tv On the Money CNBC June 30, 2018 5:30am-6:00am EDT
hi, everyone welcome to "on the money." i'm becky quick. an investigative report inside the world of illegal short-term rentals and the tense battle with regulators. the business that won a big fight in the trade war with china, but the owner says she still came out a loser millennials and money. they may be doing better than you think. that could matter for your wallet re-inventing retail. you've heard it before, now a flip and the temperature is rising, but prices are dropping. what to buy in july. "on the money" starts, right now. >> announcer: this is "on the
money. your money, more life, your future now, becky quick we begin with an emerging turf battle under way between cities and the upstart technology companies like airbnb, capitalizing on the wild west landscape of the share economy. valued at $31 billion, the company is currently worth more than most of its publicly traded hotel rivals, but gigantic growth means big growing pains, too. airbnb unwelcome guest is our investigation into that clash between illegal short-term rentals and restricted regulations. airbnb says it worked with cities around the world to craft reasonable regulations but not in miami beach where the fight has no end in sight. morgan brennan has our cover story. ♪ >> reporter: it's 9:00 on a saturday night and we're riding
along with miami beach cod compliance on the lookout for illegal short-term rentals. >> what are you looking forward tonight? >> hopefully establish contact if its occupied and determine what is the violation. >> reporter: code compliance officers have seen it all. this officer, large, late-night parties in residential neighborhoods. scantily clad women and short-term rental complains. >> miami beach code clines. >> reporter: and unwitting tourists who say they unknowingly booked them in these areas. >> this is messed up. >> reporter: all captured on camera videos recorded over the past two years. >> hello >> reporter: some so blatant, what to do if someone asks told to lie saying they're a friend and don't mention they rent this place. >> you're not allows to rent this house for less than six months and one day. >> everybody needs to leave. >> this party needs to clear out.
>> reporter: and a loud party in california, in the san francisco bay area, shots rang out [ gunshots ] guests seen on surveillance cameras running down the street. airbnb has zero tolerance for this type of behavior and permanently band the guests. airbnb says these don't represent overwhelming numbers satisfying hosting guests in 81,000 cities and 191 countries and has successfully worked with lawmakers around the world back on the streets of miami beach, it's not long before we roll up on a group of vacationers. the building has tell tale signs of an illegal rental two united nations advertised on airbnb have lock boxes and key pads. >> do you live there >> we do. >> how long have you been living there. >> just rented. >> are you surprised to hear it's not legal here? >> i am. >> you would say, when you hear that story. >> reporter: the miami beach mayor, the issue is clear-cut.
>> let me work in some places, but they don't really work here, because at the end of the day it's not the mom and pops we're seeing here. we're seeing commercialized predatory companies that are trying to commercialize a residential community. >> reporter: predatory seems like a strong word what do you mean by that >> it is predatory, because it's not about a mom and pop or a grandmother wanting to bring in a college kit to make him chicken soup at night. it's people taking very nice properties, buying them, and turning them into essentially a flop house. >> reporter: a former prosecutor and florida state lawmaker says airbnb and other home-sharing platforms must abide by the law. >> reporter: have you spoken to airbnb and other companies that work here? >> i've spoken to representatives before i was elected. i'd like to send a message i'd like them to be corporately responsible. do the right thing. >> reporter: why do you think they haven't done that >> look, these are not charities. these home-sharing platforms, they want to make money.
>> reporter: in an interview at airbnb's san francisco headquarters, chris lahane, head of global policy strongly defended the company's track record. >> i've yet to see a program being run by any mayor, any elected official in this time of economic inequality generated $6,100 for a typical middle class family out without a expenditure of a single taxpayer dollar that is what airbnb is about at its corps. economic empowerment. >> reporter: should airbnb be responsible for what is in that market on an illegal platform? >> a common sense solution from miami beach, happy to do this, they actually want to sit down and have a constructive conversation if you could take that 35% residential, make it exclusionary allows activity to take place in 65% of the city zoned for this type of activity. >> reporter: in the meantime, illegal listings are on your
site. >> first, look at the underlying law in the city, in miami beach, right? miami beach allowed for this activity to take place $20,000 fine on someone making their home available a few times a year to actually help make ends meet? doesn't that make us want to work as low as possible. >> reporter: the american lodging association says instead of supporting common sense regulations, airbnb opted to obtain dirty tactics, defective messaging and personal attacks against anyone who raises a concern. miami beach has been among the most aggressive in terms of enforcing their local laws but we spoke to many major cities around the country and found whether boston, los angeles or new york city, there are issues. morgan, how about other short-term rental platforms? are they facing similar regulatory issues like in?
>> absolutely. whether airbnb, booking.com or home away owned by expedia all of these companies have had clashes to varying degrees with regulators in different cities's that said throughout our months of reporting with dozens of interviews, the company brought up the most frequently far and away has been airbnb. >> morgan, thank you excellent reporting. morgan brennan now here's a look at what's making news heading into a new week "on the money." the american economy is not as strong as originally thought the gross domestic product, the broadest measure of the size and scope of the economy, an annual rate of 2% first quarter slightly low are than the last read be and expectation. consumer spending weaker but economists looking for a strong reading for the second quarter it was a tumultuous week for the dow. two triple digit declines over
trade tensions rebounding later in the week stocks continued to climb friday and amazon looks like it is set to shake up yore industry. buying an online pharmacy. pill pack caters to patients who take multiple daily prescriptions. up next, we're "on the money" after losing business to competitors from china what one small manufacturing company did to survive. later -- fasionistas listen up. how would you like to go boutique shopping in paris and milan without ever buying a plane ticket guess what now you can. right now a look at how the stock market ended the week.
u. kate rogers found out what one ceo did after her manufacturing company was caught up in a global trade battle. she has run all of her manufacturing for almost a decade the small company has two facilities in maine and manufactures heat and fire resistant fabric for industrial use selling to businesses in pa petroleum and the u.s. navy. she lost her business, causing her to lay off ten employees about 20% of her workforce and she began to explore why. >> we found that the materials were coming from china. >> reporter: the products discounted up to 30% and sold to her competitors. leonard hire add law firm that handled trade matters helping her file an anti-dumping case
with the department of commerce. 18 months and almost $1 million later, the deal offered manufacturing favor placing an import duty between 200% and 300% on the same product competitors bought from china. >> i felt -- for a moment and grateful it was over and then moved quickly on to sort of wary about the future, because it doesn't mean you win, win and all of a sudden you get all your market back and you make more money. it doesn't work that way >> reporter: so while kathy has been helped by an import duty on that chinese product, many businesses, becky, fall on the other side of the debate negatively impacted by the trump administration tariffs. >> a lot to work out thank you. while tariffs may be one hurdle small businesses have to deal with, others are trying to operate successfully in an ever-changing digital world and
many small clothing boutiques don't have an online presence. now shoptiques trying to solve that problem olga, thanks for being here. >> thanks for having me. >> and interesting and unique problem. how did you start the company and why? >> the story started from a pair of shoes, like many stories start. >> very poetic. >> i lived through it. i was banker at goldman sachs traveling all the time for work. you know, as a woman i would find five minutes to go shop local, and a big family person would bring gifts home and people were like, that is so cool where did you get this the boutique in paris or this boutique in bali and we'll were like, what's the name? we want to get the same thing. and none of the stores were online
which was a little mind-blowing to me, because this was '07. a lot of me big media companies were investing online. >> find whatever you want online. >> exactly so strange there was no platform allowing you to go in and say hey, i want something from paris or i want something from milan and actually get it delivered to your doorstep. >> how does it work if you're a consumer i remember this boutique, maybe not necessarily the place. when i was on vacation how do i find it >> say you were in paris literally go by destination. go to paris. see all of the boutiques in paris featured or literally shop on the parisian products and get the product in three to five business days on your doorstep. >> reporter: wow. >> also by category and just shop a dress and get it. >> reporter: how does it work?
do you operate everything? do the pictures? put everything up for the companies. >> we do all the boring stuff they don't like doing. finding unique products, stores like the curators, buyers and producers but don't think about you how do i write a description? take that photo? or think about what trends are coming up and combine them right? we do all of that. we do the boring stuff. >> reporter: you charge a fee? >> we take a commission on every sale for them. give them packaging materials, shipping labels. they take the piece and put it in the box, and a lot write you a special note that says, thanks for supporting my small business you know, that human relationship we want to preserve. >> reporter: you arrived in the united states at 17 years old and spoke no english tell us about your journey obviously, it's a huge success story. >> i was born in central asia kurdistan and lived a little in russia while my mom was here and moved here at 17 spoke no english became a waitress at a japanese restaurant, is how i learned english.
my first word was cucumber, if you can believe that very special, and i applied to wellesley college, and an amazing place to really find myself the slogan was women who will make a difference, and then went to wall street and worked at goldman sachs. >> reporter: obviously took the message to heart thrilled to hear your story. thank you for joining us. >> thank you for having me. folks, up next, "on the money," millennials grew up during the financial crisis. ten years later, what money choices are they making as adults later in the program, what to buy in july. the best bargain deals and where you can find them. , does your house still smell stuffy? that's because your home is filled with soft surfaces that trap odors and release them back into the room. so, try febreze fabric refresher. febreze finds odors trapped in fabrics and cleans them away as it dries. use febreze every time you tidy up to keep your whole house smelling fresh air clean. fabric refresher even works for clothes you want to wear another day. make febreze part of your clean routine for whole home freshness.
many millennials aren't so young anymore. as a group between the ages of 22 and 37 years old. a unique ten-year study followed some of the younger millennials through college and beyond how are they doing financially ted beck, president and ceo of the national endowment for money education and ted let's talk about the study. it's unique. follow add group of arizona freshmen and started when they were 18 years old. >> started in 2008 they're approaching 30 followed through interesting times. they're doing pretty well, hit a big speed bump called the recession but getting on with their lives. buying houses, making families, in committed relationships and most importantly, employed. >> a lot of millennials, sort of maligned we think of people living in basements, can't afford to buy a house or do anything is that fair or unfair
sounds differently based on what you say. >> you have to look at the segments the no is thing about this study it looked at people who actually finished college. >> okay. >> they're doing pretty well starting to buy houses 28% have houses. about 10% actually started families, have children. and are employed actually starting to save for retirement. >> reporter: is that different than we saw with gen x or baby boomers? >> a little later in the process. just because of that delay caused by the recession. the real challenge is for the young people who were in the same age group who started college, didn't finish they have student debt. >> reporter: a lot of it. >> and don't have the job, the degree, income that offsets that so that's the higher risk group. the group that finished is doing quite well. >> reporter: what do they do when it comes to retirement? willing to invest in stocks? skeptical of the stock market. >> they are skeptical but
starting to participate again. 68% now in retirement plans at work. >> reporter: great. >> they're starting to save money but not aggressive they went through a pretty tough time, and are being conservative. >> reporter: what broad takeaways can we take from this study along with that? are you hopeful? about future generation. >> reporter: a little overconfidence, we're a little concerned about. especially about young men when we look at their behavior, they actually are playing more than they should when dealing with money. >> reporter: different from any age? >> a phenomenon in research we find retaining studying men versus women, the conference level of women comes out as lower and the principled reason, they're willing to check the boxes as i don't know. men don't do that. they'll guess at something or say, oh, well. i'm sure i know that there's always a pretty big
differential between confidence of young men and women which can be entertaining. >> i don't think it's just millennials. >> some in my peer group, the same thing. >> ted, thank you. fascinating. appreciate your time >> thanks for having me on. up next "on the money," a look at the news for the week ahead. the kids are out of school time to start thinking, oh, boy, back-to-school shopping? what you should be buying now and what you should hold off for.
tuesday, auto sales for the month of june released wednesday, we celebrate our independence day and hopefully a lot of you get freedom from work on that day. the markets will be closed on friday, the big number of the week that's the employment report also the day china and the united states are set to impose tariffs on each other to the tune of $34 billion. plus, if you like fried chicken, be on the lookout for deals. happens to be national fried chicken day. summer is not only a time for barbecues and swimming, believe it or not, a time for saving the best deals you can find in the month of july, and what should you hold off on buying? joining us now, smart shopping expert >> great to be here. >> kids are out of school. may be a little bored, looking for something to do. anything you can do in terms of gaming or entertainment at this point? >> yes, actually it's a great month for gaming deals just a big entertainment conference and so after that we
do see a lot of gaming deals specifically in video game bundles. >> exactly what we want the kids to be doing, right >> all day long. the good thing is, if you're a member of playstation or xbox or best buy, free bundles given away and best buy has a $10 off deal as well so if you are okay with your kids playing the games, there are good deals to be had there. >> you say that this is actually a decent time to find fitness deals. i always think of january being the best month for that. what do you have right now >> a great point january is a good time especially gym memberships we all want to look great going into the summertime. fitness apparel, foot locker, nike, finish line, in the 40% to 55% off. >> and amazon prime, always get lots of presents from amazon the case this year >> for sure.
in its fourth year the biggest sale day for amazon last year. i expect it to be even bigger. so i work with, amazon prime date page. you'll see a lot of best deals in one place and can set deal alerts, helpful. something in particular you're looking for, for yourself or as a birthday gift for someone, send a deal alert. you get an alert when the item is on sale, pounce on it then instead of watching deals all day long. >> my kids just got out of school and thinking about back-to-school supplies and signed up to one to get all the stuff out there. time for that or wait? >> yes and no. apparel, for sure. especially summer apparel goes on sale. stock up on the warmer weather clothes they'll wear in september october. gymboree, old navy, jcpenney, and staples, early backpack deal starts in the early weeks of july with purchase of school supplies, 25% off. one of the earlier deals, but
otherwise, wait until august >> anything i should hold off from buying right now? >> yeah. you think patio and furniture would be on sale this month. you may see a little around july 4th. the big deals are closer to ends of season to stock up for next year. >> hold it so they don't have to hold the inventory over the winter thank you. great to see you. >> my pleasure. >> thanks. that's the show for today. i'm becky quick. thank you so much for joining us next week, you may be able to take a flight further than you think. why our last-minute vacations could be in reach thanks to low-cost carriers. each week keep it right here we're "on the money" have a great one and we will see you next weekenddawn,