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European IPOs stage a comeback

Written By limadu on Senin, 30 September 2013 | 05.32

chart european ipos

The European IPO market is recovering from 2012, but is not nearly as robust as it was before the eurozone crisis hit.

LONDON (CNNMoney)

According to data from Dealogic, new listings on European stock exchanges this year have raised $16.2 billion, nearly triple the amount raised in the same period last year.

The revival comes as concerns about the break-up of the eurozone have all but disappeared and equity markets have rallied.

U.S. investors are slowly rebuilding their exposure to Europe, after previously fleeing the region when the sovereign debt crisis was raging. And company profits are rising as Europe emerges from recession.

"There's a fundamental earnings recovery story in Europe that U.S. investors find quite compelling," said Gareth McCartney, a London-based managing director at UBS (UBS).

McCartney points out that the IPO market in the U.K. has been particularly strong, held up by issuers in the property and insurance markets.

Related: The American IPO market is on fire!

But it's not time to pop the champagne quite yet -- European IPO activity still hasn't hit the levels seen in 2010 and 2011 when over $30 billion was raised each year.

Looking ahead to the rest of the year and into 2014, the European IPO market is expected to maintain its upward momentum, even if the volumes from a couple of years ago remain out of reach.

"The pipeline of potential IPOs remains very healthy and continues to grow. We'll see a continued recovery of the European market into 2014," said McCartney.

Leon Saunders Calvert, head of banking and research at Thomson Reuters, said Europe is the only region expected to see an increase in offerings over the next few months as activity in U.S. and Asian markets slows.

"There will be continued slow growth in the European IPO market. But that growth comes off a ridiculously bare market in 2012," said Saunders Calvert.

Among the high profile listings expected for the rest of the year, Britain's Royal Mail is set to be privatized in a deal expected to value the company at roughly £3 billion ($5 billion).

Earlier this year, real estate firm LEG Immobilien raised roughly $1.6 billion when it listed in Frankfurt. This was one of the largest IPOs in the world this year.

Related: Alibaba drops plans for IPO in Hong Kong

There have been 578 IPOs around the world so far this year, raising nearly $100 billion, according to Dealogic.

The New York Stock Exchange has grabbed the biggest share, according to Thomson Reuters data. It played host to 69 IPOs, representing 27% of all cash raised. The tech-heavy Nasdaq came in second place, with the same number of listings but a smaller amount of money raised. To top of page

First Published: September 30, 2013: 5:28 AM ET


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Is Obamacare a jobs killer?

NEW YORK (CNNMoney)

Critics claims the Affordable Care Act -- a.k.a. Obamacare -- will cost the economy jobs. But economists' views are mixed on the issue.

Nine out of 14 economists polled by CNNMoney said businesses are putting off hiring in light of health care reform, which stipulates that employers with 50 or more workers provide affordable health insurance starting in 2015.

And CNNMoney has heard anecdotal stories from small businesses owners that healthcare reform is causing them to give employees fewer hours.

But there is also reason to believe the job killing criticism could be overblown.

As of 2010, 97% of small businesses had fewer than 50 employees, according to the U.S. Census. That means Obamacare's employer mandate applies only to 3% of America's small businesses. Of companies with more than 50 workers, 96% already offer health plans, government data shows.

The ADP jobs survey -- one of the largest surveys of private employers -- shows that small businesses are still hiring strong.

"There is little evidence that fiscal austerity and Health Care Reform have had a significant impact on the job market," said Mark Zandi, chief economist of Moody's Analytics and a collaborator on the ADP report, in a press release with the August survey.

The case for hurting job growth: Uncertainty was the big reason economists gave for why employers might not be hiring -- uncertainty over how much it's going to cost to insure additional workers, and how much health care premiums for existing employees might go up.

"The ambiguity over the law's actual impact on health care premiums imparts uncertainty over where true labor costs will be going," said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida. "It is understandable that businesses would choose to delay any hiring that is not absolutely essential rather than running into that fog."

A few of the economists predicted the legislation would cost the economy around 10,000 jobs per month.

Related: See the Obamacare premiums

Several also mentioned that Obamacare is one of many policy uncertainties out of Washington that's acting to suppress job growth -- the others primarily relating to the seemingly endless talk of a government shutdown.

Other economists said businesses are bound to hire less because the cost of each employee will likely go up.

"Any time you attach an extra cost to labor you will cause it to be less fully utilized," said Robert Brusca, chief economist at Fact and Opinion Economics, a Manhattan consultancy.

Related: The overblown Obamacare myth about small business

The case against: Economists saying Obamacare is not having a meaningful impact on jobs tend to argue that hiring is not driven by labor costs, but rather demand for goods.

"Work still needs to be done," said David Wyss, a fellow at Brown University. "But it may be biasing toward more part-timers."

Others noted that most people already have work-provided health insurance, and many small companies are exempt from the law because they employ fewer that 50 people.

"Not enough companies are negatively impacted, and those that are are adjusting in other ways," said Zandi.

One economist speculated that the health care law will boost jobs, as all those exchanges will need people to run them. To top of page

First Published: September 30, 2013: 7:43 AM ET


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Mark Cuban insider trading trial set to start

mark cuban

Mark Cuban's insider trading trial is finally set to start five years after the SEC first filed charges against him.

NEW YORK (CNNMoney)

The controversial owner of the NBA's Dallas Mavericks and a star of the reality television show "Shark Tank" is accused of dumping his whole stake in the company Mamma.com in 2004 before details of a pending stock offering were announced, avoiding a $750,000 loss on the holding.

Mamma.com, a search software company, has since changed its name to Copernic and been purchased by Constellation Software (CNSWF).

Cuban was the largest individual shareholder in Mamma.com at the time he was contacted by the company's CEO and told the company intended to sell more shares to raise funds.

According to court documents, Cuban became angry and said he opposed the sale because it would dilute his 6% stake. But he then said "Well, now I'm screwed. I can't sell." However, Cuban sold his entire stake of 600,000 shares of the company immediately after getting more details of the planned stock sale from the company's financial advisers.

Related: The gray art of not quite insider trading

Cuban argued in court that while he was prohibited from disclosing the plans for a stock sale by the company, he was not prohibited from trading his shares on the information. In July 2009, U.S. District Court Judge Sidney Fitzwater granted Cuban's motion to dismiss the case. But a court of appeals decision reinstated the case. Fitzwater will oversee the jury trial set to start Monday.

The case against Cuban is a civil case, not a criminal case. He can be forced to pay a fine, which he is used to doing. The NBA has fined him an estimated $1.8 million through a course of 19 infractions during his career, according to Bleacher Report, including a $100,000 fine once for telling CNNMoney of his interest in signing LeBron James a month before the superstar formally became a free agent.

Cuban made most of his fortune when he sold the Internet company he started, Broadcast.com, to Yahoo for $5.7 billion in 1999. Yahoo ended up shuttering the Internet broadcaster just a few years later.

The looming federal government shutdown won't immediately halt federal court cases, as the courts have enough funds to operate for at least 10 days. The SEC is one of the agencies that will be subject to the shutdown, although certain employees will be exempted and stay on the job. To top of page

First Published: September 30, 2013: 8:22 AM ET


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ExxonMobil to extend benefits to same-sex couples

Written By limadu on Minggu, 29 September 2013 | 05.32

exxon mobil

ExxonMobil announced Friday it will extend benefits to same-sex couples.

NEW YORK (CNNMoney)

Beginning Oct. 1, ExxonMobil employees in legal same-sex marriages will be eligible to receive health insurance coverage for their spouses, the oil giant said in a statement.

The company's decision was less of a change of heart than it was a technical update stemming from this summer's Supreme Court decision to recognize same-sex marriages for federal purposes.

Related: Pasta maker Barilla under fire for anti-gay comments

"The decision is consistent with the direction of most U.S. government agencies," ExxonMobil said in the statement. "We have made no change in the definition of eligibility for our U.S. benefit plans. Spousal eligibility in our U.S. benefit plans has been and continues to be governed by the federal definition of marriage and spouse."

ExxonMobil (XOM, Fortune 500) has long been criticized for having anti-LGBT policies. It currently has a lawsuit pending against it for discriminating against a lesbian applicant, and it received the lowest "corporate equality" score of any U.S. company in last year's Human Rights Campaign rankings.

Related: Same-sex benefits at conservative Wal-Mart: What gives?

Friday's announcement was therefore welcomed by gay rights groups.

"After years of stubbornly refusing, we commend Exxon for joining the majority of the Fortune 500 business leaders that already treat gay and lesbian married couples equally under employee benefit plans," Tico Almeida, president of Freedom to Work, said in a statement. "It's a shame Exxon waited until after the Labor Department issued official guidance explaining that their old policy does not comply with American law, and now it's time to move forward."

A growing number of companies have been updating their policies to become more LGBT-friendly. This summer, Walmart (WMT, Fortune 500) announced it will offer benefits to same-sex and domestic partners. As of the beginning of this year, 89% of U.S. companies provide health benefits to same-sex couples, according to the Human Rights Campaign.

But other companies continue to get bad press from the LGBT community. Just Thursday, pasta maker Barilla came under fire for comments its CEO made about refusing to feature same-sex couples in the company's commercials. The remarks sparked a firestorm on Twitter and led to a boycott of the company's products. To top of page

First Published: September 27, 2013: 4:41 PM ET


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Will young people pay a lot more under Obamacare?

Written By limadu on Jumat, 27 September 2013 | 05.32

NEW YORK (CNNMoney)

Myth: Young people will pay a lot more for insurance under Obamacare.

Reality: It's true that premiums will likely rise for some young adults, particularly men. But that doesn't take two important considerations into account: federal subsidies and more comprehensive coverage.

The Obama administration Wednesday released a first look at how much consumers will pay for premiums in 36 insurance exchanges partly or fully run by the federal government. The exchanges open for enrollment on October 1, while coverage begins in January.

The new data showed that in Indianapolis, for instance, the sticker price for the cheapest bronze plan for a 27-year-old will be $204. Right now, he can get a policy for as little as $52.50, according to eHealthInsurance, an online marketplace.

In Fort Lauderdale, Fla., the least expensive bronze plan will cost $128, compared to $66 today.

But those comparisons are very misleading because they do not take out-of-pocket costs and coverage limits into account, said Linda Blumberg, senior fellow at The Urban Institute. The cheap insurance policies today have very high deductibles -- $10,000 each for the Indianapolis and Fort Lauderdale plans -- and don't cover mental health, brand-name drugs or pre-natal care. The out-of-pocket limit in each of these plans is $12,500.

"Part of the problem with these plans is that people think they are insured until something bad happens and then they find out they aren't covered," she said. The Obamacare plans are "real insurance."

Related: What you'll pay

Under Obamacare, the plans must cover an array of basic health benefits, including prescription drugs, maternity care and mental health. The out-of-pocket max is limited to $6,350 for an individual so the deductible on the bronze plans can't be higher than that.

And, Blumberg notes, the cheap plans on the market today are only available to healthy young adults with no pre-existing conditions. But insurers must offer the same coverage to everyone -- regardless of their health history -- under Obamacare.

Also, sticker prices on the Obamacare plans are not what most young adults will actually pay, Blumberg said. Single people earning less than $46,000 will be eligible for federal subsidies to defray premium costs. The size of the subsidy is based on age, income and residence.

So if the Indianapolis resident makes only $25,000, he will pay $70 for the bronze plan, while the young man in Fort Lauderdale would pay only $74, not too much higher than the current rates.

Young adults up to age 30 can also sign up for more bare-bones catastrophic plans under Obamacare, but they won't be eligible for subsidies. Such plans would cost $170 in Indianapolis and $86 in Fort Lauderdale. To top of page

First Published: September 27, 2013: 6:12 AM ET


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J.C. Penney raises $810 million in offering

jcp 720

Click on chart to track JCP

NEW YORK (CNNMoney)

J.C. Penney priced the offering at $9.65 per share, which was below the Thursday closing price of $10.42. The offering raised about $810 million.

The stock rose 3% Thursday amid reports the company was seeking to raise as much as $1 billion. But they sank following the news that J.C. Penney was indeed selling shares.

The company said it plans to use proceeds from the offering "for general corporate purposes." Underwriters will have the option to purchase an additional 12.6 million shares in the next 30 days.

Goldman Sachs (GS, Fortune 500) is managing the deal, which is expected to close on Oct. 1.

Related: Is the end near for J.C. Penney?

It's been a rough year for J.C. Penney (JCP, Fortune 500). The company has been hemorrhaging money, losing $586 million in the second quarter alone. The stock is down 47% in 2013.

Activist investor Bill Ackman added fuel to the fire when he cut his losses last month. His hedge fund, Pershing Square Capital Management, sold its entire 18% stake in the company.

Ackman had tried to save the company by recruiting Ron Johnson, former head of Apple (AAPL, Fortune 500) retailing, to lead J.C. Penney as chief executive. But Johnson got rid of company discounts, distancing its customer base and sinking sales. So the company him pushed out earlier this year.

The company is now being led by interim CEO Mike Ullman, the former CEO of the company. To top of page

First Published: September 27, 2013: 7:25 AM ET


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Another bleak day for BlackBerry

blackberry earnings fire

Friday's woeful results could be one of the last public earnings reports from BlackBerry.

NEW YORK (CNNMoney)

BlackBerry warned of the loss a week ago, and also announced that it will lay off 4,500 employees by the end of the year.

Sales for the struggling smartphone maker's second fiscal quarter came in at just $1.6 billion, a 45% drop from what BlackBerry (BBRY) reported one year ago, the company said Friday.

The results included a $934 million charge for unsold Z10 devices, the first phone launched on the new BlackBerry 10 operating system. BlackBerry added that a big chunk of the devices it did sell in the quarter were of older BlackBerry 7 phones.

In what could be the understatement of the year, BlackBerry CEO Thorsten Heins said in a press release that the company is "disappointed" with the results.

"We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt," Heins insisted.

Shares of BlackBerry were up modestly in pre-market trading following the release. But the stock is down more than 30% so far in 2013 and nearly 90% over the past five years.

Friday's results could be one of the last public earnings reports from BlackBerry.

On Monday, Fairfax Financial -- a Canadian insurance company that is BlackBerry's largest shareholder -- said it was considering buying BlackBerry for $4.7 billion. Cynics think Fairfax is simply trying to draw in other offers and cash out its 10% stake, but if Fairfax does make an offer, it could face a bidding war over BlackBerry's valuable patents.

BlackBerry may have little left of value besides those patents. The company said last week it now plans to offer just four smartphones instead of six, and it's finally giving up on the consumer market. BlackBerry's market share has plunged in the past few years due to competition from Apple (AAPL, Fortune 500) and companies like Samsung that make phones running on the Google (GOOG, Fortune 500) Android operating system.

Instead, BlackBerry will focus on corporate customers and "prosumers" -- professional consumers who are also increasingly opting for iPhones and Androids.

BlackBerry's consumer struggles became worse with Blackberry 10, the operating system that was meant to save the company. The software's release was delayed several times -- essentially leaving BlackBerry customers with no new phones to buy. After it finally launched in January, sales of the new devices have sorely disappointed.

Related story: Terrible apps killed BlackBerry

Although BlackBerry is in bad shape, it's premature for BlackBerry diehards to worry about their service being taken away just yet. Still, some analysts think BlackBerry's userbase could fall to 0 within just two to three years as subscribers continue to leave in droves.

BlackBerry will not be holding a conference call with analysts Friday to discuss its results. A spokeswoman for BlackBerry said it was due to "the Fairfax news." But analysts and investors haven't heard from BlackBerry's management beyond what's been said in recent press releases.

The company didn't hold a press call after the preliminary earnings release last week. It also was silent following the announcement of Fairfax's offer. To top of page

First Published: September 27, 2013: 7:32 AM ET


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Are employers dumping health benefits because of Obamacare?

Written By limadu on Kamis, 26 September 2013 | 05.32

NEW YORK (CNNMoney)

Myth: Employers are dumping health benefits because of Obamacare.

Reality: It's true that Obamacare is raising costs on employers. And some are either passing those increased tabs to workers or are cutting back on benefits to keep costs under control.

Several employers -- including UPS (UPS, Fortune 500), Delta (DAL, Fortune 500) and University of Virginia -- have recently cited Obamacare as a source of increased costs. UPS and University of Virginia will no longer provide benefits for spouses with coverage options elsewhere. Trader Joe's and Home Depot (HD, Fortune 500)are shifting part-time workers to the Obamacare exchanges.

Some companies are making major changes that aren't directly related to Obamacare, but embrace the idea of health insurance exchanges. IBM (IBM, Fortune 500) and Time Warner (TWX, Fortune 500) are moving retirees to private exchanges, while Walgreens (WAG, Fortune 500) is shifting all its employees to a private exchange next year.

But Obamacare is not the only reason behind the benefits adjustments.

"An increase in costs of a few percent isn't enough to cause widespread changes in benefits," said Larry Levitt, senior vice president at the Kaiser Family Foundation.

Other factors, such as the improving economy, are contributing to rising costs since people use more medical care when the economy is healthier.

Also, companies have been shifting costs to employees for years. While UPS will limit its spousal coverage, it is not the first company to do so.

"The ACA is definitely escalating the pace of change," said Sandy Ageloff, senior consultant with Towers Watson, a professional services firm.

Not all companies, however, are planning to pull back on benefits. Starbucks' CEO Howard Schultz told CNN earlier this month that Starbucks will not change its coverage even though Obamacare will raise its costs.

"I don't believe that ... the health care law should be a reason or a motivation to cut benefits for either the employee or spouses," Schultz said. "An investment in your people is an investment in shareholder value." To top of page

First Published: September 26, 2013: 6:07 AM ET


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Cyprus reeling 6 months after EU rescue

cyprus unemployment data

The number of registered unemployed people in Cyprus jumped by 43% over a year, while others who still have jobs are facing deep salary cuts in the range of 20% to 30%.

LONDON (CNNMoney)

Six months after Cyprus became the fourth eurozone country to need a bailout, the Mediterranean island's economy is shrinking rapidly as austerity measures bite, sending unemployment through the roof.

Cyprus is the most potent example of a European country still struggling for economic survival even as the region claws its way out of recession. Unemployment has jumped by 43% over the past year.

Constantinos Menelaou, a 28-year-old teacher at Casa College in the capital Nicosia, said he considers himself lucky that he still has a job, even though his salary was slashed by a quarter over the summer.

Menelaou is stoical about his situation, saying he feels a sense of solidarity with many of his friends facing similar pay cuts, and losing their jobs.

"There's no bright future. Day by day, things get worse," he told CNNMoney. "People are trying to get a job and they can't," he said, noting that frugal get-togethers in the island's cafes have replaced evenings out at a bar.

Menelaou said many of his friends are starting their own small businesses or trying to leave the country, as they see little hope of finding work at home.

Related: From unemployment to start-up success

Unemployment had been rising in the country over the past few years, but the situation turned dire in March.

That's when Cypriot banks nearly collapsed, cash flows froze up and the country's lawmakers turned to the European Union and International Monetary Fund for a bailout.

They agreed to an unprecedented €10 billion rescue package which included raiding Cypriot bank accounts with more than €100,000 on deposit to help fund a restructuring of the financial sector.

Since then, cash withdrawals have been severely restricted -- individuals can only take €300 from their accounts each day -- as officials fear Cypriot banks could be drained without strict controls.

Austerity measures have also been introduced to satisfy bailout conditions, with lawmakers implementing tax hikes and steep salary cuts in the public sector.

Related: Latvia is set to adopt the euro

Recruitment specialist Persis Christodoulou suffered with everyone else as the unemployment rate shot up to over 15% in the second quarter.

"We used to handle 60 to 70 job openings per month in Cyprus in 2008. Now we handle 3-4, if we're lucky," he said.

His family-run firm in Limassol -- Executive Connections -- slashed its workforce by 50% and was forced to move into a home office.

"People woke up one day, they turned on the radio and were told they couldn't get access to their money," he said. "So you had to lay people off because you couldn't pay your employees. You couldn't import, you couldn't pay for electricity."

Christodoulou said employers are still looking to cut back, with many firms considering asking staff to work a four-day week.

Related: Germany says Greece will need more support

Elmos Neocleous, who runs a TV production company in Nicosia, sums up his situation with stark numbers: "We used to make €500,000 a year. Now we make €50,000 a year. We used to have 12 employees. Now we have 2 ... There's no serious income anymore."

"Everybody is disgusted with the system," said Neocleous.

The Cypriot economy is expected to shrink by 13% over 2013 and 2014, according to the latest report by the European Commission. It's the only eurozone state expected to see a decline in GDP in 2014, and will have to wait at least until 2015 for a modest rebound. To top of page

First Published: September 26, 2013: 7:18 AM ET


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J.C. Penney continues its long slide

jcp jcpenney

J.C. Penney stock plunges

NEW YORK (CNNMoney)

J.C. Penney (JCP, Fortune 500) dropped 9% in premarket trading, following a 15% plunge on Wednesday, amid reports that the clothing retailer could be seeking to raise as much as $1 billion through the sale of new stock or bonds.

The company's shares are set to open beneath $10, a level that it hasn't reached since 2000.

Some analysts are projecting that J.C. Penney had a disappointing back-to-school shopping season, with sales continuing to take a dive through this month.

Activist investor Bill Ackman added fuel to the fire when he cut his losses last month. His hedge fund, Pershing Square Capital Management, sold its entire 18% stake of the company.

Related: Ackman takes big loss on J.C. Penney

Ackman had tried to save the company by recruiting Ron Johnson, former head of Apple retailing, to lead J.C. Penney as chief executive. But Johnson got rid of company discounts, distancing its customer base and sinking sales, so the company him pushed out.

The company is now being led by interim CEO Mike Ullman, a veteran of the company.

Representatives of J.C. Penney were not immediately available for comment.

CNNMoney's Maureen Farrell contributed to this story. To top of page

First Published: September 26, 2013: 7:56 AM ET


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Federal workers: Hand over BlackBerry during shutdown

Written By limadu on Rabu, 25 September 2013 | 05.32

blackberry shutdown government workers

If the government shuts down next week, Blackberries and iPhones may be turned in.

WASHINGTON (CNNMoney)

That's because if the government shuts down next Tuesday, furloughed federal workers could be violating the law if they do something as simple as check their work e-mail.

The Antideficiency Act, passed by Congress during Chester Arthur's administration, prevents non-working federal employees from doing any job-related functions during a shutdown if the government cannot pay for it.

The White House budget office made clear last week that employees on furlough during a shutdown can't touch their government-issued mobile devices, or even use home computers or laptops to access work email.

Related: How a government shutdown hurts Main Street

But in the age of ubiquitous communication, how do you even enforce a no-cell phone ban?

The truth is, no one really knows yet. In the last shutdown of 1996, the Palm Pilot was about as advanced as handheld devices got.

The Office of Management and Budget has left it up to the various federal agencies to figure out how to carry out its edict.

In 2011, when the government came close to a shutdown, the Department of Housing and Urban Development said it would allow employees to keep government-issued BlackBerries (BBRY) and laptops on the condition they didn't use them. But the House of Representatives had planned to order furloughed employees to turn in their BlackBerries, laptops, and even cell phones, and to turn on "out of office" messages.

Now, with a shutdown looming just a week a way, the HUD, House, and the IRS have said they're still crafting their contingency plans, including how to handle websites and mobile phone use.

Federal worker union representatives say it doesn't matter what the government decides on BlackBerry use.

"When a federal employee gets furloughed because of a government shutdown, the last thing they're worried about is whether they can turn on their laptop or Blackberry; they're worried about paying the mortgage and putting food on the table," said Randy Erwin, director of the legislative affairs at the National Federation of Federal Employees.

Shutdown expert John Cooney said a short shutdown lasting a few days may have little impact and agencies may not require staff to turn phones in.

"If it's a long shut down, the agency could collect cell phones from employees," said Cooney who helped craft the modern day shutdown plan for the Reagan White House.

Related: Are Social Security payments at risk?

One potential problem: The budget office says agencies can't rely on work email to alert employees to go back to work, when a shutdown ends. The agencies will have go back to old-fashioned communication to get furloughed employees to return to the office via unconventional tools like calls to personal phones, television, radio, Facebook and Twitter.

Of course, federal employees in critical jobs will continue to work, and also use their smartphones to carry out their "essential functions." They include some senior managers, lawmakers and workers who are needed to protect life and property.

They also include the President, also known as the E-mailer-in-chief, and a government employee with a critical job. To top of page

First Published: September 25, 2013: 6:09 AM ET


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How income inequality hurts America

NEW YORK (CNNMoney)

It's a well-established fact that the rich are getting richer, while the poor and middle class are falling behind.

"The 400 richest people in the United States have more wealth than the bottom 150 million put together," said Berkeley Professor and former Labor Secretary Robert Reich on a recent CNNMoney panel on inequality.

Meanwhile, the median wage earner in America took home 9% less last year than in 1999.

But the rising income gap is manifesting itself in American society in other ways too.

Social scientists have long said income inequality is bad for society. Yet popular measures of social stability -- crime rates, voter non-participation -- have been going down over the last couple of decades.

So how does inequality hurt?

Lifespans: Paychecks aren't the only things that are increasingly unequal. Rich people are actually living longer than poor people.

In the early 1980s, wealthy Americans lived 2.8 years longer than the poor, according to the Department of Health and Human Services. The wealthy and poor were defined as the top and bottom 10% on a number of different economic measures.

But by the late 1990s the rich were living 4.5 years longer, and the gap has only widened since then, HHS said.

The increasing disparity is a result of a variety of reasons including "material and social living conditions" as well as access to medical care, according to HHS.

Related: SEC rule to disclose CEO vs. worker pay

Education: For Americans born in the early 1960s, 5% of poor people went to college and 35% of rich folks did, according to the Russell Sage Foundation. They defined rich and poor as top and bottom 25% for income.

Only one generation later -- Americans born around 1980 -- the number of rich people going to college jumped by 20 percentage points. For poor people, it rose only 3 percentage points.

That further perpetuates the cycle of income inequality, as an increasing number of middle-class jobs favor the more educated.

While researchers stress that it's difficult to concretely link any of these measures with rising income inequality, the correlation is compelling.

"When income inequality goes up, you see more inequality in these other things," said Lane Kenworthy, a professor of sociology and political science at the University of Arizona.

Related: 5 years after the crisis: Main St. vs. Wall St.

Economic growth: Some economists have long argued that a widening income gap suppresses economic growth and job creation, and may be one reason this economic recovery doesn't feel like a recovery at all.

The theory is based on research showing middle-class people tend to spend more of their income than rich people. As their incomes and feelings of relative wealth decline, so does overall economic growth.

Since the recession ended, growth has averaged just 2.2%. That compares to the 3.3% historical average since the Great Depression.

"Our middle class is too weak to support the consumer spending that has historically driven our economic growth," Nobel Prize-winning Economist and Columbia Professor Joseph Stiglitz wrote in an editorial earlier this year.

"With inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying."

What to do about it: Research shows Americans want the country to be more equal -- two thirds say inequality is a problem according to Leslie McCall, a sociology and political science professor at Northwestern University.

The trouble is, Americans don't really know what to do about it. Strengthening unions, taxing the rich, raising the minimum wage and better job training are a few ideas.

But many view inequality as an unavoidable symptom of the free market -- a market that has, on a global scale, lifted hundreds of millions of people out of poverty and provided the wherewithal to boost living standards around the world.

"It's not clear that raising taxes will produce what people want -- which is better jobs and more pay," said McCall. To top of page

First Published: September 25, 2013: 6:43 AM ET


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Obamacare premium rates lower than expected

NEW YORK (CNNMoney)

The national average premium for the benchmark plan will be $328 a month before subsidies, 16% less than projected by the Congressional Budget Office.

The benchmark is the second-lowest cost "silver" policy for 48 states, upon which federal subsidies are based.

The long-awaited release of the premium rates also details for the first time what shoppers will pay on the 36 state-based exchanges that the federal government will fully or partly run. States that are operating their own exchanges have been revealing their rates over the past few months.

Consumers will be able to start enrolling in the exchanges on Oct. 1, with coverage beginning in January.

Starting in 2014, nearly everyone must have insurance -- either through their jobs, government programs or the individual market -- or face a penalty.

Americans with incomes up to 400% of poverty are eligible for federal subsidies, and what they'll actually pay on the exchanges varies widely by state, age and income.

For instance, a 27-year-old living in Dallas making $25,000 could pay as little as $74 a month for the cheapest "bronze" plan after subsidies, according to the Department of Health and Human Services.

But a 60-year-old in Wyoming who makes more than $46,000 a year -- too much to get a tax credit -- could pay as much as $758 for a similar plan.

The majority of people uninsured today can find a policy for $100 or less a month, taking into account subsidies and Medicaid eligibility, the administration said. To top of page

First Published: September 25, 2013: 7:45 AM ET


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'Made in America' revival gathers pace

Written By limadu on Selasa, 24 September 2013 | 05.32

LONDON (CNNMoney)

A new survey published Tuesday showed a big jump in recent months in the number of companies considering "re-shoring" production from China, once favored for its low costs.

Boston Consulting Group said its survey found most large U.S. companies now plan to move some production to America from China, or are "actively considering" the move.

The number of firms that have shifted manufacturing to the U.S. from China, or will do so in the next two years, has nearly doubled over the past 18 months.

The survey found the three main drivers of the trend are labor costs, product quality and a desire to be closer to customers.

Related: China's $8 billion plan to rival Hollywood

As lower energy prices and declining labor costs make America a cheaper place to manufacture goods, China's dynamics are also changing.

Once a source of cheap labor, the country is seeing its advantage squeezed by rising wage costs and an impending labor shortage.

More than 200 U.S.-based manufacturing companies with annual sales topping $1 billion took part in the Boston Consulting Group study.

Related: 'Made in USA' not just Apple

A pick-up in manufacturing is a crucial plank in the American recovery story.

Already, several technology giants have shifted production back to the U.S. Google (GOOG, Fortune 500)chief Eric Schmidt said it costs about the same to produce its Texas-made Moto X device locally as it would in Asia.

Apple (AAPL, Fortune 500) boss Tim Cook made a big splash last year when he announced production of some Mac computers would be shifted to America.

But a stronger push by technology firms to manufacture in the U.S. is unlikely. Most component suppliers for tech companies are based in Asia, while China has far more skilled engineers needed to meet swelling global demand for smartphones and devices than the United States. To top of page

First Published: September 24, 2013: 6:40 AM ET


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Bank of America fined $2 million for race discrimination

Bank of America

A judge is ordering Bank of America to pay a $2.2 million fine after African-American job seekers faced discrimination at the company's offices in North Carolina.

LONDON (CNNMoney)

The U.S. Department of Labor has ordered Bank of America (BAC, Fortune 500) to pay up after finding that over 1,100 African-American job seekers faced discrimination at the company's offices in Charlotte, North Carolina, at various times between 1993 and 2005.

The money will be distributed to the former job applicants after a judge found that the bank applied "unfair and inconsistent selection criteria" which resulted in the rejection of qualified African-Americans, the department said in a statement.

In this particular case, the applicants had been hoping to secure entry-level administrative work and teller positions.

Bank of America did not immediately return a request for comment on the ruling.

The judge overseeing the case also ordered the bank to give suitable job offers to 10 former applicants when positions become available.

Related: JPMorgan ordered to refund $309 million over "unfair" practices

This ruling comes less than a month after Merrill Lynch reached a settlement to pay $160 million over a federal class action lawsuit brought by its African-American brokers in 2005. The settlement was one of the largest ever in an employment discrimination case.

Merrill Lynch is now part of Bank of America, after it was acquired in January 2009 in the middle of the financial crisis. The two cases are not related.

Related: Bank of America intern dies in London

The Bank of America case first came to light back in 1993 when the labor department was conducting a routine compliance review. A formal complaint was filed in 1997.

"Our investigators and attorneys prevailed despite decades of stalling tactics," said labor solicitor M. Patricia Smith in a statement. To top of page

First Published: September 24, 2013: 6:58 AM ET


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Big banks charged with causing credit union failures

morgan stanley

Morgan Stanley is one of 9 major banks charged with selling bad mortgages to credit unions.

NEW YORK (CNNMoney)

The suits charge that Morgan Stanley (MS, Fortune 500), Barclays (BCS), JPMorgan Chase (JPM, Fortune 500), Credit Suisse (CS), Royal Bank of Scotland (RBS) and UBS (UBS) sold the bad mortgages to Southwest and Members United corporate credit unions, while Goldman Sachs (GS, Fortune 500), the Wachovia unit of Wells Fargo (WFC, Fortune 500) and a unit of what is now Ally Financial sold mortgages to just Southwest. JPMorgan is being sued because of mortgages sold by Bear Stearns, which was bought by the bank in 2008.

Related: Big banks' legal tab -- $66 billion and growing

The suits from the National Credit Union Administration say that Morgan Stanley was the major seller of the bad mortgages to the credit unions, selling more than $416 million in mortgage-backed securities. The other seven banks sold more than $1.9 billion in mortgage securities between them.

The suits allege the banks made misrepresentations in connection with the underwriting and subsequent sale of the mortgage-backed securities.

Representatives of the banks either were not available for comment about the suits early Tuesday or did not have a comment.

Related: Bank stocks have roared back to life

Southwest and Members United were corporate credit unions, which functioned as wholesale credit unions providing such services to retail credit unions as check clearing, electronic payments and investments. In all, five corporate credit unions failed due to the meltdown in the market for mortgage securities after the housing bust.

The NCUA has already recovered $335 million from earlier suits against Citigroup (C, Fortune 500), Deutsche Bank (DB), HSBC (HBC) and Bank of America (BAC, Fortune 500). The funds it recovers go into the Temporary Corporate Credit Union Stabilization Fund, an insurance fund that protects the funds of customers of credit unions when they fail. The fund gets its assets from assessments against all federally insured credit unions, so any recoveries would help reduce future assessments on credit unions. To top of page

First Published: September 24, 2013: 8:09 AM ET


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Buy a beer share, invest in a local brewery

Written By limadu on Senin, 23 September 2013 | 05.33

big alice brewing

Big Alice Brewing is located in an old Bible warehouse in Queens, N.Y.; the bottles are all hand-corked with hemp ties.

NEW YORK (CNNMoney)

Queens' Big Alice Brewing -- located in an old Bible warehouse near the water -- opened its doors in June and is selling beer shares as a way to finance the brewery. Inspired by the concept of community-supported agriculture, in which people buy directly from farmers, CSB subscribers pay $200 and receive two large bottles of beer each month for six months.

Other breweries use different price points, time frames and methods of delivery, but the concept is the same: Buyers commit to a certain amount of beer for a certain amount of time, and the brewery gets guaranteed cash up front. Combined with more traditional methods of financing, it's an attractive way to solicit investment -- and get locals involved with the brewery.

Big Alice's three cofounders initially invested about $35,000 to buy the equipment and convert the space, which they began work on in August 2012. They started brewing in January, and five months later had 20 batches of beer. The brewery used its first round of beer shares -- which started in July and runs through December -- to finance much of the raw materials like grain, yeast, bottles and corks.

Related: Small craft breweries hit it big

With flavors like salted caramel, purple potato trippel, and chamomile ale, subscribers were promised 12 different beers over the course of their share. Two-thirds of the first 90 shares went to friends and family and the remaining 30were snapped up on the first day they were offered to the public.

At Seattle's NW Peaks, Kevin Klein offers mountainBeers subscribers a 64-oz. growler for about $11 a month. The model provided roughly $10,000 in the first few months -- enough for supplies, rent and some additional equipment -- and also allowed NW Peaks to "brew to the number of subscribers," Klein said. "We could make sure that we had enough beer and enough product instead of killing ourselves to make more when we didn't need it."

Chicago's Begyle Brewing started distributing kegs to local bars in October 2012, but the brewery's goal was always to sell directly to customers. They used "every facet of financing" to get off the ground, according to cofounder Kevin Cary. Investments from the three owners, friends and family, bank loans -- even a Kickstarter campaign to buy a specialized growler filler.

With the $18,000 raised from Kickstarter, they hope to have the retail space up and running by mid-November. Once the space is operational, they'll launch their CSB, offering a certain number of growler fills a month for subscribers.

"If we have 200 members all paying at once, that's a nice cash infusion," said Cary. "If we can handle more than 200 members, we can leverage that to secure a bank loan or another piece of equipment that will help us grow the brewery."

Related: Jim Koch: Samuel Adams' beer revolutionary

That's how Big Alice sees its beer share program. Cofounder Scott Berger said they are already looking to expand their brewing system, which would offer 21 times the capacity they currently have. They'll need more investment and capital to actually buy the equipment, but he says they can use the next round of shares to buy the raw materials -- which will run about $5,000 per brew day, or $20,000 a month.

Currently, the beer shares make up two-thirds of their sales (they sell the remaining bottles to the public on Friday evenings. But they plan to sell to local bars and restaurants, as well as specialty beer shops, with the expansion. They also hope that two of the founders (who are the brewers) will eventually be able to start to work at Big Alice full-time.

But even as they grow, all three breweries plan to continue with the community-supported financing.

"It's a way for our members to be a part of our growth," said Begyle's Cary. "It makes you part of the team in a way and you get to be there and watch the brewery grow." To top of page

First Published: September 23, 2013: 6:49 AM ET


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Fidelity sued by employees over its own 401(k) plan

NEW YORK (CNNMoney)

A group of current and former employees claim the plan is dominated by expensive Fidelity mutual funds when lower-fee options are available within Fidelity's own offerings and from other providers.

Fidelity's employee retirement plan covers more than 50,000 participants and has roughly $8.5 billion in assets, according to court documents.

An industry leader, Fidelity is the 401(k) provider for roughly 12 million workers across thousands of companies.

The legal battle heated up earlier this month when 26 current and former employees signed on to join the proposed class action, which was filed by a former employee in March. Their request to join the suit is pending.

Related: How much are 401(k) fees costing you?

All of the more than 150 investment options available in the Fidelity plan were offered by Fidelity or a company subsidiary, according to the suit. And, at the end of 2010, nearly 85% of the plan's assets were held in actively managed Fidelity mutual funds, which tend to have higher fees than passively managed index funds.

Fidelity has filed to dismiss the lawsuit, citing that its employees have a wide variety of investments to choose from -- including low-cost index funds.

"We believe the lawsuit is totally without merit, and we intend to defend vigorously against it," said spokesman Vincent Loporchio. "Fidelity has a very generous benefits package that provides significant contributions to our employee's retirement planning."

Fidelity provides a 100% match for up to 7% of a worker's salary and typically makes annual profit-sharing contributions as well, according to court documents.

One of Fidelity's big competitors, TD Ameritrade, gets around potential conflicts of interest by outsourcing its 401(k) plan, the lawsuit said.

The Fidelity complaint comes on the heels of a wave of 401(k)-related lawsuits against financial firms and other companies that allege mismanagement and inappropriately high fees.

Related: Google, Southwest employees have a better 401(k) than you

Under the federal Employee Retirement Income Security Act, companies with 401(k) retirement plans have a "fiduciary responsibility" to act in the best interest of their employees.

In 2011, for example, Wells Fargo (WFC, Fortune 500) agreed to pay $17.5 million to settle a class action lawsuit that alleged it had engaged in self-dealing when choosing investments for its 401(k) plan. In the same year, Wal-Mart (WMT, Fortune 500) and Merrill Lynch settled a multimillion dollar lawsuit that alleged the Wal-Mart 401(k) plan had subjected its worker to excessively high fees. To top of page

First Published: September 23, 2013: 6:57 AM ET


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China's $8 billion plan to rival Hollywood

nicole kidman oriental movie metropolis

Nicole Kidman was among the A-list celebrities attending the weekend launch of the "Qingdao Oriental Movie Metropolis".

LONDON (CNNMoney)

China's richest man, Wang Jianlin, has thrown his money behind an $8.2 billion development in the eastern coastal city that will boast massive film and television studios, production facilities, theme parks and hotels.

Wang and his firm Dalian Wanda Group hope the "Qingdao Oriental Movie Metropolis" -- covering 1.5 square miles -- will become a global magnet for film stars, movie studios and tourists.

The company said it had reached preliminary agreements with various media giants to shoot 30 foreign films in the studios each year, in addition to plans for 100 Chinese films and television shows.

The blueprint for the 'metropolis' includes plans for 20 studios and the world's only fixed underwater studio.

Related: China's richest man worth $22 billion

But overtaking Hollywood isn't enough. Wang hopes Qingdao will eventually challenge Disney (DIS, Fortune 500) and the Cannes film festival.

Wanda Group expects crowds will flock to the city's theme parks, celebrity wax museums, hotels and water-front bars. And plans are in place for the new facilities to host an international film festival from 2016.

Wang's Wanda Group has made no secret about its international ambitions, recently paying over $1.6 billion to buy the British yacht maker Sunseeker, which crafts vessels for James Bond films. The firm also announced plans to develop a five-star hotel and apartment complex in a prime London location.

Last year, Wanda bought cinema chain AMC Entertainment Holdings in a $2.6 billion deal.

Wang said he expects China's box office revenue will surpass North America's by 2018.

The weekend launch drew A-list celebrities including Leonardo DiCaprio, Nicole Kidman, John Travolta and Catherine Zeta-Jones. Executives from major American film studios also attended, including execs from Sony (SNE), Comcast's (CCV) Universal Studios and Warner Bros., a unit of CNNMoney parent Time Warner (TWX, Fortune 500), according to a statement from Wanda Group. To top of page

First Published: September 23, 2013: 8:05 AM ET


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BlackBerry slashes staff, warns of $1 billion loss

Written By limadu on Minggu, 22 September 2013 | 05.32

blackberry 1day final

Click the chart to track shares of BlackBerry.

NEW YORK (CNNMoney)

Shares of BlackBerry (BBRY) were halted at about 3:30 p.m. ET and plunged 20% when trading resumed. For the day they closed down 17%. BlackBerry's stock is down 26.5% this year.

The news of 4,500 job cuts came late Friday afternoon, confirming layoff rumors that have been swirling about problems at the smartphone maker. It attributed the loss to a charge it will take to restructure its business as well as an "increasingly competitive business environment."

It also said it will offer just four smartphones instead of six.

The anticipated operating loss is about three times larger than the consensus forecast of analysts. The company is due to report financial results on September 27.

"We expected bad results but the device sales are pretty bad," said James Moorman, analyst with S&P Capital IQ. "I like their strategy of cutting back, but it's kind of late. This should have been done about a year ago."

Neeraj Monga, analyst with Veritas Investment Research, says that BlackBerry made a stunning admission about the lack of demand for its new BlackBerry 10 upon which it has placed so much hope. Normally companies book revenue when they ship products to retailers but Friday's statement said it will instead wait to book revenue from those phones until they're sold to customers.

"It's a bigger flop than anybody thought it could be," he said. "They expect 80% (of shipped phones) to come back."

The company reported last month that it is exploring ways to keep itself afloat -- including a possible sale of the company.

Related: BlackBerry explores a sale of the company

Moorman said the constant drumbeat of bad news is scaring away potential customers, and added that taking the company private would be the best course of action.

"Now with the stock taking a hit, that's more attractive," he said. "Going private takes you out of the spotlight. When you're on CNBC every day talking about a death spiral, that's not good. It becomes a self-fulfilling prophesy if you stay public."

There have been rumors that Toronto-based investment firm Fairfax Financial Holdings (FRFHF) might be interested in taking the company private. It's already Blackberry's largest shareholder, with nearly a 10% stake.

But Monga said he thinks that time is running out for BlackBerry.

"I do not believe this business can be turned around. I don't think an acquisition is in the offering. This suggests the end is coming pretty soon," he said.

Experts predict that BlackBerry would have a tough time finding a buyer for the entire company, since no suitor is likely to be interested in its hardware business.

But BlackBerry does possess some lucrative patents that could be attractive to a potential buyer or partner. That's a massive advantage in the competitive and highly litigious world of smartphones, and it could be attractive to a big rival like Microsoft (MSFT, Fortune 500), Apple (AAPL, Fortune 500) or Samsung.

At least BlackBerry has some breathing room: The company has $2.6 billion in cash. But that's down about $500 million from the previous quarter, a cash burn rate that Moorman described as "shocking."

If BlackBerry's smartphones themselves are a deal-killer, peeling off the company's software business could help gain interest from a number of buyers. BlackBerry's brand has lost consumer cachet, but it still holds a strong reputation for corporate security.

- Julianne Pepitone contributed to this report. To top of page

First Published: September 20, 2013: 3:39 PM ET


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Target to reduce 2013 holiday hiring

target stores holiday hiring

A Target store in Daly City, Calif. advertises for employment.

NEW YORK (CNNMoney)

The discount store chain said Friday that it plans to hire about 70,000 temporary workers this year, down from 88,000 a year ago.

Target said it planned to offer more holiday hours to full-time staff members -- "as much as five to 10 percent more for the busiest periods around Black Friday and the week before Christmas."

"This approach takes into account recent trends that are becoming more and more pronounced—the busy periods are busier than ever, while the early part of December is quieter," Target (TGT, Fortune 500) said. "And with year-round team members looking for more hours, we want to accommodate their requests first."

Related: Hot toys for the 2013 holidays

Off the 88,000 seasonal workers hired last year, Target said 34,000 were offered year-round roles.

Industry tracker ShopperTrak said this week that it expects retail sales to rise 2.4% versus last year in November and December.

"Although the economy continues to recover slowly, consumers remain cautious about spending and are not ready to splurge," ShopperTrak Founder Bill Martin said .

Retailers have to contend with a shorter peak-shopping season this year. Black Friday doesn't fall until Nov. 29, compared with Nov. 23 in 2012. To top of page

First Published: September 20, 2013: 4:24 PM ET


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Father and son charged in $6.5 million deathbed bond scam

sec fraud

The SEC says the two men "exploited the tragic circumstances surrounding a terminally ill diagnosis and turned the misfortune of others into a profit-making enterprise for themselves."

NEW YORK (CNNMoney)

The dying people were accessories to a scheme that defrauded banks and bond issuers by taking advantage of features in some corporate bonds known as "survivor's options," the Securities and Exchange Commission said. A survivor's option requires bond issuers to repay the full principal amount before maturity if an owner of the bonds dies.

The accused are 62-year-old Benjamin S. Staples and his son, 28-year-old Benjamin O. Staples, both of Lexington, S.C.

Related: Beanie Babies creator pinched for tax evasion

The alleged scheme, the SEC says, worked like this: First, the Staples would find people close to death who were concerned about being able to afford their funerals. The pair allegedly offered to pay for the funerals if the terminally ill agreed to open joint brokerage accounts with them.

In setting up the accounts, the Staples are accused of requiring the sick to sign agreements relinquishing any ownership interest. Then, they allegedly purchased discounted corporate bonds through the accounts.

Upon the deaths of the individuals they recruited, the Staples wrote to brokerage firms asking to redeem the discounted bonds at full value pursuant to the survivor's option, the SEC said.

The profits the pair earned came from the difference "between the discounted price of the bonds they purchased and the full principal amount they obtained when redeeming the bonds early," the SEC said.

Related: Still no charges for Wall Street execs five years after crash

All told, the Stapes are alleged to have recruited at least 44 dying people and purchased $26.5 million in bonds, earning at least $6.5 million in profits.

"The Stapleses deceived brokerage firms and bond issuers by casting themselves as survivors of a joint ownership situation when the deceased had no legal ties to the bonds at all," Kenneth Israel, director of the SEC's Salt Lake regional office, said in a statement.

Attorneys for the two men did not immediately respond to requests for comment. To top of page

First Published: September 20, 2013: 6:37 PM ET


05.32 | 0 komentar | Read More

BlackBerry slashes staff, warns of $1 billion loss

Written By limadu on Sabtu, 21 September 2013 | 05.32

blackberry 1day final

Click the chart to track shares of BlackBerry.

NEW YORK (CNNMoney)

Shares of BlackBerry (BBRY) were halted at about 3:30 p.m. ET and plunged 20% when trading resumed. For the day they closed down 17%. BlackBerry's stock is down 26.5% this year.

The news of 4,500 job cuts came late Friday afternoon, confirming layoff rumors that have been swirling about problems at the smartphone maker. It attributed the loss to a charge it will take to restructure its business as well as an "increasingly competitive business environment."

It also said it will offer just four smartphones instead of six.

The anticipated operating loss is about three times larger than the consensus forecast of analysts. The company is due to report financial results on September 27.

"We expected bad results but the device sales are pretty bad," said James Moorman, analyst with S&P Capital IQ. "I like their strategy of cutting back, but it's kind of late. This should have been done about a year ago."

Neeraj Monga, analyst with Veritas Investment Research, says that BlackBerry made a stunning admission about the lack of demand for its new BlackBerry 10 upon which it has placed so much hope. Normally companies book revenue when they ship products to retailers but Friday's statement said it will instead wait to book revenue from those phones until they're sold to customers.

"It's a bigger flop than anybody thought it could be," he said. "They expect 80% (of shipped phones) to come back."

The company reported last month that it is exploring ways to keep itself afloat -- including a possible sale of the company.

Related: BlackBerry explores a sale of the company

Moorman said the constant drumbeat of bad news is scaring away potential customers, and added that taking the company private would be the best course of action.

"Now with the stock taking a hit, that's more attractive," he said. "Going private takes you out of the spotlight. When you're on CNBC every day talking about a death spiral, that's not good. It becomes a self-fulfilling prophesy if you stay public."

There have been rumors that Toronto-based investment firm Fairfax Financial Holdings (FRFHF) might be interested in taking the company private. It's already Blackberry's largest shareholder, with nearly a 10% stake.

But Monga said he thinks that time is running out for BlackBerry.

"I do not believe this business can be turned around. I don't think an acquisition is in the offering. This suggests the end is coming pretty soon," he said.

Experts predict that BlackBerry would have a tough time finding a buyer for the entire company, since no suitor is likely to be interested in its hardware business.

But BlackBerry does possess some lucrative patents that could be attractive to a potential buyer or partner. That's a massive advantage in the competitive and highly litigious world of smartphones, and it could be attractive to a big rival like Microsoft (MSFT, Fortune 500), Apple (AAPL, Fortune 500) or Samsung.

At least BlackBerry has some breathing room: The company has $2.6 billion in cash. But that's down about $500 million from the previous quarter, a cash burn rate that Moorman described as "shocking."

If BlackBerry's smartphones themselves are a deal-killer, peeling off the company's software business could help gain interest from a number of buyers. BlackBerry's brand has lost consumer cachet, but it still holds a strong reputation for corporate security.

- Julianne Pepitone contributed to this report. To top of page

First Published: September 20, 2013: 3:39 PM ET


05.32 | 0 komentar | Read More

Target to reduce 2013 holiday hiring

target stores holiday hiring

A Target store in Daly City, Calif. advertises for employment.

NEW YORK (CNNMoney)

The discount store chain said Friday that it plans to hire about 70,000 temporary workers this year, down from 88,000 a year ago.

Target said it planned to offer more holiday hours to full-time staff members -- "as much as five to 10 percent more for the busiest periods around Black Friday and the week before Christmas."

"This approach takes into account recent trends that are becoming more and more pronounced—the busy periods are busier than ever, while the early part of December is quieter," Target (TGT, Fortune 500) said. "And with year-round team members looking for more hours, we want to accommodate their requests first."

Related: Hot toys for the 2013 holidays

Off the 88,000 seasonal workers hired last year, Target said 34,000 were offered year-round roles.

Industry tracker ShopperTrak said this week that it expects retail sales to rise 2.4% versus last year in November and December.

"Although the economy continues to recover slowly, consumers remain cautious about spending and are not ready to splurge," ShopperTrak Founder Bill Martin said .

Retailers have to contend with a shorter peak-shopping season this year. Black Friday doesn't fall until Nov. 29, compared with Nov. 23 in 2012. To top of page

First Published: September 20, 2013: 4:24 PM ET


05.32 | 0 komentar | Read More

Father and son charged in $6.5 million deathbed bond scam

sec fraud

The SEC says the two men "exploited the tragic circumstances surrounding a terminally ill diagnosis and turned the misfortune of others into a profit-making enterprise for themselves."

NEW YORK (CNNMoney)

The dying people were accessories to a scheme that defrauded banks and bond issuers by taking advantage of features in some corporate bonds known as "survivor's options," the Securities and Exchange Commission said. A survivor's option requires bond issuers to repay the full principal amount before maturity if an owner of the bonds dies.

The accused are 62-year-old Benjamin S. Staples and his son, 28-year-old Benjamin O. Staples, both of Lexington, S.C.

Related: Beanie Babies creator pinched for tax evasion

The alleged scheme, the SEC says, worked like this: First, the Staples would find people close to death who were concerned about being able to afford their funerals. The pair allegedly offered to pay for the funerals if the terminally ill agreed to open joint brokerage accounts with them.

In setting up the accounts, the Staples are accused of requiring the sick to sign agreements relinquishing any ownership interest. Then, they allegedly purchased discounted corporate bonds through the accounts.

Upon the deaths of the individuals they recruited, the Staples wrote to brokerage firms asking to redeem the discounted bonds at full value pursuant to the survivor's option, the SEC said.

The profits the pair earned came from the difference "between the discounted price of the bonds they purchased and the full principal amount they obtained when redeeming the bonds early," the SEC said.

Related: Still no charges for Wall Street execs five years after crash

All told, the Stapes are alleged to have recruited at least 44 dying people and purchased $26.5 million in bonds, earning at least $6.5 million in profits.

"The Stapleses deceived brokerage firms and bond issuers by casting themselves as survivors of a joint ownership situation when the deceased had no legal ties to the bonds at all," Kenneth Israel, director of the SEC's Salt Lake regional office, said in a statement.

Attorneys for the two men did not immediately respond to requests for comment. To top of page

First Published: September 20, 2013: 6:37 PM ET


05.32 | 0 komentar | Read More

No thanks, Obamacare. I'll pay the penalty

Written By limadu on Jumat, 20 September 2013 | 05.32

jim moore

Jim Moore plans to pay the Obamacare penalty because he is opposed to the health reform law.

NEW YORK (CNNMoney)

These are some of the reasons why CNNMoney readers say they'll opt to pay a penalty for not having health insurance in 2014, rather than sign up for a policy in the state-based exchanges or through their companies.

"I would love to have insurance, but we just don't have the money," said Sandra Czop, 58, of Bloomingdale, Ill. "We need that $100 to put food on the table. We have no money to put gas in the car."

Czop, a mortgage loan officer whose business is down 60% and whose husband is unemployed, summed up the sentiments of many readers. Though subsidies are available to those earning less than 400% of the poverty level, the premiums are still too high for many Americans.

Have questions on Obamacare? Join our Facebook chat on Friday.

For 2014, the penalty is either $95 per adult or 1% of family income, whichever results in a larger fine. (Income is defined as total income above the filing threshold, which is $10,000 for an individual and $20,000 for a family in 2013.) That's still a lot less than premiums, which are generally $200 to $300 a month for a silver plan.

So a person making $50,000 would not be eligible for a subsidy and would pay full price for a plan. If he declined to get insurance, he would only be subject to a $400 penalty for the year.

A couple earning that amount would receive a roughly $1,300 subsidy, leaving them to pay about $4,750 in premiums for the year. But that compares to a $300 penalty.

For some folks, health insurance just isn't a good deal. Take Jessica Birge, 29, who is studying nursing and works as a medical assistant. Her job gives her $100 a month for medical expenses, though she does have dental and vision coverage through her employer. But she doesn't have a lot of medical expenses since she rarely goes to the doctor, opting instead to go to a local clinic for her annual exams.

Though she knows she needs insurance in case she gets into an accident, she doesn't think Obamacare is very affordable.

"I don't really want to pay a penalty, but it's more economical for me to pay $300 a year [in fines] than $200 to $300 a month for insurance I don't use," said Birge, acknowledging she may get insurance in several years, when the penalties get more onerous.

Some people are opting to remain uninsured, even though they have access to coverage on the job. Since they don't go to the doctor much, they just prefer to pay for their health care out of pocket.

Christie Egeston, 35, could get insurance at her lab job, but instead she puts money into the flexible spending account at work to cover her yearly checkup.

"I don't really feel I need health insurance," said Egeston, who lives in Avondale Estates, Ga. "If the penalty is less than what I'm paying for the year in insurance, it balances out."

And, of course, there are people who will not sign up for Obamacare because they fundamentally oppose the idea of a health insurance requirement. That's the camp Jim Moore of Denver falls into.

"I'm just so opposed to the legislation and Obama's big government agenda," said Moore, 62, a contract certified public accountant. "There's no way I'm giving my health care records to the government. I and many people need to make a statement." To top of page

First Published: September 20, 2013: 6:10 AM ET


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This Iron Man toy soars 200 feet

NEW YORK (CNNMoney)

"There have been plenty of remote-control toys before this. But no one has created a flying superhero in this category," said Chris Wilson, executive vice president with EB Brands, the company behind the toy.

Remote-control toys are typically hot holiday sellers because of the "'wow' factor attached to them," said toy industry expert Chris Byrne. "They do cost more, but consumers are willing to spend more on these toys as gifts."

The Iron Man Extreme Hero, which costs $70, clocks in at 19 inches and weighs just two ounces -- which lets it fly as high as 200 feet, according to Wilson.

But the idea for a flying remote-controlled super hero didn't originate at New York-based EB Brands. It was the brainchild of Greg Tanous, 49, a CNC machinist and aspiring inventor who lives just outside of Portland, Ore.

For the last 15 years, Tanous, who's had a passion for planes and remote-controlled toys since he was 10, has worked diligently on a side project in his garage. "I've wanted to invent a life-size flying fictional super hero," he said.

His finished prototype was a 6-foot-3 flying man sculpture that weighed just four pounds and could take off vertically from the ground. In 2009, Tanous posted a video on YouTube showing his flying super hero in action.

Related Story: Hot toys for Holiday 2013

The video quickly started racking up views -- it's received over a million hits so far -- and Tanous realized he could market his invention. He set up a website where people could pay $20 for the PDF instructions to make their own flying super hero, or pay $400 for a kit and assemble it themselves.

Over the next three years, sales took off and Tanous sold more than 50 kits and hundreds of the plans. At one point, he was making more than $25,000 a month from his side business.

Wilson contacted Tanous in early 2012 after hearing about the invention from a colleague. "My immediate thought was that this was incredible, especially if we could scale it down and make a toy version of it," said Wilson.

EB Brands collaborated with Tanous to create the current version and inked a licensing agreement with Marvel Entertainment to use the Iron Man character and other Avenger superheroes for future iterations of the toy.

Byrne is betting that EB Brands' flying Iron Man, which launched in Wal-Mart (WMT, Fortune 500), Target (TGT, Fortune 500) and Toys R Us stores this month, could become a game changer for remote-controlled toys.

"Not only does it look and move remarkably like the Iron Man character in the movies, it's also very easy to use," said Byrne. "This appeals both to kids and adults." To top of page

First Published: September 20, 2013: 6:07 AM ET


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How you can buy a 'Breaking Bad' prop

breaking bad

Walt's and Jesse's hazmat suit are being auctioned off along with other props from the show "Breaking Bad"

NEW YORK (CNNMoney)

The car, and hundreds of other props from the show, are set to be auctioned off online starting Sept. 29, the day the finale of the series about a dying teacher who turns to drug dealing is set to air.

The 1989 Jeep Wagoneer driven by Walter's wife, Skylar, is also set to go on auction for a minimum $1,000 bid. The auction site Screen Bid warns it leaks oil and has some paint bubbles and chipping, and is being sold "as is." The RV in which Walt and sidekick Jesse Pinkman started their careers cooking crystal meth is not being listed for sale.

The auction is set to run through Oct. 8.

Related: Breaking Bad fans sue Apple

Other iconic items used on the show have even higher minimum bids, including $1,500 for Walt's hazmat suit, $3,500 for series villain Hector "Tio" Salamanca's bell, and $5,000 for his wheel chair.

Other items have only a modest opening bid, including $10 each for the duffel bags Walt and Jesse used to carry around millions in cash, a DEA coffee mug and Vamonos Blue Coveralls.

Related: How to spot a meth lab

The show, which debuted in January 2008, has become a huge hit for the AMC Networks (AMCX) and Sony Pictures Television, the unit of Sony (SNE) that produced the episodes and owns the props.

It has averaged 5.2 million viewers per episode so far in its final season, reaching a record 6.4 million viewers on the most recent episode Sunday night. That episode also inspired more than 600,000 tweets, according to Entertainment Weekly. To top of page

First Published: September 20, 2013: 7:24 AM ET


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The book of Bing's assistants

Written By limadu on Kamis, 19 September 2013 | 05.33

(Fortune)

And Mildred begat Margo, who was the apotheosis of an Alsatian shepherd, guarding us all, keeping us safe, anticipating and besting any wolf who dared appear at the door. And Margo was lost to the vortex in a massive merger although we still have lunch sometimes. And it was the evening and it was the morning and it was the end of a decade already.


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Making room for technology

(Fortune)

The app is more than just a nice amenity. Westin's parent company, Starwood Hotels & Resorts Worldwide (No. 400 on the Fortune 500), believes such technological innovation is at the heart of a larger strategy to drive guest loyalty. Like points programs that reward frequent visitors with free or discounted rooms, the company hopes personalized apps and other cool tools will help retain customers. (A handful of Starwood's Aloft locations let guests bypass registration by using their smartphones to check in; special reusable keycards can be remotely preprogrammed to unlock a guest's room.) "What technology can do is take the intimacy of that one-to-one relationship you might have with a favorite hotel and make that possible across a system of 1,162 hotels in nearly 100 countries," says CEO Frits van Paasschen.


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Is the epic boom in commodities over?

INV07 jim rogers

Rogers in Singapore's Chinatown

(Fortune)

More and more people on Wall Street say the commodities boom is over. Is it?

That's a very good question. I have certainly noticed what you've noticed, and it's a good sign from my point of view. I've been around markets long enough to know that when everybody's on one side of the boat, it's probably not the right side to be on. During the long bull market in equities between 1982 and 2000, stocks collapsed in 1987 and they fell in '90, '94, '97, and '98. Every time, people said, "Well, the bull market's over." But the bull market was not over. And like most long bull markets, it eventually ended in a mania and a bubble.

So you don't think we've reached the mania stage yet with commodities?

I don't see enough supply having come onstream in most commodities to end the bull market. Agriculture inventories are near historical lows because the world has consumed more than it grows for a decade now. Many minerals companies have canceled capital-spending programs because they, too, have heard from Wall Street that the boom is over. I haven't seen a mania yet.


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IOS 7 is here: A whole new iPhone experience

Written By limadu on Rabu, 18 September 2013 | 05.32

ios7 review

The new iOS 7 iPhone software not only has a new look, but Apple successfully addresses many long-standing issues.

NEW YORK (CNNMoney)

The new iPhone operating system is the most substantial update in the software's history. Apple not only added new features and functionality, but the company radically reinvented the six-year old operating system's appearance.

For the most part, Apple (AAPL, Fortune 500) succeeded in making iOS easier on the eyes and simpler to use. Apple trimmed the fat where necessary and added some meat to areas that were lacking.

New look: The most noticeable difference in iOS 7 is the design. Gone are the core apps that look like real-life objects. In their place is a far more modern, streamlined, flatter digital aesthetic.

Apple didn't eliminate depth and texture altogether, but it redefined how it uses those effects. For instance, Apple made some menus and features appear translucent, like a frosted sheet of glass. That not only provides a stylish touch, but it produces a layered effect to help visualize how different parts of an app are linked, and how they are separate.

You'll notice this everywhere from the home screen icons to the design of the lock screen to the screen that shows up when you receive a call. But the way you use those elements is more or less the same as before.

Related story: Hits and misses of Apple's new iPhones

And there are still touches of the old version of iOS throughout the new iOS 7. For example, the Messages app still uses speech bubbles, and the camera app still uses an on-screen shutter button. But the look of those features have been spruced up as well.

There was a time when Apple had to demonstrate how its flat, glass screen could replace many self-contained gadgets people already owned. So everything had a glassy, textured layer applied to it. The calendar had to look like a paper calendar. The compass had to look like something you'd see in a 16th-century Spanish galleon.

Now that the vast majority of us understand our smartphones, Apple has been able to ditch those visual analogs and become truer to its sleek, modern hardware.

New features: Perhaps the most useful addition to iOS 7 is Control Center. It's your metaphorical junk drawer full of settings, media playback controls, and shortcuts to utility apps, like the clock, camera and calculator. You can now also toggle the LED on and off from control center, functioning as a de facto flashlight. And it's easily accessible: just swipe up from the bottom of the screen.

Control Center isn't a revelation: Having quick access to Airplane Mode, Wi-Fi and Bluetooth is something that's long been on Android. But it's a welcome addition -- and frankly should have already been added to iOS a long time ago.

Related story: Apple will never make a cheap iPhone

Siri's functionality has been expanded some. It can now be used to search for Wikipedia and Twitter. That's nice, but it's still no Google (GOOG, Fortune 500) Now, which can tell you to leave home earlier than usual because there's an accident on the freeway.

The new weather app in iOS 7 is more informative than ever, and the App Store can automatically update your apps.

The Photo app has mostly been changed for the better by automatically arranging your photos according to time and place. But the new shared photo streams addition felt incomplete. It allows multiple people to share and comment on photos -- think of it as a remixed version of group MMS. But with so many people already using Apple's iMessage to share photos, it's unclear why people are supposed to use the new feature.

The Notification Center in iOS 7 now has three separate sub-pages, making it feel more bloated and confusing than its previous iteration. For example, if you don't use a calendar, one of the sub-pages is just a completely empty screen.

Question marks: Apple overhauled multitasking in iOS 7, giving apps the ability to fully run in the background. That means apps like Twitter and Facebook will be able to automatically update their feeds without you having to open the app. Apple even promises that iOS 7 will learn which apps you use the most, when you use them, and will make sure they're always updated at that time. But it will be hard to tell how well this feature will work until app makers begin to support it.

Airdrop is Apple's file sharing protocol, allowing iPhone users to share photos, contacts and things like passbook cards with one another. In theory, it is a wonderfully simple way to transfer files. But you can't use it with the Mac version of Airdrop. And the main appeal of Airdrop seems to be photos -- which is confusing since that's what shared photostreams are for. Until there is a critical mass of people running iOS 7, it's hard to gauge how useful Airdrop will be.

Bottom line: Despite a few hiccups in execution, Apple has successfully re-thought iOS for the better.

The biggest achievement of iOS 7 is Apple's willingness to acknowledge that it's immensely successful hardware had gone a bit stale. Apple had the awareness and courage to make some major changes without doing anything so drastic that it risked alienating its user base.

IOS 7 isn't perfect, but it's still as worthy a mobile OS as Google's Android. IOS 7 lays down the foundation for the next five or so years that will allow Apple to keep the iPhone feeling modern and progressive. To top of page

First Published: September 18, 2013: 6:04 AM ET


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