Current Events in October 2016

Home prices continued their gains in August on both an annual and month-to-month basis.

According to the S&P CoreLogic Case-Shiller Indices, the National Home Price Index, which covers all nine U.S. census divisions, was up 5.3% from the same time a year ago.

The 10-City Composite showed a 4.3% annual gain, while the 20-City Composite reported a year-over-year advance of 5.1%.

Portland, Seattle, and Denver reported the highest year-over-year increases among the 20 cities over each of the last seven months. Portland posted an 11.7% year-over-year price increase, followed by Seattle at 11.4%, and Denver with an 8.8% increase.

Ten cities reported greater price increases in the year ending August 2016 than in the year ending July 2016.

Month-over-month

Before seasonal adjustment, the National Index was up 0.5% on a a month-over-month basis, with both the 10- and 20-City Composites posting a 0.4% increase.

The National Index recorded an advance of 0.6% after seasonal adjustment, while both the 10-City Composite and the 20-City Composite reported 0.2% month-over-month increases.

After seasonal adjustment, 14 cities saw prices rise, two cities were unchanged, and four cities posted declines.

This isn't the only encouraging housing news. David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices notes that, “Other housing data including sales of existing single family homes, measures of housing affordability, and permits for new construction also point to a reasonably healthy housing market.”

Consolidation continues in the media and communications industries, but the latest proposed deal is getting some strong push-back.

Over the weekend, AT&T confirmed that it wants to buy Time Warner for more than $85 billion. It comes on the heels of Verizon's deal to buy Yahoo and AT&T's own purchase of DirecTV in 2015.

But Yahoo Finance reports the deal may have a tough time getting a green light from government regulators. It quotes analysts as saying both the Federal Communications Commission and Department of Justice are likely to put the deal under a microscope to determine how it will affect consumers.

Matt Wood, policy director at Free Press, says these kinds of deals are almost always better for the combined businesses than for their customers.

Time to grab your wallet

"Any time you hear media executives talking about synergies, throwing around the business-babble that always accompanies these rumors, you know it’s time to grab your wallet and hang on tight,” Wood said in an email to ConsumerAffairs. “Big mergers like this inevitably mean higher prices for real people, to pay down the money borrowed to finance these deals and compensate top executives.”

Wall Street, of course, was quick to celebrate the proposed deal, because reducing competition and combining resources is usually good for the bottom line. But Wood says the evidence is clear that it doesn't help consumers. He says AT&T's acquisition of DirecTV was followed by price hikes.

"It’s a good thing there’s a renewed interest among lawmakers and antitrust enforcers in addressing this merger-mania,” Wood said. “It’s also a good thing we have solid Net Neutrality rules on the books — even though companies like AT&T continue to test those rules in the market, threaten them in Congress, and challenge them in the courts.”

Bipartisan opposition

Opposition to the proposed deal also surfaced on the presidential campaign trail. Speaking in Pennsylvania, GOP Presidential nominee Donald Trump denounced the deal in unusually harsh terms, saying “deals like this destroy democracy.” If elected, Trump said his Justice Department would move to quash the merger.

On the other side of the aisle, Senator Al Franken (D-MN) took to Facebook over the weekend to express his reservations.

“I'm skeptical of huge media mergers because they can lead to higher costs, fewer choices, and even worse service for consumers,” Franken wrote in a post. “And regulators often agree, like when Comcast unsuccessfully tried to buy Time Warner Cable, a deal that I fiercely opposed.”

In the coming days, Franken said he will press for further details about the proposed deal and how consumers would be affected.

Brookwood Farms of Siler City, N.C., is recalling approximately 126,570 pounds of pulled pork product.

The product contains soy, an allergen not declared on the label.

There have been no confirmed reports of injury, illness, or adverse reactions due to consumption of these products.

The following fully cooked, pulled pork item, produced between June 12, 2014, and Oct. 21, 2016, is being recalled:

• 5-lb. plastic bags containing “COOKED PULLED PORK CARNITA STYLE.”

The recalled product, bearing establishment number “EST. 1740” inside the USDA mark of inspection and code 15006 on the label, was distributed for institutional use nationwide.

What to do

Customers who purchased the recalled product should not consume it, but throw it away or return it to the place of purchase.

Consumers with questions about the recall may contact Craig Wood at (919) 663-3612 ext.226. 

Once upon a time – let's say five or 10 years ago – the average internet user could enjoy a wide range of free content on the internet in relative peace.

Suddenly, there are ads everywhere. Not unobtrusive display ads like you find in newspapers and magazines, but pop-ups that entirely obscure the page, and video ads that start playing as soon as you land on a page.

If you are trying to read an interesting article, sometimes it is next to impossible because you have to stop every few seconds to try to close an ad, or stop a video from playing.

Mark Havenner, a vice-president at The Pollack PR Marketing Group in Los Angeles, traces the escalation in annoyance to just two years ago.

“Pop-ups have been around forever and they've always been disruptive,” Havenner told ConsumerAffairs. “Online advertising has never really worked. We've seen data that suggests disruptive advertising has a negative effect.”

The Facebook factor

But around 2014, he says, Facebook began to score spectacular results with “native” advertising. Native advertising blends in with the content of the site you are on. If you are looking at your Facebook timeline, you get video ads mixed in with everything else. The difference is, the content of the ads matches things you are more or less interested in. It's more effective for the advertiser but less obtrusive for the reader.

Because Facebook has been so successful with that strategy, Havenner says nearly all advertisers are now trying to replicate it, even though it might not be practical for their kind of site.

“When you're on a news site, that's different than being on Facebook,” Havenner said. “On Facebook you're looking at content. On a news site, you're just reading articles, you're not actively looking for something like a video ad. But advertisers want to catch your attention, so they just start playing them.”

Not all internet advertising is as infuriating as the ads that interfere with how you are trying to use the web.

Hulu and YouTube play commercials within videos. Hula commercials come within the content, much like TV commercials would. YouTube plays commercials at the beginning of videos but most of the time you can skip out after a few seconds.

“That kind of advertising doesn't mess with people,” Havenner said.

Ad dollars moving online

Another part of the problem is that a huge transition has taken place in how people consume media. Television viewership is down, with most of those eyes moving to the internet. The advertising dollars have followed and web publications are fighting for them.

If you want to blame someone for the annoying state of the internet, Havenner suggests blaming the online publications that allow jarring and disruptive advertising. Because of it, he believes these publications are losing readers. If so, does that mean there's hope for the future?

“I suppose there is,” Havenner said. “If they start losing readership over it. They see the analytics and see that when that ad is displayed people left their site. So I would hope they would make changes.”

Havenner's advice to fed up consumers is to simply avoid going to sites with obtrusive ads. Eventually, he says, advertisers will get the message.

Fast food chains will soon be required to post calorie information on menus but researchers at New York University say that based on the experience of chains that have already taken that step, it won't help. Consumers, they predict, will still make unhealthy food choices.

They've written up their findings in the Journal of Public Policy & Marketing.

McDonalds, Subway, and many other fast food franchises already put calorie information on their menus. While that's laudable, the researchers say only about 8% of customers are digesting the data and using it to order a healthier meal.

Study author Andrew Breck says health policies should focus on what is known about effective messaging and behavior change.

Information by itself is not enough

“The success of fast-food menu labeling depends on multiple conditions being met, not just the availability of calorie information,” he said.

The calorie-posting initiative assumes that consumers will make healthy choices if given the right information. But the obesity epidemic should be evidence that we don't always act in our best interests, even when we know better. Most people know that eating too much food, especially too much of the wrong food, will pack on the pounds. Yet we do it anyway.

The research team says part of the problem is the information about calories simply isn't enough. Consumers need additional information.

First, they must be aware of the labeling. Everyone looks at the menu but not everyone recognizes those numbers beside the menu item.

Motivation is required

Second, the researchers say consumers have to want to eat healthy. Unless they are motivated to do it, they won't.

Third, they have to know what the calories mean. To many, being told the triple cheeseburger and fries has 1,176 calories might not mean anything unless they know that's about half their recommended daily calories.

Interestingly, earlier research done at Arizona State University found similar evidence that most consumers didn't benefit from the calorie information. Those who did, it found, were the most affluent and educated consumers -- consumers who knew how many calories they were supposed to consume each day and were motivated to stay within that number.

This latest study suggests that, until all consumers have a better understanding of calories and have the motivation to eat a healthier diet, they'll probably ignore the soon-to-be-mandated calorie information.