GM recalls another 3.4 million vehicles

The Buick Lacrosse and other vehicles are included in the new recall.

NEW YORK (CNNMoney)

The new recall affects cars from model years 2000 through 2014. The ignition switch can move out of the run position, turning off power steering and power braking while the car is being driven. Extra weight on the key chain can jostle the ignition when the vehicle strikes something in the road like a pothole.

Some model years of the Chevrolet Impala, Cadillac Deville and DTS, as well as the Buick Lacrosse, Lucerne and Regal are included in this recall.

Monday's announcement comes after a review of ignition switch issues in the wake 2.6 million recalled Chevrolet Cobalts and other small cars for a similar problem. At least 13 deaths have been blamed for the earlier ignition switch problem.

It took the company more than a decade to recall those cars, and the automaker is currently under investigation and facing several lawsuits over the delay.

Related: Barra set to testify again on GM recall

Monday's recall pertains to a different ignition switch and requires a different solution, GM spokesman Alan Adler said.

Owners of cars included in the Cobalt recall must get the ignition switch replaced, but those affected by Monday's recall don't have to. Instead, GM dealerships will add an insert to the key that closes the slot and leaves only a small hole where a key ring can be attached.

Dealerships are expected to start fixing owners' keys in the next few weeks. Until then, owners are urged to remove any additional weight from their key chains.

GM engineer Ray DeGiorgio was involved with the design of both ignition switches, according to Adler. DeGiorgio was placed on paid leave at the start of the Cobalt investigation and is no longer with the company.

The automaker also issued five smaller recalls Monday, affecting about 194,000 vehicles worldwide. More than half of those are Cadillac ATS and CTS cars with a problem that could prevent the driver from shifting gears. The company said it is unaware of any related crashes or injuries.

GM (GM) said it expects to take a charge of about $700 million for recalls this quarter, on top of the $1.3 billion in recall-related charges that it's already announced this year.

First Published: June 16, 2014: 4:16 PM ET

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Pope Francis rails against food speculation

NEW YORK (CNNMoney)

The leader of the Catholic Church chastised investors in food-based commodities markets, especially those who make speculative bets on price movements. The Pope said these types of investors reduce the affordability of food for the poorest families.

He went as far as to call it a "scandal" of our time.

"Advances in technology have increased the speed of financial transactions, but in the long run this is significant only to the extent that it better serves the common good," he said. "In this regard, speculation on food prices is a scandal which seriously compromises access to food on the part of the poorest members of our human family."

Related: Milk demand from Chinese, others boost dairy prices

The position is not a new one for Pope Francis. He similarly railed against food commodity speculation last year in a speech before the Food and Agriculture Organization at the United Nations, and his predecessor Pope Benedict XVI also spoke out about the issue.

This year's remarks came during the Vatican's Investing for the Poor conference, which seeks to highlight ways that investors can make social and environment impacts.

Related: Pope made same denunciations last year

"It is increasingly intolerable that financial markets are shaping the destiny of peoples rather than serving their needs, or that the few derive immense wealth from financial speculation while the many are deeply burdened by the consequences," he said.

The Pope's comments come at an interesting turning point in global commodity markets. Many food prices rose in the past year as droughts and other issues impacted the supply of various crops.

But food prices have been falling in the last month, according to data from the Food and Agricultural Organization (FAO). The organization said overall food prices fell by about 1.2% from April to May, with indices for major global food staples all falling further since then.

First Published: June 16, 2014: 5:06 PM ET

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Judge rules against J.C. Penney in Martha Stewart case

J.C. Penney may have to pay up for striking a deal with Martha Stewart.

NEW YORK (CNNMoney)

New York Supreme Court Judge Jeffrey Oing called the actions of J.C. Penny's top executives "less than admirable."

"At best, one can only describe such conduct as adolescent hijinks in the worst form," he wrote in the court order.

Martha Stewart Living Omnimedia (MSO) has been selling Martha Stewart-branded products at Macy's (M) since 2006. But in 2011 it reached a deal with J.C. Penney (JCP) to start selling some of its products at that retailer as well.

Macy's took both companies to court claiming they violated its own exclusive deal with Stewart's company. It settled with MSLO in January, but the terms of the deal were not disclosed.

Related: Martha Stewart and Macy's settle legal fight

Oing did not rule on how much J.C. Penney may have to pay Macy's for lost profit and attorney fees, deferring that decision to special judicial hearing officer.

J.C. Penney said that it "does not believe that money damages are warranted." It is also considering appealing the ruling.

Meanwhile, a statement from Macy's said the company was "delighted" by the order and looking forward to the damages phase of the case.

Since litigation began, J.C. Penney axed CEO Ron Johnson, who struck the deal with Stewart's company back in 2011, and scaled back its partnership, limiting it to window treatments and hardware, lighting, rugs and holiday products. J.C. Penney also sold its stake of MSLO, for which it paid $38.5 million in 2011.

"Their grand strategy was a colossal and abject retail failure," Oing wrote.

J.C. Penney has suffered massive losses in recent quarters following Johnson's failed turnaround effort.

First Published: June 16, 2014: 7:44 PM ET

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The death of U.S. savings bonds

NEW YORK (CNNMoney)

Americans bought over 40 million of the most popular savings bonds in 2000. Last year, the U.S. sold a mere 400,000 of them.

They were often given to students, newly married couples or anyone having a birthday. It was akin to gifting cash, but better. The bond certificate looked extra official, and it encouraged young people to save for the future -- whether for further study, a car or a house.

Savings bonds offer some interest each year -- much like money held in a bank's savings account -- but if you hold the bond to the end of the 10 to 30 year duration, you often make more money due to various adjustment procedures. It's akin to a bonus payment.

But these bonds are going the way of the landline telephone, and there are several reasons why.

For starters, savings bonds, which have been around since the 1930s, are no longer an attractive investment.

Related: Investors chase higher yields in scary places

"The interest rates are so low these days that people just don't even get involved in them anymore," says Jim Moore, a Wells Fargo financial advisor based in St. Louis.

The fixed-rate "EE" bond offers a mere 0.5% interest rate for the next 20 years, barely better than putting money under a mattress. Bonds issued at the end of last year were yielding an even more lousy 0.1% rate.

Moore recommends buying a good quality, high paying dividend stock or exploring other savings options instead. Many parents and grandparents utilize 529 savings plans for colleges that are run at the state level. Investment growth in a 529 plan is tax deferred, and any money taken from the 529 to pay for college isn't taxed at the federal level.

Related: Tax-savvy college savings options

But it's the Internet that really killed off demand for savings bonds.

You can no longer buy a paper savings bond. On January 1, 2012, the government stopped sales of over-the-counter paper bonds and forced people to buy them online via TreasuryDirect.

That's when the big plummet occurred. The goal was to save money, but in the process, the government made it harder for potential buyers.

Many older Americans were raised on ads to be patriotic and buy these bonds to help the country (and yourself). There were slogans such as "Back Your Future." The savings bonds were sold in many places, including local banks and brokerages.

Now you have to go online and fill out cumbersome forms with your taxpayer ID number, the intended recipient's Social Security number, your bank account and other information. It's even more complex if you try to gift a savings bond to someone under 18.

Related: Fewer students have jobs on graduation day

Kate Warne, investment strategist for Edward Jones, says the only time she hears about savings bonds these days is from clients telling her how hard the website is to navigate.

"The complaint I get is 'I have trouble. What should I do instead?'" Warne says.

Those formal looking certificates that made such lovely accompaniments to graduation degrees are history. The only way to get one now is to ask for your federal tax refund to be returned to you as savings bonds.

Even that is convoluted. The bonds are only issued in $50 increments, so unless your refund is perfectly divisible by 50, you get savings bonds plus a check for the difference. It's a small program according to the Treasury Department.

The government has no plans to revive paper savings bond sales. There is a mock certificate people can print out online to wrap up in a box and give as a gift. But that just doesn't have the same appeal.

First Published: June 14, 2014: 9:10 AM ET

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Jetblue's answer to first class

NEW YORK (CNNMoney)

That's what Jetblue is hoping to sell to its customers starting Sunday, when the airline launches a new service called "Mint." It will begin with only the New York to Los Angeles route, and will offer the kind of amenities usually seen on international flights.

Billing it "coast-to-coast without the cost," travelers can expect seats that become private suites with a door, food lifted from the menu of a trendy New York City restaurant and tiny bottles of fancy beauty products. There's also a signature cocktail and organic ice cream from a Brooklyn scoop shop, all for about $600 a ticket, each way.

It's not exactly flying behind the first class curtain (there is, in fact, no curtain separating the cabins) but it's close, and built for the everyday business traveler willing to spend a little more.

"I think they can expect a refreshing surprise," said Brad Farmerie, the executive chef of Saxon + Parole, the restaurant behind Mint's food.

He said passengers will be offered options like octopus with truffled portobello mushroom mousse for dinner, and French toast stuffed with banana and homemade Nutella for breakfast.

Related: jetBlue pilots vote to unionize

The beauty company Birchbox will supply the amenities for Mint, with gift boxes filled with products like moisturizers, sunscreens and hair products. Birchbox co-founder and co-CEO Katia Beauchamp said that she hopes the kits will make traveling easier "and more glamorous!"

There are gift boxes for women, and separate ones for men.

The cost for all this luxury? Seats are currently offered at $599 one way, if booked by next week for travel later this year. A non-refundable economy class ticket taken during a similar time is about $330. All the amenities are included with the ticket price.

JetBlue's new service comes at a time when more and more airlines are building in extravagant options for fliers willing to spend. AirFrance recently announced its new La Première cabin, which has four private suites and will debut in September.

Etihad Airways' A380 offers a one-bedroom "residence" on one of its long-haul planes departing from London, at a cost of $21,000 a ticket.

While all that luxury comes with a hefty price tag, JetBlue's decision to keep things less astronomical may signal a trend that combines the casual with the costly.

Like Virgin Atlantic's rather whimsical new option for its higher-paying passengers -- a onesie pajama bodysuit with feet. The airline dubbed the onesie a "fun alternative" for the first class flier.

First Published: June 14, 2014: 9:17 AM ET

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Costa Rica aims to win World Cup ad game

NEW YORK (CNNMoney)

Many experts, including Goldman Sachs, predict Costa Rica (and the U.S.) won't make it out of the first round, but the Central American nation has it sights on another goal: Winning the World Cup ad game.

"Essential Costa Rica" is a print and TV ad campaign running in major cities in the U.S., U.K. and Germany during the World Cup. The message is simple: Costa Rica is more than a pretty place to vacation, come invest and partner with us.

Related: Brazil 2014 set to smash TV records

It's a push to shed the country's image as a Banana Republic. Only 6% of the country's GDP is agriculture today, although the sector remains a large employer. The U.S. is its biggest trading partner, accounting for about half of its exports and foreign direct investment.

The country is growing its technology industry and promoting the fact that 16% of its population has college degrees now.

President Solís is a good example. His grandfather had no schooling. His father made it to about high school, and he has a master's degree. Before he was elected president in April, much of his life was spent as a history professor and scholar. He ran as a "third party" candidate.

CNNMoney interviewed President Solís in New York this week. This is an excerpt of the conversation.

Q: Intel (INTC, Tech30) and Bank of America (BAC) recently announced 3,000 job cuts in Costa Rica. What are you doing about it?

Solís: Within one month of taking office, I am here in the United States speaking with investors, those already working in Costa Rica and those who may want to go. As a result, we've been able to get an announcement from Intel that their Mega Lab will be installed in Costa Rica, which is extraordinarily important for us, thus moving us from manufacturing to research and development of new products. I hope this will bring about significant change in how we're seen in the international community.

We also have a VMWare (VMW) announcement saying they are expanding their activities in Costa Rica. I hope this will clear any doubt that may exist regarding the commitment of the new government to the private sector or the conditions of the country for direct investments.

Q: Several analysts cut your GDP forecasts in half. Is that fair?

Solís: This is not what the central bank in Costa Rica is saying. In our estimation and that of the World Bank, we are going to grow at a rate of 3.7% this year. I think it's going to go up, not down. I hope so because this is the best way we can deal with a number of challenges that we have: Fiscal, monetary and other ways.

Related: The world's largest economies

Q: How do you move the Costa Rican economy beyond tourism and agriculture?

Solís: It has happened in the last 25 years. We were an early exporter of coffee to Europe. Now we have more than 250 multi-national companies, especially in manufacturing and services.

We have 14 different free trade agreements -- 50 countries -- with China, North America, Europe, etc. Coffee exports today are only 3% of our goods. Bananas are 7%. Services represent 33%. We have already moved beyond agriculture.

Related: CNN selects Costa Rica as one of the top 11 travel spots for 2014

Q: Your currency the colón has fallen a lot against the dollar in recent months. Will this continue?

Solís: Before the government entered into office, the colón depreciation started to jump in the band system that we have. We're going to keep the bands, but we are going to lower the volatility by flattening the bands. The central bank has enough reserves to prevent this volatility without tampering with the trend -- the slow trend -- towards devaluation, which has been good news for the Costa Rican exporters and the tourism industry. We are almost at the level we were before the crisis.

Q: What would you like to see evolve in your relations with the United States?

Solís: I would like to see the relationship evolve in an official way to move more from security issues related to drugs into talk of the environment, green energy and social development issues. These policies will help prevent violence, including narcotraffic.

Q: A mysterious kidney disease is impacting your agriculture workers. What are you doing about it?

Solís: We are researching the problem to begin with because we don't know where it comes from. We were also asked about arsenic. We're trying to find out what the problem is because it seems to be associated with certain regions.

First Published: June 14, 2014: 9:36 AM ET

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PayPal chief leaving for Facebook

Outgoing PayPal chief David Marcus, seen here in what would make for a nice Facebook pic.

NEW YORK (CNNMoney)

PayPal parent eBay (EBAY, Tech30) said Monday that Marcus, who was named president of the unit in April 2012, "has made a career decision to focus on what he loves most -- leading smaller teams to create great product experiences."

In his new role, Facebook said Marcus will "lead our efforts in mobile messaging."

"Messaging is a core part of Facebook's service and key to achieving our mission of making the world more open and connected," the company said. "We're excited by the potential to continue developing great new messaging experiences."

EBay shares slipped 2.6% in after-hours trading Monday following the announcement. Facebook (FB, Tech30) shares ticked up 0.5%.

Related: Amazon continues assault on PayPal

The move comes at a time when many analysts believe Facebook is poised to expand into the mobile payments business. The company is hoping to obtain regulatory approval for a mobile payments system in the United Kingdom, The Financial Times reported in April.

Facebook has also been active on the messaging front. It purchased mobile messaging app WhatsApp for a stunning $19 billion in February, and in April, it broke out its own messaging service into a standalone app.

Marcus' move to Facebook also comes on the same day that Amazon (AMZN, Tech30) launched a new service allowing customers to automatically pay recurring charges, such as monthly subscription fees or phone bills, using their Amazon log-in details. The new Amazon Payments feature will go head-to-head with PayPal.

First Published: June 9, 2014: 5:03 PM ET

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GoDaddy files for $100 million IPO

GoDaddy is going public -- again. But its finances don't look pretty.

NEW YORK (CNNMoney)

But don't cue the celebratory racy Danica Patrick video just yet: In a filing with the Security and Exchange Commission on Monday, the website registration company offered an inside look at the company's hurting finances, and GoDaddy hasn't made a profit since 2009.

The company lost $279 million in 2012. It bled another $200 million last year. This year doesn't look much better, with another $51 million lost in the first quarter.

What's going on? The company's still recovering from a bad stretch. It was mired in debt back in 2011, when three private equity firms came to the rescue: KKR & Co. (KKR), Silver Lake Partners and Technology Crossover Ventures.

They reportedly paid $2.25 billion or so to buy a major stake in the company, according to The New York Times and Wall Street Journal.

Also, as part of the announcement, GoDaddy founder Bob Parsons said he is stepping down from his current position as executive chairman, though he'll remain on the board. He stepped down as CEO in 2011.

Related story: The story behind GoDaddy's 'I quit' ad

GoDaddy's SEC filing shows Parsons -- a controversial figure who's taken heat for shooting elephants and the company's sexually-themed commercials -- still owns 28% of the company directly. KKR and Silver Lake each own 28%. Technology Crossover Ventures has the smallest slice, with 12%.

On the bright side, the company is showing steady growth. Its customer base has been expanding at about 13% a year and reached at 11.6 million customers in 2013. Its total number of registered websites has also grown, reaching 1.4 million bookings that same year.

The company also sees business potential in selling the hundreds of new top-level domains (like .nyc and .bike) that will soon be available with the approval of the Internet Corporation for Assigned Names and Numbers.

This is the second time GoDaddy has tried to go public. It went this route back in 2006, but then backed out when it didn't get the pricing it wanted.

This time around, the company plans to offer a yet-undetermined number of shares of common stock. And there's no word yet what the company ticker will be.

First Published: June 9, 2014: 5:39 PM ET

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Chinese struggle to give away their riches

HONG KONG (CNNMoney)

Would-be donors have to navigate the country's fledgling non-profit sector, which suffers from a relative lack of trusted organizations, weak tax incentives and public concerns over transparency.

Philanthropy is also a new idea in China. Traditional values emphasize an individual's responsibility to family, so pursuing riches only to donate them to outsiders strikes some as odd.

Chinese gave an estimated $13 billion to charity in 2012, compared to $316 billion in the U.S. The country has around half a million non-profits, whereas the U.S. has about 1.5 million.

Anke Schrader, a China-based researcher at the Conference Board, said that China's position is not unusual for a developing country. While the U.S. has a long history of producing massively rich individuals, China didn't have a single billionaire just 10 years ago.

"Overall, it's still in its very early stages," she said. "Entrepreneurs are shifting their thinking from what I would say is a pure consideration of pure wealth accumulation to thinking about wealth distribution."

Related story: Alibaba founders fund mega charity ahead of IPO

Advocates are hopeful that a decision by Alibaba co-founder Jack Ma will encourage other billionaires to open their wallets. In April, Ma partnered with current Alibaba CEO Joe Tsai to establish charitable trusts that could be worth more than $3 billion.

"It will send a ripple effect through the community," said Dien Yuen, managing director of Kordant Philanthropy Advisors. "They're being proactive ... I think it will encourage more people to step up."

But growth in charitable giving will also require the government to make substantial changes to the tax code, and loosen its grip on civil society.

The central government has been at work for about a decade on a charity promotion law, but nothing official has materialized. The rules that do exist are thin, vague and sporadically enforced.

Just setting up a non-profit or NGO can be exceedingly difficult.

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

Charities are supposed to register with Beijing, and in many cases, submit to its control -- some of the biggest groups are joint partnerships with the government. The rules are opaque and applicants must complete a huge pile of paperwork.

As a result, many decide to skirt the law. Yuen estimates that more than 1 million charities in China are unregistered. The lack of transparency can make it hard for donors to pick a legitimate group, and some choose to set up their own private foundations in an effort to avoid swindlers.

Non-profits and donors also have to consider political circumstances -- advocating for free speech and human rights is off limits. More acceptable causes include the environment, rural education, poverty and support for migrant workers.

Most charitable donations in China are made by corporations, which accounted for 58% of total donations in 2012, according to the Conference Board.

Related story: Chinese billionaire buys 007's yacht maker

Corporate donations outstrip individual gifts, Yuen said, partly because there aren't strong tax incentives to give to charity. While the government does offer some tax breaks for charitable donations, it can be difficult to claim the deduction.

And since China doesn't have an inheritance tax, there isn't much impetus for the rich to reduce their heirs' tax bill by donating money.

Numerous scandals in recent years have only added to the distrust of charities. One state-run group, the Red Cross Society of China, is still working to rebuild public confidence after a supposed employee was caught posting photos of herself with expensive cars and extravagant accessories.

While China's Red Cross denied that the woman, Guo Meimei, was an employee, her posts led to widespread outrage in China and allegations of corruption.

The incident had a lasting effect on the group, which has also been accused of misappropriating funds earmarked for disaster relief following the massive 2008 earthquake in Sichuan.

"There was a huge backlash for years until this Jack Ma gift became public," said Yuen. "And suddenly, there is this whole positive movement again."

First Published: June 9, 2014: 10:27 PM ET

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Where's the fear in the stock market?

NEW YORK (CNNMoney)

The CBOE volatility index, or VIX (VIX), measures investors' expectations for market volatility in the near term.

Often referred to as Wall Street's "fear gauge," the VIX fell last week to its lowest level since before the financial crisis struck.

On Friday, it dipped below 11 for the first time since February 2007. Consider that at this point last year, the index was oscillating between 15 to 17. In June 2009, the VIX was hovering around 30.

What does this mean?

The apparent lack of fear in the market could be a red flag. Stocks have been in a bull market for more than five years, and some worry that investors have become complacent.

In another sign of the bullish tone, CNNMoney's Fear & Greed index, which is based on the VIX and several other measures, is back above the level that indicates "extreme greed" in the market.

Related: The bull market at 5: Not old yet

But others argue that the mood is not as cavalier as it seems.

Dan Greenhaus, chief market strategist at BTIG, said the idea that investors are complacent is "utter and total nonsense." He says there's "no shortage of worries" among the clients of his brokerage firm.

Greenhaus said investors are concerned about Federal Reserve policy, sluggish economic growth and lackluster corporate earnings, to name a few.

In fact, traders are worried enough to be looking for ways to hedge the expected rise in volatility.

Joe Bell, senior equity analyst at Schaeffer's Investment Research, said investors have been stocking up on call options for the VIX, which are derivative contracts designed to pay off when the index rises.

"Yes, volatility is low," he said. "But it's not like no one is talking about how volatility is low -- and they're buying hedges."

Last week, the Dow Jones Industrial Average and the S&P 500 both hit fresh record highs after solid economic news on the jobs front and further stimulus measures from the European Central Bank.

The Dow is a mere 75 points from breaking the 17,000 level. It crossed the 16,000 marker late last year.

Related: Finally! Job market returns to 2008 peak

JJ Kinahan, chief derivatives strategist at TD Ameritrade, said it's not surprising to see the VIX at its current level given the stock market's recent performance.

"We are at all-time highs, so you would expect the VIX to be at the lower end of it's range," he said.

The steady move higher this year has encouraged more investors to put money to work in the stock market, which helps keep a lid on volatility.

In any case, the lull in the VIX may not last much longer.

This week brings the expiration of a slew of derivatives contract, a quarterly phenomenon known as quadruple witching, said Kinahan

"That's when you could see some pressure on the VIX," he said.

First Published: June 8, 2014: 2:57 PM ET

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