U.S. economy shrinks in first quarter for first time since 2011 (Mercado de Dinero)

Jueves, Mayo 29 2014 11:00 | Escrito por Redacción

 

The U.S. economy contracted by 1% in the first quarter to mark the biggest decline in three years, hampered by harsh winter weather that disrupted business operations and construction on residential and commercial properties, according to newly revised government figures.

The nation’s gross domestic product in the first three months of 2014 fell at a 1% annual rate, vs. the 0.1% increase first estimated, the Commerce Department said Thursday.

Initially the Commerce Department had reported last month that gross domestic product rose at an annual 0.1% pace in the first three months of 2014. The decline in first-quarter growth mainly stemmed from lower investment, especially in new housing, offices and plants. Business investment in structures was revised to show a sharp 7.5% drop instead of a small 0.2% gain.

Residential investment fell by 5%. Companies also restocked warehouses at a much slower pace. The increase in inventories, which adds to GDP, was slashed to $49 billion from an originally reported $87.4 billion. Inventories had grown by more than $100 billion in each of the last two quarters of 2013. Adjusted corporate profits, meanwhile, sank by 9.8% in the first quarter, the biggest decline in almost six years. Profits had set a new record in the fourth quarter, however.

U.S. exports fell 6% while imports actually rose 0.7% instead of falling by 1.4%. Softer net exports also subtracted from first-quarter growth. Consumer spending climbed 3.1%, a tick higher than previously reported. Inflation as measured by the PCE index rose at a 1.4% annual pace, or by 1.2% excluding food and energy, little changed from the preliminary estimate.

Economists expect growth to accelerate this year now that consumers have shed much of the debt they amassed in the mid-2000′s and federal government spending cuts have eased. The housing recovery, meanwhile, is expected to regain momentum after faltering in the first quarter.

Zoli Kahan: Teenager. High School Dropout. Silicon Valley Recruit. (TechRepublic)

While many high school seniors are busy plotting prom proposals and college admissions applications, 18-year-old Zoli Kahan was ready to ditch school and start his programming career. 

Five months before finishing high school, Zoli Kahan dropped out. It wasn't because he couldn't finish- he just didn't want to. He felt he'd passed the point where he was getting anything useful from going to class. And why waste time when he could get going on a career in programming? San Francisco is far more enticing than a desk and locker.

So, the Austin, Texas native, who had already gotten his parents used to the thought of him skipping college, introduced them to the idea of cutting out before turning his tassel.

"Not going to college was one thing, not finishing high school was another," he said. Still, they supported him.

SEE: Do programmers still need a computer science degree to land a great job?

As far as early starts go, this isn't totally unexpected. Kahan's interest in computers started at age 10. He and his dad put together a Shuttle computer. A few years later he got into coding by way of grey hat hacking, and eventually started building his own tools. All of this is to say, he couldn't wait to get started doing the thing that he loved.

His job search even got going early - well, one day early. The day before his 18th birthday, a Google recruiter got in touch with him after he participated in Google Code Jam.

But once legal, Kahan was proactive in reaching out to companies on his own, as well as signing up for Hired.com, a site that lets employers bid on job candidates for positions like UX/UI designers, software engineers, and data scientists.

In the roughly two and a half months Kahan spent trying to nail down a job, he went through a bevy of phone calls and technical interviews, getting to various stages of recruitment.

There was interest on the part of companies like Yahoo, Klout, and Optimizely. Frequently, though, it fizzled when the employers found out he didn't have a degree. Kahan said initial calls would start off well, but then in a case like Yahoo, for example, the representative would quickly jump off the line saying something like "We don't hire people without a degree." His call with Yahoo lasted four minutes.

While experiences like these made Kahan feel like things were getting "bleak," there were other moments that gave him hope.

Google, for example, didn't seem to have a problem with him not having a degree. On his blog, which features a detailed log of his job search, Kahan even notes that after completing a second phone interview with with Google, they called back the same day wanting to fly him out to the company's Mountain View headquarters.

Around the same time, Nomic, an app that's a city directory for Las Vegas, was also recruiting Kahan for an engineer position. He flew to Las Vegas to meet the co-founder, and then to San Francisco to meet the team and to do more technical interviewing.

He wrote on his blog: "Everyone is extremely smart and shares many similar interests, and I get a great feeling that working with these people would be an amazing experience."

On December 13, Nomic made an offer, and despite Google trying to get Kahan in for that onsite interview, he went accepted.

But... Google

A job with Google might be the dream gig for a lot of folks in the tech industry, but for Kahan, once again the seemingly best route wasn't what he wanted.

During his job search process, he'd identified that one of the characteristics he wanted out of a company was for it to be small enough that he could be involved with more than just code.

His end goal is to start his own business someday.

"My dad really inspired me," he said of his father who had started two companies of his own and gave Kahan the desire to "run the ship" himself.

Whereas working at Google would have meant focusing on coding and solving problems, working at Nomic means Kahan gets to be a part of bigger conversations, like where the company is going in the future.

But for now, he's settling into life in San Francisco, which these days involves fewer video games and more tech meetups than when he lived in Austin. While he had already started networking when he lived in Texas by going to local tech events to hear stories from engineers, now he gets to immerse himself in tech at least two or three times a week in the Bay Area.

He also continues to blog. Though he didn't always get much out of high school, that is where he picked up the habit that he now considers to be incredibly valuable.

His blogging came about as a class requirement. Then Kahan began to post about side projects he was working on even then, and realized that he really enjoyed writing about the ways he had approached and solved coding problems, as it helped him process what he'd done.

So whether he's posting about Zethos, his speed reading app that he's submitted to JS1k, or about his quest to dive into the San Francisco tech world, it's clear that the thread running through it all is the extent to which is life is focused on coding.

"If you're not doing what you love, you're doing it wrong," he said.

Launching a startup: A primer for new entrepreneurs (TechRepublic)

 Tech Pro Research for May 23, 2014                                                                                                       

Turning a great idea into a company requires meticulous planning and savvy execution. From pitching your ideas to obtaining funding to choosing a co-founder and building your team, the journey from inspiration to a successful launch can be complicated and challenging. This primer will acquaint you with the finer points of seeking VC funding, getting your business off the ground, and navigating the hazards you may encounter along the way. It also gives you a behind-the-scenes look at several startups that are making a go of it, such as Flightcar, Indiegogo, and Beam. 

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Medicare Won't Let Massage Therapists Prescribe Drugs Any More

A Florida massage therapist ordered 3,756 prescriptions filled by Medicare’s drug plan in 2009. The cost: $183,132.

The unidentified masseuse was among 2,780 professionals who didn’t have the authority to prescribe medication and nonetheless ordered drugs for Medicare patients, according to a review (PDF) last year by the Health and Human Services Department’s Office of Inspector General. The tally included 713 dietitians, 398 athletic trainers, 240 massage therapists, and 20 veterinarians, among others. Medicare plans and patients paid more than $5 million for the medications. The report found 7,679 prescriptions for frequently abused drugs such as oxycodone, written by people with no prescribing authority.

The government is planning to keep a closer watch on those prescription pads. In a new regulation finalized on Monday, the Centers for Medicare and Medicaid Services (CMS) will require that anyone writing a prescription to be paid by the drug plan, known as Part D, be enrolled in the Medicare program. The additional level of scrutiny apparently has not been required before.

STORY: Big Pharma's Favorite Prescription: Higher Prices

Medicare drug plans, which are run by private insurers, will now have to deny pharmacy claims if they don’t have the ID of a valid prescriber. ”The overriding purpose of these provisions is to help ensure that Part D drugs are prescribed only by physicians and eligible professionals who are qualified to do so under state law and under the requirements of the Medicare program,” CMS wrote in its final rule (PDF) document, which runs 487 pages. The change will take effect on June 1, 2015.

The regulation covers some other ground as well. Altogether, CMS expects the reform to save $1.6 billion over the next 10 years. It may seem baffling that the agency didn’t take action sooner. Medicare’s drug plan, known as Part D, was created in 2006. There’s a rich literature on the fraud it made possible while helping 52 million elderly or disabled Americans afford medication.

In theory, Medicare will be able to more carefully screen people ordering drugs through the $62 billion-a-year program. Noting that some doctors with suspended licenses have been able to write prescriptions paid for by Medicare, the agency wrote, ”we believe we can better address these and similar vulnerabilities by verifying the credentials of prescribers.”

STORY: Doctors Banned From Medicare May Get an Easier Shot at a Second Chance

Even when it does screen doctors in its fee-for-service program, Medicare’s record of avoiding fraud is spotty, to put it mildly. The agency has been considered “high risk” for fraud and abuse by the Government Accountability Office for almost a quarter century—half its history—because of its size, complexity, and vulnerability to making improper payments.

Not filling prescriptions written by massage therapists won’t solve those problems, but it’s a small step in the right direction.

BLOG: A Pharmacist Pitches Comparison Shopping for Prescription Drugs

Tozzi is a reporter for Bloomberg Businessweek in New York.

The Smart Way to Shrink Your Retail Store (BusinessWeek)

Retail space isn’t what it used to be. More people are browsing and buying online. Stores can get products faster from manufacturers, so they don’t need as much space to warehouse inventory. Small businesses are thus moving to smaller storefronts to lower costs.

If you’re going to shrink your footprint, make sure you have a plan.

“Understand why you’re doing it; understand why it’s better to do than not to do it,” says John Krubski, a retail marketing consultant with ITLC Insights. The decision “will inevitably have consequences lasting beyond the immediate circumstances,” he says.

STORY: How Small U.S. Businesses Can Court Customers in China

There are smart ways to cut your rent by half—or more. Most retailers should be exploring them, especially if they have large warehouses or other space dedicated to storing inventory, says Bob Phibbs, a retail consultant at Retail Doctor. “Just-in-time delivery is now available from most anyone,” he says. “Many retailers are paying for space they simply don’t need.”

Some strategies—like subletting or moving to smaller quarters—are obvious. Others require creativity, such as finding a partner that could rent a kiosk or a counter in your storefront. Or you might sell some space to a service provider—putting a tailoring corner in a dress shop, for instance.

Krubski offers the example of a hardware store that brings in a handyman to teach fix-it-yourself classes. “The combination of the tools and supplies with people who know how to use them offers the homeowner new options and creates a win-win-win scenario,” he says. “The hardware store owner reduces rent, enhances his brand, and possibly increases the market and sales,” he says. Customers get hands-on help, and contractors gets to market their services.

STORY: Koreans Find Overseas Bargains a Click Away

Such deals can backfire, so proceed with caution. Avoid partnerships that might diminish your brand—or even worse, cost you store traffic and turn off your existing customers, Krubski says.

What you’re looking for is not just a short-term reduction in overhead, but a brand or product that complements your own without sending customers to a direct competitor. You also want to make sure that a branded space doesn’t cheapen your layout or come across “looking like those old, giant gumball machines in vogue during the ’90s,” Phibbs cautions.

The store-in-a-store concept harkens back to the mid-20th century, when the butcher, baker, and produce vendor first came together in a one-stop, supermarket concept, says Gary Ambrosino, president and chief operating officer of TimeTrade, a Boston software company. He sells retail systems to large companies, as well as to about 10,000 small businesses. His clients report that customers today have done their comparison shopping online and visit stores to buy, not browse.

STORY: With Enough Customers, You Don't Need a Product

“The old paradigm had stores struggling to boost their sales per square foot when they had these large footprints. Now they’ve got the possibility of shrinking the space and making it really efficient,” he says.

One way to do that is to train your staff and turn them into experts who can provide the highly personalized service that shoppers can’t get online. “Moving to a high-service model can drive a lot of foot traffic, and if you give people the opportunity to make an appointment to see the expert in your store, you can accommodate them, even in a smaller space,” Ambrosino says.

While as many as 70 percent of people who walk into stores have already narrowed their buying choices, they are still seeking the kind of emotional validation for their purchase that they can’t get online. “They want to make sure they are not making a mistake and they’re interested in getting smart advice from a knowledgeable person, face-to-face,” he says. That kind of one-on-one interaction requires good employees—but doesn’t have to take up a lot of room.

STORY: The Right Way to Bring a Partner Into Your Business

Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

Advice for Small Businesses Considering Dropping Health Coverage (BusinessWeek)

By Karen E. Klein May 08, 2014

Question: Our business has 30 employees. Our current group health insurance premium was increased so much this year that we cannot continue to offer coverage. If we were to drop our insurance and agree to pay workers an amount equal to what we pay for the insurance, would it be cost-effective? What are the implications of such a move?

Answer: This is a question that a lot of small business owners are asking these days, according to insurance and tax professionals around the country. That’s probably because providing health insurance is so costly—and the Affordable Care Act may give your employees better options.

Providing health coverage costs an average of $9,300 annually per employee, according to TriNet, a human resource and payroll provider, with employers picking up $6,700 of that cost each year, on average, the company says.

STORY: At Obamacare Small Business Exchanges, Sign-Ups Are Off to Slow Start

Small business owners, in particular, have long been worried about escalating health insurance costs, and the Affordable Care Act has raised their concerns, says Steven J. Friedman, co-chairman of the employee benefit practice group at the law firm of Littler, Mendelson. “There is widespread fear that the ACA will have a significant cost impact,” he says.

Unfortunately, it’s not easy to answer your question, because there are so many potential consequences of dropping insurance coverage, chief among them damage to employee morale and retention. That’s probably why most small businesses seem to be sticking with the status quo, Friedman says: “No employer wants to be the first to declare they’re going to cut health-care coverage and give people a stipend.”

Let’s unpack some of the issues you raise. First, because you have fewer than 50 full-time employees, your company is not required to offer health insurance. Your employees, however, are required to have coverage or pay a penalty under the ACA. If they buy insurance though the Obamacare exchanges, they could get government subsidies to help them with the cost. More than 80 percent of the individuals who enrolled for 2014 were eligible for such subsidies, according to the Kaiser Family Foundation.

STORY: SeeChange Health: Small Business Insurance Plan Grows Big

That means low-income to moderate-income employees may be able to get better coverage for less. Subsidies are available for individuals making up to $45,960 in annual income and up to $94,200 for a family of four.

Also consider the demographics of your workforce. Older individuals buying individual coverage for the first time may be hit with sticker shock, because insurers charge more to cover older people. That could create problems if you’re concerned about retaining your long-term, more experienced employees. “To go to your employees and say we’re throwing you out into the Wild West, go out and find your own coverage—even if you’re subsidizing—may not go over well, especially [among] older employees and those who will get zero subsidy,” says Hugo R. Sibrian, chief executive officer and president of Benefits & Risk Solutions, an employee benefit consultant.

There are tax consequences, as well. Right now, what you pay for your group plan is tax-deductible, and employees’ contributions to their health premiums are made pretax as well. That lowers your total cost of compensation and thus the total amount you pay in payroll taxes for each employee. You’ll lose both those advantages if you drop your group plan, and federal and state taxes will be deducted from the additional money you give employees to buy their own coverage—causing another potential pain point.

BLOG: Small Business Health-Care Premiums Have Nearly Doubled Since 2009

Still, the strategy you’re contemplating is increasingly discussed among employers and insurers. “Once the snowball starts rolling down the hill, it may be that employers in lower-paying industries start shedding group coverage, and it works out better for them and their employees in the long run,” Friedman says.

There’s also a whole industry of private exchanges that let you contribute a fixed sum to employees’ premiums and allow them to choose from a menu of different plans. Intuit Online Payroll offers a health benefit marketplace service that lets you contribute as much or as little as you want to each employee’s cost for health insurance. That amount is then automatically added to every paycheck, says the company’s senior tax analyst, Mike D’Avolio.

Before you make a decision, investigate whether your state offers a small-group insurance option through the Small Employer Health Options Program (SHOP) marketplaces, advises Linda Blumberg, senior fellow at the Urban Institute’s Health Policy Center. You can browse plans and order coverage through a broker on the federal site at healthcare.gov, and 15 states are up and running with their own SHOP exchanges.

Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

How startups are like baby sea turtles (TechRepublic)

By Conner Forrest                            May 15, 2014,
If startups had a spirit animal, it would be the sea turtle. The lifecycle of a startup bears an amazing resemblance to the treacherous journey of a baby sea turtle. 

The baby sea turtle is the spirit animal of the startup world. Let's take a look at their parallel journeys.

Once a female sea turtle finds a suitable nesting beach, she pulls herself ashore and chooses a dark, quiet spot to lay her eggs. Once she has dug a proper nest, known as a clutch, she lays around 100 eggs. Around two months later the baby sea turtles hatch and begin to emerge from the clutch.

Much like a female sea turtle, a startup founder must first choose a startup scene in which to build his or her company. The founder must then choose a dark, quiet spot of the market to hatch their product or service. Each idea they have is like a sea turtle egg. They are soft on the outside and easily broken, so they must be hearty and well-protected if they want to survive. Some sea turtles will lay infertile eggs that incapable of maturing and some founders will begin with empty ideas that don't have what it takes to grow. For the sake of this analogy, each egg that emerges will represent an individual startup company.

When momma sea turtle is done building her clutch and laying her eggs, she conceals the spot where her eggs are by throwing loose sand over it and covering her tracks. Many startups do this when they choose to operate in "stealth mode," only revealing their idea and plan to the most trusted advisors. After the two months is up, the baby sea turtles hatch from their eggs and begin to climb out of the nest.

When they reach the open air, one of the most important evolutionary instincts kicks in -- the baby sea turtles begin to head toward the brightest light. Normally, the brightest light in the area would be the sun or moon, which would lead them to the ocean horizon and into the water. But, the advent of artificial light and the increase in real estate development have created competitors for the natural light of the sun or moon, leaving babies confused and disoriented. This often leads baby sea turtles to make their way toward lit buildings and away from the water.

Once a startup has its minimum viable product (MVP), it is ready to take its first step on the path to market. The sea turtles emergence on the beach is analogous to a startup acquiring its first beta customers. There is a set path to market, but a misunderstanding of its audience or customer can lead a startup down a different path and away from profitability. Much like the turtle can realize the error of its ways and turn around, a startup can pivot. Unfortunately for both parties, this is often done when it is already too late.

For those turtles that do orient themselves correctly and begin heading to the water, a whole new set of dangers are presented. The same goes for startups that begin their path to market. Just as the turtles face aerial attacks from sea gulls or the possibility of going head-to-head with a hungry crab, startups face their own challenges. Startups can run out of steam or capital before they make it to market, or their IP can be patented by another company effectively killing their value proposition.

Even if sea turtles make it to the ocean, or startups make it to market, more dangers will be waiting in the water. If they make it past the new set of predators that live in the ocean, there is still the issue of finding food. While global warming and oil spills can make sea turtle food scarce, startups can face a crowded market that leaves them with too little market share to ever generate enough revenue.

When sea turtles first enter the ocean, they begin a process that is often referred to as the "lost years," where the turtles swim around as they mature. This process could take up to ten years. The startup equivalent is there first few years in the market as they establish their brand and build their customer base. Sea turtles continue to forage and grow as startups often acquire younger companies and/or start on a path toward an exit, such as an IPO.

Once mature, an adult sea turtle will often return to their place of origin to reproduce. Once a startup has grown into a big enough company, the founders will often invest their own earned money into another company as a venture capitalist or angel investor, essentially perpetuating the startup lifecycle.

Scientists believe that some sea turtles can live up to a century in the wild; and the most successful startups can also mature and live on as long-standing companies. Of course, unlike sea turtles, some startups aren't worth saving. They are ultimately destined to be nutrition and sustenance for other creatures.

Conner Forrest is a Staff Writer for TechRepublic. He covers Google and startups and is passionate about the convergence of technology and culture.

Privacy?...(ZDNet)

Is Google's next product in the White House privacy report?

Summary: OPINION: The 2014 White House Report on Big Data and Privacy was widely discussed, but one unmentioned section of the report reads like Google's five-year product projection.

By Violet Blue                  | May 14, 2014

The 2014 White House Report on Big Data and Privacy includes a fictional vignette where a woman's life is made safer (and lives of those around her) because she's continuously monitored by external and internal surveillance products.

It's almost like reading Google's five-to-ten year product projection showcase.

The White House privacy report was published in multiple pieces on May 1, centralizing on two primary reports: Big Data and Privacy: A Technological Perspective (Findings of the Big Data and Privacy Working Group Review) and Big Data: Seizing Opportunities, Preserving Values.

The Big Data and Privacy Report was compiled by thePresident's Council of Advisors on Science and Technology(PCAST).

The privacy report made strong points about privacy risks, yet its weakened approaches to privacy protection and stance on allowing uncontrolled data collection to continue left some wondering what interests will be served by the report's recommendations.

Google in particular has been singled out.

That's partly because PCAST includes Google's Eric Schmidt, but also because the report stresses that White House policy should leave data collection alone, stating that controlling collection isn't "scalable" and that enforcing collection control would be "economically damaging." And Google is conspicuously at the top of the collection business.

Another reason is because people like to blame Google for a lot regarding our seriously broken personal privacy these days. But it doesn't help that Google has more senior employees involved in the report than any other company.

Google's Eric Grosse and Peter Weinberger were among the "additional experts," and other companies making privacy policy recommendations to the White House include Booz Allen, Microsoft, In-Q-Tel, Ernst & Young, Palantir, United Technologies Corporation and Zetta Venture Partners.

In this light, it's interesting to examine section 2.4 Tradeoffs among privacy, security, and convenience (pp 17-18).

Noting that it's important to consider that "notions of privacy change generationally" the report advises the White House that kids in the near future would be okay with things that might freak out anyone upset by "1984."

The report states, "Raised in a world with digital assistants who know everything about them, and (one may hope) with wise policies in force to govern use of the data, future generations may see little threat in scenarios that individuals today would find threatening, if not Orwellian."

PCAST conjures up an entire world in which surveillance products are a system of guardians, to protect us not only from threats of criminal intent or benign missteps such as missing one's plane -- but part of a futuristic system that protects us from the threat of deviation.

"PCAST’s final scenario, perhaps at the outer limit of its ability to prognosticate, is constructed to illustrate this point."

The 2014 White House Privacy Report section reads:

Taylor Rodriguez prepares for a short business trip. She packed a bag the night before and put it outside the front door of her home for pickup. No worries that it will be stolen: The camera on the streetlight was watching it; and, in any case, almost every item in it has a tiny RFID tag. Any would‐be thief would be tracked and arrested within minutes. Nor is there any need to give explicit instructions to the delivery company, because the cloud knows Taylor’s itinerary and plans; the bag is picked up overnight and will be in Taylor’s destination hotel room by the time of her arrival.

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Taylor finishes breakfast and steps out the front door. Knowing the schedule, the cloud has provided a self‐ driving car, waiting at the curb. At the airport, Taylor walks directly to the gate – no need to go through any security. Nor are there any formalities at the gate: A twenty‐minute “open door” interval is provided for passengers to stroll onto the plane and take their seats (which each sees individually highlighted in his or her wearable optical device).

There are no boarding passes and no organized lines. Why bother, when Taylor’s identity (as for everyone else who enters the airport) has been tracked and is known absolutely? When her known information emanations (phone, RFID tags in clothes, facial recognition, gait, emotional state) are known to the cloud, vetted, and essentially unforgeable?

When, in the unlikely event that Taylor has become deranged and dangerous, many detectable signs would already have been tracked, detected, and acted on?

Indeed, everything that Taylor carries has been screened far more effectively than any rushed airport search today. Friendly cameras in every LED lighting fixture in Taylor’s house have watched her dress and pack, as they do every day. Normally these data would be used only by Taylor’s personal digital assistants, perhaps to offer reminders or fashion advice. As a condition of using the airport transit system, however, Taylor has authorized the use of the data for ensuring airport security and public safety.

Taylor’s world seems creepy to us. Taylor has accepted a different balance among the public goods of convenience, privacy, and security than would most people today. Taylor acts in the unconscious belief (whether justified or not, depending on the nature and effectiveness of policies in force) that the cloud and its robotic servants are trustworthy in matters of personal privacy.

In such a world, major improvements in the convenience and security of everyday life become possible.

The section ends there.

Next is "Collection, Analytics, and Supporting Infrastructure." The rest of the White House Privacy Report lacks fanciful short fiction pieces about productive citizens humans living in harmony with surveillance products connected to big data tracking and analytics.

The authors might say it's "Orwellian," but Mr. Orwell's near-satire of Stalinism was obvious.

If it were a traditional product launch with so-called "first hint" and "conditioning" methodology, this kind of pitch would be way more subtle than Orwell. Even so, it's not hard to think of or imagine any number of Google projects, patents or acquisitions while reading the privacy report's little work of futurism.

I suppose we'll find out soon enough.

Violet Blue is the author of The Smart Girl's Guide to Privacy. She contributes to ZDNet, CNET, CBS News and SF Appeal.