Moneybox
A blog about business and economics.

July 29 2016 1:38 PM

People Are Now Listing Gas Stations, Treehouses, and Teslas on Airbnb

This post originally appeared on Inc.

Where do you picture yourself sleeping the next time you head out of town? Do you see yourself in a bedroom of some sort? How about on an airplane?

Lufthansa Airlines is offering $885 roundtrip flights between New York and Frankfurt on Airbnb, touting in its ad that “Luxury Awaits Above the Clouds.” It sounds like a quirky use of a site mostly known for renting out spare rooms in people’s houses and apartments, but it’s only one of many creative listings.

Here are other listings that have gotten attention for being a little different than what you might consider when you think of travel accommodations.

Gas Station

Apparently childhood dreams of sleeping in a gas station are A Thing, at least according to a gas station owner in Salinas, California. Pete Shen as of last month was offering $50 bring-your-own-air mattress overnight stays at Sanborn & Market Gas. It appears the listing has been removed, but not before Shen told KSBW he had received a good deal of interest.

July 29 2016 11:53 AM

The Book Chelsea Clinton Touted as Her Childhood Favorite Is Now Outselling Trump’s Art of the Deal

Chelsea Clinton’s speech on Thursday night at the Democratic National Convention worked in large part because it was full of precise, and often deeply personal, details about her mother. As Slate's Ruth Graham notes, it stood in pointed contradistinction to those given by Donald Trump’s children, which “made their father sound inspirational but barely involved in their lives.” More tellingly, though, there’s now objective evidence that people were actually listening carefully to even the most minor asides in Chelsea Clinton’s paean to her mother.

Many of the most deeply felt moments in Clinton’s speech came when she alluded to her family’s love of books and reading. Painting a picture of her mother as someone who was always there for her, she recalled, “My earliest memory is my mom picking me up after I’d fallen down, giving me a big hug, and reading me Goodnight Moon.” Later, she described the way her parents would challenge her to describe what she had learned at school each day, adding, “I remember one week talking incessantly about a book that had captured my imagination, A Wrinkle in Time.”

In both stories, the books in question aren’t especially important, since Chelsea Clinton declined to say anything else about either. If you’re already familiar with them, they might tell you something about the family’s values and interests, but those qualities remain largely tertiary to Clinton’s remarks. Little more than texture, then, they’re there to show that Clinton actually has a connection to her mother—that Hillary Clinton is human and real, someone she talks to about real things, like books. The titles evoke the nerdy, charming Chelsea Clinton that America has known for decades, associatively imbuing her mother with a hint of authenticity.

Ornamental as these details may have been, however, people were clearly paying attention. When I checked Amazon’s sales stats for the two books just after Clinton mentioned them, Goodnight Moon was at No. 55 on the site’s best-seller lists while A Wrinkle in Time came in at No. 376. Since Amazon updates its public-facing comparative sales stats hourly, it’s not clear whether interest in the books spiked immediately. When I looked at the books again 12 hours later, their position had changed, dramatically in the case of Madeleine L’Engle’s classic young adult novel.* In the intervening time, A Wrinkle in Time had vaulted into the site’s Top 100 books list, landing at No. 85. Goodnight Moon, meanwhile, had climbed into the Top 50, where it currently resides at No.43. (I didn’t pull data for the other book Clinton mentioned, Chugga-Chugga Choo-Choo.)

As data about the effectiveness of a political convention goes, this is hardly the most important, especially relative to polling data. Minor as it is, it’s still potentially significant, however, precisely because it suggests that small things—not just big rhetorical flourishes—matter.

Possibly more meaningful still? Thanks to Clinton’s brief reference, A Wrinkle in Time is now outselling Trump’s Art of the Deal, which currently sits at No. 356.

*Correction, July 29, 2016: This post originally misspelled Madeleine L’Engle’s first name.

July 29 2016 11:29 AM

Could This Mercedes-Benz Ad Fool Consumers Into Thinking It Sells a Self-Driving Car?

The newest ad for the Mercedes-Benz E-Class opens on a futuristic, egg-like car, containing humans interacting with one another while the car apparently takes care of the driving on its own. A narrator asks, “Is the world truly ready for a vehicle that can drive itself? An autonomous, thinking automobile that protects those inside and outside? Ready or not, the future is here. The all-new E-Class, self-braking, self-correcting, self-parking. A Mercedes-Benz concept car that’s already a reality. Mercedes-Benz: the best or nothing.”

Sounds great! Except Mercedes-Benz isn’t about to sell you such an autonomous vehicle, no matter what impression the ad, titled “The Future,” may leave consumers consumed. And that might get Mercedes into some trouble

Consumer and federal safety advocates wrote a letter on Wednesday to the Director of the Federal Trade Commission protesting the implications of the marketing campaign. Consumer Reports explained in their letter that E-Class, which can self park and self brake, doesn’t meet the National Highway Traffic Safety Administration’s criteria to be considered a fully or partially self-driving car and that such advertising will lead consumers to believe that it is. The group specifically asks that the FTC take action against Mercedes-Benz for its “potentially deceptive advertising.”

July 28 2016 4:44 PM

This Might Be Trump’s Second Dumbest Economic Idea Yet

Another week, another instance in which Donald Trump has offhandedly suggested that, given the opportunity, he might just lay waste to the postwar global order.

You might have missed this news, what with all the intrigue over Russian hacking and his campaign's unabashed sympathies toward the Kremlin. But during a Sunday Meet the Press appearance, Trump floated the idea of withdrawing from the World Trade Organization if it tried to prevent him from taxing U.S. companies that move their manufacturing abroad. Here’s the exchange:

Chuck Todd: What kind of tax are you thinking?
Donald Trump: It could be 25 percent. It could be 35 percent. It could be 15 percent. I haven't determined. And it could be different for different companies. [Rambles semi-coherently for a while.]
Chuck Todd: Well, some of these things aren't going to get through the World Trade Organization. There's—
Donald Trump: It doesn't matter. Then we're going to renegotiate or we're going to pull out. These trade deals are a disaster, Chuck. World Trade Organization is a disaster.

This is one of the more destructive things Trump has blurted out during his spirit-crushing intellectual train wreck of a campaign. As others have noted, it's roughly the trade equivalent of the time he said he might abandon our NATO allies. I dare say it might be the second dumbest economic idea Trump has raised yet, behind that time he hinted he might default on America's national debt. (Nothing is going to top that one, even if he sort of walked it back.)

The World Trade Organization is the international body that has structured global commerce since its inception in 1995. It's loathed by the left—and now the reactionary right—who tend to see it as a tool of global corporate interests. But the bottom line is it sets the basic trade rules among 163 different nations—from the U.S. to China all the way down to Vanuatu—and enforces them through its judicial branch. The system allows countries to settle disputes without risking an escalating battle of tit-for-tat tariffs or, you know, actual war. (Of course, members can still negotiate bilateral or multilateral trade deals like NAFTA or the TPP on the side.) And bailing on it would massively destabilize the institutional underpinnings of the entire world economy, which were painstakingly built over decades. (The WTO evolved out of the General Agreement on Tariffs and Trade, signed in 1947.)

You can argue about the WTO's sins and virtues; there are indeed some who think we might be better off without it. But what makes Trump's outburst so mind-numbing is that leaving the WTO would actually make it harder for the U.S. to pursue the protectionist policies he's so eager to implement.

Yes, harder. Under WTO rules, countries are required to go through a lengthy process to settle trade battles that involve rounds of negotiation, hearings, and appeals. If President Trump were to put up, say, a massive tariff on Chinese steel, it could takes years for Beijing to successfully challenge it and win the right to retaliate with a tariff of its own. If the United States were not a member of the WTO, however, China could retaliate immediately, with no repercussions. Instead of enjoying a nice first-mover advantage in a trade war, the United States would be subjecting itself to a potentially disastrous free-for-all.

In other words, if you're a protectionist like Trump, leaving the WTO is self-defeating. As Roosevelt Institute fellow Todd Tucker put it to me, the group “allows more protectionism without rapid retaliation.”

Of course, if China or Mexico or any other country really was violating international trade rules by, say, dumping cheap exports into our markets as Trump sometimes accuses them of doing, the WTO process would allow the government to put up tariffs without facing Chinese retaliation at all. The Obama administration, for instance, has won disputes over tariffs it slapped on Chinese tires. The current White House has also brought numerous cases challenging China's own protectionist measures at the WTO. And, though it might surprise Trump, we frequently win.

Now here's the worst thing about Trump's completely backward threat: He might be able to make it happen. Though there's some controversy over the matter, many believe presidents do have the legal power to pull the United States out of its trade agreements unilaterally (what they can't do on their own is create new tariffs). “Anything he does that he’s threatened, he would be challenged in court,” said Gary Hufbauer, a trade expert at the Peterson Institute for International Economics. “My view, having read these statutes, is that he has a much better than even chance of prevailing in the courts.” So, as futile and self-destructive as this gesture might be, Trump could not only threaten it. He could probably follow through.

July 28 2016 12:04 PM

The Feds Are About to Get Serious About Stopping Abuses by Debt Collectors

Remember when John Oliver took the debt industry to task earlier this year? He showed how collection agencies buy our overdue bills for mere pennies on the dollar, then hound consumers for the full sum. Might someone at the Consumer Financial Protection Bureau have been watching?

On Thursday, the CFPB released long-awaited proposed rules governing the $13.7 billion debt-collection industry. If ultimately adopted, they would reshape the way debt-collection agencies are allowed to interact with the people they believe owe them money, giving Americans new rights and putting a stop to some of the industry’s worst practices and abuses.

“Consumers should not be limited to being passive participants in a system they do not trust or understand,” CFPB Director Richard Cordray said in remarks he is scheduled to deliver later Thursday in California. “We are determined to put the burden of proof on the debt collector and take some of the weight off the consumer.”

Imagine that.

It’s a powerful reminder of why we need the CFPB, the federal agency initiated by now-Sen. Elizabeth Warren, one that stands as a defender of Americans against the all-too-often predatory financial services industry.

The CFPB is also, of course, an agency any number of Republicans say they would like to do away with. Donald Trump says he would push to repeal to the Dodd-Frank Act, which gave birth to the CFPB, though he won’t actually get any more specific about the CFPB than that. Texas Sen. Ted Cruz did propose legislation in 2015 that would’ve killed the CFPB, claiming it “does little to protect consumers.” There’s yet another Republican-sponsored congressional bill that would turn the leadership of the CFPB over to a committee consisting of members of both major political parties. That would likely render the CFPB toothless, since the Republicans oppose its very existence. “Consumers’ primary advocate in the U.S. government would have to fight with one hand tied behind its back,” Hillary Clinton said in a statement last year opposing this Republican initiative. “It puts the interests of powerful corporations and lobbyists ahead of the needs of consumers and families.” The Republican platform embraces all these schemes, calling the CFPB a “rogue agency” that “if not abolished” should be funded by Congress, something that would increase lawmakers’ control over it.

No doubt they will squawk about this, too.

At the core of the proposed debt-collection changes is the matter of documentation. Collection agencies are not the originators of debt. Instead, they purchase debt consumers are said to have defaulted on in bulk, almost always for a mere fraction of its value, and then try to get consumers to make good on their bills. It’s a fraught process. Information is frequently not transferred in full when the debt is sold, the result being that people are hounded for debt they’ve already repaid, disgorged via bankruptcy filings, or perhaps never even owed at all.

Debt collectors will, if the new regulations are adopted, need not only to be able to prove the debt is real, they’ll also be required to inform consumers that they have a right to insist on that. Before ever contacting a debtor, collectors must be able to verify the person they’re contacting actually owes the debt. They must have such details as the borrowers’ full name, last known address, telephone number, how much was owed both when the debt went to collections and if any other payments have been made toward it.

In addition, bill collectors cannot file lawsuits to reclaim money without full and complete documentation including, in the words of the CFPB, “evidence of the amount of principal, interest, or fees billed, and the date and amount of each payment made after the default.”

The proposed regs will also give consumers greater rights when it comes to so-called zombie debt—that is, debt so aged consumers can’t remember or say they paid off at some time in the past, or is no longer due thanks to the statute of limitations (which varies by state). All official collection letters would need to contain a “tear off” sheet, allowing the recipient to dispute the debt. If a consumer claims the debt is not accurate in any way, the debt collector would need to demonstrate that they are wrong. Till they do that, they can’t hound the debtor.

As for debt that is past the statute of limitations, the collection letter would need to clearly state if the debt is, as the CFPB put it, “too old for a lawsuit.” In addition, collectors would be banned from taking consumers to court in order to try and collect on this aged debt.

Moreover, the CFPB’s suggested rules, if ultimately adopted, will limit debt collectors to a maximum of six attempts a week to get in touch with debtors—and that includes all telephone calls and emails. Yes, voicemails count. Ditto unanswered calls. Moreover, if a consumer asks a bill collector not to contact them in a particular way—say, at work—they need to listen. Full stop.

Finally, if the debt collector sells off a debt, it needs to transfer all information it has about the unpaid bill with it, and if the debtor is disputing any part of it, the matter needs to be handled before the new holder of the debt can attempt to collect on it.

These rules aren’t final, not by a long shot. There will be public hearings and various reviews before the CFPB can issue new rules—which the public and business interests alike can comment on for several months. The agency then will evaluate those submissions before releasing a revised, final rule. It’s highly unlikely all of this will be accomplished before next year, making this a timely reminder on the day Hillary Clinton is set to accept her party’s nomination for president of the United States of what a Democratic president can do for us and what a Republican president can possibly take away.

July 27 2016 1:37 PM

Jill Stein’s Ideas Are Terrible. She Is Not the Savior the Left Is Looking For.

Now that Hillary Clinton has officially won the Democratic presidential nomination, chances are we're going to hear a lot more about Jill Stein. The Green Party candidate, currently polling in the low single digits nationally, has been gunning for the support of disaffected Bernie Sanders fans, urging them to “keep the revolution going” by getting behind her own longshot White House bid. Tuesday, she was on hand at the Democratic convention to meet aggrieved Sanders delegates, some of whom formed a small crowd around her to chant, “Bernie or Jill.” Thanks to progressive grassroots rage, she may well peel off a few percentage points of the vote come the fall, when she's expected to be on the ballot in about 47 states.

July 26 2016 5:13 PM

A Florida Judge Ruled That Bitcoin Isn’t Money

This post originally appeared on Business Insider.

Bitcoin isn't money, a Florida judge has declared.

Circuit Court Judge Teresa Pooler has dismissed a money laundering case brought against a website developer, ruling that "nothing in our frame of references allows us to accurately define or describe Bitcoin."

It's a judgment that has been cheered by advocates for the digital currency (or token, or property, or whatever you want to call it), and may set a precedent for how it is dealt with in other legal cases.

(We first saw the case over at The Miami Herald, and you can read the full ruling below.)

First, the facts. Michell Espinoza was charged with money laundering and acting as an unauthorised money transmitter after selling bitcoin to undercover cops who found him through a bitcoin-selling website, Local Bitcoins. Over a series of meetings, Espinoza sold the undercover agent $2,000-worth of bitcoin, which the agent said would be used to purchase stolen credit card numbers. Espinoza was then arrested after a bogus fourth sale was arranged for $30,000-worth.

But Judge Pooler, in an order signed on July 22, has thrown these charges out.

She argues that the modern regulatory and frameworks we have do not allow people to "accurately define or describe Bitcoin." The digital currency runs in an entirely decentralised fashion, with no central bank, and can be extremely volatile.

July 26 2016 3:09 PM

The Vatican’s Bank Is Nearly Out of the Penalty Box

On Tuesday, the Vatican and the Bank of Italy signed a cooperation agreement that aims to put an end to years of Italian mistrust of Vatican finances. The agreement looks to enhance “the exchange of information in the field of financial supervision, on the basis of reciprocity.” In other words: The Vatican’s financial sketchiness landed it in the penalty box, but it may now be getting a chance to make nice with Italy’s financial establishment.

For years, Italian banks have expressed concern that the Institute for Works of Religion, or IOR,—the Vatican’s official bank—provides a tax haven for well-connected Italians. In 2010, Italian banks ceased dealings with the IOR after the Bank of Italy said it needed to implement strict anti–money laundering standards. Later that year, $31.15 million held by the IOR in two Italian banks was frozen amid an investigation into money laundering, though the money was later returned. The largest impact that their shaky relationship has had was in 2013, when Italy blocked the use of debit and credit cards in the Vatican due to a lack of transparency. This proved to be a major obstacle, as one of the city-state’s largest sources of income is from tourists visiting Vatican museums.

Since 2013, when Pope Francis was elected, relations between Italian and Vatican financial authorities have improved. In 2014, Pope Francis created a new department, the Secretariat for the Economy, and brought in an outsider, Australian Cardinal George Pell, to lead it. Cardinal Pell explained that “We are aiming at a substantial transparency. Our ambition is to become something of a model of financial management, rather than a cause for occasional scandal.”

In the past few years, the IOR has certainly cleaned up its act. Thousands of accounts have been closed and the Vatican created three departments to oversee, independently, Vatican administrative and financial structures—the Council for the Economy, the Secretariat for the Economy, and the Office of the Auditor General.

Even Moneyval, the European financial-crimes watchdog that has previously criticized the Vatican for insufficient supervision and monitoring as well as insufficient compliance on reporting of suspicious transactions, said in a 2015 report that the Vatican is making great strides toward improving its practices. Much of Moneyval’s praise centers around the Vatican’s creation of independent supervision structures to circumvent the kind of fraud or money laundering that might have taken place in the past. Since the creation of these new systems, Moneyval reports that 29 money-laundering investigations have started, although no prosecutions have been initiated. The report still offered suggestions for continued improvement, mainly that the Vatican’s judiciary needs to be more aggressive when dealing with those suspected of financial crimes. At the very least, the bank's increased transparency will ensure that it has more eyes on it than the ones above.

July 26 2016 1:47 PM

Laugh All You Want: Under Armour Says Sales of Stephen Curry’s Lame Shoes Are on Fire

The internet has not been kind to Stephen Curry's shoes. When Under Armour debuted the all-white  Curry 2 Low “Chef” in June—the blandest iteration of the reigning NBA MVP's line of signature sneakers—it was subjected to one of the most thorough roastings Twitter has ever seen, its reputation quickly charred to a punchline. And rightly so. The Chef looked like a mayo-on-white-bread sandwich served on a rubber sole. It looked like a shoe only Jerry Seinfeld could love. It looked like it might come with keys to a Buick and a Sam's Club card. It looked like a shoe you'd ignore on the sales rack at Marshalls. As many rermarked, it looked like a nurse’s shoe. A lunch-lady shoe. It was not a good shoe.

And yet, as in so many other instances, Twitter's opinion doesn't appear to have counted for much. In its second-quarter earnings report released Tuesday, Under Armour announced that, for all the laughter, Curry's shoe line was doing just dandy. “Footwear net revenues increased 58% to $243 million from $154 million in the prior year's period, primarily reflecting the continued success of the basketball category led by the Curry signature basketball line as well as growth in running and cleated categories,” the company stated.

Does this mean boring has triumphed? Has the all-white Chef 2 turned out to be the Coldplay of basketball shoes—milquetoast, mocked, and massively popular? I wouldn't quite go that far. Under Armour did apparently sell out of the Chef online a few days ago. But Canaccord Genuity analyst Camilo Lyon has estimated that the Chef also only makes up about 5 percent of sales for the Curry 2 line, which includes high-tops and low-tops in all sorts of color combinations that, mercifully, look a bit less orthopedic.

The bigger takeaway is that while Under Armour is still having difficulty designing shoes that can win over fashion-conscious sneaker obsessives as well as actual athletes (Slate's John Swansburg has written extensively on this), all the online laughter directed at the Chef doesn't seemed to have damaged Curry's brand. That sets the company up pretty nicely for the eventual release of the Curry 3, which might make a little aesthetic progress.

Then again, that white-on-white Chef did sell. To some, bland is apparently beautiful.

July 25 2016 6:34 PM

The DNC’s Leaked Emails Show It Had No Idea How to Rig an Election

Let me start with the obvious: Bernie Sanders' supporters have every right to be royally pissed off about the revelations contained in the hacked Democratic National Committee emails that have been released by WikiLeaks. The correspondence shows party officials clearly preferred Hillary Clinton, were flip and condescending about Sanders, and occasionally plotted ways to hurt him in the media. This was unacceptable coming from an ostensibly neutral organization with a key role in the nominating process; it was also a tactically idiotic way to treat a candidate whose campaign was exciting millions of young voters. Debbie Wasserman Schultz, who is resigning as DNC chairwoman at the end of this week, deserves her downfall.

But there's also something a little ironic about this scandal. Rather than proving that the primary was deviously rigged by Clinton's cronies—as many Sandernistas clearly believe—the WikiLeaks emails suggest the opposite. The party didn't seem to have very many ideas at all for meddling with Sanders' candidacy. And the ones they cooked up were weak and quickly forgotten.

Consider the most damaging news to come out of the leak. One DNC official seems to have floated the concept of trying to make an issue of Sanders' apparent atheism, in order to hurt his standing with Southern Baptists in states like Kentucky. This was a deeply offensive idea.1 It also seems to have gone nowhere. In May, meanwhile, the DNC national press secretary suggested “pushing a narrative” that Sanders “never ever had his act together, that his campaign was a mess.” This was meant to push back against the charge that there was a DNC conspiracy against against him in the first place. But in any event, as ABC News notes, the idea was quashed.

Other than that? Wassmerman Schulz called Sanders campaign manager Jeff Weaver a “damn liar” after he claimed there was no violence at Nevada's state Democratic Party convention; some media outlets had reported that Sanders supporters threw chairs (there was controversy about whether that was true). Some radio host got called a Bernie Bro. Wasserman Schultz fulminated about how Sanders never understood the Democratic Party, because he was never part of it (which, until this election, was true). The committee coordinated with a Clinton campaign lawyer about how to respond after Sanders charged that the DNC had “laundered” money to Clinton—which is completely unremarkable, given that both groups were implicated in the allegation. DNC employees also planned to pass around an article critical of Sanders (mind you, an article that had already been published). In late May, after Sanders told CNN that Wasserman Schultz would not be reappointed DNC chair if he won the presidency, a DNC staffer wrote: “This is a silly story. Sanders isn't going to be president." Mean? Perhaps, but it was also pretty clearly true by then.

None of this is good, mind you. The emails create a vague sense of impropriety. But as the (useful) cliché now goes, it's more Veep than House of Cards. We're reading a bunch of cranky D.C. office drones dealing with and letting off some steam about a cantankerous campaign. And in at least one other email that has Sanders fans angry, the DNC actually seems to be worrying about heading off even the possible appearance of foul play. In that one, they fretted that Rhode Island, a state in which Bernie had a lead, was opening up only a limited number of polling places. “If she outperforms this polling," one email read, "the Bernie camp will go nuts and allege misconduct.” The staffer suggested putting out an inquiry to Rhode Island's governor, who is “one of ours”—which seems like another way of saying “a Democrat.”

Again, on balance, this is all a bad look for the DNC. But it's not vote tampering. The worst ideas seem to have been scotched. It's always possible the real malfeasance was plotted offline. But nothing has been found in the leaked batch of emails that rises to the level of “rigging.”

As of now, we know of one truly significant way in which the DNC seems to have aided Clinton. It planned relatively few debates and scheduled the early ones for weekends, when nobody would watch. The DNC denied it had done this to prevent Clinton's opponents from getting exposure. But even at the time, this seemed like a pretty transparent attempt to “circle the wagons around the inevitable front-runner,” as then candidate Martin O'Malley put it. The WikiLeaks emails certainly don't do anything to ease those concerns. In one, a DNC staffer wrote “lol” after Sanders prematurely announced that he and Clinton had agreed on an extra debate before the California primary (the event didn't end up happening).

Did the paucity of debates really skew the election results? Sanders diehards will probably say so. Some have blamed Sanders' poor performance in the South, which essentially lost him the nomination, on a lack of name recognition among black voters. It's possible that a few more prime-time debate-nights might have helped erase that disadvantage. On the other hand, it's possible they would have helped shore up support for Clinton, who reminded everybody during the campaign that she was a very formidable debater. Moreover, there were many problems with Sanders' efforts to court black voters, including what may have been a deadly hamfistedness with retail politicking. Even if you believe that the Wikileaks emails suggest the DNC wanted to put its thumb on the scale during the primary through the debate schedule, it's hard to tell how decisive or meaningful that effort really was.

Aside from the debates, the major allegations about DNC favoritism involved Clinton's joint fundraising efforts with the DNC (Sanders inked a deal to do something similar, but never took advantage of it) and a scuffle over access to voter data that Sanders and the DNC eventually resolved. At this point, the WikiLeaks emails don't add anything to that dossier. They show the DNC lacked the respect for Sanders that his campaign had earned, but not that it stole his nomination.

1Why on earth would the Democratic Party contemplate alienating secular Jews, one of their most reliable, albeit small, constituencies?

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