TIME Greece

Everything to Know About Greece’s Debt Vote

It could have serious consequences for Europe's future

Q. Why and when are the Greeks voting on this referendum?

A. The Greek government called the referendum because it failed to get acceptable terms for debt relief and further assistance in four months of negotiations with the creditors. It felt it couldn’t agree to the last set of proposals received before the expiry of its bailout, because they couldn’t square it with their election promise to end austerity.

The referendum will be on Sunday, 5th July.

Q. So what are the Greeks actually being asked to vote on?

A. They’re being asked to vote on a set of proposals drafted by IMF, ECB and European Commission officials that were never formally completed or published.

This is the actual ballot. As you can see, the “No” (OXI) option, recommended by the government, is above the “Yes” (NAI) option.

Screen Shot 2015-07-02 at 16.14.12

For the non-Greek readers, (or for those who only know ancient Greek), here’s a translation:

Screen Shot 2015-07-02 at 16.18.50

The two documents referred to can be found here and here (debt sustainability analysis).

Q. What are the key points?

A. The most contentious demand is that Greece squeeze another 1% of GDP in savings out of its battered pension system, specifically by eliminating top-ups that have been desperately needed by poorer pensioners to keep themselves above the breadline in recent years. The other big point is the elimination of VAT exemptions for Greece’s islands. The government argues this threatens the existence of the tourism industry on the islands.

The DSA, meanwhile, almost–but not quite–brings itself to admit that the debt load is unsustainable. If Greece adopts and implements the conditions immediately, it says, then the debt-to-GDP ratio could fall to 124% by 2022 from over 175% right now. That’s the best case scenario, and not one that sits comfortably with the last five years’ experience. It’s also not many people’s idea of sustainability.

Q. What happens if Greece votes ‘Yes’?

A. A ‘Yes’ vote would be the first step towards a third bailout agreement for Greece (the IMF suggested today that Greece will need €50 billion, or $56 billion, in financing to get it through to the end of 2018, as well as a 20-year grace period). The last one expired Tuesday.

Q. Could the Greek government collapse?

A. Probably. It has campaigned for a ‘No’ vote, so the blow to its credibility would be huge. Its electoral mandate–to end austerity while keeping the euro–would be obsolete. Individual ministers have already said they’ll resign in that event. However, the radical left-wing Syriza party is by far the largest in parliament, a large part of its lawmakers won’t sign any new bailout deal, and there is no stable pro-bailout majority without it. That points to new elections. Quite how negotiations could resume, and quite how the banks could reopen, in those circumstances isn’t clear.

Q. If Greece votes ‘No’, what happens?

A. Prime Minister Alexis Tsipras claims that a ‘No’ vote will strengthen the Greeks’ negotiating position by showing the strength of resistance to further austerity. However, the creditors have shown no sign that it would change their position. More likely is that the continued uncertainty will make it impossible for the banks, which have been closed since Monday, to reopen. They would be immediately faced with demands for cash that they can’t possibly meet. In practical terms, the banks couldn’t open again until the bulk of their liabilities–i.e. customer deposits–had been re-denominated in a new Greek currency. This would lead to a large part of the country’s savings being wiped out.

Q. Could this vote result in Greece leaving the Eurozone?

A. Absolutely, because it would be clear that the political will to share a currency with Germany and others was no longer there. How we get from A. to B. is unclear, because there are no precedents and no provisions for it in the E.U.’s treaty. There is a provision for leaving the E.U., but not even Tsipras wants to do that.

Q. Is the bailout deal they’re voting on even still on the table?

A. Not officially, but the creditors will look stupid, merciless and irresponsible if they don’t react to a ‘Yes’ vote with something to relieve the immediate pressure on Greece’s banks and the economy at large, and a large part of the political dynamic in this process is about dodging blame for the whole mess. It’s tempting to think that, once Syriza is out of government, some form of debt restructuring will become politically possible. The creditors would rather eat dirt than reward a party, and individual ministers, that they regard as dangerous charlatans.

Q. What does this mean for the global economy?

A. A ‘Yes’ vote would remove one of the big geopolitical risks that are currently holding back investment in the Eurozone, which would be a clear bonus to global growth (the Eurozone is over two-thirds of the E.U. economy, which about 20% of world GDP).

A ‘No’ vote, could have quite mild consequences if Greece can be kept inside the Eurozone and the ECB douses the flames of market fear with a flood of liquidity. That wouldn’t be as good for the economy, but it would at least contain the damage to financial markets. But a ‘No’ vote that leads to “Grexit” is another matter. Again, one would expect the ECB to throw money at the markets to keep volatility down, but the sight of European integration going into reverse would nix a basic geopolitical assumption of the last 60 years. The resulting political uncertainty could be highly damaging for investment not only in Europe, but also further afield.

 

MONEY Airlines

Why the Era of Airfare Price Wars Is Gone, Perhaps Forever

people in airplane seats
iStock

The airlines have little reason to compete on price.

Airline profits have soared to record highs recently, and the overarching reason why the industry has been so successful is that the few big players that still exist have stressed “discipline.”

The New York Times recently noted that “discipline” is the go-to buzzword for airline executives. It’s most often used in conjunction with “capacity,” and the gist is that airlines have been focused on limiting the number of flights and seats. So long as supply of flights is relatively low, airfare prices—and profits—can remain high.

The question now being asked—not merely by travelers annoyed by high prices, but by a Justice Department investigation—is this: Is the airline industry’s much-heralded “discipline” illegal?

This week, the Justice Department sent letters to American Airlines, Delta Air Lines, Southwest Airlines and United Airlines—the nation’s four largest domestic carriers, accounting for 80% of flights within the U.S.—concerning “the undesirability of your company or any other airline increasing capacity.” The airlines were asked to turn over flight and capacity data accrued since 2010, with the idea that the Justice Department is investigating whether any “unlawful coordination” on capacity, and by extension on pricing, has been taking place.

The investigation comes a couple of weeks after U.S. Sen. Richard Blumenthal (D-CT) publicly accused the airlines of “potential anti-competitive, anti-consumer behavior and misuse of market power.” In his complaint, which urged the Department of Justice to pursue the matter, Blumenthal quoted a previous DOJ report that summed up how airfares have gone up steadily and largely unchecked by competition in recent years:

“The structure of the airline industry is already conducive to coordinated behavior…the legacy airlines closely watch the pricing moves of their competitors. When one airline ‘leads’ a price increase, other airlines frequently respond by following with price increases of their own.”

This scenario has become all the more common in the post-merger era of oligopoly in the airline industry. With fewer competitors, there are fewer players to worry about having to get on board with each successive fare increase. Considering that unprofitable routes have been cut and flights are fuller than ever, there is little reason for an airline to break ranks and refuse to raise fares, let alone to dare engage in pricing wars.

In lieu of the desperation to fill seats via bargain flight prices like they did regularly in the past, the airlines have focused lately on maximizing the profitability of each route, with higher fares, more add-on fees, and no worries about having to drop fares to match some upstart competitor.

This behavior is undeniably anti-consumer. We’ll have to see if it’s deemed illegally anti-competitive, and what if anything rulings or fines can possibly do to change the (un)competitive atmosphere in the consumer’s favor.

The airlines might point out that the investigation is occurring just as flight prices are, in fact, getting cheaper. Flight search data indicates that, overall, flights this summer are a few percentage points less expensive than they were a year ago. Still, considering that fuel prices have decreased dramatically, it would be reasonable to expect airfare prices to drop significantly further, and for airlines to add capacity to take advantage of lower costs.

But doing so would be exhibiting a lack of “discipline,” and would be seriously frowned upon by many airline executives and airline investors alike. In late May, airline stocks tanked after a move was announced by Southwest Airlines. The airline’s crime? It was bumping up expansion plans slightly. The decision might seem sensible—fuel prices are low, flight capacity is high, so why not add flights and fight for more market share?—but investors punished Southwest, and the entire airline industry, due to concerns that “Domestic capacity discipline has effectively vanished,” as Wolfe Research airline analyst Hunter Keay put it.

On Wednesday of this week, airline stocks took another significant dip. This time, the blame went to the Justice Department’s investigation into “unlawful coordination” among the airlines. It goes to show that there could be something to the concept that when airline stocks take a beating, it’s probably good news for travelers.

The larger, unfortunate truth is that, no matter what the Justice Department finds in its investigation, there’s no getting around that there’s very little legitimate competition left in the domestic airline market. With fewer competitors dominating domestic flights, the age of discipline—and, perhaps, collusion—is here. That’s why the era of flight pricing wars is dead.

TIME Media

Apple Music Is Cheaper Depending on Where You Live

Apple Worldwide Developers Conference Opens In San Francisco
Justin Sullivan—Getty Images Apple's senior vice president of Internet Software and Services Eddy Cue speaks during the Apple WWDC on June 8, 2015 in San Francisco, California.

Apple wants to make its service competitive with other apps available on Android

Apple Music may cost about $10 per month in the United States, but that’s not the case everywhere.

The music streaming service, which rolls out in more than 100 countries this week, is considerably cheaper in parts of Asia and South America. In India, a subscription will cost about $2 per month, according to Quartz. In Brazil, Indonesia and Thailand, the cost is about $5. These countries also have the group membership subscription, which costs $15 in the U.S., offered at a similar discount.

Other streaming services like Rdio already offer competing services in foreign markets at a pretty low price. In the past, Apple hasn’t tried to compete on price in emerging markets, instead positioning the iPhone as a luxury item. But with Apple Music set to launch on Android, the world’s most popular mobile operating system, in the fall, it makes sense for Apple to price its service in a way that makes it affordable to all smartphone users and not just iPhone owners.

TIME Apple

Here’s What Steve Wozniak Thinks of The Steve Jobs Trailer

"I felt a lot of the real Jobs"

Apple co-founder Steve Wozniak says parts of the trailer for the upcoming biopic Steve Jobs are inaccurate—but that doesn’t mean he doesn’t like the direction the movie is taking.

In the trailer, Wozniak (played by Seth Rogen) confronts Jobs (Michael Fassbender) about his lack of technical skills. “What do you do?” the film’s Wozniak says. “You’re not an engineer. You’re not a designer. You can’t put a hammer to a nail. I built the circuit board. The graphical interface was stolen. So how come, 10 times in a day, I read ‘Steve Jobs is a genius?'”

In an interview with Bloomberg, the real Wozniak says he never uttered those exact words, but their spirit “carried the right message” about his relationship with Jobs, who quickly became the face of the company the two men co-founded.

“I felt a lot of the real Jobs in the trailer, although a bit exaggerated,” Wozniak said.

The trailer paints Jobs in a less-than-flattering light, showing him going on tirades against employees and disavowing his own daughter. The movie, written by The Social Network writer Aaron Sorkin, debuts on Oct. 9.

TIME Companies

Donald Trump Deserted By Partners as Immigrant Furor Grows

The billionaire's continued attack on Mexican immigrants has caused some partners to rethink their relationship with him

More partners of Donald Trump have distanced themselves from the billionaire, as he doubled down on remarks Wednesday about Mexican immigrants being “rapists” during an interview on CNN Tonight with Don Lemon.

New York City has vowed to review its contracts, which include an ice-skating rink and golf course, with the mogul while four leading golf organizations distanced themselves from him. “Donald Trump’s remarks were disgusting and offensive, and this hateful language has no place in our city,” said the city’s mayor, Bill de Blasio, in a statement on Wednesday.

Trump had said in an interview with the Golf Channel that the golfing world was in agreement with him on immigration. But the PGA Tour, LPGA Tour, USGA and PGA of America issued a joint statement to counter that assumption. “In response to Mr. Trump’s comments about the golf industry ‘knowing he is right’ in regards to his recent statements about Mexican immigrants, we feel compelled to clarify that those remarks do not reflect the views of our organizations,” it said.

The billionaire first stirred up controversy in a speech last week where he described undocumented Mexicans as “rapists” and “killers”. The fall-out from his comments saw major business partners like Macy’s, Univision and Comcast’s NBCUniversal sever ties with him.

Trump seemed unwilling to back down from his remarks Wednesday evening, telling CNN’s Don Lemon in an interview that the statistics about immigration were “mind-boggling.”

“It’s unbelievable when you look at what’s going on. So all I’m doing is telling the truth,” Trump said. He has also sued the Spanish-language network, Univision, for $500 million when it cut ties with his Miss USA Pageant.

TIME Economy

U.S. Unemployment Rate Drops to 5.3%

Employers Post Most Job Openings In Four Years In June
Spencer Platt—Getty Images A "now hiring" sign is viewed in the window of a fast food restaurant on August 7, 2012 in New York City.

But labor force participation dropped

The United States labor market put in a tepid performance in June, with the addition of only 223,000 jobs, according to a report released by the Bureau of Labor Statistics on Thursday.

That was short of analysts’ exceptions, which put estimates for June job growth in the 225,000 to 230,000 territory.

According to the household survey, unemployment declined to a seven-year low of 5.3% in June, after inching up to 5.5% in May.

Though the jobs report’s top line numbers were not too bad, a closely-watched sub-indicator didn’t show such good news: hourly wages remained flat in June. That stagnation could delay a long-awaited hike in interest rates. After the May jobs report showed that wages had increased by 8 cents per hour, Federal Reserve chair Janet Yellen said at a press conference June 17 that “wage increases are still running at a low level, but there have been some tentative signs that wage growth is picking up.”

Thursday’s report—released a day early because of the observation of the July 4th holiday on Friday—also showed that labor force participation dipped by 432,000 or 0.3% in June after an increase of similar size in May. The share of Americans participating in the labor market fell back from 62.9% in May to 62.6%–its lowest since 1977.

The number of long-term unemployed who’ve been without a job for 27 weeks or more declined by 381,000 to 2.1 million in June. Over the past 12 months that figure—which currently makes up 25.8% of the unemployed—has decreased by nearly 1 million.

MONEY deals

Summer Price Break! 6 Things That Are Actually Cheaper This Summer

Blessedly, bacon and cheese are on the list.

For the most part, consumers are accustomed to seeing prices for a wide range of goods go in only one direction: up, up, and up. Often, this is simply the result of inflation and regular price increases. There are also freak price spikes like the current situation with eggs, which have risen dramatically of late thanks to the bird flu outbreak. And more costly eggs have in turn begun causing price increases everywhere from diners to bakeries.

Thankfully, from time to time consumers get to benefit from the occasional price decrease on goods and services—including some of their favorite treats. Here are a half-dozen things you’ll actually pay less for this summer.

  • Bacon

    Plate of bacon
    Alamy

    While bacon prices aren’t cheap by historical standards, they are significantly cheaper than in the summer of 2014, when they spiked amid low supplies. According to the Bureau of Labor Statistics, the average price for a pound of bacon as of May 2015 was below $5, compared with $5.50 at the start of 2015 and more than $6 last summer. Overall, bacon prices fell 18% over a 12-month span.

  • Gas

    gas prices
    Elise Amendola—AP

    After surging steadily through much of the spring, gas prices have dipped of late, hitting a national average of $2.77 for a gallon of regular at the start of the week, according to AAA. Drivers in nearly all states are paying at least 75¢ less per gallon compared with a year ago, and AAA estimates that cheap gas prices in 2015 have helped Americans collectively save $65 billion on fuel costs thus far this year.

  • Last-Minute Hotels

    Luxury Hotels on the Las Vegas Strip
    John Kellerman—Alamy The Las Vegas Strip

    Overall, hotel rates in the U.S. are expected to be up 5% to 6% in 2015, and in some cases are up more than 10%. But in certain cities and under specific circumstances, prices can be much cheaper compared with this time last year. Data from the last-minute hotel booking specialist HotelTonight indicates that some Fourth of July weekend rates booked right now are bargains compared with the 2014 holiday. Average rates in Las Vegas are 39% cheaper versus last year, and July 4 hotel prices are also down in destinations such as the Berkshires (down 29%), Tampa (20%), and Williamsburg, Va. (12%).

  • Other Pork Products

    sausages on grill
    Slawomir Purgal—Alamy

    The same rise in the nation’s pork supply that’s caused bacon prices to retreat is lowering prices for pork chops, hot dogs, and the like. The American Farm Bureau Federation recently estimated that the cost of a typical July 4 cookout that feeds 10 people is 3% cheaper than it was a year ago. One of the reasons why this is so is that two of the main dishes—hot dogs and pork spare ribs—are 2% to 4% less expensive than they were in 2014.

  • Airfare

    plane flying over field
    iStock

    At the start of the year, researchers from the likes of Expedia predicted that flight prices would fall in 2015, if for no other reason than airlines would finally have to lower fares in the face of dramatically cheaper fuel prices. And while airfare prices depend on a range of factors—route, timing, demand, etc.—data from the flight search Hopper.com show that overall, domestic flights in the spring and early summer were 8.7% cheaper compared with the same time last year. The site also predicted that the trend will continue through the summer, with the average flight selling for $18 (or about 6%) less than in the summer of 2014.

  • Dairy Products

    Vitamin Cottage Natural Grocers, Denver, Colorado
    Brennan Linsley—AP

    The USDA reports that national stockpiles of butter, cheese, and milk are all up significantly compared with a year ago, and prices for most dairy products—including yogurt, ice cream, and blocks of cheese—are down as a result. Bear in mind that some of the price decrease is based on how expensive dairy products were for much of last year. Butter consumption, for instance, has been increasing for years, and prices spiked to near record prices last summer through the fall.

TIME Companies

Whole Foods Admits to Sometimes Overcharging Customers

They promise customers that incorrectly weighed products will be free

Following an investigation that revealed the grocery store chain Whole Foods was overcharging customers in New York City for some products, the company released a video Wednesday vowing to fix the problem.

“Straight up, we made some mistakes. We want to own that and tell you what we’re doing about it,” said Walter Robb, co-CEO of Whole Foods Market, in the video.

Robb and his fellow CEO John Mackey said that a small percentage of their fresh food was being weighed incorrectly. “We know they’re unintentional because there are mistakes in the customer’s favor and sometimes not in the customer’s favor,” said Robb.

The two CEOs promised to increase training of their staff across the country and implement a third-party auditing system to track improvements, which customers will be able to follow. They also said customers can ask the cashier to check weights. “If there is a mistake that’s not in your favor, we promise to give you that item for free,” they said.

New York City investigators said after a probe into the charging practices of grocery stores across the city that Whole Foods was “the worst case” they had ever seen. The investigation came just one year after Whole Foods paid an $800,000 settlement for overcharging customers in California.

Even when the company is not overcharging, Whole Foods, which has been nicknamed “Whole Paycheck” by some, has a reputation for its high prices. The grocery store announced in May that they plan to open a lower-price chain for customers turned off by Whole Foods’ prices.

 

TIME Careers & Workplace

4 Questions to Ask Yourself Before Starting Your Career Path

fork-road
Getty Images

Corporate versus startup

If you’re a college senior cramming for your final final exams, stealing longing glances at your cap and gown hung teasingly on a hook in the corner of your dorm room—daring you to daydream of the light at the end of tunnel—there’s a good chance you’re wondering what’s next?

You may have had enough of academia and are ready to dive into the workforce. If this is true for you, you’ll need to do some soul searching to decide what type of work will best enable you to achieve your goals and accelerate your career. Too often, new grads rush blindly into roles, accepting the first job offers they receive to begin paying off student loans. The important thing to remember is– when it comes to your career—there are no right answers. As you consider the options, the best you can do is to experiment, push your boundaries, and then reflect purposefully to inform your next moves.

Many recent grads looking for jobs after graduation decide to get their starts in corporate work but, for some, smaller companies offer more opportunities for growth. Ask yourself these questions to determine if a corporate job or work for startups will offer you the experiences you need to thrive:

Do you need structured training to learn?

Corporate work is all about structure. You’re likely to go through a formal onboarding process, and there may be company trainings that you’re required to participate in.

Generally speaking, startups don’t have the resources and training programs that larger companies do, but the loads of responsibility and creative freedom at startups offer a more immersive kind of education than multi-day orientations and professional development trainings.

Are you the self-starter type or do you learn better through formal training? If you like a lot of structure, a corporate environment would be more likely to support your learning needs, while comfort and confidence with a trial-and-error approach is critical to success at a startup.

How much influence do you want to have?

Coming into a company at the ground-floor, you’ll have a hand in shaping company culture, operations, and developing the product from scratch. You’re likely to work closely with company executives and every choice you make will have an impact. Are you comfortable with that level of responsibility?

Conversely, recent grads coming into corporate jobs after graduation are probably coming in at entry-level. Your responsibilities will be far less weighty, allowing you to build experience before you take on a key role.

Can you work under ambiguity?

Startups are constantly in flux. Whether you’re in hyper-growth mode or pivoting in search of greater success, startup employees need to expect the unexpected. It’s up to you to manage the chaos and work through problems on the fly with limited information and resources. Larger companies, on the other hand, tend to have more stable infrastructures and procedures in place.

What are your career goals?

Larger companies often have siloed departments and established career paths. You always have the opportunity to move around and change direction, but your specific role at any point will be very focused.

Alternatively, employees at startups often have to juggle a number of diverse responsibilities while working closely with teammates of all disciplines. If you’re interested in getting your hands dirty and exploring all aspects of the business, startup work may be a great choice for you.

Startups aren’t for everyone, but neither are large corporations. If you’d rather find the best of both worlds– the innovation and dynamism of a startup with the structure of a large company– you may want to look at employment opportunities at scaleup companies. Whichever way you go, do your research to decide if it’s the right choice for you.

Are you a recent or soon-to-be graduate looking to set yourself up for a successful and fulfilling career? Our guide to getting (and loving) your first job after graduation will help you figure out what kind of role is right for you and will give you the tips you need to ace the interview.

This article originally appeared on Startup Institute‘s blog The Whiteboard

TIME NBC

New York’s 30 Rock Just Got a New Name

30 Rock
NBC—NBC via Getty Images 30 Rockefeller Plaza.

Rooftop sign will replace GE's initials

The iconic 30 Rock building will now be known as the Comcast Building.

The new name may not sound as cool, but the building does get a colorful peacock to help illuminate New York’s skyline.

Located at 30 Rockefeller Plaza in Midtown Manhattan, the iconic New York City skyscraper will light up Wednesday evening with its new corporate name.

The rooftop sign will replace General Electric’s initials. Comcast acquired full ownership of General Electric’s NBCUniversal business in 2013.

According to NBC, this will be the third name for the iconic building: It was first known as the RCA building, and later as the GE building.

“I remember when it said RCA up there,” Michael Miscione, Manhattan’s borough president, told NBC. “The fact that they’re bringing GE down is just one step in a many decade evolution of the signage on the building.”

The building reportedly first opened in 1933 and is 70 stories high.

For more on Comcast, check out this in-depth Fortune feature on the company’s management.

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