Current Events in October 2019

The United Parcel Service (UPS) says it is the first delivery company to get full Federal Aviation Administration (FAA) certification to operate a fleet of drone aircraft for package delivery. 

The company said it will start with an expansion of its current drone delivery service supporting hospital campuses around the country. Moving forward, UPS Flight Forward plans to transport a variety of items for customers in many industries, regularly flying drones beyond the operators’ line of sight.

Wasting no time, UPS Flight Forward launched a drone delivery flight immediately upon receiving the certification, making a delivery to WakeMed’s hospital campus in Raleigh, N.C. The delivery, employing a Matternet M2 quadcopter, was a first in the U.S. for a regular revenue-generating delivery.

UPS says drone delivery is especially important in healthcare venues since reducing transit time can improve efficiency and help healthcare professionals serve their patients better. The company sees this as a growth area for drone deliveries.

‘History in the making’

“This is history in the making, and we aren’t done yet,” said David Abney, UPS’ CEO. “Our technology is opening doors for UPS and solving problems in unique ways for our customers. We will soon announce other steps to build out our infrastructure, expand services for healthcare customers and put drones to new uses in the future.”

UPS says the FAA’s Part 135 Standard certification has no limits on the size or scope of operations. So far, UPS says it is the only delivery company to attain it.

Amazon has made noises about using drones to make some of its deliveries and Uber Eats recently announced that it will test drone delivery in high-density urban areas. For the initial phase of Uber’s food-delivery-by-drone test, Uber has been working with McDonald’s. The company plans to work with other partners before the end of the year.

Consumer acceptance an open question

How drone deliveries go over with consumers may be an open question that won’t be answered until delivery companies have been doing it for a while. A 2016 survey found that most consumers were skeptical but were willing to keep an open mind until they see how it works in real-world applications.

UPS says it has plenty of experience in drone deliveries and has collaborated with government regulators responsible for establishing rules for safe drone operations in the U.S. The company says a UPS senior executive has served since 2017 as one of a select group of corporate advisors on the FAA’s drone advisory committee.

Consider Bardwell Farm of West Pawlet, Vt., is recalling Dorset, Slyboro and Experience cheeses.

The products may be contaminated with Listeria monocytogenes.

No illnesses have been reported to date.

The following items, sold in California, Massachusetts, New York, Texas and Vermont, are being recalled:

Slyboro

• Unit Size: 2 pound wheel
• Comments: 
  • Units per case: 2
  • Case dimensions: 12”x 6”x 4”
  • Gross case weight: 4 lb
  • Pallet boxes per layer (TI): 24
  • Pallet number of tiers (HI): 12
  • Cases per pallet: 288
• Product Code: All in your possession
• Product Dates: 4/28/2019 until present

Dorset

• Unit Size: 2.5 pound wheel
• Comments: 
  • Units per case: 4
  • Case dimensions: 8”x 8”x10”
  • Gross case weight: 10 lb
  • Pallet boxes per layer (TI): 30
  • Pallet number of tiers (HI): 8
  • Cases per pallet: 240
• Product Code: All in your possession
• Product Dates: 4/28/2019 until present

Experience

• Unit Size: Three quarters pound square
• Comments: 
  • Units per case: 8
  • Case dimensions: 12”x 6”x 4”
  • Gross case weight: 4 lb
  • Pallet boxes per layer (TI): 24
  • Pallet number of tiers (HI): 12
  • Cases per pallet: 288
• Product Code: All in your possession
• Product Dates: 4/28/2019 until present

What to do

Customers who purchased the recalled products should return them to the place of purchase for a full refund.

Consumers with questions may contact the company at (802) 645-9928

General Motors is recalling 301 model year 2019-2020 Chevrolet Equinox all-wheel drive vehicles.

The fuel tanks may have been manufactured with an improperly sealed seam, possibly allowing fuel to leak along the seam near the fuel inlet.

A fuel leak in the presence of the ignition source can pose the risk of a fire.

What to do

GM will notify owners, and dealers will replace the fuel tank, free of charge.

The manufacturer has not yet provided a notification schedule.

Owners may contact GM customer service at (586) 596-1733. GM's number for this recall is N192271870.

Fisher Packing Company of Redkey, Ind., is recalling approximately 744 pounds of ready-to-eat (RTE) ham and bacon.

The products may be contaminated with Listeria monocytogenes.

There are no confirmed reports of adverse reactions due to consumption of these products.

The the following RTE products, packaged on August 27, 2019, are being recalled:

• Vacuum-sealed packages of various weights containing “FISHER MEATS OLD FASHION SMOKED HAM” with a lot code of 19239 on the label.
• Vacuum-sealed packages of various weights of “FISHER MEATS SMOKED HAM SHANKS WITH NATURAL JUICES” with a lot code of 19239 on the label.
• Vacuum-sealed packages of various weights of “FISHER MEATS CANADIAN BACON” with a freeze by date of 11/25/19 and a lot code of 19239 on the label.

The recalled products, bearing establishment number “74SEIN” inside the USDA mark of inspection, were shipped to retail locations in Indiana.

What to do

Customers who purchased the recalled products should not consume them, but discard or return them to the place of purchase.

Consumers with questions regarding the recall may contact the company at (260) 726-7355 or (765) 282-1609.

Billionaire businessman Mark Cuban, a cast member on the hit TV show “Shark Tank,” has advised young people that the best investment they can make is paying off their credit card balances.

Since the average interest rate on a credit card is around 16 percent, Cuban asks “where else can you get a guaranteed 16 percent return on your money?”

A fin-tech home equity lender recently put a figure on how much homeowners are spending on high-interest loans such as credit cards and personal loans. Figure Technologies puts the number at around $100 billion, suggesting homeowners could save a lot of money by tapping the equity in their homes. That works out to about $6,225 per homeowner.

"Currently, borrowers are paying the highest interest on credit card balances of any time in the last 24 years," said John Sweeney, head of Wealth and Asset Management at Figure. "Refinancing expensive debt using home equity may be the easiest way for a homeowner to save thousands of dollars."

Note of caution

Experts at Bankrate say that paying off high-interest debt with a home equity loan can be a prudent thing to do, but they add a note of caution. If you use a home equity line to pay your credit card balance down to zero, make sure you don’t go back into debt on that credit card.

Talk to a non-profit credit counselor if you need help putting together a money-management plan. If you had been paying $600 a month on your credit card bill, apply that same amount to the home equity line each month. Instead of 15 percent, the interest rate is likely to be around 5 percent, meaning the balance will go down a lot faster.

Experts say it’s never a good idea to tap your home’s equity to pay for an expensive vacation or to finance a luxury item that will quickly lose value.

Why home equity loans have lower rates

Lenders offer lower interest rates on home equity lines than credit cards because credit cards are unsecured loans and home equity loans, as the name implies, are secured by the equity in your home. Banks often lend money at their prime rate, the rate offered to their best customers.

Lenders usually charge closing costs on home equity lines, just as they do on mortgages. The costs are normally based on the amount of the line.

In Figure’s calculations, homeowners paying 8 percent interest on a home equity line and who have enough home equity to refinance $12,549 in high-interest debt could get out of debt at least two and a half years faster.

An appeals court has ruled that the Federal Communications Commission (FCC) can’t legally ban states from implementing their own net neutrality laws. 

The federal appeals court handling Mozilla’s 2018 case against the FCC over its gutting of net neutrality rules said the agency “lacked the legal authority to categorically abolish all fifty States’ statutorily conferred authority to regulate intrastate communications.” 

However, the court upheld the FCC’s repeal of net neutrality laws. For this reason, FCC Chairman Ajit Pai called the decision a "victory.” 

"Today’s decision is a victory for consumers, broadband deployment, and the free and open Internet," Pai said in a statement. "The court affirmed the FCC’s decision to repeal 1930s utility-style regulation of the Internet imposed by the prior Administration. The court also upheld our robust transparency rule so that consumers can be fully informed about their online options."

Ongoing fight to maintain net neutrality

Mozilla said in a statement that it would continue to fight to “preserve net neutrality as a fundamental digital right.”

"We are encouraged to see the Court free states to enact net neutrality rules that protect consumers,” said Amy Keating, the chief legal officer for Mozilla. “We are considering our next steps in the litigation around the FCC’s 2018 Order, and are grateful to be a part of a broad community pressing for net neutrality protections in courts, states and in Congress."

Lawmakers in several states, including California, have voted to reinstate net neutrality protections at a state level. If maintained, the court’s ruling would preserve the right for those states to keep their own protections and would give other states the right to set their own as well. 

Amazon is in talks to license its Go store technology to movie theaters, airport stores, sports stadiums, and other merchants across the U.S., according to CNBC. 

Sources familiar with the matter told the outlet that Amazon has proposed potential partnerships with several companies, including OTG's CIBO Express and Cineworld's Regal Theatres. Amazon’s grab-and-go cashierless technology could also be added to concession stands at MLB stadiums. 

“The idea is to start installing the technology working for customers in the first quarter of 2020 and have hundreds of these stores working by the end of 2020, two of the people said,” CNBC reported. “One person said Amazon hopes to have the upgrade process take just two weeks.”

Growing its retail presence 

Amazon currently has 16 of its cashierless Go stores in operation. At the stores, customers can pick up items such as ready-made snacks, lunches, drinks, frozen dinners, and basic groceries and walk out of the store without stopping to pay a cashier. 

The company is able to fulfill its “no lines, no checkouts, no registers” promise by relying on sensors and cameras placed throughout the store. These allow Amazon to track what customers take out of the store and charge customers’ credit cards accordingly.

Late last year, it was reported that the e-commerce giant had spoken to officials at several major U.S. airports regarding the possibility of putting Go stores in terminals. Few additional details were reported at the time. 

Now, CNBC’s sources say Amazon has approached several other companies about the possibility of using its cashierless technology. The company reportedly views partnerships with other merchants as a way to expand its retail presence rapidly. 

Amazon already owns Whole Foods, physical bookstores, and Amazon 4-star stores, where it sells items with positive customer reviews. 

While Amazon is eager to establish Go technology partnerships, opposition to the idea could come from those who argue that cashless operations are discriminatory to certain groups of people. Lawmakers in multiple cities have already pushed to ban cashless stores on the basis that they don’t provide equitable access to groups such as young people, victims of identity theft, immigrants, and the homeless.

If you’ve flown anywhere in the last few years, you’ve no doubt felt the pinch that today’s shrinking airline seats are causing. A congressional subcommittee has apparently felt the same pinch and is trying to things moving in the right direction once and for all.

In 2018, a bill -- Seat Egress in Air Travel (SEAT) -- was passed, giving the Federal Aviation Administration (FAA) the power to establish minimums on airplane seat width and pitch (the space between a point on one seat and the same point on the seat in front of it). The objective of the bill was to ensure that airplanes can be safely evacuated in the statutorily mandated 90 seconds. 

To the dismay of traveling consumers, the FAA must’ve been stuck in its own seat and never moved forward with its newfound power. So, late last week, a frustrated House Transportation and Infrastructure Committee’s Subcommittee on Aviation called in FAA Deputy Administrator Daniel Elwell to ask why the SEAT Act has laid dormant. 

“I am concerned that the FAA has not fully complied with the provisions of my SEAT Act almost a year after it was signed into law,” complained Rep. Steve Cohen (D-TN), the original author of the bill.

“Americans are getting bigger so seat size is important but it’s got to be looked at in the context of safety,” Elwell admitted at the hearing.

Elwell clearly did his homework. The average American has gained some 30-odd pounds since 1960. At the same time, airline seats have been shrinking -- as much as 3.5 inches over the last 30 years.

Putting it to the test

With people and seat dimension stats in hand, the FAA is finally putting the situation under a microscope with a 12-day battery of tests. 

Slated for November at the Civil Aerospace Medical Institute in Oklahoma City, 720 demographically representative volunteers will be evaluated on critical and stressful moves they would likely encounter if an aircraft cabin had to be evacuated: flying with a lap child, being disabled, and situations where the lights are off and/or one or more of the exits is blocked.

Elwell’s preaching to the congressional choir was not only perfect timing but met warmly, by other regulators. 

“Beside whether I cram my backside into the seat, getting out would be a really useful thing,” said Rep. Paul Mitchell (R-MI).

“It is past time for the FAA to prioritize safe evacuation of airplanes in emergencies,” agreed Cohen. “I look forward to seeing the SEAT Act’s safety provisions implemented as soon as possible.”

Medical debt is the number one obstacle preventing Americans from buying or renting a home, according to a new survey by Zillow. 

The real estate listings website found that more than two-thirds of renters have some type of debt, whether it’s via credit cards, student loans, or medical bills. 

Nearly 40 percent of the 13,000 adults polled by Zillow said they had been rejected for a mortgage or home rental because of medical debt. Among Millennials, medical debt was cited by 1 in 5 as an obstacle to home ownership. 

Busting budgets

Compared to other kinds of debt, medical debt has “a unique capacity to bust budgets,” according to Zillow. 

“When we focus on low unemployment and the strong economy, we often forget that in many ways the rising costs of life can erode most of those gains,” Skylar Olsen, Zillow’s director of economic research, said in a press release. “Health care has never been more expensive. Getting a college degree, a path more likely to lead to economic success for those able to get through it, has never been more expensive. U.S. housing values and rents have never been more expensive.”

Zillow’s fourth-annual Consumer Housing Trends report also found that roughly two-thirds of renters and 44 percent of homeowners with medical debt were unable to cover an unforeseen $1,000 expense.

“While incomes, both at the high and low end, are growing, the pace hasn’t kept up with those crucial life expenses. That’s [a] fact, and Americans are feeling it,” Olson said. 

More and more research is warning consumers about their red meat consumption, but a new study conducted by researchers from the University of Nottingham found that completely eliminating the food group could be taking things too far. 

The study found that reducing red meat consumption by about half could be just what consumers need to stay on track with their health. 

“With a high saturated fatty acid content, red and processed meat has been linked to heart disease, and other chronic diseases, particularly colon cancer,” said researcher Andrew Salter. “The results of the study presented showed that, even in relatively young and healthy individuals, making relatively small changes to [red and processed meat] intake induced significant changes in LDL cholesterol, which, if maintained over a period of time could potentially reduce the risk of developing heart disease.” 

Finding a healthy balance

Over the course of 12 weeks, the researchers had nearly 50 participants adjust their red meat intake to determine how doing so would affect their health. 

During that time, the participants swapped food items like beef, veal, pork, and lamb with traditionally healthier items -- like fish or leaner meat options. The team hoped that participants would be avoiding many of the health concerns that are associated with a higher red meat intake, such as heart disease, heart attack, or higher cholesterol. 

Throughout the study, participants had their blood taken to assess their vitals. They also kept a log of everything they ate so that the researchers could better determine how their diets were affecting their physical health. 

None of the participants cut out red meat completely, but the researchers found that just limiting their intake was beneficial in several ways. All participants had lower LDL cholesterol, and they also had lower white and red blood cell counts by the end of the study. 

The research team hopes that consumers understand the benefits that come with eating less red meat and how important it is to maintain a balanced diet in an effort to stay healthy. 

“Meat is a rich source of the micronutrients (vitamins and minerals) required for the manufacture of blood cells, and although it is possible to obtain these nutrients in plant-based diets, our results suggest that those reducing their meat intake need to ensure that their new diet contains a wide variety of fruit, vegetables, pulses, and whole grains to provide those nutrients,” said researcher Dr. Liz Simpson. 

A survey of parents has found a rather large disconnect between how parents view a child’s allowance and what the child actually does with it.

The survey, conducted by The Harris Poll for the American Institute of Certified Public Accountants (AICPA), found 75 percent of parents say the most important reason to give their children an allowance is to teach good money management skills.

However, only 3 percent of parents said their children primarily save the money they get. The other 97 percent say their children usually spend their allowance.

“One of the best gifts we can give our children is a solid education on how to manage their money,” said Gregory Anton, chair of the AICPA’s National CPA Financial Literacy Commission. “Simply handing money over to a child without guidance is a missed opportunity. By making an allowance a teachable moment, parents will help instill money management skills in their child at a young age that will help prepare them for the important financial decisions they’ll have to make when they’re older.”

Talking the talk

When it comes to money, people tend to talk the talk even if they don’t always walk the walk. A study conducted by research firm Ipsos in partnership with COUNTRY Financial and published last month showed consumers overwhelmingly support the idea of financial literacy, with 86 percent saying financial literacy education should be mandatory. 

But the AICPA survey suggests those lessons aren’t being taught at home. The survey shows the average child’s allowance is $30 a week, enough to sock away several hundred dollars a year. However, the survey found that children’s allowance money is rarely saved. 

Forty-five percent of parents said their children spend most of their allowance going places with friends, while 37 percent say most of the allowance goes to purchase digital devices and downloads. A third of respondents say their children use their allowance to purchase toys.

At the same time, 86 percent of parents say they don’t simply hand over cash to their kids; instead, they say that their children are required to earn it by performing a set of chores.

AICPA says a child’s allowance can be an important teaching tool, but parents have to use it. The group suggests starting the allowance early, setting clear rules, using the allowance to talk about budgeting, and discussing how impulse purchases can impact savings goals.

A new study conducted by researchers from Cardiff University found that the tone of voice that mothers use when communicating with their teens could impact how likely or well they respond.

The study found that teens feel distanced themselves from their mothers when their tones carried too much pressure or control. On the other hand, they responded better when they felt supported and encouraged. 

“If parents want conversations with their teens to have the most benefit, it’s important to use supportive tones of voice,” said researcher Dr. Netta Weinstein. “It’s easy for parents to forget, especially if they are feeling stressed, tired, or pressured themselves.” 

Support is key

The researchers conducted an experiment involving over 1,000 teens between the ages of 14 and 15 to determine how their parents’ tone of voice affected their relationship and how they responded in certain scenarios. 

The participants were divided into three groups, at which point they’d hear statements in one of three ways from a mother: a neutral tone, a controlling tone, or a supportive tone. While the mothers involved in the study were completely random, the participants reflected on how hearing each of the statements from their own mothers would make them feel. 

Regardless of what the mothers were saying, teens responded most to how the statement was delivered. The researchers noted that teens were more likely to act positively towards their parents if they heard a more supportive, encouraging tone, as opposed to one that felt more commanding and controlling. 

“Adolescents likely feel more cared about and happier, and as a result they try harder at school, when parents and teachers speak in supportive rather than pressuring tones of voice,” said Dr. Weinstein. 

Moving forward, the researchers hope that consumers -- especially those with teens at home -- understand how much power lies in their tone of voice and realize how important it is to make their growing kids feel secure. 

After having to inject billions of dollars into the short term money market -- the so-called repo market -- the Federal Reserve may be moving toward a more permanent solution to stabilize that capital markets.

In an interview with The New York Times, John Williams, president of the New York Federal Reserve Bank, said the Fed might contemplate an ongoing program for overnight repos, to prevent shortfalls in the future.

Throughout September, the New York Fed has stepped in to pump more cash into the overnight market to keep the federal funds rate at the target range of 1.75 percent to 2 percent. Because of a shortage of money from major banks, the rate shot up to 10 percent earlier this month. That not only posed a threat to the bond market but to the overall banking system.

More troubling perhaps, it was the first time this issue had arisen since 2008, just before the financial crisis.

The need for the first injection of capital was blamed on a one-off situation -- major corporations needing to make quarterly tax payments. Since then, however, the Fed had acted again to put more cash into the system.

Permanent program

Williams says the Fed might consider putting in place a permanent program for overnight repurchase agreements, or repos, to avoid such risks in the future. 

"We are seeing that liquidity doesn't move around as easily in these situations, which means that if we want interest rates to stay kind of on their own in a narrow range, that we have to make sure we have that amount of reserves to support that," Williams told The Times.

What’s concerning is the fact that banks have experienced a shortage of money for short-term, overnight loans. After the financial reforms enacted after the financial crisis banks are required to maintain larger cash reserves.

But some analysts have said banks have the option of keeping those reserves invested with the Federal Reserve earning interest and have found that to be a better business than loaning it out.

For the Fed, the issue is one of control. After setting the target federal funds rate at between 1.75 percent and 2 percent it can’t afford to have the market send that rate sharply higher.

The policy-making branch of the Fed -- the Open Market Committee -- set the federal funds rate at between 1.75 percent and 2 percent in late September and has since been forced to take extraordinary steps to keep it there.

BMW of North America is recalling seven model year 2020 Toyota Supras.

The driver's seat belt guide loop mount may have been improperly welded.

In the event of a crash, the mount could become damaged and the seat belt may not properly restrain the driver, increasing the risk of injury.

What to do

Owners have been notified, and Toyota dealers will inspect the seat belt guide loop mount. If the mount is defective, the vehicle will be replaced free of charge.

The recall began September 13, 2019.

Owners may contact Toyota at (888) 270-9371. Toyota's number for this recall is K0R.