Incomes bounce back in February

NEW YORK (CNNMoney)

Personal incomes rose 1.1% in February, while spending rose 0.7%, the Commerce Department said.

Both figures were larger than expected. Economists were expecting a 0.8% rise in incomes and a 0.6% gain in spending, according to consensus estimates from Briefing.com.

The surprise jump in take-home pay came after incomes plunged 3.7% in January, driven lower by certain "special factors," the government said.

Incomes in January were depressed by the expiration of the "payroll tax holiday," as well as bonus and dividend payments that were made early in anticipation of tax hikes that took effect in 2013.

Excluding these factors, personal income increased 0.4% in February.

Meanwhile, personal spending continued to rise despite higher payroll taxes.

"We have yet to see the effect of increased payroll taxes on outlays," said Tanweer Akram, senior economist at ING U.S. Investment Management.

Stronger job growth, rising home prices and stocks at all-time highs have consumers feeling more optimistic about the economy recently. But it remains to be seen whether this increase in wealth will translate to a sustained rise in spending, Akram said.

"I'm cautiously optimistic, but I don't expect strong spending this year," he said.

Friday's report came one day after the government said U.S. gross domestic product rose at a 0.4% annual rate in the final three months of 2013. That was better than the previous estimate of 0.1% and the initial reading, which showed a 0.1% decline.

First Published: March 29, 2013: 10:35 AM ET

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Fortune Brainstorm Podcast: Lena Dunham

NEW YORK (Fortune)

Fortune wants to make it even easier for you to eavesdrop. The weekly Fortune Brainstorm podcast features recorded conversations from Fortune's live events.

In this week's installment, actor and writer Lena Dunham -- creator of Girls (which just wrapped up its second season on HBO) -- takes center stage with CNN's Soledad O'Brien. Recorded at last year's Most Powerful Women Summit, Dunham discusses the (other) women in her life, how artists also function as small business owners, her critics, and her career. Don't worry: No spoilers.

Subscribe to and download the podcast from iTunes.

Or stick the podcast's RSS feed into your favorite podcast app: http://fortunebrainstormpodcast.libsyn.com/rss

First Published: March 29, 2013: 11:10 AM ET

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Feds turn up heat on hedge-fund mogul Steven Cohen

Steven Cohen of SAC Capital.

NEW YORK (CNNMoney)

Michael Steinberg, apprehended in Manhattan on Friday morning, is one of at least seven current or former SAC Capital employees to be charged in insider-trading cases over the past few years.

SAC is renowned as one of the country's top investment firms, generating annualized returns averaging more than 25% since it was founded in 1992. Cohen himself is a Wall Street celebrity, with a net worth estimated at $9.3 billion by Forbes Magazine.

SAC's mounting legal troubles, however, have brought the firm unwanted attention, and threaten to ensnare Cohen himself. With Steinberg's arrest, the government is likely hoping to "work its way up the chain" to Cohen, said Michael Weinstein, a defense attorney and former federal prosecutor.

"This is absolutely standard operating procedure for bringing a big defendant down," Weinstein said. "The government's going to continue to pressure people around him."

Related: Should Steve Cohen shut down SAC?

Steinberg, who's been with SAC since 1997, pleaded not guilty in a court appearance Friday morning and posted $3 million bail.

"Mike has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity," SAC spokesman Jonathan Gasthalter said in an email.

Cohen himself hasn't been accused of any wrongdoing, and the firm has repeatedly denied that he has done anything improper.

But investors have been monitoring the government's SAC cases warily, requesting the withdrawal of more than $1.68 billion before the quarterly deadline to do so last month.

The firm was already under pressure after federal officials levied charges in November against Mathew Martoma, a former portfolio manager at an SAC subsidiary, accusing him of participating in a $276 million insider-trading scheme. That indictment claims Cohen made trades based on Martoma's recommendations, though it does not allege that Cohen knew Martoma had obtained information illegally.

Martoma has denied the allegations against him, though other SAC alums have struck cooperation deals with the government. That group includes former analyst Jon Horvath, whose testimony is likely to figure in the case against his one-time boss, Steinberg.

Among the charges Steinberg faces are four counts of securities fraud, each of which carries a maximum sentence of 20 years in prison. The government has a sterling record in insider-trading cases -- 71 convictions and no acquittals since August 2009 -- and analysts say prosecutors will likely put serious pressure on Steinberg to testify against Cohen.

"They're going to start exerting pressure on Steinberg and exerting pressure on Martoma," said Michael Bachner, a lawyer who has represented defendants in insider-trading cases. "They are looking to try and get as many individuals charged who could cooperate and corroborate each other."

On the civil side, SAC agreed earlier this month to pay more than $600 million in a settlement with the Securities and Exchange Commission over the trades at issue in Martoma's case. In a court hearing Thursday, however, a federal judge reportedly questioned why the firm was allowed to settle without admitting or denying wrongdoing, raising doubt as to whether the settlement will be approved.

The firm reached a $14 million settlement with the SEC over the trades in Steinberg's case, though that also awaits court approval.

In the meantime, both the SEC and the Justice Department say their investigations are continuing. As for Cohen, he's apparently finding ways to take his mind off the controversy -- reports emerged this week that he recently purchased Picasso's "Le Reve" for $155 million, the most expensive art purchase ever by a U.S. collector.

CNN Wires staff and CNNMoney's Aaron Smith contributed reporting.

First Published: March 29, 2013: 6:49 PM ET

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Incomes bounce back in February

NEW YORK (CNNMoney)

Personal incomes rose 1.1% in February, while spending rose 0.7%, the Commerce Department said.

Both figures were larger than expected. Economists were expecting a 0.8% rise in incomes and a 0.6% gain in spending, according to consensus estimates from Briefing.com.

The surprise jump in take-home pay came after incomes plunged 3.7% in January, driven lower by certain "special factors," the government said.

Incomes in January were depressed by the expiration of the "payroll tax holiday," as well as bonus and dividend payments that were made early in anticipation of tax hikes that took effect in 2013.

Excluding these factors, personal income increased 0.4% in February.

Meanwhile, personal spending continued to rise despite higher payroll taxes.

"We have yet to see the effect of increased payroll taxes on outlays," said Tanweer Akram, senior economist at ING U.S. Investment Management.

Stronger job growth, rising home prices and stocks at all-time highs have consumers feeling more optimistic about the economy recently. But it remains to be seen whether this increase in wealth will translate to a sustained rise in spending, Akram said.

"I'm cautiously optimistic, but I don't expect strong spending this year," he said.

Friday's report came one day after the government said U.S. gross domestic product rose at a 0.4% annual rate in the final three months of 2013. That was better than the previous estimate of 0.1% and the initial reading, which showed a 0.1% decline.

First Published: March 29, 2013: 10:35 AM ET

05.32 | 0 komentar | Read More

Fortune Brainstorm Podcast: Lena Dunham

NEW YORK (Fortune)

Fortune wants to make it even easier for you to eavesdrop. The weekly Fortune Brainstorm podcast features recorded conversations from Fortune's live events.

In this week's installment, actor and writer Lena Dunham -- creator of Girls (which just wrapped up its second season on HBO) -- takes center stage with CNN's Soledad O'Brien. Recorded at last year's Most Powerful Women Summit, Dunham discusses the (other) women in her life, how artists also function as small business owners, her critics, and her career. Don't worry: No spoilers.

Subscribe to and download the podcast from iTunes.

Or stick the podcast's RSS feed into your favorite podcast app: http://fortunebrainstormpodcast.libsyn.com/rss

First Published: March 29, 2013: 11:10 AM ET

05.32 | 0 komentar | Read More

Feds turn up heat on hedge-fund mogul Steven Cohen

Steven Cohen of SAC Capital.

NEW YORK (CNNMoney)

Michael Steinberg, apprehended in Manhattan on Friday morning, is one of at least seven current or former SAC Capital employees to be charged in insider-trading cases over the past few years.

SAC is renowned as one of the country's top investment firms, generating annualized returns averaging more than 25% since it was founded in 1992. Cohen himself is a Wall Street celebrity, with a net worth estimated at $9.3 billion by Forbes Magazine.

SAC's mounting legal troubles, however, have brought the firm unwanted attention, and threaten to ensnare Cohen himself. With Steinberg's arrest, the government is likely hoping to "work its way up the chain" to Cohen, said Michael Weinstein, a defense attorney and former federal prosecutor.

"This is absolutely standard operating procedure for bringing a big defendant down," Weinstein said. "The government's going to continue to pressure people around him."

Related: Should Steve Cohen shut down SAC?

Steinberg, who's been with SAC since 1997, pleaded not guilty in a court appearance Friday morning and posted $3 million bail.

"Mike has conducted himself professionally and ethically during his long tenure at the firm. We believe him to be a man of integrity," SAC spokesman Jonathan Gasthalter said in an email.

Cohen himself hasn't been accused of any wrongdoing, and the firm has repeatedly denied that he has done anything improper.

But investors have been monitoring the government's SAC cases warily, requesting the withdrawal of more than $1.68 billion before the quarterly deadline to do so last month.

The firm was already under pressure after federal officials levied charges in November against Mathew Martoma, a former portfolio manager at an SAC subsidiary, accusing him of participating in a $276 million insider-trading scheme. That indictment claims Cohen made trades based on Martoma's recommendations, though it does not allege that Cohen knew Martoma had obtained information illegally.

Martoma has denied the allegations against him, though other SAC alums have struck cooperation deals with the government. That group includes former analyst Jon Horvath, whose testimony is likely to figure in the case against his one-time boss, Steinberg.

Among the charges Steinberg faces are four counts of securities fraud, each of which carries a maximum sentence of 20 years in prison. The government has a sterling record in insider-trading cases -- 71 convictions and no acquittals since August 2009 -- and analysts say prosecutors will likely put serious pressure on Steinberg to testify against Cohen.

"They're going to start exerting pressure on Steinberg and exerting pressure on Martoma," said Michael Bachner, a lawyer who has represented defendants in insider-trading cases. "They are looking to try and get as many individuals charged who could cooperate and corroborate each other."

On the civil side, SAC agreed earlier this month to pay more than $600 million in a settlement with the Securities and Exchange Commission over the trades at issue in Martoma's case. In a court hearing Thursday, however, a federal judge reportedly questioned why the firm was allowed to settle without admitting or denying wrongdoing, raising doubt as to whether the settlement will be approved.

The firm reached a $14 million settlement with the SEC over the trades in Steinberg's case, though that also awaits court approval.

In the meantime, both the SEC and the Justice Department say their investigations are continuing. As for Cohen, he's apparently finding ways to take his mind off the controversy -- reports emerged this week that he recently purchased Picasso's "Le Reve" for $155 million, the most expensive art purchase ever by a U.S. collector.

CNN Wires staff and CNNMoney's Aaron Smith contributed reporting.

First Published: March 29, 2013: 6:49 PM ET

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Triangle home with 'drawbridge'

NEW YORK (CNNMoney)

"It's not totally clear what the building is because it's such an odd or unusual shape," said Russell, who designed the property himself.

The 3,200-square-foot home is built on a triangular plot of land flanked by Interstate 5 and San Diego International Airport.

With planes and cars whizzing by, the home is louder than most. And with its peculiar shape, it's narrower too. In fact, it's just 8 feet on one side. But at its widest, the house spans more than 28 feet.

Still, Russell wanted at least one traditional feature -- a deck. So he built what he calls a "drawbridge." It's actually a windowed wall that can be lowered by towing cables to sit perpendicular to the home. Voila, a patio.

"A lot of people build their dream house and everything has to be perfect and everything has to be right," said Russell. "This was more about how much fun can you have with this pile of sticks and bricks."

More Unique Homes:

Mansion for sale: swim in your living room

Slide through NYC's penthouse playground

Life inside a far-out design project

First Published: March 29, 2013: 7:08 AM ET

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One in four U.S. firms in China report data theft

HONG KONG (CNNMoney)

Many American businesses in the country also reported worrying more about data security, with over 40% of respondents saying the risk of a data breach is rising. Fifty-three percent said the risk is static, while only 5% said the risk is decreasing.

"This poses a substantial obstacle for businesses in China, especially when considered alongside the concerns over [intellectual property rights] enforcement and de facto technology transfer requirements," the report said.

While 78% of businesses said they were optimistic when asked to describe their two-year outlook, the percentage who said the investment environment is improving dropped from 43% in 2012 to 28% this year.

Rising labor costs and slower economic growth in China were most frequently cited as the greatest risks facing foreign businesses in China. The survey was conducted last November and December, and included 325 respondents.

The report comes amid elevated tensions between China and the U.S. over the issues of cybersecurity and computer hacking.

Last month, an American cybersecurity firm linked one of the world's most prolific groups of computer hackers to the Chinese government, setting off a war of words between the two countries.

The security firm, Mandiant, detailed its allegations in a 60-page report that described the tactics of the hacking group over a six-year period. Mandiant claimed it observed the hackers -- called the "comment crew" -- systematically steal hundreds of terabytes of data from at least 141 organizations across 20 industries worldwide.

Related story: Wake up, America! China is attacking

Mandiant claims the activity could be traced to four networks near Shanghai -- with some operations taking place in a location that is also the headquarters of Unit 61398, a secret division of China's military.

The Chinese government dismissed the hacking charges, insisting that China is the victim of many cyberattacks, most originating in the United States.

Despite the threat, many businesses are taking a lackadaisical approach to cybersecurity. Multiple industry studies have shown that the vast majority of companies don't begin following cybersecurity best practices until after they've been hit.

First Published: March 29, 2013: 7:38 AM ET

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SAC Capital trader arrested

FBI agents arrested a high profile trader from SAC Capital on Friday, as part of an investigation into insider trading.

NEW YORK (CNNMoney)

Michael Steinberg, a portfolio manager at SAC Capital, was arrested following an investigation of insider trading, according to an FBI spokesman. The spokesman did not specify the charges against Steinberg, saying that there will be a formal announcement later in the day.

Steinberg was arrested at 6 a.m. at his Manhattan residence.

"Michael Steinberg did absolutely nothing wrong," his lawyer, Barry Berke, said in an e-mail to CNNMoney. "At all times, his trading decisions were based on detailed analysis as well as information that he understood had been properly obtained through the types of channels that institutional investors rely upon on a daily basis."

"Caught in the crossfire of aggressive investigations of others, there is no basis for even the slightest blemish on his spotless reputation," Berke added.

Related: SAC Capital pays $614 million for insider trading

The arrest follows on the heels of a settlement, reached earlier this month, between SAC Capital and the Securities and Exchange Commission, the largest settlement in SEC history.

On March 15, two units of hedge fund SAC Capital agreed to pay $614 million to the SEC to settle charges of insider trading.

Cohen, the founder of SAC Capital, was not been charged, though federal investigators have been circling him for months, sniffing around for signs of insider trading and making peripheral strikes on his employees.

First Published: March 29, 2013: 8:15 AM ET

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IRS says taxpayers making fewer mistakes

NEW YORK (CNNMoney)

Last year, the IRS identified 2.7 million math mistakes made by 2 million taxpayers on their 2011 returns, according to new data from the agency. That's less than half of the 6.6 million errors found in 2011 on 5 million 2010 tax returns.

To avoid catching the attention of the IRS, beware of these pitfalls.

The most common error, which accounted for 24% of all mistakes last year, was calculating the amount of tax owed. About 15% of mistakes were made in reporting exemptions, and another 13% were made claiming the Earned Income Tax Credit.

In 2011, roughly half of the mistakes were related to the Making Work Pay Credit, which could be claimed on 2010 tax returns and provided up to $400 per worker. Many taxpayers failed to claim the credit because they didn't realize they qualified, so the IRS had to alter those returns and factor that amount into its calculations.

Related: 12 tax audit red flags

"As there are new laws or changes [to credits], the chance of math errors increases," said Brent Lipschultz, partner at accounting firm EisnerAmper.

But even without the 3.3 million errors related to the Making Work Pay Credit, last year's 2.7 million errors was still a considerable improvement from the year before.

The IRS can thank the growing use and availability of tax software programs, like H&R Block and TurboTax, for the decline in errors, said Thomas Cooke, a professor of accounting and business law at Georgetown University.

"One of the most common mistakes made by taxpayers is math -- calculating the numbers," said Cooke. "It is a lot harder to make a math mistake when a computer program is doing the work for you."

It's free to file a basic federal return with many tax filing programs, and you simply plug in numbers straight from your W-2, answer a handful of questions and your tax liability or refund is automatically calculated. Your return is then electronically filed straight to the IRS, which has its own screening system that scans returns for mistakes before accepting them. If something doesn't add up, it will kick the return back.

Related: 12 smart ways to cut your tax bill

Roughly 81% of individual tax returns were filed electronically last year, up from 77% in 2011 and 66% in 2009, according to the IRS. And it's not just taxpayers who e-file -- these percentages include tax returns filed electronically by tax preparers as well, said Dominique Molina, president of the American Institute of Certified Tax Coaches.

And while electronic filing may reduce math errors, there can be a downside to relying solely on software, she said.

"No matter how sophisticated the tax preparation program, it's never a substitute for judgment and it's not always going to tell you what you're missing or whether there are other opportunities you could take advantage of," said Molina. "But for those folks who have very simple returns, the software makes it so much easier."

First Published: March 28, 2013: 6:27 AM ET

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Cyprus banks reopen with tough cash limits

Banks in Cyprus reopened Thursday for the first time since they were shut March 16 throughout fraught bailout negotiations.

LONDON (CNNMoney)

Cyprus became the first eurozone country since the currency was launched on Jan. 1, 1999, to place restrictions on how much money individuals and companies can take across its borders after confidence in its outsized financial system was shaken by the bailout terms.

Queues formed outside bank branches in the capital Nicosia amid tight security but there was no evidence of panic. The controls were announced Wednesday in a bid to prevent a run on the banks, which had been shut since March 16.

Cypriots queued at cash machines during the extended bank closure as it became clear that deposits would be raided as part of the bailout by the EU and International Monetary Fund.

The tiny island nation was brought to the brink of financial collapse and possible exit from the eurozone by the losses its two biggest banks -- Bank of Cyprus and Popular Bank -- sustained on Greek government debt, which wiped out a third of their combined capital.

It turned to its eurozone partners for help and after months of negotiations signed up Monday for a 10 billion euro rescue, equivalent to nearly 60% of gross domestic product.

In return, Cyprus committed to raise billions from big depositors to fund the winding down of Popular Bank and to recapitalize Bank of Cyprus. The EU wants Cyprus to shrink its bloated banking industry to average size by 2018, meaning shedding about half its assets.

Deposits above 100,000 euros have been frozen at both banks. They could be wiped out entirely at Popular. At Bank of Cyprus, about 40% will be converted into equity.

Related: Tough times for Cyprus after EU bailout

All deposits of less than 100,000 euros are guaranteed. And the bailout does not affect smaller banks in Cyprus, which account for about 60% of the country's total deposits of 68 billion euros.

Many of those deposits belong to foreign investors, in particular Russians, and Cypriot authorities fear an uncontrolled flight of capital that would cause the economy to implode.

Credit and debit card use abroad has been limited to 5,000 euros per month, and people leaving Cyprus can only take 3,000 euros in cash each trip.

Bans on the early withdrawal of funds on term deposits and transfers of more than 5,000 euros abroad, unless approved for trade purposes, have been introduced. Checks can be paid into accounts but not cashed, and a daily withdrawal limit of 300 euros has been set.

--CNN's Ivan Watson contributed to this report from Nicosia.

First Published: March 28, 2013: 7:10 AM ET

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BlackBerry sells 1 million Z10 phones

BlackBerry sold 1 million of its new Z10 smartphones in the fourth quarter. But overall revenue missed forecasts.

NEW YORK (CNNMoney)

BlackBerry's (BBRY) fiscal fourth quarter, which ended March 2, was a transitional one. The company finally launched its long-delayed BlackBerry 10 operating system in January, and rolled out the first phone to run on the new software a few weeks later.

That phone, the Z10, launched in February in Canada, the U.K. and the United Arab Emirates -- only a few weeks before the end of the quarter. The Z10 went on sale in the United States at AT&T (T, Fortune 500) last Friday and hits Verizon (VZ, Fortune 500) stores today.

Overall, BlackBerry earned $94 million, or 18 cents per share, in the fourth quarter from its ongoing businesses. Analysts polled by Thomson Reuters had expected a the company to lose 29 cents per share. The company said it was able to swing to a profit due to a cost-cutting initiative that began during the quarter, including making its supply chain more efficient. BlackBerry lost $118 million a year ago.

CEO Thorsten Heins credited "numerous changes at BlackBerry over the past year" with the company's return to profitability.

Still, BlackBerry's sales of $2.7 billion during the quarter disappointed. Wall Street analysts had expected the company to bring in $2.8 billion in revenue. The company sold just 6 million total smartphones and its subscriber base fell to 76 million.

Investors knew BlackBerry's fourth-quarter results wouldn't say much about the success or failure of the newly launched phones. For that, analysts will be looking to the company's first-quarter results. BlackBerry said it expects to break even during the current quarter, despite raising its marketing spending by 50%. Wall Street analysts had been expecting a small loss.

Shares fell 1% in pre-market trading.

Related story: Inside BlackBerry's last stand

BlackBerry's stock has enjoyed a strong comeback since the company said last year that BlackBerry 10 would finally be unveiled in January after long delays. Shares are up 91% over the past six months, but the stock has been extremely volatile.

That's partly because many investors are still betting against BlackBerry. As of March 15, nearly one-third of shares were held by short-sellers who think that BlackBerry's stock will fall. That's a whopping percentage, and it has contributed to BlackBerry's wild swings as "shorts" are occasionally forced to buy up shares in order to cover their positions.

Ultimately, investors will want to see more evidence that BlackBerry's new phones can make a dent in what's a highly competitive mobile market.

Devices made by Samsung and others that run on Google's (GOOG, Fortune 500) Android operating system have become popular. Apple (AAPL, Fortune 500)is, of course, still a significant player. And Nokia (NOK) is also gunning for smartphone users with new Lumia phones that run on mobile software from Microsoft (MSFT, Fortune 500).

BlackBerry is hoping its new operating system will usher in a new era for the company. Meanwhile, another era is ending: Mike Lazaridis, who co-founded the company in 1984 and served as co-CEO until 2012, is stepping down from the board on May 1. Last week, Lazaridis announced he is starting a venture fund called Quantum Valley Investments.

First Published: March 28, 2013: 7:30 AM ET

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Agency sacks employees over Ford art depicting tied-up women

HONG KONG (CNNMoney)

The cartoonish drawings, produced by WPP unit JWT, were never part of a paid campaign. But they have struck a nerve as India institutes new rules to protect women following a series of high-profile gang rapes.

One of the images depicts Silvio Berlusconi, former prime minister of Italy, driving a Ford Figo with three tied-up women in the back. Another image depicts Paris Hilton driving a Figo with what's meant to be the three Kardashian sisters tied up in the back. A third image shows three male race-car drivers tied up in the back.

"After a thorough internal review, we have taken appropriate disciplinary action with those involved, which included the exit of employees at JWT," the company said in a statement. "These were necessary steps owing to the direct accountability of the concerned individuals as we work to ensure that both the right oversight and processes are strictly enforced so that this never happens again."

Deepa Sridhar, a spokesperson for JWT, declined to say how many employees had been fired. The ads were not published or seen by senior executives at WPP or Ford.

The incident has drawn apologies from all of the involved parties, including Ford.

"We deeply regret this incident and agree with our agency partners that it should have never happened," the automaker said earlier this week in a prepared statement. "The posters are contrary to the standards of professionalism and decency within Ford and our agency partners."

Related story: Ford unveils Figo for India

WPP also released a statement saying that it "deeply regret[s]" the existence of the "distasteful" posters.

Ford unveiled the Figo, a subcompact, in 2009 to be produced in India and exported to other Asian countries and Africa.

First Published: March 27, 2013: 7:31 AM ET

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Honda unveils minivan with built-in vacuum cleaner

Honda debuted a minivan with a built-in vacuum cleaner at the New York auto show Wednesday.

NEW YORK (CNNMoney)

At the New York Auto Show on Tuesday, Honda unveiled its 2014 Odyssey minivan -- and the feature getting most of the attention was a vacuum cleaner from Shop-Vac in the rear of the van.

Honda said the hose and attachments on what it is calling the HondaVac, can reach anywhere in the minivan and includes a replaceable filter and canister bag. It can run continuously while the engine is running or run for eight minutes with the engine off.

It comes in the Touring Elite version of the minivan and will go on sale this summer.

The Odyssey was the No. 2 selling minivan in the U.S. market last year, with about 126,000 sold. That put it behind only the Dodge Caravan, but ahead of the Toyota (TM) Sienna and the Chrysler Town & Country. But the minivan segment has been shrinking for years.

Related: New wheels from the New York auto show

General Motors (GM, Fortune 500) and Ford Motor (F, Fortune 500) stopped making minivans years ago as families in need of the space for hauling children, pets and other items have turned to SUVs and crossover vehicles. There were only 540,000 minivans sold in the United States last year, according to sales tracker Autodata, which is just less than half the sales that the segment achieved 10 years earlier.

Related: Iconic Jeep Cherokee's controversial return

Honda (HMC) has been an innovator in the segment, introducing the first van with a fold-down rear seat more than 10 years ago. Its sales have held up better than most in the segment, falling only 4% since 2001.

First Published: March 27, 2013: 7:50 AM ET

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British banks need $38 billion to fill cash gap

Bank of England says UK banks need to be raise capital this year

LONDON (CNNMoney)

The Bank of England said it would ensure that all major British lenders take action to plug the gap by the end of 2013 after regulators found that the industry was underestimating medium-term risks.

Losses on commercial real estate and high-risk loans to eurozone borrowers could exceed existing provisions by about £30 billion, and the cost of future misconduct cases -- such as the recent Libor scandal -- was understated by about £10 billion.

Related: Stakes high as Cyprus sweats bank controls

A more prudent approach to the assessment of risk also revealed a £12 billion shortfall, the central bank said.

"Taken together, the effect of these three adjustments would be equivalent to around a £50 billion reduction in the regulatory capital of the major U.K. banks and building societies," the bank said in a statement.

Related: RBS plans Citizens IPO within two years

British banks such as HSBC (HBC), Barclays, RBS (RBS) and Lloyds (LLDTF)have been fined billions of pounds for the improper sale of payment protection insurance and interest rate swaps.

Barclays and RBS have also paid big penalties for their roles in attempting to rig the Libor benchmark interest rate, while HSBC paid $1.9 billion last year to settle money-laundering claims by U.S. authorities.

Related: Europe financial sector is fragile, says IMF

Some banks already have the capital they need to make higher provisions, but the total shortfall for those that do not was around £25 billion at the end of 2012. Others have begun to take measures to strengthen their balance sheets by issuing new bonds or reducing dividend payments to retain a greater proportion of earnings.

Those that haven't will need to achieve a core capital ratio of at least 7% of risk-weighted assets by the end of 2013 as a first step, to give them the capacity to absorb future losses without restricting lending to individuals and businesses.

The Bank of England, which has assumed responsibility for bank regulation from the Financial Services Authority, said capital ratios would need to rise further after 2013 to comply with a global set of rules known as Basel III and the government's plans to make the industry safer by separating retail and investment banking activities.

First Published: March 27, 2013: 7:34 AM ET

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Boeing completes first 787 Dreamliner test flight

Boeing conducted a test flight of its troubled 787 Dreamliner on Monday.

HONG KONG (CNNMoney)

The brief flight, which departed from Everett, Wash., took the plane along the Pacific coast into Oregon before returning to land at Paine Field. According to Boeing, the flight went "according to plan."

Boeing has not been able to deliver 787 Dreamliners to customers since the Federal Aviation Administration ordered the plane grounded on Jan. 16 as safety investigators probed two fires in its lithium batteries.

The aircraft used Monday is an undelivered Boeing-owned model built for LOT Polish Airlines.

Earlier this month, the FAA approved a Boeing proposal for fixing the plane's battery system problems.

The plan includes a redesign of internal battery components to minimize chances of a short circuit. It also involves better insulation of battery cells and a new containment and venting system that is supposed to prevent overheating from affecting the plane or being noticed by passengers.

Boeing (BA, Fortune 500) will do at least one more test flight.

"The plan is to conduct one certification demonstration flight," Boeing spokesman Marc Birtel said. "That flight ... will demonstrate that the new battery system performs as intended during flight conditions."

Related story: Boeing apologizes for Dreamliner fiasco

The Dreamliner has sold well in Asia and the Middle East, where airlines depend on long-range flights for much of their business and can benefit most from the improvements in fuel economy the lighter-weight plane promises.

The problems with the new battery technology have already prompted Boeing's European rival Airbus to revert to standard nickel-cadmium batteries in its A350 plane, designed to compete with the Dreamliner and due to make its first test flight in the middle of this year.

-- CNN's Aaron Cooper contributed to this report.

First Published: March 26, 2013: 5:52 AM ET

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Marriage ruling could save same-sex couples thousands

NEW YORK (CNNMoney)

This week, the court will hear a case challenging the Defense of Marriage Act, a 1996 law that prevents same-sex couples from receiving more than 1,000 federal benefits that opposite-sex married couples receive.

This includes the right to file federal taxes jointly -- which, depending on income, gives some married filers a "bonus" of thousands of dollars, while penalizing others.

A same-sex couple with combined income of $100,000, in which one person earns $70,000 and the other makes $30,000, currently pays an extra $1,625 per year by filing separately rather than jointly, according to an analysis H&R Block conducted for CNNMoney. The calculations assume a standard deduction, no children and no tax credits.

Related: 'What legalizing gay marriage means for our money'

The extra tax liability jumps to nearly $8,000 when one spouse earns all $100,000 and the other reports no income. In this case, couples filing jointly owe tax of $11,858, while a same-sex couple filing separately owes $19,585 -- a 65% difference.

"[There's] a myth that any time married people file jointly they are worse off than filing singly, and that's just not correct at all -- sometimes they get a marriage bonus," said Jackie Perlman, a principal analyst at H&R Block.

That's because filing jointly merges the two incomes, shifting some of the higher-earning spouse's income into a lower tax bracket. In some scenarios, couples would even cut their tax bills in half by filing jointly -- typically when incomes are low, Perlman said.

As the gap between incomes shrinks, however, the difference in tax liability is less pronounced. In H&R Block's scenario, no extra tax is owed when each spouse earns an income of $50,000 and they file jointly instead of individually.

Other couples would end up owing more by filing jointly, especially if they miss out on deductions or credits like the Earned Income Tax Credit and the Child Tax Credit because, when combined, their income is no longer low enough to qualify or receive the full benefit.

Related: Gay marriage case: Financial benefits at stake

Another major tax issue at stake in the DOMA case is the estate tax. Currently, surviving spouses in federally-recognized marriages don't have to pay taxes on their deceased spouse's estate, while same-sex widows pay a 35% estate tax on anything in excess of a $5 million exemption.

The case challenging DOMA was filed by New Yorker Edith Windsor, who sued to get back the $363,000 in estate taxes she paid when her partner of more than 40 years died.

Her arguments are being presented on Wednesday. Meanwhile, opposition to the law is growing -- with the Obama Administration, a coalition of big businesses and even a group of prominent Republicans all signing legal briefs in support of gay marriage.

If the court decides to overturn DOMA, it could significantly impact the financial lives of same-sex couples married at the state level. But it's up in the air whether federal benefits would be extended to domestic partnerships and civil unions. Currently, same-sex marriage is legal in nine states and Washington, D.C.

In addition to not being able to file jointly and owing extra estate tax in certain cases, many same-sex couples owe tax on medical benefits received through a partner's employer-sponsored health insurance plan, are denied thousands of dollars in spousal Social Security benefits or don't qualify for survivors benefits if a spouse or partner passes away.

Related: Same-sex couples could see tax windfalls

Mikey Rox and Earl Morrow, from New York City, would boost their refund by nearly $2,000 per year by filing jointly.

And the $2,500 in tax they currently pay on the health insurance benefits Mikey receives from Earl's plan would vanish.

Some couples could even get refunded for the extra tax they paid in the past three years as well, if they file protective refund claims with the IRS and amend their returns to file jointly. Adele and Jennifer Hoppe-House, from Los Angeles, expect to get more than $13,000 back by doing this if DOMA is struck down.

Even for those who would owe more tax if they were allowed to file jointly, the extra money is often a small price to pay to see DOMA overturned.

"I'm sure more people are going to get financial wins than losses, whether it's taxes or Social Security," said Nanette Miller, head of the LGBT practice at accounting firm Marcum LLP. "But it's not just an economic issue -- it's that they want that equality."

First Published: March 26, 2013: 6:05 AM ET

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Stocks: Keeping a watch on Europe

Click on chart for market data

NEW YORK (CNNMoney)

Cyprus' banks will remain shut until Thursday to give regulators time to guard against a run on deposits. Some form of capital controls will be applied when the banks eventually reopen.

The island nation agreed early Monday to raise billions of euros from big depositors at the Bank of Cyprus and Popular Bank of Cyprus, and shrink its banking sector, in return for a €10 billion European Union bailout.

U.S. stocks closed lower Monday as investors fretted over Cyprus. But U.S. stock futures were up slightly ahead of the opening bell Tuesday.

Mediobanca analyst Christopher Wheeler said that Cypriot jitters, which "sent the banks into a tailspin" on Monday, seems to be wearing off. Shares of Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500) and JPMorgan Chase (JPM, Fortune 500) nudged higher in premarket trading.

"I think today there's a bit more settling down, a feeling that the concerns yesterday were a bit overdone," said Wheeler.

Related: Fear & Greed Index: Getting greedy

Back in the U.S., the Census Bureau will release data on durable goods orders at 8:30 a.m. ET. Orders for durable goods are expected to have increased 3.8% in February, according to the Briefing.com consensus of economists' opinion. But excluding transportation orders are forecast to have slipped 0.2%.

The S&P/Case-Shiller home price index is due at 9 a.m. ET, while reports on consumer confidence and new home sales are up at 10 a.m. The Case-Shiller index is expected to show an increase in the annual pace of home-price increases, according to the Briefing.com consensus, while consumer confidence is expected to have edged up in March and new home sales are expected to have risen to an annual rate of 426,000 in February.

Related: Check out CNNMoney's new portfolio tool!

In company news, Boeing (BA, Fortune 500) completed the first test flight for its troubled 787 Dreamliner since redesigning the aircraft's battery system.

European markets were slightly higher in morning trading, recovering some ground lost Monday when bank stocks were hit by concern that the Cyprus bailout could serve as a model for future eurozone rescues. Shares of Banco Santander (SAN) and Deutsche Bank (DB) continued to trend lower.

Asian markets ended mixed. The Shanghai Composite lost 1.3%, the Nikkei declined 0.6% and the Hang Seng added 0.3%.

First Published: March 26, 2013: 6:02 AM ET

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Guns and ammo sales spark jobs boom

The rising enthusiasm for firearms, especially semiautomatic rifles, is fueling a vibrant job market for the manufacturing of guns and ammunition.

NEW YORK (CNNMoney)

Mike Weddle, head of maintenance at Dynamic Research Technologies, an ammunition manufacturer in Albany, Mo., says he is adding 10 new hires to his staff of 35. DRT's machine operators make between $10 and $17 an hour -- a healthy paycheck in a region where it's tough to find a job and the cost of living is relatively low.

DRT currently cranks out 80,000 bullets per shift and operates two shifts per day. But that's not enough to meet demand. So Weddle is adding a third manufacturing shift and building an additional facility.

"Demand picked up a year ago -- it quadrupled," he said. "It just went crazy." He says .223 caliber ammo, which is for semiautomatic rifles, is particularly difficult to keep in stock.

Related: Cheap ammo for sale online

DRT is a tiny part of an industry that employs about 240,000 nationwide, according to an estimate from Brian Rafn, who follows the gun industry for Morgan Dempsey Capital Management. And like DRT, many of the giants in the business of making guns and ammo are also expanding.

"Sturm, Ruger and Smith & Wesson have both added manufacturing capacity, which includes labor and shifts, in the past year," said Wedbush Securities analyst Rommel Dionisio.

Caleb Ogilvie, a concealed-carry instructor who works at Cabot Gun & Ammo in Cabot, Ark., said that employees at a nearby Remington plant in Lonoke are telling him that "they're running full swing up there, running 24-7."

The good news for Smith & Wesson (SWHC), Sturm, Ruger & Co. (RGR), Colt and Remington is that they're based in regions of New England and upstate New York where manufacturing has vanished, leaving a labor pool that's hungry for work, according to Dionisio. He said that many of the added jobs are "temporary, contract-type hires, as opposed to full-time, permanent hires" since the companies don't know how long the surge in demand will last.

Related: Unemployment rate for post-9/11 vets has gone down

But these companies also need highly-skilled workers. Rafn said that competition among gun makers is fierce for top-notch engineers. That's because it's the engineers that come up with the unique gun-design flourishes that inspire gun buyers to add to their collections.

"To get a guy to buy his 29th or 30th gun, you've got to come up with a whole new frame," said Rafn. "We're always looking at new products, and it's these guys who design them."

New features include ergonomic frames, triggers with innovative safeties or actions, or side-mounted laser sights, to give guns a competitive edge. Engineers with the computer-design skills to create them can easily earn $100,000 a year, he added.

Related: Sturm, Ruger profit surges on gun sales

Jacob Herman, chief operating officer for Red Jacket Firearms in Baton Rouge, La., agrees that finding qualified workers is the biggest hurdle for his business, which has an 18-month long blacklog of orders. Red Jacket, a family-owned company with 30 employees, makes AR15 semiautomatic rifles but has had to stop taking new orders for the time being.

"Finding skilled machinists and advanced skilled labor is one of the biggest problems that we face in getting products out the door," said Herman.

"The firearms industry is fighting for the same employees as the exploding oil business, both here in the Gulf [of Mexico] and in the Dakotas," said Herman, referring to the oil boom in North Dakota, where workers are flocking for jobs with Halliburton (HAL, Fortune 500), Continental Resources (CLR), Hess (HES, Fortune 500) and Whiting Petroleum (WLL).

Related: Assault rifles are selling out

Machinists can also go into business for themselves as gunsmiths, making about $60,000 a year repairing and maintaining firearms.

Mark Raines, who spends his days refinishing, rebarrelling and nickel-plating, said the orders are piling up at his shop, Masters of Gun and Rod, in Tallahassee, Fla.

"The demand is so high, that I've probably got 250 guns in here for repair at any given time," said Raines. "You make a good living, [but] you don't get rich. Because any time you work with your hands, you're limited to how much you can turn out in a 24-hour period."

First Published: March 25, 2013: 5:53 AM ET

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For repo men, economic recovery is a blow to business

NEW YORK (CNNMoney)

The Lynbrook, N.Y.-based entrepreneur owns Payback Repo Incorporated, a car repossession company.

"People say, 'Oh you guys must be doing amazing!'" Lennon said. "It's the total opposite."

Repossession specialists, better known as "repo men," are suffering a nationwide decline in business. There were about 1.3 million auto repossessions in 2012, down from 1.9 million at the height of the recession in 2009, according to Tom Webb, chief economist for Manheim Auctions. Data from Experian Automotive shows a one-third drop in repossessions over the same time period.

As the economy recovers, more Americans have been able to keep up with their car payments. The percentage of Americans more than 90 days late on a car loan declined to 4% in the fourth quarter of 2012, down from 5.3% in the fourth quarter of 2010, according to data from the Federal Reserve Bank of New York.

For those in the repossession business, those are grim statistics.

Seth Rose, owner of Express Results in Hicksville, N.Y., cut his fleet from seven tow trucks in 2011 to just two trucks today.

"I decided to lower my overhead," Rose said. "All the expenses have continuously gone up, and our revenues have gone down."

Three years ago, Rose said he was seizing 75 to 100 cars a week. Now, he's down to 25 to 35 a week.

"Right after the big crash, everything was great," said Rose. "I had two lots that were jam-packed." He has since sold one of those lots.

Related: Companies make fast, pricey cars even more so

It's not just a matter of volume: repo men are also getting paid less.

Payback Repo's Lennon said he currently makes about $300 per car, down from the $400 he averaged during the recession.

"There's a pinch on our clients, and that causes banks to look for ways to cut costs too," Lennon said. "There's been a lot of causalities in the past two to three years. I had to have this mindset that I need to just survive these years, and half my competition would be gone."

Rose is trying to offset his lost revenue with new ventures, like his Orus iPhone app, released last week. Repo agents need to file reports with the banks when they arrive at a residence and the car isn't there. Orus lets them file those dispatches immediately from the field.

Meanwhile, Lennon's key survival tactic is creative cost-cutting. Instead of sending out gas-guzzling tow trucks to hunt down cars, he now uses fuel-efficient vehicles like the Toyota Prius. He equips them with cameras and license-plate recognition software. His repo agents only summon a tow truck after they've found their target -- saving time and money.

"It's a challenging business," Lennon said, "but I tell myself, isn't everyone in the same boat?"

Andrew Welsch is a multimedia journalist and master's student at the CUNY Graduate School of Journalism.

First Published: March 25, 2013: 5:55 AM ET

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Icahn, Blackstone make buyout bids for Dell

Dell confirmed two new bidders for the company Monday.

NEW YORK (CNNMoney)

The board said it will enter into negotiations with both groups. It also said that CEO Michael Dell has agreed to the "possibility of working with third parties" regarding their buyout proposals.

The announcement does not close the door on Dell's bid, though. Several reports Monday suggested that Michael Dell may agree to raise his bid in response to the new offers.

Blackstone (BX) says its offer would value Dell in excess of $14.25 per share. Icahn values his offer at $15 a share. Financing is not firm for either deal, however.

Both the Icahn and Blackstone bids would allow Dell shareholders to continue holding their stakes in the company, with stock continuing to be traded publicly. Money managers Southeastern Asset Management and T. Rowe Price (TROW), two of the largest institutional holders with more than 10% of Dell shares between them, are on record desiring to keep their Dell holdings, according to the Icahn bid letter.

Shares of Dell (DELL, Fortune 500) rose about 3% to $14.53 in premarket trading following the announcement.

Michael Dell announced a $13.65-a-share offer to take Dell private on Feb 5. Michael Dell, who owns 15% of the shares of the company he started in his college dorm room, joined with private equity firm Silver Lake Partners in making the bid. He also would get a $2 billion loan from Microsoft (MSFT, Fortune 500) to help finance the deal.

The Dell board entered into a "go-shop" period following that offer to see what other bidders were interested in the company.

Fortune reported last week that Blackstone would prefer to have Michael Dell on its side. But if he prefers to remain with Silver Lake, Blackstone has started using back channels to reach out to potential CEO replacements. Top candidates, according to Fortune, include Mark Hurd, the former Hewlett-Packard (HPQ, Fortune 500) CEO who currently serves as president and a board member of Oracle (ORCL, Fortune 500), and Michael Capellas, the former boss of Compaq Computer and First Data.

Fortune also reported that rival computer makers Lenovo (LNVGY) and Hewlett-Packard (HPQ, Fortune 500) also weighed bids for Dell during the go-shop period but decided against doing so.

First Published: March 25, 2013: 7:21 AM ET

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Cyprus endgame: What happens if its banks collapse?

A banking collapse would likely lead to Cyprus' exit from the eurozone. The ramifications of that are unknown.

LONDON (CNNMoney)

The European Union wants the beleaguered country to find nearly €6 billion to add to a €10 billion bailout program backed by the International Monetary Fund to save the country's insolvent banks.

And Cyprus is scrambling to put together a plan that will satisfy its would-be rescuers, while not further inflaming depositors.

Amid great uncertainty, one thing is clear -- the collapse of the tiny island nation's banks would lead the 17-member eurozone into uncharted waters.

Without agreement on a European rescue, emergency funding from the European Central Bank that has been keeping Cypriot banks afloat is due to end on Tuesday.

But will the ECB carry out its threat to yank the funding, knowing it would start a chain reaction that would almost certainly end in Cyprus abandoning the euro after just five years?

Some experts believe it will.

"Extending the emergency liquidity assistance without a clear deal could lead to a significant transfer of risk toward the ECB, and questions over its credibility," noted the Open Europe think tank.

"This would be a particularly poisonous debate in Germany, something which neither the ECB nor the German government would want."

Related: Cyprus sitting on natural gas gold mine

Banks in Cyprus have been closed to prevent a run on deposits after initial plans for a tax on all accounts -- since abandoned -- were revealed last weekend. ATMs have continued to function but long queues have formed at some banks.

In the absence of a rescue, Cypriots and foreign depositors will rush to withdraw cash as soon as they can. The government could extend the bank holiday again, and impose limits on financial transactions, but that would only delay the inevitable.

"The longer the restrictions on withdrawing and transferring assets continue, the more it increases the chances of drastic capital flight once they are lifted," wrote IHS Global Insight analyst Sean Harrison in a report.

Restricting the movement of capital wouldn't solve the country's banking crisis but only further depress activity in a recession-hit economy dependent on financial services and tourism, exacerbating the government's debt crisis.

Cyprus could close its two weakest banks -- it is already working on a plan to restructure one of them, Popular Bank of Cyprus -- but depositors would face big losses, further undermining confidence in the system as a whole.

Unable to restore trust in its banks and with an economy locked in a downward spiral, social and political unrest would escalate quickly. At that point, Cyprus may decide it has no option but to abandon the euro and start printing its own currency.

A new Cyprus pound would be worth much less than the euro, imposing even more pain on depositors than the original bank levy rejected by parliament on Tuesday.

What would a Cyprexit mean for the eurozone?

"If a collapse were to occur, we maintain our view that Cyprus is so different from any other eurozone country and banking system that contagion is far from obvious," said Unicredit chief economist Erik Nielsen.

While European stock markets and the euro took a hit this week, government bonds in Italy and Spain held steady. And U.S. stock markets ended the week down a little less than 0.5%.

Still, it's possible the ECB could feel pressure to take emergency steps to prop up markets by, for example, purchasing government bonds.

Spain has secured an EU-backed bailout of its banking industry, and policymakers and investors appear at this point to be relaxed about the absence of a government in Rome, pointing to measures already taken to control its borrowing.

Some analysts believe it's more likely that another small eurozone country -- Slovenia -- could move center stage if Cyprus collapses.

Slovenia has an economy twice the size of Cyprus, but it has already been forced to bail out its banking sector, which is plagued by a high and rising rate of bad loans, and a new government may struggle to fund the recapitalization.

The International Monetary Fund says Slovenia may need to provide an extra €1 billion in capital for its three largest banks, at a time when the country's debt burden is rising due to a recession caused by poor export demand and austerity measures.

First Published: March 23, 2013: 7:17 AM ET

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Cyprus bailout: Bank tax plan still unresolved

LONDON (CNNMoney)

The tiny island nation needs to find a way to raise nearly €6 billion to satisfy the conditions of a €10 billion EU rescue or face economic meltdown when banks reopen Tuesday after a 10-day hiatus.

Late Friday, after a long debate, lawmakers passed bills to create a sovereign wealth fund, nationalize pension assets and impose strict limits on the movement of capital.

But the most important vote -- on introducing a tax of 20% to 25% on deposits of more than €100,000 euros at Bank of Cyprus, the country's biggest lender -- was still to come.

The timing of a vote on the tax was uncertain. Cypriot officials and EU finance ministers were in talks this weekend over the 11th-hour effort to agree on a plan. They plan to meet Sunday in Brussels at 1 pm ET.

Officials have been scrambling to find ways to raise Cyprus' share of an EU bailout since the country's parliament threw out an unprecedented plan to tax all bank deposits.

Without a rescue, the European Central Bank has said it will cut off the emergency funding that has been keeping the country's biggest banks afloat since Tuesday, potentially leading to Cyprus' exit from the eurozone.

Cyprus' plan includes an overhaul of its bloated and largely insolvent banking sector.

The country's second largest bank, Popular Bank of Cyprus, would be broken up and depositors under €100,000 protected. As a first step, the country agreed to sell the Greek branches of its two biggest banks to Athens-based Piraeus Bank.

Cyprus' top bankers said a tax on bank deposits that protected small savers with less than €100,000 was still the best option to prevent catastrophe.

"In my opinion, if we had done the haircut on deposits ... it would have been a much better solution because the banks would be safe," Takis Phidias, Popular Bank's acting CEO told CNN.

The Bank of Cyprus also called for the adoption of the eurozone proposal, fearing that a lack of viable alternatives would lead to a collapse, putting all deposits at risk.

"We want to highlight that any return to the Cypriot pound means significant loss of asset value and [would] lead to a vicious circle of devaluation and hyperinflation," the bank said in a statement, according to Reuters.

The proposed tax on all accounts, including deposits covered by the national guarantee program, outraged Cypriots and prompted widespread condemnation for undermining the principle that ordinary savers should not pay for bank failures.

Cypriots have been queuing at cash machines since the levy was first announced on March 16.

Related: Cyprus is sitting on a natural gas gold mine

Cyprus has been brought to its knees by the losses that its oversized banking sector sustained on investments in Greece, and a deep recession.

Eurozone policymakers want Cyprus to stump up cash from its banks as part of the rescue to ensure the country's debt doesn't become unsustainable. The total funding required to recapitalize the banks and meet government commitments is almost equal to annual gross domestic product.

And the EU believes wealthy foreigners who have profited from Cyprus' low tax rates should contribute. More than half of bank deposits are held by foreigners, many of them Russian.

On Friday, Cyprus' Finance Minister Michalis Sarris returned from talks in Moscow empty handed. He had been hoping Russia would ease the pressure by relaxing the terms of an existing €2.5 billion loan, and possibly invest in the island's offshore gas reserves.

Russia would wait for a decision by Cyprus' European partners and the International Monetary Fund before deciding whether to take part in a rescue, Finance Minister Anton Siluanov said.

Moody's rating agency estimates that Russian banks have lent $30 billion to $40 billion to Cyprus-based companies of Russian origin, equivalent to up to 20% of the banks' capital base.

-- CNN's Jim Boulden and Fred Pleitgen contributed to this article.

First Published: March 22, 2013: 2:33 PM ET

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'Only hard choices' for Cyprus

LONDON (CNNMoney)

Negotiations between Cyprus and its would-be bailout partners at the European Union and International Monetary Fund continued through the weekend as the clock ticks down on the country's financial system.

"The events of recent days have led to a situation where there are no longer any optimal solutions available," Olli Rehn, the EU's top economic official, said Saturday. "There are only hard choices left."

A meeting of European Union finance minister has been set for Sunday, at 1 pm ET in Brussels.

Related: What happens if the banks fail?

The tiny island nation needs to find a way to raise nearly €6 billion to satisfy the conditions of a €10 billion EU rescue or face economic meltdown when banks reopen Tuesday after a 10-day hiatus.

Late Friday, after a long debate, the Cyprus parliament passed bills to create a sovereign wealth fund, nationalize pension assets and impose strict limits on the movement of capital.

Still unresolved is one of the most controversial parts of the bailout plan -- a tax on bank deposits.

The original EU bailout plan called for an unprecedented tax of on all bank deposits. Since then talks have focused on proposals that would protect deposits of less than €100,000 euros but impose a heavy tax -- perhaps 20% to 25% -- on larger accounts.

Officials have been scrambling to find ways to raise Cyprus' share of an EU bailout since parliament threw out the original terms last week.

Under the financial restructuring being considered, the country's second largest bank, Popular Bank of Cyprus, would be broken up and depositors under €100,000 protected.

The proposed tax on all accounts, including deposits covered by the national guarantee program, outraged Cypriots and prompted widespread condemnation for undermining the principle that ordinary savers should not pay for bank failures.

Related: Cyprus' natural gas gold mine

Without a rescue, the European Central Bank has said it will cut off the emergency funding that has been keeping the country's biggest banks afloat, potentially leading to Cyprus' exit from the eurozone.

Cypriots have been queuing at cash machines since the EU bailout proposal was first announced on March 16.

Cyprus has been brought to its knees by the losses that its oversized banking sector sustained on investments in Greece, as well as a deep recession.

Eurozone policymakers want Cyprus to stump up cash from its banks as part of the rescue to ensure the country's debt doesn't become unsustainable.

And the EU believes wealthy foreigners who have profited from Cyprus' low tax rates should contribute. More than half of bank deposits are held by foreigners, many of them Russian.

First Published: March 24, 2013: 7:45 AM ET

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Google Keep is a note-taking app with great potential

Google Keep has a lot of potential.

NEW YORK (CNNMoney)

Before the arrival of Keep, which Google launched this week, there was no default note-taking app for Android. It was a glaring hole, considering that Apple's (AAPL, Fortune 500) iPhone has built-in Notes and Reminders apps that can be powered by Siri.

Instead of settling for a bare bones app to fill the void, the search giant took things one step further. Keep isn't simply just a place to bank whatever random half-thoughts come to mind: Users can construct to-do lists, stash photos, and color code your notes -- all in one well-designed and easy-to-use interface.

The second you log anything into your phone, it is also accessible from a PC Web browser via Google Drive. Alternatively, you can save things while working on your computer, and it will instantly appear on your phone, ready for use while on the go.

The design may not be as progressive as the to-do app Clear, but Keep makes up for that in its simplicity and efficiency.

Everything in Keep is presented like a Microsoft (MSFT, Fortune 500) Windows Phone-esque stream of tiles. Swiping left or right will archive those notes you no longer need (but don't want to erase entirely). At the top of the app is a text entry field that serves as your main point of entry for all new notes. And when viewing any specific note, tapping any part of that note (title, body, etc.) will allow you to edit it. The entire experience is frictionless.

That said, it's not going to conquer the world quite yet. Organization options are limited -- color coding is your only choice, and you can't re-order your notes. Sharing with others is mostly limited to email and Google+, and the desktop features are pretty bare bones.

But that's more a function of it being new, rather than poorly thought out. Like most things Google (GOOG, Fortune 500), expect the company to flesh out Keep over time and really turn it into our personal internet junk drawer.

It's easy to foresee the day the when users will be able to send anything from their Web browser or Maps directly to Keep. The prospect of Keep incorporating features of services such as Pinterest or Pocket, or even making it easy to catalog streaming media, could turn it into something big. That should scare Evernote.

Keep is not the reinvention of the wheel in any aspect -- there are a plethora of third-party apps already available for Android. But it is a well-exectuted refinement.

In filling a minor, but important gap in its mobile ecosystem, Google gives the competition one less claim of superiority over Android.

First Published: March 22, 2013: 11:35 AM ET

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Cyprus endgame: What happens if its banks collapse?

A banking collapse would likely lead to Cyprus' exit from the eurozone. The ramifications of that are unknown.

LONDON (CNNMoney)

The European Union wants the beleaguered country to find nearly €6 billion to add to a €10 billion bailout program backed by the International Monetary Fund to save the country's insolvent banks.

And Cyprus is scrambling to put together a plan that will satisfy its would-be rescuers, while not further inflaming depositors.

Amid great uncertainty, one thing is clear -- the collapse of the tiny island nation's banks would lead the 17-member eurozone into uncharted waters.

Without agreement on a European rescue, emergency funding from the European Central Bank that has been keeping Cypriot banks afloat is due to end on Tuesday.

But will the ECB carry out its threat to yank the funding, knowing it would start a chain reaction that would almost certainly end in Cyprus abandoning the euro after just five years?

Some experts believe it will.

"Extending the emergency liquidity assistance without a clear deal could lead to a significant transfer of risk toward the ECB, and questions over its credibility," noted the Open Europe think tank.

"This would be a particularly poisonous debate in Germany, something which neither the ECB nor the German government would want."

Related: Cyprus sitting on natural gas gold mine

Banks in Cyprus have been closed to prevent a run on deposits after initial plans for a tax on all accounts -- since abandoned -- were revealed last weekend. ATMs have continued to function but long queues have formed at some banks.

In the absence of a rescue, Cypriots and foreign depositors will rush to withdraw cash as soon as they can. The government could extend the bank holiday again, and impose limits on financial transactions, but that would only delay the inevitable.

"The longer the restrictions on withdrawing and transferring assets continue, the more it increases the chances of drastic capital flight once they are lifted," wrote IHS Global Insight analyst Sean Harrison in a report.

Restricting the movement of capital wouldn't solve the country's banking crisis but only further depress activity in a recession-hit economy dependent on financial services and tourism, exacerbating the government's debt crisis.

Cyprus could close its two weakest banks -- it is already working on a plan to restructure one of them, Popular Bank of Cyprus -- but depositors would face big losses, further undermining confidence in the system as a whole.

Unable to restore trust in its banks and with an economy locked in a downward spiral, social and political unrest would escalate quickly. At that point, Cyprus may decide it has no option but to abandon the euro and start printing its own currency.

A new Cyprus pound would be worth much less than the euro, imposing even more pain on depositors than the original bank levy rejected by parliament on Tuesday.

What would a Cyprexit mean for the eurozone?

"If a collapse were to occur, we maintain our view that Cyprus is so different from any other eurozone country and banking system that contagion is far from obvious," said Unicredit chief economist Erik Nielsen.

While European stock markets and the euro took a hit this week, government bonds in Italy and Spain held steady. And U.S. stock markets ended the week down a little less than 0.5%.

Still, it's possible the ECB could feel pressure to take emergency steps to prop up markets by, for example, purchasing government bonds.

Spain has secured an EU-backed bailout of its banking industry, and policymakers and investors appear at this point to be relaxed about the absence of a government in Rome, pointing to measures already taken to control its borrowing.

Some analysts believe it's more likely that another small eurozone country -- Slovenia -- could move center stage if Cyprus collapses.

Slovenia has an economy twice the size of Cyprus, but it has already been forced to bail out its banking sector, which is plagued by a high and rising rate of bad loans, and a new government may struggle to fund the recapitalization.

The International Monetary Fund says Slovenia may need to provide an extra €1 billion in capital for its three largest banks, at a time when the country's debt burden is rising due to a recession caused by poor export demand and austerity measures.

First Published: March 23, 2013: 7:17 AM ET

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Cyprus bailout: Bank tax plan still unresolved

LONDON (CNNMoney)

The tiny island nation needs to find a way to raise nearly €6 billion to satisfy the conditions of a €10 billion EU rescue or face economic meltdown when banks reopen Tuesday after a 10-day hiatus.

Late Friday, after a long debate, lawmakers passed bills to create a sovereign wealth fund, nationalize pension assets and impose strict limits on the movement of capital.

But the most important vote -- on introducing a tax of 20% to 25% on deposits of more than €100,000 euros at Bank of Cyprus, the country's biggest lender -- was still to come.

The timing of a vote on the tax was uncertain. Cypriot officials and EU finance ministers were in talks this weekend over the 11th-hour effort to agree on a plan.

Officials have been scrambling to find ways to raise Cyprus' share of an EU bailout since the country's parliament threw out an unprecedented plan to tax all bank deposits earlier this week.

Without a rescue, the European Central Bank has said it will cut off the emergency funding that has been keeping the country's biggest banks afloat since Tuesday, potentially leading to Cyprus' exit from the eurozone.

Cyprus' plan includes an overhaul of its bloated and largely insolvent banking sector.

The country's second largest bank, Popular Bank of Cyprus, would be broken up and depositors under €100,000 protected. As a first step, the country agreed to sell the Greek branches of its two biggest banks to Athens-based Piraeus Bank.

Cyprus' top bankers said a tax on bank deposits that protected small savers with less than €100,000 was still the best option to prevent catastrophe.

"In my opinion, if we had done the haircut on deposits ... it would have been a much better solution because the banks would be safe," Takis Phidias, Popular Bank's acting CEO told CNN.

The Bank of Cyprus also called for the adoption of the eurozone proposal, fearing that a lack of viable alternatives would lead to a collapse, putting all deposits at risk.

"We want to highlight that any return to the Cypriot pound means significant loss of asset value and [would] lead to a vicious circle of devaluation and hyperinflation," the bank said in a statement, according to Reuters.

The proposed tax on all accounts, including deposits covered by the national guarantee program, outraged Cypriots and prompted widespread condemnation for undermining the principle that ordinary savers should not pay for bank failures.

Cypriots have been queuing at cash machines since the levy was first announced on March 16.

Related: Cyprus is stiing on a natural gas gold mine

Cyprus has been brought to its knees by the losses that its oversized banking sector sustained on investments in Greece, and a deep recession.

Eurozone policymakers want Cyprus to stump up cash from its banks as part of the rescue to ensure the country's debt doesn't become unsustainable. The total funding required to recapitalize the banks and meet government commitments is almost equal to annual gross domestic product.

And the EU believes wealthy foreigners who have profited from Cyprus' low tax rates should contribute. More than half of bank deposits are held by foreigners, many of them Russian.

On Friday, Cyprus' Finance Minister Michalis Sarris returned from talks in Moscow empty handed. He had been hoping Russia would ease the pressure by relaxing the terms of an existing €2.5 billion loan, and possibly invest in the island's offshore gas reserves.

Russia would wait for a decision by Cyprus' European partners and the International Monetary Fund before deciding whether to take part in a rescue, Finance Minister Anton Siluanov said.

Moody's rating agency estimates that Russian banks have lent $30 billion to $40 billion to Cyprus-based companies of Russian origin, equivalent to up to 20% of the banks' capital base.

-- CNN's Jim Boulden and Fred Pleitgen contributed to this article.

First Published: March 22, 2013: 2:33 PM ET

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Get more out of your closet space

To figure out the most effective solution, you need to determine the size of your challenge. Start by weeding out what you don't wear.

(Money Magazine)

There's plenty of space for all manner of sweater shelves, lingerie drawers, shoe cubbies, and tie racks.

So what about the rest of us, who live with reach-in (or squeeze-in) closets? No storage contraption can radically expand inside-the-closet capacity, but you don't necessarily have to install it there.

Here are two ways to create organized and tidy wardrobe cargo space for practically any closet-challenged house.

Thin and restructure

Before you buy any closet gizmo, force yourself to weed out what you don't wear.

"About 70% to 80% of what's in most closets never gets taken off the hanger," says Newton, Mass., professional organizer MJ Rosenthal.

An organizing system will make what remains easier to access.

"The standard pole-and-shelf setup leaves loads of wasted vertical space," says Chesapeake, Va., cabinetmaker David Alderman, who tricks out about 35 closets a year. He typically lowers the pole to four feet high and, above it, installs either a second pole or numerous adjustable shelves designed to keep piles of folded clothing to at most five items tall. When he's working with closets that are deeper than they are wide, he may hang everything from one of the sidewalls.

Related: Find the best handyman for the job

Know that a custom system won't come cheap: You'll pay $800 to $1,200 for a one-door closet, and $1,500 to $2,500 for a double-door.

Almost all are made from melamine -- a waterproof plastic board -- which you can get either in white or a faux-wood finish. Somewhat handy? You can save about 20% with a modular do-it-yourself kit from easyclosets.com or containerstore.com/elfa.

Either way, invest only if you're staying in your home; realtors say this typically isn't an improvement that impresses buyers.

Think outside the closet

Closets that are outrageously undersized require you to look beyond their walls for a solution, says California Closets' chief design officer, Ginny Snook Scott.

If you want something that can move with you, pick up an armoire (for as little as $100 at Ikea).

Related: 4 tips from a serial home remodeler

Alternatively, a closet company or cabinetmaker can craft a built-in wall cabinet for your master bedroom and fill it with hanger poles, shelves, and cubbies. You'll pay about $2,000 to $4,000 for an eight-foot-wide wall of doors and drawers. (You can add a spot to hang your flat-screen TV.)

Because it's useful, attractive, and permanent, it may even yield some payback when it's time to sell -- not bad for something that you'll reap dividends from at least two times a day.

First Published: March 22, 2013: 7:17 AM ET

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Meat industry rescues federal workers

The meat and poultry industry came to the rescue of food inspectors who faced 11 days of furloughs this year.

WASHINGTON (CNNMoney)

Over 9,000 federal food inspectors won't face furloughs after top companies from the meat and poultry industries spoke out in support of them.

In a bill passed by both houses of Congress and sent to President Obama on Thursday, food safety and inspection workers avoided 11 days of furlough, or one day a week from July through September.

So far, they are the only federal workers that Congress has agreed to deliver from furloughs. Close to a million federal workers will be forced to stay home without pay from 3 to 22 days, depending on the agency, thanks to $85 billion in forced budget cuts that took effect March 1.

Meat and poultry heavyweights, including Arkansas-based Tyson Foods (TSN, Fortune 500) and the cattle industry's powerful lobby group, the National Cattlemen's Beef Association, wooed lawmakers -- especially Republicans, some of whom were in no mood to mitigate any part of the sequester, according to congressional aides.

Last week, the National Chicken Council flew in chicken processors from several states, including Georgia, Mississippi, Arkansas and California, who met face-to-face with lawmakers on Capitol Hill.

The groups argued that, unlike other industries that would face only minor disruption, furloughs would lead to a complete shutdown of meat and poultry packing plants on days that the government inspectors stayed home.

The U.S. Department of Agriculture had estimated that 15 days of furloughs for meat inspectors would lead to a loss of $10 billion and cut production by 2 billion pounds of meat, 3 billion pounds of chicken, and 200 million pounds of eggs. People expected it to cause food shortages and possibly price spikes at the grocery store.

"This was a perfect storm, because it would have shut down the food supply and would have affected everyone who eats," said Chase Adams, spokesman for the cattlemen's group, which urged members to write their lawmakers and USDA to keep inspectors on the job.

Sen. Mark Pryor, an Arkansas Democrat, sponsored the amendment saving food inspectors. It was added to a bill that would keep government running through Sept. 30.

Related: 5 federal workers: What job cuts mean to me

One reason why Republicans agreed to save food inspectors was that the measure didn't spend new money, congressional aides say. It came from a $55 million funding shift -- $30 million cut from a program to maintain USDA buildings and $25 million from a new USDA program to upgrade school kitchen equipment.

Pryor and his co-sponsor on the amendment, Sen. Roy Blunt, a Missouri Republican, represent areas with big meat processing plants. Arkansas, alone, has 91 meat slaughter and poultry processing plants that employ 44,000 workers.

The meat and poultry industry is no stranger to winning big on Capitol Hill. Meat and poultry processors have spent more than $28 million on lobbying each year since 2008, according to the Center for Responsive Politics.

Tyson Foods spokesman Gary Mickelson confirmed the company was among those pushing for funding for food inspectors. He called the bill's passage "good news for consumers, farmers, grocery stores, restaurants and meat companies."

Tony Corbo, a senior lobbyist at Washington consumer group Food and Water Watch, said the meat and poultry industry worked the funding bill pretty hard. Though his group is usually on the other side of the industry on issues, he supported saving food inspectors from furloughs.

"You're talking about food safety, and this is going to get everybody's attention, because everybody's got to eat," Corbo said.

First Published: March 22, 2013: 7:23 AM ET

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The wedding is off! Who gets the engagement ring?

Many courts have ruled that the ring is a "conditional gift" that must be returned to the person who bought it.

NEW YORK (CNNMoney)

More than $5,000 is spent on the average engagement ring. And deciding who gets to keep the ring when the big day gets called off is such a hotly-contested issue that most states have laws governing its ownership.

Some bitter lovers even take the case to court.

Colette DiPierro, 31, thought her broken engagement was behind her when she learned that her ex-fiancé Christopher Reinhold was suing, demanding the return of her $17,500 diamond engagement ring.

They had dated for almost two years when Reinhold proposed in May 2009. But the couple began to fight, often about money, and they split four months later, said DiPierro, a physician assistant in Staten Island, N.Y. The following spring, he filed a lawsuit. Reinhold and his attorney did not respond to requests for comment.

Poll: Who do you think should keep the ring?

According to DiPierro, she held onto the ring because he hadn't repaid her for his share of $40,000 worth of living expenses. Their deal: she had paid for rent, food, car payments and other bills while Reinhold saved for the ring.

"I helped him save so I felt that I was holding onto the ring for collateral," she said.

Laws vary by state, but many consider the ring a "conditional gift" until the couple says "I do," -- meaning that regardless of who gets cold feet, the ring must be returned to the person who bought it, said Alton Abramowitz, a New York-based attorney and president of the American Academy of Matrimonial Lawyers.

But it's not always that simple.

A New York judge ruled in 2006 that a woman could keep her 3.4-carat diamond engagement ring because her ex had not yet been divorced from his previous wife when he proposed. The Montana Supreme Court, meanwhile, has shot down the conditional gift theory entirely, ruling that the ring is the rightful property of its recipient.

In certain states, determining who gets the ring rests on who called off the wedding. And, to complicate matters further, some states treat an engagement ring given on a holiday differently than one given on a non-holiday.

In DiPierro's case, because the ring was given to her on her birthday, she argued that it should be hers to keep.

Related: How to ask a friend to pay you back

New York State law was on her side, said George Muscato, a Lockport, N.Y.-based attorney who recently represented a female client in an engagement ring-related suit. He did not represent DiPierro.

"If you give her that ring on a holiday like Christmas or Valentine's Day or her birthday, then you are making a gift to her as a present [that is] unconditional," he said.

But as legal proceedings dragged on for more than a year, DiPierro said she ultimately agreed to a financial settlement with Reinhold.

While she's glad her time in court is behind her, DiPierro said it drastically changed her perspective on money and romantic relationships.

"I guess, in some cases, I was naive," she said. "Money became very complicated in every future relationship."

First Published: March 22, 2013: 7:47 AM ET

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The U.S.A.: Still unrivaled

(Fortune)

Isn't it amazing how much of what you read and hear turns out to be nonsense? To this category let us now consign the whole "End of the American Dream" story line. It's a new century. And as we consider in this issue the entire question of historic competitions, one thing stands clear: This particular macro-corporation is still unrivaled.

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Mississippi's great green hope

(Fortune)

The plant is the first commercial-scale facility for KiOR, a Pasadena, Texas-based startup bankrolled by Vinod Khosla, the billionaire clean-tech investor. After nearly a decade of coming up short, he's hoping he has finally struck on an earthmoving innovation, one that will break the grip that fossil fuels hold on the transportation market. And in the process he hopes to restore rural communities across the country devastated by the decline of paper mills. "My dream would be that there are 500 communities, 15 years from now, that are all back in business using the wood chips in the forests around them, and that forestry is a lively business -- not moving to Brazil," he says.

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Can Time Inc. make it alone?

(Fortune)

For a newly independent Time Inc., the 91-year-old publisher of Time, Sports Illustrated, People, and dozens of other titles, including Fortune, the general opinion was downbeat: Unlike Time Warner, which grew operating earnings in its nonpublishing businesses by 4.7% last year, the magazine business needs radical change. Put simply, revenues and profits for Time Inc. and the magazine industry as a whole are shrinking.

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States eye private insurance for Medicaid expansion enrollees

Some states may use their Medicaid expansion funds to buy private insurance.

NEW YORK (CNNMoney)

That twist is keeping alive the possibility of broadening Medicaid coverage in states where conservative legislators are bucking their governors' acceptance of the optional -- and controversial -- Affordable Care Act provision.

Republican governors in at least eight states have agreed to Medicaid expansion, which would extend coverage to all adults with income below 138% of the poverty line. It's part of the Obama administration's push for universal insurance, and the federal government is dangling a big carrot to make it happen. It will cover each state's expansion costs in full for the first three years. After that, states will be responsible for no more than 10% of the tab.

However, lawmakers in Ohio, Louisiana and Florida -- and in Arkansas, which has a Democratic governor and a Republican legislature -- have an alternative idea: Use the federal cash to cover the premiums on private insurance for their newly eligible Medicaid participants. They believe getting the private market involved could help rein in costs.

The U.S. Department of Health and Human Services is open to the idea, saying it wants to be flexible and work with states to design plans that fit their needs.

There's precedent for using Medicaid cash to pay for private insurance -- but it's rarely used. States have to clear two big hurdles before they can do it.

First, they have to prove that the private insurance costs are the same or less than those of enrolling the person in Medicaid directly. That's not easy, because Medicaid's costs are fairly low, said Joan Alker, co-executive director of the Georgetown Center for Children and Families.

Also, states generally have to make sure that recipients get all the same benefits that they would with Medicaid. If there's any shortfall, the state has to kick in money to buy extra coverage or cover the additional costs imposed by the private plans.

Those obstacles mean that only a tiny fraction of Medicaid funds get used to purchase private insurance -- less than 1% of all Medicaid and Children's Health Insurance Program spending in fiscal year 2009, according to the most recent estimates compiled by Georgetown. The most common path is to purchase insurance for low-income workers through their employer-sponsored plans.

The Affordable Care Act introduces another option. Starting in 2014, residents in all 50 states will be able to shop for coverage through health insurance exchanges.

Some lawmakers want the newly eligible Medicaid participants to sign up for plans through the exchanges, with the state using its expansion money to cover the premiums for these folks.

Taking that route might mollify some Republicans, since it would increase the involvement of the private market, which they believe will help lower Medicaid spending. It could also prove beneficial for some Medicaid recipients, particularly those at the higher end of the income scale. It could give them access to more providers. Also, it could help them maintain consistent coverage if their earnings rise above the Medicaid income threshold, since they would be able to remain in the exchange and qualify for federal subsidies to help cover their premiums.

Reducing that churn -- Medicaid participants exiting and returning to the program -- would save states time and money.

But the proposal leaves open some key questions. Among the biggest is whether providing premium assistance on the individual market will prove cost-effective, said Sara Rosenbaum, a law professor at George Washington School of Public Health and Health Services. Covering each recipient through an exchange would cost the federal government an additional $9,000 per year, rather than $6,000 through Medicaid, according to Congressional Budget Office estimates.

Also, unlike in an employer plan, where companies pick up much of the premium cost, the states would be responsible for covering the entire individual premium in the exchange, she noted.

Precisely what the states are thinking remains to be seen. Lawmakers in Ohio and Arkansas said they are still analyzing their options. They're especially focusing on whether going through the exchanges will save the states money in the long run.

"It seems there's an opportunity with private insurance plans to drive costs down over a number of years," said Davy Carter, Speaker of the Arkansas House of Representatives.

Until states settle on their plans, it's hard to judge how well the program might work, experts said.

"The devil will be in the details," Alker said. "We will have to see how it unfolds. There are clear pluses and minuses."

First Published: March 20, 2013: 6:16 AM ET

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