Senate confirms Jack Lew as Treasury Secretary

The Senate confirmed Jack Lew to be the next Treasury secretary.

WASHINGTON (CNNMoney)

Lew, 57, most recently served as the White House chief-of-staff.

As a former budget director for Presidents Obama and Bill Clinton, Lew has overseen budget talks in times of deficits and also surpluses.

As the secretary of the Treasury, Lew will run U.S. domestic financial policy and is charged with collecting federal taxes and managing public debt, among other duties.

Lew was confirmed with a 71-26 vote. Compared with the bruising confirmation battle of Chuck Hagel as Defense secretary, Lew's was a breeze.

President Obama said in a statement that he was "pleased that the Senate took bipartisan action today to confirm Jack Lew as our nation's next Treasury secretary."

"His reputation as a master of fiscal issues who can work with leaders on both sides of the aisle has already helped him succeed in some of the toughest jobs in Washington," Obama said.

Republicans who voted against Lew said they were concerned about his experience at Citigroup (C, Fortune 500) during the financial crisis. Lew had served as the chief operating officer at Citi Alternative Investments in 2008, which made bets against the housing market.

Lawmakers questioned an offshore investment in the Cayman Islands and a $900,000 bonus Lew received even as the bank was being bailed out by taxpayers.

"In the past, the president has railed again the 'fat cats' on Wall Street," Sen. Charles Grassley of Iowa, who opposed the confirmation, said Wednesday. "Today, the president nominates a man who took a bonus from a bailed-out financially insolvent bank.

Lew has said he did not make investment decisions at Citigroup and that he has paid taxes on all his investments, many of which he sold for a loss.

Other Republicans and some on Wall Street have said they're concerned about Lew's lack of business and financial markets experience.

Still, Lew garnered a stronger confirmation vote than his predecessor, Tim Geithner, who took office in 2009, after a 60-34 Senate vote.

Geithner stepped down in January. He was the last holdover from President Obama's original economic team.

Related: How much is a Treasury Secretary worth?

Lew is expected to jump right in to the debate over how to address some $85 billion in forced budget cuts that are scheduled to hit Friday. He was part of the team that came up with the original idea of the cuts, as a key player in the 2011 debt ceiling talks. At the time, nobody thought the cuts would ever come to pass, as they were intended to be so horrible that they'd force a budget deal.

First Published: February 27, 2013: 6:19 PM ET

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Indiana reverses plan to halt federal unemployment benefits

The long-term unemployed will be among the first to feel the effects of the forced budget cuts scheduled to take effect on Friday.

NEW YORK (CNNMoney)

The state had said it would stop the checks this weekend because it needed additional guidance from the federal government concerning the forced budget cuts that will take effect Friday. It received those answers late Thursday afternoon.

"The U.S. Department of Labor confirmed that unemployment benefits will not be impacted by sequestration through the week ending March 9, and additional guidance will be forthcoming," wrote Scott Sanders, commissioner of the Indiana Department of Workforce Development, on the agency's website. "As such, the Indiana Department of Workforce Development will proceed with full payment of extended unemployment compensation until further notice."

The confusion in Indiana is playing out across the nation as states, cities, government contractors, non-profits and others await the $85 billion in budget cuts set to start Friday. Few have answers on how this will play out or whether Congress will act before the reductions fully take hold.

The long-term unemployed -- who collect extended federal benefits -- will be among the first to be hit by the forced spending cuts. States are waiting for guidance from Washington, D.C., so they can reprogram their computers to accommodate the spending cuts.

Some 3.8 million people could see their weekly benefits drop by 9.4% if the budget cuts go into effect, according to U.S. Department of Labor estimates. Recipients of those payments would lose an average of more than $400 in benefits each this fiscal year, which ends on Sept. 30.

State benefits will not be affected. The jobless can collect state benefits for up to 26 weeks after they're laid off. After those run out, the federal program kicks in.

Just when the long-term unemployed will see smaller checks depends on where they live. It could take a few weeks, as states scramble to adjust their systems if Congress fails to avert the cuts. Any reductions, though, would be retroactive to March 1.

Federal extended benefits payments kick in when state unemployment insurance ends. Eligible workers can then collect federal benefits for up to 47 weeks. The payments, which average $300 a week, are an emergency measure that Congress has been authorizing since 2008. It's a stopgap aimed at protecting the millions of Americans struggling to find new jobs in a challenging economy.

The forced spending cuts don't end the program's funding, but they trim it.

First Published: February 27, 2013: 6:15 PM ET

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It's official: Kuroda nominated to BoJ's top spot

Haruhiko Kuroda has been nominated to lead the Bank of Japan.

HONG KONG (CNNMoney)

Kuroda, the current president of the Asian Development Bank, has years of experience in international finance and monetary prescriptions that largely mirror those of Abe.

The former finance ministry official has been critical of the central bank in the past, saying it has been too timid in its efforts to spur growth and fight deflation.

The opposition Democratic Party of Japan signaled earlier this week it would not oppose Kuroda in the Diet, clearing the way for lawmakers to approve the nomination.

With Japan in recession, Abe based his election campaign last year on a commitment to take radical steps to end years of deflation, combining promises of looser monetary policy with pledges of fiscal stimulus. Kuroda, if confirmed, gives Abe a like-minded ally at the top of the central bank.

The Japanese yen has already weakened significantly in response to policy changes, falling 20% against the U.S. dollar since the beginning of October and driving up the stock market. It has also lost ground against the euro and some Asian peers, raising concerns that Japan may be engaged in a race to the bottom to promote exports.

Weak currency cheapens the price of a country's exports, making them more attractive to international buyers by undercutting competitors. Japan's exporters have cheered the yen's decline, and Abe's popularity has skyrocketed in recent weeks.

Related: Japan's economy contracts for third straight quarter

Kuroda appears willing to follow through on Abe's policies, telling the Wall Street Journal earlier this month that Japan has "plenty of room for monetary easing."

"If necessary and if appropriate, of course additional monetary easing this year could be justified," he said.

Masaaki Shirakawa, the current BoJ head, has announced he will stand down on March 19, several weeks before his term was due to end.

Shirakawa agreed last month to double the bank's inflation target and adopt open-ended purchases of government bonds. But he is opposed to some of the more extreme proposals considered by the bank and has been accused of doing too little, too late.

Related: Don't fight the BoJ

By way of contrast, Kuroda told the Journal that the BoJ must move aggressively to meet its 2% inflation target.

"You cannot wait for five years, 10 years or 15 years. You have to achieve the target within a reasonably short time period," he said.

The political pressure on the Bank of Japan has caused consternation in the international community, with some lobbing charges of currency manipulation in Japan's direction.

Tokyo has rejected those claims, saying its policies are aimed at the economy not the yen, but the G7 group of leading industrial nations - including Japan - felt compelled to issue a rare statement earlier this month aimed at cooling talk of a currency war.

Kuroda, for one, seems undeterred, telling the Journal that the yen's weakening is good for the global economy.

"From a global point of view, is it good for the Japanese economy to continue to suffer from deflation...and low growth?" he asked. "That is not good for Japan, not good for the world economy."

-- CNN's Junko Ogura and Yoko Wakatsuki contributed to this report.

First Published: February 27, 2013: 10:00 PM ET

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For sale: Your personal info

BARCELONA, Spain (CNNMoney)

Today, most of the data wireless carriers share with third parties is pretty generic: All four national carriers bundle together their customers' personal information and use that aggregated data to help outside companies target ads to their subscribers.

But cell phone companies are just scratching the surface of what they could be sharing. Smartphones know where you are now, where you've been, what you like to shop for, and what apps you use. Your phone company knows your age, race and sex.

Put all that together, and the carriers have some extremely relevant information for brands vying for your business.

"An interesting transformation is happening in wireless, in which consumers are no longer customers -- they're the product," said Dan Hays, principal in PricewaterhouseCooper's communications and technology practice. "The trick is for operators to find out how to make money without violating their relationships and trust with their users."

Here's how cell phone companies and third-party brands might use your data: When you're standing outside a store, your cell phone company could provide your location and age (without your name attached) to the retailer, which could instantly place an ad on your phone that's targeted to you. Or, based on who is walking down the street, a retailer could instantly change a digital sign to lure them in. If you have a shop's app installed on your phone, that store could send you a coupon when you're nearby.

Verizon (VZ, Fortune 500) has already begun selling aggregated customers' location data to third parties. The carrier tracks broad categories of who passes by stores (age, race, sex) and gives that bundled information to the retailers. Those stores could then better advertise to the people that are most likely to buy their products, or they could set up shop in a part of town where their target demographic travels.

Related story: AT&T wants to bill you for everything

But carriers are now gaining the ability to go a level deeper with the information they collect. Cisco (CSCO, Fortune 500) last week unveiled Quantum, a new mobile monetization platform that enables real-time network analytics and actions.

Quantum, as well as some other solutions offered by IBM (IBM, Fortune 500) and other companies, allow carriers to know what's going on in their networks at any given time and immediately act upon that information. In other words, ads and coupons are going to become hyperlocal and even more precisely targeted.

"Network operators sit on a goldmine of data," said Kelly Ahuja, general manager of Cisco's service provider mobility group. "We're going to help them capture and apply it."

Targeted mobile advertising could be an $8 billion market in 2016, according to Ahuja.

Yet all of this has the potential to be creepy and make users feel violated. That's something mobile operators are both aware and wary of.

"We can't be casual about privacy," said Abhi Ingle, head of AT&T's (T, Fortune 500) ecosystem and innovation team. "If you go a level deeper than category-based analytics, there needs to be explicit permission given from the user."

Only about 5% of retailers currently have the interest or the ability to market to specific customers based on their location, according to Ingle. Most of what brands are interested in is more generalized information about their customers.

But in a rapidly evolving and increasingly mobile marketplace, the brands that arrive late to the location-based targeted advertising game may be left out in the cold.

First Published: February 26, 2013: 3:41 PM ET

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Instagram hits 100 million users

Instagram now has 100 million active users each month.

NEW YORK (CNNMoney)

The milestone comes just a few months after the photo-sharing company's second birthday, and less than one year since Facebook (FB) bought Instagram for $1 billion.

Co-founder Kevin Systrom penned a long blog post to commemorate the news, chronicling Instagram's modest beginnings in a chilly co-working space atop the San Francisco Bay and the journey to becoming a global phenomenon.

"Now, more than ever, people are capturing the world in real-time using Instagram—sharing images from the farthest corners of the globe," Systrom wrote. "What we see as a result is a world more connected and understood through photographs."

Systrom's post also discussed a couple who met through Instagram and began dating, the Instagram habits of small artisan businesses, and a United Nations aid worker who uses the platform to share images from refugee camps in Sudan.

"Instagram, as a tool to inspire and connect, is only as powerful as the community it is made of. For this reason, we feel extremely lucky to have the chance to build this with all of you," he wrote.

Related story: Your smartphone camera: Meet the man behind the curtain

The feel-good post focused on Instagram's successes, and it didn't mention a rough patch the company skidded through just two months ago.

In December, Instagram announced a rule change that would give the company commercial rights to user accounts and images. Users revolted, because in a worst-case scenario, the new rules would have allowed the company to sell images to outside parties.

Backlash was swift, with users vowing to dump their Instagram accounts altogether. Instagram quickly backtracked, saying that wasn't their intent, and promised to "modify specific parts" of the new terms to make its intentions clear. That softened policy went into effect in January.

Some thought the damage had already been done, with reports warning of an Instagram user exodus. At 100 million monthly actives, however, it seems many Instagram users stuck around.

First Published: February 26, 2013: 5:01 PM ET

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Gold posts best day of 2013

NEW YORK (CNNMoney)

U.S. gold futures for April delivery rose $28.90, or 1.8%, to end the day at $1,615.50 per ounce. That's the precious metal's biggest jump both in terms of points and on a percentage basis for 2013.

The rally came after gold prices fell below $1,575 an ounce last week, driven lower by speculation that the Fed could wind down its bond buying program sooner than expected.

But the chairman's remarks Tuesday reinforced the notion that U.S. monetary policy will remain accommodative, said Chris Blasi, president of Neptune Global Holdings, a boutique precious metals firm in Wilmington, Del.

"Bernanke reiterated today that the dovish sentiment is in place," he said.

In the first day of his semi-annual testimony to Congress, Bernanke said the Fed has "the technical means to unwind" its unconventional stimulus measures at the "appropriate time," though he acknowledged that the timing "is always difficult."

Related: Bernanke says spending cuts add 'significant' burden to recovery

Gold prices were also supported by concerns about renewed turmoil in Europe after elections in Italy over the weekend resulted in a potentially deadlocked government.

"Renewed market uncertainties about the sustainability of Europe's single currency may again become another plus for gold-price prospects," said Jeffrey Nichols, managing director of American Precious Metals Advisors.

Looking ahead, gold prices should continue to "grind higher" over the next few months, although there could be some "substantial pullbacks" along the way, said Blasi.

While prices are unlikely to fall back to $1,200 an ounce, Blasi acknowledged that prices will face "strong resistance" near $1,600 an ounce.

"There will be a lot of back and forth, with a bias to the upside," he said.

First Published: February 26, 2013: 5:07 PM ET

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Americans still aren't saving enough

Of those surveyed, 38% said they were saving less than last year.

NEW YORK (CNNMoney)

Only half of respondents reported good savings habits, including having a spending and/or saving plan in place, according to the Consumer Federation of America and the American Savings Education Council which conducted the survey.

While more than half of all Baby Boomers and Gen-Xers will be able to retire with enough money to cover basic retirement needs, including health care costs, a significant number are at risk of running short, according to projections by the Employee Benefit Research Institute.

The survey also found that only 49% of non-retired respondents feel they are saving enough to achieve a "desirable standard of living" in retirement.

When it came to overall household savings, the survey found there was little improvement compared to last year.

"Clearly the great recession has had a lingering effect on many Americans," said Stephen Brobeck, executive director of the Consumer Federation of America. "Millions of families have been unable to make progress in rebuilding their finances, especially their savings."

Related: Money 101 saving basics

Of those surveyed, 38% said they were saving less than last year, compared to 30% who said they were saving more than last year. Only 41% of all respondents said that they save outside of work through automatic transfers from checking to savings or investments. About two-thirds said they had sufficient emergency savings to cover unexpected expenses like car repairs or a doctor visit.

In a separate survey released earlier Monday, Bankrate reported that just 55% of Americans have more cash stowed away for hard times than they owe on their credit cards -- up from 52% two years ago.

"We know from other research that if one does not have adequate emergency savings, it's much more difficult for people to save for other purposes, either a home or retirement," said Brobeck.

Paying down credit card debt is also a key step in developing better savings habits, he said, because it's hard to save when losing cash to high interest payments.

In the Bankrate.com survey, nearly 70% of respondents making at least $75,000 a year had more savings than credit card debt, compared to 41% of those making less than $30,000.

Related: Make your money last

Less than half of low-to-moderate-income Americans even have a savings or money market account, Brobeck said, citing a CFA analysis of Federal Reserve data. "But having an account if you have a relatively low or moderate income is the most important thing you need to do," he said.

As part of America Saves Week, more than 1,300 national, state and local financial and nonprofit organizations are encouraging Americans to boost their savings through simple steps, such as opening a savings account, setting up automatic transfers and increasing their 401(k) contributions.

First Published: February 25, 2013: 3:47 PM ET

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Sony's incredibly thin Xperia Tablet Z tablet

BARCELONA, Spain (CNNMoney)

If you were to pick up Sony's (SNE) new 10.1-inch tablet and not look at it, you'd think you were holding a 7-inch device in your hand. It's that light.

The Xperia Tablet Z is just 0.27 inches thick and 1.09 pounds. That's 27% thinner and 24% lighter than Apple's (AAPL, Fortune 500) fourth-generation iPad.

Announced last month and on display for the first time at Mobile World Congress, which began Monday, the Android-powered Tablet Z packs a decent amount of punch for its size. It sports a 1.5 GHz quad-core processor, 2 gigabytes of RAM, and a full HD resolution of 1920x1080.

But on internal components alone, the Tablet Z wouldn't be enough to make anyone take notice. It's by no means the fastest tablet on the market -- its Snapdragon S4 Pro chipset from Qualcomm (QCOM, Fortune 500) is last year's model. Its display isn't the most pixel-dense, but it's suitable enough for 2013.

The appeal of this device only becomes apparent when you hold it and see it. After a few brief moments messing around with the Xperia Tablet Z, I found myself excited about a new tablet for the first time in awhile.

Related story: Samsung stuffs a phone in new Galaxy Note 8.0 tablet

It's not just that it's thin and light, but the Tablet Z is constructed in such a way that the lack of mass doesn't make the device feel cheap, like a toy. It still feels like a premium tablet.

Oh, and it's waterproof.

Yet there are a couple of drawbacks to consider when thinking about purchasing a Tablet Z. Sony's custom user interface is inferior to Google's (GOOG, Fortune 500) stock Android UI, and it annoyingly pushes many of Sony's custom apps and services. The Tablet Z does sport Android 4.1, but Sony only committed to delivering the latest 4.2 update sometime "post-launch." Could be weeks. Could be months.

Related story: HP takes cautious step into Android waters with new tablet

The tablet also has a premium price tag. At $499 for the 16 GB model and $599 for the 32 GB model, it is as expensive as the iPad and Nexus 10. Apple and Google will likely release updated tablets later this year with all the latest bells and whistles, but it will likely be another year -- at least -- before we see a Tablet Z successor.

The Sony Xperia Tablet Z is a device worth watching when it goes on sale later this year. It might just be the most impressive new device at the this year's Mobile World Congress.

First Published: February 25, 2013: 3:32 PM ET

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HP sells off the last scraps of Palm: webOS

HP bought Palm for its webOS, but it left the software for dead after HP killed off its TouchPad tablet and webOS smartphone line.

NEW YORK (CNNMoney)

LG is buying all of the assets associated with webOS: the source code, engineering talent, patents, and more. It plans to use the software in its smart TVs. Financial terms of the deal were not disclosed, though a press release said neither company expects the deal "to have a material impact" on its financials.

HP (HPQ, Fortune 500) certainly won't miss webOS, which it acquired in 2010 when it bought the ailing Palm for $1.2 billion. Palm's webOS was innovative and well-respected, but its Pre and Pixi smartphones failed to take off with buyers.

HP swore it would be "doubling down" on webOS, but that's not what happened. Instead, webOS fell prey to issues at HP during the troubled reign of Leo Apotheker. In August 2011, a few months after taking the CEO, Apotheker made massive changes that included bad news for webOS.

HP killed off its webOS-based TouchPad tablet after just 49 days on the market. The company also pulled the plug on its entire webOS smartphone line, saying none of its webOS products reached the company's internal sales targets.

That appeared to kill webOS altogether, but the LG purchase revives the platform -- though not necessarily as mobile software. In the press release announcing the deal, LG focused on using webOS only in its Internet-connected TVs. WebOS staffers will join a new "LG Silicon Valley Lab," which will focus on research and development.

First Published: February 25, 2013: 5:23 PM ET

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Stocks: Budget cuts loom

Click the chart for more stock market data .

NEW YORK (CNNMoney)

If lawmakers don't come up with a solution by March 1, the budgets of most federal government programs and agencies will shrink. This could mean furloughs for federal workers, smaller unemployment benefits and even longer wait times at the airport because of fewer workers available to clear passengers.

The cuts aren't expected to come right away, and experts expect agencies to do all they can to delay them.

Beyond the big news out of Washington, investors will get a feel for the U.S. economy's health throughout the week.

The second estimate of U.S. gross domestic product for the fourth quarter of 2012 is due out on Thursday. The first estimate showed that GDP, the broadest measure of the nation's economic growth, contracted for the first time in more than three years as the government cut spending and businesses drew down inventory.

Related: Spending cuts: What you need to know

The economic health of Americans will also be in focus, with consumer confidence, auto sales and Michigan sentiment due out throughout the week. It's been a tough start to the year for consumers, as the payroll tax, higher gas prices and a delay in income tax refunds have simultaneously been hitting wallets.

A survey of shoppers conducted by the National Retail Federation found that three-quarters of respondents were cutting back to cope with the tax changes this year. Half of the people polled said they planned to spend less on overall purchases, about a third said they would reduce dining out, while about a quarter said they would reduce entertainment, vacation and travel plans.

Wal-Mart (WMT, Fortune 500), the nation's largest retailer, said its sales slowed in late January and early February because shoppers were feeling the pain.

Investors will get to see if other retailers were seeing the same pattern. So far, many retailers have reported healthy sales in January, a sign that not all consumers may be worried about higher taxes and a still stagnant economy just yet.

Several retailers will also report corporate earnings this week, including Macy's (M, Fortune 500), Home Depot, (HD, Fortune 500) Best Buy, (BBY, Fortune 500) Kohls (KSS, Fortune 500), Barnes & Noble (BKS, Fortune 500) and Gap Inc (GPS, Fortune 500).

Related: Fear & Greed Index

Data on the housing market is also expected, with the Case-Shiller 20 city index, new home sales and construction spending on tap.

Just over half of economists surveyed by CNNMoney identified a housing recovery as the primary driver of economic growth this year. In 2012, home sales rebounded to the strongest level in five years, as home building bounced back to levels not seen since early in the recession. The combination of near record low mortgage rates, rising home prices and a drop in foreclosures have lured buyers back to the market.

Last week was the worst week of the year for the S&P 500 and Nasdaq , but the Dow Jones Industrial Average managed to end the week with a slight gain. The S&P and Nasdaq lost 0.3% and 1% respectively, while the Dow gained 0.1%.

First Published: February 24, 2013: 11:36 AM ET

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Samsung stuffs a phone in new Galaxy Note 8.0 tablet

NEW YORK (CNNMoney)

It runs Android 4.1, has a 1.6 GHz quad-core CPU, 2 gigabytes of RAM, and an 8-inch, 1280 x 800 display that you can control with Samsung's S-Pen stylus. But on the international version of the device, there's something quite strange lurking near the top.
Yes, it's an earpiece. Yes, it's meant for you to make calls. Yes, Samsung expects you to hold an 8-inch tablet up to your face.

Samsung expects you to hold an 8-inch tablet up to your face.

The decision to imbue an 8-inch tablet with a phone very much seems like a reaction to the success of Samsung's Galaxy Note phones, which checked in at 5.3 and 5.5-inches, opening up some of the functionality of tablets. (Ugh, phablets).

I joked before about the day when we'd see a 7-inch phone. Turns out we got an 8-inch one sooner than we thought. But it is worth mentioning that it's undecided if a phone-enabled version of the Galaxy Note 8.0 will see the light of day in the U.S.

The device itself is suitably thin and light (more or less comparable to the iPad mini, it's closest known competition), and is responsive enough for most tasks. The stylus works pretty well, introducing a new feature that lets you activate preview panes of apps such as email and Flipboard, without ever touching the the screen (instead, you hover above the area you want to preview).

Related: Samsung overtakes Apple in 'smart connected devices'

But aside from the stylus, it also has a couple of tricks the iPad Mini does not. For starters, It has an IR remote which lets you enter the codes for most television sets and control your TV with your tablet, much like you would with any other remote. But sweetening the deal is the use of the media guide software from Peel Technologies, allowing you to seek out and directly jump to specific shows and movies without resorting to the channel up/down buttons.

It also supports a dual-window mode, where you can run two apps side by side, and without the loss of functionality. For now it only works with a handful of optimized apps, but includes a calendar app, a note-taking app, Chrome, Gmail, YouTube and more (adding up to more than 20 in all).

And while it's expected to arrive sometime in the next few months, there was not so much as a whisper about price. Judging from the year-old guts inside the Galaxy Note 8.0, it's possible Samsung made the necessary moves to offer it at a mainstream price point. If it falls anywhere under the $330 price tag of Apple's iPad Mini, it might just have what it takes to steal some of Cupertino's thunder.

But why...why does it have to have a built-in phone?

First Published: February 23, 2013: 9:57 PM ET

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Japan to tap Kuroda as next central bank governor

Haruhiko Kuroda is likely to be named the BoJ's next governor.

HONG KONG (CNNMoney)

After weeks of speculation, multiple Japanese media reports indicate that Prime Minister Shinzo Abe has chosen Asian Development Bank President Haruhiko Kuroda to be the BoJ's next governor.

Kuroda was seen as a likely candidate due to his experience in international finance, and monetary prescriptions that largely mirror those of Abe.

Abe based his election campaign last year on a commitment to take radical steps to end years of deflation, combining promises of looser monetary policy with pledges of fiscal stimulus.

The Japanese yen has already weakened significantly in response to policy changes, falling almost 21% against the U.S. dollar since the beginning of October and driving up the stock market. It has also lost ground against the euro and some Asian peers, raising concerns that Japan may be engaged in a race to the bottom to promote exports.

The yen weakened further Monday on news of Kuroda's likely nomination, falling to 94.3 against the U.S. dollar. The Nikkei, meanwhile, gained 2% in early trading.

Weak currency cheapens the price of a country's exports, making them more attractive to international buyers by undercutting competitors. Japan's exporters have cheered the yen's decline, and Abe's popularity has skyrocketed in recent weeks.

Related: Japan's economy contracts for third straight quarter

Kuroda appears willing to follow through on Abe's policies, telling the Wall Street Journal earlier this month that Japan has "plenty of room for monetary easing."

"If necessary and if appropriate, of course additional monetary easing this year could be justified," he said.

Masaaki Shirakawa, the current BoJ head, has announced he will stand down on March 19, several weeks before his term was due to end. The official nomination of Kuroda, along with two deputies, is expected later this week.

Shirakawa agreed last month to double the bank's inflation target and adopt open-ended purchases of government bonds but is opposed to some of the more extreme proposals considered by the bank and has been accused of doing too little, too late.

Related: Don't fight the BoJ

By way of contrast, Kuroda told the Journal that the BoJ must move aggressively to meet its 2% inflation target.

"You cannot wait for five years, 10 years or 15 years. You have to achieve the target within a reasonably short time period," he said.

The political pressure on the Bank of Japan has caused consternation in the international community, with some lobbing charges of currency manipulation in Japan's direction.

Tokyo has rejected those claims, saying its policies are aimed at the economy not the yen, but the G7 group of leading industrial nations - including Japan - felt compelled to issue a rare statement earlier this month aimed at cooling talk of a currency war.

Kuroda, for one, seems undeterred, telling the Journal that the yen's weakening is good for the global economy.

"From a global point of view, is it good for the Japanese economy to continue to suffer from deflation...and low growth?" he asked. "That is not good for Japan, not good for the world economy."

First Published: February 24, 2013: 10:16 PM ET

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Judge rules against Apple in Einhorn cash fight

NEW YORK (CNNMoney)

Einhorn's Greenlight Capital filed a lawsuit earlier this month seeking to "unbundle" a number of shareholder proposals that would have been voted on as a group, including one that would have made it difficult for the company to issue preferred stock. The vote on this, known as Proposal No. 2, was scheduled to be voted on at Apple's annual shareholder meeting on February 27.

Judge Richard Sullivan of the Southern District of New York ruled that bundling four different items in one proposal violates Securities and Exchange Commission regulations.

"Given the disparate, material nature of the items in Proposal No. 2, it is probable that Apple has improperly bundled four 'separate matters' for a single vote," the ruling states.

Apple (AAPL, Fortune 500)shares rose 1% on Friday. News of the ruling came just a few minutes before the market closed.

Einhorn has launched an activist campaign to get Apple to unlock some of its $137 billion in cash by issuing preferred stock, or iPrefs, as he calls them. He argues that allowing the cash to sit idle on Apple's balance sheet is bad for the company and its shareholders.

A spokesman for Greenlight said that the ruling "is a significant win for all Apple shareholders and for good corporate governance" and added that "we look forward to Apple's evaluation of our iPref idea and we encourage fellow shareholders to urge Apple to unlock the significant value residing on its balance sheet."

Related: Einhorn takes aim at Apple's cash hoard

But another big Apple shareholder was not pleased with the judge's ruling.

California's powerful pension fund, CalPERS, supported Apple's proposal, which it said would give shareholders more voting power over the issuance of Apple stock.

"We encourage Apple to reintroduce these measures as soon as is practical so that all investors can be heard," said Anne Simpson, a CalPERS senior portfolio manager and director of global governance. "We applaud the company's commitment to strengthening shareholder rights."

Apple has said it is reviewing Einhorn's proposal, but CEO Tim Cook has called the lawsuit a "silly sideshow."

Spokespeople for Apple could not immediately be reached for comment.

First Published: February 22, 2013: 5:01 PM ET

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Moody's downgrades United Kingdom from AAA

God save the AAA rating.

NEW YORK (CNNMoney)

The U.K. was knocked down one notch to Aa1, with its ratings outlook at stable. Moody's said the key drivers of the downgrade included the country's rising debt burden and tepid growth outlook over the next few years.

"[A]lthough the U.K.'s debt-servicing capacity remains very strong and very capable of withstanding further adverse economic and financial shocks, it does not at present possess the extraordinary resilience common to other AAA-rated issuers," Moody's said.

The U.K. had held AAA status since Moody's first began rating the country in 1978.

In December, the U.K.'s budget monitor projected that the country's economy would grow by just 1.3% this year. The government has been pushing a much-criticized austerity program, and finance minister George Osbourne said he remained committed to those efforts, even after the downgrade.

"This is a stark reminder of the debt problems that Britain faces and the clearest possible warning to anyone who thinks we can run away from dealing with those problems," he said. "Far from weakening our resolve to deal with our debts, this should redouble our resolve."

Related: U.K. risks new recession

The British government has said its belt-tightening will have to continue until 2018.

In announcing the downgrade, Moody's said it expects the U.K.'s debt to peak at 96% of GDP in 2016, up from around 90% today.

A year ago, Moody's switched the outlook on the U.K.'s AAA rating to negative, in a prelude to Friday's downgrade. At the same time, the firm cut the ratings of half a dozen European countries.

The other major rating agencies, Fitch and Standard & Poor's, still have the U.K. rated AAA, though with negative outlooks.

Elsewhere in Europe, France lost its AAA rating from Moody's in November, after a similar downgrade from S&P in January.

The United States maintains its AAA rating from Moody's and Fitch, though it was downgraded by S&P in August 2011 following the debt ceiling standoff in Washington.

Steven Englander, a foreign exchange strategist with Citigroup (C, Fortune 500), said in a research note following the downgrade that the move was unlikely to raise borrowing costs for the U.K., as bond yields in the United States, France and Japan had remained stable following similar downgrades. But it increases pressure on the country to pursue growth by weakening the pound, he added.

"[W]hile by itself the announcement merely accelerates what was expected to happen at some point, the need for weakness [in the British pound] will become more apparent to policymakers and investors," Englander said.

Among Europe's other major economies, Germany, Switzerland and the Netherlands maintain their AAA ratings from Moody's. France sits at Aa1, while Italy is down at Baa2 with Spain at Baa3.

First Published: February 22, 2013: 5:01 PM ET

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Samsung stuffs a phone in new Galaxy Note 8.0 tablet

t-ts-samsung-galaxy-note-8_00000111.jpg

NEW YORK (CNNMoney)

It runs Android 4.1, has a 1.6 GHz quad-core CPU, 2 gigabytes of RAM, and an 8-inch, 1280 x 800 display that you can control with Samsung's S-Pen stylus. But on the international version of the device, there's something quite strange lurking near the top.
Yes, it's an earpiece. Yes, it's meant for you to make calls. Yes, Samsung expects you to hold an 8-inch tablet up to your face.

Samsung expects you to hold an 8-inch tablet up to your face.

The decision to imbue an 8-inch tablet with a phone very much seems like a reaction to the success of Samsung's Galaxy Note phones, which checked in at 5.3 and 5.5-inches, opening up some of the functionality of tablets. (Ugh, phablets).

I joked before about the day when we'd see a 7-inch phone. Turns out we got an 8-inch one sooner than we thought. But it is worth mentioning that it's undecided if a phone-enabled version of the Galaxy Note 8.0 will see the light of day in the U.S.

The device itself is suitably thin and light (more or less comparable to the iPad mini, it's closest known competition), and is responsive enough for most tasks. The stylus works pretty well, introducing a new feature that lets you activate preview panes of apps such as email and Flipboard, without ever touching the the screen (instead, you hover above the area you want to preview).

Related: Samsung overtakes Apple in 'smart connected devices'

But aside from the stylus, it also has a couple of tricks the iPad Mini does not. For starters, It has an IR remote which lets you enter the codes for most television sets and control your TV with your tablet, much like you would with any other remote. But sweetening the deal is the use of the media guide software from Peel Technologies, allowing you to seek out and directly jump to specific shows and movies without resorting to the channel up/down buttons.

It also supports a dual-window mode, where you can run two apps side by side, and without the loss of functionality. For now it only works with a handful of optimized apps, but includes a calendar app, a note-taking app, Chrome, Gmail, YouTube and more (adding up to more than 20 in all).

And while it's expected to arrive sometime in the next few months, there was not so much as a whisper about price. Judging from the year-old guts inside the Galaxy Note 8.0, it's possible Samsung made the necessary moves to offer it at a mainstream price point. If it falls anywhere under the $330 price tag of Apple's iPad Mini, it might just have what it takes to steal some of Cupertino's thunder.

But why...why does it have to have a built-in phone?

First Published: February 23, 2013: 9:57 PM ET

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Judge rules against Apple in Einhorn cash fight

NEW YORK (CNNMoney)

Einhorn's Greenlight Capital filed a lawsuit earlier this month seeking to "unbundle" a number of shareholder proposals that would have been voted on as a group, including one that would have made it difficult for the company to issue preferred stock. The vote on this, known as Proposal No. 2, was scheduled to be voted on at Apple's annual shareholder meeting on February 27.

Judge Richard Sullivan of the Southern District of New York ruled that bundling four different items in one proposal violates Securities and Exchange Commission regulations.

"Given the disparate, material nature of the items in Proposal No. 2, it is probable that Apple has improperly bundled four 'separate matters' for a single vote," the ruling states.

Apple (AAPL, Fortune 500)shares rose 1% on Friday. News of the ruling came just a few minutes before the market closed.

Einhorn has launched an activist campaign to get Apple to unlock some of its $137 billion in cash by issuing preferred stock, or iPrefs, as he calls them. He argues that allowing the cash to sit idle on Apple's balance sheet is bad for the company and its shareholders.

A spokesman for Greenlight said that the ruling "is a significant win for all Apple shareholders and for good corporate governance" and added that "we look forward to Apple's evaluation of our iPref idea and we encourage fellow shareholders to urge Apple to unlock the significant value residing on its balance sheet."

Related: Einhorn takes aim at Apple's cash hoard

But another big Apple shareholder was not pleased with the judge's ruling.

California's powerful pension fund, CalPERS, supported Apple's proposal, which it said would give shareholders more voting power over the issuance of Apple stock.

"We encourage Apple to reintroduce these measures as soon as is practical so that all investors can be heard," said Anne Simpson, a CalPERS senior portfolio manager and director of global governance. "We applaud the company's commitment to strengthening shareholder rights."

Apple has said it is reviewing Einhorn's proposal, but CEO Tim Cook has called the lawsuit a "silly sideshow."

Spokespeople for Apple could not immediately be reached for comment.

First Published: February 22, 2013: 5:01 PM ET

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Fed officials: Don't worry if we lose money

NEW YORK (CNNMoney)

But that's okay, Fed officials say.

After years of record profits, the Fed is likely to be saddled with losses starting in 2017 or 2018, economists predict in a paper that was presented Friday at the U.S. Monetary Policy Forum, a New York conference organized by the University of Chicago Booth School of Business.

Here's the scenario they think will play out: As the economy improves, the Fed will eventually tighten monetary policy. The central bank will stop buying mortgage-backed securities and Treasuries by the end of this year, they believe, and start raising interest rates in 2015.

Eventually, the Fed will have to start selling off the massive collection of bonds it acquired in its stimulus efforts.

And when that time comes, even the Fed admits that it will probably incur losses.

Inside the Fed's finances

Unlike most government agencies, the Federal Reserve funds itself. Its expenses are not paid for in by U.S. federal budget.

Each year after paying its own bills, the central bank hands over all its remaining profit to the Treasury Department. Most of the money comes from interest earned on holdings like Treasury bonds and other debt.

Those payments have ballooned in recent years. The Fed is earning huge profits from the large bond portfolio it amassed (and continues to amass) during its stimulus efforts.

In the decade preceding the Great Recession, the Fed paid out an average of $25 billion a year to the Treasury. In the last three years, its remittances have averaged $81 billion.

Based on those numbers, you could call the Fed the most profitable bank in the world. It's generating more income than America's top five banks -- JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500), Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and Goldman Sachs (GS, Fortune 500) -- combined.

Once the economy improves to its liking -- which could still be years away -- the Fed will have to start shrinking its portfolio, to ward off rapid inflation.

As the economy gets better, the Fed will raise interest rates. At the same time, bond prices will probably fall as the Fed sells off massive amounts of them.

That means the central bank is likely to lose money.

That's not necessarily a problem. A relatively new accounting rule would allow the Fed to pay for its operations and make interest payments basically on credit, deferring its losses and paying them off later in profitable years.

The situation could easily become a public relations nightmare, though -- especially in the current political environment.

"We're in a period where the attacks on the Federal Reserve system are the worst I've seen in 40 years," said Frederic Mishkin, a former Fed governor who is now a professor at Columbia University.

"In any year where the Fed is not giving remittances back to the Treasury, this is going to come up big time in Congress," he added.

St. Louis Fed President James Bullard also calls it a "recipe for political problems." During the same period that the Fed will incur losses, the government will be paying billions of dollars in interest to foreign governments.

The Fed seems to be trying to get ahead of the PR blow-up.

The central bank put out a research paper on the topic last month, and minutes released earlier this week show the issue was discussed at the Fed's January meeting.

Since then, several officials have spoken about it quite openly.

"There is a chance that we could go through a period of time in which our income falls, and we could even take losses," said Janet Yellen, vice-chair of the Federal Reserve Board, in a speech last week.

Her colleague Jerome Powell, a Fed governor, reiterated that point Friday.

Some Fed watchers expect Fed Chairman Ben Bernanke to discuss the topic when he speaks before Congress next week in his semi-annual testimony.

He's stuck in a "damned if you do, damned if you don't" position. If the economy improves, great -- but when it does, the Fed has big losses and a PR crisis to look forward to.

First Published: February 22, 2013: 2:27 PM ET

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Moody's downgrades United Kingdom from AAA

God save the AAA rating.

NEW YORK (CNNMoney)

The U.K. was knocked down one notch to Aa1, with its ratings outlook at stable. Moody's said the key drivers of the downgrade included the country's rising debt burden and tepid growth outlook over the next few years.

"[A]lthough the U.K.'s debt-servicing capacity remains very strong and very capable of withstanding further adverse economic and financial shocks, it does not at present possess the extraordinary resilience common to other AAA-rated issuers," Moody's said.

The U.K. had held AAA status since Moody's first began rating the country in 1978.

In December, the U.K.'s budget monitor projected that the country's economy would grow by just 1.3% this year. The government has been pushing a much-criticized austerity program, and finance minister George Osbourne said he remained committed to those efforts, even after the downgrade.

"This is a stark reminder of the debt problems that Britain faces and the clearest possible warning to anyone who thinks we can run away from dealing with those problems," he said. "Far from weakening our resolve to deal with our debts, this should redouble our resolve."

Related: U.K. risks new recession

The British government has said its belt-tightening will have to continue until 2018.

In announcing the downgrade, Moody's said it expects the U.K.'s debt to peak at 96% of GDP in 2016, up from around 90% today.

A year ago, Moody's switched the outlook on the U.K.'s AAA rating to negative, in a prelude to Friday's downgrade. At the same time, the firm cut the ratings of half a dozen European countries.

The other major rating agencies, Fitch and Standard & Poor's, still have the U.K. rated AAA, though with negative outlooks.

Elsewhere in Europe, France lost its AAA rating from Moody's in November, after a similar downgrade from S&P in January.

The United States maintains its AAA rating from Moody's and Fitch, though it was downgraded by S&P in August 2011 following the debt ceiling standoff in Washington.

Steven Englander, a foreign exchange strategist with Citigroup (C, Fortune 500), said in a research note following the downgrade that the move was unlikely to raise borrowing costs for the U.K., as bond yields in the United States, France and Japan had remained stable following similar downgrades. But it increases pressure on the country to pursue growth by weakening the pound, he added.

"[W]hile by itself the announcement merely accelerates what was expected to happen at some point, the need for weakness [in the British pound] will become more apparent to policymakers and investors," Englander said.

Among Europe's other major economies, Germany, Switzerland and the Netherlands maintain their AAA ratings from Moody's. France sits at Aa1, while Italy is down at Baa2 with Spain at Baa3.

First Published: February 22, 2013: 5:01 PM ET

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Tesla stock tumbles 9%

Click on chart for more stock data.

NEW YORK (CNNMoney)

But he couldn't overcome criticism from investors Thursday who drove the stock sharply lower after the company posted a bigger than expected loss.

Shares of Tesla (TSLA) ended about 9% lower, their biggest one-day drop in more than a year, after the company announced a $75 million loss.

During a conference call on Wednesday, Musk tried to balance the earnings miss with some good news, saying Tesla had increased production and decreased capital expenditures which, he said, should allow it to generate a slight profit for the current quarter.

"Due to an enormous amount of hard work by a really dedicated group of people at Tesla, we're going to be profitable, and I think that's a pretty big deal," Musk said.

But comments about profit margins spooked some investors.

Analysts said Thursday that the real problem for Tesla are growing concerns that glowing reviews for its products and heady expectations for the upscale electric car market may have lifted its stock price too high, too fast.

"Investors are now beginning to focus on what sustainable demand is beyond 2013. The question remains: how big is the addressable market?" said Adam Jonas, auto analyst for Morgan Stanley, in a note on Thursday.

Jonas has a "buy" recommendation on Tesla.

Other analysts aren't as sure, even if they say Tesla's financial report had as much good news as bad.

Ben Schuman of Pacific Crest Securities has a "hold" recommendation on the stock, with an estimated value about $5 below its current price, even after Thursday's sell-off.

"Frankly the stock had reflected a lot of optimism heading into the earnings call. Much of the value is based upon expectations for growth for the company," he said. "It's going to be more volatile than a traditional auto stock, that's for sure. It's more of a tech stock." He said the company has some of the highest short interest of any mid-cap company, meaning many investors are betting against it.

Tesla would not comment on Thursday's stock move.

Related: Test Drive: DC to Boston in a Tesla Model S

Musk and Tesla have been in the headlines recently after a negative review of the new Model S in the New York Times earlier this month sent shares sinking.

Writer John Broder said the battery in his Model S drained more quickly than expected in cold weather during a recent trip up the East Coast, stranding him in Connecticut and forcing him to get towed to the nearest charging station.

Musk fired back, alleging that Broder falsified aspects of the article. The review came at a sensitive time for Tesla, which has struggled to hit delivery targets amid continuing challenges with its technology.

He was more subdued during Wednesday's analyst call, acknowledging that "for a long-distance trip right now, depending upon where you are in the country, a little bit of extra planning is needed."

"We have a bunch more superchargers that are going in to the East Coast and across the country," Musk said. "We really want to get to the point where you don't have to think about it, and I think we're very close to that point."

The Model S has met critical acclaim elsewhere in the media, garnering "Car of the Year" honors in 2012 from both Motor Trend and Automobile Magazine.

First Published: February 21, 2013: 3:00 PM ET

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Wal-Mart: Small businesses are hurting, too

Wal-Mart said consumers aren't the only ones tightening their wallets. Small businesses that shop at its Sam's Club warehouse stores also are buying less as payroll taxes and higher gas prices take a toll.

NEW YORK (CNNMoney)

Small businesses frequently flock to its Sam's Club warehouse stores to buy items like paper, staplers, snacks and coffee machines for their offices at a discount.

But firms have become more cautious about how much they're buying at Sam's Club, according to Wal-Mart (WMT, Fortune 500), which reported quarterly results Thursday.

"We recognize the mounting economic concern from both small businesses and consumers," said Sam's Club CEO Rosalind Brewer in a statement. "Recent traffic patterns of our business members indicate that they are more deliberate in their spending due to macroeconomic factors."

Related: Wal-Mart warns of soft start to year

When consumers tighten their wallets, small businesses often follow suit, said Rhett Buttle, government affairs director at Small Business Majority, an advocacy group.

Wal-Mart (WMT, Fortune 500)'s sales growth slowed last quarter as taxes and gas prices weighed on shoppers' minds.

At Sam's Club, sales at stores open at least a year increased just 2.3% in the fourth quarter, down from 5.4% a year earlier. Sam's Club has more than 47 million members, about half of which are small businesses and entrepreneurs.

Related: 7 spending cuts you'll really feel

Experts agreed that small businesses are on edge.

Economic uncertainty and the deficit are top concern of small firms, said Molly Brogan, spokeswoman for the National Small Business Association, an advocacy group.

Business owners are worried about the state of consumer spending and health-care costs, said Cynthia Magnuson, a spokesperson with the National Federation of Independent Business, which has 350,000 members.

"We're not surprised that small businesses are buying less," said Magnuson. "Our members tell us that if their business isn't picking up, and their products aren't flying off the shelves, then they won't be spending more money on supplies and other purchases."

First Published: February 21, 2013: 1:30 PM ET

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HP profit falls 16%, beating super-low expectations

HP's first-quarter earnings were weak, but expectations are so low that the figures came in above analysts' estimates.

NEW YORK (CNNMoney)

Sales fell in every HP business unit last quarter -- save one measly 1% gain in its relatively tiny financial services division.

HP is trying hard to be about more than just PCs and printers, which are quickly becoming obsolete. But the path to reinvention has been slow.

"HP's turnaround will not be linear," CEO Meg Whitman warned on a post-earnings conference call. It's a sentiment she's repeated often.

HP hasn't been able to make major inroads in the mobile market, which is dominated by Apple (AAPL, Fortune 500) and Android developer Google (GOOG, Fortune 500). Revenue in HP's services business fell 7%, its enterprise group declined 4%, and software sales slipped 2% in the company's first quarter, which ended in January.

Whitman discussed "tectonic shifts" in the personal device market, citing those issues as a major focus for HP.

Meanwhile HP's two legacy businesses continued to suffer: Sales of consumer PCs fell by 13% over the year, and the printing unit fell by 5%.

If there's good news, it's is that the company's sales declines weren't as steep as they had been in previous quarters. Wall Street analysts were expecting worse, and shares rose 5.7% in after-hours trading.

Overall, HP's (HPQ, Fortune 500) first-quarter profit fell 16% over the same period a year ago to $1.2 billion. Sales came in at $28.4 billion, down 6% from a year ago.

For 2013, HP expects it will earn between $3.40 and $3.60 per share. That was slightly above estimates from analysts polled by Thomson Reuters, who were expecting outlook of $3.32 a share.

Despite HP beating super-low expectations, it's hardly a strong start for 2013, which is shaping up to be another tough year for Meg Whitman. She's held the CEO role for nearly 18 months, and she has continued to preach patience. She has repeatedly said that HP is on a five-year path to recovery.

Related story: HP to limit student labor in China

Whitman has faced a lot of setbacks recently. A host of issues plagued the company last year: shockingly low PC sales, big dives in sales and profit, and massive writedowns.

In the fourth quarter HP was forced to write down $8.8 billion of the value of Autonomy, the British software company it bought in 2011, after discovering that Autonomy misrepresented its finances.

First Published: February 21, 2013: 4:47 PM ET

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New York Times looks to sell Boston Globe

Boston Globe for sale.

NEW YORK (CNNMoney)

The firm has hired Evercore Partners to lead the search for a buyer and manage the sale.

New York Times CEO Mark Thompson said the company is "proud of our association" with the Globe, as well as Worcester Telegram & Gazette and their related digital properties, but added that based on the "differences between these businesses and The New York Times, we believe that a sale is in the best long-term interests of these properties and the employees who work for them as well as in the best interests of our shareholders."

Related: Meredith will likely need help in a Time Inc. deal

The Times' search for a buyer comes less than a year after it shed About.com to IAC/Interactive Corp. for $300 million.

The Times has been looking to get rid of the Globe for years, and even threatened to close the newspaper in 2009 due to issues with labor unions. The company purchased the newspaper in 1991 for $1.1 billion.

In addition to the Globe, the company still owns the International Herald Tribune.

Shares of New York Times (NYT) spiked almost 1.5% initially on the news, but finished the day down 0.4%.

In other publishing news, the parent company of Reader's Digest magazine, RDA Holding Co., filed for bankruptcy earlier this week as part of a financial restructuring move that includes shrinking its $465 million debt.

And earlier this month, Fortune reported that Time Warner (TWX, Fortune 500), the parent company of CNNMoney.com, was in talks with Meredith Corp. (MDP) to separate itself from Time Inc., possibly selling such publications as People and InStyle to the Des Moines-based publisher of Family Circle.

First Published: February 20, 2013: 4:58 PM ET

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Americans in love-hate relationship with payday loans

Many borrowers say payday loans take advantage of them, but most would use one again, Pew found.

NEW YORK (CNNMoney)

Payday loans are advertised as short-term credit lines, typically extended for two weeks to help consumers get through to their next paycheck.

Each year, nearly 12 million borrowers take out payday loans averaging $375 each. Yet, only 14% can afford to repay the $430 in principal and fees owed after two weeks, according to a Pew Charitable Trusts report based on interviews with more than 700 borrowers.

Instead, many borrowers find the $55 fee needed to renew the loan for another two weeks to be much more affordable. For the average borrower that leads to a five-month cycle of debt where they end up owing a total of $520 in fees, plus the principal on the loan, Pew found in a separate report issued last year.

Related: Debt collection horror stories

Payday loans are often advertised as a convenient source of emergency cash, but most borrowers say they use the money for recurring expenses like rent -- with 86% of borrowers saying they have trouble covering monthly bills at least some of the time. To get out of this debt trap and repay their loans, 41% of borrowers have taken out another loan, sold or pawned possessions, used a tax refund or borrowed money from friends or family.

Because of the excessive fees and how long it takes to get out of debt, over half of borrowers say that payday loans "take advantage of borrowers." And 72% said more regulation of the industry is needed. While the government's Consumer Financial Protection Bureau now has jurisdiction over payday lenders -- meaning it can audit companies and create new rules for the industry -- the agency hasn't publicly announced any enforcement efforts yet.

Despite all the criticism, many borrowers give payday lenders high marks for customer service, and 48% of borrowers think payday loans help borrowers more than they hurt them -- compared to 41% who said payday loans mostly hurt borrowers and 8% who said they help and hurt people equally.

"Payday borrowers' experiences -- receiving credit to cover expenses but then ending up spending far more than suggested by the loan's two-week price tag -- lead to complicated and conflicted feelings," the report stated.

Related: A startup tries to fix payday lending

More than half of borrowers said payday loans relieve stress when they're in need of quick cash and three in five borrowers would likely use them again. In fact, 37% of borrowers said they are so desperate they would take out a payday loan no matter how bad the terms are, and nearly half of respondents in "fairly bad" or "very bad" financial situations would do this.

"These borrowers accept an unaffordable loan for the simple reason that it allows them to stay solvent for two more weeks, regardless of cost," the report found.

A payday loan may seem like the only option out there for someone who is desperate for cash, but it's not, said Nick Bourke, a Pew project director. Alternatives include credit cards and home equity loans. While these options aren't always ideal, they can be more affordable than payday loans.

And for many consumers, it's just a matter of reeling in spending. About 81% of borrowers said they would cut back on their spending on items like clothing and food if they weren't able to take out a payday loan, Pew's previous report found.

First Published: February 20, 2013: 5:08 PM ET

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Tesla posts loss, claims profits are in sight

Click the chart for more info.

NEW YORK (CNNMoney)

Tesla (TSLA) reported a loss of roughly $75 million for the fourth quarter on Wednesday, or 65 cents a share, wider than analysts had predicted. Sales came in slightly ahead of estimates at $306 million, but that wasn't enough to keep shares from sinking nearly 6% in after-hours trading.

Analysts surveyed by Thomson Reuters projected that the company would post $298 million in sales and a loss of 53 cents a share.

Tesla executives struck an optimistic note Wednesday, however, saying the company expects to generate a slight profit for the current quarter, with production improving and capital expenditures decreasing.

"Due to an enormous amount of hard work by a really dedicated group of people at Tesla, we're going to be profitable, and I think that's a pretty big deal," CEO Elon Musk said in a call with analysts.

Related: Test Drive: DC to Boston in a Tesla Model S

Tesla has "concluded the majority of our investment" in its factory and in the tooling of its signature Model S, an all-electric plug-in luxury car, executives said in a letter to shareholders Wednesday.

"The production line is in place, so I think they're going to concentrate on execution and profits as they progress toward their next-generation car in the next few years," said Ben Schulman, an analyst with Pacific Crest Securities.

Analysts expect Tesla to post a modest full-year profit in 2013.

Tesla has been in the headlines recently after a negative review of its new Model S in the New York Times earlier this month sent shares sinking.

Writer John Broder said the battery in his Model S drained more quickly than expected in cold weather during a recent trip up the East Coast, forcing him to turn down the heat in the car and, eventually, get towed to the nearest charging station.

Musk fired back, alleging that Broder falsified aspects of the article. The review came at a sensitive time for Tesla, which has struggled to hit delivery targets amid continuing challenges with its technology.

Musk was more subdued during Wednesday's analyst call, acknowledging that "for a long-distance trip right now, depending upon where you are in the country, a little bit of extra planning is needed."

"We have a bunch more superchargers that are going in to the East Coast and across the country," Musk said. "We really want to get to the point where you don't have to think about it, and I think we're very close to that point."

The Model S has met critical acclaim elsewhere in the media, garnering "Car of the Year" honors in 2012 from both Motor Trend and Automobile Magazine.

First Published: February 20, 2013: 4:38 PM ET

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HTC One combines slick looks and powerful features

NEW YORK (CNNMoney)

The 4.7-inch phone is cased with mix of aluminum and polycarbonate, employing a design that's as attractive and well-constructed as any other phone currently available. HTC's device is thin and light, and the screen is plenty big -- but not so big that it's difficult to wield with one hand.

It also has some of the most current and advanced components around, with the newest quad-core Qualcomm (QCOM, Fortune 500) Snapdragon chipset, two gigs of RAM and a display that has a resolution of 1920x1080. (Spoiler alert: it looks fantastic.)

The HTC One also introduces a handful of new media-centric features, including better speakers, an infrared remote control, and a completely redesigned camera sensor.

The HTC One camera only snaps four-megapixel images, but HTC says it has increased the physical size of those pixels—and dubbed them "ultrapixels," which will supposedly give it an image quality on par with an eight-megapixel sensor.

Another feature to go with the improved camera is the "HTC Zoe." The tool will allow users to shoot short burst video clips, and then the HTC One's software will automatically cobble it into a video that you can share with friends and family. It seems like more gimmick than essential feature.

But the biggest leap over previous HTC offerings is not the bump in specs or even the updated design. It's the reimagining of Sense, HTC's custom Android user interface.

With the new Sense, HTC borrowed a page from Microsoft's (MSFT, Fortune 500) Windows Phone and developed a tiled interface called BlinkFeed. The new UI dynamically pulls content from social networks, calendars and 1,400 media outlets including the AP, ESPN, Flickr, the Financial Times, and MTV, which users can curate to reflect their specific interests.

Previously, Sense had been more focused on organizing contacts and delivering notifications, such as calls, texts, emails, and events. News and social media integration was very much a secondary concern, but now those priorities have been reversed: Content is king.

For the few minutes I played with the Sense UI, I found it to be smooth, responsive and well-designed. Occasionally some of the tile elements or the browser showed signs of lag, but that didn't make the experience unpleasant.

It would have been nice, however, to see Sense integrate information from apps and notifications, even if they aren't the primary focus of the new UI. Sure, you can add items to your calendar, and Facebook (FB) and Twitter. But missed calls and new emails did not appear to live in HTC's BlinkFeed.

All of HTC's changes should make its new phone competitive with all the other new Android phones to hit the market this year.

But there is one thing that could hold it back. Ironically, it's the HTC One's biggest selling point, the Sense UI. Any custom Android interface "skin," no matter how unobtrusive, means that a device can't receive the latest updates as soon as they're available -- Google's Android update has to be configured to work with the custom UI.

In fact, it's already behind: The HTC One is not running the latest build of Android (4.2), but a version released earlier in 2012 (4.1). There's not a huge difference between the versions now, but generally speaking Android updates bring plenty of new features and functionality. Skinned Android phones might not see an update for months (or maybe even years).

This may or may not come back to haunt the HTC One, but for now, it's a phone to keep an eye on in 2013.

The HTC one will be available in late-March on AT&T (T, Fortune 500), T-Mobile and Sprint (S, Fortune 500). It will come in 32- and 64 gigabyte varieties. Pricing, however, is still a mystery.

First Published: February 19, 2013: 4:09 PM ET

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Herbalife raises 2013 guidance, yet reveals SEC inquiry

NEW YORK (CNNMoney)

Its fourth quarter results beat profit expectations. It bought back four million shares of its stock over the past month and a half, increased its dividend, and boosted its 2013 forecasts.

Yet, the embattled nutritional supplement company also revealed in an SEC filing that the SEC's Division of Enforcement has been conducting an inquiry into its "business and financial operations" since December 2012. There had been press reports about a potential inquiry in early January.

Investors initially pushed the stock up more than 1% but then pulled back slightly leaving it up 0.4% in after hours trading.

Related: Herbalife stock rallies 17% on Icahn stake

Investors have been trained to ask a lot of questions about Herbalife's numbers, since hedge fund manager Bill Ackman called the company a massive "pyramid scheme" in late December 2012.

They won't have that chance until Wednesday at 11 a.m. EST when Herbalife's management hosts a conference call.

Herbalife reported fourth quarter profits of $1.05, a 22% increase over the prior year. Its fourth quarter revenues came in at $1.1 billion, 20% above the fourth quarter 2011.

Herbalife's investors have been taken on a wild, volatile ride over the past two months. Ackman, the founder of the hedge fund Pershing Square, disclosed his $1 billion bet against the company in December, causing its stock to drop more than 30%. Ackman has said Herbalife's business model is fraudulent.

Related: Is Herbalife a pyramid scheme?

Since then, two other hedge fund titans -- Dan Loeb and Carl Icahn -- have pushed the stock higher when they disclosed new positions in the company in the past month.

In an SEC filing earlier this month, Icahn said he would talk to management about potentially taking the company private as a way to enhance shareholder value.

The biggest positive from this report: stock buybacks. Since Ackman first announced his position, investors had been pushing the company to buy back more stock. At least one Herbalife watcher liked what he saw in that regard. "Buying back 4% of its shares over a two month period is aggressive by any measurement," said fund manager Robert Chapman, who recently exited his stake in the company.

First Published: February 19, 2013: 5:32 PM ET

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Wake up, America! China is attacking

This building, in Shanghai's northern suburb of Gaoquio, is the headquarters for Unit 61398 of the Chinese military. Security firm Mandiant has tied this location to hundreds of cyberattacks.

NEW YORK (CNNMoney)

But 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.

The latest and most telling example came Tuesday. According to a new report from information security company Mandiant, the Chinese military is linked to one of the most prolific hacking groups in the world.

That group, known as the "Comment Crew," has attacked Coca-Cola (KO, Fortune 500), EMC (EMC, Fortune 500) security division RSA, military contractor Lockheed Martin (LMT, Fortune 500), and hundreds of others. It reportedly holds the blueprints to America's energy systems, and has funneled trade secrets out of some of the country's largest corporations.

The implications of China's presence in Corporate America's networks are vast, from matters of economic competitiveness to international diplomacy.

China has strong ties with its businesses, and any information gathered from U.S. corporations could wind up in the hands of a Chinese rival. Imagine Apple's rumored iWatch being produced first by a competitor that stole Apple's plans. Not only would Apple (AAPL, Fortune 500) lose an edge in the market, but the theft could impact the vast ecosystem of third-party software developers and accessory makers.

"It is fundamentally important that the American private sector wake up to the fact that dozens of countries -- including China -- are robbing us blind." said Tom Kellermann, head of cybersecurity at Trend Micro (TMICY) and former commissioner of President Obama's cybersecurity council.

Kellerman estimates that the cost of trade secrets being stolen online is in the hundreds of billions of dollars annually.

Related story: Your antivirus software probably won't prevent a cyberattack

U.S. jobs are also at stake.

"This is not some 15-year old trying to hack your database to see if he can," said Andy Serwin, adviser to the Naval Post Graduate School's Center for Asymmetric Warfare and chair of the information security practice at Foley & Lardner. "This is a large-scale organized effort to steal your company's most valuable information."

The Chinese government has long been believed to be behind a widespread cyberespionage scheme, but Mandiant's report is the first to clearly explain the link.

"It is time to acknowledge the threat is originating from China," said Dan McWhorter, Mandiant's managing director of threat Intelligence. "Without establishing a solid connection to China, there will always be room for observers to dismiss advanced persistent threat actions as uncoordinated, solely criminal in nature, or peripheral to larger national security and global economic concerns."

Cyber Cold War has clearly begun. Fears about a crippling attack by China on the nation's power grid or other critical infrastructure are also a legitimate worry. That's because 85% of such infrastructure -- including electric and water utilities -- is controlled by private industry.

"Knowing China could turn off our lights has vast diplomatic implications," said Dave Aitel, CEO of security consultancy Immunity.

And while there haven't been any successful breaches of critical infrastructure command and control centers yet, there is strong evidence that a cybercriminal could strike if they wanted to. Last year, Comment Crew broke into the network of smart grid control systems maker Telvent. In that attack, Comment Crew gained access to blueprints for 60% of North and South America's oil and gas pipelines.

That's likely part of the reason why the Obama administration, which signed an executive order last week that promotes sharing information about cyberattacks between the government and critical infrastructure companies, has been reluctant to call out China on its own. In his State of the Union address, the president simply said that the U.S. knows "foreign countries and companies swipe our corporate secrets."

In response to the Mandiant report on Tuesday, an administration spokesman said the White House continues to work with the Chinese government to stop the flow of these attacks.

But experts say something bigger needs to be done. An increasing number of businesses are looking to Congress to pass legislation that would set minimum cybersecurity standards for businesses to follow. Industry experts say that if Mandiant's report truly serves as a wake-up call, hopefully such a bill will ultimately get passed.

"Every time a big report comes out, it builds awareness ... and it gives us a chance to saber rattle and blame someone else. But we still don't pass cybersecurity legislation," said Art Coviello, CEO of RSA. "There are a lot of really good proposals on the table. Are we going to have rule of law prevail or not?"

First Published: February 19, 2013: 5:44 PM ET

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A $160,000 jewelry heist at the Four Seasons

Bling, like these pieces from designer Jacob & Company, was taken from the midtown Manhattan Four Season Hotel early Saturday.

NEW YORK (CNNMoney)

The men walked out of the hotel with two high-end wrist watches, a diamond chain and a pendant -- together worth more than $160,000 -- according to the New York Police Department. No one stopped them.

New York City hotels appear to be an easy target for criminals looking for a quick, and valuable, steal. Last year, a New Jersey man was sentenced to one-to-three years in prison for walking out of the Chambers Hotel in June 2011 with five paintings, each valued at $1,800, stuffed in a canvas tote bag. Two weeks later, the same man pilfered a $350,000 sketch by the highly regarded modern artist Fernand Leger from the Carlyle Hotel.

This is the first time a theft like this has occurred at The Four Seasons in its 20 years, according to Tiffani Cailor, a hotel spokeswoman.

"This is an unusual incident," she said. "We are very concerned and upset over the theft."

The upscale Four Seasons hotel lobby has 18 display cases, according to Cailor. The suspects chose to smash the one filled with jewels from Jacob & Company, a designer favored by celebrities from Jay-Z to Jennifer Lopez to former New York Mayor Rudy Giuliani.

Related: Swatch buys luxury jeweler Harry Winston

Cailor said that the hotel is working with the police as well as Jacob & Co. to resolve the case. She said its security levels will remain high.

"Guests and employees can rest assured [that security measures] are rigorous," Cailor said.

The NYPD released images of the suspects from a surveillance camera late Sunday night, and confirmed that police are still looking for them. The men were last seen heading east on 57 Street after the heist.

First Published: February 18, 2013: 12:29 PM ET

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Reader's Digest parent files for bankruptcy

NEW YORK (CNNMoney)

This is the second time in four years that the iconic print magazine has faced bankruptcy. In 2009, its then debt-laden publisher Reader's Digest Association Inc., also filed for bankruptcy. In 2010, the company emerged from bankruptcy after being taken over by its lenders.

"After considering a wide range of alternatives, we believe this course of action will most effectively enable us to maintain our momentum in transforming the business and allow us to capitalize on the growing strength and presence of our outstanding brands and products," RDA Holding CEO Robert Guth said in a statement.

RDA expects to exit bankruptcy with just $100 million of debt, or about 80% less than the current level.

The 91-year-old magazine, founded by DeWitt and Lila Wallace, was once among the nation's best-selling magazines. But it has become the latest longstanding title to fall on hard times as consumers increasingly favor reading content digitally -- on tablets and smartphones -- to the traditional paper format.

The Pew Research Center said in September that just 18% of Americans surveyed reported having read a magazine in print the previous day, down from 26% in 2000. Some 39% reported reading the news online.

Last month, magazine publisher Time Inc., a division of CNNMoney.com parent company Time Warner (TWX, Fortune 500), said it would to cut 6% of its staff of 8,000, or roughly 480 people, as it attempts to "continue to transform [the] company into one that is leaner, more nimble and more innately multi-platform."

Fortune reported last week that Time Warner was in talks with Meredith Corp. (MDP) to separate itself from Time Inc., possibly yielding such publications as People and InStyle to the Des Moines-based publisher of Family Circle.

Related: Meredith will likely need help in a Time Inc. deal

Newsweek, Time's historic rival, ceased publication of its print edition at the end of last year. Editor-in-chief Tina Brown said the growing use of tablets, combined with weakness in print advertising, drove the decision. Magazine publisher Condé Nast also reportedly began a round of job cuts late last year.

RDA Holding's Chapter 11 bankruptcy protection documents were filed in the U.S. Bankruptcy Court for the Southern District of New York.

RDA said its expects the bankruptcy proceedings to conclude in less than six months, subject to court approval. The company said it would continue to publish all of its U.S. publications during that period.

First Published: February 18, 2013: 12:02 PM ET

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Burger King Twitter gets McHacked

Burger King's Twitter account was hacked by an apparent fan of McDonald's.

NEW YORK (CNNMoney)

Two weeks after traces of horse meat were found in beef patties at a European Burger King (BKW) supplier, the burger chain's Twitter account was hacked. Making matters worse, the yet-to-be-identified hackers made it appear as though Burger King was bought by McDonald's (MCD, Fortune 500).

"We just got sold to McDonalds! Look for McDonalds in a hood near you," the company tweeted at noon ET Monday.

Burger King's Twitter profile photo was changed to a McDonald's logo, and its profile information said, "Just got sold to McDonalds because the whopper flopped." It also included the misspelled line "FREDOM IS FAILURE" and a dead link to a press release.

Over the course of an hour after it had been hacked, the account's attacker tweeted out a slew of increasingly ridiculous or obscene items. Twitter suspended the account around 1 p.m. ET.

"The Twitter account of the Burger King brand has been hacked," said Bryson Thornton, spokesman for Burger King, who apologized for the incident. "We have worked directly with administrators to suspend the account until we are able to reestablish our legitimate site and authentic postings."

A spokesman for Twitter said the company doesn't comment on individual accounts for privacy and security reasons, but he "urged users to use good password hygiene on Twitter."

McDonald's on Monday tweeted, "We empathize with our @BurgerKing counterparts. Rest assured, we had nothing to do with the hacking."

Related story: Watching porn is bad for your smartphone

"Somebody needs to tell Burgerking that 'whopper123' isn't a secure password," tweeted @flibblesan. The hacker, using the @BurgerKing twitter account, denied the password was related to the Whopper, Burger King's iconic burger.

The company's account included a mention of @DFNCTSC in its first message after it was hacked. It's unclear if that is the account's attacker, since no one has tweeted from that account yet. But the attacker appears to be a fan of hacktivist group Anonymous, using Burger King's account to ask the group to follow it.

"We're guessing the @BurgerKing social media team is having a bad day..." tweeted @YourAnonNews, one of Anonymous' most active Twitter accounts.

The hacked account did not mention anything about the horse meat scandal, though it did tweet out a gross-looking photo of a burger, saying "This is why we were sold to @McDonalds."

On Jan 31, Burger King announced that it had terminated its relationship with supplier Silvercrest Foods after finding traces of horse meat in beef patties at a Silvercrest facility.

Silvercrest provided beef for Burger King restaurants in the United Kingdom, Ireland and Denmark. Burger King said that while samples of beef from restaurants in these countries showed no evidence of contamination, four samples from a Silvercrest plant in Ireland showed "very small trace levels of equine DNA."

Burger King said the tainted product was never sold in restaurants, and appeared to have originated from a sub-contracted supplier in Poland.

First Published: February 18, 2013: 1:21 PM ET

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