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CNBC's List: The 25 Most Transformative Businesspeople of the Past 25 Years

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By CNBC

They have disrupted industries, sparked change and exercised an influence far beyond their own companies. Here is our ranked list of the 25 people we judge to have had the most profound impact on business and finance since 1989, the year CNBC went live.

As CNBC embarks on its second quarter-century, it faces a world completely altered from when it started. Then, the Dow was below 2,400; only four U.S. companies had annual revenue of more than $50 billion; Walmart didn't make the list of America's 500 largest companies; and a blog was archaic slang for a servant boy. Today, the Dow is about 16,500; more than 50 firms beat that revenue number; Walmart tops the Fortune 500; and blogs are one many new bits for e-commerce.

The 25 men and women listed below -- from different parts of the world and across different industries -- have, for better or worse, been the rebels, icons and leaders in the vanguard of that change.

1. Steve Jobs, Apple's iVisionary.
2. Bill Gates, Microsoft founder and philanthropist.
3. Ben Bernanke & Alan Greenspan, former U.S. Fed chairs.
4. Sergey Brin, Larry Page and Eric Schmidt, Google's Internet and media disruptors.
5. Jeff Bezos, Amazon's retail revolutionary.
6. Warren Buffett, legendary American investor.
7. Oprah Winfrey, billionaire talk-show entrepreneur.
8. Mark Zuckerberg, Facebook founder.
9. Jack Bogle, index mutual fund pioneer.
10. Larry Ellison, Oracle co-founder.
11. Rupert Murdoch, global media mogul.
12. Jack Welch, 20-year chairman and CEO of GE.
13. NR Narayana Murthy, Infosys founder and "father" of Indian information technology.
14. Howard Schultz, Starbucks CEO.
15. Bernard Arnault, luxury baron of LVMH.
16. Li Ka-shing, Hong Kong tycoon and Asia's richest man.
17. Carl Icahn, American activist investor.
18. Meg Whitman, Hewlett-Packard and former eBay CEO.
19. Amancio Ortega, founder of Zara fashion stores.
20. Michael Bloomberg, Wall Street data pioneer and form New York City mayor.
21. Sandy Weill, banker and Wall Street dealmaker.
22. Cher Wang, founder of Taiwan smartphone maker HTC.
23. Aliko Dangote, billionaire African entrepreneur.
24. Martha Stewart, founder of home-making media empire.
25. Carlos Slim, billionaire Mexican business magnate.

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Apple and Google Show That Stock Splits Are Cool Again

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Apple Reports Quarterly Earnings
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It seems as if tech darlings don't want to scare off potential investors with sticker shock. Last Wednesday Apple (AAPL) became the latest company with a hefty share price to declare a stock split, agreeing to exchange every single share for seven shares trading at a much lower price.

Stock splits are zero sum games. If an investor has 100 shares of Apple with the stock at $560 at the time of the 7-for-1 split, that investor would own 700 shares with a stock price of $80. But no matter how you slice it, the math still results in a $56,000 stake in the consumer tech giant. However, many think that there's a psychological benefit to having a stock appear to have a lower price.

Apple isn't alone. Google (GOOG) also recently completed what was in effect a 2-for-1 stock split by giving investors a new share of non-voting stock for every share that they owned at the time. With Apple and Google validating the practice, don't be surprised if more stocks with large share prices go this route.

A Split by Any Other Name

Apple executed 2-for-1 stock splits in 1987, 2000 and 2005. It was quick on the trigger whenever its stock approached high double digits or poked its head into triple digits.

However, the stock splits went away after that. Apple's stock continue to shoot higher as the iPod grew in popularity, followed by the introduction of the iPhone in 2007 and the iPad a few years later.

Why did the company alter its behavior? The best bet is that Google changed the game when it went public around the time of Apple's final stock split. Google wanted to go public at a price that was as high as $135 during the summer of 2004. It had to settle for $85, but the message was clear: Google wasn't going to try to cater to conventional whims where companies would perform pre-IPO splits in order to hit the market at more accessible prices between $10 and 30.

Google's reluctance to declare stock splits through nearly 10 years of trading let everyone know that it was in a race to hit the highest share price possible. It finally gave up the game a few weeks ago when it broke through the $1,000 ceiling, announcing a spinoff that was essentially a 2-for-1 stock split. Google's move now leaves just four stocks trading for more than $1,000 a share.

The Rise and Fall and Rise of Stock Splits

Stock splits were fashionable in the late 20th century. Retail investors were buying stocks in round lots of 100 shares at a time, and a company didn't want to limit its appeal. Individual investors who had just $20,000 to invest in a new stock would gravitate to 100 shares of a stock at $20 than to buy 20 shares of a stock at $100.

Even today, some investors argue that a stock price can be too high. Market cap is the product of a stock's price and the number of shares outstanding. The stock price on its own is immaterial. A stock can be expensive if it's overvalued relative to its fundamentals, but there's really no such thing as a share price that is too high on its own.

It's true that the greatest investor of our time is not a fan of stock splits. Warren Buffett has refused to declare a stock split on Berkshire Hathaway (BRK-A), though he reluctantly went on to offer a new class of shares (BRK-B) at a lower price several years ago. However, with the exception of a handful of successful companies, most companies don't like to see their prices get too high.

Now that Apple and Google are going for splits, expect that thin pool of high-priced stocks to follow suit. We're not back to the way things used to be, of course. Apple's will still price the stock at levels where it used to initiate its 2-for-1 splits, and Google's stock still carries the 11th higher price of all stocks in this country. (The top 10: Berkshire Hathaway, Seaboard (SEB), Priceline (PCLN), NVR (NVR), Altisource Asset Management (AAMC), Graham Holdings (GHC), Markel (MKL), Apple, White Mountains Insurance Group (WTM) and AutoZone (AZO).)

Then again, every trend has to start somewhere. Stock splits are back in fashion.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Apple and Google (C shares). Try any of our newsletter services free for 30 days.

 

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What I Wish I'd Known About Money When I Was 21

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By Gerri Detweiler

At 21, young people have all the financial responsibilities of adults -- without much experience managing them. So we asked some of your elders (via Facebook and Twitter) what they wish they'd known earlier -- or the best advice they'd been given.

Many pointed out that in young adulthood, time is on your side. You may not have much money, but if you put some aside, it has lots of time to grow -- and the money you put aside now will have a huge effect on the amount you have when you retire. (And yes, I know how hard it is to think about retirement when you are just beginning your career.) Save as much as you can. There will always be killer deals and other temptations, but the money you can save now will be incredibly valuable -- whether you are saving it for retirement or for a trip you'll never forget.

Time is on your side in another way, too. You have time to travel, decide what's important to you, pick a life partner (or not) and decide where to live. You don't have to rush other life decisions (though getting started on saving is crucial).

How to Save Your Cash

Savings tips from Twitter and Facebook included:
  • Learn to cook. It's easier to save money when you pack lunches and can make tasty and nutritious meals yourself.
  • From financial columnist and author Kathy Kristof: "Start saving young. Even though you think you're too poor, your financial obligations only increase as you age. And by starting young, you let compound interest do most of the work for you. ... If you saved $250 a month starting at age 25, when you're 65, you would have $1,581,000 (and change). The total amount that you saved was $120,000. If you wait until you're age 35, your nest egg will be one-third as large -- $565,000. In fact, if you save from 25 to 35, you could stop saving completely and still be better off than the person who started at 35 and saved for the rest of their career. That's compound interest for you. ... Einstein reportedly called it the most powerful force in the universe."
  • Putting something aside in your 20s can help keep you from panicking about retirement in your 40s.
  • Live with roommates.
  • Don't get a car unless you live in a place that absolutely demands it. In that case, drive a beater (hopefully one you paid for with cash). That old car will likely have far lower insurance premiums than a newer model, too.
  • "Start a savings account and pay yourself first."
Where to Spend Money

And despite everything we're telling you about saving, it's also important to think about how to spend your time and money, even when you have plenty of the former and not so much of the latter. Know what is most important to you, and don't be afraid to spend money on the things that are.

Travel came up a lot in the financial advice for 21-year-olds. When you're young, you're more likely to happily enjoy some of the cheapest options available (less-than-luxurious accommodations, unpopular flights, short-term jobs). And you may be able to fit all your worldly goods in a car trunk or trailer. Done right, travel is not necessarily expensive. It might even cause you to reconsider some of the things you thought you "needed" for a comfortable lifestyle. I regret not traveling more when I was younger. (But as one man noted, it's not as if you can't start seeing the world later -- it will likely be a bit more complex to arrange.)

Starting a Lifetime of Good Credit Habits

If you've not had a credit card in your own name before, now's the time to do that, assuming you have an income. And though the credit card "limit" logically seems like the amount you can spend, if your balance is more than 30 percent of your limit, your credit scores are likely to suffer. (Keeping it to 10 percent or less is even better.)

Before you apply for a card, be almost certain you will qualify for it. Some cards require high credit scores, and some are geared toward people who do not have them. (Ones judged more creditworthy generally get better terms.) But anytime you apply, it counts as a "hard inquiry," and that reduces your score just a little for a short time. You can buy scores or get them for free online from Credit.com.

Checking your score monthly can give you an idea of where you stand and suggestions for how to improve your scores. Your credit scores come from proprietary formulas using the information in your credit reports -- and you can get a look at those for free once a year from each of the three credit bureaus. It's important to make sure the information on these reports is accurate and to dispute it if it's not. Checking credit reports is a smart financial habit -- develop it while you're young.

The credit advice from your elders:
  • Don't charge anything that will be gone when the bill arrives -- dinners out, concert tickets, etc. (Yes, we know about rewards cards, but if you're new at handling your finances independently, it's smart to establish the habit of paying the balance in full every month before applying for a card that incentivizes spending.)
  • "Make keeping your credit healthy as big of a priority as keeping your body healthy. With a few exceptions, if you can't pay cash for it, you probably don't need it that bad." (Keeping your body healthy can also be good for your finances, with lower insurance rates and health care costs.)
  • "Beware of anyone who is quick to tell you, 'You can afford the payments, and I know people that can finance almost anyone.'"
  • "Find a banker to explain how loans work. Stay out of debt as long as you can."
  • "Learn something about auto financing before you are in a dealership buying your first car."
The Beauty of a Spending Plan

You need a budget as a road map to those travel adventures and to financial comfort in your old age. If you have never made a spending plan, there's lots of advice online, as well as books and classes to help you learn. If you have a life partner, make sure the two of you are on the same page. Also know that you will have to make choices and trade-offs. You may be able to do all the things that are important to you, but you probably can't do them all at the same time.

A couple of observations from people who aren't 21 anymore:
  • "If you marry and have children really early, you could end up living with your in-laws in your 30s while you finish school."
  • "Think about where you get your first or second job because you may end up living there forever."
Closing Thoughts

Don't even think of buying a house unless you are pretty sure you'll want to stay put for at least five years. Don't spend too much on happy hour or at casinos. (Remember that budget?)

Enjoy -- you're learning about yourself, the world and your finances. Accept that you'll learn some of it by making mistakes. And before you know it, you'll be past 25 and offering your own sage advice.

Gerri Detweiler is Credit.com's director of consumer education. Bev O'Shea contributed to this post.

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After Market: Another Super Tuesday for Stocks

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There's been very little that investors could be certain about so far this year, except for this: Tuesday's are usually winners. While the market has bounced back and forth, the S&P 500 has posted gains on 14 of the 16 Tuesdays this year. The index is up about 9 percent on Tuesdays, and down about 9 percent on all of the other days.

This Tuesday was no exception: The Dow Jones industrial average (^DJI) rose 86 points, the Standard & Poor's 500 index (^GPSC) added 9, and the Nasdaq composite (^IXIC) gained 29 points.

The focus today was on earnings, but that could switch on Wednesday to the economy, when the Federal Reserve wraps up its two-day policy meeting and we get a look a first-quarter GDP.

Let's start with the earnings winners:

Merck (MRK) gained 3½ percent as it beat expectations. It's been one of the Dow's best performing stocks over the past six months, up 28 percent.

BP (BP) rose 2½ percent even though its net fell, but it did boost its dividend. Sprint (S) jumped 11 percent. Its loss narrowed from a year ago.

Buffalo Wild Wings (BWLD) poured on the hot sauce, gaining 5 percent, after raising its outlook. Chipotle Mexican Grill (CMG) rose 3 percent as it plans to raise menu prices. And Twitter (TWTR) rose 4½ percent ahead of its results.

Of course, there were some earnings disappointments too.

Goodyear Tire (GT) fell 7½ percent after coming in short of expectations. Coach (COH) tumbled 9 percent after the maker of bags and accessories posted weak sales. And the 3D printing firm 3D Systems (DDD) fell 9 percent on disappointing earnings guidance for the year.

Elsewhere, GoGo (GOGO) went - straight down. The provider of in-flight internet service tumbled 28 percent on word that AT&T will enter the business next year. GoGo shares have lost more than a third of their value in past three months.

But the biotech firm Amicus Therapeutics (FOLD) jumped 21 percent on positive test results for its treatment of a disease that allows fat to build up in human cells.

Internet and social network stocks rebounded. Facebook (FB) gained 3½ percent and Google (GOOG) added 2 percent.

What to Watch Wednesday:
  • Payroll processor ADP releases its survey of private-sector hiring for April.
  • The Commerce Department reports first-quarter gross domestic product, and the Labor Department releases its first-quarter employment cost index, both at 8:30 a.m. Eastern time.
  • Federal Reserve policymakers conclude their two-day meeting to set interest rates at 2 p.m.
These major companies are scheduled to release quarterly financial results:
  • ADP (ADP)
  • Boston Beer Co. (SAM)
  • Carlyle Group (CG)
  • GlaxoSmithKline (GSK)
  • Time Warner (TWX)
  • WellPoint (WLP)
  • Southern Co. (SO)
  • Weight Watchers International (WTW)
  • Williams Cos. (WMB)
  • Yelp (YELP)
-Produced by Drew Trachtenberg.

 

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The 15 Online Retailers Most Likely to Offer Discount Codes

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By Sarah Jones

Some online shoppers skip searching for coupons before checking out. Perhaps they think it takes too much time, or, more likely, that there just won't be one available that makes it worth it.

It's true that finding a coupon at any given moment is somewhat of a crapshoot, but some retailers release coupon codes on a regular basis, and are therefore more likely to pay off in savings if you take the time to search before placing an order. So which stores fall into this category of high-volume coupons? And what type of codes are they offering? We dove deep into our coupon database, sorting through every offer we posted in 2013, to find out.

The Top 15 Stores With the Most General-Use Codes

These stores have the most regular assortment of codes that apply to items sitewide or to broad categories, such as clothing. Since the codes are so frequent, and usually apply to a wide swath of items, a smart shopper would rarely buy things from these stores without the use of a coupon.

1. Snapfish always offers a solid selection of coupon codes. Many codes are specific to certain categories, like photo books, but the assortment is wide enough to cover most photo products. You'll also regularly find sitewide discount codes for up to 60 percent off, some with a minimum purchase, and general free shipping offers.
2. RazorGator has discount codes to save on tickets to your next concert, game, but you may need to pull a group together and buy in bulk to get the best savings. The minimum purchase amount is usually at least $150, and discounts become higher as the total increases.
3. Jimmy Jazz has plenty of coupons for clothing, shoes, and accessories. You'll find general-use coupons and shipping offers, but many codes are targeted to specific categories like T-shirts. However, the wide assortment of coupons means you're likely to find a discount on just about anything you have your eye on.
4. Sears tends to have an abundance of coupon codes, both for sitewide use and for specific product categories. General-use codes for $5 off $50 and $35 off $300 are currently available on an ongoing basis, but use of category-specific coupons may yield higher savings and may have a lower minimum purchase threshold, for items like tools, fitness equipment, appliances, and clothing.
5. JCPenney may have shunned coupon codes, but the store started releasing more and more codes over the last year, and now you can just about always get a discount if you look. You'll typically find 15 percent off with no minimum at any given time, but you may also find discounts of 20 percent to 25 percent for larger purchases or specific product categories.
6. Walgreens coupons focus on photo services. We also see codes that apply sitewide or to certain items like contact lenses and vitamins.
7. Victoria's Secret has regular coupons for intimates, clothing, beauty, and more, and you can stack up to three codes at checkout to see if they combine. The types of coupons available tend to be a mix of offers that apply to items sitewide and to specific product categories, like clothing. We most often see codes for free shipping, a free panty with bra purchase, free secret rewards cards, free gifts with purchase and tiered discounts like $15 off $100, $30 off $150, or $75 off $250.
8. Quill coupons discount office supplies, furniture, printer ink, business machines and more. You'll also find codes for free gifts with select purchases.
9. Cafepress often has general-use coupons for 20 percent to 40 percent off with no minimum purchase, plus codes for similar discounts on select product categories, like apparel.
10. Bath & Body Works applies one code per order, but codes do combine with its non-code based "buy one, get one" promotion. Typical offerings: 20 percent off with no minimum, $10 off $30, a free item with purchase, $1 shipping on $25.
11. Kohl's almost always has a code available. You can usually get 15 percent off your order with no minimum or 20 percent off $100, although we do see 20 percent off with no minimum from time to time. There are also regular codes for specific categories, such as kids' clothing. Try stacking a general code with a category or shipping discount coupon for maximum savings.
12. One Stop Plus, a clothing retailer, releases many general-use codes. They often apply higher discounts to single items, such as 40 percent off one item, or reward purchases that contain a higher number of items, like 30 percent off the first and third highest-priced items in the order. We also see coupons for things like free shipping or 15 percent off, so be sure to compare the discount that each code will provide before deciding on one for your particular order.
13. Macy's coupons taking 10 percent to 20 percent off your purchase with no minimum are usually released a few times a month. Plus, we also see codes released for certain item types, like bed and bath or shoes.
14. Saks Fifth Avenue coupons sometimes have higher minimum purchase requirements, but the store currently has an ongoing code for free shipping with no minimum, and you can stack up to five codes per order, which sets the stage for plenty of potential savings. We see codes for free gift cards or gifts with purchase, discounts on certain categories such as men's clothing, and free samples with beauty purchase.
15. Kmart is owned by the same company as Sears, so you'll find a similar selection of coupon codes. Current ongoing general-use codes include discounts for $5 off $45, 10 percent off $75 or $10 off $100. But also check for coupon discounts on certain categories, like shoes, appliances and toys, since you may find lower minimum purchase amounts or higher savings.

Top 10 Stores for Specific Item Codes

While many stores will offer general use codes like those listed above, some retailers prefer to release coupons that apply to specific items. For this reason, it can be more hit or miss to find a code at these stores if you've already made up your mind on a very particular item. However, if you're flexible and only require that you find the best price on, say, a hard drive, then a perusal of all of a store's current codes may yield an offer that works for you.

Most of the stores below are electronics retailers. So if that's something you consistently look to invest in, it may benefit you to subscribe to these stores' newsletters to keep abreast of the product-specific codes they offer.
  1. Newegg
  2. TigerDirect
  3. Ashford
  4. Lenovo
  5. Paul's TV
  6. Dell
  7. Cowboom
  8. World Wide Stereo
  9. HP Home & Office
  10. SupermediaStore
If you're shopping at any of the above stores, the chances are very good that you'll find coupons. The savings may be only a few dollars or more substantial. Regardless, you shouldn't pay more than you have to. Consistently applying coupon codes is a game definitely worth playing.

Sarah Jones joined DealNews in 2005 and currently manages the team that publishes coupons and breaks down the info in Black Friday ads, one item at a time.


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4 Alternatives to Reverse Mortgages

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By Daniel Solin

You may be all too familiar with commercials featuring folksy celebrities explaining how everyone tells him that reverse mortgages sound "too good to be true," but there isn't a catch this time. You can have the best of both worlds: You can stay in your home and get cash for the equity you have built up. What's more, you never have to pay back the loan.

A reverse mortgage is a home loan available only to those 62 years of age and older. Unlike typical loans, no monthly repayment of these loans is required. Senior citizens can tap into the equity they have built up in their homes. Payment of the loan is deferred until they die, transfer ownership of their home, fail to pay taxes or insurance, fail to keep the home in good repair or move out.

According to a report prepared by the Consumer Financial Protection Bureau for Congress in June of 2012, there are a number of issues with reverse mortgages. Few of these problems are referenced in the rosy picture painted by those who sell these products. However, for some seniors, it may be an appropriate option that will permit them to remain in their homes and access funds needed to pay their living expenses in retirement.

If you are considering a reverse mortgage, there are other options that will permit you to gain access to the equity in your home. These options may (or may not) be preferable to a reverse mortgage.

1. Refinance your home. Refinancing your home doesn't come without costs. According to Bankrate's 2012 closing costs survey, the national average for closing costs on a $200,000 loan was $3,754. Nevertheless, if you plan on staying in your home for a meaningful period of time, refinancing can be an appealing option. Assuming interest rates are favorable, your monthly payment will be less, which will free up some cash. In addition, your home will remain an asset for you and your heirs, which is not the case when you take out a reverse mortgage.

2. Take out a home equity loan or line of credit. A home equity loan will give you a lump-sum payment that you will have to pay back in fixed monthly installments over a stated period of time. Most home equity loans bear a fixed rate of interest. A home equity line of credit gives you the right to borrow money up to a stated limit. The interest on a home equity line of credit typically fluctuates with the prime rate.

Whether a home equity loan or a home equity line of credit is right for you depends on a number of factors, including whether or not you need a lump-sum payment immediately or are concerned about having cash available on an as-needed basis. Remember that with a home equity loan, you are paying interest on the entire amount of the loan, whether or not you are using the proceeds. With a home equity line of credit, you only pay interest on the amount you borrow.

Typically, a home equity loan or line of credit features low fees. Home equity loans and home equity lines of credit are easier and less expensive to obtain than a reverse mortgage. Both preserve your home as an asset for you and your heirs. However, be aware that failure to make repayments as required (including interest) may put your home at risk of foreclosure.

The Federal Reserve Board published a useful guide for those considering home equity loans or a line of credit.

3. Sell your home to a third party. Obviously, this option doesn't permit you to stay in your home, but it will give you access to the equity you have built up. If your home is too big for your current needs, or if you are facing significant repair costs or high taxes, consider selling and renting an apartment or purchasing a lower-cost home or condominium.

4. Sell your home to your children. First, there some caveats. Mixing business with family is fraught with peril. If you decide to sell your home to your children, you should execute the same carefully prepared agreements you would have in a sale to an unaffiliated third party. You and your children (or child) should each retain experienced real estate attorneys.

Steve McLinden, who writes Bankrate's Real Estate Adviser column, outlines a number of ways to execute a transfer of title to your children, saying that one of the easiest approaches is to finance the sale, permitting your child to make monthly payments directly to you instead of going through a third-party lender. Assuming it is financially feasible for everyone concerned, and consistent with the value of your home, you can structure the monthly payments based on your need for income. The agreement should provide that the title transfers back to you in the event of a default.

If none of these options is viable, consider obtaining a loan against your whole or universal life policy. You could also take a distribution from your 401(k) plan (which you can do without penalty if you are 59½ or older) or borrow from your 401(k) plan, assuming loans are permitted by your company plan. Loans from 401(k) plans are subject to borrowing limits, repayment requirements and other restrictions.

Of course, you also have the option of delaying retirement, or going back to work full or part-time if you are already retired. All of these options should be fully explored when you are considering a reverse mortgage.

Dan Solin is the director of investor advocacy for the BAM Alliance and a wealth adviser with Buckingham Asset Management. He is a New York Times best-selling author of the Smartest series of books. His latest book, "The Smartest Sales Book You'll Ever Read," has just been published.


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What 'Mad Men' Teaches Us About Money

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Millions of Americans are addicted to "Mad Men," the AMC drama chronicling the lives of the people at ad agency Sterling Cooper Draper Pryce. Enthralling us over seven seasons are their mostly sordid sex lives, boozy business lunches, snazzy apartments, period clothes and finned Cadillacs.

Although money is rarely addressed, suck-up Bob Benson of season six (James Wolk) sums up their attitudes neatly: "They say money can't buy happiness, but it sure as hell buys everything else." Here's what else you can learn about money from the hit show, which wraps up this year.

'Happiness Is the ... Freedom from Fear'

Agency creative director Don Draper (Jon Hamm) leads a complicated life. He had been on unscheduled leave after a major meltdown in front of the Hershey (HSY) clients. He conspires with his former secretary to keep his family in the dark about his out-of-work status. His relationship with his work and money is so tied in to the '60s concept of the masculine breadwinner that on the April 27 episode he finally admits his fear to wife, Megan (Jessica Pare),"If you found out what happened, you wouldn't look at me in the same way."

Draper could have taken a job at another agency for less money but submits sheepishly to be part of the SCDP fold under humiliating conditions to keep up his lifestyle and win back Megan.

In today's dollars, he earns $356,000 a year, yet he can't support his lifestyle in Manhattan, private schools, first-class fights and Hawaiian vacations. He, like other people of that time, also doesn't use credit cards much, as they were a relatively new phenomenon. To this man, who grew up in a Depression era bordello, cash is still king.

For Draper, "Happiness is the smell of a new car. It's freedom from fear," as he pitches to the Lucky Strike clients in the pilot. Booze, babes and bread are only means to quiet his mind over his secret identity and hardscrabble past.

Takeaway: Fight to keep that job -- even if it means compromise.

The Power of a Job You Like

Agency partner Roger Sterling (John Slattery) is unwilling to help out his newlywed daughter financially yet is more than willing to throw wads of cash to bed partners and alimony to ex-wives. He does tries to do right by his new son with former secretary Joan Holloway (Christina Hendricks). But overall, money for him is just a means to keep score and keep scoring. He is known for his zingy one liners, such as what he says to his psychiatrist: "I'm just acknowledging that life, unlike this analysis, will eventually end, and someone else will get the bill." But the most endearing thing about Sterling is a lesson to everyone: when you treat work as fun (and boy, does he) you will likely succeed.

Takeaway: Find work that engages you.

The Glass Ceiling

In 2014 dollars, they all make good money, save the secretarial pool. Peggy Olson (Elisabeth Moss) started as a secretary and was deservedly promoted to copy chief. In her personal life, she is both meek (she still demurs to her boyfriend and takes an apartment in a neighborhood that frightens her) and bold (to generate multiple streams of income, she becomes a landlady).

Joan Harris (Christina Hendricks) is a single working mom whose drive to support her son leads her to sleep with a client to get the Avon (AVP) account and agency partnership. Yet, she's unwilling for Sterling to contribute to their son's upkeep. She is well aware of the gender pay inequality that persists today. President Obama even noted in his 2014 State of the Union speech women earn 77 cents to every dollar a man earns, exhorting, "It's time to do away with workplace policies that belong in a 'Mad Men' episode."

Takeaway: Look for supplements to your salary. Earn as much as you can while you're young (but don't sleep your way to the top).

Don't Count Your Bonuses Before They Hatch

The saddest object lesson in seasons past concerned Lane Pryce (Jared Harris) who brilliantly devises ways to save the newly independent agency from financial ruin. Unfortunately, as financial officer, he should have known better when he is hit with a large tax bill. Trying to live the New York City lifestyle, he has been living beyond his means.

To pay the debt he convinces the other partners to pay out Christmas bonuses. When a client loss cancels the bonuses, Pryce forges Draper's signature on a bonus check, is caught by Draper and fired. He takes his own life in his office.

Takeaway: Put some money aside for emergencies.

What Does It All Mean?

You may not be able to afford the "Mad Men" lifestyle, but you should have freedom from fear and maybe the smell of a new Cadillac.

More from Annalisa Kraft-Linder

 

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Walmart Brings One-Stop Shopping to Car Insurance

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Walmart Auto Insurance
walmart.com/AP
By ANNE D'INNOCENZIO

NEW YORK -- Walmart (WMT) is bringing one-stop shopping to another area: auto insurance.

The world's largest retailer has teamed up with AutoInsurance.com to let shoppers quickly find and buy insurance policies online in real time to cut down costs.

The service is available immediately in eight states -- Arkansas, Louisiana, Mississippi, Missouri, Oklahoma, Pennsylvania, Tennessee and Texas. It will be available nationwide in the next few months.

Shoppers can go to autoinsurance.com or access the site through Walmart's website at www.walmart.com/autoinsurance.

AutoInsurance.com, a division of Fort Lee, N.J.-based Tranzutary Insurance Solutions, a licensed property and casualty insurance agency, was created after Walmart realized there was an opportunity for a quicker service where shoppers can buy and save on car insurance that provides the final price -- with no bait and switch tactics. Walmart says car insurance is among the biggest monthly expenses for customers, and for some, it can outpace health care costs.

In a Tuesday briefing with the media, Daniel Eckert, senior vice president of services for Walmart U.S., said the Bentonville, Ark.-based discounter will be AutoInsurance.com's exclusive retail partner and receive promotion payments in its role as marketer. AutoInsurance.com will earn a commission every time a policy is sold.

"Our customers too often have to settle for auto insurance policies that aren't the best fit and cost more than they want to spend," Eckert said.

The strategy marks Walmart's latest flirtation with insurance marketing and also highlights how the retailer is trying to use its size to expand beyond food and other staples into a one-stop shopping destination as it seeks to bring in more shoppers to its site and its stores. Walmart plans to promote the insurance shopping service in its stores.

Last month, Walmart introduced a new money transfer service that it says will cut fees for its low-income customers by up to 50 percent compared with similar services elsewhere. That service is being rolled out in partnership with Ria Money Transfer, a subsidiary of Euronet Worldwide (EEFT).

Joshua Kazam, founder of AutoInsurance.com and the founder and chairman of Tranzutary, noted that 90 percent of people compare prices online for products and services like airline tickets, but its survey shows that only one in five comparison-shop for auto insurance because it's a complicated process.

Walmart has had a relationship with Kazam, an entrepreneur, and his partners that dates back several years. For example, in 2009 Kazam and his team partnered with Walmart to bring PetArmor, a generic version of a popular flea and tick preventative treatment, to Walmart customers. Kazam founded Velcera, which created the PetArmor brand and was acquired last year by Perrigo (PRGO). But recently, Walmart has been working with Kazam in improving the experience related to insurance products.

In 2012, Walmart tested a program with Tranzutary to sell prepaid MetLife (MET) insurance policies in 217 stores in Georgia and South Carolina. Then last April, it launched a test program in Pennsylvania where customers who purchased policies from AutoInsurance.com reported annual savings on their insurance of $1,168, on average. At the same time, it displayed kiosks in Illinois where shoppers could pick up a saving card that offered a discount on a new auto insurance policy sold through Esurance.

Walmart decided that focusing on a price comparison service was the way to go.

It works this way: customers log on to the site and provide their name, address, date of birth and contact information. They can also have the site retrieve their current auto insurance policy, allowing AutoInsurance.com to automatically fill in the necessary coverage information for an apples-to-apples comparison. The free service offers customers multiple quotes from some of the leading national insurance carriers like Esurance, Safeco, and Progressive (PGR) within minutes.

Customers can choose to either purchase the policy online immediately, speak with a licensed agent at 800-700-7500 or save the information and purchase later.

 

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Fed Expected to Further Taper Bond-Buying Program

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Yellen Economic Club
Bebeto Matthews/APFederal Reserve Chair Janet Yellen
By Howard Schneider

WASHINGTON -- The Federal Reserve is expected to cut its bond-buying program by a further $10 billion Wednesday as signs mount that the U.S. economy is starting to pull away from its winter slowdown.

Janet Yellen's second policy-setting session as Fed chair should confirm the central bank's plan to wind down its purchases of Treasuries and mortgage-backed securities by year-end -- a sign of its confidence the economy is gaining traction.

The reduction likely to be announced at the end of the Fed's two-day meeting would bring the total monthly purchases down to $45 billion, split between $25 billion of Treasuries and $20 billion of mortgage-backed securities.

But analysts expect little more out of the session as the Fed enters what may be a sort of holding pattern as it transitions from an era of crisis response to one of more normal monetary policy.

The meeting "will probably be a quiet one," with the reduction in purchases "a foregone conclusion," and no fresh economic forecasts from the members of the Fed's policymaking committee, said Goldman Sachs senior economist Kris Dawsey.

A statement outlining the policy decision and the Fed's view of the economy will be issued at 2 p.m. Eastern time.

Little or no change is expected in the Fed's guidance on its key overnight interest rate, which it has kept near zero since the depths of the financial crisis in December 2008.

The Fed changed its guidance in March when it dropped language that said the target rate wouldn't be increased until the unemployment rate fell to at least 6.5 percent.

Unemployment has been steadily approaching that threshold, and now stands at 6.7 percent. But with little sign of inflation, Yellen has said she feels there is still ample "slack" in the economy and a need to keep rates low to continue to support economic growth.

During an April 16 speech in New York, she said the United States may still be more than two years away from what the Fed now regards as the "longer-run normal unemployment rate" of between 5.2 percent and 5.6 percent.

"Thus far in the recovery and to this day, there is little question that the economy has remained far from maximum employment," she said.

The last Fed statement said rates would likely remain near zero "for a considerable time after the asset purchase program ends."

Investors have construed that to mean a rate increase isn't likely until the middle of next year. That, however, will depend on the performance of an economy that is expanding, but not generating much upward pressure on wages and prices.

With inflation well below the central bank's 2 percent objective, "We continue to see the Fed erring on the side of caution and moving on the policy rate later rather than sooner," Millan Mulraine, deputy chief economist at TD Securities in New York, wrote in a preview of the Fed meeting.

"Indeed, the elevated level of economic slack, both in the labor market and other sectors of the economy, will ensure that wage pressures stay weak and pricing power among firms remains contained," Mulraine said.

Data on gross domestic product for the first quarter will be released on Wednesday morning. Analysts expect a poor headline result, largely because of an unusually snowy winter that depressed economic activity.

But the underlying trend is much stronger, said Ben Herzon, senior economist with consulting firm Macroeconomic Advisers.

Both the harsh winter and a slowdown in the accumulation of business inventories will produce an annualized GDP growth reading of about 1 percent for the first quarter, he said. But recent data has already shown the economy is bouncing back.

"The economy is continuing to progress," Herzon said. "Not blockbuster, but decent. The pace of GDP growth is sufficient to keep the unemployment rate moving down."

 

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Twitter Set to Tumble as User Growth Disappoints

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Earns Twitter
Richard Drew/AP
By Jennifer Booton

Twitter (TWTR) reported a top- and bottom-line beat late Tuesday and attributed a 119 percent increase in revenue to user and engagement growth, however its shares were pummeled after hours by skittish investors unhappy with the pace of acceleration.

Monthly active users were up 25 percent year-over-year to 255 million as of March 31, slightly below Wall Street's expectations of 256.8 million MAUs.

That seems to have spooked investors, as analysts have long expressed concern about the pace of Twitter's user growth.

Advertising revenue per thousand timeline reviews grew 96 percent to $1.44 -- important as the company readies to roll out another 15 new ad types.

The company's guidance was mostly in-line with expectations; however, its shares dropped more than 9 percent to $38.74 in after-hours trade.

The microblogging site projected revenue in the range of $270 million to $280 million for the second quarter and $1.2 billion to $1.25 billion for fiscal 2014. Analysts on average were calling for second-quarter sales of $272.9 million on full-year revenue of $1.24 billion.

The company reported a GAAP loss of $132 million, or 23 cents a share, compared with a year-earlier loss of $27 million. Excluding $126 million of stock-based compensation, Twitter said it earned $183,000.

It also reported break-even adjusted earnings per share -- the closest it has come to profitability -- which is better than the three-cent loss predicted by analysts in a Thomson Reuters poll.

Revenue for the three-month period was up 119 percent to $250 million from $114 million a year ago, topping the Street's view of $241.5 million.

"We had a very strong first quarter. Revenue growth accelerated on a year-over-year basis, fueled by increased engagement and user growth," Twitter CEO Dick Costolo said in a statement.

The report comes a quarter after the social network said it added a disappointing 9 million users, causing the company's stock in plunge 20 percent.

Since then, Twitter has been busy upgrading the service, which now resembles the Facebook (FB) News Feed, as well as rolling out an aggressive ad expansion. It has also acquired new data analytics firms and made strides toward social television.


Twitter's Stock Sinks Despite Revenue and User Growth

 

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Mortgage Applications Dive on Higher Rates, Low Inventory

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Mortgage Loan Application
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By Caroline Valetkevitch

NEW YORK -- Applications for U.S. home mortgages fell last week to their lowest level since December 2000 as both refinancing and purchase applications declined, an industry group said Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 5.9 percent to 333.2 in the week ended April 25. That was the lowest level since December 2000, the group said.

"Purchase application volume remains weak despite other data which indicated the overall pace of economic growth is picking up. The combination of higher rates, new regulation and tight inventory are all leading to a weaker spring market than we have seen in years," said Mike Fratantoni, MBA's chief economist.

The MBA's seasonally adjusted index of refinancing applications declined 6.9 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, fell 4.4 percent.

Fixed 30-year mortgage rates averaged 4.49 percent in the week, unchanged from the week before.

The survey covers more than 75 percent of U.S. retail residential mortgage applications, according to MBA.

 

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'Lego Movie' Gives Time Warner Boost in 1Q

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Lego Movie Gives Time Warner Boost in 1Q
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NEW YORK -- Time Warner's (TWX) first-quarter net income climbed as revenue grew on the success of properties such as Warner Bros. "The Lego Movie" and the HBO show "True Detective."

The performance topped analyst estimates. Shares rose in premarket trading Wednesday.

Chairman and CEO Jeff Bewkes said in a statement that "The Lego Movie" helped create another franchise for the company and led all releases at the domestic box office. Warner Bros. revenue climbed 14 percent to $3.1 billion in the quarter.

Home Box Office scored with "True Detective," the most-watched freshman series in the cable network's history. Bewkes said that "Game of Thrones" continues its surge, with its season 4 premiere earlier this month drawing HBO's biggest audience since "The Sopranos" finale. Revenue at HBO increased 9 percent to $1.3 billion.

Bringing the NCAA Men's basketball final four to cable television for the first time was a win for Turner, pulling in audiences in the key demographics of adults aged 18-34 and 18-49. Turner's quarterly revenue rose 5 percent to $2.6 billion.

For the three months ended March 31, the media and entertainment company earned $1.29 billion, or $1.42 a share. That's up from $754 million, or 79 cents a share, a year ago.

Removing certain items, earnings were 91 cents a share. Excluding publishing division Time Inc. -- expected to be spun off in the second quarter -- earnings were 97 cents a share.

Analysts surveyed by FactSet forecast earnings of 88 cents a share.

Time Warner's stock added 56 cents to $65.30 in premarket trading about 90 minutes before the market open.

Revenue for the New York company increased 9 percent to $7.55 billion from $6.94 billion, driven by strong performances from Warner Bros., Turner and HBO. Taking out Time Inc., revenue was $6.8 billion.

Wall Street expected $6.63 billion in revenue.

At Time Inc., revenue edged up 1 percent to $745 million on the acquisition of the Affluent Media Group, which was previously known as American Express Publishing Corp.

Time Warner Inc. updated its full-year forecast on Wednesday to account for the planned spinoff of Time Inc. It now foresees 2014 adjusted earnings climbing by a low teens percentage rate from 2013's $3.51 a share. The company previously said that it expected 2014 adjusted earnings per share to rise by the "low-double-digits" from their 2013 level when excluding Time Inc.

 

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Hiring Spree: Private Employers Add 220,000 Jobs In April

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ADP employment report
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By CHRISTOPHER S. RUGABER

WASHINGTON -- U.S. businesses boosted hiring in April, according to a private survey, a sign the economy may improve after a sluggish start this year.

Payroll processer ADP (ADP) said Wednesday that private employers added 220,000 jobs in April, the most since November and up from 209,000 in March.

The figures suggest that the government's jobs report for April, to be released Friday, could show a healthy gain. Economists forecast that report will show employers added 210,000 jobs in April, according to a survey by FactSet. That would be the most in five months.

A strong increase of 200,000 or more jobs would give the economy a much-needed boost after harsh winter snowstorms kept shoppers indoors and dragged down home and car sales. The economy barely expanded in the first three months of this year, according to a separate report Wednesday. The Commerce Department said growth was just 0.1 percent at an annual rate in the first quarter, much lower than the fourth quarter's 2.6 percent pace.

More hiring would put more money in Americans' pockets, potentially boosting spending and growth. Most economists expect growth to accelerate in the spring and summer, as the weather improves and hiring picks up.

The ADP report says most of the hiring occurred in service industries such as retail, transportation, and professional services. Construction firms added 19,000 jobs, a healthy gain. Manufacturing added just 1,000.

Hiring was also widespread among small, medium-sized and larger companies.

The step-up in hiring comes after job gains faltered over the winter. Employers added only 84,000 jobs in December and 144,000 in January. Hiring then improved to 197,000 in February and 192,000 last month.

There are other signs the job market is getting better. The number of Americans seeking unemployment aid has fallen to the lowest level since the recession, a sign companies are laying off fewer workers.

The ADP numbers cover only private businesses and often diverge from the government's more comprehensive report. Mark Zandi, chief economist at Moody's Analytics, said that ADP's figures have been off by about 40,000, on average, from the government's report each month for the past 18 months. Moody's calculates the figures for ADP.

 

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U.S. Economic Growth Slows to a Crawl in First Quarter

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Economy GDP
Tony Dejak/AP
By Lucia Mutikani

WASHINGTON -- The U.S. economy barely grew in the first quarter as exports tumbled and businesses accumulated stocks at the slowest pace in nearly a year, but activity already appears to be bouncing back.

Gross domestic product expanded at a 0.1 percent annual rate, the slowest since the fourth quarter of 2012, the Commerce Department said Wednesday.

That was a sharp pullback from the fourth quarter's 2.6 percent pace and was worse than economists' expectations for a slowdown to a 1.2 percent rate. The slowdown partly reflected an unusually cold and disruptive winter, marked by declines in sectors ranging from business spending to home building.

The Commerce Department's first snapshot of first-quarter growth was released just hours before the Federal Reserve wraps up a two-day policy meeting.

While harsh weather partially explains the weakness in growth, the magnitude of the slowdown could complicate the U.S. central bank's message as it sets to announce a further reduction in the amount of money it is pumping into the economy through monthly bond purchases.

U.S. stock index futures fell slightly on the report, while U.S. Treasury debt prices trimmed losses.

The first-quarter stall in growth, however, is likely to be temporary and recent data have suggested strength at the tail end of the quarter.

Separately, the ADP National Employment Report showed private employers added 220,000 jobs to their payrolls in April after increasing headcount by 209,000 in March.

"This weakness is not carrying through the second quarter," said Gus Faucher, senior economist at PNC Financial Services in Pittsburgh.

Economists estimate severe weather could have chopped off as much as 1.4 percentage points from GDP growth. The government, however, gave no details on the impact of the weather.

Inventory Growth Decelerates

Businesses restocked inventories to the tune of $111.7 bln in the final three months of last year, but added only $87.4 billion more to stocks in the first quarter, the smallest amount since the second quarter of 2013.

The slowdown in restocking subtracted 0.57 percentage point from GDP growth in the first quarter.

Trade also undercut growth, taking off 0.83 percentage point, partly because of the weather, which left goods piling up at ports. Exports fell at a 7.6 percent rate in the first quarter, the largest decline in five years, after growing at a 9.5 percent pace in the final three months of 2013.

Together, inventories and trade sliced off 1.4 percentage points from GDP growth. A measure of domestic demand that strips out exports and inventories expanded at a 1.5 percent rate.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at a 3 percent rate, reflecting a spurt in spending on services linked to demand for heating during the winter and the Affordable Healthcare Act, which expanded health care coverage to many Americans.

Spending on services grew at its quickest pace since the second quarter of 2000.

Spending on goods, however, slowed sharply, indicating that the frigid temperatures had reduced foot traffic to shopping malls. Consumer spending had increased at a brisk 3.3 percent pace in the fourth-quarter.

Harsh weather also undercut business spending on equipment. While investment in nonresidential structures, such as gas drilling, rebounded, the increase was minor. Business spending on equipment fell at its fastest pace in nearly five years.

Investment in home building contracted for a second straight quarter, in part because of the weather. But a rise in mortgage rates over the past year has also hurt.

A second quarter of contraction in spending on home building suggests a housing recession, which could raise some eyebrows at the U.S. central bank. A bounce back is, however, expected in the April-June period.

-Additional reporting by Richard Leong.

 

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Money Minute: Target Takes Aim at New Card Technology

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Target moves to a new technology to protect consumers from having their personal information stolen again.

Target (TGT) is still trying to recover from the loss of consumer confidence after the security breach last year that affected about 100 million customers. It will become the first major American retailer to adopt a credit card technology that's popular in Europe. Turn over your credit or debit card and look at the magnetic strip along the back. Well, that's going away. It will be replaced next year by a chip and PIN system considered far more secure. The chip makes it harder to make counterfeits and the PIN makes it more difficult for a thief to use your card. Target is also switching to MasterCard (MA) from Visa (V).

Target's main rival, Walmart Stores (WMT), is also making news. It's going into the car insurance business -- teaming up with the website AutoInsurance.com, which allows consumers to comparison shop among six insurance carriers. This is Walmart's second foray into financial services this month. It also plans to offer store-to-store money transfers.

Sprint (S) and a group of partners are working on a new product to appeal to audiophiles who are unhappy with the sound quality of the music they get from their Apple (AAPL) iPods and other music players. HTC makes the smartphone and audio equipment company Harmon restores the highs and lows lost when music is compressed on current devices. And the new HTC One will come pre-loaded with Spotify's music streaming service.

Here on Wall Street, the Dow Jones industrial average (^DJI) rose 86 points Tuesday, the Standard & Poor's 500 index (^GPSC) added 9, and the Nasdaq composite (^IXIC) gained 29 points. Both the Dow and S&P are within 1 percent of their all-time highs.

Watch shares of Twitter (TWTR) today. The little blue bird is likely to get crushed after the company reported disappointing growth in the number of people using the messaging service, and when you're supposed to be a growth company, that's trouble. Twitter shares are far below where they began trading back in November.

-Produced by Drew Trachtenberg.

 

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Sterling Now Banned, Adidas Reinstates Clippers Deal

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Clippers Sterling Basketball
Danny Moloshok/APLos Angeles Clippers owner Donald Sterling
By Emma Thomasson

BERLIN -- German sportswear firm Adidas has reinstated its partnership with the Los Angeles Clippers after the National Basketball Association banned its owner Donald Sterling from the game for life for racist comments.

On Tuesday, NBA Commissioner Adam Silver said Sterling, 80, will be barred from any role in the operations of his franchise or from serving as one of the league's governors.

"We fully support the league's decision. As a long-term partner of the NBA, we are proud that the Commissioner is taking serious action to ensure prejudice is not tolerated in the game," Adidas said in a statement.

Adidas, the world's second biggest sportswear firm, had suspended the Clippers partnership Tuesday morning after widespread outrage over recorded comments by Stirling criticizing a woman friend for "associating with black people."

The comments drew outrage from players, fans, politicians and commercial sponsors, several of whom said they were cutting ties with the team, even after the NBA moved to expel Sterling.

Adidas doesn't break down sales by sport but it has just a fraction of the basketball market, which is dominated by U.S. rival Nike (NKE).

 

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Burger King Flips the Script, and Sizzles as McDonald's Shrinks

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Burger King Worldwide Inc. Products & Signage Ahead Of Earns
Andrew Harrer/Bloomberg/Getty Images
Don't let the recent weakness at McDonald's (MCD) lead you to the conclusion that all burger flippers are struggling. It's just not true, and Burger King (BKW) proved that in its latest quarter.

McDonald's longtime nemesis posted better than expected profitability during the first three months of the year, fueled by marginally positive comparable-restaurant sales for the period.

It may not seem like much of a victory. Burger King's worldwide comps rose 2 percent, with its U.S. and Canada locations clocking in with a meager 0.1 percent increase. However, even that baby step up is better than the 1.7 percent decline at McDonald's.

Unlike Ronald McDonald, Burger King isn't clowning around.

The Whopper Beats the Big Mac?

This would be an opportune time for Burger King to break away from the larger chain that it's been copying for years. We've seen Burger King offer up items that are blatantly similar to McCafe smoothies, Chicken McBites, Big Macs, Egg McMuffins, and even the cult fave McRibs.

However, now that McDonald's is in a rut -- having posted three consecutive quarters of negative comparable-restaurant sales in this country -- it appears Burger King is ready to carve its own path.

"We started off 2014 strong by generating comparable sales growth across all four regions during the first quarter," Burger King Worldwide CEO Daniel Schwartz explained in the fast food giant's earnings release. "Despite severe winter weather in the U.S. and Canada, our commitment to launching fewer, more impactful products and simplifying in-restaurant operations helped drive improved performance."

If there's one thing in that statement that should stand out as a sharp contrast to the current strategy at McDonald's it's that Burger King is rolling out "fewer" products as it is "simplifying" operations. That's an entirely different strategy than the one being used by McDonald's, which seems to involve rolling out a lot of new menu items and seeing what sells.

McDonald's big push for 2014 is the installation of deeper prep tables in its kitchens that will allow the chain to offer more ingredients as burger toppings. That's a pretty big gamble for McDonald's; it could easily result in a slow-down in orders or more mistakes.

Burger King isn't performing perfectly. Sales did come in a bit lighter than Wall Street was forecasting. We also saw the chain close 43 more restaurants than it opened during the period. Burger King's overall restaurant count grew on the heels of its popularity overseas, but it needs to begin growing its store count closer to home to make the most of its inspiring unit-level performance.

Fast Food Roundup

It may not be fair to pick on McDonald's just to show that Burger King is doing relatively better. Other fast food concepts that have reported this earnings season haven't been very impressive. Yum! Brands (YUM) posted negative comps at KFC, Taco Bell, and Pizza Hut during the same three-month period.

We'll get a clearer snapshot of the burger industry in the coming days. Wendy's (WEN) reports next week, and Jack in the Box (JACK) follows shortly after that. Will they be positive like Burger King or negative like McDonald's? Wendy's offered up guidance back in late February, forecasting comparable-restaurant sales to climb 2.5 percent to 3 percent this year. That implies strength for all of 2014, but we still don't know how well it navigated January storms that melted into diner apathy in February and March for McDonald's.

Burger King is getting it right by not following McDonald's. Soon we will see what the rest of the industry is up to.

Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Burger King Worldwide and McDonald's. The Motley Fool owns shares of McDonald's. Try any of our newsletter services free for 30 days.

 

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U.S. Government Lost $11.2 billion on GM Bailout

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U.S. Government Lost $11.2 billion on GM Bailout
Joe Raedle/Getty Images
By Eric Beech

WASHINGTON -- The U.S. government lost $11.2 billion on its bailout of General Motors (GM), more than the $10.3 billion the Treasury Department estimated when it sold its remaining GM shares in December, according to a government report released Wednesday.

The $11.2 billion loss includes a write-off in March of the government's remaining $826 million investment in "old" GM, the quarterly report by a Treasury watchdog said.

The U.S. government spent about $50 billion to bail out GM. As a result of the company's 2009 bankruptcy, the government's investment was converted to a 61 percent equity stake in the Detroit-based automaker, plus preferred shares and a loan.

Treasury whittled down its GM stake through a series of stock sales starting in November 2010, with the remaining shares sold on Dec. 9.

At the time of the December sale, Treasury put the total loss at $10.3 billion but said it didn't expect any significant proceeds from its remaining $826 million investment in "old" GM, the report by the Office of the Special Inspector General for the Troubled Asset Relief Program said.

The U.S. bailout of GM and Chrysler, which received about $12.5 billion, saved 1.5 million jobs in the United States, according to the Center for Automotive Research.

Last week, GM posted its 17th consecutive profitable quarter. Earnings, however, were hurt by a $1.3 billion charge for the costs of various recalls, including for faulty ignition switches on 2.6 million cars.

GM is under investigation by the Justice Department, U.S. auto safety regulators and Congress over its failure to detect the faulty ignition switch for over a decade. The U.S. Securities and Exchange Commission is also investigating GM.


U.S. Government Sells Last Of Its GM Shares

 

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Old Dwarfs vs. Kid Wizards: Theme Park War Gets Fresh Troops

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Universal-Harry-Potter
Universal Orlando/AP
This summer is shaping up to be a hot one in Central Florida as two theme park giants turn to new marquee attractions in the fight for tourist dollars.

Disney (DIS) will strike first. The family entertainment giant is hosting the dedication for its Seven Dwarfs Mine Train roller coaster at the Magic Kingdom on Friday. A few miles away and a few weeks later, Comcast's (CMCSK) Universal Studios Florida will unveil the Diagon Alley expansion of its wildly popular Wizarding World of Harry Potter.

Young wizards and aging dwarfs may seem to be odd combatants for a battle in the theme park capital of the world, but the economy's showing signs of life, and Florida is likely see a healthy uptick in tourism this summer. The question is which theme park will win the war.

Whistle While You Work

The Seven Dwarfs Mine Train is a family-friendly coaster with mine carts that sway and tip. It's the final piece of the New Fantasyland expansion at the Magic Kingdom that began in 2012.

It's also the first roller coaster to open at any of Disney World's four theme parks in Florida in eight years. The ride's central location -- where the 20,000 Leagues Under the Sea attraction was -- will make it an icon for years to come.

The Seven Dwarfs Mine Train will be a key part of Disney's marketing strategy. Some of the coaster's first riders were part of a TV commercial shoot last week. However, even Disney's mighty advertising will be challenged by what Universal Studios Florida is doing a few miles away.

Wingardium Leviosa

Disney is banking on a single new ride, but Universal is taking a broader approach. Its Diagon Alley expansion features the richly themed London end of the Harry Potter Universe and a thrilling indoor coaster through Gringotts Bank.

This would seem to be pitting goblins against dwarfs in new coaster rides, but an even bigger piece of the Diagon Alley expansion is a train ride that will connect Universal Studios Florida with its neighboring Islands of Adventure. It won't be merely a train ride; rich effects and projections will enhance the experience for travelers. And the ride from from King's Cross at Universal Studios Florida to Hogsmeade Station will motivate visitors to pay for admission into both parks.

Disney took some heat for bumping prices higher in February, raising the cost to enter Disney World's Magic Kingdom to $99 -- or $105.44 once state taxes are factored into the single-day admission. Universal quietly followed with a price increase of its own, to $96, or $102.24 with taxes.

The winter increases stood out because the parks typically push their ticket rates higher in June, at the start of the telltale summer season. The higher prices are unlikely to get in the way of what should be record attendance for both. We may have Snow White's dwarfs battling against Harry Potter's classmates, but no one has to play Grumpy. They can both be Happy.

Motley Fool contributor Rick Munarriz owns shares of Walt Disney. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our newsletter services free for 30 days.

 

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Fed Sees Strength in Economy, Continues Bond-Buying Cuts

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Fed shows faith in U.S. economy with bond-buying reduction
Andrew Burton/Getty ImagesFederal Reserve Chair Janet Yellen
By Howard Schneider
and Michael Flaherty


WASHINGTON -- The Federal Reserve on Wednesday looked past a dismal reading on first quarter U.S. economic growth and announced a cut in its massive bond-buying stimulus, a sign of its confidence in the economy's prospects.

The Fed said in a statement that it would reduce its monthly bond purchases to $45 billion from $55 billion, a widely expected decision that keeps it on track to end the program as soon as October. The decision was unanimous.

At the end of a two-day policy meeting, the central bank said the economy "will expand at a moderate pace and labor market conditions will continue to improve gradually" -- an assessment that tracked its statement last month.

Recent information "indicates that growth in economic activity has picked up recently, after having slowed sharply during the winter in part because of adverse weather conditions," the Fed said in the statement.

The Fed has now reduced its monthly bond purchases by a cumulative $40 billion in four steady steps. The gradual tapering seeks to close an era in which the central bank's balance sheet quadrupled to more than $4.2 trillion through three separate purchase programs launched to battle the financial crisis and recession and the slow growth that followed.

The projected end of the program sets the stage for a series of policy decisions expected next year on when and how to reduce the balance sheet to more usual levels, and, most notably, when to move the target interest rate above the near zero level maintained since late 2008.

Janet Yellen's second policy-setting session as Fed chair offered no new guidance on that front. The Fed has said it will keep the overnight target rate between 0 and 0.25 percent "for a considerable time" after the bond-buying program ends -- language reiterated Wednesday.

The Fed's decision to further slow its bond-buying came despite new data showing the economy grew at a disappointing 0.1 percent annual rate at the start of the year. The Fed had already said it anticipated a poor first-quarter result because of a harsh winter in many parts of the United States.

Going forward, the bond purchases will be split between $25 billion of Treasuries and $20 billion of mortgage-backed securities, a cut of $5 billion a month to each.

Analysts expected little out of this session as the Fed's policy committee enters what may prove a sort of holding pattern as it closes out the bond purchases and debates when an initial interest rate increase may be warranted. Investors currently expect the first rate rise around the middle of next year.

With little sign of inflation and unemployment at a still-elevated 6.7 percent, Yellen has said there is plenty of "slack" in the economy and a need to keep rates low.

In an April 16 speech, she said the United States may still be more than two years away from what the Fed views as the "longer-run normal unemployment rate" of between 5.2 percent and 5.6 percent.

"Thus far in the recovery and to this day, there is little question that the economy has remained far from maximum employment," she said.

While the latest report on GDP growth didn't throw the Fed off course, it could influence the discussion going forward. The 0.1 percent annual growth rate was far below expectations.

"This certainly is going to give Janet Yellen's camp a lot more ammunition to remain on the more neutral to dovish side," Richard Cochinos, a currency strategist at Citi (C) in New York, said ahead of the Fed's decision.

It will also focus attention on the next round of data on jobs and inflation as signs of whether what the Fed analyzed as a winter lull was in fact nothing more than that.

-Additional reporting by Daniel Bases in New York.

 

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