Current Events in August 2018

Today, Amazon publicly launched its children’s book subscription service “Prime Book Box.” The service was initially introduced in May, but at the time it was only available to customers with an invitation.

For $22.99 per box, Prime members can receive either four board books for children two years old and younger or two picture books or novels for older children every one, two, or three months (with the option to skip a box at any time).

The selection of books that Prime members receive are curated by Amazon Books editors, who handpick books for the selected age range. The books range from classics to “hidden gems,” and are tailored to the reader’s age range of “Baby-2,” “3-5,” “6-8,” or “9-12.”

Amazon says it even makes sure not to send titles that the subscriber already has at home that were purchased through Amazon. Parents can also preview the selection of books and swap out certain books for others by logging on to the Book Box site.

Up to 35 percent off list price

“As a mom who’s spent over 20 years reading and reviewing children’s books, the best part of my job is sharing a love of reading with kids and their families,” said Seira Wilson, Senior Editor, Amazon Books, in a statement.

“Over the past few months, it’s been both exciting and rewarding to hear that Prime Book Box is encouraging kids to spend more time reading. Now that Prime Book Box is available to all U.S. Prime members, I hope we can inspire even more children to discover a love of reading that will last a lifetime.”

The $23 price tag for the service is about 35 percent less than the price of buying children’s books at normal price, says Amazon.

The service is available to all Prime members in the U.S. starting today.

Being admitted to a private hospital room, rather than sharing a room with another patient, leads to a better outcome, according to a large study published in PLOS ONE.

Researchers from the University of North Texas Health Science Center studied the discharge records of more than one million patients at 335 hospitals in Texas. Patients who were admitted to double-occupancy rooms suffered 64 percent more central line infections than patients who stayed in private rooms.

Of course, other factors may influence who gets these infections and who doesn't, but after adjusting for specific risk factors, patients who shared rooms still had a 21 percent greater chance of central line infections.

A central line infection is caused by germs from venous catheters. They're responsible for about 5,000 to 10,000 deaths annually.

Risk of death twice as high

The researchers also discovered the hospitals that consisted mostly of private rooms had a third fewer of these dangerous infections than hospitals made up of mostly double-occupancy patient rooms. In hospitals with mostly double-occupancy rooms, the risk of dying of these infections was about twice as high.

As you might expect, the cost of a private room is greater than a semi-private room, which are shared with another patient. In recent years, new hospitals have embraced the private room model, finding it financially more advantageous.

Costs also vary by the type of hospital, though the results are somewhat surprising. As of 2013, Kaiser State Health Facts determined that the average daily rate in non-profit hospitals was $2,289; however, it was only $1,791 at for-profit hospitals.

Demographic factors

While the choice of hospital might influence whether a patient is admitted to a private room or not, the Texas researchers determined that demographic factors also play a role.

African-Americans were 63 percent more likely to be in a double-occupancy hospital room. Hispanics were 44 percent more likely. However, economics might not fully explain the disparity since both groups tend to be admitted to older hospitals, where double-occupancy rooms are the norm.

Study author Liam O'Neill says the conversation should not be about how much a private room costs versus a double-occupancy room. Rather, he says it should be about how many lives can be saved.

Fear of having credit card information stolen by a gas pump “skimmer” has forced many consumers to change the way they pay for gasoline.

A survey by CompareCards found 43 percent of consumers have altered their gas-purchasing habits to avoid being ripped off.

For the last three decades consumers have been able to swipe their credit or debit cards at the pump to pay for a gasoline purchase. Before that, everyone went inside and handed either cash or their payment card to a human being.

But it didn't take clever thieves long to figure out how to exploit this trend. They devised devices that fit over the top of the gas pumps' card readers to intercept the credit card information.

With the information, the thieve could sell a copy of the card or make online purchases. The victim might not know for weeks.

Growing number of victims

The CompareCards survey found that 15 percent of consumers who had purchased gas in the last month had been the victim of a skimming fraud. Because of that, 20 percent of these consumers say they now go inside the gas station to pay for their fuel.

Most retail locations now accept chip cards, which are more secure. These cards are inserted instead of swiped. Gas pumps, however, still read the card data off the magnetic strip on the back of the card.

“One huge driver of this phenomenon is the fact that gas station pumps don’t need to be converted to accept EMV cards until October 2020,” said Matt Schulz, credit card analyst for CompareCards. “That makes those pumps low-hanging fruit for fraudsters.”

What to do

Consumers can protect themselves by taking a number of steps, short of paying inside. Using the same local gas station for every fill-up helps, since you become familiar with what the card reader in the gas pump looks like. Any change or alteration should set off alarm bells.

It's also advisable to pay at the pump with a credit card rather than a debit card. If credit card information is stolen, liability can be limited to $50. A debit card, however, gives a thief access to your bank account.

The Federal Trade Commission (FTC) says skimmers are now harder to detect because technology improvements have made them smaller. The agency says some stations now place a security seal over the crack where the card reader joins with the rest of the pump.

The placement of seals is voluntary – some stations do it and some don't. But the FTC says if you see that intact seal when you fill up you have a better chance of keeping your payment card information secure.

The Consumer Financial Protection Bureau (CFPB) official in charge of protecting student loan borrowers has resigned, accusing the Trump administration of abandoning efforts to help them.

Seth Frotman, CFPB's student loan ombudsman, wrote a two-page resignation letter obtained by various media outlets. In it, he articulated many of the frustrations felt by the agency's consumer advocates, who have charged the political appointees now running the bureau are actively working against consumers.

Mick Mulvaney, CFPB's acting director, is a long-time critic of the agency he heads, charging it has been unaccountable and taken unjustified actions against businesses. In his letter to Mulvaney, Frotman says he views the CFPB's mission in a different light, believing CFPB is supposed to police those same businesses.

“I had hoped to continue this critical work in partnership with you and your staff by using our authority under the law to stand up for student loan borrowers trapped in a broken system,” Frotman wrote. "Unfortunately, under your leadership, the Bureau has abandoned the very consumers it is tasked by Congress with protecting. Instead, you have used the Bureau to serve the wishes of the most powerful financial companies in America."

Parting shots

In his blistering letter, Frotman accused his soon-to-be former boss of undercutting enforcement of the law by not supporting or pursuing enforcement actions. He also charged the political appointees in the bureau are shielding “bad actors” from scrutiny.

Ashley Harrington, a policy counsel with the Center for Responsible Lending, said Frotman's resignation is bad news for the 44 million student loan borrowers who now owe more than $1.5 trillion.

“Seth Frotman’s departure leaves both a void as well as serious concerns about the future of the agency often termed the consumer cop on the beat,” Harrington said. “Created to ensure American consumers wouldn't be targeted for financial abuse, CFPB actions and priorities under Acting Director Mick Mulvaney represent a systematic departure from helping people to helping businesses that continue to prey upon unsuspecting consumers.”

Frotman's resignation is effective September 1. The CFPB said it has a policy of not commenting on personnel departures but said it wishes all former employees the best of luck in their next jobs.

The Manhattan Toy Company of Minneapolis, Minn., is recalling about 6,000 Pull-Back Speedy Jets sold in the U.S. and Canada.

The rubber tires can separate from the wheels, posing a choking hazard for young children.

The company has received two reports of the rubber tires separating from the wheels. No injuries have been reported.

The Pull-Back Speedy Jet is a wooden toy airplane with a blue painted body, natural wood wings and plastic wheels with black rubber tires. The toy has a pull-back feature that propels the plane forward.

The model number and lot code are printed on the bottom of the plane. The recall includes only those toy planes with lot code 155400 EJ.

The toy planes, manufactured in China, were sold at small independent stores from August 2017, through June 2018, for about $8.

What to do

Consumers should immediately take the recalled toy away from children and return it to the store where purchased or contact Manhattan Toy for a full refund.

Consumers may contact Manhattan Toy Company at (800) 541-1345 from 8 a.m. to 5 p.m. (CT) Monday through Thursday, 8 a.m. to 12 p.m. (CT) on Friday, or online at www.manhattantoy.com and click on “Recall Information” at the bottom of the homepage for more information.

Mercedes-Benz USA (MBUSA) is recalling 9,044 model year 2018 Mercedes-Benz GLE350 4Matics, GLE350s, GLS450 4Matics, GLS550 4matics, GLE43 AMG 4Matics, GLE63 AMG 4Matics, GLE63S AMG 4Matics, and GLS63 AMG 4Matics.

The rear brake caliper pistons may not have been correctly coated, causing gas to become temporarily released into the rear brake hydraulic circuit, reducing braking performance and increase the risk of a crash.

What to do

MBUSA will notify owners, and dealers will bleed the rear axle brake system, free of charge.

The recall is expected to begin in early September 2018.

Owners may contact MBUSA customer service at 1-800-367-6372.

Yamaha Motor Corporation U.S.A., of Cypress, Calif., is recalling about 120 SRVenture DX snowmobiles.

The passenger handgrips can come loose during operation, increasing the risk that a passenger could lose balance and fall, resulting in severe injury.

No incidents or injuries are reported.

This recall involves 2018 model SRVenture DX (SRT1NJ) snowmobiles.

The recalled snowmobiles were sold in a gray and blue color and have a vehicle identification number (VIN) between 4UF8MU107JT000101 and 4UF8MU106JT000364. The model name can be found on the left and right sides of the front cowling.

The vehicle identification number (VIN) and the model name/code are stamped on the frame (tunnel) near the right foot well of the snowmobile.

The snowmobiles, manufactured in the U.S., were sold exclusively at Yamaha snowmobile dealers nationwide from October 2017, through June 2018, for about $14,600.

What to do

Consumers should immediately stop using the recalled snowmobiles and contact a Yamaha snowmobile dealer to schedule a free repair. Yamaha is contacting all registered owners directly.

Consumers may contact Yamaha at (800) 962-7926 anytime or online at www.yamahamotorsports.com and click on the “Product Recalls” tab at the bottom of the page for more information.

North Country Premium Sausage Co., is recalling various North Country Premium brand Bavarian smokies.

The products contain mustard and milk, allergens not declared on the label.

The following products, distributed throughout Ontario, Canada, are being recalled:

What to do

Consumers with questions may contact the company at (807 475-3665 Monday – Saturday from 9 a.m. – 6 p.m., Sunday from 10 a.m. – 5 p.m., or by email at kevin@northcountrymeats.com.

In January, Amazon opened its first cashier-less convenience store -- Amazon Go -- in the company’s hometown of Seattle, Washington. Today, the second Amazon Go store opened its doors.

Seattle residents can now visit the store -- located downtown at 5th and Marion, near the Seattle Central Library -- Monday through Friday from 7AM - 7PM, as Amazon is looking to cater to the office worker crowd. The new store is 1,450 square feet, which is slightly smaller than the original store’s 1,800 square feet. Despite the size difference, customers are expected to gain almost an identical experience at both stores.

The store will feature a variety of ready-to-eat meal and snack options, as well as Amazon’s Meal Kits. Amazon chefs and local eateries and bakeries will be making all the food options, and customers can expect locally made chocolates, chips, granola bars, and candy, as well as lunch options like wraps, sandwiches, and salads. Amazon’s Meal Kits offer customers all of the ingredients needed to prepare a meal for two in 30 minutes.

This second Amazon Go store does stock less than the flagship store, which offers customers beer, wine, grocery items, and Whole Foods’ 365 Everyday Value brand products.

According to the Seattle Times -- which toured the facility prior to its grand opening -- there is no kitchen on premises. All of the prepared food will come from Amazon’s kitchen, which is also located in Seattle.

Amazon Go technology

The second Amazon Go store is set up in a nearly identical fashion as the original store.

In an effort to continually advance technology, Amazon’s Go stores have no lines and no cashiers -- and customers don’t have to wait to checkout. Consumers go through the aisles picking up what they need, and simply leave the store when they’re done.

Amazon has cameras and sensors strategically placed throughout the store to track what customers are taking home with them, and their credit cards -- which are stored on file through the Amazon Go app -- are charged accordingly. Customers must have the app downloaded to their smartphones, as they are required to scan a unique QR code at the store’s exit before leaving.

“Our Just Walk Out technology automatically detects when products are taken from or return to the shelves and keeps track of them in a virtual cart,” Amazon said. “When you’re done shopping, you can just leave the store. Shortly after, we’ll charge your card and send you a receipt.”

The future of Amazon Go

Not long after Amazon opened its first Amazon Go store back in January, reports indicated that the company was preparing to open an additional six storefronts expected this year. At the time, many expected the second store to open in Los Angeles.

Since those early reports, Amazon has yet to publicly discuss its plans for the future. Back in May, Amazon posted job listings that led many to believe the next stores would be opening in Chicago and San Francisco, but Amazon only confirmed that plans were in the works -- not what the plans are.

Starting today, JetBlue passengers will have to pay $30 to check their first bag and $40 to check their second.

Previously, the airline charged $25 and $35 for first and second bag checks, which is what other major airlines also charge. Travelers will have to pay $150 to check a third bag, up from $100.

The price increase comes amid rising airline fuel prices. To help offset rising fuel costs, several airlines have announced efforts to boost revenue by paring down expenses.

Last week, American Airlines announced that it’s eliminating some of its money-losing flights to China. Southwest Airlines announced that it’s increasing the price of its EarlyBird boarding fee from a flat $15 to $15, $20, or $25 per one-way route starting on August 29, 2018. United Airlines will soon start charging for certain economy seat assignments.

On a conference call with reporters in July, JetBlue executives announced that the airline intends to boost “ancillary revenue” through a series of initiatives. JetBlue said it is trying to cut costs by up to $300 million a year by 2020. Earlier this summer, it underwent a company restructuring by “eliminating a number of positions” through layoffs, buyouts, and attrition.

JetBlue’s new fees for checked baggage are listed on its website.

Just a few weeks after Tesla CEO Elon Musk announced his intent to make Tesla a private company, he’s backing off the plan.

On Friday, Musk wrote on the company’s website that he had informed Tesla’s board on Thursday that he believes “the better path is for Tesla to remain public.” He said he came to this conclusion following discussions with shareholders and advisors from Silver Lake, Goldman Sachs, and Morgan Stanley.

“Given the feedback I’ve received, it’s apparent that most of Tesla’s existing shareholders believe we are better off as a public company,” he wrote. “Although the majority of shareholders I spoke to said they would remain with Tesla if we went private, the sentiment, in a nutshell, was ‘please don’t do this’.”

Tweets drew scrutiny from the SEC

On August 7, Musk tweeted that he was considering taking the company private at $420 a share and that he had even “secured” the funding. At the time, the CEO contended that taking Tesla private was “the best path forward” because it would take away some of the distractions that come as a result of “wild swings in our stock price.”

However, Musk was unable to provide solid evidence that he had secured the funding for the transaction, which, at $70 billion, would have been the largest corporate buyout in history. He said that he had been in talks with Saudi Arabia’s sovereign-wealth fund about a deal, but former SEC Chairman Harvey Pitt pointed out that discussions are not the same as having a legally enforceable agreement.

Now, Musk says he’s abandoning the idea of taking the company private.

“Time-consuming and distracting”

“I knew the process of going private would be challenging, but it’s clear that it would be even more time-consuming and distracting than initially anticipated,” he wrote. He said the fact that some shareholders would be forced to cash out was also a factor in his decision.

“Couldn’t make it happen, even through expert fiduciary SPV, without creating exotic trust structure that would prob not be accepted by regulators,” he said on Twitter. “Current rules have good intentions, but make wealth creation harder for small investors.”

In a statement, six of Tesla’s board members confirmed that Musk had informed them of his decision and that the board and the entire company “remain focused on ensuring Tesla’s operational success” and “fully support” Musk.

“Moving forward, we will continue to focus on what matters most: building products that people love and that make a difference to the shared future of life on Earth,” Musk wrote on the company’s website. “We’ve shown that we can make great sustainable energy products, and we now need to show that we can be sustainably profitable.”

Financial challenges facing U.S. millennials have been well documented, and that may be why new government research shows this generation is far from frivolous when it comes to spending.

The Bureau of Labor Statistics (BLS) report compares the spending habits of millennials to baby boomers when they were the same age. It finds today's millennials spend less on food and entertainment and significantly more on health care and education than boomers did.

It should be noted that education and health care both cost a lot more than they did 30 years ago. So it may be that frugality has been forced on this generation, which came of age just as the financial crisis hit.

In fact, the BLS spending survey shows student loan debt per household more than tripled between 1989 and 2013. That leaves less for dining out and entertainment.

Housing costs are also eating into millennial budgets. Interestingly, millennials and young boomers spend roughly the same for housing, but boomers were much more likely to have purchased homes by the time they were in their late 20s and early 30s than their younger counterparts.

More on rent and less on mortgages

Compared to boomers in their younger years, millennials spend nearly 49 percent more on rented homes and 11 percent less on mortgages. That coincides with previous research that shows millennials are purchasing homes at a much lower rate than previous generations.

A report by the Urban Institute shows millennials' homeownership rate is around 37 percent, compared to baby boomers' 45 percent rate when they were in that age group.

Previous research has also shown that millennials struggle to save money. Earlier this year the National Institute on Retirement Security (NIRS) found that about 66 percent of people between the ages of 21 and 32 haven’t even put the first dollar toward their retirement fund. The report is based on Census data collected in 2014.

The BLS research suggests education spending is a big reason for that. Millennials spend 145 percent more on education that young boomers did and 73 percent more on health care, That doesn't leave a lot for other purchases young boomers were inclined to make, such as clothing, books, alcohol, and tobacco.

Uber’s CEO Dara Khosrowshahi recently shared the company’s plans to place more of its focus on electric bikes and scooters -- especially for both shorter and inner-city rides.

Khosrowshahi explained that the decision would be most profitable in urban areas, as “it is very inefficient for a one-ton of hulk of metal to take one person 10 blocks” during rush hour.

“We’re able to shape behavior in a way that’s a win for the user,” Khosrowshahi said. “It’s a win for the city.”

Despite the positives, Khosrowshahi did note that the company is likely to take a financial hit. The lower fares for e-bikes and scooters, coupled with the $5.4 billion in losses the company accumulated over the last year, means that the new venture is likely to be a financial burden in the short-term.

“Short-term, financially, maybe it’s not a win for us,” Khosrowshahi explained, “but strategically long term we think that is exactly where we want to head.”

Uber drivers are also likely to be affected by this decision at a time when many say they are already experiencing low wages. Khosrowshahi noted that down the road, drivers are more likely to be requested for longer rides that result in bigger paychecks on clearer roads.

“When I’ve spoken to our driver partners about it, the first impression was, why are you bringing in a bike to compete against me?” Khosrowshahi said. “The second impression after the conversation is, oh, I get a longer ride where I can make more money? Sign me up.”

Uber’s dockless bike history

Back in April, Uber announced its introduction to the bike-sharing business with the acquisition of Jump -- a New York start-up with an all-electric fleet of dockless bikes.

“Today, we help tens of millions of people get a ride at the tap of a button,” Khosrowshahi said. “But our ultimate goal is one we share with cities around the world: making it easier to live without owning a personal car.”

Just days after the acquisition of Jump, Uber took another step in becoming the one-stop shop for mobility on-demand services. The company announced it would be integrating electric bike rental, public transit, and car sharing into its mobile app.

“Having a greater variety of transportation modes at your fingertips helps make it increasingly easy to live without a car,” Khosrowshahi said. “That’s why we want to provide alternatives to personal car ownership by bringing together multiple modes of transportation right in our app.”

With Uber Rent, users will be able to rent cars from private car owners -- who earn a 60 percent commission on each rental. The service was initially rolled out in San Francisco.

Users are also able to buy public bus and rail tickets through the Uber app, and Masabi public transportation tickets made that service available in Boston, London, Athens, Las Vegas, and Los Angeles.

Lastly, Uber Bike allows users to rent dockless electric bikes. At $2 for the first half-hour, and 7¢ per minute afterwards, the bikes were first available in Washington D.C. and San Francisco.

Taking a low-dose aspirin every day may not help cut the risk for heart attack or stroke in people who don’t yet have heart disease or a blood vessel-related problem, according to a new study published in The Lancet.

The study’s lead author, J. Michael Gaziano of the Brigham and Women's Hospital in Boston, said that while the benefit of taking aspirin for preventing second events in patients with previous heart attack or stroke is established, the jury is still out on whether aspirin can help prevent first heart attacks or strokes.

"The decision on whether to use aspirin for protection against cardiovascular disease should be made in consultation with a doctor, considering all the potential risks and benefits,” Professor Gaziano said.

Some of the recommendations against taking aspirin daily cite the increased risk of major bleeding, the study authors pointed out. 

“There’s been a lot of uncertainty among doctors around the world about prescribing aspirin” beyond those for whom it’s now recommended, said one study leader, Dr. Jane Armitage of the University of Oxford in England. “If you’re healthy, it’s probably not worth taking it.”  

Study details

For the study, investigators gave aspirin or placebo pills to 12,546 people who were thought to have a moderate risk of suffering a heart attack or stroke within a decade due to other health issues.

A follow-up with participants five years later showed that 4 percent of each group had suffered a heart problem. This was fewer than the researchers had expected, which suggested that these participants were at low risk, not moderate.

Gaziano said these individuals were also taking other medicines to lower blood pressure and cholesterol, which may have reduced their heart risk so much that aspirin likely wouldn’t help more.

"Aspirin did not reduce the occurrence of major cardiovascular events in this study," Gaziano said. "However, there were fewer events than expected, suggesting that this was in fact a low risk population. This may have been because some participants were taking medications to lower blood pressure and lipids, which protected them from disease."

Among participants who took aspirin, one percent had stomach or intestinal bleeding -- twice as many as those who were taking placebo pills. The study found that aspirin users also had more nosebleeds, indigestion, reflux, or belly pain.

While consumer debt is increasing, consumers appear to be managing it pretty well.

The latest data compiled by S&P Dow Jones Indices and Experian show the composite consumer default rate in the first half of the year was largely unchanged from a year ago. The composite measures defaults on credit cards, mortgages and car payments.

Consumers did a better job of paying their credit card bills but fell behind slightly on car payments. Mortgage defaults were unchanged from the first half of 2017.

Early in the year it was a different story. Credit card default rates increased in each of the first four months of the year before beginning to fall in May and declining in each of the next two months.

The composite default rate, which measures all consumer debt, has gradually declined in 2018 and is now nine basis points lower than it was at the beginning of the year.

David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices, has identified some conflicting trends behind the continued stability in consumer credit default rates.

Conflicting trends

"Default rates for mortgages and automobile loans have varied very little in the last five years,” he said. “Defaults on bank cards are more volatile. Despite continued growth of outstanding debt across all three categories which is outpacing wage gain, debt service ratios – the proportion of income needed to cover monthly borrowing costs – are flat to down.”

Blitzer says there may be a simple explanation for that. Since the financial crisis of 2008, most of the loans for cars and homes have gone to the consumers with strong credit histories.

At the same time, credit card default rates have been more volatile. He attributes some of that to higher gasoline costs, which often end up on credit cards. At the same time, consumers are generally spending more.

"Consumer sentiment remains quite high but is not rising, and sales of both new and existing homes are roughly flat in recent months,” Blitzer said. “These two trends suggest slower borrowing growth and possibly some stability in bank card default rates."

But a report by LendingTree, released in May, was more cautionary. It predicted that U.S. consumers will owe a total of $4 trillion by the end of 2018. Consumers now owe 26 percent of their income on debt, up from 22 percent eight years ago.

Confer Plastics of North Tonawanda, N.Y., is recalling about 102,100 curve in-pool step systems sold in the U.S. and Canada.

Children’s limbs can become entrapped in the side openings of the step systems, posing a drowning hazard.

The firm has received two reports of children’s arms becoming entrapped in the side panel openings of the step systems, including reports of minor abrasions. No drownings have been reported.

This recall involves three models of in-pool step systems with curved steps for in-ground and above-ground pools. The steps and handrails are made of gray and beige plastic.

The manufacturing/date code is located on the side walls of each step.

The pool step systems, manufactured in the U.S., were sold at Champion Pool Distributors, Cinderella, EMSCO Distributors, Leisure Living, Leslie's, Superior Pool Products, Water Warehouse stores and other stores nationwide and online at www.conferplastics.com from January 2013, through July 2018, for between $200 and $400.

What to do

Consumers should immediately stop using the recalled pool step systems and contact Confer Plastics for a free repair kit. The repair kit will include additional panels to prevent entrapment and installation instructions.

Consumers may contact Confer Plastics at (800) 635-3213 from 9 a.m. to 5 p.m. (ET) Monday through Friday or online at www.conferplastics.com and click on “Curve Recall” at the top of the page for more information.