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Hackers attack Yahoo Mail accounts

Written By limadu on Jumat, 31 Januari 2014 | 10.20

NEW YORK (CNNMoney)

Yahoo (YHOO, Fortune 500) said it recently identified a coordinated effort by hackers who tried to log into many email accounts with stolen usernames and passwords. The note by Yahoo products executive Jay Rossiter did not immediately say how many accounts were affected.

The company declined to comment further but said it has teamed up with federal law enforcement to investigate the attack.

The credentials were likely taken from a third-party database, Yahoo said.

Related story: Stolen credentials blamed in Target breach

Yahoo said it reset passwords for users who were impacted. The company sent them text messages Wednesday night warning of "unusual activity on the network." To top of page

First Published: January 30, 2014: 6:04 PM ET


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Chipotle shares sizzle following red-hot quarter

chipotle quarter

Chipotle says it plans to open between 180 and 195 new restaurants in 2014.

NEW YORK (CNNMoney)

The burrito chain's stock surged nearly 13% in after-hours trading Thursday following fourth-quarter results showing the company's strong growth continuing.

Chipotle (CMG) posted $844 million in sales, up 21% versus a year prior, and $80 million in earnings. The company is expanding aggressively, opening 56 new restaurants in the fourth quarter, and now has nearly 1,600 locations.

Related: Which country has the cheapest Big Mac?

Chipotle was spun off from McDonald's (MCD, Fortune 500) in 2006, and shares have been on a tear ever since, rising over 60% in the past year alone.

McDonald's meanwhile may be losing its luster. Its stock has been in the doldrums as it's struggled to match new menu offerings from competitors like Burger King (BKW) and Wendy's (WEN).

Related: Burger King tests Chicken and Waffle sandwich

There are still some Chipotle skeptics out there -- hedge fund moguls David Einhorn and Jeffrey Gundlach have made cases against the stock in the past year and a half. To top of page

First Published: January 30, 2014: 6:50 PM ET


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GoldieBlox ad makes Super Bowl history

goldieblox

Debbie Sterling's toy startup GoldieBlox becomes the first small business ever to air an ad during the Super Bowl.

NEW YORK (CNNMoney)

The startup will make Super Bowl history this Sunday by becoming the first small business to have a commercial air on TV during the most-watched event of the year.

GoldieBlox won a contest run by Intuit (INTU), where the grand prize was the 30-second ad that will debut during the third quarter of the game. Intuit will pick up the $4 million cost.

"We still can't believe that we won. We were all crying when we found out," said Debbie Sterling, founder of GoldieBlox, a line of storybooks and toys aimed at getting young girls excited about science and engineering.

GoldieBlox's ad will appear alongside some of the biggest brands in the world such as Budweiser, Cheerios, and Coca-Cola (KO, Fortune 500). Super Bowl commercials typically are dominated by big brands that can afford the hefty price tag.

Related Story: Sneak peek at the Super bowl spots

But GoldieBlox got its start just 18 months ago and has barely 15 employees. Its toys sell in Toys R Us and Target (TGT, Fortune 500).

The ad, which was produced by a top ad agency RPA, puts GoldieBlox shoulder to shoulder with the big leagues, and Sterling hopes the exposure to over 100 million viewers will enable the brand to take a "giant leap forward for our mission."

A Stanford University engineering graduate, Sterling launched GoldieBlox in 2012 after became obsessed with the idea of "disrupting the pink aisle" with a toy that could potentially inspire the next generation of female engineers.

Related Story: Super Bowl creating traffic jam for private jets

She turned to crowdfunding site Kickstarter with the goal of raising $150,000 to fire up her idea.

"We did that in just 4 days," said Sterling. In total, her Kickstarter campaign raised over $285,000. "So yes, we knew we were on to something," she said.

Intuit's contest kicked off last July and asked U.S.-based business with 50 or fewer employees to submit a compelling story about their company.

An online vote determined the top 20 submissions, and then Intuit's 8,000 employees voted to pick four finalists -- GoldieBlox, dog treats maker Barley Labs, organic egg farm Locally Laid Egg Company and natural compost producer POOP. A separate online vote in December determined the grand-prize winner.

Intuit said millions of votes were cast for the entries but declined to say how many went to GoldieBlox.

"GoldieBlox is an outstanding example of the 29 million small businesses across the United States," said Intuit's CEO Brad Smith. "It's clear voters around the world felt the same way."

GoldieBlox's Intuit win, however, isn't its first brush with fame.

Last year, the company created a parody video that featured the Beastie Boys song "Girls." The video, which featured young girls rejecting the "princess" stereotype as they built a complex maze, became a viral hit. But it also brought on a copyright infringement lawsuit by the Beastie Boys for using their song.

GoldieBlox initially countered with its own lawsuit but ultimately removed the song from the video.

Intuit also confirmed that it will hold a similar contest again next year. To top of page

First Published: January 30, 2014: 6:17 PM ET


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Google to sell Motorola Mobility unit to Lenovo

Written By limadu on Kamis, 30 Januari 2014 | 10.20

google lenovo

China-based Lenovo is the world's largest PC maker.

NEW YORK (CNNMoney)

The search giant announced Wednesday that it will sell its Motorola Mobility smartphone unit to Chinese PC maker Lenovo for $2.9 billion, giving up on a business it purchased for $12.5 billion in May 2012.

The deal was Google's largest-ever acquisition, giving it the ability to produce hardware to go along with its Android mobile operating system. But Motorola has been a perpetual money-loser, raising the ire of shareholders and Wall Street analysts.

Google (GOOG, Fortune 500) said it will maintain ownership of the "vast majority" of the Motorola Mobility patent portfolio after the sale.

When Google bought Motorola, the company said it planned to use those patents to ward off lawsuits from Apple (AAPL, Fortune 500) and Microsoft (MSFT, Fortune 500) that threaten Android. Lenovo will be able to license those patents from Google.

In a blog post announcing the deal, Google CEO Larry Page acknowledged that it doesn't make sense for his company to continue manufacturing phones itself.

"[T]he smartphone market is super competitive, and to thrive it helps to be all-in when it comes to making mobile devices," Page wrote. "This move will enable Google to devote our energy to driving innovation across the Android ecosystem."

Google shares rose 2% in after-hours trading.

Related: Can Lenovo do it?

Lenovo chief Yang Yuanqing said the deal "will immediately make Lenovo a strong global competitor in smartphones."

In addition to being the world's largest PC maker, the company is already the No. 4 global smartphone maker after Samsung, Apple (AAPL, Fortune 500) and Huawei. In a conference call with reporters Wednesday afternoon, Lenovo executives said the company will soon be able to sell more than 100 million smartphones annually, challenging Apple and Samsung.

While its phones are already well-known in China and other international markets, Lenovo will continue to use the Motorola brand in the U.S. and Latin America.

"We are confident that we can bring together the best of both companies to deliver products customers will love and a strong, growing business," Yang said.

Lenovo announced another big transaction with an American company last week, agreeing to pay $2.3 billion for IBM's (IBM, Fortune 500) low-end x86 server business.

Page, for his part, said Google's sale "does not signal a larger shift for our other hardware efforts."

Earlier this month, Google announced that it was buying connnected home-appliance maker Nest for $3.2 billion.

"The dynamics and maturity of the wearable and home markets, for example, are very different from that of the mobile industry," Page said. "We're excited by the opportunities to build amazing new products for users within these emerging ecosystems." To top of page

First Published: January 29, 2014: 5:31 PM ET


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Stolen credentials blamed in Target breach

NEW YORK (CNNMoney)

Since discovering the breach, "we have taken extra precautions such as limiting or updating access to some of our platforms while the investigation continues," Target spokeswoman Molly Snyder said.

The news adds details about the cause of the Target (TGT, Fortune 500) hack, which remains under investigation. It could be the largest breach in U.S. retail history.

The holiday shopping season breach affected up to 110 million customers, including 40 million credit and debit cards and up to 70 million customers' personal information.

The discount retailer discovered the breach in mid-December, notified customers several days later, and launched an investigation with the help of a private security firm and law enforcement.

Related: Target hack: Tips for all customers

Attorney General Eric Holder spoke about the federal investigation at a Senate hearing on Wednesday.

"The Department of Justice takes very seriously reports of any data breach, particularly those involving personally identifiable or financial information, and looks into allegations that are brought to its attention," he said. "And we are committed to working to find not only the perpetrators of these sorts of data breaches, but also any individuals and groups who exploit that data via credit card fraud."

Since Target's disclosure, high-end retailer Neiman Marcus announced over 1 million customer cards were compromised in a breach last summer. Over the weekend, crafts retailer Michaels said its systems may have been breached.

It isn't immediately clear if these possible attacks were related. Security experts have warned it is likely other companies were targeted by the hackers who hit Target. To top of page

First Published: January 29, 2014: 7:53 PM ET


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Asia stocks battered by emerging market fears

HONG KONG (CNNMoney)

Japan's Nikkei was off 3.2% in morning trading, while Hong Kong's Hang Seng dropped 1.4% and Australia ASX All Ordinaries lost 1%.

The Shanghai Composite, which often diverges from other Asian markets, was trading 0.6% higher.

Investors have been rattled in recent weeks by growing fragility in Turkey, India, Brazil, Indonesia and South Africa as the Federal Reserve rolls back the bond-buying program that has supported growth in emerging markets. Weakness in China's all-important manufacturing sector has only added to worries.

Emerging market currencies have suffered a broad decline, and even drastic efforts to control the situation appear to be falling short.

On Tuesday, Turkey's central bank increased its key overnight lending rate to 12% from 7.75%.The Turkish lira fell further Wednesday.

In addition to Turkey, India and South Africa have raised rates this week to stabilize shaky currencies. The Argentinian peso has been in free fall since Argentina's government moved to devalue the currency last week.

Related story: Google to sell Motorola Mobility unit to Lenovo

Many emerging markets have benefited over the past few years as the Fed and other central banks have pumped money into the global economy.

But investors have been pulling out of emerging markets this year now that the Fed has begun to scale back its bond buying. The central bank said Wednesday that it would reduce its bond-buying program to $65 billion a month from $75 billion.

The bet is that higher rates in the U.S. and a stronger dollar will make emerging market investments far less attractive. To top of page

First Published: January 29, 2014: 9:56 PM ET


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5 airline fees we hate the most

Written By limadu on Rabu, 29 Januari 2014 | 10.20

airline baggage fees

Baggage fees top the list of most hated airlines fees.

NEW YORK (CNNMoney)

U.S.-based airlines were raking in baggage and reservation change fees at an annualized rate of roughly $6 billion last year, according to the Department of Transportation.

And the fees keep getting worse. United Airlines (USBOX) charges an oversized baggage fee of $200 now and increased its fee for a third checked bag to $125 from $100 in December.

A United spokesman said the hike better enables the airline to recover costs associated with transporting checked bags, especially overweight ones.

Even the cost of taking your Jack Russell Terrier is getting jacked up. Southwest Airlines (LUV, Fortune 500) just raised its pet transport fee to $95 from $75.

"Adjusting the price will allow us to remain competitive in pricing, yet still lower than our competitors," said a spokeswoman for Southwest.

Related: Most complained about credit cards

So which of these fees do we hate most? A recent poll of 6,100 fliers by Airfarewatchdog found these fees to be the most egregious.

1. Baggage fees: Spirit Airlines (SAVE) rang in the new year by hiking many of its baggage fees by up to $6 per bag. The standard fees it charges depend on when you pay. The first checked bag is $21 to $30 if paid at booking, $31 to $40 if paid while checking in online, $45 at the airport, and a whopping $100 at the gate. Overall, the carrier has 24 different baggage fees.

Many of the other major carriers, including American Airlines (AAL), Virgin America and Alaska Airlines (ALK), charge $25 for the first checked bag.

Related: Getaways that give back

There are a few holdouts that don't charge, however. Southwest allows you to check two bags for free and JetBlue (JBLU, Fortune 500) allows you one. Frequent flier participants can also escape the fee.

Another way to avoid them, is to get credit cards affiliated with the airlines that include free checked bags, advises George Hobica, founder of Airfarewatchdog.

2. Change/cancellation fees: Have a last-minute emergency and need to change your flight? It will cost you anywhere from $30 to $200.

"[Passengers] can feel gouged when they get charged. It's not pleasant," said Douglas Kidd, executive director of the National Association of Airline Passengers, an advocate for passengers' rights.

Related: 5 dream trips of a lifetime

Even more infuriating: "With flights so full, the chances are that the airline will collect the $200 fee and turn around and almost immediately sell the seat, perhaps for an even higher fare," said Hobica.

He believes the airlines are charging such high fees because they are trying to get passengers to buy more expensive refundable fares.

3. Advance seat selection: The days when an airline let you sit with your family for free are becoming increasingly rare. Allegiant Air (ALGT), the low-cost carrier, now charges up to $80 for this service, AirTran charges $6 to $20, and Spirit $1 to $50.

An Allegiant spokeswoman said the airline seeks to offer the lowest fares and one way they do that is by offering a menu of services, allowing passengers to customize their travel to their needs and budget.

"For passengers who don't have strong feelings about where they sit, they can travel for a little less," she said.

4. Phone reservation fees: If you have to book your reservation on the phone, most U.S. carriers (Southwest is an exception) charge $10 to $25.

Travelers can easily avoid these fees by booking online for free, explained Hobica.

5. Fees for last-minute frequent flier award tickets: A few airlines charge their loyal customers a fee of $75 to book flights with their frequent flier miles within 21 days of less of their departure date.

Hobica says the airlines will waive the fee for higher status frequent fliers. So those who have been dinged in the past may be motivated to build up more miles in order to avoid the fee in the future.

Kidd sees it much differently. "It's a good way to lose passenger loyalty," he said. To top of page

First Published: January 28, 2014: 5:43 PM ET


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Turkey's central bank hikes rates to combat sell-off

turkey central bank 2

Turkey's central bank heads into a crisis meeting on raising rates to defend the lira, despite government claims that the economy is solid.

NEW YORK (CNNMoney)

The announcement came following an emergency meeting convened in response to the crisis. The bank increased its key overnight lending right well beyond what analysts were expecting to 12% from 7.75%.

Other emerging market currencies, including Argentina's peso and India's rupee, have also been hit by expectations that the Federal Reserve and the Bank of England will pull back on their stimulus measures, which have driven inflows to developing economies in recent years.

Related: Emerging markets rattled as anxiety rises

Over the past month, the Turkish lira has sunk to record lows against the dollar, and weakened sharply against the euro. It stabilized Tuesday on expectations that the country's central bank would act, and extended gains following the announcement.

Turkish stocks have also struggled of late as a wide-ranging probe into public sector corruption continues to spook investors.

Police have so far detained scores of high-profile suspects, including the sons of three ministers, a mayor and the chief executive of a major state bank. The investigation has undermined the government of Prime Minister Recep Tayyip Erdogan ahead of national elections in August. To top of page

First Published: January 28, 2014: 5:55 PM ET


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China's anti-corruption drive eats into growth

china corruption

Chinese President Xi Jinping has ordered an end to lavish spending by officials on everything from luxury hotels to lavish funerals.

HONG KONG (CNNMoney)

The anti-corruption campaign has ensnared executives working for foreign and Chinese companies, and more than 37,000 government officials have been placed under investigation, according to state media.

Employees at drug giant GlaxoSmithKline (GLAXF), dairy producer Danone (DANOY) and state-backed oil company PetroChina (PCCYF) have all been implicated.

In addition, Beijing has put the kibosh on conspicuous spending. Government representatives have been told to stop holding extravagant banquets, riding in showy cars and giving or accepting luxury gifts.

Flower arrangements and exotic Chinese dishes like shark fin have been banned from official functions. Officials have even been ordered to stop holding lavish funerals.

Related story: Baidu CEO on foreign firms in China

While it's difficult to quantify the size of the hit, economists surveyed by CNNMoney said the effects of the crackdown have shown up in government statistics.

"China's anti-corruption campaign looks to have weighed on public spending in some consumption of goods and services," said Qinwei Wang of Capital Economics.

Wang estimates that the clean up drive may have shaved 0.1 to 0.2 percentage points off GDP growth for the full year.

Economists pointed to slower retail sales growth in the first half of 2013, which dropped to 12.8% from 14.3% the previous year. UBS economist Wang Tao said that while activity picked up a bit late in the year, consumption for 2013 as a whole will suffer "a visible dip."

The campaign, which began in earnest after Xi Jinping took up his post as China's president, is affecting a range of industries.

Related story: Biggest risk to markets? Global politics

Just a few months after Xi ordered party officials to rein in spending, the government reported that high-end catering enterprises were suffering, sales of Chinese specialty dishes had plummeted by as much as 70%, and premium liquor sales had flopped.

Luxury retailers have suffered, with sales growth in China falling to 2% in 2013 from 7% the previous year, according to a report by consulting firm Bain & Co.

Fancy hotels are also feeling the pinch as officials cancel big banquets and conferences. State media reported last week that more than 50 five-star hotels have asked for one star to be removed, hoping that will allow them to continue to host official events.

Related story: China's new richest man worth $22 billion

Some say Xi's campaign is purely political -- an effort to consolidate his power, address public discontent with Communist Party officials, and perhaps maintain social stability as the wealth gap widens.

Others are hopeful that this marks a new chapter of cleaner government in China, even as reports of incredible wealth accumulation by top party officials pile up.

Regardless of Xi's motivations, UBS's Wang said the campaign could be positive for the economy in the long run.

"The campaign has somewhat increased public confidence in the government officials, improved social stability, and reduced transaction costs of conducting business in China," she said. To top of page

First Published: January 28, 2014: 9:10 PM ET


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ATM outage strands U.K. bank customers

Written By limadu on Senin, 27 Januari 2014 | 10.20

NEW YORK (CNNMoney)

A Lloyds Banking Group (LLDTF) spokeswoman said the three-hour outage had been resolved but did not know how many customers had been unable to use their cards.

Issues with in-store purchases were resolved by 6 p.m. local, and ATM outages were resolved by 7:30 p.m. At 7:45 p.m. local, the bank's customer service hotline was still warning callers "we're extremely busy at the moment" because the bank was "experiencing issues with some credit cards and debit card transactions."

One bank executive took to social media, directly answering customer complaints and questions. He said the outage was caused by a server failure.

"My apologies to TSB customers having problems with their cards. I'm working hard with my team now to try to fix the problems," wrote Paul Pester. He is CEO of TSB Bank, which split off from Lloyds in September but is one of several banks that he tweeted "use the same IT systems."

Related: ATM heist thieves pocket $3 million in just hours

The banking group has suffered other payment outages, including one when the two banks split and divvied up their retail locations and customer accounts. To top of page

First Published: January 26, 2014: 4:03 PM ET


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Investor compares U.S. wealth debate to Nazi Germany

tom perkins

Tom Perkins, pictured in September 2013.

NEW YORK (CNNMoney)

"Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its 'one percent,' namely its Jews, to the progressive war on the American one percent, namely the 'rich,'" he wrote, opening a letter to the editor of the Wall Street Journal.

"This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendent 'progressive' radicalism unthinkable now?" he concluded.

The venture capital firm he co-founded -- Kleiner Perkins Caufield & Byers -- lists him as a "partner emeritus" but distanced itself from his comments.

"Tom Perkins has not been involved in KPCB in years. We were shocked by his views expressed today in the WSJ and do not agree," an online posting from the firm read.

Perkins told CNN's Dan Simon on Sunday he stood by his comments. "As for criticism of the letter, everyone is entitled to his or her opinion," he said.

In an email to the news outlet Bloomberg, he dismissed the views of his former firm.

"[O]ur philosophies and strategies have drifted so far apart that now my name means little on the door," the outlet said he wrote.

"In the Nazi area it was racial demonization, now it is class demonization," Perkins wrote.

On Kristallnacht in 1938, almost 100 Jewish people were killed and 30,000 imprisoned in concentration camps amid destructive riots that targeted Jewish-owned businesses and synagogues.

In the letter, he claims evidence of "a rising tide of hatred of the successful one percent," including protests surrounding private buses that transport technology workers from San Francisco to the campuses of companies like Google (GOOG, Fortune 500). He also takes aim at the San Francisco Chronicle, which he claims spends "virtually every word" demonizing the rich and has launched "libelous and cruel attacks" on his ex-wife, Danielle Steel, an author and philanthropist.

Another prominent investor was criticized for referencing the Nazis. In 2010, Blackstone chief Stephen Schwarzman reportedly likened an Obama administration proposal to raise tax rates for hedge funds to a war, then added, "It's like when Hitler invaded Poland in 1939." He later apologized. To top of page

First Published: January 26, 2014: 1:08 PM ET


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Emerging markets rattled as anxiety rises

india currency

India's rupee has weakened in recent days amid concerns about emerging market economies.

HONG KONG (CNNMoney)

Asian markets opened sharply lower as benchmark indices in Tokyo and Hong Kong shed more than 2% as investors looked to move out of riskier assets. South Korea's KOSPI Index was off by 1.6% in morning trading.

In currency markets, the yen gained ground against the dollar as investors parked their money in traditional safe havens. Emerging market currencies extended losses, building on a trend from last week that hit the Argentinian peso, Turkey's lira and India's rupee especially hard.

Emerging markets have been hammered in recent days due to the possibility that the Federal Reserve, Bank of England and Bank of Japan will pull back on propping up their own economies. Signs of weakness in China's huge manufacturing sector and a looming default in the shadow banking system have only added to worries.

"The fear is that the Fed, Bank of England, and even the Band of Japan will become less dovish more quickly than had been though even a few weeks ago," said Steven Englander, head of foreign exchange strategy at CitiFX.

Related story: Will stocks break out of their rut?

Developing markets were the prime beneficiaries of low interest rates in the United States, which encouraged a rush of capital into the developing world. Should rates rise and that trend reverse, vulnerable economies could take a hit as their currencies weaken and investors flee.

Related story: Buckle up! 2014 will be a bumpy ride

The Fed will reveal its latest policy decision Wednesday. At its previous meeting, the Fed announced plans to begin scaling back its massive stimulus program by $10 billion per month to $75 billion in monthly bond purchases, citing signs of economic growth.

Even though the economy only added 74,000 jobs in December, many market observers expect the Fed will continue to cut back on its quantitative easing. To top of page

First Published: January 26, 2014: 10:07 PM ET


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Buckle up! 2014 will be a bumpy ride

Written By limadu on Minggu, 26 Januari 2014 | 10.20

davos laurence fink

BlackRock CEO Laurence Fink: "I hear way too much optimism going forward -- we're going to be in a world of much greater volatility."

Davos, Switzerland (CNNMoney)

Financial experts at the World Economic Forum in Davos were cautiously optimistic about the outlook for growth in 2014, but the beginning of the end of post-crisis emergency financial support will be bumpy.

The Dow just had its worst week since 2011. And emerging market currencies got hit hard as investors fled riskier assets.

Investors were troubled by signs of weakness in China's huge manufacturing sector and a looming default in the shadow banking system. Expectations that the Federal Reserve will continue to pull back monetary stimulus pushed things along.

"I hear way too much optimism going forward -- we're going to be in a world of much greater volatility," said BlackRock CEO Laurence Fink.

Related: Cry for me Argentina? Peso plunges

Investors had been encouraged by "good, consistent" central bank policy around the world in recent years, he said. But the next impetus for growth would depend on governments in China, Japan, the U.S. and Europe delivering on promised economic reforms.

"That troubles me, because there has been great consistency of governments dragging their feet," Fink said.

Monetary policy is already beginning to change in the U.S. and U.K., in response to stronger growth and falling unemployment.

The Federal Reserve has begun to "taper" its purchases of government bonds, and some analysts predict the Bank of England will raise interest rates as early as the fourth quarter.

Bank of England Governor Mark Carney said there was "no immediate need" for an increase in the cost of borrowing, and that when it comes, the process will be gradual.

But the return to more normal levels of market volatility would feel worse than it is, coming after an extended period of calm, he said.

Related: India headed for 8% growth

The International Monetary Fund upgraded its forecast for world growth on Tuesday. It warned that the outlook would depend on the impact of the withdrawal of central bank support.

"This is clearly a new risk on the horizon, and it needs to be watched," IMF Managing Director Christine Lagarde said.

The flow of money back to the U.S. and other developed economies would not affect emerging markets uniformly, she added. Investors would differentiate based on political stability, commitment to reform, and signs of financial weakness.

"The risk is there, but well managed emerging markets will be able to cope with it," said Montek Ahluwalia, deputy chairman of India's planning commission.

Fink said too much attention was paid to the actions of the Fed and other central banks, and not enough to the reforms needed to respond to the massive technological changes that are destroying jobs. To top of page

First Published: January 25, 2014: 11:22 AM ET


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Michaels stores: Possible data 'attack'

michaels craft store hacked

The country's largest crafts chain said Saturday it learned recently of 'possible fraudulent activity' on some customer payment cards, suggesting there may have been a breach.

NEW YORK (CNNMoney)

Michaels said Saturday that it learned recently of "possible fraudulent activity" on some of its customers' payment cards, suggesting there may have been a breach.

CEO Chuck Rubin said the company has not confirmed a breach, but wanted to alert customers.

"We are concerned there may have been a data security attack on Michaels that may have affected our customers' payment card information and we are taking aggressive action to determine the nature and scope of the issue," Rubin said in a statement.

The company gave no additional information on the possible breach, including how many customers may be involved, when those customers shopped at Michaels, and if the possible breach affected online or in-store shoppers.

In recent weeks Target (TGT, Fortune 500) and Neiman Marcus have each acknowledged breaches.

The attack on Target affected as many as 110 million customers, including 40 million credit and debit card shoppers at the height of the holiday shopping season.

Neiman Marcus said a three-month breach in the summer and fall affected 1.1 million customers.

Michaels says it operates more than 1,100 stores in the U.S. and Canada. To top of page

First Published: January 25, 2014: 2:42 PM ET


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Weather Channel-DirecTV blackout: No end in sight

directv weather channel

TV channel owners and distributors usually haggle in private. But the dispute between the Weather Channel and DirecTV underscores how contentious the negotiations can become.

NEW YORK (CNNMoney)

On Friday, DirecTV Chief Executive Mike White published a letter online blasting television channels for acting like "it's their absolute birthright to be paid more and more each year for the same content they offer, regardless of how many customers actually watch their channels."

White didn't stop there. He asserted that the Weather Channel's total audience has been declining as consumers gravitate to the Web.

"Why should DirecTV customers pay more for a channel they are watching far less?" he wrote.

White's letter was unusual. Television channel owners and distributors usually haggle in private and come up with carriage agreements that both sides can live with.

The dispute between the Weather Channel and DirecTV underscores how contentious the negotiations can become.

Related: Cable TV competition from the Web

White asserted in his letter that DirecTV believes the channel is only worth "one-quarter" of the price the channel wants.

According to research firm SNL Kagan, the Weather Channel earns about 13 cents per television subscriber per month. During the dispute, the channel has said that it's asking for a penny more, while DirecTV is asking it to accept a 20% reduction, or roughly 10 cents per subscriber per month.

The more drastic reduction that White described in his letter is basically unheard of in the television business.

But White's stated logic may appeal to many of his customers: "In every other industry, when the demand for any product is reduced, prices go down, they don't go up. That is the heart of this issue."

In response, Weather Channel spokeswoman Shirley Powell said that DirecTV's decision to drop the channel "has nothing to do with keeping costs down for consumers." She noted that DirecTV recently said it would raise its prices by 4.4% on average.

Related: Verizon bets on future of TV

For his part, White conceded that DirecTV was raising its prices along with other TV providers like Comcast, Dish and Time Warner Cable. But he blamed the content providers.

"[W]e are forced to raise our prices annually due to programmers like the Weather Channel, demanding to be paid more and more each year," he wrote. He said DirecTV "will be forced" to pay 8% more for programming in 2014 and that it was passing on to its customers only a 3.7% increase.

White's letter sent a message to DirecTV customers: Don't switch to another provider, because channels like the Weather Channel are forcing them to raise rates, too.

DirecTV provides television service to about 20 million homes, totaling roughly one in six households in the United States. Before the dispute with the Weather Channel, DirecTV introduced an upstart channel, WeatherNation, as an alternative.

White admitted in Friday's letter that WeatherNation is not an "exact substitute" -- far from it -- but said it "offers our customers what they want at a fraction of the price."

One of White's main points is the same one that outside analysts have pushed: The television version of the Weather Channel is being cannibalized by the parent company's Web sites and apps. The channel's Weather.com is one of the preeminent sources for online weather information.

"Our customers tell us the Weather Channel is their fourth choice when looking to access weather information," White said. "They first turn to mobile devices and computers for instant weather information and then to local news sources that have a better grasp on local conditions."

Last week, on CNN's "Reliable Sources," I asked Weather Channel meteorologist Jim Cantore if the channel's apps were pulling people away from TV.

"Here's my analogy," he said. "If your knee is starting to ail a little bit, you may go online and see what the symptoms may be. But at the end of the day, you're going to the doctor to find out what's going on with that." The flagship television channel, he said, is the doctor.

But the back-and-forth between the Weather Channel and DirecTV suggests that DirecTV subscribers won't be seeing that doctor anytime soon. To top of page

First Published: January 25, 2014: 7:31 PM ET


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Nissan spanked over fake dune-climbing ad

Written By limadu on Sabtu, 25 Januari 2014 | 10.20

NEW YORK (CNNMoney)

So Nissan and its advertising agency have entered into a proposed settlement with the Federal Trade Commission over charges of deceptive advertising. Neither Nissan (NSANF) or its advertising agency, TBWA Worldwide, will pay any fines. They simply agree not to make any more misleading ads.

The ad aired in October and November of 2011. In making it, the truck and the dune buggy were actually pulled up the hill using cables, according to the FTC. That means the ad, which is shot to look as if it were done by an amateur with a cell phone camera, does not accurately show the true capabilities of an unaltered Nissan Frontier.

Plenty of TV ads show vehicles doing absurd things -- like jumping on and off moving trains -- but those ads depict situations that are completely unbelievable and, so, don't actually mislead anyone. In the case of the Nissan Frontier ad, someone might actually think the truck could do this.

"Special effects in ads can be entertaining, but advertisers can't use them to misrepresent what a product can do," said Jessica Rich, Director of the FTC's Bureau of Consumer Protection. "This ad made the Nissan Frontier appear capable of doing something it can't do."

Gallery - 10 priciest collector cars from Scottsdale auctions

"Under the proposed settlements, Nissan and TBWA cannot misrepresent any material quality or feature of a pickup truck through the depiction of a test, experiment, or demonstration," according to the FTC's statement. Special effects can still be used, however, as long as they do not misrepresent the truck or its capabilities.

Nissan and TBWA both said they take their "commitment to fair and truthful advertising seriously" and that they are "committed to complying with the law."

The proposed settlement will be available for public comment for 30 days before the FTC decides to make it final. To top of page

First Published: January 24, 2014: 3:56 PM ET


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Sony gets rights to Sandberg's 'Lean In'

sheryl sandberg lean in

Sony Pictures has acquired the film rights to Sheryl Sandberg's book "Lean In."

NEW YORK (CNNMoney)

Sony Pictures confirmed that it has acquired the rights to make the Facebook (FB, Fortune 500) COO's book into a movie.

Published in March 2013, "Lean In: Women, Work and the Will to Lead" encourages women to advance their careers. If the film stays true to the book, it won't be so much a biography of Sandberg, who recently became one of the youngest female billionaires ever, as a manifesto advising women on how to achieve professional success.

Sandberg also launched an organization, Lean In, to further promote her message. She will donate her proceeds from the film to the foundation, according to Deadline, which reported the story earlier.

While there were few specifics available about the movie or the deal, Deadline said Sony Pictures (SNE), which made "The Social Network" about Facebook CEO Mark Zuckerberg -- tapped Nell Scovell to write the script. Scovell helped Sandberg write the book.

--CNN's David Daniel contributed to this report. To top of page

First Published: January 24, 2014: 5:54 PM ET


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Sam's Club laying off 2% of workers

sams club layoffs

Sam's Club will lay off 2% of its workforce.

NEW YORK (CNNMoney)

That's 2% of the workforce for the wholesale club chain, which has nearly 600 locations in the United States.

A little less than half of the employees affected are assistant managers, according to Sam's Club spokesman Bill Durling. Before the layoff, each club's fresh section -- which sells meat, poultry, seafood, dairy, produce and baked goods -- had six managers. Half of those jobs have been eliminated. Instead there will be three fresh section managers, who will be paid more, Durling said.

The company eliminated some hourly positions too.

Each employee affected by the cut will be paid for 60 days and is encouraged to look for other jobs at Sam's Clubs or its parent company, Wal-Mart, (WMT, Fortune 500)stores. If they cannot find a job within the company, they will receive some severance, Durling said.

Durling said that the company also plans to add at least fifteen more stores in the next year.

--CNN's Poppy Harlow contributed to this report. To top of page

First Published: January 24, 2014: 7:18 PM ET


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Oops! Pentagon didn't actually order 80,000 new BlackBerries

Written By limadu on Jumat, 24 Januari 2014 | 10.20

blackberry hq canada

Smartphone maker BlackBerry didn't sell 80,000 new phones to the Pentagon, but the sale of most of its Canadian real estate holdings will help its finances.

NEW YORK (CNNMoney)

"The Department of Defense is not planning to purchase upwards of 80,000 BlackBerry devices," a Pentagon spokesman said in a statement.

The confusion began when the DoD said in a Jan. 16 press release that it launched a new mobile network that would support 80,000 BlackBerries in addition to 1,800 iPhones, iPads, and Android devices. Shares soared 5% the following day.

The problem is that those 80,000 BlackBerry smartphones are existing devices -- not new ones. So down shares came tumbling after The Verge first reported the Pentagon's clarification.

Despite Thursday's setback, BlackBerry shares have been on a tear in 2013 -- up 38% so far. Investors have enthusiastically embraced new CEO John Chen -- who took the top spot only recently and has been successful turning around other companies.

Real estate sale drives stock: Investors particularly supported Chen's latest move, announcing earlier this week that BlackBerry would sell most of its real estate in its home country in a bid to raise much needed cash. BlackBerry shares had been up 19% this week prior to Thursday.

The real estate in question totals over 3 million square feet -- or nearly the same amount of office space in the Pentagon. Blackberry said it will lease back much of the space and will stay in its hometown near Toronto.

"BlackBerry remains committed to being headquartered in Waterloo," John Chen, the company's CEO, said in a statement. "This initiative will further enhance BlackBerry's financial flexibility, and will provide additional resources to support our operations as our business continues to evolve."

The company wouldn't say how much it expects to make off the sale. Peter Misek, a managing director at Jefferies & Co. that covers Blackberry, thinks it will be at least $450 million.

Misek does not see the move as an act of desperation or an indication that the company may move elsewhere.

"He's raising fortress levels of cash to show people that this company is going to be around, at least in the near term," Misek said of CEO Chen's move. "It's a really smart idea."

Related: BlackBerry CEO may have golden touch

Struggling business: BlackBerry (BBRY) sure needs the cash. The company has $3.2 billion in cash but has been bleeding money and subscribers for the better part of a year as customers flock to other smart phones, such as Apple's (AAPL, Fortune 500) iPhone or Samsung's Galaxy.

Last quarter BlackBerry announced a huge $4.4 billion loss, including a $1 billion writedown on the failed Z10 smartphone. Sales fell 56% from the same time a year prior. Earlier this fall it said it was laying off 4,500 employees -- 40% of its work force -- and gave up on a bid to sell itself.

BlackBerry's losses going forward are expected to be much more manageable -- maybe $300 million a quarter for the next couple of quarters, said Misek. Ideally, the company would return to profitability sometime after that. To top of page

First Published: January 23, 2014: 4:03 PM ET


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Jack Lew: U.S. could grow by 3% this year

Davos, Switzerland (CNNMoney)

"We have a good first quarter underway, I believe," Lew said at the World Economic Forum in Davos, Switzerland.

Lew was reluctant to make a specific prediction about the rate of expansion this year, but said there were reasons to believe growth in the world's biggest economy would "break through 3%."

He believes that, freed from last year's drag of tax rises and spending cuts, and with business confidence strong, the economy should accelerate sharply from last year.

"I really think there is every reason to be hopeful that we will do well this year," Lew said.

Related: My minimum wage isn't a living wage

In its latest forecast Tuesday, the International Monetary Fund upgraded its projection for U.S. economic growth in 2014 to 2.8% from 2.6%, citing stronger domestic demand and the boost from smaller spending cuts as a result of the recent budget deal.

The IMF estimates U.S. growth of 1.9% in 2013.

While the U.S. is recovering at a faster pace than other developed economies, Lew said there was still a way to go in creating jobs and making work pay.

Related: Economic mobility: No better, no worse

"We don't think it's OK to work full time and be below poverty," he said. "Until every American who wants a job has a job, we'll have more work to do."

Lew also cautioned companies against rushing to do business with Iran following an interim deal that limits the country's nuclear program in exchange for lighter sanctions.

President Hassan Rouhani said earlier Tuesday that Iran would continue with its peaceful nuclear program, and will push to re-engage with the world to build its economy.

"I've been very clear that business should be very clear headed about going to do business in Iran because the sanctions regime has not been lifted," Lew said.

He said it was way too early to predict the outcome of negotiations with Iran aimed at securing a comprehensive, long-term agreement on the future of its nuclear program. To top of page

First Published: January 23, 2014: 1:39 PM ET


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Microsoft sales soar 14%

microsoft earnings signage

Microsoft shares rise after company reports strong second quarter sales that beat analyst estimates

NEW YORK (CNNMoney)

The software giant posted solid shipments of the Xbox One, selling 3.9 million of the new game consoles. Microsoft has been neck-and-neck with rival Sony (SNE), which launched the PlayStation 4 console a week before the Xbox One went on sale.

Microsoft also doubled sales of its Surface tablet, bringing in nearly $900 million in revenue from the device. That's a positive turnaround for a device that got off to such a slow start last year that the company was forced to write down nearly $1 billion in inventory.

But PC sales continued to haunt Microsoft: Consumer sales of Windows 7 and Windows 8 fell 20% last quarter, the company said. The company said overall Windows revenue fell just 3% in the quarter, as a 12% increase in businesses licensing the software offset the awful consumer sales.

Overall, Microsoft said in a statement that its fiscal second quarter sales topped $24.5 billion -- a 14% jump from the same time last year. Profit rose 3% to $6.6 billion and 78 cents per share.

Wall Street analysts were expecting revenue of $23.7 billion and earnings per share of 68 cents, according to a survey conducted by Thomson Reuters.

Microsoft (MSFT, Fortune 500) shares rose 4% in after hours trading.

"It's a good quarter to ride out on," said BGC Partners analyst Colin Gillis, referring to the impending departure of Microsoft CEO Steve Ballmer.

Related: Microsoft CEO should be...

It was a good quarter for Microsoft, but the real question, he said, is who is going to succeed Ballmer.

"What direction are they going to take the company," he said. "They need to get it done."

Microsoft is expected to announce a successor sometime in the next month or two.

Microsoft's stock, like the broader market, enjoyed a healthy 2013 -- rising 38%. But Microsoft hasn't carried that success into 2014.

Weighing on the stock is uncertainty surrounding who will succeed Ballmer, declining PC sales and the rise of PC alternatives such as smart phones and tablets -- a segment the company has not been able to dominate. To top of page

First Published: January 23, 2014: 4:21 PM ET


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Netflix stock soars 16% on huge subscriber growth

Written By limadu on Kamis, 23 Januari 2014 | 10.20

netflix on tablet

Netflix's best subscriber growth in three years helped send the stock soaring in after-hours trading.

NEW YORK (CNNMoney)

In international markets, including Canada and Latin America, the service gained another 1.7 million subscribers, allowing Netflix to surpass the 10 million mark overseas for the first time. Overall, Netflix ended 2013 with over 44 million members, the company said in its quarterly letter to shareholders Wednesday afternoon.

Neflix's (NFLX) subscriber totals came in ahead of many estimates, causing the stock to rise sharply -- about 16% -- in after-hours trading.

Netflix's revenues were $1.2 billion in the quarter, up from $1.1 billion in the prior quarter, reflecting gains during the holiday season. Its net income was $48 million, up from $32 million.

Room for growth: For months now, there has been an active debate in media and investment circles about how big Netflix may or may not become. On Wednesday the company projected a gain of another 2.25 million subscribers in the U.S. and 1.6 million internationally in the first quarter of the year, which in both cases would improve on its first-quarter performance last year.

Related: Court strikes down net neutrality rules

In their letter, Netflix CEO Reed Hastings and Chief Financial Officer David Wells called that a "great outcome," because even with 33 million members in the United States, the copmany still has "years of member growth ahead."

They attributed the fourth quarter's subscriber uptick to "service improvements, marketing effectiveness, and sales of Internet connected devices."

According to the company's quarterly filings, the last time it gained more than 2.3 million American subscribers in a quarter was during the first quarter of 2011. Back then, it added 3.3 million subscribers, but the comparison is inexact because its streaming and DVD-by-mail services were still linked.

International expansion: Outside the United States, Netflix continued to operate at a loss due to expansion efforts, but it lost less in the fourth quarter -- $57 million -- than at any other time in 2013. The company projected that it'll lose $42 million in the first quarter of this year.

Confirming the suspicions of some investors, Hastings and Wells said Netflix plans later to launch a "substantial" European expansion later this year.

"Our success this year in international net additions and shrinking contribution losses confirms our belief that there is a big international opportunity for Netflix," they said.

New pricing strategy: The executives also updated shareholders on the company's experiments with tiered pricing. Last spring, Netflix started to sell a $11.99 plan that allowed up to four family members to stream at the same time. More recently it started to test a $6.99 single-stream plan for new customers.

Related: Verizon bets on the future of television

Hastings said on a Wednesday afternoon conference call that Netflix is "probing around the edges" about the best pricing structure for the streaming service.

"We're trying to figure out some models of good-better-best price tiering that make sense and provide some flexibility for our customers, at least for our new customers," Hastings said.

He and Wells emphasized in their shareholders letter that they're not in any hurry to raise prices or make other changes. They added that if the company does change the pricing structure, existing members would get "generous grandfathering of their existing plans and prices."

That means the company appears to have learned from its Qwikster disaster, when it separated the DVD-by-mail and streaming services, in effect hiking prices dramatically for many customers. But the grandfathering strategy also means any future price hikes would result in "no material near-term revenue increase," the company said.

Net neutrality: Wednesday's shareholder letter also included Netflix's first comments about net neutrality since a federal court ruled that the government doesn't have the right to regulate how Internet service providers deliver websites like Netflix.

Hastings and Wells said that, in principle, an Internet service provider "can legally impede the video streams that members request from Netflix ... to get Netflix to pay fees to stop this degradation."

They indicated that they'd "vigorously protest" that if it happened, but predicted that it won't because broadband providers "don't want to galvanize government action" and do want to sell higher-priced, higher-bandwidth packages. To top of page

First Published: January 22, 2014: 4:43 PM ET


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Lew: Raise debt ceiling before late February

jack lew debt ceiling

Treasury Secretary Jack Lew makes it official in a letter to Congressional leaders: They must move before end of February to raise nation's debt ceiling to ward off any risk of a U.S. default.

NEW YORK (CNNMoney)

Otherwise, he said, the Treasury Department will run out of tricks to ensure that the United States can continue to pay all its bills in full and on time.

The nation's borrowing limit is suspended until Feb. 7. After that, unless Congress has acted, Treasury will have to deploy special accounting maneuvers to avert the risk of a U.S. default.

Lew said in a letter to congressional leaders that he does "not foresee any reasonable scenario" in which those so-called extraordinary measures would last past late February. "This is in large part because the government experiences large net cash outflows in the month of February, due to tax refunds," he wrote.

For example, last February Treasury paid out a total of $230 billion, versus an average of $45 billion in other months, Lew noted.

That's the same message he delivered last week in a public interview at the Council on Foreign Relations.

In that interview he also stressed that any last-minute drama over the debt ceiling could cut the U.S. economy's potential for growth and undermine confidence.

"Why would anyone want to hurt the U.S. economy and hurt the recipients of payments they're entitled to?" Lew said.

"Everyone knows these obligations are not made when you raise the borrowing authority. The obligations are made when you vote on appropriations bills and when you vote on tax bills."

And, he added, it causes undue anxiety among investors and consumers when lawmakers push the issue to the last minute. To top of page

First Published: January 22, 2014: 4:09 PM ET


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eBay spikes after-hours on Icahn proposal

icahn paypal ebay

Activist investor Carl Icahn wants eBay to spinoff PayPal into a separate company.

NEW YORK (CNNMoney)

In its fourth quarter earnings release, eBay (EBAY, Fortune 500) said Icahn wants the tech giant to spin off PayPal into its own company.

EBay said it has previously explored separating PayPal, but decided against it.

"EBay is a big contributor to PayPal's growth and expansion," eBay CEO John Donahoe said on a conference call with investors Wednesday.

Icahn's proposal for a separation is a "distraction," he said.

EBay also posted fourth quarter earnings Wednesday that edged past analyst expectations, but it was the Icahn news that really moved the stock.

Besides the spinoff proposal, Icahn also acquired a 0.82% stake in the company earlier this month and nominated two of his employees for seats on eBay's board of directors, eBay said.

Related: Carl Icahn ups Apple stake to $3 billion

The irony: PayPal used to be its own company, until eBay bought it in 2002 for $1.5 billion.

So what changed?

It's all about the mobile-payment business.

In recent years, PayPal has steadily grown its share of eBay's overall sales.

And hot-startups such as Square, along with more established players as Google, are upping the ante, all battling for a bigger piece of the mobile-payment pie.

The situation is not lost on eBay.

The company bought online payment platform Braintree in September for $800 million, and has been integrating it with PayPal.

Related: Paying by phone? What to watch out for

Ebay, one of the stocks in CNNMoney's Tech 30 Index, has roared back since depths of the financial crisis. Recently though, it has lost some steam, gaining only about 2% in the last year as analysts worry it may have overheated.

The 77-year old Icahn is known to take sizable positions in companies and then aggressively advocate for change in the name of shareholder value.

He recently bought a stake in Apple (AAPL, Fortune 500) and has publicly campaigned for the cash-rich company to give more money back to investors in the form of a $150 billion stock buyback.

On Wednesday, he increased his investment in Apple by $500 million to $3 billion.

Apple has repeatedly rebuffed Icahn's proposal.

While Icahn is known to be tough in his attempts to shake up companies, he knows when to back off.

In 2012, he took a position in Netflix (NFLX) and said the company would be a nice takeover target for a larger firm looking to add streaming video to its portfolio.

But Netflix fought back hard and Icahn surrendered.

Netflix has had an amazing run since then, netting Icahn a tidy 460% profit. To top of page

First Published: January 22, 2014: 7:01 PM ET


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Opinion: Mobility is the problem, not income inequality

Written By limadu on Rabu, 22 Januari 2014 | 10.20

economy for 99

The problem for the 99% is not that incomes for the top 1% have grown faster than everyone else's, says social policy expert Scott Winship. It's because economic mobility has been stagnant for decades.

Washington, D.C. (CNNMoney)

Too many families struggle in poverty, too many workers have given up looking for work, and too many young adults have graduated into a weak economy that will lower their lifetime earnings.

If the economy were stronger, there is reason to believe inequality would not be such a concern. For instance, inequality was high and rising during the late 1990s, but because the growing economy was largely benefiting everyone, few people were worried about income concentration at the top.

What's more, living standards have improved over time for the poor and middle class even as income inequality has grown. For that matter, the growth in inequality has been exaggerated. And contrary to claims that rising income inequality has hurt their economic opportunity, evidence of a link between the two is weak.

Average income in the middle fifth of households rose 66% between 1969 and 2007 and it grew 55% in the bottom fifth. This growth was much slower than it was in the 1950s and '60s. But the slowdown actually began in the 1970s, before income concentration at the top started to take off.

Opposing view: Why growth in income inequality does matter

Economic mobility hasn't changed much either. No research shows a sizable increase in mobility since the mid-20th century. And the most common change found in many studies is so modest (up or down) as to be statistically insignificant.

In the face of this unsupportive research, proponents of the view that inequality has hurt mobility have turned to cross-national research, notably the "Great Gatsby Curve." This chart shows a strong statistical relationship between countries' inequality levels and the mobility their citizens enjoy.

But it's problematic as evidence for several reasons. The most damning: it uses a measure that automatically assigns a country a lower mobility value when its growth in inequality is greater than in other countries.

New research by the creator of the Great Gatsby Curve, which does not automatically adjust mobility downward when there are differences in inequality between nations, suggests that there may be no cross-national relationship between high inequality and low mobility.

While there's reason to believe mobility has not diminished much if at all over time, it has been stuck at unacceptably low levels for decades.

If past patterns hold, 70% of poor children today will fail to make it to the middle class as adults. Four in 10 will be mired in poverty themselves in midlife.

These are not the kind of odds those of us solidly in the middle class would accept for our children. The American Dream is in poor health if children who grow up in the bottom can aspire only to fill the same sorts of jobs as their parents hold.

The challenge is to identify real solutions to the problem of limited mobility. Fifty years after Lyndon Johnson's declaration of war on poverty, we should establish a second front against immobility.

Attacking inequality, however, is unlikely to mitigate either problem. To top of page

First Published: January 21, 2014: 6:25 PM ET


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The world's most expensive whisky

NEW YORK (CNNMoney)

A large crystal decanter filled with rare Macallan "M" whisky sold for $628,205 at a Sotheby's auction in Hong Kong this weekend. That hefty price tag set a new world record for the most expensive single-malt whisky sold at auction.

What makes this whisky so special?

Mostly, its rarity.

First, there's the bottle. The faceted crystal decanter of The Macallan Imperiale "M" is 28 inches tall and holds 6 liters of whisky -- the same volume as 3 big soda bottles. The glass crafter said forty of the hand-blown decanters were created and destroyed due to imperfections before the piece was finally completed. Named after the Roman emperor, the "Constantine" decanter took 17 craftsmen over 50 hours to complete, the French glass company said.

The Constantine is one of only four bottles of its kind.

Then there's the bottle's amber-colored contents.

At The Macallan distillery in Scotland, the resident whisky maker spent two years choosing seven casks out of nearly 200,000 that would be blended to create "M," according to the auction catalog. The Macallan brand ambassador, Charlie Whitfield, said those rare sherry oak casks range in age from about 75 to 25 years old.

Related: Spending $402 million in one week

Before the sale, the world record was held by another Macallan whisky, a 64-year-old scotch that went for $460,000 in New York in 2010.

But The Macallan Imperiale "M" doesn't have an age statement since the casks were chosen for rarity rather than age. Instead of paying for years, the winning bidder was buying what Whitfield called "a unique opportunity to own a collaboration between best-respected luxury brands."

In recent years, such collaborations between spirit producers and luxury brands have become increasingly appealing to high-end bidders, according to Jennifer Simonetti-Bryan, a certified wine and spirits expert.

Asian buyers have been central to that trend, she said.

While Macallan's largest market is the United States, Asia is becoming a new hotspot for spirit investors. "In the past ten years the Asian market for rare spirits has exploded," Whitfield said.

An added incentive for local buyers -- all proceeds from the sale go to Hong Kong charities.

Another attractive quality of these rare spirits is their long-lasting drinkability. Unlike an uncorked bottle of wine, most spirits, like the Macallan scotch, can be opened and drunk over a period of months or even years, the expert said.

Whenever the winning bidder, who chose to remain anonymous, decides to pull out the stopper and pour a dram, Whitfield said they can expect to taste notes of cinnamon, green apple, raisin, and wood smoke.

And if you're lucky enough to taste a drop from the "Constantine," the whisky inside, "M", is available in regular-sized bottles as well. Good luck finding it though. There are just 1,750 in the world, selling for the bargain price of $4,500. To top of page

First Published: January 21, 2014: 4:37 PM ET


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Opinion: Why growing income inequality matters

fair economy now

The concern about growing income inequality is not about begrudging the wealthy their success, says economist Jared Bernstein. The worry is that it is curbing everyone else's economic potential.

Washington, D.C. (CNNMoney)

First, by giving a major address on the issue, President Obama elevated it to front-page status. Next, high visibility politicians with very different views than the president on such matters, like Sen. Marco Rubio and Rep. Paul Ryan, also embraced the topic. Sen. Rubio called the inequality trends "startling" and agreed that they "deserve attention."

Now, I'll be the first to admit that Washington has been dysfunction junction for a long time now, but I consider this to be progress: Policymakers who agree on almost nothing agree that the level of inequality facing America today is a big problem. The first step to getting better is to recognize you're not well.

Of course, there will always be gaps between the resources of American households at different points in the income scale. There may be some out there who seek equality of outcomes, but I don't know them.

Yet, while we don't always achieve it, most Americans deeply value equality of opportunity.

I believe the reason that policymakers of all stripes are now talking about inequality is that they worry, as do many analysts like myself who've been working on this a long time, that the historically high levels of economic disparity threaten the opportunities of those on the wrong side of the economic divide.

Opposing view: Mobility is the problem, not income inequality

Ask yourself this question: Is America a meritocracy, meaning that regardless of the status of your birth, you're free to go as far as your inherent talents will take you?

It's a question I pose to audiences all the time, and most people recognize that we are not there yet. In fact, we're far from it. Research shows that not only is the correlation between parents' income and education a reliable predictor of how their kids do, but that correlation is higher here than in most other advanced economies.

In other words, while knowing a baby's zip code won't tell you for certain how successful they'll be as a grownup, it tells you more than it should.

But how does this relate to income inequality? First of all, there's a strong, positive relationship between countries with high inequality and that zip code problem. That suggests the two are linked, and that when high levels of income inequality persevere, barriers to getting ahead -- opportunity barriers -- will arise.

Some indicators suggest this process is already at work in the United States:

  • There's a wide and growing gap in how much parents invest in their kids. High-income families spend increasingly more on tutoring, art, sports, books, and so on relative to low-income families.
  • The academic achievement gap on standardized tests between students for low- versus high-income families has increased by 40% over the last 30 years, the period of rising inequality.
  • College attainment has increased much more among kids from wealthy families. The wealthier your family, the more likely you are to go to a top-tier college.

To many Americans, that's why we worry about the heights to which inequality has grown. Not because we begrudge the wealthy their success, but because we want our own kids to be able to realize their economic potential.

And society's growing economic disparities are threatening that most basic aspiration. To top of page

First Published: January 21, 2014: 6:25 PM ET


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Global economic recovery feeds growing inequality

Written By limadu on Selasa, 21 Januari 2014 | 10.20

income inequality

For many, the recovery from the financial crisis is a phantom: Many people can't see an improvement in their quality of life, and the gap between rich and poor is growing.

DAVOS (CNNMoney)

The top line numbers are looking brighter: The global economy should grow by 3.2% this year, up from 2.4% in 2013, according to the World Bank.

Yet for many, in the developed world and emerging markets alike, the recovery from the worst economic crisis since the 1930s has a phantom-like quality. Many people can't see an improvement in their quality of life, and the gap between the rich and poor is growing.

"Since the global financial crisis, it's been a race to the bottom in jobs, wages and living standards," said Philip Jennings, general secretary of UNI Global Union.

Central banks have pumped trillions of dollars into the world financial system to stabilize their economies, sending stock markets and real estate prices soaring to the benefit of the wealthy.

At the same time, governments have slashed public sector jobs, reduced protections for those working in the private sector, cut welfare benefits and made pensions less generous -- changes that hit the young and most vulnerable the hardest. Companies continue to shed jobs, too.

Related: More austerity for U.K. despite recovery

The World Economic Forum, which is hosting its annual meeting of the business elite in the Swiss mountain resort of Davos this week, surveyed over 700 experts about what was the biggest risk to the global economy over the next 10 years.

The answer: a yawning gap in incomes that could put a huge strain on social cohesion.

Taking third place on the list, after extreme weather, was unemployment.

Europe may have stemmed its debt crisis but risks a "lost generation" of people born in the aftermath of the fall of the Berlin Wall, nearly 25 years ago, because it isn't creating enough jobs.

Eurozone unemployment has been stuck at a record high of 12% since April 2013, meaning over 19 million are without work. For those under 25, the picture is even worse -- nearly one in four does not have a job.

Related: 'I just want a job'

Where jobs are being created, such as the U.S., U.K. or even Spain, they're often poorly paid or offer only temporary employment, making it hard for people to save money, gain experience and build a career.

Many are giving up on the search for work, discouraged by repeated rejections or low wages. And chronic long term youth unemployment may be creating another crisis -- major health problems that will add billions to future care costs.

In Davos, heads of state will rub shoulders with central bankers and top executives, who on average pay $20,000 to attend (before flight and hotel costs).

And searching questions will be asked about growing inequality and the future of work. But answers will be harder to find. To top of page

First Published: January 20, 2014: 1:25 PM ET


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Investors should root for Seattle ... maybe

broncos seahawks

If you believe in the Super Bowl indicator, you may want to root for Russell Wilson and the Seattle Seahawks over Peyton Manning's Denver Broncos.

NEW YORK (CNNMoney)

According to this bit of Wall Street lore, the Dow tends to go up when a team from the original National Football League beats a team that played in the upstart American Football League, which merged to create the current NFL.

The Seahawks actually didn't come into existence until the 1970s. But they started in the National Football Conference, where most old NFL teams play. Following a 25-year stint in the opposing American Football Conference, the Seahawks returned to the NFC in 2002. That's why investors are supposed to root for Seattle.

Most of the old AFL teams, including the Broncos, now play in the AFC. So usually it's better when a current NFC team beats the AFC team.

Of course, the Super Bowl Indicator is nothing more than a correlation. There is no real cause and effect and investors should NOT use it as a guide for buying and selling stocks.

But for what it's worth, the indicator has been accurate more than 80% of time since the first Super Bowl in 1967 -- albeit with plenty of loopholes.

For example, the six-time Super Bowl champ Pittsburgh Steelers count as an "old" team even though they play in the AFC. That's because they were originally in the NFL before the merger.

Similarly, the Baltimore Ravens, which won last year's Super Bowl, are also considered an "old" team despite playing in the AFC. They were previously the old NFL's Cleveland Browns before moving to Baltimore nearly two decades ago.

Related: Fox Sports sells out Super Bowl ads

During the times when the indicator has worked, the Dow has averaged a 10% gain that year..

But the indicator is not perfect. And the last time it failed, it went horribly wrong for stocks. That was in 2008, when the NFC's New York Giants beat the New England Patriots. The Dow tumbled more than 30% due to the financial crisis and Great Recession.

A Broncos win may not be so bad: Interestingly enough, in the nine times that the Super Bowl Indicator has failed to accurately predict market direction, the Denver Broncos have been participants in four of those championship games.

In 1978 and 1990, the Denver Broncos were defeated in the Super Bowl by the Dallas Cowboys and San Francisco 49ers respectively. But the Dow fell anyway in both years.

When the Broncos beat the Green Bay Packers in 1998 and repeated as champs with a victory over the Atlanta Falcons in 1999, the Dow delivered gains north of 15% during one of the best bull markets in history.

The market really loves the 49ers: Still, some might argue that the Seahawks jinxed things by making it to the Super Bowl. While the Dallas Cowboys will always be America's Team (disclosure: this writer was born and bred a Dallas Cowboys fan), Wall Street's favorite team seems to be the San Francisco 49ers.

San Francisco lost Sunday night in a testy battle against the Seahawks that led to an instant classic postgame interview with Seattle cornerback Richard Sherman.

During the five years that the Niners have won the Super Bowl, the Dow averaged an increase of more than 20%.

Then again, San Francisco lost last year and the Dow went on to hit a record high.

So feel free to have fun on Super Bowl Sunday and root for whichever team is your favorite. What the market does in 2014 depends more on how strong earnings are and how quickly new Fed chief Janet Yellen pulls back on stimulus for the economy than whether or not Peyton Manning gets his second Super Bowl ring. To top of page

First Published: January 20, 2014: 2:03 PM ET


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