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Government Shutdown Hoedown: Answers To Your Most Pressing Questions

Pictured: The emotions of pretty much every American right now

It finally happened. Congress couldn’t agree on a budget in time, and now the government shut down is in effect. Some of you reading this may feel frightened, others may salivating at the thought of pure sweet anarchy. Either way, if you’re an American citizen you probably have a lot of questions about what a government shut down is and what it actually means. Don’t fret, ROI-Zone is here to help quell your fears and answer your biggest questions.

We’ll leave quietly Ms. Fergie

Why is the government even arguing about a budget in October? Shouldn’t this shut down have happened on January 1st or something?

The timing of the shutdown may seem strange to the majority of us, but it makes perfect sense to people who work for Uncle Sam. You see, the government’s fiscal year doesn’t follow the usual year marks we’re used to. For reasons no one really understands, the government’s fiscal year starts on October 1st and ends on September 30th. Usually the government has a yearly budget ready to go by the end of September, but that didn’t happen this year.

WUT

Wait a minute, if this is about a budget why is everybody screaming about Obamacare?

This is where it gets confusing. Essentially Republicans are very upset about certain stipulations in the Patient Protection and Affordable Care Act (the real non-partisan name for the health care law). Since the law requires that employers provide health insurance to their employees, the GOP believes that it’ll hurt small business owners and that the government shouldn’t be involved in how private businesses choose to handle insuring their employees.

The Patient Protection and Affordable Care Act pretty much has nothing to do with the budget, but because of political ideologies Republicans chose to incorporate their demands into the budgets they came up with. House Republicans insist that any new spending bill should include provisions to either make changes to the Patient Protection and Affordable Care Act, de-fund it, or take it away completely.

AUGH

How did this become such a bizarre mess?

Essentially the House of Representatives is controlled by republicans and the Senate is controlled by democrats. Republicans would pass something in the house, democrats would deny it in the senate, and the whole thing repeats over and over again. Both sides refused to budge on certain issues, and also failed to reach a compromise.

A whole lot of nothing

What happened over the past few days?

On Sunday morning the House passed two spending bills, one would delay the Patient Protection and Affordable Care Act for a year, and another would repeal the plan’s medical device tax. When the bills went to Senate on Monday they were rejected, which caused the House to approve another spending plan that would remove the individual mandate clause of the Patient Protection and Affordable Care Act. The Senate also rejected that plan. Both the House and the Senate failed to reach an agreement before the midnight deadline that day, and as a result the government shutdown went into effect at midnight on October 1st.

Luckily, the opera glasses industry is booming despite the shutdown

What happens now?

The Senate will meet again and probably decide if they want to negotiate with the House.  Senate majority leader Harry Reid said he wouldn’t consider meeting until the House strips the Patient Protection and Affordable Care Act amendments from the spending bill, so don’t expect a fast resolution.

It was a simpler, more innocent time for our nation

OMG has this ever happened before?!

In before times in the long long ago in the ancient and mystical year of 1995, the federal government experienced a shutdown. While Americans were enjoying TGIF and guzzling Fruitopia, democratic President Bill Clinton and the republican controlled Congress clashed over funding for Medicare, education, public health, and environmental programs. The government was shut down after Clinton vetoed the spending bill Congress sent him, and non-essential government workers were put on a furlough while non-essential government services were suspended. The shut down occurred from November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996, culminating to 28 days of government chaos.

We don’t even LIKE the EPA or FDA

So, who gets kicked out of their office?

Out of 3.3 million workers the government employs, only about 800,000 employees will be temporarily out of work. Most of the furloughed federal workers were supposed to be out of their offices four hours after the official start of the business day on October 1st.

Bye bye money :)

How is this going to affect the economy?

Depending on who you’re talking to, it’ll either barely have an affect or it’ll completely bring us to financial ruin. Most economists do agree that the affect it’ll have on the economy depends on how long it goes on for. Brain Kessler, an economist with Moody’s Analytics, estimates that a 3-4 week shut down could cost the economy about $55 billion.

Honestly, I just really wanted to use this gif

Is this going to affect me?

That kind of depends. National zoos, parks, and monuments will be shut down (there were a lot of confused and angry tourists at the Statue of Liberty Tuesday). Last time the shutdown occurred over 200,000 applications for passports went unprocessed, but according to the State Department that won’t happen this time. Social security recipients will still be receiving benefits, but people who are looking for federal money through loans will have to wait. The garbage men will still pick up your trash, but not if you live in DC since they currently don’t have a budget since that also must be approved by Congress. So the answer is, yes?

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France Debuts Bold And Innovative Plan To Jumpstart Economy (That They Already Tried in 2010)

The United States is far from the only country that is desperately trying to get back some of its former economic glory.  Out of all of the EU nations in economic turmoil France is far from the worst, but the country has been struggling to jump start its economy for decades.  Other European nations like Spain and Germany have been adopting polices that make their country’s much more business friendly since the 1990s, and now France is looking pretty expensive to businessmen in comparison to their neighbors.

Hindsight is 20/20

French labor costs are the highest of any major EU economy, and taxes have risen considerably over the past few years.  France recently lost the business of Michelin which closed its 52 year old factory in favor of moving operations to Spain, and it’s possible that other companies could plan on jumping ship to cheaper nations.  These events paired with the fact that the country’s economy has barely grown over the past few years spells an economic dry spell for France, but its president recently announced plans to bring some money back to the struggling EU nation.

President François Hollande is planning on jump starting the French economy by investing billions in up and coming technology.  When you look at the country’s past economic success with revolutionizing nuclear power and high speed trains Hollande’s plan seems practical, but some economists are doubtful that the investments will have much of a payoff.

Pictured: Not France

Pumping nearly 3.7 billion euros into industries that are working on 3D software, robotics, and other futuristic technology seems very similar to ex-president Nicolas Sarkozy’s plan to pump money into emerging technologies in 2010.  That plan was 5 billion euros worth of failure, nearly three years after his Hail Mary plan corporate profit margins in the country are the lowest they’ve been since 1985.  Corporations are already wary of settling down in a country where wages and business taxes are high, so for this to work France would need to not only keep the companies that are already in the country, but also somehow attract other companies that could easily do business in cheaper surrounding countries.  Only time will tell if the plan will work, but most economists are doubtful that it’ll help.

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Help Me I’m Poor: New Report Shows That Americans Are Overworked And Underpaid

Every American worker

Do you have a nagging feeling that you’d be earning nearly double the amount of your current salary if the economy was better?  Well wage slave, there’s some good news and bad news!  The good news is that it isn’t all in your head.  A report from the Economic Policy Institute shows that the American economy is going through a period of wage stagnation.  The bad news is that their numbers were taken from 2002 to 2012, so wages were awful well before the economic crash of 2008.

Between 2002 and 2012 wages were either stagnant or declined for the entire bottom 70% of the wage distribution.  Wages may have been at their worst in the past 10 years, but these numbers come after a few decades of poor wage growth.  Essentially the American wage has been in decline since 1979.  Workers saw a brief period of growth thanks to internet boom in the 90s, but even then those who experienced a wage increase were in very specialized fields.

The average worker has seen a meager 5% wage increase from 1979 to 2012, despite the fact that worker productivity on average has been skyrocketing.  Essentially all of your after work whiskey rants are true, you ARE working way too hard for much less pay than you deserve.

Get used to it America

The news gets even worse.  Wages aren’t the only thing that has decreased, workers benefits like healthcare and paid time off have dropped off along with earnings.  The college wage premium (the wage held by workers with college degrees over workers without degrees) has grown much more slowly over the past decade in comparison to 20 years ago.  If that didn’t make you depressed, you should also know that corporate profits are at an all-time high in this country.

This may be shocking to you, but this isn’t news to the average economist.  People know that there’s a problem, but have no idea how to fix it.  Some workers have tried striking, but walk outs and protests won’t be able to fix the problem.  Despite the fact that many Americans think corporations could stand to pay their employees more, they’re also rabidly opposed to making it happen since they’re worried that the “job creators” will leave towns and states if they’re forced to pay their employees a living wage.    Washington D.C.’s infamous living wage bill was passed by a vote, but it seems like Mayor Vincent Gray is stalling on signing the controversial bill into law.

Currently we’re at an impasse, we know that there’s a problem but the public and the people in power can’t agree on what to do.  If you’re affected by low wages, your best bet is to take on a 2nd job and forgo eating, clothing yourself, and taking care of your children.

They’ll be fine

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NASDAQ Shut Down Caused By Computer Error, Jimmies Remain Rustled

Don’t cry my child, the jimmies will soon be back in order

Yesterday the global financial market had a horrifying scare when the NASDAQ was inaccessible and offline for three hours Thursday.  The shutdown didn’t happen because people were worried about a terrorist attack, nor was it shut down because of some sort of national emergency.  A “minor” computer error put the entire system on lockdown, and now people across the industry are worried about the security of one of the most crucial financial systems on the planet.

A three hour shut down may not seem like that big of a deal to you, but you need to keep in mind that the NASDAQ is the second biggest American market operator and is the trading home for 3,200 companies across 37 nations.  The mistake was so serious that President Barack Obama was notified of the shutdown shortly after it occurred, and now SEC chairman Mary Joe White wants to meet with exchange leaders in Washington to discuss vulnerabilities in the system.  Their alarm may seem suspicious, but they have a good reason to scramble the finance troops.  If a minor computer error was able to shut down the NASDAQ for a few hours, imagine what skilled hackers could do.

The IT specialists at the stock exchange are probably in for some trouble, but most people have their pitchforks and torches aimed at the NASDAQ’s chief executive Robert Greifeld.  Some people still haven’t forgiven Greifeld over last year’s Facebook IPO disaster, and this news has only added more fuel to the “Greifeld sucks” fire.  People are upset that Greifeld wasn’t reachable when people first noticed the trouble on the trading floor.  To be fair, Greifeld wasn’t available since he was at a wake in New Jersey, but for some death isn’t an excuse for not doing your job.  Greifeld attempted to do damage control on CNBC and Bloomberg TV this morning, but people still feel like they didn’t get a reasonable explanation for the catastrophic shut down.

It’s very likely that there will be more news about IT security issues in the stock market, and even more likely that Greifeld will do something to embarrass himself even more.  All you can do now is sit back, relax, and watch the financial sector have a good old fashioned freak out.

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Luluemon CEO Steps Down, Surprisingly Has Little To Do With Transparent Pants

Not pictured: The legions of perverts behind her taking pictures of her see through clothing

When you hear the name Luluemon, what do you think about?  If you’re like 99% of the population you probably think about tissue paper yoga pants, but the company has been making headlines for a different reason.  Earlier this week Luluemon CEO Christine Day announced that she would step down from her position at the company.  Even though some reporters are trying to say that the pants predicament caused Day to lose her job, Luluemon investors have a very different take on the matter.

The transparent yoga pants didn’t really help the company, but Day actually took the right steps in handling the problem and confronting it in the press.  If anything the whole scandal just showed how competent of a CEO Day was.  Instead of shuffling around employees and scapegoating, she fired the company’s Chief Product Officer and got started immediately doing damage control by offering customers refunds and discounts to get back in their good graces.

Stock shares grew significantly when Day was in control of the company.  They were just at $4 a share when she started, and they closed at $80 share before she announced her leaving the position.  The number of stores nearly tripled during the five years she was in charge of the company, and they’ve become an established household name during a time where economic growth was stagnant and people were quickly dropping brick and mortar retailers for e-tailers.

Day may have done everything right when she was in charge, but some people think that her departure could be a sign that there’s going to be trouble for the company that has experienced a meteoric rise to the top.  Her discounts may have helped some customers come back to the business, but Luluemon still hasn’t fully recovered the share of customers they lost after the big recall.  Since Day didn’t name a successor, shares dropped by $10 the day she announced her decision to leave the company.  Some also wonder if their expansion in men’s clothing is a logical next step, or a short sighted attempt to seem innovative when they’re out of ideas.  Either way, it seems like Luluemon will never be the same.

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The Economics of Turkey

Unless you live under a rock (or live in Turkey and get your news from national broadcasters), you’re probably aware of the turmoil happening in Turkey right now.  What started off as a peaceful protest over a new shopping mall turned into a full blown rebellion, and now people are eagerly watching to see what’s going to happen next.

There are a lot of reasons why the Turkish people are protesting.  Their “democratic” country has been slowly shifting to a more conservative theocratic organization, and their leader has made a lot of questionable and potentially dangerous decisions.  People are talking a lot about the political reasons behind the protest, but are neglecting to talk about a big underlying reason of the current situation: the Turkish economy.

One of the reasons why Prime Minister Recep Tayyip Erdo?an has gotten more and more brazen with his political decisions has to do with the country’s somewhat recent economic expansion.  During the decade Erdogan has been in power the country has experienced an extraordinary period of economic growth.  This time period cemented Turkey’s status as the “model child” in the family of Islamic countries.  You see, Erdogan is backed by the Islamist Justice and Development Party, a powerful religious political party that came to power in 2002.  Most countries (mainly the US) were horrified when nearly a year after 9/11 there was another Islamic republic coming to power, and to their surprise absolutely nothing negative came from it.   When other countries were training terrorists and fighting over the good swing Turkey was quietly playing with legos while building up their economy.

When Erdogan was in power their out of control budget deficit and inflation problems drastically improved, their loans from the International Monetary Fund were paid off, and per capital income nearly tripled.  The older generation had never seen this much prosperity and supported Erdogan fiercely, and other countries were praising his efforts.

The flip-side of Erdogan’s rule isn’t nearly as sunny.  While some Turkish nationals praise his economic decisions, others argue that the Erdogan economy isn’t nearly as prosperous as they think it is.  Even though the purchasing power for most Turkish people has dramatically risen, many are in a lot of debt. There’s no doubt that the underlying reasons of the protest have more to do with political ideology than anything else, but the economy is one of the main things that has some Turkish people behind Erdogan

 

 

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Yahoo Purchases Tumblr For $1.1 Billion

That Feel

The internet exploded a little Monday when the news hit that the relevant in the 1990s internet company Yahoo purchased Tumblr for a little over $1 billion (technically they made the deal Sunday, but that detail isn’t that important).  The Yahoo/Tumblr deal is the largest acquisition of a social networking company in years, surpassing last year’s Facebook/Instagram deal by mere millions of dollars.  Some believe that the acquisition was a bold move from Marissa Mayer, the CEO of Yahoo and the brief target of internet rage after she took away her employee’s work from home days,that was done in order to make today’s internet whipper snappers care about Yahoo.

Actual footage of acquisition

 

Some people wonder if Mayer made a mistake purchasing such a large and popular company, but since she has been the CEO she has made a number of acquisitions and they have yet to burst into failure flames.  On the other hand Yahoo’s acquisition of Flickr could have turned out a bit better, so some people think their worrying is justified.  People on Yahoo’s end swear that they don’t plan on making a lot of changes to tumblr’s policies and that users shouldn’t expect to see much change.  Bloomberg Businessweek was kind enough to point out that they may have a problem keeping that promise.

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Cyprian Financial Crisis 2: Electric Boogaloo

You’re welcome.

It’s time to praise your economic gods, after days of tension the EU and the IMF have finally reached a deal to help bail out Cyprus.  On late Sunday/early Monday (kind of depends on which timezone you’re in) the powers that be approved a 10 billion euro (about $13 billion in dollars) plan that’s going to temporarily bring some big changes to the country.  Cyprus will be shutting down its second largest bank Laiki, and will be putting deposits under 100,000 euros into the Bank of Cyprus in hopes of creating a less awful bank.

Curious about what will happen to the bank’s larger deposits?  Deposits that are over 100,000 euros from both the Bank of Laiki and the Bank of Cyprus will be temporarily frozen and used to take care of the nation’s debts and to recapitalize the Bank of Cyprus.  By tomorrow the nation’s banks should be fully functioning, but it’ll be an extremely regulated functioning.  Some people wonder if Cyprus’ crisis will be the straw that broke the euro camel’s back.  Others wonder if this bail out deal will be the model for other European bail outs.  It’s too early to tell what far reaching affect the bail out deal will have, but there is one thing that’s certain in these uncertain times: the citizens of Cyprus are still pretty much screwed.

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A Watered Down Explanation of the Cyprus Financial Crisis

Up until Monday if you asked the average person what they think about the situation in Cyprus, you’d probably get a confused glance and accusations that Cyprus isn’t a real country.  Today people know that the Republic of Cyprus does indeed exist because this small island nation is about to screw up the world economy.  This all happened kind of fast, so it’s okay if you aren’t exactly sure what’s going.  That’s why you have ROIZone to give you the basics of the situation.

It’s no secret that the European Union and the euro have been pretty much screwed since 2008.  Austerity didn’t work out as well as people had hoped it would, and some countries have gone a little crazy because of the financial stress.  You got people in Spain and Bulgaria self-immolating in front of banks, and Greece seems to be slowly morphing into the Fourth Reich.  Things are bad all over, but Cyprus is going through its own special financial hell right now.

In September 2011 Cyprus’ credit rating was downgraded by every major credit rating agency, and it had a ripple effect that nobody planned for.  Island nations are great for off-shore banking, and some of the world’s ruling class had their money safely tucked away in Cyprian bank accounts to protect it from their home government’s greedy hands.  It would be a gross exaggeration to say that all of Cyprus’ money was tied up in off shore accounts, but it was enough to cause some problems.  After the downgrade the wealthy couldn’t withdraw their money fast enough, and that combined with the massive debt banks held from Cyprus’ own citizens sent their banking industry into a downward spiral.

Cyprus would have gone under if it wasn’t for the kindness of the Russian government.  In January 2012 the Russian government loaned the nation 2.5 billion euros (about $3.236 billion) because they’re just cool like that.  It has a relatively low interest rate and its good for 4 ½ years, and Cyprus expected to be able to bounce back by the first quarter of this year.    Unfortunately in June 2012 Moody’s and Fitch downgraded their credit rating to complete crap, and that rating officially disqualified them for being accepted as collateral by the European Central Bank.

daaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaamn

Actual shot of Putin rushing to save Cyprus (daaaaaaaaaaaaamn baby)

Cyprus spent the last months of 2012 and 2013 freaking the hell out, but last week it seemed like their troubles would be over.  The European Union and the International Monetary Fund agreed to a 10 billion euro deal with the country, allowing it to join the other European deadbeat countries of Portugal, Greece, Ireland, and Spain.  This hail-mary deal did come with a small stipulation.  Every bank deposit under 100,000 euros would have a levy of 6.7% imposed on them, and deposits that exceed that amount will have a 9.9% levy.

The bailout wasn’t met with much acclaim.  The Russian government isn’t happy.  EU countries aren’t happy.  The people of Cyprus aren’t happy, and since the bailout deal came to the table financial conditions have gotten worse in the country.  Businesses are refusing credit card payments, and as of today citizens haven’t had working banks in 11 days.

The powers that be in Cyprus and the EU are currently trying to hammer out a deal, and if you want to see how that’s going The Guardian has a great livestream of updates.  Until then all we can do is sit back and watch the financial explosion.

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Apple Settles Lawsuit with Parents Who Got Smurfed in the Smurf From Expensive In-App Purchases

The village of the damned/smurfed

We’ve all been there before.  We’re stuck with a kid who can’t stop whining about being bored, needing food, or craving the love and discipline of an adult.  So to get them to shut up we hand them our iphone/ ipod/whatever electronic device and tell them to play something so we can shut them up.  We get a few hours a of peace, and then suffer from a few hours of abject horror when we get our monthly bill. We see that little Johnny spent $600 on smurf berries, and that a Steve Jobs clone is coming to punch our teeth down your throat if we don’t pay up.

That story may sound a bit farfetched, but if anything it isn’t insane enough to show the problem some parents were having with their kids finding and using “hidden” in-app purchases.  In 2011 Stephanie Kay was taken aback when she received a bill for $1400 from Apple in her inbox, and was presumably even more shocked when she realized that the bill wasn’t a bizarre prank.  Her 8 year old daughter was playing the Capcom game Smurfs’ Village, a game that her mother was able to download for free.  Kay wasn’t aware that the manufacturer made the game free, but chose to make certain items in the game cost money.  These weren’t little multi-use items that cost under $1.99, this game was happily charging its users $99 for a wagon of smurfberries and $19 for a freaking bucket of snowflakes.

It isn’t exactly news that there are free to play games that charge their users for special in game content, but people were particularly outraged that a game that’s marketed to children could have so many covertly hidden and expensive items.  Kay wasn’t the only parent who had lost hundreds of dollars to the smurfs and other cute shovelware games; there were tons of parents that were unknowingly letting their kids play games with absurdly expensive items.  Capcom eventually added a disclaimer to the Smurfs’ Village game:

PLEASE NOTE: Smurf Village is free to play, but charges real money for additional in-app content. You may lock out the ability to purchase in-app content by adjusting your device’s settings.

But by the time they had posted it, it was already too late for some people.

Take my money Apple, I was only using it to make it rain on stockphoto models anyway

Since most apps didn’t require users to re-enter passwords to make in-game purchases, in 2011 rightfully pissed-off parents filled a lawsuit against Apple for making it too easy for kids to purchase in game goods.  Apple essentially changed their in-app purchasing systems in March of 2011, but by then most of the damage was already done.  In a surprising turn of events Apple ended up settling the lawsuit, but the U.S. district court judge who ruled the case is still ironing out the details.

Essentially users who spent more than $30 in in-app purchases can receive a cash refund after jumping through some hoops, and Apple will be required to notify the 23 million+ iTunes account holders who purchased content from certain games about the settlement.  Some people can expect to receive a $5 iTunes gift card for their troubles because Apple feels the need to give their loyal customers one final middle finger.

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