Sriracha factory ordered to put a lid on smell after locals pepper city with complaints

NEW YORK (CNNMoney)

A judge in Los Angeles County has ordered Sriracha maker Huy Fong Foods to suspend operations at a plant in the city of Irwindale that local residents claim has caused an overpowering odor.

Irwindale claimed in a lawsuit that the stench was causing watery eyes, sore throats and headaches, prompting complaints from dozens of residents.

"You couldn't stay outside in some places," Irwindale city manager John Davidson said. "We've had softball teams that have had to cancel their games and practices because their eyes were watering."

The judge's ruling orders Huy Fong to "immediately make changes in its site operations reducing odors and the potential for odors." The city has been pushing Huy Fong to install a new filtration system to address the issue.

"We want to find a balance between letting this business be a business and protecting our residents," Davidson said. "We hope this will allow us to sit down with Huy Fong and come up with a solution that meets the needs of the community."

Huy Fong declined to comment.

For most of its lifespan, Huy Fong has produced the Thai chili sauce without incident in Rosemead, Calif., but it shifted some production to Irwindale earlier this year.

While Huy Fong isn't the originator of Sriracha, the company's distinctive green-topped bottles have become a staple on grocery shelves, kitchen lines and restaurant tables since it began U.S. production in 1983.

The company produced 20 million bottles of Sriracha in 2012, or $60 million worth, all without the benefit of advertising. Consumer devotion to the brand has inspired cookbooks, embroidery, jewelry and a limited-edition flavor of Lay's potato chips.

First Published: November 27, 2013: 4:31 PM ET

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Disgusted shoppers threaten to boycott Black Friday Thursday

This badge is circulating on Facebook and was shared more than 959,000 times as of mid-day Wednesday.

NEW YORK (CNNMoney)

Among their biggest targets: Kmart plans to kick Thanksgiving day off, opening stores at 6 a.m. and remaining open for 41 hours straight.

Toys "R" Us starts its doorbusters at 5 p.m. At Wal-Mart stores (many of which are open all day), the deals start at 6 p.m.

Best Buy opens at 6 p.m., and then Macy's, Kohl's, J.C. Penney, Target and Sears all open at 8 p.m.

An "I pledge to not shop on Thanksgiving" badge is circulating on Facebook and has been shared more than 959,000 times as of mid-day Wednesday.

Related: Are you working during the holidays? Share your story

"5 pm open on Thanksgiving? Really?" wrote Jaime Etheridge Krauss on the Toys "R" Us Facebook page. "A store who is devoted to children and families opens when Americans sit down at the dinner table? What about your employees?!?"

"Hey Kmart! Because of you being Open on Thanksgiving and totally disrespecting your employees, Our Family will never spend a $ in your store!" writes Frank Chip Munroe.

"Kohl's has always been my absolute favorite place to shop. However, as much as it breaks my heart to say this I will no longer be shopping at Kohl's from this point on or any of the other retailers that are opening ON THANKSGIVING. This is a day for family and giving thanks," wrote Kelli Williams Lord.

"Macy's I am disappointed in you for opening your stores on Thanksgiving. Let your employees have a day with their families! It is not the end of the world to wait until Friday to start the chaos!" wrote Katie Buchanan Reynolds.

"I always wanted to believe that Target was somehow better than Walmart in product, and in policies. I realize that Target does not share my values and will no longer get my business. Give your employees a paid day off!" wrote Sean Pierce.

"Even Ebenezer Scrooge let Bob Cratchit go home a few minutes early on Christmas Eve," wrote Dan Hall on J.C. Penney's page. "When you're eating your Thanksgiving turkey this year, remember that your employees are taking time away from their families to help satisfy your greed."

Poll: Do you think Black Friday is worth it?

Of course, the real test of shopper anger will come tomorrow night: Will the the outraged shoppers be outnumbered by people who turn out for the deals?

The holiday shopping season was cut six days shorter this year because Thanksgiving falls later on the calendar, and retailers are fearing sales could be flat.

First Published: November 27, 2013: 2:18 PM ET

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U.K. moves to cool property market

The Bank of England says U.K. house price inflation is accelerating and spreading out from London.

LONDON (CNNMoney)

House prices have increased by about 7% in a year, and by much more in London, raising concerns that borrowers may have trouble making repayments when interest rates start to rise from their record low levels.

Bank of England Governor Mark Carney said house price increases were gaining momentum, and broadening out across the country, but that the risks were manageable.

It was important to act now to avoid more dramatic intervention later, and to allow the bank to keep supporting the broader recovery in the U.K. economy with its low-rate policy, he told reporters.

"Risks to financial stability may grow if there are further substantial and rapid increases in house prices and a further build-up of household indebtedness," he said.

Household mortgage debt stands at about 110% of annual disposable income, below the 2008 peak of 128% but well above the longer term average.

Related: Five housing bubbles to watch

The changes announced Thursday mean that from next year, U.K. banks will no longer be able to use the "Funding for Lending" program to access cheap credit for mortgages and personal loans. Lending to businesses will be unaffected.

The Bank of England is also giving itself the power to vary the affordability criteria that mortgage borrowers must meet. This is supposed to ensure banks don't take on excess risk and homeowners are better able to service their debts if circumstances change.

But some analysts say the measures don't go far enough, particularly as a separate program of subsidized mortgages for borrowers with small deposits -- known as "Help to Buy" -- is unaffected.

Since April, such borrowers have been able to access interest-free loans for five years on newly-built homes. The program will be extended to help buyers purchase existing properties worth up to £600,000.

Related: Surging U.K. economy surprises central bank

Both programs were launched with the aim of stimulating lending in the wake of the financial crisis to support the economic recovery and job creation. But just months after the U.K. was teetering on the brink of a triple-dip recession, a surge in consumer spending and rising house prices have led to a dramatic turnaround.

The strength of the comeback took the Bank of England by surprise, and earlier this month it upgraded its forecasts for growth and signaled that interest rates could rise much sooner than it was forecasting earlier in the year.

The pound has rallied 10% since July to trade near a 12-month high of $1.63.

First Published: November 28, 2013: 8:12 AM ET

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Sriracha factory ordered to put a lid on smell after locals pepper city with complaints

NEW YORK (CNNMoney)

A judge in Los Angeles County has ordered Sriracha maker Huy Fong Foods to suspend operations at a plant in the city of Irwindale that local residents claim has caused an overpowering odor.

Irwindale claimed in a lawsuit that the stench was causing watery eyes, sore throats and headaches, prompting complaints from dozens of residents.

"You couldn't stay outside in some places," Irwindale city manager John Davidson said. "We've had softball teams that have had to cancel their games and practices because their eyes were watering."

The judge's ruling orders Huy Fong to "immediately make changes in its site operations reducing odors and the potential for odors." The city has been pushing Huy Fong to install a new filtration system to address the issue.

"We want to find a balance between letting this business be a business and protecting our residents," Davidson said. "We hope this will allow us to sit down with Huy Fong and come up with a solution that meets the needs of the community."

Huy Fong declined to comment.

For most of its lifespan, Huy Fong has produced the Thai chili sauce without incident in Rosemead, Calif., but it shifted some production to Irwindale earlier this year.

While Huy Fong isn't the originator of Sriracha, the company's distinctive green-topped bottles have become a staple on grocery shelves, kitchen lines and restaurant tables since it began U.S. production in 1983.

The company produced 20 million bottles of Sriracha in 2012, or $60 million worth, all without the benefit of advertising. Consumer devotion to the brand has inspired cookbooks, embroidery, jewelry and a limited-edition flavor of Lay's potato chips.

First Published: November 27, 2013: 4:31 PM ET

10.20 | 0 komentar | Read More

Disgusted shoppers threaten to boycott Black Friday Thursday

This badge is circulating on Facebook and was shared more than 959,000 times as of mid-day Wednesday.

NEW YORK (CNNMoney)

Among their biggest targets: Kmart plans to kick Thanksgiving day off, opening stores at 6 a.m. and remaining open for 41 hours straight.

Toys "R" Us starts its doorbusters at 5 p.m. At Wal-Mart stores (many of which are open all day), the deals start at 6 p.m.

Best Buy opens at 6 p.m., and then Macy's, Kohl's, J.C. Penney, Target and Sears all open at 8 p.m.

An "I pledge to not shop on Thanksgiving" badge is circulating on Facebook and has been shared more than 959,000 times as of mid-day Wednesday.

Related: Are you working during the holidays? Share your story

"5 pm open on Thanksgiving? Really?" wrote Jaime Etheridge Krauss on the Toys "R" Us Facebook page. "A store who is devoted to children and families opens when Americans sit down at the dinner table? What about your employees?!?"

"Hey Kmart! Because of you being Open on Thanksgiving and totally disrespecting your employees, Our Family will never spend a $ in your store!" writes Frank Chip Munroe.

"Kohl's has always been my absolute favorite place to shop. However, as much as it breaks my heart to say this I will no longer be shopping at Kohl's from this point on or any of the other retailers that are opening ON THANKSGIVING. This is a day for family and giving thanks," wrote Kelli Williams Lord.

"Macy's I am disappointed in you for opening your stores on Thanksgiving. Let your employees have a day with their families! It is not the end of the world to wait until Friday to start the chaos!" wrote Katie Buchanan Reynolds.

"I always wanted to believe that Target was somehow better than Walmart in product, and in policies. I realize that Target does not share my values and will no longer get my business. Give your employees a paid day off!" wrote Sean Pierce.

"Even Ebenezer Scrooge let Bob Cratchit go home a few minutes early on Christmas Eve," wrote Dan Hall on J.C. Penney's page. "When you're eating your Thanksgiving turkey this year, remember that your employees are taking time away from their families to help satisfy your greed."

Poll: Do you think Black Friday is worth it?

Of course, the real test of shopper anger will come tomorrow night: Will the the outraged shoppers be outnumbered by people who turn out for the deals?

The holiday shopping season was cut six days shorter this year because Thanksgiving falls later on the calendar, and retailers are fearing sales could be flat.

First Published: November 27, 2013: 2:18 PM ET

10.20 | 0 komentar | Read More

Black Friday: Is it worth it?

NEW YORK (CNNMoney)

Some of the nation's largest retailers plan to open their doors on Thanksgiving Day, kicking off with Kmart (SHLD, Fortune 500) at 6 a.m.,Toys R Us at 5 p.m. Wal-Mart (WMT, Fortune 500) and Best Buy (BBY, Fortune 500) at 6 p.m. and Macy's (M, Fortune 500), Target (TGT, Fortune 500) and others will open throughout the evening.

The big enticement will be so-called "doorbusters," limited-time only deals offered to the first shoppers in the store. Hot-ticket doorbusters are typically electronic items like TVs and laptops at deep discounts of 50% or more.

Poll: Will you shop on Black Friday or not?

Yet most stores keep such limited supplies of these deals, that few shoppers walk away with them, said Marshal Cohen, chief retail analyst at the NPD Group. "If you're looking for that ultimate score, the half-price big screen TV, if you're not the 24th person in the line, 'good luck,'" he said.

Some die-hard shoppers started camping out in front of an Ohio Best Buy as early as last week to nab its popular doorbuster deals on big-screen TVs, laptops,video games and other electronics, such as a $500 55-inch LG flat-screen TV.

One exception: Wal-Mart is guaranteeing prices for some of its best deals, as long as customers are in line during specific times. If a store runs out of the product, shoppers get a voucher guaranteeing the product at the sale price.

But shoppers may not need to venture out to nab most Black Friday deals in the first place. With competition fierce, many retailers' are offering deals online that rival the ones being offered in stores, said Walter Loeb, a retail analyst and president of Loeb Associates.

Target, for example, will start offering almost all of its in-store deals in the early morning hours of Thanksgiving on Target.com before stores even open. Meanwhile, Consumer Reports has noted that Amazon (AMZN, Fortune 500) is offering Black Friday prices on big-screen TVs that are similar to deals available at Wal-Mart and Best Buy stores.

Related: Black Friday 2013: What to expect

"Prices during the holidays, even for some of the doorbusters, aren't necessarily the best prices of the season," said Patricia Huddleston, a professor of retailing at Michigan State University.

A recent survey by personal finance site, NerdWallet.com, found that 23 out of 25 stores were offering at least one product at the exact same price as last year, while some stores had multiple deal repeats or offered better prices on certain products earlier in the year.

And certain products will likely see even deeper discounts as Christmas approaches.

For example, better prices on winter clothing and generic toys are often found in the final week or two before Christmas as stores attempt to clear their shelves, said Trae Bodge, a spokesperson for RetailMeNot.com, a web site that tracks consumer deals.

So unless you have your eye on a hot product that you're worried will sell out, it's often best to wait. "Black Friday is about specific items," Bodge said. "Do the remainder of your shopping afterwards."

Related: 5 Black Friday tricks to avoid

Jessica Kessler had her first Black Friday experience several years ago, waking up at 3 a.m. on Friday to stand outside in the cold with hundreds of people waiting for Kohl's to open. Since then, she has ventured out with her husband's family in the early morning hours of Black Friday to hunt for deals. But she said there is no discount deep enough to draw her from her home on Thanksgiving.

"I was able to knock out a good bit of my shopping in the years that we went and got some deals that I was happy with," she said. "But at this point, there is no amount of savings that they could offer that would make it worth it to me."

First Published: November 27, 2013: 12:05 PM ET

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5 ways identity thieves are targeting you

Fraudsters have many ways of stealing your identity.

NEW YORK (CNNMoney)

Now Jumio, a company that allows customers to make mobile payments and verify their identities online or by phone, has come out with "The Fraudsters' Playbook."

The report outlines the most common ways people steal identities. Jumio collaborated with some reformed former identity thieves, as well as professional criminologists and law enforcement agents.

1. Setting up fake Wi-Fi networks: Fraudsters steal identities anywhere that offers free public Wi-Fi access, like cafes, airports, libraries and hotels.

An identity thief simply sets up a separate Wi-Fi network with the same name as the real one, and you may mistakenly log on. Then, using malware, the perp accesses your computer and hacks into your email and bank accounts. At that point, say goodbye to your identity.

Is this your password? Change it.

2. Posing as Census workers: Some fraudsters go door-to-door pretending to be Census workers collecting information. They ask for your name, address, date of birth or email address. And if you seem especially gullible, they may go even further and ask for more information.

One con cited in Jumio's report said he would target houses with nice cars parked outside. Others call or email victims asking for personal information to "verify a purchase" or "confirm account information."

3. Mining social media profiles: People who still don't have privacy settings on their social media profiles are prime targets.

Identity thieves will locate profiles with the most public information and send them pointed offers based on it -- like to a favorite restaurant or retailer they have listed on their profiles or have visited recently. If they're lucky, this can rope in victims and convince them to supply financial information like their credit card number.

Related: Cyberattacks are the bank robberies of the future

4. Advertising bogus discounts: You'd think that by now people would know not to give their financial information to someone over the phone who they've never met. But the trick still works.

An identity thief pretends to be calling from a local business and offers you discounts on your next purchase. Then he says that to receive the discount, you need to make a small payment and provide your personal information. Bingo! He just got everything he needs to steal your identity -- and money.

5. Buying bank account information: There's an underground market for identity theft, called carding sites, where identity thieves sell credit or debit card information to other criminals for around $100 to $200 a pop, Jumio found.

Card numbers often flood into the marketplace after big data breaches at online retailers and banks. And buyers will even use tactics to find cards with the highest credit limits or the biggest balances -- often looking for certain account numbers that signal a card was opened a long time ago, since older cardholders are more likely to have bigger lines of credit.

First Published: November 26, 2013: 4:21 PM ET

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HP up 6% on strong quarter

NEW YORK (CNNMoney)

On Tuesday, HP (HPQ, Fortune 500) shares soared 6% after the company showed it ended the year with a strong fiscal fourth quarter. HP reported quarterly revenue of $29.1 billion, soundly beating Wall Street analysts' expectations.

The company reported earnings per share of $1.01 for investors, also better than analysts had forecast.

The strong finish will serve to combat perceptions that the aging tech giant is losing the fight to remain relevant, especially as consumers move away from desktops and laptops, reaching instead for tablets like Apple's (AAPL, Fortune 500) iPad.

Related: Thanks, bull market! Stocks keep rallying

Those concerns became even more apparent in September, when HP was dropped from the Dow Jones Industrial Average. It became the first to be replaced from the group that joined the DJIA in 1997, which includes Wal-Mart (WMT, Fortune 500), Travelers (TRV, Fortune 500) and Johnson & Johnson (JNJ, Fortune 500).

If the company is indeed experiencing an upswing, credit would go to CEO Meg Whitman, who has laid out a five-year plan to increase investment in research and development, especially for software and cloud services.

"Overall, I'm pleased with the progress we've made. But we still have a a lot of work to do," Whitman said during the earnings call with analysts on Tuesday.

Indeed, HP performed better than expected, but its fourth quarter revenue was $900 million short of the same quarter last year. A look at the company's many divisions shows what it's facing internally:

• PC sales were down 2% since last year, showing that HP isn't immune from the worldwide drop in demand for that hardware. However, it's doing better than its competitors. PC sales fell 8% worldwide, according to tech research firm Gartner.
• Its division providing back-end servers saw revenue rise 2%.
• The "enterprise" unit, which provides services to businesses, had sales drop 9% compared to last year. But that follows an industry trend that's hitting IT providers Cisco (CSCO, Fortune 500) and IBM (IBM, Fortune 500) as well.

Whitman said HP would concentrate on lowering prices to grow its customer base and increase profitability. With that in mind, HP executives on the call said the company -- which has already cut 13,000 jobs this fiscal year -- will cut several thousand more in the next 12 months.

Investors focus on HP because, with its significant exposure in the consumer and business worlds, it's considered a good indicator of the global economy.

First Published: November 26, 2013: 4:34 PM ET

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Europe's golden visas lure rich Chinese

A fence separates Morocco from Spain's north African enclave of Melilla. Spain recently joined Portugal in offering rich foreigners a way into the EU in return for cash.

LONDON (CNNMoney)

Spain, Portugal, Greece and Cyprus, which have suffered the most from the region's prolonged recession, are offering visas to foreigners who buy real estate. The goal is to lure investment and strengthen battered European economies.

Chinese nationals are at the front of the line for these golden tickets to Europe, immigration experts say. Interest from Russia, the United Arab Emirates and South Africa is also stirring.

Foreign investors who purchase real estate are granted residency rights, and in some cases full European Union citizenship. The minimum outlay ranges from €250,000 (about $340,000) to €500,000.

Related: Eurozone recovery fades as growth stalls

Portugal has been offering these deals for just over a year. Foreigners receive a residency permit when they invest €500,000 in property.

After five years, they can apply for permanent residency, and EU citizenship one year later. Portugal is also trading visas to those who inject capital or create jobs in the country -- similar to the U.S. immigrant investor program, which requires a minimum spend of $500,000.

Like those on offer in Spain, the Portuguese visas grant access to the Schengen area, which includes the bulk of the EU but not the U.K.

Official figures show more than 330 visas have been issued in the first 12 months of the program, raising €225 million.

By contrast, lawyers with Efthymios G. Navridis & Associates say just one application for a so-called golden visa has been approved in Greece.

Yet the flow of wealthy investors buying the keys to Europe -- via Portugal at least -- is strengthening.

Francisco Barata Salgueiro, partner at Portuguese law firm Neville de Rougemont & Associates, has seen a steady rise in inquiries this year and currently advises around 150 mostly Chinese investors on the golden visa program.

The increase partly reflects a watering down of the law. In January, the minimum stay requirements were scaled back significantly, to just 35 days over 5 years.

Salgueiro said most investors are lured by the prospect of being able to travel freely throughout most of Europe.

"They also mention the flexibility of sending their children to study in Europe. Quite a few will consider retiring here," he said.

Related: Rich Chinese look abroad to secure wealth

The Portuguese economy, one of the eurozone's smallest, has paid a heavy price for the spending cuts and reforms demanded in return for a €78 billion euro bailout.

The country recently emerged from its worst recession in about 40 years, though unemployment remains near record highs and the outlook is cloudy.

It hopes the revenue from visa-hungry investors will help boost the ailing economy and revive the property market.

Singapore agency Premiere Realty is tapping into growing demand in Asia for Portuguese real estate.

"A lot of Chinese want to migrate to Singapore but aren't successful, so we work with immigration partners who offer Portugal to their clients as an alternative," Premiere Realty's Florence Ang said.

Spain launched a program last month, with a few key differences. The minimum outlay is also €500,000 but those chasing EU citizenship will find it much more onerous.

Wannabe Europeans must live in Spain for more than half the year for 10 years before citizenship will be offered.

And Ang reckons Portugal may be a wiser bet for buyers seeking a return on their investment, as well as residency rights.

Spain's property market is recovering very slowly from the 2007 crash that tipped the country into a deep recession.

"The real estate market in Portugal is definitely in better shape," she said.

First Published: November 26, 2013: 9:27 PM ET

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Credit Suisse banker sentenced to 30 months in prison

NEW YORK (CNNMoney)

Serageldin, who had been extradited from the UK in April, had pled guilty to the charges. At the time of his February 2012 indictment, authorities said he faced up to 45 years in prison if convicted. Preet Bharara, the U.S. Attorney for the Southern District of New York, announced the sentencing late Friday evening.

According to the statement from Bharara's office last year, Serageldin's manipulated the prices of the mortgage bonds to try to cover up the trading loss. His price manipulation, it said, was responsible for $540 million of the $2.85 billion charge that Credit Suisse (CS) was forced to take in early 2008.

Serageldin's co-conspirators, David Higgs and Salmaan Siddiqui, have also pleaded guilty and are awaiting sentencing.

First Published: November 22, 2013: 7:56 PM ET

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Investors thankful for stocks at records

Click the chart for more stock market data.

NEW YORK (CNNMoney)

Trading volume is typically quiet during the holiday-shortened week. The U.S. markets will be closed on Thursday for Thanksgiving and will shut down at 1 p.m. EST on Friday.

Still, stocks have historically moved higher even as investors may be more focused on turkey and football. The S&P 500 has averaged a gain of 0.6% during Thanksgiving week over the past 20 years, according to Schaffer's Investment Research.

And with just a small move up, the Nasdaq could top 4,000, a level it hasn't touched since September 2000 -- just months after the tech market collapsed. The Nasdaq ended last week just shy of 3,992.

Related: 8 things to know about the 2013 bull market

Meanwhile, world focus was on the nuclear deal reached between Iran and the five permanent members of the U.N. Security Council plus Germany this weekend.

Under the deal, Iran has agreed to significantly reduce its nuclear program. In exchange, the six world powers will temporarily lift several sanctions against Iran, including those on gold and precious metals. Nearly $4.2 billion in Iranian oil reserves that had been frozen will also be unlocked.

Investors continue to wait for more clarity from the Federal Reserve about when it may pull back on some of its stimulus measures.

Minutes from the Fed's October meeting released last week showed that policymakers believe scaling back, or tapering, its bond buying program is warranted "in coming months." But exactly when the Fed will make the tapering announcement remains unclear.

Some experts believe the Fed could begin pulling back on its $85 billion per month in bond purchases as early as December.

Poll: How will the stock market do in 2014?

But others think the Fed will wait until early 2014 after Ben Bernanke's term as Fed chair is over.

Current Fed vice chair Janet Yellen is awaiting approval from the Senate to be the next head of the Fed.

Her confirmation is expected to be a formality after the Senate Banking Committee voted last week to send her nomination to the full Senate for a vote that is likely to take place next month.

The Fed's stimulus measures have been a major factor fueling the bull market for the past several years.

HP earnings and retail sales in the spotlight: Though the week ahead will likely be light on economic news, investors will be keeping an eye on a few earnings reports.

Hewlett-Packard (HPQ, Fortune 500) will be in focus as investors look for an update on Meg Whitman's turnaround plan for the PC and printer maker. Investors have been pleased with Whitman so far, and HP has been beating low expectations. Shares of HP are up almost 80% so far this year.

Related: Retailers brace for a tough holiday season

Tiffany's (TIF) and Barnes & Noble (BKS, Fortune 500) are also on tap to report their latest quarterly results. Retailers will generate a lot of attention on the night of Thanksgiving and Black Friday as the holiday shopping season kicks off.

There are some worries that consumers may be less willing to spend as much on gifts this year. But stores are opening earlier than ever before in hopes to attract more shoppers for Black Friday, one of the busiest days of the year for retailers.

Kmart, a subsidiary of Sears (SHLD, Fortune 500), is leading the pack, opening at 6 a.m. on Thanksgiving Day and staying open for 41 hours straight -- a move that has generated backlash from some customers who feel that store employees should be given a break to spend time with family on the holiday.

Wal-Mart (WMT, Fortune 500)is opening doors at at 6 p.m. on Thanksgiving Day, two hours earlier than last year. Macy's (M, Fortune 500), Kohl's (KSS, Fortune 500), J.C. Penney (JCP, Fortune 500) and Sears will let customers in at 8 p.m.

First Published: November 24, 2013: 11:17 AM ET

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Swiss voters reject proposal to cap executive pay

The campaign to cap executive pay at 12 times the lowest salary was led by young members of Switzerland's Social Democratic party.

LONDON (CNNMoney)

The "1:12 -- for fair wages" initiative, which proposed capping executive salaries at 12 times the lowest paid employee's, was rejected by 65.3% of voters, and failed to win majority support in any of the country's 26 districts.

The vote means that Swiss-based executives at companies such as UBS, (UBS) Credit Suisse (CREDIT SUISSE AG), Novartis (NVS)or Glencore Xstrata (GLCNF), will still be able to earn salaries worth more in a month than their lowest paid workers make in a year.

Switzerland's constitution allows four popular initiatives to be put to a national vote each year, provided the organizers gather 100,000 signatures in support.

In order to force a change in the law, the initiative would have needed to be approved by a majority of the electorate and the country's 26 cantons, or districts.

Related: Opinion: U.S. should follow Swiss on pay cap

The Swiss federal government and parliament had recommended voting against the cap, joining business leaders in warning that it could force some companies to leave the country and others to shed jobs.

Switzerland is a wealthy country, enjoying above average rates of growth and employment and relatively short working hours. The average household has net disposable income of about $30,000, compared with the OECD average of $23,000.

But OECD figures also show a considerable gap between rich and poor -- the top 20% of the population earn nearly five times as much as the bottom 20% -- and anger at growing inequality has been increasing as executive pay packages soar.

Examples of excess -- such as a plan by Novartis, subsequently dropped, to pay its outgoing chairman nearly $78 million over six years -- gave the 1:12 campaign momentum.

Related: UK moves to block bankers' bonus cap

Some of Switzerland's neighbors have also responded to popular anger over executive pay at a time of record unemployment and stagnant wages.

EU policymakers are hoping to limit bonuses for any banker earning more than 500,000 euros a year (or $678,000 U.S.). The maximum payout would be equal to annual salary or twice salary if a majority of shareholders approve.

The cap -- which is being challenged in court by the British government -- would apply globally to banks based in the EU, and to international banks operating within Europe. It could affect more than 35,000 bankers around the world, the vast majority of them in London.

First Published: November 24, 2013: 12:48 PM ET

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Foxconn to build plant in Pennsylvania

A Foxconn factory in China. The contract manufacturer for Apple and other leading U.S. tech companies announced plans to build a plant in Pennsylvania.

NEW YORK (CNNMoney)

The company, which a year ago said it was looking at expanding its U.S. operations, will also give $10 million to Carnegie Mellon University as part of a strategic research and development partnership with the Pennsylvania college. The money will go towards research and education in the fields of robotics and advanced manufacturing.

The company made the announcement Thursday evening, only one day after Terry Gou, the founder and chairman, first met with Pennsylvania Gov. Tom Corbett.

"This is somewhat of a rarity for us that a project moved along as quickly as it has," said Steve Kratz, spokesman for the state's department of Community and Economic Development.

A location for the plant has yet to be selected.

Related: Apple faces new Chinese labor allegations

Foxconn said last December that it wanted to increase its U.S. operations beyond plants it operated in Texas and Indiana. The company has 30 employees in Harrisburg already, although state officials could not say what the facility there did now.

The statement about its U.S. expansion plans came on the heels of an announcement by Apple (AAPL, Fortune 500), a major Foxconn customer, that it planned to start building some Apple products in the United States.

Foxconn's plants in Asia are massive, employing as many as 190,000 workers at a single factory by some estimates, many of whom live at the plants as well as work there. The company has been criticized for work conditions and for the large number of workers at some plants who have committed suicide.

First Published: November 22, 2013: 7:12 PM ET

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Cable stocks surge on takeover chatter

Click the chart to track shares of Time Warner Cable.

NEW YORK (CNNMoney)

Charter Communications (CHTR, Fortune 500), the fourth largest cable provider with just over 4 million subscribers, has reportedly been in talks with major banks to borrow money to fund a possible bid for Time Warner Cable (TWC, Fortune 500), the second largest cable company with over 11 million subscribers.

But according to a source familiar with the matter, Time Warner Cable has reached out to Comcast (CMCSA, Fortune 500) for a possible deal. There are currently no ongoing conversations though, the source added. With over 21 million subscribers, Comcast is the nation's largest cable provider. (Time Warner Cable was spun off from CNNMoney owner Time Warner (TWX, Fortune 500) in 2009.)

Time Warner Cable and Comcast declined to comment, while Charter could not be reached.

Shares of Time Warner Cable jumped almost 10% on the chatter, while Comcast and Charter shares also gained ground. Another smaller cable company, New York-based Cablevision (CVC, Fortune 500), shot up on the reports as well. Cablevision has long been considered a takeover target.

Related: Who's cutting the cord? Cable stocks soaring

Citing people familiar with the situation, the Wall Street Journal said Charter has held talks with Bank of America (BAC, Fortune 500), Barclays (BCS) and Deutsche Bank (DB) to help come up with financing for a Time Warner Cable bid.

The company may also be reaching out to sovereign wealth funds and wealthy individuals to help pay for the buyout without taking on too much debt. Time Warner Cable is worth $34 billion -- almost three times as much as Charter.

Media mogul John Malone's Liberty Media (LMCA) is the largest shareholder in Charter and Malone has been a loud supporter of more consolidation in the cable industry, which is facing rising costs in programming.

Plus, cable companies are worried about losing subscribers, as some consumers cut the cord and shift to devices like Apple (AAPL, Fortune 500) TV and Roku as well as streaming video services like Aereo, Netflix (NFLX), Hulu and Amazon's (AMZN, Fortune 500)' Prime Instant Video.

While speculation of a deal has been rising for several months since Malone became a shareholder of Charter, the financing efforts represent "perhaps the most concrete step discussed to date," said Nomura analyst Adam Ilkowitz in a note to clients.

He expects Charter will have to raise about $25 billion in total -- $15 billion in debt and $10 billion in cash from other sources.

A merger between the two would likely save $500 million in programming expenses a year, Ilkowitz said.

But IHS cable networks analyst Erik Brannon said those savings may or may not trickle down to consumers, given the rising expenses and intense competition among cable providers.

Meanwhile, further consolidation between the nation's largest cable providers could raise concern among government regulators -- most notably the Department of Justice and the Federal Communications Commission. Citing unnamed sources, CNBC reported that Comcast is seeking advice on antitrust and FCC concerns.

A merger between Comcast and Time Warner Cable would result in one company with over 32 million subscribers, or nearly a third of all cable subscribers, Brannon said. But he doesn't think a merger between the two is likely.

"I don't think it makes sense for Comcast at this point," he said, noting that Time Warner Cable has been losing an average of about 175,000 subscribers per quarter recently. During the third quarter alone, the company lost a startling 306,000 subscribers due to its month-long fight with CBS (CBS, Fortune 500). "There isn't much upside versus the expenditures Comcast would have."

First Published: November 22, 2013: 1:32 PM ET

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Credit Suisse banker sentenced to 30 months in prison

NEW YORK (CNNMoney)

Serageldin, who had been extradited from the UK in April, had pled guilty to the charges. At the time of his February 2012 indictment, authorities said he faced up to 45 years in prison if convicted. Preet Bharara, the U.S. Attorney for the Southern District of New York, announced the sentencing late Friday evening.

According to the statement from Bharara's office last year, Serageldin's manipulated the prices of the mortgage bonds to try to cover up the trading loss. His price manipulation, it said, was responsible for $540 million of the $2.85 billion charge that Credit Suisse (CS) was forced to take in early 2008.

Serageldin's co-conspirators, David Higgs and Salmaan Siddiqui, have also pleaded guilty and are awaiting sentencing.

First Published: November 22, 2013: 7:56 PM ET

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Foxconn to build plant in Pennsylvania

A Foxconn factory in China. The contract manufacturer for Apple and other leading U.S. tech companies announced plans to build a plant in Pennsylvania.

NEW YORK (CNNMoney)

The company, which a year ago said it was looking at expanding its U.S. operations, will also give $10 million to Carnegie Mellon University as part of a strategic research and development partnership with the Pennsylvania college. The money will go towards research and education in the fields of robotics and advanced manufacturing.

The company made the announcement Thursday evening, only one day after Terry Gou, the founder and chairman, first met with Pennsylvania Gov. Tom Corbett.

"This is somewhat of a rarity for us that a project moved along as quickly as it has," said Steve Kratz, spokesman for the state's department of Community and Economic Development.

A location for the plant has yet to be selected.

Related: Apple faces new Chinese labor allegations

Foxconn said last December that it wanted to increase its U.S. operations beyond plants it operated in Texas and Indiana. The company has 30 employees in Harrisburg already, although state officials could not say what the facility there did now.

The statement about its U.S. expansion plans came on the heels of an announcement by Apple (AAPL, Fortune 500), a major Foxconn customer, that it planned to start building some Apple products in the United States.

Foxconn's plants in Asia are massive, employing as many as 190,000 workers at a single factory by some estimates, many of whom live at the plants as well as work there. The company has been criticized for work conditions and for the large number of workers at some plants who have committed suicide.

First Published: November 22, 2013: 7:12 PM ET

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Cable stocks surge on takeover chatter

Click the chart to track shares of Time Warner Cable.

NEW YORK (CNNMoney)

Charter Communications (CHTR, Fortune 500), the fourth largest cable provider with just over 4 million subscribers, has reportedly been in talks with major banks to borrow money to fund a possible bid for Time Warner Cable (TWC, Fortune 500), the second largest cable company with over 11 million subscribers.

But according to a source familiar with the matter, Time Warner Cable has reached out to Comcast (CMCSA, Fortune 500) for a possible deal. There are currently no ongoing conversations though, the source added. With over 21 million subscribers, Comcast is the nation's largest cable provider. (Time Warner Cable was spun off from CNNMoney owner Time Warner (TWX, Fortune 500) in 2009.)

Time Warner Cable and Comcast declined to comment, while Charter could not be reached.

Shares of Time Warner Cable jumped almost 10% on the chatter, while Comcast and Charter shares also gained ground. Another smaller cable company, New York-based Cablevision (CVC, Fortune 500), shot up on the reports as well. Cablevision has long been considered a takeover target.

Related: Who's cutting the cord? Cable stocks soaring

Citing people familiar with the situation, the Wall Street Journal said Charter has held talks with Bank of America (BAC, Fortune 500), Barclays (BCS) and Deutsche Bank (DB) to help come up with financing for a Time Warner Cable bid.

The company may also be reaching out to sovereign wealth funds and wealthy individuals to help pay for the buyout without taking on too much debt. Time Warner Cable is worth $34 billion -- almost three times as much as Charter.

Media mogul John Malone's Liberty Media (LMCA) is the largest shareholder in Charter and Malone has been a loud supporter of more consolidation in the cable industry, which is facing rising costs in programming.

Plus, cable companies are worried about losing subscribers, as some consumers cut the cord and shift to devices like Apple (AAPL, Fortune 500) TV and Roku as well as streaming video services like Aereo, Netflix (NFLX), Hulu and Amazon's (AMZN, Fortune 500)' Prime Instant Video.

While speculation of a deal has been rising for several months since Malone became a shareholder of Charter, the financing efforts represent "perhaps the most concrete step discussed to date," said Nomura analyst Adam Ilkowitz in a note to clients.

He expects Charter will have to raise about $25 billion in total -- $15 billion in debt and $10 billion in cash from other sources.

A merger between the two would likely save $500 million in programming expenses a year, Ilkowitz said.

But IHS cable networks analyst Erik Brannon said those savings may or may not trickle down to consumers, given the rising expenses and intense competition among cable providers.

Meanwhile, further consolidation between the nation's largest cable providers could raise concern among government regulators -- most notably the Department of Justice and the Federal Communications Commission. Citing unnamed sources, CNBC reported that Comcast is seeking advice on antitrust and FCC concerns.

A merger between Comcast and Time Warner Cable would result in one company with over 32 million subscribers, or nearly a third of all cable subscribers, Brannon said. But he doesn't think a merger between the two is likely.

"I don't think it makes sense for Comcast at this point," he said, noting that Time Warner Cable has been losing an average of about 175,000 subscribers per quarter recently. During the third quarter alone, the company lost a startling 306,000 subscribers due to its month-long fight with CBS (CBS, Fortune 500). "There isn't much upside versus the expenditures Comcast would have."

First Published: November 22, 2013: 1:32 PM ET

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Credit Suisse banker sentenced to 30 months in prison

NEW YORK (CNNMoney)

Serageldin, who had been extradited from the UK in April, had pled guilty to the charges. At the time of his February 2012 indictment, authorities said he faced up to 45 years in prison if convicted. Preet Bharara, the U.S. Attorney for the Southern District of New York, announced the sentencing late Friday evening.

According to the statement from Bharara's office last year, Serageldin's manipulated the prices of the mortgage bonds to try to cover up the trading loss. His price manipulation, it said, was responsible for $540 million of the $2.85 billion charge that Credit Suisse (CS) was forced to take in early 2008.

Serageldin's co-conspirators, David Higgs and Salmaan Siddiqui, have also pleaded guilty and are awaiting sentencing.

First Published: November 22, 2013: 7:56 PM ET

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California: 10K a day applying for Obamacare

More people are signing up for Obamacare coverage in California.

NEW YORK (CNNMoney)

The Covered California board also voted Thursday not to allow residents to extend individual policies that don't comply with Obamacare. Seeking to quell an uproar over insurers canceling plans, President Obama last week allowed state regulators and insurers to extend these policies for another year.

More than 360,000 people have created accounts on the Covered California website, through Nov. 19, according to health exchange officials. Some 39% of them are eligible for Medi-Cal. The rest can pick a private insurance policy on the exchange, with about half of them eligible for federal subsidies to defer premiums or out-of-pocket expenses.

Nearly 80,000 residents have signed up for a policy, the final step on the exchange before working out payment with the insurance company. That's up from 59,000 in mid-November.

"What we're seeing is people signing up," said Peter Lee, Covered California's executive director.

Younger Californians age 18 to 34 account for about 22.5% of the sign ups in October, just about the share they represent in the state population. Luring in younger and healthier consumers, who use fewer medical services and would offset older, costlier policyholders, are vital to the health of the state exchange. If young people don't enroll, then rates could soar for 2015.

"Not only are we seeing strong enrollment numbers overall, but enrollment in key demographics like the so-called young invincibles is very encouraging," said Lee.

Share your story: Are you signing up for Obamacare?

Those ages 55 to 64 account for about one-third of the 30,830 people in October who signed up for a plan.

Anthem Blue Cross, Kaiser Permanente and Blue Shield of California are capturing the majority of those picking plans, with each securing just over a quarter, according to exchange data.

One area where the exchange needs improvement is outreach to non-English speaking Californians, advocates at the exchange's board meeting said. Some 85.5% of those signing up are English-speakers, though only 56.1% of the state population is.

Coverage begins on Jan. 1, while open enrollment runs through March 31. Those who don't enroll face a penalty of $95 or 1% of family income, whichever is greater.

Also, although roughly 450,000 residents who are losing their current individual policies face higher premium prices on the exchange, the board opted not to take Obama up on his "fix." Extending the policies risks destabilizing the exchange because it is likely to attract sicker people seeking more comprehensive coverage, while allowing healthier policy holders to retain their bare bones plans. That could cause rates to rise in 2015. Also, it will cause much confusion among Californians. An insurance trade group representative urged board members not to allow extensions.

California joins at least eight other states rejecting the extensions. Some 200,000 residents will be allowed to extend their plans into early next year because their carriers -- Blue Shield of California and Anthem Blue Cross -- did not give them sufficient notice.

First Published: November 21, 2013: 5:42 PM ET

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Jury orders Samsung to pay Apple another $290 million

Samsung's smartphones (right) were found to have infringed on Apple's patents for the iPhone in a ruling last August.

NEW YORK (CNNMoney)

Thursday's ruling is the latest judgment in a serpentine case that has been ongoing for more than two years. In August 2012, the Korean smartphone maker was found to have violated several of Apple's patents, and a jury ruled that Samsung owed Apple more than $1 billion in damages. U.S. District Court Judge Lucy Koh later said the jury had miscalculated the award, and about $450 million worth of those damages were reconsidered in a new trial.

After Thursday's ruling, Samsung now owes Apple another $290 million in damages on top of the $640 million in damages that Judge Koh upheld in the original damages trial.

Apple (AAPL, Fortune 500) argued it deserved another $379 million, while Samsung said it owed only about $52 million.

The damages total is now $935 million -- close to the original $1.05 billion figure.

But to further complicate the issue, both companies have appealed the original August 2012 ruling ... so Thursday's decision could mean little or nothing.

Apple and Samsung are embroiled in dozens of patent disputes in courts around the world, but Thursday's ruling involves the biggest case. Apple accused Samsung of "slavishly" copying both the iPhone and iPad for its own devices, including the hardware design as well as software features like double-tap zooming. Samsung countersued, accusing Apple of infringing on its own software patents.

It could take years for the lawsuits to be resolved. And so it goes in the litigious world of smartphone patents.

First Published: November 21, 2013: 5:24 PM ET

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Banks warned on high-interest loans

NEW YORK (CNNMoney)

Deposit advance loans are short-term loans offered by firms including U.S. Bank (USB, Fortune 500), Wells Fargo (WFC, Fortune 500) and Regions (RF, Fortune 500), typically in increments of a few hundred dollars or less.

Like payday loans, they often carry stiff fees and interest rates that can stretch well into the triple digits on an annualized basis. But unlike payday loans, they are limited to a bank's account holders, with the lender automatically deducting repayment from the customer's direct deposit.

While advertised as a convenient source for emergency cash, these loans can quickly become a recurring expense for borrowers.

"[T]hese products can trap customers in a cycle of high-cost debt that they are unable to repay," Thomas Curry, head of the Office of the Comptroller of the Currency, said in a statement.

The OCC and the Federal Deposit Insurance Corporation said deposit advance loans could potentially violate the Truth in Lending Act and other consumer-protection laws.

The FDIC said it recognized "the demand for responsible small-dollar credit products," but called for such loans to be affordable and underwritten with attention to the borrower's ability to repay. Bank examiners will assess deposit advance programs with an eye to protecting consumers, the OCC said, flagging those with poor underwriting standards and excessive fees.

Related: Top 10 consumer complaints

Regulators have previously issued similar guidance on payday and subprime loans.

Consumer advocates have long criticized deposit advance loans, and called for the country's other major banking regulator, the Federal Reserve, to address them as well.

"At long last, two key financial watchdogs have taken decisive action against the predatory loan practices of national banks and federal savings associations," Americans for Financial Reform said.

U.S. Bank, Wells Fargo and Regions said they were reviewing the guidance to see how it would affect their lending programs. The Consumer Bankers Association, an industry group, warned that the regulators could end up driving consumers to pawnshops and unregulated lenders.

A survey on payday loans released earlier this year by the Pew Charitable Trusts found that 72% of borrowers believed more regulation of the industry was needed, though 48% said they thought payday loans help borrowers more than they hurt them.

"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 said.

First Published: November 21, 2013: 6:42 PM ET

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CBO: Real debt ceiling deadline could hit in March

Treasury Secretary Jack Lew this week again noted that political brinksmanship over raising the debt ceiling benefits no one. And he urged lawmakers to raise the limit soon to create certainty for the economy.

NEW YORK (CNNMoney)

But soon enough, they will have to turn their attention to raising the debt ceiling.

If they don't they will risk a potential default on U.S. debt as early as March, according to a report released Wednesday by the Congressional Budget Office.

The deal lawmakers brokered in October to end the government shutdown let the Treasury Department continue borrowing new money through February 7 without regard to the debt limit. Then, on February 8, the debt limit will automatically reset to a higher level that reflects how much Treasury borrowed during the nearly 4-month debt ceiling suspension period.

At that point, however, Treasury will still be able to use "extraordinary measures," the special accounting maneuvers that let it keep paying the country's bills without going over the debt limit.

But the measures won't last very long.

"CBO projects that those measures would probably be exhausted in March. However, the timing and magnitude of tax refunds and receipts in February, March, and April could shift that date of exhaustion into May or June," the agency said.

Related: Budget czar to Congress: Just do it

Given how uneven the government's cash flow is from day to day and month to month, it's impossible to say with more precision when an actual default could occur.

CBO notes that the Treasury typically issues a large amount of tax refunds in February and March, which can lead to big monthly deficits. By contrast, April tends to create a large surplus because everyone is sending in their federal tax returns along with checks for any additional taxes they owe for the previous year.

Treasury Secretary Jack Lew has noted many times that political brinksmanship over raising the debt ceiling benefits no one. And he suggested as much again this week at the Wall Street Journal CEO Forum, where he urged lawmakers to raise the limit without drama.

"I hope ... they just do the debt limit in a business-like way and give some certainty to the U.S. and global economy. That would be the right thing to do."

First Published: November 20, 2013: 5:39 PM ET

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Help! A bill collector is coming after me

NEW YORK (Money Magazine)

You have 30 days after a collection agency has contacted you in writing to ask for proof of the debt, says John Ulzheimer, a contributor to CreditSesame.com.

Should that month have passed, try negotiating with the shipper.

No luck? Your best choice (albeit unfair) is to give in. If the company still owns the debt, paying it may keep the claim off your credit report. If the shipper has sold the debt, though, the claim will stay even if you pay.

Why worry about a collections claim? Having one could ding an 800-plus FICO score by 200 points, raising rates with lenders and maybe insurance premiums too.

Related: Can my 80-year-old dad give me money from his IRA?

Your score will start to recover after a year, but Ulzheimer says it is not likely to exceed the mid-700s for the seven years the claim is listed.

First Published: November 20, 2013: 5:18 PM ET

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Google launches prepaid card

Google's new prepaid card will be funded by Google Wallet accounts.

NEW YORK (CNNMoney)

The tech giant announced the launch of a physical prepaid card on Wednesday. The new Google Wallet Card will be tied to a customer's Google Wallet account and can be used to make purchases and withdraw money from ATMs.

Google Wallet, which has been around since 2011, is a virtual wallet that is funded by transfers from other Google Wallet users or money transferred from other bank and credit card accounts. You can then use that balance to pay with a mobile phone at certain retailers.

The venture hasn't really taken off, however -- iPhones haven't adopted the technology necessary to use the in-store payment feature, and many retailers don't have the appropriate point-of-sale equipment to process the transactions.

Related: Occupy Wall Street's prepaid card for the 99%

But with the launch of this new prepaid card, a phone is no longer necessary to pay in stores -- customers can simply swipe their card the old-fashioned way instead.

The Google Wallet Card can be used at all locations where MasterCard is accepted, and it doesn't come with any fees. It doesn't even charge you to withdraw cash at the ATM (though some ATMs will charge you a separate fee).

The card can be requested through the Google Wallet Android app or online.

Google (GOOG, Fortune 500) is just the latest in a long line of companies, organizations and celebrities to jump on the prepaid card bandwagon. Last month, Occupy Wall Street debuted the Occupy Card. Walgreens, Justin Bieber and Suze Orman are among the many other newcomers to the business.

First Published: November 20, 2013: 6:49 PM ET

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Bernanke: Recent jobs reports are 'disappointing'

NEW YORK (CNNMoney)

The latest data show the economy added an average of 200,000 jobs each of the last three months -- marking a sudden breakout for the labor market after months of weaker reports.

Immediately after the October report was released, Fed watchers started speculating that it may just be the good news the Fed has been waiting for: Would the Fed start winding down its stimulus program at its next meeting in December?

Now, it doesn't sound like it.

In a speech Tuesday evening, Bernanke characterized that data as "somewhat disappointing."

The Fed stands by its stimulus program, he said, repeating comments that Vice Chair Janet Yellen delivered to the Senate Banking Committee last week.

"The FOMC remains committed to maintaining highly accommodative policies for as long as they are needed," Bernanke said in prepared remarks.

The Fed is currently engaged in its third bond-buying spree in the last five years, purchasing $85 billion in Treasuries and mortgage-backed securities each month. It's a controversial policy with unknown risks, but the aim is to stimulate the economy by keeping long-term interest rates low.

The central bank is looking for substantial improvement in the job market before it starts gradually reducing that bond-buying program.

Bernanke repeated Tuesday that the bond purchases are "not on a preset course, and the committee's decisions about their pace will remain contingent on the committee's economic outlook."

Related: Smooth sailing for Yellen in front of Senate

Yellen is currently under consideration to succeed Bernanke as Fed Chair, when his second term ends in January. Like Bernanke, she has recently spoken out in favor of continued stimulus.

"I consider it imperative that we do what we can to promote a very strong recovery," she told lawmakers last week.

First Published: November 19, 2013: 7:04 PM ET

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JPMorgan can deduct big chunk of $13 billion deal

NEW YORK (CNNMoney)

Here's why: Many of the costs associated with corporate legal cases are treated as deductible under the tax code, in much the same way that a company's wages or equipment expenses are.

That means JPMorgan will be able to reduce its tax bill because of many of the settlement payments that it must make.

"From 1913, our tax laws have permitted companies to deduct their 'ordinary and necessary' expenses, which include compensation and restitution payments," said Steve Rosenthal, a lawyer specializing in financial institution taxation and a visiting fellow at the Tax Policy Center.

But not all types of settlement payments are deductible. For instance, companies are prohibited from deducting fines and penalties payable to the federal government.

"In 1969, Congress decided that allowing companies to deduct fines and similar penalties frustrated public policy, so it disallowed deductions for these payments -- and, separately, disallowed deductions for antitrust damages, illegal bribes, and kickbacks," Rosenthal said.

Related: JPMorgan agrees to $13 billion settlement

The U.S. Department of Justice, which negotiated the deal with JPMorgan, said the bank will pay $2 billion as a "civil penalty" to settle certain legal claims.

And it's JPMorgan's understanding that the $2 billion is not deductible, the bank's chief financial officer said on an analyst call Tuesday.

It wasn't immediately clear how much of the rest of the $13 billion settlement, if any, may be considered non-deductible as well.

But here's the general bottom line: The compensation or restitution portions of a settlement like the one struck by JPMorgan (JPM, Fortune 500) may be deducted, but the penalties can't.

While that may seem like a bright line, settlements are often written in a way that can leave a lot open to interpretation.

In some deals, for instance, a penalty may be characterized in such a way that the company could argue that it should be deductible.

That's why some are pushing for much greater transparency in the drafting of government settlements.

Phineas Baxandall, a senior analyst at the U.S. Public Interest Research Group, wants agencies like Justice to expressly label what is "a penalty for tax purposes."

Senators Charles Grassley and Jack Reed recently introduced a bill that would narrow the scope of what can be considered deductible in such a deal.

Under their bill, all settlement payments over potential violations of the law would be considered non-deductible -- unless they meet the criteria of restitution or a payment needed to bring a company into compliance with the law.

The legislation would further require agencies to spell out what is deductible and what is not.

"If a company is paying thousands, millions or even billions in fines, it shouldn't save money for those same misdeeds. It should be held accountable," Reed said in a statement.

First Published: November 19, 2013: 6:55 PM ET

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House panel to investigate unemployment data

NEW YORK (CNNMoney)

Reps. Blake Farenthold, Darrell Issa and Kevin Brady submitted a letter to Census Bureau Director John Thompson on Tuesday, demanding the agency investigate allegations that an employee in its Philadelphia office fabricated data under instructions from his supervisor.

The accusations came from a New York Post report, which claims the shady behavior reaches beyond just that one employee and go back at least as far as 2010.

"The implications of an unreliable unemployment figure are serious and far-reaching," reads the congressmen's letter. "The national unemployment rate affects everything from legislation on Capitol Hill, to Federal Reserve policy, to stock prices on Wall Street."

The Census Bureau responded, issuing a statement that said it takes the accusations "very seriously," but it doesn't believe there's a widespread problem.

"We have no reason to believe that there was a systematic manipulation of the data described in media reports," a Census Bureau spokesperson said.

Every month, the Census Bureau conducts a nationwide survey of 60,000 households known as the Current Population Survey. It's a gargantuan task involving 2,200 Census employees. Even if one rogue employee decided to submit fake information, it would be difficult to alter the overall results dramatically -- the problem would have to be wider spread.

The agency also said it does random checks, often re-interviewing survey participants and double checking data that its employees have submitted.

The Labor Department then uses this data to calculate the national unemployment rate and other employment statistics. It uses a separate survey of businesses to calculate the number of jobs created in the economy each month.

Related: Jack Welch: I was right about jobs report

The latest reports have shown the unemployment rate has fallen slowly from as high as 10% in 2010, to 7.3% as of October. The news has not been entirely encouraging though, because the data also show much of the decline is due to workers dropping out of the labor force.

Allegations that the data are manipulated are nothing new. Last year, Jack Welch -- the former CEO of General Electric -- accused the Obama Administration of fudging the numbers ahead of the election. Hilda Solis, who served as Labor Secretary at the time, called those accusations "insulting."

The New York Post article also alleges the Census manipulations continued in the months leading up to the 2012 election, but fails to point out the named source in the story -- Julius Buckmon -- hasn't worked for the Census Bureau since August 2011. According to the Post, Buckmon filed as many as 100 fake reports a month in 2010.

A Census Bureau spokesperson confirmed to CNNMoney that Buckmon no longer works at the agency.

First Published: November 19, 2013: 9:50 PM ET

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U.S., JPMorgan near $13 billion settlement

JPMorgan and Justice Department could announce settlement as soon as Tuesday.

WASHINGTON (CNNMoney)

Elements of the proposed pact are now being signed by states that are parties to the agreement, the person said. Only a few details remain to be completed.

The outlines of the deal were first tentatively agreed to in October in negotiations led by Attorney General Eric Holder and JPMorgan (JPM, Fortune 500) Chief Executive Jamie Dimon.

A spokesman for the bank declined to comment on Monday evening.

In recent days, the parties finalized one of the last major pieces of the deal calling for $4 billion in money to help consumers.

Of that amount, at least $1.5 billion will go to reduce loan payments for homeowners mortgages are underwater, meaning the money owed on the loan exceeds the value of the home. Another $300 million to $500 million will pay for partial loan forgiveness and other aid for homeowners, with the goal of keeping them in their homes.

The remaining $2 billion could be used in a variety of ways, including funding new loans for low-income home buyers that the bank would be required to keep on its books instead of selling to investors. The bank could also use some of the money to pay for knocking down foreclosed homes in areas hard hit by the mortgage crisis.

An independent monitor will keep an eye on the bank to ensure compliance.

At issue in the deal are mortgage-backed securities and related derivatives that were blamed as a key cause of the financial crisis.

Related: Where are key players from the financial crisis now?

The $13 billion settlement includes an already-completed $4 billion deal with the Federal Housing Finance Agency to compensate Fannie Mae and Freddie Mac for allegedly misleading practices in loans sold to those agencies.

A federal criminal investigation based in Sacramento, California, would continue against the bank and several employees, and JPMorgan Chase has agreed to cooperate with that probe.

First Published: November 18, 2013: 6:57 PM ET

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Maria Bartiromo leaving CNBC

Bartiromo joined CNBC in 1993.

NEW YORK (CNNMoney)

CNBC anchor Maria Bartiromo is leaving the financial news channel, CNBC spokesman Brian Steel confirmed Monday. She is set to join rival Fox Business Network, according to various reports Monday evening.

"After 20 years of groundbreaking work at CNBC, Maria Bartiromo will be leaving the company as her contract expires on November 24th," Steel said in a statement. "Her contributions to CNBC are too numerous to list but we thank her for all of her hard work over the years and wish her the best."

A Fox spokeswoman said the network "[does] not have anything to announce at this time"

Related: Forbes explores sale

Bartiromo currently hosts the daytime program "Closing Bell" as well as a weekend show, "On the Money with Maria Bartiromo." She joined CNBC in 1993 and later became the first journalist to report live from the floor of the New York Stock Exchange on a daily basis.

She worked for five years at CNN Business News prior to joining CNBC.

Nicknamed the "money honey," Bartiromo was famously the subject of a tribute song by punk rocker Joey Ramone.

"I watch her at the big board every single day," Ramone sang. "While she's reporting you best stay out of her way."

First Published: November 18, 2013: 7:08 PM ET

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Protesting Wal-Mart workers win round in labor fight

Last year, hundreds of workers and thousands of supporters took part in Black Friday demonstrations in front of Wal-Mart stores across the country.

NEW YORK (CNNMoney)

The National Labor Relations Board, which protects the rights of workers who organize for better working conditions, said in a statement Monday that its general counsel had found merit in several allegations against Wal-Mart.

The agency said it would file a complaint if Wal-Mart and the parties could not reach a settlement.

Wal-Mart, in statements on national TV and to employees at Wal-Mart (WMT, Fortune 500) stores in California and Texas, illegally threatened "reprisal" for workers who protested on November 22, 2012, the labor board said.

The NLRB also said Wal-Mart stores in more than a dozen states "unlawfully threatened, disciplined, and/or terminated employees" who participated in legal strikes and protests.

Related: Amid criticism, Wal-Mart touts promotions for workers

At the same time, the NLRB said it did not find merit in allegations that Wal-Mart had retaliated by changing work schedules, or that it interfered with workers' right to strike by telling non-employee protesters to move from Wal-Mart property.

Wal-Mart spokesperson Brooke Buchanan said the company will pursue its "options to defend" itself, noting that it takes labor laws very seriously.

"We believe our actions were legal and justified," Buchanan said.

The finding stems from claims filed a year ago related to Black Friday strikes and protests by hundreds of workers across the country.

An advocate for Wal-Mart workers applauded the NLRB's finding.

"The board's decision confirms what Walmart workers have long known -- the company is illegally trying to silence employees who speak out for better jobs," said Sarita Gupta, executive director of Jobs With Justice and American Rights at Work.

Worker protests continue at Wal-Mart. Earlier this month, five workers seeking higher wages were arrested while demonstrating in Los Angeles.

First Published: November 18, 2013: 7:54 PM ET

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Hot startup Coin has 3 big problems

Will this card be the only one you ever need in your wallet again? Startup Coin hopes so.

NEW YORK (CNNMoney)

Coin revealed itself to the world with a gorgeously produced video that lays out how the card will work: Swipe your credit, debit or rewards card through an attachment on your smartphone, snap a picture of the front and back, and the card's information is stored in Coin. Simple, right?

Once your cards are stored, you can use Coin's digital display to select which of them you'd like to use to pay. Merchants swipe Coin just as they would a regular card.

In short, Coin aims to solve the problem of too many cards in a fat wallet. That may not sound like a major issue to solve, but loads of people loved Coin's premise and pre-ordered the device for $50 ahead of its slated summer 2014 release (when it will cost $100).

So yes, the hottest new startup product doesn't exactly exist yet. It's a common phenomenon in the Kickstarter world we live in.

But CEO and founder Kanishk Parashar told CNNMoney that the company hit its fundraising goal of $50,000 worth of pre-orders in just 40 minutes last Thursday.

The company -- which is backed by investors including Y Combinator and K9 Ventures -- has been testing working prototypes of Coin and is "two iterations away" from being ready to manufacture, Parashar said.

Still, it's hardly clear that Coin can meet its promised launch date of next summer. As with any buzzy product that hasn't yet been released, various problems could prop up. There's already a similar "all-in-one" card called the Protean Echo that got some tech-press love in August 2012. But the Echo website still lists the product as "Coming Soon!"

But even if Coin makes it to consumers on time, here are three other hurdles it must overcome before you can cut up all your credit cards for good.

Coin won't work if your phone is dead: Yup. The current iteration of Coin "locks up" if it's away from your smartphone for more than 10 minutes ... or if your phone's battery has run out.

It's a security measure to ensure that you don't lose your card, which is a valid concern. (Your phone will even send you a notification if you do leave your Coin behind at a bar.) But having to depend on battery-guzzling smartphones in order to pay for dinner is an obvious problem.

The company is working on a way to let users re-activate Coin from the card itself, even if a phone is far away or out of juice. But that feature hasn't been worked out yet.

Related story: How to successfully launch a second startup

Credit card companies might nix it: Coin hasn't secured approval with any of the major credit card issuers and networks it hopes to work with, nor has the company gotten a sense of whether the industry would embrace it.

Parashar said Coin has had "some conversations with some credit card companies," but he wouldn't reveal whether they were major issuers or how they felt about his product.

Why hasn't Coin had more wide-ranging discussions? "We're a really small company, and these are really large banks," Parashar said. "We will talk more when Coin is further along."

But one could argue Coin won't get further along if nobody wants to partner with it.

If major credit cards see Coin as a liability or ripe for fraud -- after all, the actual issued card isn't being presented -- Coin would be sunk.

Even the mighty Google (GOOG, Fortune 500) received an industry wrist slap in August 2012, when it expanded its mobile Wallet program. Google said all major credit cards had signed on, but American Express (AXP, Fortune 500) fired back with a statement that it hadn't approved a partnership and was still learning about Google's technology.

But Parashar insisted he has "no concerns" that credit card companies won't endorse Coin. The product already encrypts credit card information, he said, and Coin is working on "two more features to curb the possibility of fraudulent activity." Visa (V, Fortune 500), MasterCard (MA, Fortune 500), AmEx and Discover (DFS, Fortune 500) either declined to comment about Coin or didn't reply to requests.

Merchants might be stumped: Coin's design is slick, but it really doesn't look like the familiar old credit cards merchants are used to accepting. No raised-up numbers. No hologram.

"When we pay with Coin in San Francisco, as part of our testing, we are always accepted gladly," Parashar said.

And while it's true that other new mobile payment solutions like Square are becoming more common with retailers, it's easy to see how merchants outside of the Bay Area tech scene might be skeptical of a credit card that doesn't look like anything they've seen before.

Yet Coin doesn't plan to reach out to merchants to facilitate a nationwide rollout.

"We don't plan to go out of our way to educate the merchant world about it, because we're focused on the consumer side," Parashar said. "And anyone who works on the merchant side is also a consumer anyway."

Coin has set lofty goals in attempting to tackle the payments industry. But it'll take more than hype to completely revamp the wallet.

First Published: November 17, 2013: 11:14 AM ET

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