Marketplace Morning Report
Start your day with an up-to-the-minute report on the world of business and finance with host David Brancaccio.
When the markets closed yesterday, a barrel of U.S.crude oil was trading at $81.84. That's the lowest it's been in years, and it's bringing down the cost of gasoline. That may be good news for consumers in this country, but there is a growing debate among countries that export oil about whether prices have fallen too far, too fast. One of those countries, Venezuela, has called for an emergency meeting next month. More on that. And Medicare's open-enrollment period starts today, and some beneficiaries will notice a few changes to the program. As baby boomers retire, Medicare is being pulled in new directions. Plus, the U.S. is the biggest importer of Mexican avocados. Every year, Americans eat 1.7 billion pounds of them. But Mexico is eyeing an even bigger market: Asia.
A lot of lending isn't subject to regulation; It takes place in what's called the shadow banking sector. The players are hedge funds, money market funds, and private equity groups. This posed a big problem during the financial crisis, as there wasn't enough liquidity. Now, international regulators have come up with a new rule designed to keep that from happening again. Plus, many banks are expected to announce quarterly earnings today, and many analysts expect to see profits in a place that's hasn't been that exciting, traditionally: credit cards. And the French economist Jean Tirole is the newest Nobel laureate. The Swedish Academy called him "one of the most influential economists of our time."
Tirole's spent his career studying regulation and how markets work, concluding different sectors have to be regulated differently. A few hours after Jean Tirole was named the recipient of this year's Nobel Memorial Prize in Economic Science, we spoke with him by phone.
It's advantageous for companies to do business in Ireland because of how that country calculates taxes. Tech giants like Google, Facebook and Apple have set up subsidiaries there, and in doing so, have saved billions of dollars thanks to a tax rate that's way lower than the rates in many other countries. Well, the Irish government is expected to unveil a new budget tomorrow, and there are reports it'll include a proposal to close that tax loophole. Plus, financial innovation in the housing market is back. We're hearing terms like "R-E-O-to-rental securitization, or "rental backed-securities." If you're having flashbacks to the a sub-prime crisis, you're not alone. But many are saying this is a different animal.
The sell-a-thon persists on world stock markets this morning. This is the week that the International Monetary Fund revised downward its forecast for economic growth around the world, not so much the U.S., but a lot of other places, including Asia and Europe. More on that. Plus, we talk about a connection between the digital device that so many of us can't seem to do without and digging big holes in the ground--Electronics need certain rare metals and other natural materials that are often in limited supply and hard to find.
At five major U.S. airports, the government will screen passengers for Ebola symptoms. In Spain, three more people have been quarantined, and in Texas, Thomas Eric Duncan succumbed to the disease yesterday. As the death toll from the Ebola epidemic approaches 4,000, the World Bank is out with a new report on the economic effects of the virus's spread, estimating the cost could be $32 billion. Meanwhile, a new report reveals that senior citizens in 49 out of 50 states don't have enough money to replace their pre-retirement income. Experts say retirees need at least 70 percent of the income they earned in their working years, but only seniors in Washington, D.C. and Nevada are in a position to make this happen. Also, many consumers don't know that bills are negotiable. Sometimes, all you have to do is pick up the phone and call your cable or cell phone provider and you could save as much as 10 percent from your monthly bill.
Worries about the economies of Europe, Japan, and China helped shove the Dow Jones Industrial Average down 272 points, yesterday, 1.6 percent. The S&P 500 fell 1.5 percent. But a counter-vailing push could come later today as companies start to release their quarterly profits and losses. Monsanto's results come during the trading day. Alcoa's after the market closes. Stock prices have been held up in part by the trend of using profits to buy back company shares. But are companies taking this too far? And forty years ago tonight, October 8th, 1974, President Gerald Ford went before congress and declared a kind of war: the Whip Inflation Now speech. We take a stroll down inflation memory lane. Plus, Fortune Magazine's senior editor at large Alan Sloan, has been reflecting on this autumn's big Moment (capital M) for bond investors. He joins us to discuss.