Business Insider
Analyzing the top news stories across the web

June 17 2015 4:53 PM

Should Countries Reduce Their Debt by Monetizing Their Parks?

This post originally appeared on Business Insider.

With so many nations unable to balance their budgets and government spending through the roof, it's no surprise that the world has amassed about $54 trillion in total global public debt. But did you know that governments around the world also hold more than $75 trillion of public assets?

In nearly every country, the largest holder of wealth is not a large corporation or someone like Bill Gates, but the assets collectively held by the public. In their new book, titled The Public Wealth of Nations, Dag Detter and Stefan Fölster argue that better management of these enormous assets could drastically improve the economic well-being of nations, raising productivity and living standards, and even reducing the risk premium of public debt.

Citi's Chief Economist, Willem Buiter, along with Detter and Fölster outlined these ideas in a recent report that also serves as a preview for the book set to be released in July. "Given that in most countries public wealth is larger than public debt, just managing it better could help to solve the debt problem while also providing the material for future economic growth," the report finds. "A higher return of just 1 percent on global public assets would add some $750 billion to public revenues. Poor management not only throws money down the drain, but also forecloses opportunities."

The authors add that an achievable return of 3.5 percent would put $2.7 trillion a year in the hands of governments, enough to cover the cost of national infrastructure spending worldwide. For this reason, assets such as government-owned corporations and real estate holdings—many of which are not accounted for in government balance sheets—all add value to public wealth that need to be recognized, the authors say.

For example, a U.S. national park likely has negative cash flows due to the annual operating expenses. However, the current financial value of that park could include the potential for future cash flows originating from activities like drilling, fracking, or real estate development.

"We are not advocating strip mining Yellowstone National Park, only outlining the way in which the federal government's guardianship of Yellowstone National Park ought to be reflected in the federal government's comprehensive balance sheet," Buiter writes. "Only that way can a well-informed cost-benefit analysis be conducted to determine the socially optimal use of this public asset."

But even so, the authors suggest that most governments don’t understand the full value of their assets.

They wrote:

[M]ost governments have more wealth than they are aware of, including the many nations currently caught in the grip of debt crises. Many of these troubled countries own thousands of firms, land titles, and other assets, which they have not valued, let alone manage for the common good. Public wealth is a gold mine waiting to be managed professionally for the common good. Like a gold mine, most of the wealth is not visible without some effort to bring it out in the open.

The U.S. has its own gold mine. According to the IMF, the federal government owns more than a quarter of all land in the country, as well as a real estate portfolio worth $1.5 trillion.

Plus, state and local governments have real estate holdings worth $6 trillion. Government-owned buildings, state and local-owned airports, as well as highways and Amtrak lines could all be better managed to make money, instead of bleeding it.

For example, if Amtrak reduced its operations to just 23 states, it could focus investment on the highly used, highly profitable lines, such as those in its Northeast Corridor.

Of course, this raises questions about the economic value of social return and whether "bridges to nowhere" for a few are worth the high cost. Still the potential benefits of these kinds of ideas seem too lucrative to ignore.

"In the U.S., for every 1 percent increase in yield from the federal government asset portfolio, total taxes could be lowered by 4 percent," Detter and Fölster wrote. "This alone should make every individual citizen, taxpayer, investor, financial analyst, and stakeholder stand up and pay attention. And it should spur demand for action."

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June 16 2015 1:32 PM

Apple Music Will Pay Artists Way More Than We Previously Thought

This post originally appeared on Business Insider.

Apple is going to give labels, publishers, and other music owners over 70 percent of revenues from its new music streaming service. 

Last week a leaked Apple Music contract suggested that the company was only going to pay out 58 percent of its revenue in licensing fees. This didn't go down very well, especially considering Apple is not going to pay music owners anything for the songs played during the three-month free trial following the launch of Apple Music in June, according to a Re/Code report.

But once the free trial is over, the only way to keep using the service is to pay Apple $10 a month.

In an interview with Re/Code, Apple exec Robert Kondrk, who negotiates music deals alongside Eddy Cue, revealed the real numbers where this $10 monthly fee is going to go. 

Apple will pay music owners 71.5 percent of Apple Music's revenue in the U.S. Outside the U.S. this could fluctuate, but will average out at around 73 percent. How much the musicians who wrote the songs will actually get depends on the contracts they have with the music labels and publishers who distribute their songs, the report pointed out. The total of around 70 percent will go to the people who own the complete sound recordings Apple Music will play and the people who own the publishing rights to the underlying compositions of the songs. 

Apple's revenue split is only a few percentage points more than the industry average of 70 percent, which Spotify also says it pays.

But Apple's stance against free music streaming is supposed to reassure labels and artists that getting paid for allowing their songs to be played on Apple Music is more worthwhile than letting them be played on Spotify. 

June 15 2015 4:25 PM

Ask Not What the Hyperloop Can Do for You. Ask What You Can Do for Hyperloop.

This post originally appeared on Business Insider.

This time next summer, Elon Musk's Hyperloop test track will be a real thing—a small version of it, anyway.

SpaceX plans to host a competition in June 2016 for university students and independent engineering teams to build or design a sub-scale pod for the Hyperloop, according to documents obtained by Business Insider. 

To support the contest, the company wants to build a one-mile test track adjacent to its headquarters in Hawthorne, California, where qualified entrants could test their pods. The pod is the portion of the Hyperloop that riders actually sit in. However, there won't be any human riders in this competition.

This is a shift from January of this year, when Musk said that the company would host a competition and that the test track would most likely be in Texas, but gave no other details. 

There's been growing interest in developing a Hyperloop since Musk revealed the concept in a white paper in 2013. 

Two companies in California—Hyperloop Technologies and Hyperloop Transportation Technologies—are currently working to make the track a reality. SpaceX has no affiliation with either company, but still wants to advance the Hyperloop idea and technologies.

"While we are not developing a commercial Hyperloop ourselves, we are interested in helping to accelerate development of a functional Hyperloop prototype," the SpaceX website states. Like Musk's Hyperloop white paper, all information learned from this competition will also be open-sourced, according to the SpaceX documents.

While SpaceX won't release more detailed rules and criteria for the competition until August, the company just posted the general plan for the Hyperloop Pod Competition on its website. The contest will be hosted at two main locations.

First, in January all entrants will be required to participate in-person at Texas A&M University in College Station, Texas, for a "design weekend." This is where participants will submit their pod designs to be evaluated by a panel of SpaceX engineers, Tesla Motors engineers, and university professors. 

This event will also be the first opportunity for companies to choose teams they want to sponsor for the final event, which is the "competition weekend." 

In June, qualified entrants will gather in Hawthorne to test their pods on SpaceX's new test track. According to the competition overview document, SpaceX will likely also build a Hyperloop pod for demonstration. However, its pod will not be eligible to win. 

SpaceX hasn't said what the winning entrant gets, but has an announcement about the prize planned for August.

Check out the schedule for the event below. 



June 12 2015 1:21 PM

Apple Just Found Another Way to Demote the iPod

This post originally appeared on Business Insider.

Apple has just pulled the iPod from its website's main menu, giving Apple Music the old spot of the portable media player. The main menu at the top of Apple's page used to advertise the company's hardware, including the Mac, iPhone, iPod, and iPad, and later the Apple Watch.

While the rest of Apple's products still take pride of place, the iPod has been removed, AppleInsider pointed out, and Apple Music has taken its place. The iPod hasn't been removed from Apple's website completely. It can still be found at the bottom of the Apple Music page or at the company's online store.

In the first quarter of 2007, the iPod made up more than 48 percent of Apple's revenue. But thanks to the music-playing iPhone and its smartphone competitors, the device's sales have been declining for years.

If you're wondering about the iPod's recent sales, Apple won't tell. The company has decided to stop revealing the iPod's sales in quarterly filings.

There also haven't been any updates to the iPod Touch since 2012, and the iPod Classic was discontinued in 2014. Tim Cook said at the time that the move had come because Apple couldn't get the parts it needed to keep making the device. Observers were skeptical—this is the company that just reinvented gold, after all.

Despite rumors picked up by AppleInsider that the iPod Touch may see a revamp at the end of this year, Apple has been putting all its energy into developing its higher-yielding products and launching Apple Music. And with the launch of the Apple Watch, the company could be hoping that people who aren't happy listening to music on their phones will shell out more for music on the go.

June 10 2015 4:32 PM

What to Do When Ransomware Takes Your Computer Hostage

This post originally appeared on Business Insider.

Ransomware is evolving and that’s bad news for just about everybody except cyber thieves. Ransomware, which is a form of malware, works by either holding your entire computer hostage or by blocking access to all of your files by encrypting them. A person infected with ransomware is typically ordered (via a pop-up window) to pay anything from a few hundred to a few thousand dollars in order to get the key to unlock their encrypted data.

Of course, there’s no guarantee that even if a victim pays the demanded amount they will actually get access to their files again, which makes dealing with ransomware somewhat of a tricky issue. And with new, sophisticated strands of ransomware on the rise, it's likely that more people will become infected and have to deal with the headache that comes along with it, security experts tell Business Insider.

Cyber criminals are now using the most modern cryptography to encrypt stolen files and are getting really good at making their dangerous links and downloads seem perfectly benign. One new strand of ransomware that falls into this category is called CDT-Locker and is often times very hard to detect. CDT-Locker can be hidden in files in such a way that even security software can’t tell it's there. To make matters worse, hackers are getting people to willingly download these dangerous files by using sneaky tricks to make them appear legitimate.

For example, a hacker might pose as your utility company in an email stating that they need you to fill out an attached form or else your power will be cut off. Or a hacker might even use social engineering to pose as someone in your contact list to get you to click on a link in an email.

Cyber criminals are even using social media sites and newsgroup postings to spread the malicious code. “There’s a lot that the facilitators are doing to take advantage of natural human reactions that we would find disturbing in the real world,” said Steve Grobman, the chief technology officer of Intel’s Security Group. “They are really using any sort of content that you can put in front of a user's eyes. Whether it’s Twitter or various news feeds or websites. It’s any point of contact to download and run the software with the ransomware.”

So what do you do if you accidently fall victim to ransomware? Well, the first thing you may want to do is alert law enforcement, said Jason Glassberg, the cofounder of the security firm Casaba Security. While they might not be able to help you much, they should still be made aware of the crime.

Second, you should turn off your infected computer and disconnect it from the network it is on. This is important because an infected computer can potentially take down other computers sharing the same network, Glassberg said.

While the malicious software itself can be removed, getting your data back is a whole different story, Glassberg said. Because new strains of ransomware are using advanced cryptography, recovering files is pretty much impossible without the necessary key to unencrypt them, he said. 

Finally, you have to decide whether or not you are going to pay the ransom. If you’ve backed up your data on a separate hard drive you can at least recover the data you lost from the point of the last backup. And this can prevent the major headache of debating whether or not to chance paying the criminals who locked your computer. 

"We want to make it very clear, as far as preventing yourself from getting into this situation to begin with, it is really critical that everyone, regardless of whether you are a consumer, a small business or a large business, that backups are set up in such a way that they are separate from your computer. So if you are hit by ransomware you are able to get data back without paying the ransom," Grobman said. 

But if you decide to risk paying the ransom you should know that the cyber criminal will likely require you to pay using Bitcoin or another virtual currency over the Tor network, which is a software used to make web browsing anonymous. This means that tracing the thieves is nearly impossible and if they decide not to unlock your computer you are pretty much out of luck and money. 

And even if the hackers do give you the keys to unlock your encrypted files, there is always a chance they can lock your computer again in the future to demand more payment. Considering the risks, Grobman advises against caving to the hackers. 

“We have seen many scenarios where even if the user pays, they don’t get the recovery keys. So it’s one of the reasons we tell our customers that paying the ransom is not the best course of action," Grobman said. "For starters, paying the ransom may not result in you getting your keys back. And you are also providing additional incentives for the criminal element to continue to build ransomware and make it more effective and helping it become an even bigger problem in the future."

June 10 2015 11:09 AM

I Tried the “Warby Parker of Mattresses.” It’s Spongy but Worth It.

This post originally appeared on Business Insider.

The biggest pain about buying a new mattress is ... well, just about everything. You spend an hour in the store, awkwardly flopping on and off beds trying to find the one that meets the Goldilocks standard of “just right.” Then you have to lug the winning mattress across the parking lot, onto your car roof, up stairs, and into your home.

I recently transplanted from New York City to San Francisco, and the first major purchase I made—hesitantly—was a new mattress. But I did things a little differently this time.

Casper, called “the Warby Parker of mattresses,” sells mattresses on its website and delivers them to your door in a box not much bigger than a nightstand. The Manhattan-based sleep startup raised $13 million in Series A funding last August and famously generated $1 million in its first 28 days after launch.

My shopping experience began online and was over and done with in fewer than 10 minutes. Casper sells just one type of mattress, dubbed the Casper mattress, because the company prefers to “put all our energy into building the ideal bed ... rather than confuse you with tens (or hundreds) of models that all start to feel the same after a while.” It combines latex foam for cooling and bounce, and memory foam for support. A hand-sewn, custom-designed cover seals the layers.

I ordered a full-sized mattress for $750, comforted by the knowledge that I could return my Casper mattress for any reason within 100 days. Plus, it was free to ship.

Less than one week later, it arrived. My roommates wheeled the box on a cart into my room. We turned it upright and cut open the box. Inside, a cloth bag held instructions and ...


Melia Robinson/Business Insider

... the most adorable little letter opener. I held the box at a 45-degree angle as my boyfriend wiggled the mattress out. It weighed about 60 pounds.

We cut the mattress free from its felt binding using the letter opener. Then came time for the “unfurling.” The 10-inch-thick mattress expanded and flattened as it filled with air. My boyfriend cut through the plastic and the mattress sprung to life. In seconds, it was ready for sleeping.

I've slept in the bed for a few nights now, and here are my takeaways.

The Casper mattress is surprisingly springy, even for an experienced Tempur-Pedic sleeper like myself. Its latex-and-memory-foam combination absorbs and contours to my body like a sponge. That said, the sinkage is minimal. Thanks to the surface layer's high foam density, I don't feel like I'm climbing out of a manhole everytime I get out of bed.

Does it meet the Goldilocks standard of just right? Not quite. How could it, when every sleeper's needs are different? I would have preferred a slightly firmer mattress, and I hope a variation is available in the future.

Still, the convenience and low costs associated with Casper trump all other mattress-buying experiences. It was infinitely easier to maneuver this cardboard box around my apartment building than it would have been to burden it on our backs and strap it to the car's roof on the way home from the store. Plus, by ordering online, I avoided paying for delivery, shipping, and tip.

In the on-demand era, laziness is king.

June 8 2015 3:56 PM

Pizza Hut Tried to Rebrand Itself by Marketing to Millennials. Oops.

This post originally appeared on Business Insider.

Last year, Pizza Hut announced what was billed as the biggest brand overhaul in company history. To appeal to millennials, the brand changed its menu to include gourmet customizing options like Peruvian cherry peppers, toasted Asiago crust, and honey Sriracha sauce.

Sales have continued to slump since the turnaround. "We obviously have not been happy with the performance of the relaunch of Pizza Hut," Greg Creed, CEO of parent company Yum Brands, told investors at a conference covered by Nation's Restaurant News.

Creed says the pizza chain's lackluster performance comes down to one mistake: focusing too much on millennials, who supposedly prefer fresh food and customizable options offered by restaurants such as Shake Shack and Chipotle.

But marketing to this group didn't help Pizza Hut. "Unfortunately, we haven't been as effective as we've liked with our marketing and need to balance its appeal to millennials with mainstream pizza customers," Creed said.

To win back older customers and families, Pizza Hut is offering aggressive deals on pizza. The pizza retailer isn't the first major chain to get stuck on millennials.

McDonald's CEO Steve Easterbrook said McDonald's had mistakenly targeted millennials in its advertisements as if they were one homogeneous group. Going forward, the company will engage in "less sweeping talk of millennials as if they are one single group with shared attitudes," he said.

June 5 2015 7:59 PM

You Can Now Visit Norwegian Airlines Using an All-Emoji URL

This post originally appeared on Business Insider.

Emoji URLs may be the next big thing. With unique and memorable domain names becoming more and more scarce, some companies and campaigns are turning to out-of-the-box digital methods to reach new audiences. 

Norwegian Airlines did just that with its new emoji-only URL, reports AdWeek, creating a Web address that replaces traditional lettering with emojis.

The airline launched this URL for a very specific offer, so it used a very specific string of emojis. It wanted to announce a new direct flight from Copenhagen to Las Vegas, and so the website was Airplane-Slot

It looks like this: www.✈️🎰💸.ws

The .ws domain represents Western Samoa, which is one of the few countries that allow URLs in non-Latin characters. There are others too, including Tokelau (.tk) which is a small New Zealand territory, according to the Washington Post.

Norwegian Airlines’ emoji URL isn’t the first of its kind. A few months back Coca-Cola launched an ad campaign of single emoji Internet addresses. Additionally, an Irish group advocating for gay marriage also launched a web campaign using either two male emojis together or two female emojis together. It redirected to a page talking about the May 22nd vote, which legalized gay marriage in Ireland. 

Still, emoji Web addresses have yet to hit the mainstream. This is likely because only younger users on mobile are able to seamlessly use the illustrative characters. Acquiring such domains are also hard due to the politics of top level domains, as some countries only allow certain types of characters.

All the same, Norwegian Airlines told AdWeek that this experiment paid off. It pushed the emoji URL to users on Instagram and saw 1,600 hits on the first day. Given that it was targeted to and released on social networks consisting primarily of millennials, the airline saw this as a successful covert ad operation.

June 4 2015 4:15 PM

Yahoo Just Cut a Service a Lot of Web Developers Will Miss. It Also Cut Yahoo Maps.

This post originally appeared on Business Insider.

Under CEO Marissa Mayer, Yahoo has decided that the three major parts of its business are search, communications, and digital content. That means all of Yahoo's services outside of those areas are at risk of being cut.

Today, Yahoo announced it's axing some less popular products in a blog entry by Amotz Maimon, Yahoo's chief architect.

Most heartbreakingly for a lot of developers, Yahoo Pipes is getting shut down at the end of August. Yahoo Pipes is a service that let people build custom Web applications that could pull in all kinds of data from all over the internet. 

When Pipes launched back in 2007, it was widely heralded as ahead of its time. Tech expert Tim O'Reilly called Pipes "a milestone in the history of the internet." It was sort of a precursor to Mashery, which helps companies manage and blend data from different sources (including public Web sources), and If This Then That (ifttt), which lets people create simple "recipes" like "text me the weather every morning" by combining different data sources and apps.

But Yahoo never seemed to know what to do with it; it never got as many users as the company would have liked, and so now it's going to be cut.

Other products on the chopping block include:

  • Yahoo Maps, which will close at the end of June.
  • The GeoPlanet and PlaceSpotter APIs, tools that Yahoo gave developers to integrate maps into their application.
  • You will no longer be able to get Yahoo Mail from older iPhones or Yahoo contacts from older Macs, either. 

Yahoo is an old company, by Web standards. During its long identity crisis, it threw a lot of stuff at the wall just to see what worked, even if it wasn't very good. CEO Marissa Meyer gets a lot of credit for helping the company finally figure out a way forward by focusing on just the stuff it's good at.

June 3 2015 3:59 PM

What It Costs to Live on a Houseboat Year-Round

This post originally appeared on Business Insider.

Three years ago, Sam Train, a naval officer stationed in Newport, Rhode Island, asked his wife, Francesca Spidalieri, if she'd be willing to live on a boat. "She said, 'Sure,'" he recalls. "I was flabbergasted."

But it made perfect sense to Francesca, since the couple would be moving every few years. "At least this way, we get to own something and bring our home with us," she explains. 

They ended up buying a pre-owned 40-foot Catalina cruiser for $150,000, with mortgage payments of about $800 a month. For two years, they lived on board during the summer, then moved to a rental apartment in winter.

But at the end of 2013, they found out that they'd be moving to San Diego, where the climate would be mild enough to live on the boat year-round. "I did the math and figured out that we'd save $50,000 over three years, if we lived on board instead of renting an apartment in San Diego and leaving the boat on the East Coast," Sam says.

So they used the Navy's relocation allowance to cover the cost of having the boat shipped from Rhode Island to California. 

A year later, they still think that it was the right choice. In an average month, it costs them around $2,200 to live on the boat. By comparison, they would spend $2,500 to $3,000 to rent an apartment in a similar area of San Diego, and still be paying the boat's mortgage on top of that.

Their largest expense is paying to keep the boat at a marina, which costs $1,050 a month, including the $250 "live aboard" fee. That covers utilities such as water and electricity, and also allows them to keep their cars in the parking lot, use the pool and laundry facilities, and receive mail and packages there.

Though there are other expenses that they wouldn't have if they lived in an apartment, the costs are minimal. For $25, a pumpout boat empties their sewage tank, which usually needs to be done once a week.

Sam maintains the boat's mechanical systems himself, but the couple hires a professional to wash and wax the boat's exterior once a month, which costs $80. Every six months, they pay a diver $50 to clean the bottom. 

Since they're living in approximately 300 square feet of space, renting a storage unit for $100 a month is a non-negotiable expense. In addition to the extra bedding and towels that they use when guests come, it also holds the majority of their clothing, serving as a giant walk-in closet. 

The couple also budgets $1,000 a year for any unexpected maintenance costs that may come up. "It's like a car, where you don’t spend anything for a while and then you spend a ton of money," Sam explains.

Sam and Francesca had their first child in August, and they admit that sharing an already-tiny space with a baby has been a learning process. But they're better suited to it than most.

Francesca grew up in Italy, and says that the boat is much more luxurious then any of the tiny apartments that she rented there as a student. And Sam has gotten used to living in a small space on board a ship while he's been in the Navy. 

The experience has forced them to limit the number of things that they own, and taught them that they can deal with minor inconveniences like not having their own laundry machines. "You can't take the American dream of a big house, big yard, and picket fence, and easily wrap it into a small space like a boat," Sam says. "You have to give up a lot of stuff."

"The idea of making do with less is something that I hope we can take with us, wherever we go next," Francesca adds. "Even if it is a house."