A blog about business and economics.

Sept. 5 2014 3:11 PM

Barclays Introduces a Finger Vein Scanner to Access Your Online Banking

Barclays is rolling out a new cybersecurity service for its corporate clients next year: finger vein readers. The biometric scanners are designed to scrutinize the unique vein patterns of customers' fingers so that they can access online bank accounts and make financial transactions without a password or PIN.

In the short and somewhat creepy demo video that Barclays included with its announcement, a woman sits down at her computer and, when prompted on her laptop's screen, places her finger into the biometric scanner, which looks a lot like the pulse oximeters they clip onto you at the doctor's. You can watch for yourself below:

Barclays assures clients that the finger scanner will "not hold the user's vein pattern and there will be no public record of it." It also notes that "unlike finger prints, vein patterns are extremely difficult to spoof or replicate." The FT puts it a little more bluntly: "blood vessel patterns are much more difficult to replicate and the scanned finger must be attached to a live human body."

Then again, if we're going to go down that grisly path, it's worth nothing that a dismembered finger won't unlock the iPhone 5S scanner, either.

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Sept. 5 2014 1:37 PM

Wearable Technology Goes Couture

This article originally appeared in Inc.

All those Clydesdale struts down runways this coming week will be measured by more than just the approving nods they earn from certain magazine editors and boutique buyers, because this is the year wearable tech goes couture. Or at least makes a concerted attempt.

A dozen or more wearable companies—among them Intel, Fitbit, and Google Glass—are forging partnerships with fashion brands to earn time on the runways at New York Fashion Week, which begins today and runs through September 11. Similar companies aim for fashion week visibility through novel marketing moves, such as appearing in models' Instagram feeds. It's the next generation of the 2012 Google Glass-Diane von Furstenberg partnership, which saw bespectacled models on the runways, and Google co-founder Sergey Brin seated in the front row of the Lincoln Center show.

Perhaps the mainstream collision of fashion and tech is overdue. If you visited a classroom at New York's FIT, or a graduate student showcase at New York University's Interactive Telecommunications Program over the past few years, you'd have seen prototypes of LED-powered skirts and dresses, hats and other headwear—even backpacks!—and bracelets and rings equipped with cameras, trackers, and other chip-powered embellishments.

Already the runways have seen wearable technologies that sync with one's smartphone--but that don't necessarily fit into the "quantified self" movement of biometric tracking. They're more for peacocking than fitness monitoring. A London fashion house, CuteCircuit, designs light-up dresses, skirts, and jackets for women, which can be controlled through an iPhone app. (You may have seen such glowing garments on Katy Perry or U2.)  The company's show is one of the very first of this year's fashion week, and you can expect plenty of buzz.

According to a study by tech-research firm IDC, nearly 20 million wearable devices will be shipped worldwide in 2014. That number is expected to climb to more than 100 million in four years' time. That's a lot of awkward plastic-y armbands. But if the fashion world has anything to say about it, that look might get a lot more graceful. 

Marie Claire creative director Nina Garcia called wearing a fitness tracker "a badge of honor, whether you're healthy or not," in the Wall Street Journal recently. And just last week, tech and fashion debuted a combined effort at the U.S. Open tennis championships. The product: A Ralph Lauren sports shirt, with knitted-in sensors that can read the wearer's heartbeat and respiration. It looks—on the surface, like a fitted black crew-neck shirt. Upon close inspection, a band of thicker fabric mid-torso is apparent, and it houses a Bluetooth transmitter, an accelerometer, and a gyroscope by OMSignal, a biometric-tracker company. 

Much of Silicon-Valley tech's toeing the runways this year is not so much about standing out as about blending in.

"Wearables need to take account for varying tastes, not least between genders," Nick Spencer with ABI Research told the Washington Post. "One size, or even design form—touch-screen designs, for example—doesn't fit all as it does to a much larger degree in consumer electronics. Designers need to play a key role here."

BaubleBar's co-founder put it less subtly in an interview with the New York Times: "There's a reason we all make fun of someone wearing a Bluetooth or a BlackBerry holster. Is it useful? Of course it is. Do I look like a tool? Yeah. I'm not going to wear it."

We've already seen fitness-tracker bracelets go from tech-gaudy to approach wearability in non-gym settings. Nike this year released the FuelBand SE with embellishments nodding to aesthetics, rather than athletics: gold, rose gold, and silver. The Basis watch—beloved by techies, but frankly clunky-looking—debuted a leather strap and slightly more stylish chrome frame this year. It's called Carbon Steel. The Misfit Shine—a sleep and fitness tracker—is being marketed as not just a workout companion, fit to clip onto a swimsuit or basketball kicks, but also as a sleek accessory: Pin it to your tux or don it as a pendant on a necklace with that gown. (It comes in not just black and silver, but also an array of colors one might find in an Anthropologie catalog, such as "coral," "wine," and "sea glass.")

What we'll see on the runways this year is a bit of embellishment on these themes. Fitbit, the Jolly Rancher-sized fitness tracker that's worn as either a bracelet or a clip-on, has been collaborating with luxury brand Tory Burch. Together, they have created a small golden cage for the Fitbit that doubles as a pendant for a necklace, and a similar Fitbit cage for the wrist, in the form of a hinged metal bracelet, which retails for $195. (A silicone bracelet, available in pink or blue, is $38.) Look out for these on models at Tory Burch's September 9 show.

Not all these wearables are for measuring one's heart-rate and daily footsteps. A fascinating collaboration between Intel and noted New York-based fashion brand Opening Ceremony, along with the Council of Fashion Designers of America and Barneys, is resulting in a device that appears inspired by Dynasty colliding with Sherlock Holmes. From the outside, it's a large, stone-encrusted metal cuff. Open it up, and it reveals a curved display, useful for "communications purposes," according to Ayse Ildeniz, Intel's head of business development and strategy for its New Devices Group. 

If that sounds cryptic, it is: Intel is debuting the bracelet on the runway of the Opening Ceremony show at Fashion Week, but it isn't releasing the exact purpose of the bracelet-shaped communications device yet. However, Ildeniz told Inc. that it may be most useful for reading one's social-news feeds and being "in touch with your loved ones." The device uses radio waves to communicate, so it requires no smartphone pairing. It already has a name, though: Mica, an acronym for "my intelligent communications accessory."

Ildeniz said for Intel, the partnership with fashion brands was a significant learning experience, one in which Intel let the designers lead, in order to focus on not just the technology, but also what consumers actually want from an aesthetic perspective.

"If we are to make wearables available to not just a few people, but to hundreds of millions of people, our philosophy is that the fashion industry needs to be in the drivers seat, not technology," she said.

Google Glass has been working with massive eyewear-maker Luxottica to design more mainstream-looking face computers. And Google's relationship with Diane von Furstenberg is deepening: It launched a collection called "DVF | Made for Glass" that includes five styles sold on website Net-a-Porter for roughly $1,500 to $1,800 each.

Far off the runway—but with auspicious timing—is Apple. The company made Sept. 9 its official launch date, for what's widely expected to be a new iPhone and also its hotly-anticipated smart watch. That date, of course, lands the event right in the middle of fashion week, albeit at the company's headquarters in Cupertino, California. (Critics speculate that what's been dubbed the "iWatch" may actually be more of a fashion accessory for the iPhone that provides extra health and fitness information to its wearer.)

Perhaps closest to something women might buy due to a perfect mix of its aesthetic appeal and technological usefulness is a Rebecca Minkoff bracelet that's debuting this week. It's one of several accessories the brand is announcing that will double as USB caves and cell-phone notification accessories. They're also relatively affordable: $40 to $120.

Still, these are no Harry Winston-level jewels. (Although, in fairness, a French jewelry designer who's worked with both Harry Winston and Louis Vuitton worked also on an attractive—and sparkly!—bracelet for tracking sun exposure, by tech company Netatmo.) While we'll see plenty of Tory Burch, Intel, and Fitbit armbands on the runways, and in fashion-magazine pages, it may still be years before a biometric device truly becomes a fashion statement—if it ever does. 

Sept. 5 2014 11:42 AM

California Wants to Be an Olive Oil King

First California came for Europe's dominance in wine. Now the state has its eye on olive oil. According to a recent piece in the Los Angeles Times, California growers and producers are in hot pursuit of the $5.4 billion olive oil market and are seeking new regulations that would help them compete with European importers. If new rules were approved, they could eliminate deliberately vague descriptors such as "light" and "pure" and require testing oil for purity and quality. ("Light," for example, does not indicate an oil with fewer calories, but rather one that contains low-quality oil refined through chemical processing.) Californians are betting that their olive oil is better than most of the stuff made in Europe, and think new rules and testing will demonstrate that.

While California oil makers currently account for less than 1 percent of global production and only slightly more of U.S. consumption, that share is growing. Since 2007, U.S. olive oil production has increased tenfold to 10,000 metric tons. To put that in perspective, Americans consumed 293,000 metric tons of olive oil in 2013, most of which came from European countries such as Spain and Italy. The dream for California producers is to create a better, higher-quality oil than their European competitors—and in doing so, convert their fellow Americans to choosing California olive oil first. New labeling standards could help make that dream a reality. They could also help attune Americans to the still-surprising fact that most extra-virgin olive oil made in Italy is neither extra-virgin nor made in Italy.

So far, European sellers are not taking kindly to the idea of stricter testing and labeling standards. The L.A. Times reports that the European Union warned in a letter to the California Department of Food and Agriculture that "the standards would be burdensome and confusing for consumers." But that line of argument sounds a little hollow coming from the same regulators that impose strict rules to govern the use of "geographical indications" in marketing and labeling on some of their countries' most prized products. Champagne, to take the most famous example, is only Champagne if it comes from the Champagne region of France; everything else is simply sparkling wine. So seriously are these restrictions taken that over the summer European winemakers vehemently protested the Internet adding .vin and .wine to its Web addresses because they thought it would make it easier for unethical wine sellers to hawk inauthentic and low-quality goods to unsuspecting buyers. 

Jeff Colombini, an olive grower at Lodi Farming in Northern California, told the L.A. Times that Europe's hostility toward changes in labeling and testing is rooted in fear that new rules could give American production an edge in the market. "The importers know that if we establish ourselves as the premier, authentic producers of olive oil, we'll cut into their business over time," he said. "They're running scared." Given that Europeans certainly like authenticity guidelines that work in their favor, Colombini has a point.

Sept. 5 2014 9:33 AM

The Job Market’s Hot Streak Just Snapped

It's all over, folks. Payrolls grew by just 142,000 in August, according to the Bureau of Labor Statistics, well below expectations. Previously, the economy had added at least 200,000 jobs for six months straight, something that hadn't happened since 1997. The streak was nice while it lasted.

Meanwhile, the unemployment rate (6.1 percent) and labor force participation rate (62.8 percent) barely changed. On the bright side, average hourly earnings are up 2.1 percent for the year. 

It's always important to take the long view on the jobs report, which will be revised in the coming months—though probably not enough to put August over the 200,000 mark. But that view is pretty dull. The three-month rolling average of job creation has fallen back into the same range it's been hovering around for roughly the past two years. It's the same old story, plodding along.

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Sept. 4 2014 4:20 PM

What It Really Takes to Open a Craft Distillery

This article originally appeared in Inc.

Boutique American distilleries are having a moment. But just because you've figured out the perfect recipe for your artisanal whiskey doesn't mean you can start selling it. There are three levels of red tape craft distillers have to get past—federal, state, and local, which can entail cities and/or counties—and many rules are time-consuming, and often non-existent. (One distiller I spoke with said it isn't unheard of for local authorities to go back to the books and look up workarounds.) 

Washington is home to the most craft distilleries (80), while Colorado (50) and Michigan (about 40) trail closely behind. The reason for this, says Bill Owens, founder and president of the American Distilling Institute, is their progressive legislatures. In Michigan, that means being able to open tasting rooms downtown where tourists can see them and operating your distillery in town, not near a refinery.

Yet in states like Arizona, where craft distilling is a fairly new phenomenon, entrepreneurs face an uphill battle trying to secure their licenses. With that in mind, here's an overview of some of the red tape craft distillers encounter as they try to get off the ground. 

Federal

Most distillers I spoke with said this step of the process is cut and dry, but there are still some things to watch out for. The application for a federal license is essentially "a full background check," warns Rick Burch of CaskWerks Distilling Co. in Tempe, Arizona, "and they're really concerned with your plan for security as far as how you're going to secure your facility from potential hazards such as fire, theft, and internal theft." This means you'll need to lease or purchase your facility beforehand and be prepared to explain how you'll protect it. You may also be asked to include documentation as proof you're in charge. 

Speaking of background checks, make sure your record is clean. "They want to know your family history," says Burch, "you can't be a felon; you have to be a good, upstanding citizen." Questions may pertain to your spouse, your top investors, and from whom you secured a loan. It's in-depth and rife with personal questions. 

Another concern to keep in mind is taxes. Say you have $100,000 worth of whiskey but lose most of it in a fire. Even if it's gone, you'll still be required to pay a tax to the government as if you had sold the whiskey. Why? Because it ensures you won't get out of paying your taxes. 

If you plan on producing new products—and who wouldn’t?—you may find yourself dealing with the feds more often. Every new formula must be approved. "You have to get data sheets on everything that goes in there, get label approval, and register new labels with the state," explains Troy Roberts of Drum Circle Distilling in Sarasota County, Florida. For instance, getting his new coconut rum approved has taken three months so far, and he's still waiting to hear back on his label. "Realistically, you have to give it six months before you get it in bottles," he says.

State

Securing a state license isn't so hard once you have your federal license, but rules vary wildly from state to state, and some are more hospitable to craft distillers than others. What's clearcut in Florida may not be in Arizona, and New York has only become more welcoming in the past 10 years. Arizona didn't even offer a craft distiller's license until this year. "Originally, we were going to get the same license as a huge vodka manufacturer—a producer's license," says Burch, who advocated for the new license. "Now we can do craft fairs and farmers markets, and that counts as a sale from the front of our house." 

It also varies how people are allowed to market their spirits directly to customers. For instance, Roberts has a tasting room but can only sell two bottles of rum to each customer per year. "We have to keep track of who buys what," he says. "We're working on changing that." 

Wherever you are, find out the liquor laws in your state and get familiar with them. "If there is a domestic or micro-distiller's license, that's great," says Burch, "because that means someone has gone before you and got that initiated." If not, expect to encounter a lot of red tape. 

Local

It's the rare craft distiller who hasn't had a run-in with local authorities. Roberts says, "They had no idea what to do with me," when he applied for his license in Sarasota County. "They thought, you're going to be a rum bar or a rum distributor because I'm the first craft distiller in this area." Thankfully, once they did some research and figured out where he needed to be zoning-wise, things got a little bit easier. "The water people came out to make sure we're not draining stuff improperly, the fire marshall had us make changes, sealing off space and installing bigger sprinklers, but there was nothing real difficult for us."  

That may have been because he's outside of the city. Paul Hletko of Few Spirits in Evanston, Illinois, took three years becoming acquainted with Chicago's maze of rules but still says craft distilling "is a heavily regulated business."* He must track every "drop of alcohol" he produces, after all. 

For this reason, Burch of CaskWerks recommends "making as many friends as you can" with local authorities, since it isn't uncommon to go back and spend money on retrofitting to "satisfy someone's request." One friend had an inspector come to his plant and say everything looked great only to meet with another inspector who spotted something he didn't agree with from the previous checklist. "Some get an overzealous fire marshall," Roberts says. 

*Correction, Sept. 4, 2014: This post originally misspelled the last name of Few Spirits’ Paul Hletko.

Sept. 4 2014 2:29 PM

Pinterest Congratulates All the Single Ladies on Their Weddings

Pinterest wants to help women plan their weddings, as it told users in an email blast on Wednesday. Too bad many of them were single.

"You're getting married!" the email opened excitedly. "And because we love wedding planning—especially all the lovely stationery—we invite you to browse our best boards curated by graphic designers, photographers and fellow brides-to-be, all Pinners with a keen eye and marriage on the mind."

Some took the email with good humor. But needless to say, not everyone was amused.

Pinterest's faux pas follows a similar error from online photo site Shutterfly in May. In that slip-up, the company touched a nerve when it accidentally congratulated scores of women without babies on their new arrivals.

Update, Sept. 4, 2014, 4:15 p.m.: Pinterest emailed us the following statement about its marketing mishap:

Every week, we email collections of category-specific pins and boards to pinners we hope will be interested in them. Unfortunately, one of these recent emails suggested that pinners were actually getting married, rather than just potentially interested in wedding-related content. We're sorry we came off like an overbearing mother who is always asking when you'll find a nice boy or girl.

Sept. 4 2014 12:53 PM

America May Have the Worst Hunger Problem of Any Rich Nation

During the recession, the number of Americans threatened by hunger skyrocketed. But during the recovery, as the U.S. Department of Agriculture reported yesterday, the number has barely fallen. All told, the government finds that more than 14 percent of households are considered “food insecure,” meaning they at least have difficulty affording meals, and in extreme cases may go without eating.

To understand just how embarrassing America’s hunger problem is, it helps to put it in a global context. Unfortunately, according to the Organization for Economic Co-operation and Development, “there are no internationally comparable statistics on food insecurity that are as detailed as those of the United States.” However, there are some useful numbers available, thanks to the researchers at Pew and Gallup who have polled citizens across the developed world about whether they can afford enough food for their families. According to Gallup’s findings, cited by the OECD, Americans are far more likely to say they were unable to pay for food than citizens of other rich countries. In 2011 and 2012, 21 percent of U.S. citizens reported food trouble, versus 8 percent of British survey takers, 6 percent of Swedes, and 5 percent of Germans. Estonia and Hungary had bigger problems with food affordability than the U.S., but both are relatively poor among developed nations.

The U.S. fared somewhat better by comparison in Pew's polling. In its 2013 results, 24 percent of Americans said they had difficulty affording food during the past year, only slightly worse than France (20 percent), on par with Greece (24 percent), and a little better than South Korea (26 percent). But countries like Britain, Australia, Canada, and Germany all performed much better. (Click here for an interactive version of the chart below.)

In an ideal world, we'd have more detailed statistics for each country, similar to what the USDA produces. Nonetheless, Pew and Gallup's findings suggest that the U.S. could have one of the worst hunger problems in the developed world—and among rich countries, we might have the worst of all.

Sept. 4 2014 10:54 AM

“Recline Rage” Is on the Rise. Lean Back at Your Own Risk.

A little over a week ago, United Airlines Flight 1462 from Newark, New Jersey, to Denver was forced to divert midtrip because two passengers got into a fight over legroom. Since then, not one but two additional U.S. flights have been forced to make unplanned landings because of similar in-air squabbles. On Aug. 27, an American Airlines flight from Miami to Paris was diverted to Boston after a passenger began quarreling with the traveler in front of him over a reclining seat and, when the dispute escalated, grabbed the arm of a crew member. Then on Sunday, a Delta flight from New York to West Palm Beach, Florida, landed prematurely in Jacksonville after a passenger who reclined angered a woman who'd been sleeping on the tray table.

The seeming explosion of in-flight battles over legroom is being dubbed "recline rage" and attributed to the ever-smaller seats that today's airlines cram passengers into. Over the past few decades, seats have dwindled by about two inches in width and shrunk two to six inches between rows; the most tightly packed seats now allot a mere 28 inches in that regard. Passengers have unhelpfully done just the opposite—growing taller and packing on extra pounds. "It's No Longer Safe to Recline Your Airplane Seat," declared an Associated Press headline earlier this week.

Clearly, things are getting a little out of hand in the skies. But does the recent spate of diverted flights signal an epidemic of "recline rage," or is this a relatively common problem that has only recently gotten media attention? "The incidence of air rage has been going up consistently year by year," says Robert Mann, a former airline executive and president of airline consulting firm R.W. Mann & Co. Customers are increasingly upset with the tight quarters they've been given by airlines and tend to give lower satisfaction marks to fuller flights. "It's not surprising that in August, which is the peak season for North American airlines, that this would manifest more frequently," he says.

Then again, more frequently still doesn't mean this sort of incident is common. According to Airlines for America, diversions of any type are "extremely rare." Only one in 500 flights is typically diverted for reasons ranging from weather to mechanical issues to medical emergencies. Diversions from passenger disruption are much more infrequent. The International Air Transport Association told the AP that unruly passengers are an "escalating problem" that have disrupted one in every 1,300 flights over the past three years. The Department of Transportation doesn't break out specific reasons for diversions.

And here's the bigger question: Should scuffles over legroom really cause flights to divert? Once the plane begins operating, that decision ultimately lies with the pilot and crew. "Flight attendants and pilots are trained in threat levels—and that includes everything from a passenger who refuses a safety directive up to high threat levels, things that could manifest themselves in serious danger to the flight," says Jessica Wheeler, a spokeswoman for Allegiant Air (which, for the record, does not use reclining seats). "Each situation is going to merit a different response."

Mann argues that the threshold for diversion as things stand is far too low. He notes that every hour an aircraft spends in the air costs about $6,000. "If you have to go an hour out of the way, it's a significant expense to the airline and a significant inconvenience to the people on board," he says. What's more, if in the process of a diversion the pilot and crew reach the maximum work hours allowed by regulation, the flight could be canceled until an entirely new pilot and crew is brought in. "More thought needs to go into it," Mann says. "I just see these as issues that shouldn't have resulted in a diversion."

With August wrapped up and Labor Day weekend over, the instances of legroom-induced air rage will hopefully start to taper off. But at the rate we've been going it seems safe to add: Recline at your own risk.

Sept. 3 2014 7:06 PM

The Number of Hungry Americans Has Barely Fallen Since the Recession

Here’s your reminder that, in the United States, reigning global power, there are still millions of people who have trouble getting enough to eat.

Each year, the U.S. Department of Agriculture produces a report on hunger in the U.S. And much like the poverty rate, the fraction of Americans who have difficulty putting meals on the table has stayed stubbornly high since the recession. The latest version finds that for six straight years now, more than 14 percent of households have suffered from “food insecurity”—meaning that they had at least some problems affording food but didn’t necessarily go hungry. Over that time, however, more than 5 percent suffered “very low food security”—meaning someone in the home either had to eat less than they wanted or skipped meals entirely. Those households facing actual hunger included 17.1 million people in 2013, barely changed since 2008, when the number skyrocketed to about 17.3 million thanks to the recession.

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The good news about food insecurity in the U.S., insofar as there is any, is that it’s rarely chronic. Poor families often have trouble buying food during a particularly lean time of the year, or at the end of a month, when their food stamp benefits tend to run low. But most of the time, they’re able to feed themselves. On a given day, only an estimated 1.1 percent of households actually have to cut back on their food.

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Still, that makes it no less a shame that so many families face the threat of hunger in a country this rich.

Sept. 3 2014 6:24 PM

Wall Street Is Getting a Little Less Miserable

Hours. Pay. Work-life balance. Overall satisfaction. In just about every way, Wall Street is getting a bit more bearable, according to an annual survey of top financial institutions conducted by career services and information site Vault.

The Blackstone Group, a global asset management firm, earned the No. 1 ranking for the second year running with peers rating it highly in terms of prestige and its own employees giving it strong scores for various quality-of-life factors. Goldman Sachs came in second but fared poorer in the quality-of-life evaluation. Morgan Stanley and JPMorgan followed in third and fourth, respectively. And across the industry, bankers reported significantly higher satisfaction on average than they did in either of the previous two years.

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Chart from Vault

In its analysis of the rankings, Vault theorizes that big-name banks like Goldman are benefiting from a concerted push to ratchet back hours for the newest employees. These policies, known by names such as "protected weekends," have included giving junior bankers Saturdays off or promising at least one entirely uninterrupted weekend per month. So far junior bankers seem to have a love-hate relationship with the increased time off: They appreciate the added freedom but fear it might be coming at the expense of their coveted bonuses.

Then again, if bonuses are staying static, salaries are climbing. In late August, a string of firms announced plans to increase base pay for junior bankers by at least 20 percent beginning in 2015. The move is expected to bring prebonus salaries for analysts at top-tier banks to around $85,000. Vault's data suggests that the overarching trend continues to be up: As you can see from the chart below, bankers industry-wide said compensation improved from the previous year, if only slightly.

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Chart from Vault

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