Current Events in September 2014

The credit reporting agency TransUnion has issued a report that suggests consumers are doing better managing their credit cards than their car loans.

The latest TransUnion Industry Insights Report puts the national delinquency rate for credit cards at its lowest level in 7 years, falling from 1.27% in the second quarter of 2013 to 1.16% in the second quarter of this year.

Auto loans, however, are a different story. Car loan delinquency rates jumped more than 9% in the second quarter of this year over the same period in 2013. At the same time, auto loan debt rose for the 13th straight quarter.

That last point should come as no surprise since car sales set new records month after month. These buyers aren't paying with cash.

Good news/bad news

When it comes to consumer debt, there does appear to be a good news/bad news breakdown.

"Consumers continue to have a good handle on their credit cards, with delinquencies at all-time lows across the spectrum," said Ezra Becker, vice president of research and consulting in TransUnion's financial services business unit. "We observed that delinquency rates are dropping for all age groups, and at relatively similar rates."

The news isn't quite as good when you look at credit card balances. While all age groups are doing better paying their bills on time, the two oldest age groups – 50 to 59 and 60 and older – are adding to their credit card balances. That's a time in life that consumers should be reducing their debt, not adding to it.

Overall, average credit card debt per borrower remained almost unchanged in the last year, increasing slightly from $5,226 in 2013 to $5,234 in 2014. On a quarterly basis, credit card debt was up only slightly in the second quarter from the first.

Falling behind

Consumers who borrowed money to buy cars are having a more difficult time keeping up with their payments.

Auto loan delinquency – which is defined as being 60 days or more late on a car payment – increased to 0.95% in the second quarter of 2014, up from 0.87% in the same period of 2013. Quarter to quarter, however, delinquencies were down slightly.

Since 2007, the auto loan delinquency rate has risen as high as 1.59% in the fourth quarter of 2008. Its low was 0.86%, in 2012.

While some might see the rising delinquency rate as cause for concern, given that new car sales have become one of the economy's strongest drivers, TransUnion believes the numbers are not unexpected.

Still relatively low

"Auto lending remains similar to what we have observed during the last several quarters," said Peter Turek, automotive vice president for TransUnion. "Delinquency rates remain relatively low while auto loan balances keep rising -- both metrics aided by increasing auto loan originations.”

TransUnion says there are 4 million additional auto loans than there were a year ago. If the delinquency rate is ticking higher, that suggests a larger portion of these loans are going to consumers who are having a harder time keeping up.

In an August report, the Federal Reserve Bank of New York noted that auto loan balances are rapidly rising and that much of the boom in sales can be traced to subprime borrowers. Is it a problem? The Fed appears to be on the fence.

While the greatest growth in car loans has been among what the Fed calls “riskier groups,” the bank says it still makes up a smaller percentage than before the 2008 financial crisis.

Here's more evidence in support of the theory that communications service providers often use data throttling solely to make more money for themselves.

Though AT&T likes to cite network congestion as an excuse for throttling certain of its mobile customers' connection speeds, its latest offer to double the data limits for new subscribers who sign up for its Mobile Share Value plan by October 31 strongly suggests that AT&T's data-throttling activities have less to do with reining in bandwidth hogs than with generating additional revenue for AT&T.

There's a longstanding debate over the issue of data throttling (or “network optimization,” as Verizon prefers to call it): deliberately slowing down, or “throttling,” someone's Internet connection, possibly to the point where streaming videos and other common activities becomes impossible until the throttling stops.

Fans of the practice (read: the companies who do it) say data throttling is necessary to prevent certain users from hogging up all the bandwidth, thus ruining smartphones and the Internet for everybody. And there's no denying that sometimes, when networks actually are congested due to heavy use, some level of throttling for the heaviest users genuinely is necessary to keep the network running.

(On a related note: that's why, when hurricanes or other natural disasters knock out utilities over a wide area, cell phone and smartphone users are asked to use text messaging rather than voice calls to keep in touch with friends and family: because text messaging uses far less bandwidth.)

Counter-arguments

Critics of the practice have a variety of counter-arguments, the most common of which is that data throttling has nothing to do with bandwidth capacity or healthy network management, but is merely a way for companies to get more money out of customers.

FCC chairman Tom Wheeler is one of those critics. Last July, he sent an open letter to Verizon executives expressing concerns over their data throttling/network optimization tactics and asking several pointed questions, including this:

What is your rationale for treating customers differently based on the type of data plan to which they subscribe, rather than network architecture or technological factors? In particular, please explain your statement that, "If you're on an unlimited data plan and are concerned that you are in the top 5% of data users, you can switch to a usage-based data plan as customers on usage-based plans are not impacted."

Not that Verizon is unique in its apparent tendency to use data throttling for reasons other than legitimate network management. In January 2014, AT&T launched its then-new “Sponsored Data” program, which it said would shift “mobile data costs from the consumer to the content provider.” (In other words, websites would have to pay in order to ensure AT&T mobile visitors could access them in a timely fashion, in complete opposite of proposed “net neutrality” rules.)

At the time, TechDirt called the program “an admission that data caps have nothing to do with congestion.”

And AT&T's current “double the amount of data” promotion seems to admit the same.

"Unlimited" data

Data throttling doesn't affect all AT&T mobile customers, only those with unlimited data plans. (AT&T no longer offers unlimited plans to new customers, though it still has some old customers enrolled in what it now calls the “Legacy Unlimited Data Plan.”)

AT&T's info page about the legacy plan says that:

As a result of the AT&T network management process, customers on a 3G or 4G smartphone with an unlimited data plan who have exceeded 3 gigabytes of data in a billing period may experience reduced speeds when using data services at times and in areas that are experiencing network congestion. Customers on a 4G LTE smartphone will experience reduced speeds once their usage in a billing cycle exceeds 5 gigabytes of data. All such customers can still use unlimited data without incurring overage charges, and their speeds will be restored with the start of the next billing cycle.

In other words: even if your plan promises “unlimited” data, once you pass a certain limit your connection will be throttled. However, the very first clause in the paragraph suggests this throttling is necessary, as part of “the AT&T network management process.”

So, if you have an unlimited data plan with AT&T, your connection might be throttled after you exceed 3 GB of data in a billing period, and will definitely be throttled if you exceed 5 GB. How does that compare to AT&T's regular plans, or its current promotion for new customers who sign up by Halloween?

AT&T is offering new promotional Mobile Share Value plans that include double the amount of data offered on Mobile Share Value plans with 15GB to 50 GB of data. New and existing customers who proactively sign-up by October 31* get 30GB of data for the price of 15GB**

Throttled after 5GB

So AT&T users with unlimited data plans get throttled after using only 5GB in a billing period, whereas “ordinary” new customers get at least 15GB per billing period, but as part of this promotion can get 30GB – six times what “unlimited” data users get before they're throttled. And that's the smallest data plan; AT&T offers another with a whopping 100GB of shared data – for $375 per month.

Yet the same company that can provide up to 100 gigabytes of shared data to certain customers also claims that “network management” obligates it to throttle any unlimited data user who shares a mere 5 gigabytes of data. That's how math works at AT&T company HQ: 5GB from an “unlimited” plan causes more congestion than a 100GB limit.

In mid-August, spokesmen for the SuperValu chain of grocery and/or liquor stores announced that, due to a previously unannounced security breach, hackers had had access to the company's customer payment-card database between June 22 and July 17, though the company did not inform anybody of this until August 14.

That security breach from last summer is not to be confused with the most recent security breach announced this week, a breach which apparently appeared shortly after Albertson's et al fixed the damage from the last security breach. On Monday, Albertson's released a statement saying:

The Company has been informed that different malware was used in this recently discovered incident than was used in the incident previously announced on August 14, 2014. The investigations into both this incident and the earlier incident are ongoing.

AB Acquisition promptly notified federal law enforcement authorities of this separate criminal incident, which apparently occurred in late August or early September 2014 …. The new malware may have captured account numbers, expiration date, other numerical information and/or the cardholder’s name.

The statement goes on to say that the problem does not affect every store in the chain, only those stores which used a particular “point of sale system,” or third-party payment processor:

Because the point of sale systems are different across AB Acquisition divisions, Albertsons stores in Arizona, Arkansas, Colorado, Florida, Louisiana, New Mexico, Texas and our two Super Saver Foods Stores in Northern Utah were not impacted by this incident. However, Albertsons stores in Southern California, Idaho, Montana, North Dakota, Nevada, Oregon, Washington, Wyoming and Southern Utah were impacted. In addition, ACME Markets in Pennsylvania, Maryland, Delaware and New Jersey; Jewel-Osco stores in Iowa, Illinois and Indiana; and Shaw’s and Star Markets stores in Maine, Massachusetts, Vermont, New Hampshire and Rhode Island were affected by this new incident.

If you keep up with customer-database hacking news, you've surely noticed how often the hackers succeed not by successfully attacking the company's own database, but by compromising a third-party point of sale system. Just last week, point-of-sale systems provider Signature Systems admitted that hackers cracked their security and accessed customer data from the Jimmy John's sandwich chain and at least 108 different independently owned businesses (mostly restaurants).

So far, there's no indication who made the particular point-of-sale system compromised in this most recent Albertson's security breach, but if you bought anything with a payment card at the affected stores within the past month, you'll probably need to get new cards issued again.

The Federal Communications Commission today voted unanimously to end its 40-year-old Sports Blackout Rule, a vestige of the days when many pro teams were struggling to fill stadiums and television signals were still a rare commodity.

Under the rule, whenever a sports league ordered a local broadcaster not to televise a game due to unsold tickets, the local cable, satellite, and other video distributors could not televise the game either. The National Football League, along with the National Association of Broadcasters and the NFL Players Association, strongly opposed efforts to end the rule,  arguing that to do so would jeopardize pro football on "free" TV, meaning over-the-air broadcasts.

“This is a historic day for sports fans,” said David Goodfriend, Chairman of Sports Fans Coalition. “Since 1975, the federal government has propped up the NFL’s obnoxious practice of blacking out a game from local TV if the stadium did not sell out. Today’s FCC action makes clear: if leagues want to mistreat fans, they will have to do so without Uncle Sam’s help.”

“Republicans and Democrats don’t agree on much these days, but when it comes to getting government out of the business of mistreating sports fans, we are in total agreement,” said Brad Blakeman, Sports Fans Coalition Board Member. “The era of government writing a blank check to sports leagues is over.”

FCC Chairman Tom Wheeler had made no secret of his stance. “Clearly, the NFL no longer needs the government’s help to remain viable,” he said earlier this month.

“To hear the NFL describe it, you would think that putting a game on CBS, NBC or Fox was a money-losing proposition instead of a highly profitable multibillion-dollar business,” he wrote in an op-ed in USA Today. “If the league truly has the best interest of millions of American fans at heart, they could simply commit to staying on network television in perpetuity.”

"With the NFL’s incredible popularity, it’s not surprising that last year the League made $10 billion in revenue and only two games were blacked-out," he added.

“The FCC did the right thing today by removing this antiquated rule, which is no longer justified by facts or simple logic," said Sen. Richard Blumenthal (D-Conn.), a longtime critic of the rule. "Even as the NFL made millions upon millions of dollars off of broadcasting rights, they continued as recently as this season to threaten fans with unnecessary blackout restrictions. Today the FCC officially threw a flag on the NFL’s anti-fan blackout policy.”

Blumenthal, along with Sen. John McCain (R-Ariz.) and Rep. Brian Higgins (D-N.Y.) has introduced the Furthering Access and Networks for Sports (FANS) Act of 2013– complementary legislation that would remove the NFL’s antitrust exemptions, unless the league ends its practice of requiring broadcasters to blackout games that don’t sell out.

More to come 

The Sports Fans Coalition said it intends to keep the momentum going after today’s FCC action, specifically by pursuing the following initiatives:

1. Eliminating sports leagues’ anti-trust exemption for imposing local blackouts;

2. Enacting the FANS Act; 

3. Conditioning taxpayer funding of professional sports arenas on direct benefits for fans, including free tickets for certain categories of veterans and school children, or in the alternative eliminating such public funding altogether; and

4. Working with domestic violence prevention professionals to help make professional sports something parents can once again proudly share with their children.

“American sports fans love their home teams, love the games, and will fight to make sure that government policies uphold the best that sports have to offer,” said Goodfriend.

Americans are more depressed now than they have been in decades even though they may not be aware of it, a new study finds.

Analyzing data from 6.9 million adolescents and adults, San Diego State University professor Jean M. Twenge that Americans now report more psychosomatic symptoms of depression, such as trouble sleeping and trouble concentrating, than their counterparts in the 1980s.

"Previous studies found that more people have been treated for depression in recent years, but that could be due to more awareness and less stigma," said Twenge. "This study shows an increase in symptoms most people don't even know are connected to depression, which suggests adolescents and adults really are suffering more."

Compared to their 1980s counterparts, teens in the 2010s are 38% more likely to have trouble remembering, 74% more likely to have trouble sleeping and twice as likely to have seen a professional for mental health issues.

College students surveyed were 50% more likely to say they feel overwhelmed, and adults were more likely to say their sleep was restless, they had poor appetite and everything was an effort — all classic psychosomatic symptoms of depression.

"Despite all of these symptoms, people are not any more likely to say they are depressed when asked directly, again suggesting that the rise is not based on people being more willing to admit depression," said Twenge.

Medication helps ... a little

The study also found that the suicide rate for teens decreased, though the decline was small compared to the increase in symptoms of depression.

With the use of anti-depressant medications doubling over this time period, Twenge speculates that medication may have helped those with the most severe problems but has not reduced increases in other symptoms that, she says, can still cause significant issues.

Twenge's findings were published in the journal Social Indicators Research.

Many cooks prefer using a gas stove and gas is often cheaper than electricity but a new study finds a potentially big downside to cooking with gas -- a higher rate of asthma and bronchitis in homes where gas stoves are used without adequate ventilation.

“In homes where a gas stove was used without venting, the prevalence of asthma and wheezing is higher than in homes where a gas stove was used with ventilation,” said Ellen Smit, an associate professor Oregon State University and one of the study’s authors. “Parents of all children should use ventilation while using a gas stove.”

Researchers can’t say that gas stove use without ventilation causes respiratory issues, but the new study clearly shows an association between having asthma and use of ventilation, Smit said. More study is needed to understand that relationship.

Asthma is a common chronic childhood disease and an estimated 48% of American homes have a gas stove. Gas stoves are known to affect indoor air pollution levels and researchers wanted to better understand the links between air pollution from gas stoves, parents’ behavior when operating gas stoves and respiratory issues, said Eric Coker, a doctoral student in public health and a co-author of the study.

The study showed that children who lived in homes where ventilation such as an exhaust fan was used when cooking with gas stoves were 32% less likely to have asthma than children who lived in homes where ventilation was not used. Children in homes where ventilation was used while cooking with a gas stove were 38% less likely to have bronchitis and 39% less likely to have wheezing.

The study also showed that lung function, an important biological marker of asthma, was significantly better among girls from homes that used ventilation when operating their gas stove.

Used for heating

Many people in the study also reported using their gas stoves for heating, researchers found. That was also related to poorer respiratory health in children, particularly when ventilation was not used. In homes where the gas kitchen stove was used for heating, children were 44% less likely to have asthma and 43% less likely to have bronchitis if ventilation was used.

The results did not change even when asthma risk factors such as pets or cigarette smoking inside the home were taken into account, Coker said.

The findings were published recently in the journal Environmental Health. Researchers used data from the Third National Health and Nutrition Examination Survey, or NHANES, conducted by the National Center for Health Statistics from 1988-1994. Data collected for NHANES is a nationally representative sample of the U.S. population.

Even though the study relies on older data, the findings remain relevant because many people still use gas stoves for cooking, and in some cases, for heat in the winter, the researchers said.

“Lots of older homes lack exhaust or other ventilation,” Coker said. “We know this is still a problem. We don’t know if it is as prevalent as it was when the data was collected.”

“More research is definitely needed,” Coker said. “But we know using an effective ventilation system will reduce air pollution levels in a home, so we can definitely recommend that.”

Hate to say it but colder weather is just around the corner and that means your energy bill will probably go up. Even if you don't have electric heat you are inside more so lights will be on more than usual, so this is a good time to review your energy habits. 

You may want to take a nice long hot bath to warm up as the weather turns chilly, but it's best to limit the baths and opt for the shower.

The average bath requires 30 to 50 gallons of water — a major energy drain, especially when a four-minute shower with a low-flow head only uses about 10 gallons.

An occasional bath isn't going to skyrocket your utility bills, but if it becomes a must-have, expect your energy costs to be slightly higher than the average household. Just like running your dishwasher, the cost of taking a bath all boils down to water consumption and the energy it takes to heat the water.

Dishwashing

Lets talk about that age-old debate -- hand-washing or the dishwasher. I have to tell you I always thought the dishwasher used more energy so I hand-washed. Wrong. After investigating, it's clear the dishwasher will save you on water and on your electric bill because it uses less water than hand-washing, on average. Maybe skip the heat-drying cycle to reduce electricity consumption.

So stack up the washer but wait until it is full to turn it on.

That electric oven can rack up the kilowatt hours if you are cooking in it every night but it's still cheaper then eating out. Some ways to conserve would be not to peek by opening up the oven to see if the food's done. Use your timer -- you lose about 25 degrees everytime you open the door.

You can save 20% of your oven-related energy costs by using a convection oven, which utilizes a fan to force the hot air around the oven. Not only does this mean shorter cooking times and lower temperatures, but your food will cook more evenly too. Keeping your oven sparkly clean will direct the heat at your food and not the burnt stuff caked to the bottom.

Freeze out

Your ice maker is melting your energy budget. Think twice about how much ice you really need and use. According to Energy Star, automatic ice machines work around the clock, constantly draining energy, and they can increase your refrigerator's energy use by 14% to 20%.

There should be a switch on the front of the ice maker to turn it off. Check your manual if you can't locate it. You can make ice the old-fashioned way in an ice tray or you can just use the ice maker when you know you will need cubes.

Not everyone can keep their refrigerator stuffed to the gills but it can actually help keep your energy bill down if it's filled. Every time you open the door warm air comes in, thus making the fridge work harder to stay cool. If there is a lot of space in it, it has to work a little harder to maintain the temp. 

You can also unplug appliances like a toaster or coffee maker until you need to use them. They can be draining energy for no reason. It's all about habits and how to change them; once you start working to save energy, you'll start seeing the savings.

Home prices were higher in July, but the rate of increase slowed significantly, according to the S&P/Case-Shiller Home Price Indices.

A leading measure of U.S. home prices, the indices show 19 of the 20 cities had lower annual returns in July with Las Vegas, Miami and San Francisco the only cities to report double-digit annual gains.

Cleveland’s rate was unchanged at +0.9% for the 12 months ending in July.

During the month, the 10-City and 20-City Composites increased 0.6% and the National Index was up 0.5%. Although all cities but one gained on a monthly basis, 17 saw smaller increases in July as compared with June. New York, which saw a lower gain, was the only city where prices rose over 1%. San Francisco posted its largest decline (-0.4%) since February 2012.

“The broad-based deceleration in home prices continued in the most recent data,” said David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “However, home prices continue to rise at two to three times the rate of inflation. The slower pace of home price appreciation is consistent with most of the other housing data on housing starts and home sales. The rise in August new home sales -- which are not covered by the S&P/Case-Shiller indices – is a welcome exception to recent trends."

Las Vegas leads the way

The 10- and 20-City Composites gained 6.7% annually with prices nationally rising at a slower pace of 5.6%. Las Vegas, one of the most depressed housing markets in the recession, is still leading the cities with 12.8% year-over-year. Phoenix, the first city to see double-digit gains back in 2012, posted its lowest annual return (+5.7%) since February 2012.

“While the year-over-year figures are trending downward,” Blitzer noted, “home prices are still rising month-to-month although at a slower rate than what we are used to seeing over the past couple of years.”

The National Index rose 0.5% -- its seventh consecutive increase. At the bottom was San Francisco with its first decline this year and the only city in the red. New York tended to under perform over the past few years but it was on top for the last two months.”

Zero improvement

While all cities continue to continue to post year-over-year gains, not one managed to show improvement. San Francisco decelerated the most from an annual return of +13.2% in June to +10.3% in July. Cleveland remained steady at +0.9% year-over-year and continued to underperform the other Metropolitan Statistical Areas by a wide margin.

San Francisco declined 0.4%, but the rest of the cities saw gains ranging from 0.1% to 1.1%. Miami was the only city to show improvement -- from +0.6% in June to +0.8% in July.

Charlotte and Cleveland remained at 0.4% and 0.5%, respectively. Dallas and Denver continue to set new peaks, while Detroit remains the only city below its January 2000 value.

Both personal income and spending rose in August, showing a bit of progress over July's lackluster performance.

According to the Bureau of Economic Analysis, incomes were up 0.3% last month to $47.3 billion, while personal consumption expenditures (PCE) increased $57.5 billion, or 0.5%. Personal income rose 0.2% and PCE were flat in July.

Disposable personal income (DPI) -- personal income less personal current taxes -- rose 0.3% compared with an increase of 0.2% the month before.

Wages and salaries

Private wages and salaries jumped $30.4 billion, compared with an increase of $17.4 billion in July.

Payrolls of goods-producing industries were up $6.0 billion, after inching up just $1.2 billion the previous month. Within that sector, manufacturing payrolls rose $3.6 billion, in contrast to an $0.8 billion in July.

Services-producing industries' payrolls increased $24.6 billion, compared with a July rise of $16.2 billion. Government wages and salaries increased $1.4 billion, following an increase of $1.1 billion in July.

Outlays and personal saving

Personal outlays, which include PCE, personal interest payments and personal current transfer payments, were up $60.4 billion in August, compared with an increase of $3.5 billion in July.

Personal saving -- DPI less personal outlays -- was $705.3 billion last month, compared with $730.5 billion in July. The personal saving rate -- personal saving as a percentage of disposable personal income -- was 5.4% a drop of 0.2% from July, but still better than the 4.9% rate reported at the start of the year.

The complete report is available on the Commerce Department website.

You might not think of apples as being hard to digest and they're not. But it turns out that they contain a high percentage of nondigestible compounds that may be helpful in preventing disorders associated with obesity.

Scientists at Washington State University say their study finds that Granny Smith apples are particularly beneficial; they encourage the growth of friendly bacteria in the colon because of their high content of non-digestible compounds, including dietary fiber and polyphenols, and low content of available carbohydrates. 

“We know that, in general, apples are a good source of these nondigestible compounds but there are differences in varieties,” said food scientist Giuliana Noratto, the study’s lead researcher. “Results from this study will help consumers to discriminate between apple varieties that can aid in the fight against obesity.”

Despite being subjected to chewing, stomach acid and digestive enzymes, the nondigestible compounds remain intact when they reach the colon. Once there, they are fermented by bacteria in the colon, which benefits the growth of friendly bacteria in the gut.

The study showed that Granny Smith apples surpass Braeburn, Fuji, Gala, Golden Delicious, McIntosh and Red Delicious in the amount of nondigestible compounds they contain.

“The nondigestible compounds in the Granny Smith apples actually changed the proportions of fecal bacteria from obese mice to be similar to that of lean mice,” Noratto said.

The discovery could help prevent some of the disorders associated with obesity such as low-grade, chronic inflammation that can lead to diabetes.

The balance of bacterial communities in the colon of obese people is disturbed. This results in microbial byproducts that lead to inflammation and influence metabolic disorders associated with obesity, Noratto said.

“What determines the balance of bacteria in our colon is the food we consume,” she said. Re-establishing a healthy balance of bacteria in the colon stabilizes metabolic processes that influence inflammation and the sensation of feeling satisfied, or satiety.

The study appears in October’s print edition of the journal Food Chemistry.

After posting an increase in August, the Conference Board's Consumer Confidence Index slumped in September, dropping from 93.4 to 80.6.

In addition, the Present Situation Index fell to 89.4 from 93.9, and the Expectations Index dropped more than 9 points -- to 83.7.

The September retreat came after 4 consecutive months of improvement.

“A less positive assessment of the current job market, most likely due to the recent softening in growth, was the sole reason for the decline in consumers’ assessment of present-day conditions,” said Lynn Franco, director of economic indicators at The Conference Board. “Looking ahead, consumers were less confident about the short-term outlook for the economy and labor market, and somewhat mixed regarding their future earnings potential. All told, consumers expect economic growth to ease in the months ahead.”

Not a lot of optimism

Consumers assessed current conditions less favorably in September versus a month ago. Their view of business conditions was virtually unchanged, with those saying conditions are “good” falliung slightly from 23.5 to 23.4%; those who think business conditions are “bad” held constant at 21.3%.

Consumers’ appraisal of the job market declined more appreciably, with the proportion stating jobs are “plentiful” dropped from 17.6% to 15.1%. Those who believe jobs are “hard to get” was barely changed, at 30.1% versus 30.0 percent in August.

Consumers’ optimism about the short-term outlook declined considerably in September. The percentage of consumers expecting business conditions to improve over the next 6 months fell from 20.8% to 18.6%, while those expecting business conditions to worsen rose from 9.9% to 12.0%.

The outlook for the labor market likewise took a downturn. Those anticipating more jobs in the months ahead fell from 17.8% to 15.2%, while those expecting fewer jobs rose from 15.2% to 17.8%.

The proportion of consumers looking for their incomes to grow rose in September to 16.8%, from 15.5% in August. However, the proportion expecting a drop in income also rose -- to 13.4% from 11.6% a month ago.

The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was September 18.

Bravo of Manchester, Conn., is recalling select lots of Bravo Turkey and Chicken pet foods for dogs and cats.

The products may be contaminated with Salmonella.

The company says it has received no reports of illness in either people or animals associated with these products to date.

The recalled product was distributed beginning on November 14, 2013, nationwide to distributors, retail stores, Internet retailers and directly to consumers. It can be identified by the batch ID code (best used by date) printed on the side of the plastic tube.

These products are being recalled because they have the potential to be contaminated with Salmonella:

Raw Food Diet Bravo! Turkey Blend For Dogs And Cats

Product Number: 31-102

Size: 2 lb. (32 OZ) plastic tubes

Best used by date: 11-05-15

UPC: 829546311025

Keep Frozen

Bravo! Blends All Natural Chicken Blend diet for dogs & cats

Product Number: 21-102

Size: 2 lb. (32 OZ) plastic tubes

Best used by date: 08-11-16

UPC: 829546211028

Keep Frozen

These products are being recalled because they were manufactured in the same manufacturing facility or on the same day as products that tested positive:

Premium Turkey Formula Bravo Balance Raw Diet

Product Number: 31-405

Size: 5 lb. (80 OZ) 2.3KG plastic tubes

Best used by date: 11-05-15

UPC: 829546314057

Keep Frozen

Bravo! Blends All Natural Chicken Blend diet for dogs & cats

Product Number: 21-105

Size: 5 lb. (80 OZ) 2.3KG plastic tubes

Best used by date: 08-11-16

UPC: 829546211059

Keep Frozen

The recalled product should not be sold or fed to pets. Pet owners who have the affected product at home should dispose of this product in a safe manner.

Customers who have purchased the recalled pet food may return to the store where purchased and submit the Product Recall Claim Form available on the Bravo website for a full refund or store credit.

Consumers may call Bravo toll free (866) 922-9222 Monday through Friday 9:00 am to 5:00 pm (EST).

New regulations being published today would limit the interest that can be charged to military service members, part of an Obama Administration effort to close gaps and loopholes in a 2006 measure. President Obama announced the executive action at the American Legion's annual convention Aug. 26. 

The Military Lending Act of 2006 imposed a 36% limit on the annual percentage rate on loans to service members but it applies only to certain types of payday loans, car title and refund anticipation loans. Obama's executive order gave the Department of Defense the authority to extend the types of loans covered by the restrictions. 

In response, the Pentagon said it would apply the protections to all forms of payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans, unsecured open-end lines of credit, and credit cards.

The housing crisis was triggered in large part by an overabundance of subprime mortgages. In short, consumers got loans for homes they couldn't afford.

To make it appear they could afford it, the payments were structured so that they were very low for the first couple of years. Purchasers were assured they could refinance into a fixed-rate loan before the payments jumped to an unaffordable level.

We all know how that turned out. Most subprime borrowers couldn't get a prime loan and ended up losing their homes, starting the collapse of the housing market.

There aren't nearly as many subprime mortgage products these days but, as it turns out, the red hot new car market is rising on quite a few subprime car loans. Just as in the mortgage market, these loans usually aren't good for car buyers.

Remote control

As recently reported by The New York Times, many lenders in the subprime market are requiring borrowers to have their cars outfitted with a device that allows the bank to disable the vehicle if the payment is late, even by one day.

This technological development has not only made the repo man obsolete, the GPS component in the in-dash device allows the bank to track the vehicle and its driver, always knowing their location.

There have been numerous cases, according to the Times report, when a consumer who purchased a car with a subprime loan has gotten in their car to go to work and found the lender has disabled it.

Lenders love this technology because it makes bundling subprime auto loans into less risky, and hence more profitable, securities. The consumer will not have access to their vehicle unless and until they are current in their payments. The leverage is all with the lender.

Not surprisingly, an estimated 2 million of these devices have been installed in cars so far. This is a big reason to avoid a subprime auto loan, but it isn't the only one.

More costly

Yes, subprime loans are available to consumers with spotty credit, allowing them to get loans they might not otherwise get. But there are costs.

Since lenders believe subprime borrowers are more likely to default on their loans and pose a higher risk to lending companies or banks, they compensate for that risk by charging a higher interest rate. According to Loans.com, the processing fees and other fees associated with getting the loan are higher in the subprime loan market.

Right from the start, the lender is assuming the borrower is going to default. If they don't, the bank is ahead.

Spotting a subprime loan

How can you avoid getting stuck with a subprime loan? There are a few tell-tale signs.

For one thing, if the salesperson talks to you only in terms of the monthly payment instead of the cost of the car, it's likely the loan doesn't have a fixed interest rate. Without a fixed rate, you don't know what your payments are going to be over the life of the loan.

Ask to see a complete rundown of all the costs associated with the loan. If the fees appear excessive, it's probably a subprime loan.

It's always a good idea to check your credit report and, if possible, obtain your credit score before arriving at the dealership. When the dealer accesses your credit file, they are required to tell you what your credit score is.

If you have a good credit score you shouldn't be offered a subprime loan. If you are, don't take the dealer's word that you are a bad credit risk. Explore other financing options at a bank or credit union.

Car insurance is like death and taxes, at least for car owners -- it's required. Every state requires car owners to have a minimum amount of liability insurance but a new study by the Consumer Federation of America finds that affordable insurance is hard to find in low-income neighborhoods, even for safe drivers.

In 24 of 50 urban regions, there was at least one lower-income ZIP code where annual premiums charged by all of the five largest auto insurers exceeded $500. In nine of these 50 areas – Miami/Ft. Lauderdale, Detroit, Minneapolis/St. Paul, Tampa/St. Petersburg, Baltimore, Orlando, Jacksonville, Hartford, and New Orleans – prices exceeded $500 in all lower-income ZIP codes.

In the report, CFA analyzed 81,000 premium quotes for State Farm, Allstate, Farmers, Progressive, Geico and each of their affiliates in all ZIP codes in 50 large urban regions, which include urban, suburban and adjacent rural communities.

“Our research raises important questions as to whether state-mandated auto insurance is priced fairly and is affordable for many lower-income Americans,” said Tom Feltner, CFA’s Director of Financial Services and the principal author of the report. “Drivers need a car to get to work or school. High insurance premiums act to deny these Americans economic opportunity and also help explain why so many lower income Americans drive without insurance.” 

CFA also released findings from a recent national survey by ORC International indicating that more than three-quarters of Americans (76%) believe that a “fair annual cost” for state-mandated insurance for a typical good driver with no accidents and no tickets should be less than $500, while two-fifths of Americans (40%) think that this driver should pay less than $250 per year.

In previous studies, CFA has found that insurers use rating factors, such as education and occupation, that tend to disadvantage low- and moderate-income drivers.

In the latest study, CFA reviewed January 2014 data on auto insurance premiums charged to a good driver – a 30-year old, unmarried woman, with a high school education and clerical job who rents her home and has a “fair” credit-based insurance score (the middle category of a 10-category range from excellent to poor) – from Quadrant Information Services for all U.S. ZIP codes.

CFA then analyzed the data focusing on annual premiums charged by the five largest auto insurers – State Farm, Allstate, GEICO, Farmers, and Progressive (who, together write 54% of premium in the U.S. auto insurance market) – in 50 large urban regions and further broke out the prices charged in those areas’ 1,377 low- and moderate-income ZIP codes (with median household incomes below about $40,000).

Action needed

The report notes that the majority of drivers in the lowest-income ZIP codes reviewed earn less than $21,000 per year, making even a $500 policy a difficult financial burden.

CFA urged federal and state regulators to thoroughly investigate the issue and help ensure that state-required auto insurance can be afforded by lower-income Americans with good driving records.

“CFA commends the Federal Insurance Office for initiating an investigation of auto insurance affordability by lower-income Americans,” said J. Robert Hunter, CFA’s Director of Insurance and former Texas Insurance Commissioner. “We are hopeful that the FIO will gain access to data on prices quoted and charged by insurers to help determine insurance affordability,” he added.

It's almost four months now since Amazon customers first noticed that bookseller Amazon and book publisher Hachette Book Group were involved in what Amazon later admitted was a contract dispute, leaving Hachette's authors stuck in the middle as many of their books are not available for sale on the world's largest online bookseller.

In July, Amazon offered to sell e-book Kindle versions of Hachette titles with 100% of the proceeds going to the authors – which sounds generous, except that such a move would seriously hurt Hachettte, leaving it unable to recoup its costs in producing those books, let alone make any profit.

Few authors went along with Amazon's offer.

Today, the New York Times reported the latest chapter in the ongoing saga: “Literary lions unite in protest over Amazon's e-book tactics.” (And most of those lions, including Philip Roth, Stephen King and Ursula LeGuin, aren't even Hachette authors, but they're all very concerned about what they think Amazon is trying to do to the publishing market — and are urging the U.S. Department of Justice to investigate Amazon for possible monopoly tactics.)

Board members interrogated

The writers are part of a group called Authors United, which on Sept. 19 mailed a letter to 10 Amazon board members. The letter, which is also available online, first dicsusses the various ways Amazon's actions have harmed Hachette authors, and asked each board member (in bold print): “Do you as an Amazon director approve of this policy of sanctioning books?”

Authors' United main complaint is not the fact that Amazon is trying to renegotiate contracts with Hachette, but the fact that, while these contract disputes are going on, Amazon is harming many Hachette authors by refusing to sell their books:

Russell Grandinetti of Amazon has stated that the company was "forced to take this step because Hachette refused to come to the table." He has also claimed that "authors are the only leverage we have." As one of the world's largest corporations, Amazon was not "forced" to do anything. …. Amazon chose to involve 2,500 Hachette authors and their books. It could end these sanctions tomorrow while continuing to negotiate. Amazon is undermining the ability of authors to support their families, pay their mortgages, and provide for their kids' college educations. We'd like to emphasize that most of us are not Hachette authors, and our concern is founded on principle, rather than self-interest.

The letter also said this:

Amazon has repeatedly tried to dismiss us as "rich" bestselling authors who are advocating higher ebook prices—a false and unfair characterization, as most of us are in fact midlist authors struggling to make a living. And we have not made any statements whatsoever on book pricing. Our point is simple: we believe it is unacceptable for Amazon to impede or block the sale of any books as a negotiating tactic.

Amazon has every right to refuse to sell consumer goods in response to a pricing disagreement with a wholesaler. But books are not mere consumer goods. Books cannot be written more cheaply, nor can authors be outsourced to another country. …. Each book is the unique, quirky creation of a lonely, intense, and often expensive struggle on the part of a single individual, a person whose living depends on his or her book finding readers. This is the process Amazon endangers when it uses its tremendous power to separate authors from their readership.

Moribund dinosaurs

But is it possible that e-publishing through Amazon is simply the wave of the future? Might old-school publishing houses like Hachette be obsolete, now that technology offers so many new publishing options for aspiring writers? Authors United addressed that concern as well:

There has been much talk on the Internet about how traditional publishers like Hachette are "dinosaurs" defending a moribund business model. There have been claims that Amazon is leading the way to a new publishing paradigm, one that pays authors higher royalties, allows anyone to publish, and cuts out the elitist gatekeepers. We agree that Amazon has spurred important innovations in publishing, including a self-publishing model that has given many new writers a voice.

But what these commentators and Amazon itself may not realize is that traditional publishing houses perform a vital role in our society. Publishers provide venture capital for ideas. They advance money to authors, giving them the time and freedom to write their books. This system is especially important for nonfiction writers, who often must travel for research. Thousands of times every year, publishers take a chance on unknown authors and advance them money solely on the basis of an idea. By assuming the risk, publishers expect—and receive—a financial return. What will Amazon replace this process with? How, in the Amazon model, will a young author get funding to pursue a promising idea? 

The New York Times reports that Amazon did not respond to its requests for comment about Authors United.

So far, though, Amazon has taken the position that its stance against Hachette is ultimately for the consumers' benefit: last July, Amazon executive Russ Granadetti gave an exclusive interview to the Wall Street Journal in which he said the fight with Hachette was “in the long-term interest of our customers.... This discussion is all about e-book pricing. The terms under which we trade will determine how good the prices are that we can offer consumers.”

The Consumer Financial Protection Bureau (CFPB) today took action against Michigan-based Flagstar Bank for violating the CFPB’s new mortgage servicing rules by illegally blocking borrowers’ attempts to save their homes.

At every step in the foreclosure relief process, Flagstar failed borrowers, the agency said, charging that the bank took excessive time to process borrowers’ applications for foreclosure relief, failed to tell borrowers when their applications were incomplete, denied loan modifications to qualified borrowers, and illegally delayed finalizing permanent loan modifications.

The CFPB is ordering Flagstar to halt its illegal activities, pay $27.5 million to victims, and pay a $10 million fine.

“Because of Flagstar’s illegal actions and unacceptable delays, struggling homeowners lost the opportunity to save their homes,” said CFPB Director Richard Cordray. “The Bureau has been clear that mortgage servicers must follow our new servicing rules and treat homeowners fairly. Today’s action signals a new era of enforcement to protect consumers against the cost of servicer runarounds.”

Insufficient resources

For example, in 2011, Flagstar had 13,000 active loss mitigation applications but only assigned 25 full-time employees and a third-party vendor in India to review them. For a time, it took the staff up to nine months to review a single application.

In Flagstar’s loss mitigation call center, the average call wait time was 25 minutes and the average call abandonment rate was almost 50 percent. And Flagstar’s loss mitigation application backlog numbered well over a thousand. 

At every step in the foreclosure relief process, Flagstar failed consumers, the CFPB said.

The agency is ordering Flagstar to pay $27.5 million to the approximately 6,500 consumers whose loans were being serviced by Flagstar and who were subject to its unlawful practices. At least $20 million of this will go to the approximately 2,000 victims of foreclosure. Borrowers who receive payments will not be prevented from taking individual action on their claims.

Caffeine is something you drink, right? Well, yes, but according to two lingerie manufacturers, it can also help you lose weight. When you wear it, not when you drink it.

Norm Thompson Outfitters, Inc., and Wacoal America, Inc., have been advertising "shapewear" undergarments that were supposedly "caffeine-infused" and therefore able to melt the pounds right off of you.

The Federal Trade Commission was not impressed by these claims and the companies have now agreed to pay $1.5 million to be used for refunds to consumers who fell for the pitch.

“Caffeine-infused shapewear is the latest ‘weight-loss’ brew concocted by marketers,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “If someone says you can lose weight by wearing the clothes they are selling, steer clear. The best approach is tried and true: diet and exercise.”

No effort needed

Specifically, the FTC alleges that the companies made claims that wearing their shapewear would eliminate or substantially reduce cellulite; reduce the wearer’s hip measurements by up to two inches and their thigh measurements by one inch; and reduce thigh and hip measurements “without any effort.”

The complaint alleges that these claims are not true or substantiated by scientific evidence, and therefore violate the FTC Act.

In the case of Norm Thompson Outfitters, the FTC says the company advertised undergarments infused with microencapsulated caffeine, retinol, and other ingredients, claiming the “shapewear” would slim and reshape the wearer’s body and reduce cellulite. The products, made with Lytess brand fabrics, were sold via mail order and on the company’s Norm Thompson Outfitters, Sahalie, Body Solutions, and Body*Belle websites.

The complaint against Wacoal America contains similar allegations. It charges that the company’s iPants supposedly slimmed the body and reduced cellulite. Specifically, the company made false and unsubstantiated claims that wearing iPants would: substantially reduce cellulite; cause a substantial reduction in the wearer’s thigh measurements; and destroy fat cells, resulting in substantial slimming.

The proposed settlement requires Norm Thompson Outfitters and Wacoal America to pay $230,000 and $1.3 million, respectively, that the FTC can use to provide refunds to consumers who bought the caffeinated shapewear.

It's one thing when your husband snores at night or on the couch when he falls asleep watching your favorite TV show, but when your fluffy little cuddly best friend does it as well you find yourself worrying and wondering why.

Besides being worrying, it can be loud and annoying. Here are some reasons why that four-legged friend of yours is sawing logs.

Snoring is the sound caused by the vibrations of respiratory systems moving air during sleep. Snoring is the result of an obstruction of the airway usually produced by the uvula and soft palate.

There are some breeds that are just prone to snore because of their breed-related anatomy. Brachycephalic breeds -- the breeds with very short noses, such as English/French bulldogs, Boston terriers and pugs -- have a natural tendency to snore. But it’s a good idea to check with your veterinarian to make sure the snoring is normal and not an indication of a health issue.

A pug or Boston terrier might be born with nostrils that are squeezed almost shut. That can be corrected by a surgical procedure.

Heavy people tend to snore and so do heavy dogs. As your dog breathes in and out, obesity makes the trachea rings slam shut. Not good -- it's a sign he needs more walks and less food.

Allergies can also make it difficult for dogs to breathe properly.If your dog is allergy-prone, the exposure to dust, pollen and smoke may contribute to the late-night buzzing serenade.

Then there are dental problems. When was the last time you had your dog's teeth cleaned? Bad teeth can cause your dog to snore. A bad tooth can lead to an abscess that penetrates the nasal sinus passages. Left untreated, dental problems can become a source of infection for the whole body, which could lead to kidney failure down the road.

Do you have a gold digger? A dog thats constantly digging in the yard looking to make his fortune in gold. Not only dirt but grass and even water can get up in his nose thus obstructing his nasal passage, resulting in snoring. Extra mucus from a cold will also create snoring. For the most part, snoring caused by nasal obstructions is temporary and should stop when the passage is cleared.

What to do

So, how can you help?

• Keep a pet diary you can show your vet to note changes in your dog’s behavior and health so he or she can look for patterns.
• Get out the smart phone and video the snoring. Its much easier on the vet to hear it, then have you try and do your own imitation. Not everyone is as good as Rich Little. They will want to know the pattern as well as if there is any nasal discharge.
• At home, give your dog a bed with a pillow to raise his head. Make it a round one so he can change positions.
• Humidifiers can provide extra moisture in the air, thereby reducing snoring.
• Change the room -- there may be allergens in the room that make it difficult to breathe.

There is nothing better than a good night's sleep. You deserve it and so does your dog. If snoring is a ongoing problem talk to your vet to get some help.

Earlier this month, Apple unveiledits latest-gen iPhone 6 and first-gen iWatch, and also officially discontinued its iPod family of MP3 players.

Though iPods were undeniably cutting-edge technology when the first one was released in 2001, by 2014 they were officially obsolete. But their legacy lives on, especially in the decade-old anti-trust class action suit Apple's faced over them.

Courthouse News reported today that last week, a federal judge denied Apple's attempt to exclude a certain expert witness chosen by the plaintiffs in that suit. (The judge also denied the plaintiffs' attempt to exclude the testimony of Apple's chosen counter-witnesses, so it's hard to say which side, if any, “won” this latest round in the legal battle.)

Apple released its first iPod player in 2001. What's the difference between an iPod and a non-Apple MP3 player? Not much, except that iPods were Apple-branded, and could only play Apple-branded MP3 files — in other words, if the iTunes store didn't offer a particular song, your iPod couldn't play it.

Disharmonious

In July 2004, the RealNetworks company put out a product called Harmony, a workaround allowing iPod owners to play any MP3 files, not just Apple-branded ones, on their devices.

On July 29, 2004, Apple released a statement suggesting RealNetworks was engaged in criminal hacking activity:

“We are stunned that RealNetworks has adopted the tactics and ethics of a hacker to break into the iPod, and we are investigating the implications of their actions under the DMCA and other laws. We strongly caution Real and their customers that when we update our iPod software from time to time it is highly likely that Real's Harmony technology will cease to work with current and future iPods.”

Sure enough, in December 2004 Apple quietly updated its iPod software so that music from RealNetworks could no longer play on iPods — which also meant many iPod owners suddenly found they couldn't listen to their own music libraries anymore.

So in early 2005, an iPod-owning Apple customer named Thomas Slattery filed a class-action suit against the company, claiming that its policy of limiting iPod owners to iTunes music violated federal anti-trust and California's state unfair-competition laws.

An amended suit filed in 2007 with different lead plaintiffs also says that Apple's actions limited iPod owners to songs from the iPod store.

Stymied

As of earlier this year, the plaintiffs intended for Stanford economist Roger Noll to offer testimony claiming two basic things: one, that the Apple software updates limiting iPods to playing iTunes music made it “more costly” for an iPod user to switch to a different brand of MP3 player, since it was so difficult to get songs that could be played on all devices. Noll also planned to testify that Apple's software “encouraged” iPod owners to only buy songs from iTunes.

As a result of these (apparently self-evident) claims, Noll further intended to testify that as a result of this effective monopoly, Apple was able to charge more for its devices, for a total of $305 million in damages to consumers.

Of course, experts hired by Apple for the defense disagree with Noll's analysis.

Apple's attorneys sought to exclude Noll's testimony, and the plaintiffs in turn sought to exclude the testimony of Apple's counter-experts, but last week, as Courthouse News reported, U.S. District Judge Yvonne Rogers denied both motions.