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Why secretary is still the top job for women

Written By limadu on Kamis, 31 Januari 2013 | 17.42

NEW YORK (CNNMoney)

The same as it was in the 1950s: secretary.

About 4 million workers in the United States fell under the category of "secretaries and administrative assistants" between 2006 and 2010, and 96% of them were women, according to the U.S. Census.

How secretary became women's work

The rise of the secretary began with the Industrial Revolution, which created an enormous amount of paperwork. In the early 20th century, it became a female job as companies realized they could pay women lower wages to do the work.

Secretarial schools offered professional training, which made it possible for many women to enter the career without a full college education.

It wasn't until 1950 that it became the most popular job among women. Back then, 1.7 million women worked in a category the Census defined as "stenographers, typists or secretaries."

While the title has evolved since then, it remains the top female job.

"It was out with the stenographers, and in with the data processing people. But many women are still employed in that large category," said Cindia Cameron, organizing director at 9to5, National Association of Working Women. Cameron worked as a secretary before joining the organization in 1983.

Why so little has changed

First, generalists tend to dominate the list of most common jobs, regardless of gender. The top job for American men, for example, is truck driver.

As workers become more specialized, either with years of experience or education, their job titles tend to become more specific to their industry.

So why are so many secretaries still around?

"Every time a major new technology showed up, there were always predictions that this would spell the end of secretaries," said Ray Weikal, spokesman for the International Association of Administrative Professionals. "You saw that with the development of electric typewriters, the personal computer, and the internet, but every time technology gets more efficient, the amount of business increases. You continue to need people who can use those tools."

Administrative assistant could very well continue to be the top job for women in 2020. The Labor Department projects the category will grow about 12% between 2010 and 2020, adding nearly 493,000 jobs during this decade.

How 'secretary' became a dirty word

The word "secretary," has been falling out of favor for decades, largely due to the feminist movement.

In the early 1970s, a group of secretaries at Harvard formed 9to5, a group with a mission to change the image and working conditions for women office workers. Their early demands included written job descriptions, overtime compensation, systematic procedures for filing a complaint, and regular salary reviews.

Sister organizations popped up in Chicago, San Francisco and New York and eventually, 9to5 turned into a national organization, with some affiliates joining unions.

Conventions and marches on National Secretaries Day included the slogan "Raises, not roses."

Related: Women earn $8,000 less than men after graduation

Along with those movements, workplaces started to rename the job "administrative assistant" or "office professional," to reflect the shifting perception of secretaries. The National Secretaries Association eventually changed its name to the International Association of Administrative Professionals.

"Increasingly women in the 1970s were demanding the opportunity to be treated as equals," Weikal said. "All of a sudden you have fewer secretaries and more executive assistants."

Even, after all that progress, the title "secretary" made a slight comeback in 2011, the first year in decades it had grown, according to an IAAP survey. The organization attributes it to the popularity of the show Mad Men and nostalgia for the 1960s.

"It's really hard to watch but it actually makes us think about how far we have come. Now you couldn't get away with half of the stuff men do in the show, and women fought really hard to change that," Cameron said. "It's a pretty hard time period to be nostalgic for, though."

Fighting for equal pay

9to5's main mission has since expanded to focus on women in low-wage jobs in general. The organization pushes for fair pay measures, paid sick days and maternity leave.

Across all industries and occupations, full-time female workers earned 78 cents to every dollar a man earned in 2010.

In the category of administrative assistants, women outnumber men more than 20 to 1, but still earn less than their male counterparts -- about 87 cents to the dollar.

Full-time female secretaries and administrative assistants earned an average salary of $34,304 in 2010.

For men, it was $39,641.

"The good news is over the past 40 years, there are very few jobs in which women have not broken through," Cameron said. "The glass ceiling is cracking in all different directions, but the bad news is, there is still a sticky floor. Most women still work in traditionally female jobs, like administrative support."

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We're looking for men who work in female-dominated professions like nursing, elementary school teaching, cosmetology, child care and other fields. If you're a guy working in one of these fields, please email Annalyn.Kurtz@turner.com.

First Published: January 31, 2013: 5:18 AM ET


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FHA to hike premiums on mortgages

The Federal Housing Administration is raising premiums and taking other measures in order to bolster its capital reserves and reduce its exposure to risky loans.

NEW YORK (CNNMoney)

The Federal Housing Administration, which is the largest insurer of low-down payment mortgages, announced Wednesday that it will raise premiums by 10 basis points, or 0.1%, on most of the new mortgages it insures. A borrower opting for a 30-year, fixed-rate mortgage who puts 5% or more down, for example, will now pay an annual insurance premium of 1.3% of their outstanding balance. While someone who puts less than 5% down will pay a premium of 1.35%.

The agency said it will also raise premiums for borrowers with jumbo loans -- or loans of $625,000 or more -- by 5 basis points, or 0.05%, and increase the minimum down payment requirement on these loans to 5% from 3.5%.

Related: 10 great foreclosure deals

FHA said it will require most buyers to pay insurance premiums for the life of their loan. A policy that was put in place in 2001 allowed borrowers to cancel premium payments once their debt fell below 78% of the principal balance. One exception will be for borrowers who put more than 10% down at the time of purchase.

Additional new policies include a requirement that any mortgage for an applicant with less than a 620 credit score and debt-to-income ratio above 43% must be underwritten manually. Lenders who want to issue loans to these applicants must be able to adequately document why they decided to approve the loans.

The agency also decided to put new restrictions on reverse mortgages, no longer permitting retirees to take such large, upfront payments.

Related: Where are the first-time homebuyers?

The changes are an effort to reduce the agency's exposure to risky loans and bolster its financial reserves, which have been depleted due to high delinquency rates from the mortgage crisis. The agency did not say when the new rates will take effect.

Last spring, FHA increased both premiums and upfront costs on mortgages. Such hikes make it tougher for mortgage borrowers -- especially first-time purchasers who can't afford the large down payments most private lenders require today, according to Jaret Seiberg, a Washington policy analyst for Guggenheim Partners. "They are the ones most likely to turn to the FHA for credit," he said.

And that could have a negative impact on the housing market overall. "You can't have a healthy housing market without a constant influx of first-time buyers," said Seiberg. To top of page

First Published: January 31, 2013: 5:26 AM ET


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Wal-Mart: The $200 billion grocer

In 2012, groceries accounted for 55%, or roughly $244 billion, of Wal-Mart's net sales.

NEW YORK (CNNMoney)

So what gives? The answer lies in groceries.

Ten years ago, groceries made up a little more than 20% of Wal-Mart's (WMT, Fortune 500)net sales, or about $48 billion. In 2012, groceries accounted for 55%, or roughly $244 billion. And most of your groceries -- from produce, to pancake mix, to paper towels -- are made right here in the U.S.

"To more and more people, living better means the ability to walk into a Wal-Mart and find affordable foods," said Steven Restivo, a Wal-Mart spokesman,

Related: Wal-Mart to hire 100,000 veterans

Experts say that this shift was no accident. The nation's largest retailer adapted to fit the needs of its cash-strapped customers in the midst of a slow economic recovery. Shoppers today are more concerned with buying basics like milk and bread than electronics and apparel, many of which are foreign-made, and the retailer is shifting focus to keep up.

"Consumers have been shopping more for 'needs' than for 'wants,' and that's why groceries are still the number one thing in their budgets," said Craig Johnson, president of independent consulting firm Customer Growth Partners. "In return, Wal-Mart has become a needs-oriented store."

The grocery push gets customers in the door -- and opening their wallets -- more often, according to Burt Flickinger III, managing director of Strategic Resource Group.

"Our research has shown that over the last ten years, the average number of shopping trips a customer makes to Wal-Mart has gone from 12 per year to 52 or more," he said. "Since customers spend on average between $50 and $60 in total per trip, that's an extra $2,000 per customer each year that Wal-Mart is bringing in."

The shift was easy -- and profitable, according to Customer Growth Partners' Johnson,

"Wal-Mart already had the infrastructure for both fresh and refrigerated foods, it had the trucks and the distribution centers," he said. "So with little investment, they're able to expand into something that has a high turnover rate that they can make money on."

According to the retailer's website, it is committed to selling $1 billion in food sourced from a million small- and medium-sized farmers. Bear in mind: That's $1 billion of $244 billion in annual grocery sales.

"We don't think families should have to choose between food that is good for them and food they can afford," Wal-Mart's Restivo said. To top of page

First Published: January 31, 2013: 5:33 AM ET


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Time Inc. cuts 6% of staff

NEW YORK (CNNMoney)

In a memo to employees, CEO Laura Lang said the cuts would hit "all areas" of the company, including both domestic and international staff.

"With the significant and ongoing changes in our industry, we must continue to transform our company into one that is leaner, more nimble and more innately multi-platform," Lang said.

A spokeswoman for Time Inc. said the company was not planning on taking any of its magazines out of print. She declined to comment on the cost savings expected to be achieved through the cuts.

Time Inc. is a division of Time Warner (TWX, Fortune 500), the parent company of CNNMoney. Time Inc.'s stable includes 95 titles worldwide, including Time, Sports Illustrated, People, Entertainment Weekly and several dozen websites.

The company has been through several shakeups at the top in the last few years. In February 2011, after less than six months on the job, CEO Jack Griffin was forced out, replaced in January of last year by Lang, former CEO of the ad firm Digitas.

Lang informed employees earlier this month that the company's traditional 3% merit bonuses would be eliminated for 2013.

The job cuts underline the challenging time for print journalism, particularly for magazines.

Newsweek, Time's historic rival, ceased publication of its print edition at the end of last year. Newsweek editor-in-chief Tina Brown said the growing use of tablet computers by readers, combined with continued weakness in print advertising, drove the decision, which was reportedly accompanied by layoffs.

Magazine publisher Condé Nast also reportedly began a round of job cuts late last year.

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

For the third quarter of 2012, Time Inc. reported sales of $838 million, down 6% from a year earlier. The company said a 6% decline in subscription revenue and a 5% decline in ad revenue had contributed to this drop. To top of page

First Published: January 30, 2013: 1:09 PM ET


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Federal Reserve blames stalled economy on weather

NEW YORK (CNNMoney)

"Growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors," the Federal Reserve's policymaking committee said in a statement Wednesday.

The report comes just hours after the Commerce Department said the U.S. economy contracted at the end of 2012, for the first time in three years.

The Fed made no major changes to its policies, opting to keep interest rates near zero. As it did in December, the Fed said it will probably keep rates low until the unemployment rate falls to 6.5% or inflation exceeds 2.5% a year.

Economists took the Fed's language as an encouraging sign that it's not too worried about the fourth quarter slump, and stocks largely shrugged off the news.

"In December, the Committee delivered an extraordinary open-ended promise to provide as much monetary policy stimulus as it takes to get labor markets, and therefore the economy, to accelerate convincingly," said Ellen Zentner, senior economist at Nomura. "After doing so, it is likely that the next several FOMC meetings will prove to be comparatively uneventful."

Related: Meet the Fed's newest voters

The central bank will also continue buying $40 billion a month in mortgage-backed securities and $45 billion a month in Treasuries. The hope is that those additional purchases will continue to push long-term interest rates even lower.

"Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative," the Fed statement said, repeating language from December's statement.

The Fed's loudest critics argue that the Fed's easing policies are unlikely to have an impact on the unemployment rate, which currently stands at 7.8%. Many also fear that as the Fed buys an unprecedented amount of bonds, it will eventually trigger rapid inflation and struggle to unload the assets in a timely manner.

Of the Fed's 12 voting members, only one disagreed with Wednesday's decision. Esther George, president of the Federal Reserve Bank of Kansas City, said she was concerned that the Fed's policies could "increase the risks of future economic and financial imbalances."

In a speech earlier this month, she warned that the Fed's stimulative policies could risk fueling an asset bubble in bonds or farmland, among other things. To top of page

First Published: January 30, 2013: 2:38 PM ET


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Facebook sales rise 40% as mobile ads expand

NEW YORK (CNNMoney)

Shares of Facebook (FB) plunged as much as 10% in after-hours trading, but recovered to a more modest 4% drop. The number of monthly active users on Facebook's mobile site and apps grew 57% over the year to 680 million. Still, that wasn't as strong as the 61% over-the-year jump Facebook had in the third quarter.

Mobile has long been a concern for Facebook. In the months right after its May IPO, the company said it wasn't making "any meaningful revenue" from mobile. That changed in August, when Facebook launched a new Apple (AAPL, Fortune 500) iOS app and began showing ads to mobile users, including Sponsored Stories and other nudges to "like" company pages.

Investors expect Facebook to continue expanding its mobile audience at a rapid clip, and CEO Mark Zuckerberg knows it. His kickoff statement on a post-earnings conference call with analysts focused on mobile.

"Today there's no argument," he said. "Facebook is a mobile company."

He later added: "A lot of what we had to do last year was simply to improve our mobile development process. Now we're there."

Related story: Facebook investors react ... on Twitter

Zuckerberg crowed about Facebook's fourth-quarter mobile ad sales: They accounted for 23% of Facebook's advertising revenue, or about $306 million. That's up from 14% last quarter.

Mobile "daily active users" -- a key metric for Facebook -- exceeded the site's desktop active users for the first time.

Overall, Facebook earned 17 cents per share (excluding some compensation and tax expenses) on sales of $1.6 billion for the fourth quarter, up 40% from Facebook's sales of $1.1 billion a year ago. Both figures beat analysts' estimates.

But on the revenue front, Zuckerberg said he wants to "temper expectations" for two new initiatives: Gifts and Graph Search. The Gifts service lets users send their virtual friends real-world items on special occasions. Graph Search is a tool that lets users search their social connections for information that their friends have shared: "music my friends like," "people who like soccer and live near me," or "photos of my friends before 2004."

COO Sheryl Sandberg talked up Facebook's Ad Exchange system (FBX), which lets advertisers bid on the social network's display ad space. It also lets them put cookies on users' computers to track people as they crawl the Web, and "retarget" those users with related ads when they log back on to Facebook. The service launched in September, and by December it was serving 1 billion ad impressions per day.

After running through the company's financials, CFO David Ebersman warned that Facebook's expenses will jump 50% in 2013. The company also expects to ramp up hiring.

During the question-and-answer session, Zuckerberg fielded a question about the long-rumored Facebook smartphone.

He shot it down quickly, in his strongest denial to date: "Everybody asks if we're going to build a phone. We're not going to build a phone." To top of page

First Published: January 30, 2013: 4:42 PM ET


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Energy prices on the rise again

Written By limadu on Rabu, 30 Januari 2013 | 17.42

Rising oil and gasoline prices haven't cut into economic growth yet, and analysts aren't expecting them to this year.

NEW YORK (CNNMoney)

Over the last month, crude oil prices have risen over 4% and are approaching $100 a barrel. Analysts think they'll soon trade in the triple digits. Gasoline futures are up even more, rising 8% over the last 30 days. At the pump, drivers are now paying 14 cents more a gallon than they were in mid December.

The only outlier is natural gas, which is used to heat homes, among other things. Natural gas prices have fluctuated widely based on the weather, and have fallen about 4% this month as the cold snap gripping much of the country was expected to ease.

Energy analysts say prices are rising partly because the cyclical nature of energy prices -- they often rise ahead of strong summer demand -- is happening earlier and earlier each year. But they're also rising because there's a sense the economy is getting better. When that happens, higher gas prices can lead people to pull back spending on other things -- a self-defeating prophecy that crimps any economic recovery in progress.

"Higher energy prices act as a tax increase," said Chris Lafakis, a senior economist at Moody's Analytics, noting that they're also coming on the heels of another tax increase -- the expiration of the payroll tax holiday -- at the start of the year. "That sets us up for weakness."

Related: Exxon's big plans for offshore drilling

Lafakis said that every penny that gasoline prices rise costs consumers a billion dollars over the course of the year.

But he doesn't think the drag will have a noticeable effect on economic growth quite yet. Oil and gas prices were, after all, at this level just a couple of months ago. Oil prices were substantially higher at the start of last year.

"We've withstood $100 a barrel before, and we can do it again," said Beth Ann Bovino, deputy chief economist at Standard & Poor's. If prices went considerable higher -- Bovino mentioned $150 a barrel -- that might not be the case.

Fortunately for drivers and the economy at large, no one is predicting record prices this year.

Largely thanks to an oil and gas production boom in this country, gasoline prices are expected to top out somewhere between $3.50 a gallon and $3.90 a gallon this year, according to Tom Kloza, chief oil analyst at the Oil Price Information Service. Last year's record high was $3.94 a gallon, set in early April.

Average prices for the year are expected to be lower too. Kloza is predicting an average of $3.25 to $3.50 a gallon. That's considerably lower than last year's average of $3.60 a gallon -- which caused U.S. motorists to spend a record $479 billion at the pump.

Other analysts say U.S. oil prices could briefly dip to $50 a barrel sometime in the next 24 months.

In addition to bringing lower prices, the energy boom also has a flip side (not the environment, which is another story): Rising energy prices actually help big sectors of the economy.

Gasoline and other refined products are the country's largest export. Hundreds of thousands -- if not millions -- of people in the industry see their paychecks go up when energy prices rise. Higher oil prices make shipping manufactured goods from overseas to the United States more expensive, encouraging companies to set up shop and hire domestically.

"Great, that's just what we need," Robert Brusca, chief economist at Fact and Opinion Economics, said when asked about rising energy prices. "In the short tern it might not be good, but in the long run it could be a positive." To top of page

First Published: January 30, 2013: 5:03 AM ET


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Get ready to file your taxes

Tax season officially kicks off on Wednesday.

NEW YORK (CNNMoney)

Wednesday marks the beginning of tax season, when most Americans can submit their returns to Uncle Sam.

The IRS had originally planned to kick things off on Jan. 22, but the fiscal cliff debate forced the agency to push the official start date back eight days.

Related: Taxpayers claiming education credits must wait to file

Certain taxpayers will still need to wait to file, however. Tax returns claiming the American Opportunity Tax Credit or the Lifetime Learning Credit, two popular education credits, won't be processed until mid-February.

This means the roughly three million people who typically file returns claiming these credits before mid-February will likely have to wait longer for refunds this year.

Other filers with more complex returns, including those claiming residential energy credits and general business credits, will need to wait until late February or March for their returns to be processed. The full list of forms being accepted in late February or March can be found on the IRS website.

Related: Prisoners rake in millions from tax fraud

If you're a victim of identity theft, you may also have to wait for your refund. The IRS has been struggling to keep up with surging tax fraud, and identity theft victims often experienced delays of at least 180 days last tax season, according to the Taxpayer Advocate Service.

Otherwise, you can generally expect to receive a refund within three weeks after the IRS receives your return. Last year, more than 110 million taxpayers collected an average refund of $2,803 a piece. To top of page

First Published: January 30, 2013: 5:08 AM ET


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Long-term investing: Keep it simple

A low-cost road to long-term investing: Index funds.

NEW YORK (Money Magazine)

I believe that investors are generally better off when they keep things simple. So for that reason alone, I'd go with index funds.

You can make a very nice diversified portfolio for yourself by combining just two funds: a total stock market index fund (VTSMX) and a total bond market index fund (VBMFX). That would give you a portfolio that covers all sectors of the U.S. stock market -- large and small caps, value and growth shares, virtually every industry -- as well as the entire investment-grade taxable bond market, including government and corporate bonds.

You would do just fine if you stopped there.

But if you want to add some exposure to foreign markets -- which over the long run can reduce the volatility of your portfolio overall -- you could also throw in a total international stock index fund (VGTSX). For guidance on how to divvy up your holdings between stocks and bonds, you can check out our Fix Your Mix asset allocation tool.

Simplicity aside, this approach offers another huge benefit: low annual expenses.

Related: Get help meeting your financial goals

By sticking to diversified stock and bond index funds, you'll likely pay yearly fees of less than 0.25% of the amount invested, in some cases less than half that figure. Regular, or actively managed, mutual funds on the other hand, often charge 1% of assets or more. And while there's no guarantee that lower expenses leads to better performance, there's plenty of evidence that's the case, including this 2010 Morningstar study.

Oh, and there's one more reason I prefer index funds: You know exactly what you're getting. As their name implies, index funds track a particular index or stock market benchmark. The fund holds all, or in some cases a representative sample, of the stocks in the index and nothing more (except, perhaps, a smidgen of cash to accommodate redeeming shareholders).

Managers of actively managed funds, by contrast, have lots of wiggle room when it comes to investing.

So even though a fund may purport to specialize in, say, domestic large-cap value stocks, it's not unusual to find a manager making forays into small-caps, growth stocks or even foreign shares in an attempt to juice returns. This sort of "adventurism" makes it harder to use actively managed funds as building blocks for a diversified portfolio in which you're counting on each fund to play a specific role.

But as much as I believe index funds are the better choice, I don't think you'd be jeopardizing your financial future by devoting a portion of your investing stash to actively managed funds. And if that's the way you want to roll, you should have no trouble finding funds run by smart managers with solid long-term records who can do a credible job of investing your money.

In that case, you might employ a version of what's known as a "core and explore" strategy: put most of your money into index funds and then round out your portfolio with some well-chosen actively managed funds.

Related: Mutual funds - a simple way to diversify your portfolio

How much of your dough goes into the core vs. explore is up to you. But to prevent any bad picks from undermining your portfolio's overall performance, I'd recommend keeping the active portion of your holdings pretty small, say, 10% to 15%.

There's one other thing you'll want to be careful about if you decide to take this hybrid approach. Some advisers suggest using index funds in "efficient" markets like those for U.S. and developed country large-cap stocks and recommend actively managed funds for "inefficient" markets like those for small-caps and emerging market stocks. But identifying efficient vs. inefficient markets isn't quite so simple, and finding active managers who consistently outperform is difficult in almost any market.

So I'd recommend that you get exposure to all markets with index funds and then add the actively managed funds you like even if it means you'll have a bit of overlap in some areas.

I also suggest that as much as possible you go with actively managed funds that have reasonable expenses, as that should give those funds a better shot at competitive performance. You can find such funds, as well as all the index funds you'll need, on our MONEY 70 list of recommended funds.

To sum up, I think most investors would be best served if they just stick with a straightforward portfolio of broad index funds.

Human nature being what it is, however, many people will give in to the urge to venture beyond the indexes for the thrill (even if only fleeting) of finding a fund that beats the market. If you're one of those people, fine. Just don't let yielding to that urge undermine your investing results. To top of page

First Published: January 30, 2013: 5:10 AM ET


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Where Americans are moving to - and from

Germany was the top destination for Americans moving abroad in 2012, followed by the United Kingdom.

NEW YORK (CNNMoney)

United Van Lines moved 573 people to Germany last year, 29% more than to the United Kingdom, the second most popular destination, according to a report released Tuesday. And the relationship was reciprocal: Of foreigners migrating to the United States, Germany was the second most popular country of origin.

"[The] international migration study offers a unique perspective into what is happening with overall migration patterns to and from the U.S.," said Rich McClure, CEO of UniGroup Relocation, United's parent company.

One of the largest U.S. moving companies, many of United's international moves are corporate relocations, which reveal where firms are investing manpower. They also reflect the burgeoning economic recovery, as the total number of moves increased for the second year in a row after declining in 2009 and 2010.

"During the first and second years of the recession, there were steep cutbacks in corporate relocations," said McClure.

Related: 10 great foreclosure deals

Many of the moves from the United States to Germany involved the U.S. military, as more than 50,000 members of the armed forces are stationed in the country.

Foreigners moving to the United States were most likely to arrive from the United Kingdom.

But the hottest markets for migration are countries on the Pacific Rim. United's moves to that region have jumped by more than 10% over the last two years due to "an uncertainty about the U.S. economy," said McClure. Until things stabilize, he thinks many U.S. companies will focus on growing their overseas subsidiaries and invest human capital accordingly.

Related: Europe on the mend but eurozone still shaky -- Draghi

Australia, which has seen a recent boom in energy production and mining, finished third among people leaving the United States.

United also released data on domestic migration earlier this month. United's clientele tends to skew wealthier, but McClure says the company's report tracks closely with the Census Bureau's data on U.S. migration and population estimates.

Washington, D.C. had the highest proportion of people moving in rather than leaving. Corporations have been steadily expanding in Washington, as more companies -- especially defense contractors, banks, pharmaceuticals and health care providers -- open branch offices to be closer to the federal government, which is the source of much of their revenues. This was the fifth straight year Washington has had the highest ratio of people moving in to those moving out.

Related: America's hardest hit foreclosure neighborhoods

Oregon was the second most popular destination, followed by Nevada, North Carolina and South Carolina.

As for the states Americans were leaving? New Jersey topped the list, followed by Illinois, West Virginia, New York and New Mexico. To top of page

First Published: January 29, 2013: 3:28 PM ET


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Embattled Chesapeake CEO McClendon to step down

Aubrey McClendon, outgoing CEO of Chesapeake Energy, is part-owner of the Oklahoma City Thunder basketball team.

NEW YORK (CNNMoney)

The Oklahoma-based firm faced scrutiny last year after Reuters reported that McClendon had taken out more than $1 billion in loans against his personal stakes in the company's wells. Chesapeake subsequently revealed that it was the subject of an inquiry from the Securities and Exchange Commission, and announced that the program through which McClendon acquired his stakes would be ended early.

In a statement released after the closing bell Tuesday, Chesapeake's board praised McClendon's "strong leadership" and said an "extensive review" of his alleged conflicts of interest had yet to uncover any improper conduct. The firm, America's second-largest natural gas producer, said its "decision to commence a search for a new leader is not related to the Board's pending review of [McClendon's] financing arrangements and other matters."

Chesapeake (CHK, Fortune 500) shares surged on the news in after-hours trading, gaining 10%.

McClendon has served as Chesapeake's CEO since the company's inception in 1989, when it had just 10 employees compared to the 12,000 it boasts today. He was also chairman until last year, when shareholders forced the firm to overhaul its board and appoint an independent chairman.

"[A]s the company moves towards more fully developing the value of its outstanding assets, Chesapeake is at an important transition in its history and Aubrey and the Board of Directors have agreed that the time has come for the company to select a new leader," Chesapeake chairman Archie Dunham said in the company's statement Tuesday.

McClendon said in the statement that he had "certain philosophical differences with the new Board," but that he was looking forward "to working collaboratively with the company and the Board to provide a smooth transition to new leadership for the company."

McClendon, 53, is a part-owner of the Oklahoma City Thunder basketball team, whose arena bears Chesapeake's name. He will retire from Chesapeake on April 1, and will step down from his position as CEO once a successor is appointed, the firm said.

The results of Chesapeake's review of McClendon's financing arrangements will be released when the company reports its quarterly earnings on February 21. To top of page

First Published: January 29, 2013: 7:01 PM ET


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Facebook earnings: Spotlight on mobile

Investors are watching Facebook for further signs of mobile sales growth.

NEW YORK (CNNMoney)

Facebook's mobile problem became a focus in the days before its May IPO. The company acknowledged that a growing number of users were accessing the site on mobile devices, where it didn't "generate any meaningful revenue."

That meant Facebook (FB) was completely missing out on making money from a large chunk of its audience. Wall Street doesn't like that.

Those mobile concerns, coupled with other worries like Facebook's high rate of spending, sent the stock plunging to about half of its $38 IPO price in the weeks after its debut. Naysayers held Facebook up as an example of dumb money thrown into a tech bubble.

But Facebook is now laser-focused on mobile. The push began in earnest in August, when Facebook launched a much-improved new Apple (AAPL, Fortune 500) iOS app and began showing mobile users ads, including Sponsored Stories and other nudges to "like" company pages.

In October, Facebook proudly revealed that 14% of its third-quarter ad revenue -- about $152 million -- came from mobile. At the same time, its mobile customer base rose 61% over the year to 604 million active users.

Facebook shares have risen more than 50% since that third-quarter report and currently trade at about $32 each. Now, the company will have to prove that it can keep making money off its ever-growing mobile audience.

Expectations are high. Research firm Trefis said in a note Monday that it expects Facebook to "make significant progress in ramping up" its mobile ad business. Facebook has been increasing the number of ads shown on mobile devices, Trefis noted, and "their effectiveness is also driving ad pricing up."

Related story: California doesn't like Facebook stock price

Raymond James analyst Aaron Kessler went even further, upgrading his rating on Facebook shares to "outperform" from "market perform." He cited the nascent mobile monetization and improving usage stats, led by mobile users, as part of his rationale for the upgrade.

Kessler was also bullish on Facebook Ad Exchange, a system launched in September that lets advertisers bid on Facebook's display ad space. It also lets them put cookies on users' computers to track people as they crawl the Web, and "retarget" those users with related ads when they log back on to Facebook.

Facebook's other recent, big product launch came earlier this month with Graph Search, a tool that lets users search their social connections for information that their friends have shared. It focuses on "natural language" queries such as "music my friends like," "people who like soccer and live near me," or "photos of my friends before 2004."

Still, mobile remains the big focus for investors, and they'll be looking for continued growth.

In October, during last quarter's conference call, CEO Mark Zuckerberg was defensive on the mobile front. He called the concerns overblown, saying "our opportunity on mobile is the most misunderstood aspect of Facebook today."

He also complained that company watchers were looking at numbers from earlier in the year, "when we weren't really trying yet" on mobile.

Facebook is trying now. That has pulled the social network out of its post-IPO slump, but the company still has a long way to go to quiet the tech-bubble naysayers. To top of page

First Published: January 30, 2013: 3:25 AM ET


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Ex-Jefferies trader charged with defrauding TARP

Written By limadu on Selasa, 29 Januari 2013 | 17.42

The Treasury Department established several investment funds in 2009 with the goal of reviving the market for mortgage bonds in the aftermath of the financial crisis.

NEW YORK (CNNMoney)

Jesse Litvak, 38, is accused of inflating the cost of mortgage bonds when brokering sales by quoting a higher price to buyers than the sellers were actually seeking -- or vice versa -- and pocketing the difference for Jefferies (JEF). In other cases, Litvak allegedly told buyers that bonds held by Jefferies were being offered by fictitious third-party sellers, allowing him to charge extra for the transactions, federal officials said.

Among the buyers Litvak is accused of defrauding are several investment funds established by the Treasury Department in 2009 with the goal of reviving the market for mortgage bonds in the aftermath of the financial crisis. All told, Litvak is accused of defrauding the government and investors of more than $2 million.

Litvak, who has pleaded not guilty, faces 11 counts of securities fraud --which carry a maximum prison term of 20 years each -- and one count of TARP fraud, among other charges. He faces a parallel civil case from the Securities and Exchange Commission.

Related: Pay remains "excessive" for execs at bailed-out firms, TARP watchdog says

Litvak's lawyer, Patrick Smith, said his client "did not cheat anyone out of a dime."

"Every Jefferies counter-party in each transaction in this indictment got the exact bond bargained for at a price each wanted to pay," Smith said in an e-mail. "Jesse looks forward to the trial in this case so that his name can be cleared and he can get on with his career."

A spokesman for Jefferies did not immediately respond to requests for comment. Industry records show that Jefferies terminated Litvak in December of 2011 after allegations that he "was not forthright with a customer" in a trade.

The charges were filed in conjunction with President Obama's Residential Mortgage-Backed Securities Working Group, a joint federal-and-state effort announced last year to investigate wrongdoing in the mortgage-bond market that contributed to the financial crisis. Litvak's alleged offenses occurred after the peak of the crisis, however, between 2009 and 2011, and are not related to the packaging of bad mortgages into securities thought to have contributed to the meltdown.

Federal officials have faced persistent criticism in the past few years regarding the lack of criminal cases against Wall Street executives over the industry's role in the crisis. To top of page

First Published: January 28, 2013: 6:44 PM ET


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Stocks: Looking for cue to extend gains

U.S. stocks finished mostly flat Monday.

NEW YORK (CNNMoney)

U.S. stock futures were indicated little changed.

Earnings remain in the spotlight, with results due before the opening bell from firms including Ford (F, Fortune 500), Pfizer (PFE, Fortune 500) and Philips Electronics (PHG). Amazon.com (AMZN, Fortune 500) is up after the bell.

On the economic front, the Case-Shiller 20-city home price index will be released at 9 a.m. ET, and at 10 a.m., the Conference Board will release its monthly Consumer Confidence Index.

Yahoo (YHOO, Fortune 500) shares rose 1.8% in after-hours trading Monday after the company posted earnings that beat expectations.

Related: Fear & Greed Index hitting extreme greed

U.S. stocks finished mostly flat Monday.

European markets were little changed in morning trading. Asian markets ended mixed as Hong Kong's Hang Seng edged lower while the Shanghai Composite and Japan's Nikkei both posted gains of about 0.3%. To top of page

First Published: January 29, 2013: 3:46 AM ET


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Automatic spending cuts more likely now

Republican Paul Ryan, the House budget chairman, and Democrat Patty Murray, who leads the Senate budget panel, have both said that automatic spending cuts set for March 1 may occur.

NEW YORK (CNNMoney)

The sequester, as it's called, aims to reduce deficits by $1.2 trillion over a decade, including interest savings. The fiscal cliff deal brokered over New Year's postponed its start date to March 1 from Jan. 2.

The cuts will slash how much federal agencies are allowed to spend by $85 billion over seven months.

The reductions would come primarily from discretionary spending -- meaning they would largely protect entitlement programs such as Medicare, Medicaid and Social Security. The cuts would be split evenly between defense and nondefense programs.

House Republicans have proposed replacing the defense cuts with more nondefense reductions, which Democrats reject. Democrats want to replace all the cuts with a mix of better targeted spending cuts and tax increases, the latter of which Republicans reject.

Unless that dynamic changes soon, sequester here we come.

"I think [the sequester's] going to happen," Republican Paul Ryan, chairman of the House budget chairman, said Sunday on "Meet the Press."

Ryan's counterpart in the Senate, Democrat Patty Murray, wrote in a memo last week that the sequester is "a very real possibility."

Meanwhile, the White House budget office has instructed federal agencies to plan to operate at lower funding levels.

The White House also reiterated its warning of "significant and harmful impacts on a wide variety of government services and operations" if the sequester is allowed to take effect.

Related: House passes bill to defuse debt ceiling

"[F]ederal agencies will likely need to furlough hundreds of thousands of employees and reduce essential services such as food inspections, air travel safety, prison security, border patrols and other mission-critical activities," the White House budget office said.

A taste of what's to come: The Pentagon last week said it would be laying off 46,000 contract and temporary workers and furloughing full-time civilian workers one day a week for 22 weeks. Those furloughed days would be unpaid.

When Congress first agreed to the sequester -- as a part of a last-minute deal to end the debt ceiling fight in 2011 -- it was considered to be such bad policy that it would force both parties to agree to a much smarter deficit reduction plan.

But they didn't. Some think if the sequester takes effect, it would only be temporary.

Steve Bell, the economic policy director of the Bipartisan Policy Center, is not among them. Even though both parties can find a lot to dislike about the sequester, they also don't want to give it up for something they fear could be worse, he noted.

For Democrats, much as they hate the indiscriminate reductions in non-defense programs, they know the sequester exempts beneficiaries of Medicare, Medicaid and Social Security.

And while they would prefer the defense cuts to be smarter and more strategic, they know the sequester will bring down the top spending line for defense going forward, which they've wanted to do.

For Republicans, the defense cuts are what they hoped to avoid. But if the sequester were to be replaced, they fear they wouldn't be able to secure the full $1.2 trillion in deficit reduction that they've been promised. To top of page

First Published: January 29, 2013: 5:12 AM ET


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Marissa Mayer calls Yahoo turnaround a 'multi-year march'

Yahoo eked out fourth-quarter sales growth, but CEO Marissa Mayer has a long way to go to restore the company's luster.

NEW YORK (CNNMoney)

Shares jumped 4% in after-hours trading Monday, but later cut those gains to about 1%. Yahoo reported earnings of 32 cents per share. That handily beat estimates from analysts polled by Thomson Reuters, who expected earnings of 28 cents per share.

Excluding traffic acquisition costs -- the portion of its revenue that Yahoo shares with partners -- revenue came in at $1.22 billion, right around what analysts were expecting. That's a 4% jump over the fourth quarter of 2011.

Yahoo's revenue for the full year was $4.5 billion, up just 2% from a year earlier.

That stat shows just how much Mayer, who is six months into her role as CEO, needs to change at a stagnant Yahoo. She immediately set out to revamp Yahoo's (YHOO, Fortune 500) business strategy, saying that she wants the company to refocus on personalizing the Web for its users.

On a post-earnings conference call with analysts, Mayer struck an upbeat but cautious tone.

"While the road to growth is certain, it will not be immediate," she said at one point.

Later, she categorized the Yahoo turnaround as a "multi-year march toward growth."

Yahoo expects its revenue, excluding partner costs, to be between $1.07 billion to $1.1 billion for the first quarter of 2013. That's essentially flat with the$1.08 billion it generated in the same quarter last year.

While the turnaround will take years, Mayer insisted that Yahoo is moving fast day-to-day: "There's basically been a new major initiative every other week."

At least for now, industry watchers and investors believe in Mayer. Shares closed Thursday at their highest level since September 18, 2008.

But Yahoo's core problems are longstanding, and analysts are especially focused on those involving Yahoo's two main sources of advertising revenue: search and display.

Yahoo gave up on search years ago, partnering instead with Microsoft's (MSFT, Fortune 500) Bing. Mayer called Yahoo's search revenue "disappointing" last quarter, but the fourth-quarter numbers were much better: Search revenue rose 14%, to $427 million.

The bigger concern is Yahoo's display revenue: its sales from banners, videos and other graphic ads. Display sales fell 5% over the year to $520 million for the fourth quarter, though that's something of an improvement over the even sharper drops in some previous quarters.

On the Monday conference call, Mayer cited search and display as two of her "big four" focus areas, along with mobile and video.

Related story: Yahoo CEO Mayer's "God" and "baby is easy" quotes go viral

Meanwhile, Mayer is trying to shake up the Yahoo culture at large, urging Yahoo staffers to move more quickly and interact with the Web the way the company's users do. She recently eliminated company-issued BlackBerrys in favor of new Apple (AAPL, Fortune 500), Google (GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500) phones.

Last week at the World Economic Forum in Davos, Mayer said her overall plan is for Yahoo to "get back to its roots."

Mayer expanded on that point during Monday's call, saying she wants Yahoo to "redouble its efforts" on its original mission: "to make the world's daily habits inspiring and entertaining." To top of page

First Published: January 28, 2013: 4:41 PM ET


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Auto insurers charge (some) safe drivers higher rates

When setting rates, insurers often put more weight on income-related factors, like education or occupation, than factors like driving history, according to a consumer watchdog report.

NEW YORK (CNNMoney)

In a case study of five major insurers in 12 cities, the Consumer Federation of America found that major insurers charged a safer driver with less education and a lower-paying job higher premiums two-thirds of the time. In a majority of those cases, the premiums were at least 25% higher. In some cases, the rates were more than double what was quoted for a driver who had recently had an accident but had a higher-paying job.

That's because most of the insurers surveyed put more weight on income-related factors, like education or occupation, than driving-related factors including miles on the road and driving history, said CFA Executive Director Stephen Brobeck.

Related: Cheapest cars to fuel

To conduct the survey, CFA used the websites for five major insurers -- Geico (BRKA, Fortune 500), Progressive (PGR, Fortune 500), State Farm, Allstate (ALL, Fortune 500) and Farmers -- to solicit rates for two hypothetical customers in 12 cities, generating 60 sets of rate quotes.

For each company and city, CFA entered information for two 30-year-old women who drove the same car, had the same annual mileage and were both seeking minimum liability insurance as required by state law. In each city, the women lived on the same street in a zip code with a median income of about $50,000. No credit score was entered.

The difference: One woman was a high-school educated single receptionist who rented her home and had been without insurance coverage for 45 days. The other was a married executive with a masters degree who owned her own home and had no lapse in coverage. The receptionist had a perfect 10-year driving record, while the executive had recently caused a car accident.

In the most extreme example, Allstate in Baltimore quoted the receptionist an annual premium of $3,292, compared to $1,248 for the executive -- a difference of 164%. Of the five companies surveyed, only State Farm consistently quoted lower rates for the receptionist -- the safer driver.

"If [State Farm] can be a successful company without using highly discriminatory factors, other large companies should be able to do so as well," Brobeck said.

Insurers say that they use a wide variety of factors to determine the likelihood a customer will be in an accident, in accordance with state regulations.

"The use of factors such as credit-based insurance scoring, location of the vehicle, driver experience, traffic citations, continuity of coverage and education helps insurers to more accurately price risk," Willem O. Rijksen, vice president of public affairs for the American Insurance Association, said in a statement.

Related: Protect your home

Insurers are barred from basing rates on race or income, but the CFA says that their rate-setting practices tend to result in higher rates for low and moderate-income drivers.

Up to a third of low-income drivers do not have insurance even though it is required by law in 49 states, according to CFA studies.

"Is there any question why so many of them drive uninsured when what is being asked for auto insurance is so much of their income?" said Robert Hunter, CFA's director of insurance.

Industry officials countered that insurance is widely available, and drivers are always able to shop around for the best price.

Geico, State Farm, Allstate and Farmers all declined to comment. Progressive noted it has a voluntary program that installs a device on a customer's vehicle to track actual driving behavior, and provide rates based on that information. To top of page

Auto insurance quotes by city

A sampling from the CFA report

Atlanta Allstate $1,248 $1,386
Farmers $1,274 $782
GEICO $812 $546
Progressive $1,224 $1,218
State Farm $770 $1,090
Los Angeles Allstate $832 $1,334
Farmers $888 $678
GEICO $624 $578
Progressive $790 $694
State Farm $678 $942
Washington D.C. Allstate $1,622 $950
Farmers $2,074 $1,486
GEICO $760 $554
Progressive $1,344 $1,126
State Farm $1,210 $1,394

Source: Consumer Federation of America

First Published: January 28, 2013: 4:34 PM ET


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Ex-Jefferies trader charged with defrauding TARP

The Treasury Department established several investment funds in 2009 with the goal of reviving the market for mortgage bonds in the aftermath of the financial crisis.

NEW YORK (CNNMoney)

Jesse Litvak, 38, is accused of inflating the cost of mortgage bonds when brokering sales by quoting a higher price to buyers than the sellers were actually seeking -- or vice versa -- and pocketing the difference for Jefferies (JEF). In other cases, Litvak allegedly told buyers that bonds held by Jefferies were being offered by fictitious third-party sellers, allowing him to charge extra for the transactions, federal officials said.

Among the buyers Litvak is accused of defrauding are several investment funds established by the Treasury Department in 2009 with the goal of reviving the market for mortgage bonds in the aftermath of the financial crisis. All told, Litvak is accused of defrauding the government and investors of more than $2 million.

Litvak, who has pleaded not guilty, faces 11 counts of securities fraud --which carry a maximum prison term of 20 years each -- and one count of TARP fraud, among other charges. He faces a parallel civil case from the Securities and Exchange Commission.

Related: Pay remains "excessive" for execs at bailed-out firms, TARP watchdog says

Litvak's lawyer, Patrick Smith, said his client "did not cheat anyone out of a dime."

"Every Jefferies counter-party in each transaction in this indictment got the exact bond bargained for at a price each wanted to pay," Smith said in an e-mail. "Jesse looks forward to the trial in this case so that his name can be cleared and he can get on with his career."

A spokesman for Jefferies did not immediately respond to requests for comment. Industry records show that Jefferies terminated Litvak in December of 2011 after allegations that he "was not forthright with a customer" in a trade.

The charges were filed in conjunction with President Obama's Residential Mortgage-Backed Securities Working Group, a joint federal-and-state effort announced last year to investigate wrongdoing in the mortgage-bond market that contributed to the financial crisis. Litvak's alleged offenses occurred after the peak of the crisis, however, between 2009 and 2011, and are not related to the packaging of bad mortgages into securities thought to have contributed to the meltdown.

Federal officials have faced persistent criticism in the past few years regarding the lack of criminal cases against Wall Street executives over the industry's role in the crisis. To top of page

First Published: January 28, 2013: 6:44 PM ET


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Yahoo earnings: Mayer still has much to prove

Written By limadu on Senin, 28 Januari 2013 | 17.42

NEW YORK (CNNMoney)

Since then, Yahoo's stock has been on a tear and analysts are pinning their hopes for a Big Purple Turnaround squarely on Mayer.

Mayer has laid out her plans to usher in a new era at Yahoo (YHOO, Fortune 500), and she's generated more excitement about the company than any of the numerous other CEOs Yahoo has had in the past decade. That includes a buzz-worthy appearance at the World Economic Forum in Davos.

But industry watchers are now starting to look for proof that Mayer can deliver on her promises.

To be fair, Mayer has only been on the job for two full quarters. In October, results for the third quarter beat estimates but were hardly fantastic. Mayer's next test comes via Monday's fourth-quarter earnings report, and it will be a look into the new Yahoo business strategy -- the results of which Mayer began laying out in an all-staff meeting in September.

Mayer wants Yahoo to focus on personalizing the Web for its users. She's also trying to shake up the company culture, urging Yahoo staffers to move more quickly and interact with the Web the way the company's users do. To that end, she eliminated company-issued BlackBerrys in favor of new Apple (AAPL, Fortune 500), Google (GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500) phones.

Mayer has also discussed efforts to revamp search and display advertising, as well as focusing on attracting top talent to Yahoo. Her message is convincing, at least to investors: Shares closed Thursday at their highest level since September 18, 2008.

And so Marissa-love has proliferated, with Yahoos and techies alike wondering if Mayer will finally be the one to right the Yahoo ship after years of failings. Adding to the Mayer obsession is her personal life: She gave birth to a baby boy on September 30 and returned to work after a two-week maternity leave.

Related story: Yahoo CEO Mayer's "God" and "baby is easy" quotes go viral

But, as always in business, the proof is in the numbers. Analysts polled by Thomson Reuters expect Yahoo to report fourth-quarter earnings of 28 cents per share, up 18% from a year ago. But they're forecasting just a 4% gain in revenue.

Of particular concern is Yahoo's display revenue: sales from banners, videos and other graphic ads. Display sales were flat in the third quarter, but that's an improvement over the sharp falls from previous quarters.

Still, analysts want to see a return to strong growth, not just stabilization.

BCG Financial analyst Colin Gillis put his thoughts in a haiku: "Time for the next stage, of the turnaround story: drive revenue growth," he wrote in a note to clients Tuesday.

Related story: Yahoo ordered to pay $2.7 billion in bizarre Mexico lawsuit

Gillis called Yahoo's display performance "anemic," and he's not happy with revenue from Yahoo's search partnership with Microsoft's Bing. Mayer herself called Yahoo's search results "disappointing" last quarter, and analysts will look to her after Monday's earnings report for more clarity on what she plans to change.

J.P. Morgan analyst Doug Anmuth offered tepid optimism about Mayer's reign, saying in a note Friday that he was "encouraged" by her focus on user experience, search, mobile, and more. Like Gillis, he wants more information on changes to search and display, plus investment and recruitment efforts.

Overall, Anmuth said he wants "to see a better path toward improved execution in the core business."

In other words, Mayer's honeymoon period with Wall Street may soon be over. It's time for Mayer to begin proving that her plan to get Yahoo back on track works, starting with Monday's results. To top of page

First Published: January 27, 2013: 12:57 PM ET


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Using a credit card? Watch out for the 'checkout fee'

Stores in most states could start charging you a fee on Sunday when you buy something with credit cards, as a result of a Visa and Mastercard settlement last summer.

NEW YORK (CNNMoney)

The new fees stem from a multi-billion dollar settlement announced in July between credit card issuers and millions of merchants.

Visa (V, Fortune 500), MasterCard (MA, Fortune 500) and nine major banks agreed to a $7.25 billion deal to settle charges that they were fixing credit card processing fees. As part of the settlement, credit card issuers said they would reduce these "swipe fees" -- fees paid by merchants to issuers when cards are used -- but only for eight months.

In addition, the settlement also gave retailers the option to tack on a surcharge if a customer uses a credit card. The retailer can only charge enough to cover the processing costs, which is about 1.5% to 3% of the total purchase, according to watchdog group Consumer Action.

This fee doesn't apply to purchases made using debit cards. And it will still be illegal to charge the new fee in 10 states, including New York, California and Texas.

Many big players in the retail industry have been up in arms about the settlement. Stores from the nation's largest retailer down to small businesses have lamented the agreement, claiming that it transferred the wrongdoings of credit card issuers to the consumer.

In November, the National Retail Federation and more than a dozen retailers asked a judge to reject the proposed settlement. In a brief submitted to a U.S. District Court judge in Brooklyn, N.Y., the trade organization wrote that the new fees threaten a merchant's ability to keep prices low for customers.

Wal-Mart (WMT, Fortune 500), Macy's (M, Fortune 500), JCPenney (JCP, Fortune 500), Limited Brands (LTD, Fortune 500), Gap Inc (GPS, Fortune 500). and The Neiman Marcus Group were among those who joined the NRF in claiming that "raising consumer prices by adding an 'interchange tax' is no remedy for Visa's and MasterCard's continuing monopoly abuse."

Related: Local merchants not crazy about swipe fee deal

In a separate statement, Wal-Mart said that it would cost consumers "tens of billions of dollars each year." Target (TGT, Fortune 500) called the agreement "bad for both retailers and consumers."

Merchants have a choice as to whether to implement the surcharge, but it poses quite a dilemma for them: Either get stuck footing the bill for the swipe fees, or risk transferring the cost to customers in an already competitive environment.

Last summer, Target said it had no interest in charging customers who use credit cards more "in order to allow Visa and MasterCard to continue charging unfair fees."

Smaller merchants echoed these concerns over the deal, saying it doesn't go far enough.

MasterCard said it doesn't expect most merchants to put the surcharge into effect, since stores won't want to drive away business.

"We anticipate that they will not impose checkout fees, particularly because the value merchants derive from card acceptance far exceeds their costs," the credit card company said in a statement. To top of page

First Published: January 27, 2013: 3:45 PM ET


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Housing to drive economic growth (finally!)

Economists expect the housing market to be the primary driver of growth this year.

NEW YORK (CNNMoney)

Just over half of economists surveyed by CNNMoney identified a housing recovery as the primary driver of economic growth this year. The rest were split fairly evenly between consumer spending, increased domestic energy production and stimulus from the Federal Reserve as major growth drivers.

"Homebuilding activity will likely remain the strongest growing component of the economy in 2013," said Keith Hembre, chief economist of Nuveen Asset Management. "After several years of excess supply, demand and supply conditions are now in much better balance."

Home sales rebounded to the strongest level in five years in 2012, as home building bounced back to levels not seen since early in the recession. Near record low mortgage rates, rising home prices and a drop in foreclosures have combined to bring buyers back to the market.

The economists surveyed also forecast that there will be just under 1 million housing starts this year -- roughly matching the 28% rise in home building in 2012. Moody's Analytics is forecasting much stronger growth -- a 50% rise both this year and next year, which it estimates will create more than 1 million new jobs.

"There's a lot of pent-up demand for housing, and very little supply," said Celia Chen, housing economist for Moody's Analytics. "As demand continues to improve, home builders have nothing to sell. They'll have to build." She said that growth in building will mean adding not just construction jobs, but also manufacturing jobs building the appliances and furniture needed in the new homes, which in turn drives overall consumption higher.

Related: The road to real recovery is open

And economists say the tight supply and renewed demand for housing should lead to higher home values -- about a 3.7% increase according to the survey.

"One of the most significant indirect effects from the housing recovery is the 'wealth effect' on consumers due to the recovery in home prices," said Joseph LaVorgna, chief U.S. economist of Deutsche Bank, who said better home values can affect both consumer psychology on spending as well as their actual finances.

"Even small moves in home prices can have large effects on consumption, because housing comprises such a significant share of household assets," he said.

But even with the bullish outlook on housing, economists are still forecasting only a modest rise in the overall economy this year. The consensus estimate is for economic growth of about 2.4% in 2013, only a modest improvement from the 2012 growth rate of about 2% they're forecasting when the final numbers are in.

By far the biggest concern is a standoff on Capitol Hill. About three-quarters of those surveyed picked Congressional gridlock -- which could result in a cutback in federal spending -- as the biggest problem facing the U.S. economy. Other choices, such as the European sovereign debt crisis, continued high unemployment and increased government regulation, were much less of a concern.

"Washington is now the primary impediment to stronger economic growth," said Russell Price, senior economist of Ameriprise Financial. To top of page

First Published: January 27, 2013: 5:33 PM ET


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Yahoo earnings: Mayer still has much to prove

NEW YORK (CNNMoney)

Since then, Yahoo's stock has been on a tear and analysts are pinning their hopes for a Big Purple Turnaround squarely on Mayer.

Mayer has laid out her plans to usher in a new era at Yahoo (YHOO, Fortune 500), and she's generated more excitement about the company than any of the numerous other CEOs Yahoo has had in the past decade. That includes a buzz-worthy appearance at the World Economic Forum in Davos.

But industry watchers are now starting to look for proof that Mayer can deliver on her promises.

To be fair, Mayer has only been on the job for two full quarters. In October, results for the third quarter beat estimates but were hardly fantastic. Mayer's next test comes via Monday's fourth-quarter earnings report, and it will be a look into the new Yahoo business strategy -- the results of which Mayer began laying out in an all-staff meeting in September.

Mayer wants Yahoo to focus on personalizing the Web for its users. She's also trying to shake up the company culture, urging Yahoo staffers to move more quickly and interact with the Web the way the company's users do. To that end, she eliminated company-issued BlackBerrys in favor of new Apple (AAPL, Fortune 500), Google (GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500) phones.

Mayer has also discussed efforts to revamp search and display advertising, as well as focusing on attracting top talent to Yahoo. Her message is convincing, at least to investors: Shares closed Thursday at their highest level since September 18, 2008.

And so Marissa-love has proliferated, with Yahoos and techies alike wondering if Mayer will finally be the one to right the Yahoo ship after years of failings. Adding to the Mayer obsession is her personal life: She gave birth to a baby boy on September 30 and returned to work after a two-week maternity leave.

Related story: Yahoo CEO Mayer's "God" and "baby is easy" quotes go viral

But, as always in business, the proof is in the numbers. Analysts polled by Thomson Reuters expect Yahoo to report fourth-quarter earnings of 28 cents per share, up 18% from a year ago. But they're forecasting just a 4% gain in revenue.

Of particular concern is Yahoo's display revenue: sales from banners, videos and other graphic ads. Display sales were flat in the third quarter, but that's an improvement over the sharp falls from previous quarters.

Still, analysts want to see a return to strong growth, not just stabilization.

BCG Financial analyst Colin Gillis put his thoughts in a haiku: "Time for the next stage, of the turnaround story: drive revenue growth," he wrote in a note to clients Tuesday.

Related story: Yahoo ordered to pay $2.7 billion in bizarre Mexico lawsuit

Gillis called Yahoo's display performance "anemic," and he's not happy with revenue from Yahoo's search partnership with Microsoft's Bing. Mayer herself called Yahoo's search results "disappointing" last quarter, and analysts will look to her after Monday's earnings report for more clarity on what she plans to change.

J.P. Morgan analyst Doug Anmuth offered tepid optimism about Mayer's reign, saying in a note Friday that he was "encouraged" by her focus on user experience, search, mobile, and more. Like Gillis, he wants more information on changes to search and display, plus investment and recruitment efforts.

Overall, Anmuth said he wants "to see a better path toward improved execution in the core business."

In other words, Mayer's honeymoon period with Wall Street may soon be over. It's time for Mayer to begin proving that her plan to get Yahoo back on track works, starting with Monday's results. To top of page

First Published: January 27, 2013: 12:57 PM ET


15.30 | 0 komentar | Read More

Using a credit card? Watch out for the 'checkout fee'

Stores in most states could start charging you a fee on Sunday when you buy something with credit cards, as a result of a Visa and Mastercard settlement last summer.

NEW YORK (CNNMoney)

The new fees stem from a multi-billion dollar settlement announced in July between credit card issuers and millions of merchants.

Visa (V, Fortune 500), MasterCard (MA, Fortune 500) and nine major banks agreed to a $7.25 billion deal to settle charges that they were fixing credit card processing fees. As part of the settlement, credit card issuers said they would reduce these "swipe fees" -- fees paid by merchants to issuers when cards are used -- but only for eight months.

In addition, the settlement also gave retailers the option to tack on a surcharge if a customer uses a credit card. The retailer can only charge enough to cover the processing costs, which is about 1.5% to 3% of the total purchase, according to watchdog group Consumer Action.

This fee doesn't apply to purchases made using debit cards. And it will still be illegal to charge the new fee in 10 states, including New York, California and Texas.

Many big players in the retail industry have been up in arms about the settlement. Stores from the nation's largest retailer down to small businesses have lamented the agreement, claiming that it transferred the wrongdoings of credit card issuers to the consumer.

In November, the National Retail Federation and more than a dozen retailers asked a judge to reject the proposed settlement. In a brief submitted to a U.S. District Court judge in Brooklyn, N.Y., the trade organization wrote that the new fees threaten a merchant's ability to keep prices low for customers.

Wal-Mart (WMT, Fortune 500), Macy's (M, Fortune 500), JCPenney (JCP, Fortune 500), Limited Brands (LTD, Fortune 500), Gap Inc (GPS, Fortune 500). and The Neiman Marcus Group were among those who joined the NRF in claiming that "raising consumer prices by adding an 'interchange tax' is no remedy for Visa's and MasterCard's continuing monopoly abuse."

Related: Local merchants not crazy about swipe fee deal

In a separate statement, Wal-Mart said that it would cost consumers "tens of billions of dollars each year." Target (TGT, Fortune 500) called the agreement "bad for both retailers and consumers."

Merchants have a choice as to whether to implement the surcharge, but it poses quite a dilemma for them: Either get stuck footing the bill for the swipe fees, or risk transferring the cost to customers in an already competitive environment.

Last summer, Target said it had no interest in charging customers who use credit cards more "in order to allow Visa and MasterCard to continue charging unfair fees."

Smaller merchants echoed these concerns over the deal, saying it doesn't go far enough.

MasterCard said it doesn't expect most merchants to put the surcharge into effect, since stores won't want to drive away business.

"We anticipate that they will not impose checkout fees, particularly because the value merchants derive from card acceptance far exceeds their costs," the credit card company said in a statement. To top of page

First Published: January 27, 2013: 3:45 PM ET


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Housing to drive economic growth (finally!)

Economists expect the housing market to be the primary driver of growth this year.

NEW YORK (CNNMoney)

Just over half of economists surveyed by CNNMoney identified a housing recovery as the primary driver of economic growth this year. The rest were split fairly evenly between consumer spending, increased domestic energy production and stimulus from the Federal Reserve as major growth drivers.

"Homebuilding activity will likely remain the strongest growing component of the economy in 2013," said Keith Hembre, chief economist of Nuveen Asset Management. "After several years of excess supply, demand and supply conditions are now in much better balance."

Home sales rebounded to the strongest level in five years in 2012, as home building bounced back to levels not seen since early in the recession. Near record low mortgage rates, rising home prices and a drop in foreclosures have combined to bring buyers back to the market.

The economists surveyed also forecast that there will be just under 1 million housing starts this year -- roughly matching the 28% rise in home building in 2012. Moody's Analytics is forecasting much stronger growth -- a 50% rise both this year and next year, which it estimates will create more than 1 million new jobs.

"There's a lot of pent-up demand for housing, and very little supply," said Celia Chen, housing economist for Moody's Analytics. "As demand continues to improve, home builders have nothing to sell. They'll have to build." She said that growth in building will mean adding not just construction jobs, but also manufacturing jobs building the appliances and furniture needed in the new homes, which in turn drives overall consumption higher.

Related: The road to real recovery is open

And economists say the tight supply and renewed demand for housing should lead to higher home values -- about a 3.7% increase according to the survey.

"One of the most significant indirect effects from the housing recovery is the 'wealth effect' on consumers due to the recovery in home prices," said Joseph LaVorgna, chief U.S. economist of Deutsche Bank, who said better home values can affect both consumer psychology on spending as well as their actual finances.

"Even small moves in home prices can have large effects on consumption, because housing comprises such a significant share of household assets," he said.

But even with the bullish outlook on housing, economists are still forecasting only a modest rise in the overall economy this year. The consensus estimate is for economic growth of about 2.4% in 2013, only a modest improvement from the 2012 growth rate of about 2% they're forecasting when the final numbers are in.

By far the biggest concern is a standoff on Capitol Hill. About three-quarters of those surveyed picked Congressional gridlock -- which could result in a cutback in federal spending -- as the biggest problem facing the U.S. economy. Other choices, such as the European sovereign debt crisis, continued high unemployment and increased government regulation, were much less of a concern.

"Washington is now the primary impediment to stronger economic growth," said Russell Price, senior economist of Ameriprise Financial. To top of page

First Published: January 27, 2013: 5:33 PM ET


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Boeing keeps building Dreamliners it can't fly

Written By limadu on Minggu, 27 Januari 2013 | 17.42

Boeing hasn't slowed production of its 787 Dreamliner despite the federal probe that has grounded the jet.

NEW YORK (CNNMoney)

A federal probe into electrical fires has grounded all 50 Boeing 787 Dreamliners around the world. But Boeing has little choice but to keep its assembly lines in South Carolina and Washington State running at their normal pace, building five jets a month. A significant slowdown in production, let alone a full shutdown, would be too costly for both Boeing and its suppliers who are counting on making parts for the aircraft.

"Stopping production is not going to happen," said Carter Leake, an aerospace analyst with BB&T Capital Markets. A halt in production or even a slow down would risk crucial suppliers going out of business. "They need to keep the lines running to support the supply chain. They can't do that to suppliers that barely survived the three year delay in producing the first plane."

National Transportation Safety Board Chairman Deborah Hersman said Thursday that investigators have yet to determine what caused the two lithium battery fires earlier this month that led the FAA to ground all Dreamliners. So even though Boeing has no idea what kind of fix to the aircraft will eventually be required, it continues to make the planes as if there is no problem.

Related: What's wrong with the Dreamliner?

"If it stopped it would be very difficult to start production again," said Chris DeNicolo, aerospace credit analyst for Standard & Poor's. And Boeing still has 800 Dreamliner orders left to fill for airlines.

Related: Dreamliner - Where the parts come from

Boeing spokeswoman Kate Bergman confirms the manufacturer hasn't changed its production schedule since the Dreamliners were grounded. Indeed, the manufacturer still plans to double production by year's end. The company would not say how many planes have been built since the FAA grounded the jets on Jan. 16, or what it will do with the completed aircraft since it can't fly them off Boeing's property.

NTSB's Hersman said the probe is only in the very early stages and suggested it could take a long time to resolve.

"This is not something we expect will be solved overnight," she said. "We are prepared to be methodical."

Related: United: Passengers will 'flock' back to Dreamliner

Leake said he is worried that the relatively quick fix that many investors were hoping for is becoming less and less likely. Airlines eager for the jet's improved fuel economy have yet to cancel any orders due to the grounding. But that won't necessarily be the case forever.

"It does sound like we're in the first inning," Leake said. "I don't know what the tipping point is. If it's three months, they'll be no cancellations, six months, some cancellations, Nine months, it's a big problem."

Working in Boeing's favor is the fact that it has more than $11 billion in cash and short-term investments on its balance sheet.

"There's an ability [for it] to absorb the additional costs," said DeNicolo. "The rest of its commercial airplane business is doing quite well."

The Dreamliner was supposed to be a major profit driver for Boeing, but that won't be the case as long as it's building planes that it can't deliver. To top of page

First Published: January 25, 2013: 4:44 PM ET


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RIM to advertise BlackBerry 10 during Super Bowl

NEW YORK (CNNMoney)

It's RIM's (RIMM) first-ever Super Bowl commercial, and while the company didn't say how much it spent, Super Bowl broadcaster CBS (CBS, Fortune 500) previously told CNNMoney that 30-second spots are going for a record high of at least $4 million.

RIM will unveil the BlackBerry 10 platform at events on Wednesday, as well as the first two devices to run on the new platform. It's been a long time coming: The software had previously been slated for release in early 2012, which was pushed to late 2012, and again to the first quarter of 2013.

While delays in tech do happen, the news was damning for the struggling RIM because BlackBerry 10 is meant t to be the crown jewel of the company's turnaround plan. Critics wondered if RIM would even survive long enough to launch the OS.

Now that launch day is nearly upon us, RIM is doing all it can to market BlackBerry 10. In addition to the Super Bowl ad, RIM said it will push BlackBerry via online ads and on social networks before and after the game. Launch day on Wednesday includes BlackBerry events around the globe.

Related story: RIM's fate hangs on BlackBerry 10

So RIM will survive to see BlackBerry 10 launch, but the delay has left the company stuck in a holding pattern. Everyone from Apple (AAPL, Fortune 500) to Nokia (NOK) to Microsoft (MSFT, Fortune 500) released new gadgets in the fall, but RIM was essentially forced to wait for the BlackBerry 10 software before selling any significant new hardware.

The company has said BlackBerry 10 will run on a smaller number of devices with essential smartphone features: a much-improved camera, a modern Web browser and social-networking integration. The software will allow customers to access e-mail with one swipe from any app, and it will shift automatically between personal and corporate modes.

RIM's main problem is its lost stronghold in the corporate market, where it once dominated. Rather than issuing company BlackBerries, many employers now have workers bring their own devices into work, usually Apple's (AAPL, Fortune 500) iPhone and Google's (GOOG, Fortune 500) Android devices. To top of page

First Published: January 25, 2013: 5:32 PM ET


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China's growth to hit 8% in 2013

Davos, Switzerland (CNNMoney)

"I think China's growth rate will be about 8% this year," Yi Gang said during a debate at the World Economic Forum in Davos, Switzerland. He said consumer price inflation could reach 3% or slightly higher.

The world's second-biggest economy grew by 7.8% last year, well below the average 10% growth seen in the past three decades but better than the government's own target of 7.5% and above analyst expectations.

The annual figure was boosted by a recovery in industrial production and exports in the fourth quarter, which grew 7.9%, prompting economists to forecast a slow but steady recovery in 2013

The acceleration in the last three months of 2012 followed seven quarters of slowing growth as China felt the impact of weak activity in the United States and Europe, as well as its own efforts to control a real estate boom and contain inflation.

Related: China's hottest companies

China's manufacturing sector showed more signs of improvement this month, with a preliminary reading of purchasing managers' sentiment rising to its highest level in two years.

Inflation rose to 2.5% in December, as a spurt of extremely cold weather drove food prices higher. That compared with 2% in November, but still represents tame inflation -- the government aims to keep annual inflation below 4%.

China is trying to rebalance its economy, placing greater emphasis on consumption. Yi said domestic demand was playing an ever more important role in the economy as growth in incomes outpaced GDP growth.

"Consumption is very robust," he said.

China would continue to aim for a reduction in its current account surplus as a percentage of GDP, he said. The figure stood at 2.8% of GDP in 2012.

To top of page

First Published: January 26, 2013: 11:42 AM ET


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Boeing keeps building Dreamliners it can't fly

Boeing hasn't slowed production of its 787 Dreamliner despite the federal probe that has grounded the jet.

NEW YORK (CNNMoney)

A federal probe into electrical fires has grounded all 50 Boeing 787 Dreamliners around the world. But Boeing has little choice but to keep its assembly lines in South Carolina and Washington State running at their normal pace, building five jets a month. A significant slowdown in production, let alone a full shutdown, would be too costly for both Boeing and its suppliers who are counting on making parts for the aircraft.

"Stopping production is not going to happen," said Carter Leake, an aerospace analyst with BB&T Capital Markets. A halt in production or even a slow down would risk crucial suppliers going out of business. "They need to keep the lines running to support the supply chain. They can't do that to suppliers that barely survived the three year delay in producing the first plane."

National Transportation Safety Board Chairman Deborah Hersman said Thursday that investigators have yet to determine what caused the two lithium battery fires earlier this month that led the FAA to ground all Dreamliners. So even though Boeing has no idea what kind of fix to the aircraft will eventually be required, it continues to make the planes as if there is no problem.

Related: What's wrong with the Dreamliner?

"If it stopped it would be very difficult to start production again," said Chris DeNicolo, aerospace credit analyst for Standard & Poor's. And Boeing still has 800 Dreamliner orders left to fill for airlines.

Related: Dreamliner - Where the parts come from

Boeing spokeswoman Kate Bergman confirms the manufacturer hasn't changed its production schedule since the Dreamliners were grounded. Indeed, the manufacturer still plans to double production by year's end. The company would not say how many planes have been built since the FAA grounded the jets on Jan. 16, or what it will do with the completed aircraft since it can't fly them off Boeing's property.

NTSB's Hersman said the probe is only in the very early stages and suggested it could take a long time to resolve.

"This is not something we expect will be solved overnight," she said. "We are prepared to be methodical."

Related: United: Passengers will 'flock' back to Dreamliner

Leake said he is worried that the relatively quick fix that many investors were hoping for is becoming less and less likely. Airlines eager for the jet's improved fuel economy have yet to cancel any orders due to the grounding. But that won't necessarily be the case forever.

"It does sound like we're in the first inning," Leake said. "I don't know what the tipping point is. If it's three months, they'll be no cancellations, six months, some cancellations, Nine months, it's a big problem."

Working in Boeing's favor is the fact that it has more than $11 billion in cash and short-term investments on its balance sheet.

"There's an ability [for it] to absorb the additional costs," said DeNicolo. "The rest of its commercial airplane business is doing quite well."

The Dreamliner was supposed to be a major profit driver for Boeing, but that won't be the case as long as it's building planes that it can't deliver. To top of page

First Published: January 25, 2013: 4:44 PM ET


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RIM to advertise BlackBerry 10 during Super Bowl

NEW YORK (CNNMoney)

It's RIM's (RIMM) first-ever Super Bowl commercial, and while the company didn't say how much it spent, Super Bowl broadcaster CBS (CBS, Fortune 500) previously told CNNMoney that 30-second spots are going for a record high of at least $4 million.

RIM will unveil the BlackBerry 10 platform at events on Wednesday, as well as the first two devices to run on the new platform. It's been a long time coming: The software had previously been slated for release in early 2012, which was pushed to late 2012, and again to the first quarter of 2013.

While delays in tech do happen, the news was damning for the struggling RIM because BlackBerry 10 is meant t to be the crown jewel of the company's turnaround plan. Critics wondered if RIM would even survive long enough to launch the OS.

Now that launch day is nearly upon us, RIM is doing all it can to market BlackBerry 10. In addition to the Super Bowl ad, RIM said it will push BlackBerry via online ads and on social networks before and after the game. Launch day on Wednesday includes BlackBerry events around the globe.

Related story: RIM's fate hangs on BlackBerry 10

So RIM will survive to see BlackBerry 10 launch, but the delay has left the company stuck in a holding pattern. Everyone from Apple (AAPL, Fortune 500) to Nokia (NOK) to Microsoft (MSFT, Fortune 500) released new gadgets in the fall, but RIM was essentially forced to wait for the BlackBerry 10 software before selling any significant new hardware.

The company has said BlackBerry 10 will run on a smaller number of devices with essential smartphone features: a much-improved camera, a modern Web browser and social-networking integration. The software will allow customers to access e-mail with one swipe from any app, and it will shift automatically between personal and corporate modes.

RIM's main problem is its lost stronghold in the corporate market, where it once dominated. Rather than issuing company BlackBerries, many employers now have workers bring their own devices into work, usually Apple's (AAPL, Fortune 500) iPhone and Google's (GOOG, Fortune 500) Android devices. To top of page

First Published: January 25, 2013: 5:32 PM ET


15.30 | 0 komentar | Read More
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