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Business

Home prices are finally falling. But how low will they go?

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The US housing market is in the midst of a major shift. After two years of stratospheric price appreciation, home prices have peaked and are on their way back down.

But what homebuyers and homeowners alike want to know is: How much lower will prices go?

The short answer: Prices are likely to drop further, but not by as much as they did during the housing bust. From the 2006 peak to the 2012 trough, national home prices fell by 27%, according to S&P CoreLogic Case-Shiller Indices, which measures US home prices.

“It was different in 2008, 2009 because that drop in prices was because of a push from sellers,” said Jeff Tucker, senior economist at Zillow. “Because of foreclosures and short sales there were a lot of extremely motivated sellers who were willing to take a loss on their homes.”

Plus, that housing crash came at a time when the inventory of homes for sale was four times higher than it is now. Current inventory is still substantially lower than pre-pandemic levels, which has increased competition for homes. And that is keeping prices relatively strong.

“I would be surprised to see prices anywhere drop below where they were in 2019,” said Tucker. “There was some overheating in the housing market in 2021 through this spring that pushed prices higher than what the fundamentals would support. Now they are coming down.”

With mortgage rates more than doubling since the start of this year, the calculations for a homebuyer have changed considerably. The monthly principal and interest mortgage payment on the median priced home is up $930 from a year ago, a 73% increase, according to Black Knight, a mortgage data company.

When you factor in soaring mortgage rates, along with elevated home prices and wages that aren’t increasing as fast, buying a home is less affordable now than it has been in decades, according to Black Knight.

But there may be some relief in sight for buyers.

Economists at Goldman Sachs expect home prices to decline by around 5% to 10% from the peak hit in June.

Wells Fargo has recently forecasted that national median single-family home prices will drop by 5.5% year-over-year by the end of 2023.

Wells Fargo’s economists estimate that the median price for an existing single family home to be $385,000 this year, up 7.8% from last year, but the growth will be a lot less than the 19% year-over-year increase seen in 2021.

The economists anticipate the median home price will fall to $364,000, a decline of 5.5% from this year. They predict prices will rebound and rise again in 2024, with the median price ticking up 3.3% to 376,000 by the end of 2024.

“The primary driver behind the housing market correction thus far has been sharply higher mortgage rates,” the Wells Fargo researchers wrote. “If our forecast for Fed rate cuts is realized, mortgage rates are likely to fall slightly just as cooling inflation pressures boost real income growth. A modest improvement in sales activity should then follow, which will reignite home price appreciation heading into 2024.”

Ultimately, how much prices fall will depend on where you live.

Unlike the run-up in prices during the pandemic that caused home values in markets across the country to surge, the cooling off will be more regional, said Tucker. The drops will be more deeply felt in places where there were larger gains during the pandemic, many of them in the West and Sunbelt, including cities like Austin, Phoenix and Boise, he said.

“Nationally, we might see a 5% decline from the peak,” Tucker said. “But prices will decline by more in the West and there will be a smaller decline in the Southeast.”

In September, month-over-month home prices dropped in several pandemic hotspots, including Phoenix, down 2.3%; Las Vegas, down 1.9% and Austin, down nearly 1%, according to Zillow.

And Boise, Idaho, where prices surged nearly 60% during the pandemic, is already seeing annual declines, with prices falling 3.9% year over year in September, according to Zillow.

“A number of metro areas, especially in the West, will see some year-over-year price declines this spring,” said Tucker. “That will be the worst comparison time because that’s when many markets reached their peak.”

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Business

First on CNN: Next spring the economy will sink into a 1990-style mild recession, Fitch says

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New York
CNN Business
 — 

Stubborn inflation and the Federal Reserve’s jumbo-sized interest rate hikes will drive the American economy into a 1990-style mild recession starting in the spring, Fitch Ratings warned on Tuesday.

In a report obtained first by CNN, Fitch slashed its US growth forecasts for this year and next because of one of the most aggressive inflation-fighting campaigns by the Fed in history. US GDP is now expected to grow by just 0.5% next year, down from 1.5% in the firm’s June forecast.

High inflation will “prove too much of a drain” on household income next year, Fitch said, shrinking consumer spending to the point that it causes a downturn during the second quarter of 2023.

Fitch, one of the world’s top three credit rating agencies, assesses the ability of companies and nations around the world to repay their debt, providing key guidance for investors.

The gloomy forecast adds to the growing fear among investors, economists and business leaders that the world’s largest economy is on the verge of a recession — just 2.5 years after the last one.

The silver lining, however, is that the next recession may not be nearly as destructive as the last two major ones.

“The US recession we expect is quite mild,” economists at Fitch Ratings said.

The credit ratings firm argued that the United States enters this difficult period from a position of strength — especially because consumers are not saddled with quite as much debt as in the past.

“US household finances are much stronger now than in 2008, the banking system is healthier and there is little evidence of overbuilding in the housing market,” Fitch Ratings economists wrote.

The Great Recession, which began in late 2007, was the worst downturn since the Great Depression and nearly led to the collapse of the financial system. The Covid recession, beginning in early 2020, caused the unemployment rate to skyrocket to nearly 15%.

By contrast, Fitch Ratings sees the unemployment rate rising from just 3.5% today to 5.2% in 2024. That translates to the loss of millions of jobs, but not nearly as many as those lost during the prior two recessions.

“Fitch Ratings expects a very strong consumer balance sheet and the strongest labor market in decades to cushion the impact of a likely recession,” the report said.

Despite rising recession fears, the job market remains very tight, with the supply of workers failing to keep up with demand for labor. Firings are low, quits and job openings are high.

Fitch says the next recession will likely be “broadly similar” to the one that started in July 1990 and ended in March 1991.

There are intriguing similarities between today and the early 1990s.

Much like today, the 1990 recession occurred after the Fed scrambled to fight inflation by rapidly raising interest rates.

Likewise, that downturn was preceded by a war-fueled oil shock. Back then, it was Iraq’s invasion of Kuwait that drove up gasoline and energy prices for Americans.

Today’s period of high energy prices is linked in large part to Russia’s invasion of Ukraine, a conflict that has also raised food prices.

The 1990-1991 recession helped doom the political fortunes of then-President George H.W. Bush.

In the 1992 race for the White House, Arkansas Governor Bill Clinton blamed Bush’s policies for the recession and a Clinton strategist coined the phrase, “It’s the economy, stupid,” highlighting the importance of that issue for voters.

Recent polls indicate voters today are also intensely focused on the state of the economy. In a New York Times poll published Monday, 44% of likely voters said economic concerns are the most important issue facing America — far higher than any other issue.

Inflation remains the biggest cloud hanging over the US economy. The high cost of living is eroding the value of worker paychecks and souring consumer confidence. Persistent inflation has also caused the Federal Reserve to slam the brakes on the economy by dramatically raising interest rates.

That’s why economists in a separate survey, from The Wall Street Journal, peg the chance of a recession in the next 12 months at 63%, the highest level in more than two years.

JPMorgan Chase CEO Jamie Dimon told CNBC last week that a “very, very serious” mix of challenges is likely to cause a recession by the middle of next year.

Fitch Ratings said there is still the risk of a deeper recession than the one that began in 1990, in part because US companies are carrying more debt relative to the size of the economy than 30 years ago. The report also cited the “highly uncertain” impact of the Fed’s efforts to shrink its $9 trillion balance sheet.

The biggest bright spot in the economy is the jobs market, where the unemployment rate is tied for the lowest level since 1969. However, Fed officials expect the jobless rate to rise in the coming quarters and Bank of America is warning the US economy will lose 175,000 jobs a month during the first quarter of next year.

Even White House officials are conceding a downturn could be in the cards.

President Joe Biden told CNN’s Jake Tapper last week a “slight recession” is possible, though he doesn’t anticipate it.

Transportation Secretary Pete Buttigieg told ABC News over the weekend that a recession is “possible but not inevitable.”

Although risks have clearly increased, a recession is not a foregone conclusion.

No one, not even the Fed, knows exactly how all of this will play out. It’s impossible to say what happens to a $23 trillion economy two years after a once-in-a-century pandemic and in the midst of a war in Europe. There is no playbook for this.

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World

China’s economy is ‘in deep trouble’ as Xi heads to Communist Party congress

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Hong Kong
CNN Business
 — 

When Xi Jinping came to power a decade ago, China had just overtaken Japan to become the world’s second largest economy.

It has grown at a phenomenal pace since then. With an average annual growth rate of 6.7% since 2012, China has seen one of the fastest sustained expansions for a major economy in history. In 2021, its GDP hit nearly $18 trillion, constituting 18.4% of the global economy, according to the World Bank.

China’s rapid technological advances have also made it a strategic threat to the United States and its allies. It’s steadily pushing American rivals out of long-held leadership positions in sectors ranging from 5G technology to artificial intelligence.

Until recently, some economists were predicting that China would become the world’s biggest economy by 2030, unseating the United States. Now, the situation looks much less promising.

As Xi prepares for his second decade in power, he faces mounting economic challenges, including an unhappy middle-class. If he is not able to bring the economy back on track, China faces slowing innovation and productivity, along with rising social discontent.

“For 30 years, China was on a path that gave people great hope,” said Doug Guthrie, the director of China Initiatives at Arizona State University’s Thunderbird School of Global Management, adding that the country is “in deep trouble right now.”

While Xi is one of the most powerful leaders China and its ruling Communist Party have seen, some experts say that he can’t claim credit for the country’s astonishing progress.

“Xi’s leadership is not causal for China’s economic rise,” said Sonja Opper, a professor at Bocconi University in Italy who studies China’s economy. “Xi was able to capitalize on an ongoing entrepreneurial movement and rapid development of a private [sector] economy prior leaders had unleashed,” she added.

Rather, in recent years, Xi’s policies have caused some massive headaches in China.

A sweeping crackdown by Beijing on the country’s private sector, that began in late 2020, and its unwavering commitment to a zero-Covid policy, have hit the economy and job market hard.

“If anything, Xi’s leadership may have dampened some of the country’s growth dynamic,” Opper said.

More than $1 trillion has been wiped off the market value of Alibaba and Tencent — the crown jewels of China’s tech industry — over the last two years. Sales growth in the sector has slowed, and

tens of thousands of employees have been laid off, leading to record youth unemployment.

The property sector has also been bludgeoned, hitting some of the country’s biggest home developers. The collapse in real estate — which accounts for as much as 30% of GDP — has triggered widespread and rare dissent among the middle class.

Thousands of angry homebuyers refused to pay their mortgages on stalled projects, fueling fears of systemic financial risks and forcing authorities to pressure banks and developers to defuse the unrest. That wasn’t the only demonstration of discontent this year.

In July, Chinese authorities violently dispersed a peaceful protest by hundreds of depositors, who were demanding their life savings back from rural banks that had frozen millions of dollars worth of deposits. The banking scandal not only threatened the livelihoods of hundreds of thousands of customers but also highlighted the deteriorating financial health of China’s smaller banks.

“Many middle-class people are disappointed in the recent economic performance and disillusioned with Xi’s rule,” said David Dollar, a senior fellow in the John L. Thornton China Center at the Brookings Institution.

According to analysts, the vulnerabilities in the financial system are a result of the country’s unfettered debt-fuelled expansion in the previous decade, and the model needs to change.

“China’s growth during Xi’s decade in power is attributable mainly to the general economic approach adopted by his predecessors, which focused on rapid expansion through investment, manufacturing, and trade,” said Neil Thomas, a senior analyst for China and Northeast Asia at Eurasia Group.

“But this model had reached a point of significantly diminishing returns and was increasing economic inequality, financial debt, and environmental damage,” he said.

While Xi is trying to change that model, he is not going about it the right way, experts said, and is risking the future of China’s businesses with tighter state controls.

The 69-year old leader launched his crackdown to rein in the “disorderly” private businesses that were growing too powerful. He also wants to redistribute wealth in the society, under his “common prosperity” goal.

Xi hopes for a “new normal,” where consumption and services become more important drivers of expansion than investments and exports.

But, so far, these measures have pushed the Chinese economy into one of its worst economic crises in four decades.

The International Monetary Fund recently cut its forecast for China’s growth to 3.2% this year, representing a sharp slowdown from 8.1% in 2021. That would be the country’s second lowest growth rate in 46 years, better only than 2020 when the initial coronavirus outbreak pummeled the economy.

Under Xi, China has not only become more insular, but has also seen the fraying of US-China relations. His refusal to condemn Moscow’s invasion of Ukraine, and China’s recent aggression towards Taiwan, could alienate the country even further from Washington and its allies.

Analysts say the current problems don’t yet pose a major threat to Xi’s rule. He is expected to secure an unprecedented third term in power at the Communist Party Congress that begins on Sunday. Priorities presented at the congress will also set China’s trajectory for the next five years or even longer.

“It would likely take an economic catastrophe on the scale of the Great Depression to create levels of social discontent and popular protest that might pose a threat to Communist Party rule,” said Thomas from Eurasia Group.

“Moreover, growth is not the only source of legitimacy and support for the Communist Party, and Xi has increasingly burnished the Communist Party’s nationalist credentials to appeal to patriotism as well as pocketbooks,” he added.

But to get China back to high growth and innovation, Xi may have to bring back market-oriented reforms.

“If he was smart, he would liberalize things quickly in his third term,” said Guthrie.

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Science

Diving deeper into the world’s oceans than ever before

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Sign up for CNN’s Wonder Theory science newsletter. Explore the universe with news on fascinating discoveries, scientific advancements and more.



CNN
 — 

Black smoke appears to rise from chimney-like formations of the hottest and deepest known hydrothermal vents on Earth.

Over the summer, Anna Michel was able to see them for herself — a few miles beneath the ocean’s surface.

Michel, an associate scientist at the Woods Hole Oceanographic Institution in Massachusetts, was part of a three-person crew aboard the submersible Alvin as it dove down to the Mid-Cayman Rise. Known as the Beebe Hydrothermal Vent Field, these vents exist on the ocean floor where two tectonic plates are separating about a half an inch (15 millimeters) per year south of the Cayman Islands.

Hydrothermal vents form where rising magma beneath the seafloor creates underwater mountain ranges called ocean ridges.

The chilly seawater seeps through seafloor cracks and becomes heated to 750 degrees Fahrenheit (400 degrees Celsius) as it interacts with the magma-heated rocks. This interaction releases minerals from the rocks, venting out nutrients and providing the perfect ecosystem for unusual marine life that clusters around them.

Alvin, which has been operating for 58 years, reached a record depth of 6,453 meters (4 miles) in July in the Puerto Rico Trench, north of San Juan, Puerto Rico. On multiple excursions, Alvin traveled 6,200 to 6,500 meters (3.8 to 4 miles) below the ocean’s surface after meeting requirements set by the US Navy and Naval Sea Systems Command.

The new range means that about 99% of the seafloor is now within Alvin’s reach as well as that of its pilot and two passengers. It’s the third increase in depth for Alvin since the submersible was commissioned, according to Andrew Bowen, principal engineer at Woods Hole Oceanographic Institution’s Applied Ocean Physics & Engineering.

“That was the first time I went to a hydrothermal vent site in person and to me, that was just absolutely incredible,” said Michel, also the chief scientist of the National Deep Submergence Facility that operates Alvin. “We were able to bring humans to see places that we’ve not gone to before with Alvin.”

Michel has worked with remotely operated underwater vehicles for 20 years, but this summer was her first time as an Alvin passenger. Despite the enclosed space of the titanium-encased sub, Michel never felt claustrophobic. Instead, she said it felt like riding in an elevator, and the eight-hour expedition flew by.

“You see a lot more three-dimensionality in real life and your spatial awareness is very different of these huge spires,” she said, referring to the vents.

Scientists will now have direct access to the ocean’s deepest zones, exploring places humans have never been to before. Researchers expect to find new species and study the fundamentals of life.

Michel and University of Rhode Island geophysicist Adam Soule, a professor of oceanography, led five scientific dives for Alvin’s Science Verification Expedition over the summer, traveling to Puerto Rico and the Caymans.

At the Puerto Rico Trench, where underwater cliffs form as the North American and Caribbean tectonic plates collide, the team collected samples of exposed ocean crust and some of the deepest known examples of seafloor organisms. During the Mid-Cayman Rise expedition, researchers took biological and chemical samples from the hydrothermal vents.

Previously, Alvin was only able to travel down 4,500 meters (2.7 miles). The new feat was possible after 18 months of overhauling the 43,000-pound (19,500-kilogram) submersible. Alvin’s new upgrades include a 4K imaging system, a new hydraulic manipulator arm, more powerful thrusters, new motor controllers and an integrated command and control system.

Alvin has contributed to numerous discoveries, including shipwrecks and ocean science. The human-operated vehicle, or HOV, has carried more than 3,000 people on over 5,000 dives to the deep. It’s the only deep-submergence vehicle in the US capable of carrying humans to the deep ocean.

Researchers have used Alvin to study plate tectonics and hydrothermal vents, discover strange sea life — and even explore the RMS Titanic in 1986 after Woods Hole Oceanographic Institution scientist Robert Ballard located the famed shipwreck. The submersible also helped the Navy locate a missing hydrogen bomb from World War II and took scientists to the seafloor beneath the Deepwater Horizon oil spill of 2010.

“For almost 60 years, the deep-submergence vehicle Alvin has unveiled the ocean’s mysteries — not just for military and national security purposes but also for the scientific benefit of society as a whole,” said Rear Adm. Lorin C. Selby, chief of naval research, in a statement.

The sub uses its two arms to collect samples that can be brought to the surface when Alvin “parks” aboard its ship, the R/V Atlantis. Alvin’s capabilities mean that scientists participating in a dive can capture photos and videos of the seafloor’s alien landscape and rare creatures, conduct experiments and deploy scientific instruments.

Alvin takes its name from Allyn Vine, the Woods Hole Oceanographic Institution physicist and oceanographer who championed the idea of submersibles that could carry researchers safely through the deep sea to conduct science in an otherwise inaccessible place.

“Alvin is built and maintained to enable new discoveries and provide new insight into the way our planet works,” Michel said. “Every generation of scientists presents new questions, and Alvin has responded in ways that have rewritten textbooks. There’s a new generation waiting to use the sub, and to them we say, ‘Alvin is ready, where do you want to go?’”

Scientists submit proposals to reserve time on Alvin to conduct their research, and the submersible undertakes about 100 dives per year to explore ocean biodiversity, Earth’s crust and the way life thrives at extreme depths.

A variety of other underwater vehicles, including autonomous ones, are increasing exploration possibilities beneath the waves.

“Imagine exploring the Grand Canyon at night with a flashlight,” Bowen said. “Historically, that’s sort of what we’ve been able to do, and Alvin has been a key part of that. Increasingly, we’ve added more technology in the form of drones, tethered vehicles and autonomous systems that really broadens the footprint for the Alvin submersible.

“Visiting the deep ocean is a laborious process. Getting the maximum benefit out of going there is where technology has a huge potential benefit.”

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Business

These fast food restaurants have the best drive-thrus, study says

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New York
CNN
 — 

Every second counts in drive-thru lanes for fast food chains. A recent study showed Chick-fil-A had the slowest one — but only because it’s so popular and there are so many cars in line.

Taco Bell led the pack in speed of service, with an average time of about 221 seconds, followed by Dunkin’ Donuts, KFC and Arby’s. But this metric doesn’t factor the number of cars in line. In that category, Chick-fil-A is the clear leader, with 16% of its lines surveyed counting ten or more cars. McDonald’s, which was in second place, only had 2% with that many customers.

Based on the total time cars spent in line, Chick-fil-A came out on top, with an average of about 107 seconds. McDonald’s came in second at 118 seconds, followed by Taco Bell and Arby’s.

QSR and Intouch Insight published its annual Drive-Thru Report, surveying more than 1,000 consumers who ranked ten industry leaders: Wendy’s, Burger King, Chick-fil-A, Dunkin’, McDonald’s, Arby’s, Carl’s Jr., Hardee’s, Taco Bell, and KFC.

Drive-thrus got bogged down last year mostly because of a shortage of restaurant workers, as thousands left the industry. The pandemic surge of drive-thru and pickup and delivery orders only exacerbated the issue

But luckily for customers, drive-thrus have gotten nearly 10 seconds faster compared to last year — and that can be a big advantage in this highly competitive industry.

“Mere seconds can be a make-it or break-it in terms of where a consumer decides to order,” Amanda Topper, a research director at Mintel, said to CNN Business last year.

However, the current average is still about 45 seconds slower than the 2019 pace. The study said pre-sell menu boards, order accuracy and friendliness helped decrease the wait times at drive-thrus this year.

During peak Covid, Chick-fil-A was one of the first brands to close its dining rooms, focusing its attention on bringing hospitality to the drive-thru outside.

“We believe that looking eye-to-eye with the customer allows for a connection that happens at the beginning of the drive-thru,” Matt Abercrombie, Chick-fil-A’s senior director of service and hospitality, said in the study.

The researchers found that Chick-fil-A had fine tuned the “check-point system,” which keeps customers engaged through different interactions with employees.

And that’s clear in consumer sentiment too — 88% of respondents said Chick-fil-A had friendly service, placing it at the top of the industry. Only 1.7% said the service was “not friendly.”

But when it comes to customer satisfaction, respondents said Arby’s had the most accurate orders filled, at 89.6%. McDonald’s and Burger King closely followed.

Wendy’s founder Dave Thomas named the first modern drive-thru in 1970, coining the term “Pick-Up Window.” And though the company this year announced a makeover that places an “emphasis on convenience, speed and accuracy,” it has lagged behind its competitors in the survey.

The chain plans to redesign its interiors and implement new pick-up windows and a more technologically advanced kitchen.

The pandemic has opened up a new consumer demand for the drive-thru, pressuring fast food companies to upgrade signage, sanitation and technology.

In the survey, Wendy’s came in 7th for speed of service and was also the lowest for order accuracy, at 79.4%. CNN Business has reached out to Wendy’s for comment.

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Business

US Postal Service proposes new prices ‘to offset’ inflation

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CNN
 — 

The US Postal Service on Friday proposed increased prices “to offset the rise in inflation,” according to a statement from the agency.

The price hikes, which have been approved by the Governors of the U.S. Postal Service, include a three-cent increase to purchase a stamp and a four-cent increase to mail a postcard. The changes amount to a 4.2% price increase for first class mail, according to USPS.

The proposal must now be reviewed by the Postal Regulatory Commission.

The announcement from the US Postal Service comes as consumers around the nation continue to grapple with rising prices for groceries, gas and other necessities. The US Postal Service has publicly struggled financially in recent years, and President Joe Biden signed a law earlier this year to overhaul the USPS’ finances and allow the agency to modernize its service.

“As operating expenses continue to rise, these price adjustments provide the Postal Service with much needed revenue to achieve the financial stability sought by its Delivering for America 10-year plan,” US Postal Service said on Friday. “The prices of the U.S. Postal Service remain among the most affordable in the world.”

Unlike other government agencies, the USPS generally does not receive taxpayer funding, and instead must rely on revenue from stamps and package deliveries to support itself.

The Postal Service is also looking to increase fees for P.O. Box rentals, money orders and the cost to purchase insurance when mailing an item.

If approved by the Postal Regulatory Commission the changes would take effect January 22, 2023, after midnight.

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Business

Listeria outbreak leads to recall of cheeses sold at more than a dozen retailers

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CNN
 — 

Old Europe Cheese, Inc., based in Benton Harbor, Michigan, is issuing a voluntary recall of its Brie and Camembert cheeses because of a possible outbreak of listeria, according to the US Food and Drug Administration.

Affected cheeses were sold at about a dozen major retailers in the US and Mexico, the FDA said.

Recalled products contain a best-buy date through December 14, 2022, and were distributed between August 1 and September 28, 2022.

Retailers who likely sold the recalled cheeses include Albertsons, Safeway, Meijer, Harding’s, Shaw’s, Price Chopper, Market Basket, Raley’s, Save Mart, Giant Foods, Stop & Shop, Fresh Thyme, Lidl, Sprouts, Athenian Foods and Whole Foods, the company said.

However, other retailers may have received the recalled products as well, and not all stores on the list may have actually received the cheeses in question.

Additionally, the FDA press release said that some recalled products may have been repackaged into smaller containers by retailers and sold with different labeling and product information.

Listeria monocytogenes is an organism “which can cause serious and sometimes fatal infections in young children, frail or elderly people and others with weakened immune systems,” the FDA said. It can cause high fever, headaches, stiffness, nausea and diarrhea. In pregnant woman, it can cause miscarriages and stillbirths.

The FDA has linked six cases of listeria from 2017 to 2022 to a strain found in samples taken at Old Europe Cheese’s Michigan facility, though the company’s products were not previously linked to the cases.

Cases were found in California, Georgia, Texas, Michigan, New Jersey and Massachusetts. Five of the six resulted in hospitalization; there have been no deaths reported, according to an investigation between the FDA, US Centers for Disease Control and Prevention and local and state health officials.

The FDA is advising consumers who may have purchased any of the products to discard them, as well as use extra vigilance in cleaning and sanitizing any surfaces that may have come into contact with the products. FDA also noted that listeria can survive in refrigerated environments.

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US

Tesla robot slowly walks on stage at AI Day

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Washington, DC
CNN
 — 

Tesla revealed on Friday a prototype of a humanoid robot that it says could be a future product for the automaker.

The robot, dubbed Optimus by Tesla, walked stiffly on stage at Tesla’s AI Day, slowly waved at the crowed and gestured with its hands for roughly one minute. Tesla CEO Elon Musk said that the robot was operating without a tether for the first time. Robotics developers often use tethers to support robots because they aren’t capable enough to walk without falling and damaging themselves.

The Optimus’ abilities appear to significantly trail what robots from competitors like Hyundai-owned Boston Dynamics are capable of. Boston Dynamics robots have been seen doing back flips and performing sophisticated dance routines without a tether.

“The robot can actually do a lot more than we just showed you,” Musk said at the event. “We just didn’t want it to fall on its face.”

Tesla also showed videos of its robot performing simple tasks like carrying boxes and watering plants with a watering can.

Musk claimed that if the robot was produced in mass volumes it would “probably” cost less than $20,000. Tesla maintains that Optimus’ advantage over competitors will be its ability to navigate independently using technology developed from Tesla’s driver-assistance system “Full Self Driving,” as well as cost savings from what it has learned about manufacturing from its automotive division. (Tesla’s “Full Self Driving” requires a human that is alert and attentive, ready to take over at any time, as it is not yet capable of fully driving itself.)

Tesla has a history of aggressive price targets that it doesn’t ultimately reach. The Tesla Model 3 was long promised as a $35,000 vehicle, but could only very briefly be purchased for that price, and not directly on its website. The most affordable Tesla Model 3 now costs $46,990. When Tesla revealed the Cybertruck in 2019, its pick-up truck that remains unavailable for purchase today, it was said to cost $39,990, but the price has since been removed from Tesla’s website.

Tesla AI Day is intended largely as a recruiting event to attract talented people to join the company.

Musk claimed the robot could be transformative for civilization. The robot displayed Friday, despite its limitations compared to competitors, was significantly ahead of what Tesla revealed a year ago, when a person jumped on stage in a robot suit and danced around.

“‘Last year was just a person in a robot suit,” Musk said before the robot walked on stage. “We’ve come a long way. Compared to that, it’s going to be very impressive.”

Tesla is not the first automaker to develop a humanoid robot. Along with Hyundai’s Boston Dynamics, Honda worked on robots dubbed “Asimo” for nearly 20 years. In its final form, Asimo was a child-size humanoid robot capable of untethered walking, running, climbing and descending stairs, and manipulating objects with its fingers.

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Business

An iconic soap with two weird claims to fame — “It floats” and it’s “99+44⁄100% Pure”

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New York
CNNBusiness
 — 

Walk into a Walmart, Target, any drugstore chain in your neighborhood or a corner bodega for New York City dwellers, and chances are you’ll find an Ivory Soap bar, or a pack of 10 bars for under $5, sitting on the shelf.

This iconic cake of soap, invented almost 150 years ago, has become a part of Americana largely by advertising its two strange merits: “It Floats” and it’s “99+44⁄100% Pure.”

The original product is a no-frills, plain white, mild-scented bar soap with the name “IVORY” etched into it in script. Impressively, it has stayed exactly that way for 143 years – barring the addition of an Aloe scented variety, and is also still around.

Ivory soap’s longevity flies in the face of a notoriously fickle market for personal beauty products where new trends can appear and disappear in a flash.

So why has Ivory Soap stood the test of time? One theory is because of its clever advertising and branding. Ivory Soap packaging famously, and relentlessly, touts the attributes of purity and buoyancy.

“That’s brilliant execution,” said David Placek, founder of Lexicon Branding, a branding expert who has helped name such popular consumer products as “Swiffer,” “Blackberry” and “Dasani.”

“Just think about it. How many other soaps can you think of that tout an attribute that’s analogous to “It Floats?” said Placek. “I can’t think of another. It makes you remember it because it also makes you think about other soaps that don’t float.”

Because Ivory Soap’s taglines have remained consistent and endured for over a century and through generations of consumers, they’ve seeped into the subconscious, said Placek.

“Even if you’ve not used Ivory Soap you know about it and you remember it,” he said.

Ivory Soap is the brainchild of Procter & Gamble. Not the huge multinational consumer brands conglomerate that it is today, but of two individuals – Harley Procter (son of P&G cofounder William Procter) and James N. Gamble (son of P&G’s other cofounder, James Gamble).

It was in the late 19th century, a period when river bathing was prevalent among large swaths of the population. Now imagine losing your grip on a bar of soap when you’re immersed waist-deep in murky water.

But what if there was a soap bar that could float?

An AdAge article about Ivory Soap’s invention explained how Gamble at the time was trying to create a new type of gently formulated soap. The R&D process inadvertently created a batch of soap that was found to float because air bubbles got trapped inside.

Gamble, according to P&G’s website, recognized the “floating soap” could revolutionize the washing experience in more ways than one.

He initially thought the floating soap could be used both for laundry and for washing up. Over time, the soap bar primarily became a bath soap.

Naming the soap was another story.

According to P&G legend, Harley Procter same upon the word “ivory” while attending church and thought it perfectly fit the new soap’s look and feel and both men adopted “Ivory Soap” as the name.

P&G launched the soap in 1879 hyping it not only as a soap bar that floated but for its purity.

That claim, according to the company, hinged on a study of the soap by chemistry professors at the request of the inventors. One study showed the soap had only a small amount of impurities – 56/100 of a percent – of a non soap material in it.

So they decided to play that up in Ivory Soap’s advertising, rounding it up to create its second iconic tagline – “99 and 44-100% pure.”

P&G maintains that while it continues to innovate its Ivory Soap, the product is still made with a simple formula free of dyes and parabens meant to gently cleanse the skin.

It has, however, extended the brand to other products.

In the 1950s, according to the AdAge article, P&G launched a light-duty dishwashing detergent under the Ivory brand, followed by liquid hand soaps in the 1980s and moisturizing body washes in 1996 with the introduction of Ivory Moisture Care. Today, the Ivory personal care portfolio also includes baby care products, hair and body washes and deodorant.

Ivory soap has become so iconic that in 2001 P&G donated a collection of its Ivory Soap artifacts to the Smithsonian Institution, including its earliest advertising and a bar of unused soap from the 1940s.

Lexicon Branding’s Placek said Ivory Soap is a product way ahead of its time. “It was ‘pure’ before pure, clean and simple products became as popular as they are with consumers today,” he said.

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