In a week dominated by bizarre spectacles and severe weather elsewhere in the news, our corner of the world was relatively placid. Newfangled technologies are still cropping up at regular intervals, but this week they were accompanied by old-timey financial products, too. Of course there were also strange financial products, like bonds based on folk musicians’ royalties and juvenile recidivism rates. Let’s have a look.
In tech, as always, there was plenty to report. Starting off the week, we learned that NFC technology is looking more and more likely on the next iPhone — meaning it might be a tap-to-pay mobile wallet. Currently, its Passbook app looks like it will rely on scannable barcode images that display on the phone’s screen. An NFC-enabled phone would be a real head-fake by Apple. Also in mobile wallet news, it turns out Google is expanding the scope of its mobile wallet to include things other than your credit card — plane tickets, bus passes and the like. That sounds familiar: it’s virtually the same as Apple’s Passbook app. Also, Isis, the mobile-carrier-backed mobile wallet project, is expected to launch some time next month. Details are scant, but at the very least, we know Isis will use NFC technology. And lastly, we learned that Barclaycard US is rolling out its own mobile wallet in a pilot phase.
Mobile wallets! You can hardly swing a cat around these days without hitting a new mobile wallet. Why is it that people always think the mobile wallet will bring and end to cash? Why not plastic? We considered that question this week. Maybe promising the death of cash is easier to explain and draw?
Not all new technologies are bad, of course — some can be used for good. Dwolla launched a new program with reddit, “The Front Page of the Internet,” to help enable secure and interchange-free charitable donations through reddit, using Dwolla’s payment system. Reddit is a powerful force, capable of whipping the hivemind into a wallet-opening frenzy over all sorts of issues, but it hasn’t done very well organizing these drives. The New York bus monitor got way too much money from redditors; honest people have been accused of fraud. This might help straighten out the confusion.
Goldman Sachs made the news a couple of times this week, both having to do with strange investment products the investment bank is cooking up. In New York, Goldman got itself what looks like a sweetheart deal on a Social Impact Bond to fund a program to help lower juvenile recidivism rates. Goldman can’t lose much on the deal, but it makes a substantially bigger return if the program it invests in actually meets its goals. Something’s a bit icky here, right? Goldman’s other odd deal this week was the news that it is issuing bonds backed by Bob Dylan’s royalties. Yes, that Bob Dylan, bundled up and trenched in an asset-backed security, just like you always dreamed he would be.
Not all financial products are new, bizarre and possibly terrifying and unethical, however. Walmart is bringing its layaway program back for the holiday season. It’s not such a bad deal, and it’s much better than credit card debt. Newer isn’t always better.
There’s a constant onslaught of bad news for recent graduates these days, and this week proved no different. We learned that, while Americans are deleveraging across the board, paying down all debts, one category lags: student loans. While auto and credit card debt are slowly being paid off, student debt is on the rise — possibly causing some serious issues for our nation’s economic wellbeing.
But not all hope is lost, especially if you haven’t gone to college yet. If that’s the case, we recommend you check out our story from guest contributor Francesca Brumm, who explained what she would do differently if she had another shot at going to college. She offers some great advice, and it will fill you with deep regret if you’ve already graduated.
That’s all! Have a happy and safe Labor Day.