Geithner takes private equity job

Tim Geithner, who stepped down as Treasury Secretary in January, will start in March as president and managing director of private equity firm Warburg Pincus.

NEW YORK (CNNMoney)

Warburg Pincus, a firm engaged in buying and selling companies, said Saturday that Geithner will start at the firm as president and managing director in March.

Geithner told the Wall Street Journal, which first reported the move, that he will play a "substantive role in helping ... manage the firm."

In a statement, Warburg Pincus said Geithner will "work closely" with its co-chief executives on strategy, management and investing.

A mainstay of President Obama's first-term cabinet, Geithner was an architect of the government's response to the financial crisis.

Geithner was widely associated with the TARP bank rescue, which was ushered through Congress by former Treasury Secretary Henry Paulson and then managed by Geithner after the Bush-Obama transition.

The controversial TARP was seen by some as a bailout of fat cat bankers. And some credited it with stabilizing the economy and helping avoid a deeper recession.

The day word leaked that Obama would name Geithner to lead Treasury, in the tumultuous period after the 2008 election, the Dow gained nearly 500 points.

When the crisis began, Geithner was president of the New York Federal Reserve, which helps oversee Wall Street. All told, he ran the New York Fed from 2003 until 2009.

Geithner, 52, left Washington in January 2013 and was succeeded by Jack Lew as Treasury chief. He first went to work at Treasury in 1988 and was later a top deputy to Treasury secretaries Robert Rubin and Larry Summers.

Reports surfaced after he left office that Geithner is writing a book about the financial crisis.

Warburg Pincus, established nearly 50 years ago, is a top player in private equity and manages $35 billion in assets.

In a deal this summer, Warburg sold eyecare specialist Bausch & Lomb to Valeant Pharmaceuticals for $8.7 billion. Years earlier, Warburg had led a private takeover of Bausch & Lomb.

Warburg did not disclose Geithner's compensation.

First Published: November 16, 2013: 8:08 AM ET

10.20 | 0 komentar | Read More

JPMorgan reaches $4.5 billion settlement with mortgage investors

JPMorgan is the nation's largest bank by assets.

NEW YORK (CNNMoney)

The deal resolves one of JPMorgan's many legal headaches in connection with securities tied to risky mortgages it allegedly sold while misrepresenting their quality. The bank called it "another important step" in addressing these issues.

The settlement still requires approval from a court and from the trustees who managed the mortgage pools. The payment would be allocated by a financial expert chosen by the trustees.

The deal relates only to JPMorgan (JPM, Fortune 500) and Bear Stearns, and does not include securities associated with Washington Mutual. JPMorgan acquired ailing Bear and WaMu during the financial turmoil of 2008.

Mortgage-backed securities and related derivatives were a key cause of the financial crisis, saddling financial institutions with huge losses as the housing market cratered.

Related: Probe targets JPMorgan hiring in China

The group of 21 investors includes BlackRock, PIMCO and government-backed housing finance firms Fannie Mae and Freddie Mac.

Fannie and Freddie were involved in a separate agreement with JPMorgan over crisis-era mortgage securities last month in which the bank agreed to pay $5.1 billion.

The Justice Department is also in talks with JPMorgan over a potential multi-billion-dollar settlement on the same issue.

JPMorgan said it believed it had set aside sufficient reserves to pay for Friday's settlement and any additional litigation over mortgage-backed securities.

It's been a busy year for JPMorgan's legal department.

The firm has paid over $1 billion in fines in connection with last year's "London Whale" trading debacle, and $80 million more over allegedly unfair credit-card-billing practices.

In July, the bank agreed to pay $410 million to settle charges that it manipulated electricity prices in California and the Midwest. It is also facing scrutiny over its hiring practices in China and its alleged involvement in the Libor rate-fixing scandal.

JPMorgan posted a loss for the third quarter based on its massive legal expenses. CEO Jamie Dimon called the loss "painful" and warned that litigation costs could continue to be a drag on earnings at the nation's largest bank for several quarters.

First Published: November 15, 2013: 6:05 PM ET

10.20 | 0 komentar | Read More

Corvette named Automobile of the Year

NEW YORK (CNNMoney)

The new Corvette has more power and better fuel economy than last year's model. It's powered by a 6.2-liter V8 engine that can put out as much as 460 horsepower but that can also get 29 miles per gallon in highway cruising.

"The Corvette has long been a tremendous performance value wrapped in an all-American package," the magazine says in its review of the car. "Now, however, with new-found sophistication and user-friendliness, the [new Corvette] should melt the barriers that have kept away so many driving enthusiasts."

Related Video: And the sexiest car of the year is...

Automobile magazine editor-in-chief Jean Jennings lauded the Corvette's overall design, performance, quality and comfort.

"The automobile of the year has to set a standard," she said. "It has to break a category in a way that really excites us," she said.

Related: Maserati Ghibli: Easier-access Italian luxury

The new Corvette should finally repair the image that Corvette has had for years as a car that only appealed to those seeking a flashy look, not real performance and sophistication.

The new car's interior, in particular, is a break from Corvettes of the past, which, even when they offered serious performance, were disappointingly cheap, she said.

In CNNMoney's own test drive of the new Corvette, we found it be a huge improvement over an already very credible sports car. The new interior has a much nicer design and higher quality than the outgoing model, while the car feels quicker, better balanced and more intuitive to drive.

Prices for the base Stingray start at just under $52,000.

Quiz: Which car is faster?

To be eligible for the award, a car must be completely or substantially new for the new model year. This is the second major award for General Motors (GM, Fortune 500) in recent weeks. The Cadillac CTS was named Motor Trend's Car of the Year earlier this month. Motor Trend and Automobile Magazine are both owned by Source Interlink, but the two magazines operate independently.

At the same time that it announced the award for the Corvette, Automobile announced that it was naming Tadge Juechter, lead engineer on the Corvette, as its Man of the Year.

First Published: November 16, 2013: 8:49 AM ET

10.20 | 0 komentar | Read More

Forbes explores sale

Steve Forbes, who could be the last member of his family to own the business magazine started by his grandfather. The company is exploring a possible sale.

NEW YORK (CNNMoney)

A letter sent to employees Friday by Forbes Media president and CEO Mike Perlis said the move is prompted by "more than a few over the transom indications of interest" to buy the company.

"The frequency and serious nature of these overtures have brought us to a decision point," he said in the letter.

Its flagship property, Forbes, with a circulation of 933,000, is the third largest U.S. business magazine, according to the Alliance for Audited Media. It lags Time Warner's Money magazine and Bloomberg Businessweek, owned by financial publisher Bloomberg. It has about 370 employees.

Related: Saudi prince vs. Forbes in billionaire brawl

Print media has been a difficult business in recent years due to losses of both readers and advertisers to online media.

Forbes' ad revenue for the first 9 months of the year fell 7.5% to $165.7 million, according to the Association of Magazine Media, and the ad pages in the print edition have fallen 12.5%.

Perlis' letter said that digital revenue at the company is expected to increase this year. The company also owns a number of web sites beyond Forbes.com, including Investopedia.com, and the RealClear family of sites such as RealClearPolitics.

Related: Forbes' 400 richest Americans

But if Forbes is sold, it would join a trend of print properties being sold.

In March Time Warner (TWX, Fortune 500), which is also owner of CNNMoney, announced its plans to spin off its Time Inc. publishing unit, the nation's largest magazine publisher, in a deal set to close early next year. That unit includes both Money and Fortune magazines.

Newsweek, the news magazine whose print version was abandoned late last year, was sold in August by IAC (IACI) to another all-digital news company, IBT Media.

Major newspapers have also been put on the block and sold this year. Amazon (AMZN, Fortune 500) founder Jeff Bezos is buying the Washington Post for $250 million in a deal announced in August, and the New York Times Co. (NYT) announced it would sell the Boston Globe for only $70 million to Boston Red Sox owner John Henry, despite having paid $1.1 billion for the paper in 1991.

In June, the former News Corp. took the name 21st Century Fox (FOX) and spun off its print publications such as the Wall Street Journal, the New York Post and several London newspapers into a new News Corp. (NWS)

Forbes was started by B.C. Forbes in 1917. His son, Malcolm, succeeded him as publisher. He handed it down to his son, Steve, who is still chairman and editor in chief. But two years ago, Perlis was brought in as the first non-family member to serve as CEO of the company.

The Forbes family also sold a minority stake in the company to investment firm Elevation Partners -- which includes rock singer Bono among its partners -- in August 2006. Elevation did not return a call seeking a comment on the sales plans.

First Published: November 15, 2013: 2:21 PM ET

10.20 | 0 komentar | Read More

EPA proposes cut to ethanol requirement for gasoline

Most gas sold in the U.S. contains up to 10% ethanol.

NEW YORK (CNNMoney)

A law passed by Congress in 2007 had called for the inclusion of 18.15 billion gallons of renewable fuel in 2014, but on Friday, the EPA proposed that this level be reduced to between 15.00 and 15.52 billion.

The standard had previously been increasing every year, with the 2013 requirement set at 16.55 billion gallons.

Lawmakers passed the 2007 legislation with the aim of increasing renewable fuel production and reducing dependence on foreign oil. But recent gasoline consumption has been less than Congress anticipated at the time, due to factors like the economic downturn and improvements in fuel economy.

As a result, adherence to the law's original standards next year would mean that the total ethanol required would exceed the amount that could be blended into conventional gasoline -- a problem known as the "blend wall."

Nearly all gas sold in the U.S. is "E10" fuel, which contains up to 10% ethanol.

Related: U.S. to become top oil producer by 2015

EPA administrator Gina McCarthy said the Obama administration continued to support increased biofuel production and use.

"We look forward to working with all stakeholders to develop a final rule that maintains the strength and promise of the [Renewable Fuel Standards] program," she said.

The proposal is subject to a 60-day public comment period, and could later be changed.

The ethanol mandate has been a boon for corn farmers and big agricultural companies that profit from higher corn demand, and has also drawn praise from policymakers who want to wean the U.S. off imported oil from the Middle East and elsewhere.

But the law also has a variety of critics.

The oil industry doesn't like it because ethanol reduces its market share. Livestock producers don't like it because it drives up the price of corn, which is used to feed cows, chicken and pigs.

Many environmentalists oppose it as well. They doubt that corn-based ethanol is any better for the planet than conventional gasoline, as its production requires the clearance of land and results in deforestation. They also argue that higher corn prices likely contribute to global hunger.

First Published: November 15, 2013: 4:58 PM ET

10.20 | 0 komentar | Read More

JPMorgan reaches $4.5 billion settlement with mortgage investors

JPMorgan is the nation's largest bank by assets.

NEW YORK (CNNMoney)

The deal resolves one of JPMorgan's many legal headaches in connection with securities tied to risky mortgages it allegedly sold while misrepresenting their quality. The bank called it "another important step" in addressing these issues.

The settlement still requires approval from a court and from the trustees who managed the mortgage pools. The payment would be allocated by a financial expert chosen by the trustees.

The deal relates only to JPMorgan (JPM, Fortune 500) and Bear Stearns, and does not include securities associated with Washington Mutual. JPMorgan acquired ailing Bear and WaMu during the financial turmoil of 2008.

Mortgage-backed securities and related derivatives were a key cause of the financial crisis, saddling financial institutions with huge losses as the housing market cratered.

Related: Probe targets JPMorgan hiring in China

The group of 21 investors includes BlackRock, PIMCO and government-backed housing finance firms Fannie Mae and Freddie Mac.

Fannie and Freddie were involved in a separate agreement with JPMorgan over crisis-era mortgage securities last month in which the bank agreed to pay $5.1 billion.

The Justice Department is also in talks with JPMorgan over a potential multi-billion-dollar settlement on the same issue.

JPMorgan said it believed it had set aside sufficient reserves to pay for Friday's settlement and any additional litigation over mortgage-backed securities.

It's been a busy year for JPMorgan's legal department.

The firm has paid over $1 billion in fines in connection with last year's "London Whale" trading debacle, and $80 million more over allegedly unfair credit-card-billing practices.

In July, the bank agreed to pay $410 million to settle charges that it manipulated electricity prices in California and the Midwest. It is also facing scrutiny over its hiring practices in China and its alleged involvement in the Libor rate-fixing scandal.

JPMorgan posted a loss for the third quarter based on its massive legal expenses. CEO Jamie Dimon called the loss "painful" and warned that litigation costs could continue to be a drag on earnings at the nation's largest bank for several quarters.

First Published: November 15, 2013: 6:05 PM ET

10.20 | 0 komentar | Read More

Save money on holiday expenses

Thanksgiving Day airfares surged 8.2% in September alone.

(Money Magazine)

With airlines cutting back on seats, Turkey Day fares in late September were 8.2% costlier than a year earlier, reports CheapAir.com. And that price differential could hit 20% by November. Use these travel, shopping, and giving strategies, then, to make it through 2013 with more cash left over.

More holiday tips

Fly a day less traveled. Save a bundle by avoiding the standard Wednesday-to-Sunday rush, says CheapAir CEO Jeff Klee. A Monday return, for example, cuts $90 from the $593 average domestic fare.

Related: 3 fun and cheap road trips

Get a delayed discount. Use the free deal-alert web app Hukkster to bookmark each gift you buy, and you'll be notified if the store cuts the price. Then ask for cash back. Most national retailers offer 15- or 30-day price adjustments, says co-founder Erica Bell.

Magnify your charity. Give more, painlessly, by adding a matching gift from your employer. At least $10 billion in workplace matches go unclaimed annually, though 65% of big companies offer them. Yours doesn't? Find givers who do at matchingdonations.org.

First Published: November 14, 2013: 4:15 PM ET

10.20 | 0 komentar | Read More

Derek Jeter launches his own line of books

Yankees star Derek Jeter announces partnership with Simon & Schuster to publish books for both children and adults.

NEW YORK (CNNMoney)

Nevertheless the Yankees star, who skipped college to start playing professional baseball, has inked a deal to launch his own imprint of books for Simon & Schuster.

Jeter Publishing will publish adult non-fiction titles, fiction and children's books. It will specialize in sports-related books, not surprisingly, but will also highlight personalities in pop-culture and other arts.

"This publishing partnership is an exciting way for me to discover and develop new books, sharing insights of my own, or from people I believe have interesting stories, philosophies or practices to share," Jeter said a statement issued by Simon & Schuster, which is a unit of CBS (CBS, Fortune 500).

Simon & Schuster did not comment on terms of the deal.

Related: Beer & hot dogs -- which ballparks charge the most

Jeter is the world's best known baseball player, according to the most recent survey by the Q Scores Company, recognizable to 60% of the general public. He also has a relatively clean image in a realm of professional sports often marred by scandal.

He's also one of the best-paid U.S. athletes according to the Fortunate 50, which is compiled by Sports Illustrated and Fortune magazines, with a salary of $17 million and $8.5 million in endorsements this year. He'll take a pay cut in 2014, having just signed a new $12 million contract for next season.

Related: Why Jeter deserves $45 million but most CEOs don't

The 39-year old is likely close to retirement, as injuries limited him to only 17 games this past season.

Jeter has already written two autobiographical books, one from Crown in 2001, the other from Random House in 2010.

First Published: November 14, 2013: 5:02 PM ET

10.20 | 0 komentar | Read More

Buffett's Berkshire grabs Exxon stake

Warren Buffett speaks onstage at the Fortune Most Powerful Women Summit last month.

NEW YORK (CNNMoney)

Buffett's Berkshire Hathaway (BRKA, Fortune 500) revealed Thursday that as of September 30, it held a stake of roughly 40 million Exxon (XOM, Fortune 500) shares. That stake would be worth $3.74 billion at Thursday's closing price.

The disclosure came on a day when investment managers made filings detailing their third-quarter holdings with the Securities and Exchange Commission.

Exxon is the world's second largest company by market capitalization after Apple (AAPL, Fortune 500), and Berkshire's stake only amounts to about 1% of the firm.

Berkshire trimmed its stake in another big oil producer, ConocoPhillips (COP, Fortune 500).

Related: SAC Capital pleads guilty

Elsewhere in the investment world, Carl Icahn revealed the size of his previously announced Apple stake, worth $2.05 billion as of Thursday's close.

John Paulson, who made a fortune betting against the housing market, revealed an $88 million stake in FedEx (FDX, Fortune 500). Fellow hedge fund celebrity Dan Loeb also announced this week that his firm, Third Point, had taken a stake in the shipping giant.

Loeb's FedEx stake was worth $272 million as of Thursday's close.

Bill Ackman's Pershing Square Capital sold its massive J.C. Penney stake in the third quarter, taking a loss of nearly $500 million. But a trio of other large hedge funds -- Jana Partners, Appaloosa Management and Farallon Capital Management -- revealed small stakes in the ailing retailer.

First Published: November 14, 2013: 6:00 PM ET

10.20 | 0 komentar | Read More

Budget czar to Congress: Just do it

Congressional Budget Office Director Douglas Elmendorf urged lawmakers to boost certainty about fiscal policy for the next year. Even a small budget deal can help the economy, he said.

NEW YORK (CNNMoney)

In his own diplomatic way, Congressional Budget Office Director Douglas Elmendorf on Wednesday told budget negotiators that if a grand bargain eludes them, a short-term deal on the federal budget is better than none.

"[S]mall steps are better than no steps at all," Elmendorf told a bipartisan committee under pressure to propose 2014 funding. "If one can move the ball a little bit and reduce uncertainty about what will happen throughout next year -- that can be an important lift to the economy."

But he also cautioned them to not make the long-term outlook worse.

Elmendorf noted that the deficit reduction scheduled to occur in the next few years marks the sharpest fiscal contraction the country has gone through since the end of World War II. And that has placed a drag on what has been an underwhelming economic recovery.

If Congress were to cancel the spending cuts known as the sequester -- on track to reduce deficits by roughly $1 trillion by 2021 -- 800,000 more jobs could be created in 2014, according to CBO estimates.

Related: Aiming for more than bupkis on the budget

At the same time, Elmendorf noted, the long-term outlook for the federal budget is unsustainable. Debt relative to the size of the economy is already the largest it's been since World War II. Even if it the debt doesn't budge from where it is today, it will drag down wages in the future, he said.

Moreover, unless Congress changes its spending and tax policies, the debt will reach 100% of GDP in 25 years, as a result of Baby Boomers retiring and health care costs rising, among other things. And interest payments on the debt will eat up ever larger portions of tax dollars and constrain lawmakers' capacity to prioritize spending and respond to crises.

Members of both parties acknowledge that tax and entitlement reform would help close the country's long-term shortfalls and help boost the economy over time. They just disagree vehemently about how to go about it.

The budget conference committee that met Wednesday was formed as a result of the deal Congress cut in October to end a 16-day partial government shutdown and avert the risk of default.

That deal funded the government only through January 15. The committee is supposed to agree on a funding level for the rest of fiscal year 2014, and both chambers of Congress must approve it. Otherwise, the government could be forced to shut down again.

What's more, a new round of budget cuts under the sequester would take effect in the second half of January without congressional action.

A big task before the committee is to find ways to replace the sequester while preserving the deficit reduction it would deliver.

Lawmakers gave the panel a December 13 deadline to reach a deal. And there is pressure for the committee to agree sooner so that appropriators can start allocating spending among various federal agencies.

Whether the 29-member committee will hit its deadline isn't clear. The meeting on Wednesday was only its second since it was formed over a month ago.

First Published: November 13, 2013: 5:24 PM ET

10.20 | 0 komentar | Read More