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Wall Street bracing for volume surge

Written By limadu on Rabu, 31 Oktober 2012 | 12.08

U.S. financial markets will reopen Wednesday, after being shuttered for two days to deal with the devastating impact of Superstorm Sandy.

NEW YORK (CNNMoney) -- Trading volume is expected to surge when U.S. financial markets reopen Wednesday, two days after Superstorm Sandy prompted an unexpected shutdown on Wall Street.

Throughout much of the month, an average of 3.5 billion shares have been exchanging hands each day, but experts say that could double on Wednesday.

"It's hard to say which direction stocks will move, but we're expecting to see a whole lot of trading volume -- three days worth of trading all in one," said Fred Dickson, chief market strategist at D.A. Davidson & Co.

Wednesday will be particularly busy for investors since it also happens to be the last day of the month, a time when traders, hedge funds and mutual funds often square up their positions.

And for some, the day also marks the last day of the fiscal year. It's a day when many mutual fund managers will try to offset their capital gains with their losses to minimize the distributions paid out to shareholders, said Dickson.

Related: U.S. stock markets to reopen Wednesday

Home improvement stocks like Home Depot (HD, Fortune 500) and Lowe's (LOW, Fortune 500) will likely be big movers, as well as insurance stocks, such as Allstate (ALL, Fortune 500), AIG (AIG, Fortune 500) and Hartford Financial (HIG, Fortune 500). Retailers, airlines and hotels that have been affected by the storm will also be in focus.

Wednesday also marks the first day investors have to react to non-storm related news.

Apple (AAPL, Fortune 500) kicked off the week with a management shake-up, announcing that two of its top executives had been shown the door. Scott Forstall -- responsible for the iOS software running iPhones and iPads, and often considered an heir-in-waiting to CEO Tim Cook -- is the most prominent executive departing Apple.

Late Tuesday, the Walt Disney Company (DIS, Fortune 500) agreed to buy Lucasfilm in a stock-and-cash deal valued at $4 billion, gaining control of the blockbuster Star Wars franchise.

Related: NYC flights still grounded

Also, many Facebook (FB) employees will finally get a chance to sell their shares for the first time, after a lock-up on their so called "restricted stock units" expired. With the market finally open, a total of 234 million Faebook shares will be newly eligible for sale Wednesday.

The storm also prompted many companies to postpone their quarterly earnings reports, but others, including Ford (F, Fortune 500), Archer Daniels Midland (ADM, Fortune 500) and TD Ameritrade Holding Corp (AMTD) still issued their results so those stocks may be active Wednesday.

Hertz (HTZ, Fortune 500), Mastercard (MA, Fortune 500), Visa (V, Fortune 500), First Solar (FSLR) and Metlife (MET, Fortune 500) are among the firms on tap to post results Wednesday.

While investors will have quite a bit of corporate news to get through, economic data that has come out over the last two days in the United States or abroad hasn't been "earth-shattering," said Peter Tuz, president of Chase Investment Counsel.

But investors will also be gearing up for the crucial October jobs report, which is scheduled to come out Friday. It will be the final reading on the health of the job market before the presidential election next week. While there has been some concern about the report being delayed, the Bureau of Labor Statistics says it is working hard to stay on schedule.

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First Published: October 30, 2012: 5:05 PM ET


12.08 | 0 komentar | Read More

A new type of 401(k): No fund picking allowed

With a managed 401(k), you can leave investing decisions to the experts.

(Money Magazine) -- The 401(k) is the best tool you have to save for retirement, but it can be an awfully clumsy one.

In a typical plan, your employer essentially hands you a list of funds and says, "Here, you pick." Maybe you spend a weekend agonizing over whether to invest in this stock fund that looks for "opportunities for value," or this other one that goes after "emerging opportunities." (Both sound great!)

For some, fine-tuning a retirement portfolio becomes a fascinating pursuit; for most, it falls somewhere between tedious housekeeping and an anxiety-provoking puzzle.

The catastrophic market crash of 2008, which took the average 401(k) balance down by 30%, has done lasting damage to the confidence of savers. Even though the S&P 500 (SPX) had doubled from its low, only 14% of workers at the start of 2012 were very confident about their retirement prospects, compared with 27% in 2007.

So if you've thought about just throwing up your hands, you aren't alone. "People have been given a license for a machine they don't know how to drive," says David Booth, founder and co-CEO of Dimensional Fund Advisors, chatting at his firm's headquarters in Austin.

With $235 billion under management, Dimensional has quietly built a reputation as one of the most sophisticated fund managers in the business. Its low-cost index-like funds have acquired a mystique, in part because they are mainly sold to institutions and clients of fee-only advisers.

Now Booth wants to go after a much broader market of 401(k) savers. And he has a proposition that may surprise you: You should be able to all but ignore your portfolio.

The decisions you must get right are all about planning -- how much to save, how much income you'll need -- not investing.

Dimensional's Managed DC service, which was launched in the U.S. this summer, is an intriguing entry in a small but growing category of managed 401(k) plans. Competitors include the more established Financial Engines and a firm called Guided Choice, recently tapped by Schwab to offer advice built around the brokerage giant's index funds.

What all the services have in common is that they set up and run a portfolio for each participant in a 401(k) plan, based on his or her age, savings, and income goals. (You can use one of these programs only if your employer makes it an option.)

So when you log on to your plan's website, you won't be given a menu of funds you can move money in and out of. That part is out of your hands. Instead, you'll get online tools that help you see whether your contributions are likely to get you to the retirement you want, and warn you to increase your savings when you are at risk of falling short.

It remains to be seen whether over the long run a custom approach will improve 401(k) savers' outcomes. Still, the plans are worth your attention, because it's not just these businesses saying that the 401(k) needs fixing.

For years pension experts have worried that 401(k)s put too much emphasis on the investing process, do too little to help people plan for the income they'll need, and allow participants to be too aggressive during market rallies or too cautious after crashes.

Understanding the better mousetraps Booth and his competition are trying to build can teach you how to better save for your retirement, regardless of whether you are in one of these plans.

Here are four seriously bright ideas behind what just might be the 401(k) of the future.

BRIGHT IDEA NO. 1: You won't win by becoming a brilliant investor

It's not that owning good funds is irrelevant. Over the past 15 years, the best-performing large-cap stock fund beat the S&P 500 index by an annualized 6.2 percentage points. If you happened to pick that winner in advance, then, yes, that would have made a big difference.

Trouble is, over the past decade 60% of actively managed U.S. large-cap funds underperformed the S&P, according to S&P Dow Jones Indices. And the noise of the market often drives fund investors to buy and sell at the wrong times.

From 2000 to 2009 the average fund earned an annual 3.2%. Morningstar data show the return to the shareholders -- measured by tracking money flows in and out -- was about half as much.

You can work to getting better at investing, but the evidence is that this won't get you far. For some savers, farming out investment choices would be a relief.

"The majority of 401(k) participants are not particularly informed about investing decisions, nor are they very interested," says Christopher Jones, chief investment officer at Financial Engines.

For those used to playing a more active role, though, taking a hands-off approach might not be so easy. Managed plans are generally take it or leave it: You can't swap some of their picks for your own ideas. And you have to pay for the service. Some advisers charge up to 0.6% on top of fund costs; Dimensional uses its own broadly diversified portfolios and charges a flat 0.6%. (That's besides other possible 401(k) costs for things like record keeping.)

Related: Tips on planning for retirement

Although the managed services pick the funds you'll hold, Financial Engines and GuidedChoice do allow you to change your exposure to stocks depending on your comfort level. At the same time, their calculators instantly show how raising your risk could lower your income if markets are poor.

Dimensional takes a more radical approach: It never asks about your appetite for risk. It sets an asset allocation it calculates will give you the best shot at hitting your income goals -- a strategy that will vary depending on your savings and time to retirement.

Dimensional thinks risk tolerance is too wobbly a concept. When stocks soar, everyone has a stomach for risk; after losses, many aggressive investors realize that they want out.

"If people answered risk questionnaires accurately, no one would be in equities," says Michael Lane, head of Dimensional's retirement business. "We don't ask questions that at the end of the day don't matter."

Do it on your own: If you can't, or won't, turn over control of your money, train yourself to mess with it less often. One way to do that is to not stray too far from a moderate asset allocation, perhaps an age-based rule like 100 or 110 minus your age in stocks. That way when the market crashes, you're less likely to be gripped by an urgent need to act.

BRIGHT IDEA NO. 2: It's not about hitting "the number"

The way you measure success in a standard 401(k) plan is by getting as close as you can to a savings target, a.k.a. your "number."

Mathematically there's nothing wrong with setting a number. Psychologically, though, it's far too fuzzy: What looks like a huge stash may not be enough to produce the income you need. "Even $1 million doesn't go that far anymore," says Olivia Mitchell, a pensions expert at the University of Pennsylvania.

Following the popular 4% rule of thumb would leave you with an initial income of $40,000. Not bad, but even with Social Security thrown in, it may not be living large for someone with a six-figure income before retirement.

Related: Countdown to retirement

On the other hand, some online retirement calculators spit out targets so seemingly high that younger savers could despair of ever reaching them. "We need to get the focus off of cash piles and onto cash flows," says Alicia Munnell of the Center for Retirement Research at Boston College.

The new 401(k) plans constantly track your progress in terms of your likely income in retirement. For example, you might see a dollar range based on your current savings habits, planned retirement age, and Social Security benefit. They also help you estimate how much you'll need.

Dimensional, for example, separates that into two buckets: money you need to cover essential costs, like food and health care premiums, and funds for luxuries, such as an annual vacation. That distinction becomes especially important late in your career, as Dimensional decides how much risk to take with your portfolio. (See bright idea No. 4.)

If you have less than a 15% probability of achieving your desired income goal, Dimensional's software could even force you to alter your plan -- by saving more, for example, or accepting a lower future income or later retirement.

Related: Are you saving enough for retirement

But Sherrie Grabot, CEO of GuidedChoice, says that even the simple exercise of showing savers how much income their nest egg will probably generate is powerful. "People understand how much their monthly bills are," she says. "If the numbers don't match up, they know they can't afford to retire. They get it."

Do it on your own: Managed 401(k) plans generally try to get you to between 70% and 80% of your pre-retirement income, including Social Security.

The free Retirement Income Calculator on the website of T. Rowe Price sets a 75% goal, and is a good way to get a ballpark estimate. If you want to depend less on market fortunes, try plugging in a conservative portfolio, rather than T. Rowe's suggested allocation, and see how much you'd have to save to make that work.

BRIGHT IDEA NO. 3: And it's not about watching your balance grow, either

Another consequence of focusing on the pile of money is that checking your balance can make a bear market look like a much bigger setback than it really is, especially for savers 20 years or more from retirement.

Grabot says that stocks could drop 40%, but a younger saver might see only a 5% to 10% drop in his probable income. "That's a very different feeling," she says.

How can that be? First, the income you'll be able to tap in retirement is driven by more than your portfolio. There's also your Social Security, as well as interest rates, which affect the value of an income-producing annuity you might choose to buy when you retire.

Even more important for the young is the fact that the investment portfolio you have today is just a fraction of the nest egg you'll be building up with contributions over the rest of your career. And when stocks drop, that means your future contributions are actually buying more shares.

Do it on your own: If you are a couple of decades away from retirement, stay focused on the bigger picture during bear markets.

"You're getting stocks on sale," says Christine Fahlund, a senior financial planner at T. Rowe Price. As you get nearer to your retirement date, however, your balance -- and what you do with it -- will matter a lot more. Which brings us to the last bright idea.

BRIGHT IDEA NO. 4: Take money off the table when you hit goals

As you age, you know that you are supposed to reduce your exposure to equities. That is the key selling point of target-date mutual funds, which make this shift automatically for you. But they're a fairly blunt instrument.

"Reducing risk should not be about age only," says David Wray of the Plan Sponsor Council of America, a trade group for employers offering 401(k)s. "It should also be about the accumulation."

In other words, once you have built up enough to pay for certain key needs in retirement, why keep that money at risk?

Related: The truth behind target-date funds

Dimensional's approach to this question is unusual. Within 15 years of retirement, Dimensional looks at your bare-minimum income goal and starts shifting money into a separate bucket of investments that it calculates will provide a 96% chance of hitting that number. (Dimensional stresses that this is not a guarantee.)

Money beyond the essentials can be invested more aggressively. By retirement, much of the essential portfolio will be in funds holding Treasury Inflation-Protected Securities, or TIPS. That idea may be a tough sell these days, with Treasury yields still at crazy lows.

The problem is mitigated, however, for those who plan to put the money into an annuity at retirement, which Dimensional strongly encourages. If interest rates climb, the bond funds will take a hit to their returns, but payouts on annuities will also be higher.

Do it on your own: It's not easy to replicate a strategy like Dimensional's on your own. But thinking ahead about how you'll pay for your essential needs -- not the cruise you might one day like to take but the regular grocery shopping and property tax bills that can't be put off -- can help you avoid taking too much risk as you near retirement.

You could easily be retired for 20 or 30 years, so it may seem like you have lots of time to wait out a bad market and capture stocks' higher long-run return.

Once you've stopped working, however, a market drop will be devastating if you're suddenly forced to turn long-term investments into gas money.

"People have been focusing on the rate of return and how much they can accumulate," says Lane. That's what most 401(k) plans, with their emphasis on investments instead of planning to replace income, train you to do.

As you get closer to the end of your career, instead of counting on riding the bull to a successful retirement, you need to start thinking about how you'll break the fall should you get thrown. To top of page

First Published: October 30, 2012: 2:13 PM ET


12.08 | 0 komentar | Read More

Disney to buy Lucasfilm for $4 billion

Lucasfilm founder George Lucas, creator of Star Wars, is selling his company to Disney for $4 bilion.

NEW YORK (CNNMoney) -- The Walt Disney Company agreed Tuesday to buy Lucasfilm in a stock-and-cash deal valued at $4 billion.

The deal will make Lucasfilm owner George Lucas a significant shareholder in Disney, which will pay for the film company with $2 billion cash and around 40 million shares of its stock.

The takeover will give Disney (DIS, Fortune 500) control of Lucasfilm's blockbuster Star Wars franchise, which encompasses both filmed productions and a massive merchandising operation. Disney will also absorb Lucasfilm's special-effects production business, Industrial Light and Magic, and its Skywalker Sound audio production studio.

"It's now time for me to pass Star Wars on to a new generation of filmmakers," George Lucas said in a written statement. "I've always believed that Star Wars could live beyond me, and I thought it was important to set up the transition during my lifetime."

Lucas said he will work as a creative consultant on Star Wars Episode 7, the first of a planned new trilogy of live-action Star Wars movies. It is targeted for release in 2015, Disney said.

"The film is in what I'll call early-stage development right now," Disney CEO Bob Iger said on a conference call with analysts. Lucas did not join him on the call.

Disney hopes to essentially relaunch the Star Wars film franchise, which had its last installment in 2005 with Revenge of the Sith. Following the three planned sequels, the company envisions releasing even more Star Wars movies at a rate of a new film every two to three years.

Future movies may not be sequels but movies that focus on fringe characters. Disney also believes there is potential for a television series.

"Disney respects and understands -- perhaps better than anyone else -- the importance of iconic characters," Iger said.

Disney's Lucasfilm purchase is the culmination of transition plans Lucas began forming several years ago as he "began contemplating a form of retirement," Iger said. "He and I started talking about a year and half ago but only decided pretty recently that this is something we both wanted to do."

Disney executives repeatedly drew parallels between the Lucasfilm deal and the company's 2009 acquisition of Marvel Entertainment, which also cost $4 billion.

Both studios operate entertainment franchises that can support a steady series of tentpole movies and fuel ancillary merchandising, theme park and other revenue streams, executives said.

They also cited the past precedent of Pixar, which Disney purchased in 2006. Apple (AAPL, Fortune 500) co-founder Steve Jobs, Pixar's creator, became Disney's largest shareholder, with a stake that dwarfs Lucas' planned share. Steve Jobs' family trust now controls his nearly 8% share of the company.

In valuing Lucasfilm, Disney focused almost entirely on the Star Wars franchise, company executives said.

"We didn't ascribe any value to the Indiana Jones franchise because of the encumbrances that exist," Iger said, referring to Paramount Pictures' ongoing stake in the series it has distributed.

News Corp. (NWS) unit 20th Century Fox has been Star Wars' distributor until now. It retains some rights to past films but has no stake in Disney's planned future installments, company executives said.

Kathleen Kennedy, current co-chairman of Lucasfilm, will become president of Lucasfilm, reporting to Walt Disney Studios Chairman Alan Horn. Lucasfilm employees will remain based at the company's San Francisco headquarters.

How active will Lucas be involved in shaping future Star Wars films? Iger's answer to that question: "It's his intent to retire."

That will come as a relief to some of the fans who flocked to sites like Twitter, where #DisneyStarWars quickly became a trending topic.

One analyst on Disney's conference call shared their mixed emotions.

"I can say, Bob, that you're risking the wrath of the entire Internet," he told Iger. "But, I dunno, I'm excited." To top of page

First Published: October 30, 2012: 4:35 PM ET


12.08 | 0 komentar | Read More

Chrysler profits surge 80%

Written By limadu on Selasa, 30 Oktober 2012 | 12.08

NEW YORK (CNNMoney) -- The comeback continues at Chrysler.

The automaker reported third-quarter profits Monday that rose 80% versus a year ago, buoyed by strong sales in U.S.

Chrysler's third-quarter net income hit $381 million, up from $212 million last year, though down versus the first two quarters of this year.

Revenues came in at $15.6 billion, up 18% versus last year.

Despite being majority-owned by Italian automaker Fiat, Chrysler is less exposed to Europe that competitors Ford and General Motors, both of which had their second-quarter results weighed down by the continent's ongoing crisis.

Last week, Ford (F, Fortune 500) announced plans to close two plants in England, continuing a string of recent cuts in Europe.

But the American auto market has been a different story. U.S. auto sales last month hit their highest level in more than four years.

Chrysler's worldwide vehicle sales for the third quarter were 556,000, up 12% from last year due mainly to the company's 13% sales gain in the U.S. The company confirmed its 2012 guidance, projecting net income of roughly $1.5 billion for 2012.

Ford is scheduled to report its third-quarter results Tuesday morning, with General Motors (GM, Fortune 500) up Wednesday, assuming the presentations aren't rescheduled because of Hurricane Sandy. To top of page

First Published: October 29, 2012: 4:55 PM ET


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Apple shakeup: Mobile head and retail chief are out

Scott Forstall , one of Apple's most influential executives, is on his way out the door.

NEW YORK (CNNMoney) -- As Hurricane Sandy battered the Northeast on Monday, a different kind of storm was brewing in Cupertino, Calif.

Apple (AAPL, Fortune 500) shook up its management team, announcing that two of its top executives had been shown the door.

Scott Forstall -- responsible for the iOS software running iPhones and iPads, and often considered an heir-in-waiting to CEO Tim Cook -- is the most prominent executive departing. He'll stick around as an advisor for the rest of this year, then leave the company, Apple said in a press release.

The move is a surprise: Forstall was one of the top executives at Apple over the past decade, and his team's software fuels Apple's premiere devices.

Yet Forstall was also behind Apple's Maps software, a debacle that was widely mocked on social media. The debut of Maps was so disastrous that Cook issued a public apology for the app and recommended rival applications while Apple worked on improvements-- including the Google Maps software that it replaced.

Siri, the iPhone and iPad's electronic personal assistant, is also an incomplete product. The service is frequently down and remains very hit-or-miss when delivering answers.

A group of Apple executives will replace Forstall, each sharing some of his responsibilities.

Eddy Cue, head of Apple's iTunes and iCloud services, will take over Siri and Maps. Mac OS chief Craig Federighi will take control of iOS, uniting Apple's two operating systems into one product group. And Jony Ive, Apple's head of hardware design, will be in charge of Apple's software look and feel going forward as well.

Cook said the management changes will "encourage even more collaboration" between the company's hardware and software teams.

"We are in one of the most prolific periods of innovation and new products in Apple's history," Cook said in a written statement.

Apple made a few other executive changes as well.

Apple's widely criticized retail store chief, John Browett, is leaving after just nine months of the job. Since coming over from British electronic store giant Dixons, Browett has had one stumble after another, including slashing the number of workers in stores -- for which Cook also had to apologize.

As the company searches for an executive to replace Browett, Cook will personally oversee the retail unit.

Apple also announce that Mac hardware guru Bob Mansfield -- who planned last year to retire, but backtracked two months later -- will head a new group called "Technologies."

The unit will focus on mobile devices, putting all of Apple's wireless products under one roof. Mansfield will also head the semiconductor teams, "who have ambitious plans for the future," Apple said. To top of page

First Published: October 29, 2012: 6:38 PM ET


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Hurricane deductible could cost homeowners thousands

Some homeowners who sustain damage from Sandy will have to pay thousands of dollars upfront for a hurricane deductible before insurance payments kick in.

NEW YORK (CNNMoney) -- Thanks to a little-known hurricane deductible, homeowners with property damage from Hurricane Sandy could be on the hook for thousands of dollars before their insurance payments kick in.

Increasingly, insurers in hurricane-prone states -- including almost all of those in states affected by Sandy -- have been adding hurricane deductibles to their homeowner's insurance policies that go into effect when named storms have sustained winds of 74 miles per hour or more, as measured by the National Weather Service.

Unlike regular deductibles that require you to pay a set dollar amount, typically $500 or $1,000, hurricane deductibles often require homeowners to cough up 1% to 5% of their property's value. In places like Florida, the deductible can run as high as 10%.

That can result in thousands of dollars in out-of-pocket costs. A loss on a $200,000 house covered by a policy that carries a 5% deductible could cost the homeowner $10,000 before the insurer pays any part of the tab. As a result, many claims result in no insurance payoff at all.

Related: Storm is already costing us billions

The ins and outs of hurricane deductibles vary by state, insurer and by individual policy. In New York State, for example, the Department of Financial Services site lists various insurers' hurricane deductibles and each one varies dramatically. Allstate's 5% hurricane deductible only kicks in when wind speeds exceed 100 miles per hour. Meanwhile, State Farm's deductibles are 2% or 5% and can apply to storms with lower wind speeds of 74 miles per hour. ACA Insurance has a 1% deductible for Category 2 (96 to 100 mile per hour winds) or higher hurricanes and a fixed deductible for Category 1.

Generally, the more at-risk the home is -- the closer it is to the shoreline, for example -- the more likely it is to have a stiff hurricane deductible. And the coverage only affects damage caused by high winds. Private homeowners insurance almost never covers flood damage. Consumers should examine their policies to see how their deductible impacts their coverage.

Related: Sandy insurance losses could hit $10 billion

Insurers along the Eastern seaboard and in the Gulf started putting these deductibles in place after Hurricane Andrew in 1992, which caused $15.5 billion in damages, according to the Insurance Information Institute. The insurers claimed hurricane-related losses were so high that they had to add the deductible in order to keep property insurance available and affordable.

Hurricane Sandy is expected to cause as much as $10 billion in damages, according to Eqecat, a disaster modeling firm. To top of page

First Published: October 29, 2012: 10:30 PM ET


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Bubble trouble in junk bonds

Written By limadu on Senin, 29 Oktober 2012 | 12.08

NEW YORK (CNNMoney) -- As yield-hungry investors continue to jump head first into junk bonds, experts are warning that a potential bubble may be forming.

So far this year, investors have plowed a record $49 billion into U.S. high-yield bond mutual funds and exchange-traded funds, more than twice as much as the previous record of $21 billion, set in 2009, according to fund flow tracking firm EPFR Global.

"That alone is indicative of an overheating type of market," said George Rusnak, director of fixed income at Wells Fargo, adding that he trimmed his clients' exposure to high-yield corporate bonds last month to neutral from overweight.

"In a year, we earned a 20% return on our high-yield corporate bond investments, but we've been starting to see more signs of a bubble-like phenomenon," Rusnak said. And as the Federal Reserve sticks to its low-rate monetary policy, and investors keep reaching for yield, Rusnak expects the high yield market to get even more bloated.

Frenzied buying has pushed yields on junk bonds to record lows of about 6%. In 2009, the average yield of bonds included in the Bank of America Merrill Lynch High Yield Master II Index stood at a whopping 19.5%.

Related: It's time to get choosy about junk bonds

Experts are also worried that investors are taking on more risk than they intend to, as weaker companies that don't typically have access to the $1.3 trillion high-yield bond market have been able to issue bonds because of the increased demand.

"Up until recently, bond issues were of good quality and purpose, though arguably a bit over-priced in certain circumstances," said Tim Gramatovich, chief investment officer at Peritus Asset Management. "This is beginning to change."

For example, Gramatovich noted that Alpha Natural Resources (ANR, Fortune 500) recently issued bonds with a decent rating and a 10% yield, which would seem like a "tremendous value," but is far from that when considering the tepid outlook for the coal industry.

Related: Higher yields on savings? It will be awhile

Gramatovich, who also manages the Peritus High Yield ETF (HYLD), notes that companies, such as Petco and Jo-Ann Stores, are issuing more so-called PIK-Toggle notes. The PIK stands for "pay in kind" and allows a company to pay bondholders with more bonds rather than cash.

"If the company can't afford to pay me in cash, then why would I want more bonds they can't pay?" asked Gramatovich. "It is amazing how quickly investors lose their discipline and composure."

While the default rate for U.S. high-yield bonds is expected to end 2012 unchanged from the previous year's rate of around 3.5% according to Moody's Investor Services, Gramatovich says investors should be prudent and choose companies that can still pay their bills if the economy turns sour.

"We are not drinking any growth Kool-Aid and continue to believe that the world remains mired in a no growth, recessionary mode for the foreseeable future," he said. "It does appear this conservatism is warranted."

Gramatovich said that for his fund, which has a robust yield of 9%, he's finding the best values in smaller companies, such as nuclear waste firm EnergySolutions (ES) and propane gas distributor Ferrellgas Partners (FGP). His fund also includes bonds issued by Supervalu (SVU, Fortune 500) and Navistar (NAV, Fortune 500).

"Smaller companies don't necessarily mean more risk," said Gramatovich. "The primary risk in the high-yield bond market is default, so the most important thing is that a company is performing well, and I believe I'm likely to keep getting paid."

Meanwhile, Rusnak of Wells Fargo has been finding opportunity in high-yield bonds outside of corporate issues, with floating rate bonds that protect against rising interest rates, as well as high-yield municipal bonds. To top of page

First Published: October 28, 2012: 10:19 PM ET


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10 questions for China's Huawei

Huawei, China's largest telecom, has been the subject of congressional scrutiny.

HONG KONG (CNNMoney) -- The U.S. House Intelligence Committee released a stinging report in early October focused on the business practices of Huawei and ZTE, two Chinese telecom companies that would like to expand their operations in the U.S.

The report recommended the U.S. "view with suspicion" any plans for domestic expansion by Chinese telecom companies, saying they "cannot be trusted to be free of foreign state influence and thus pose a security threat to the United States and to our systems."

Huawei rejected the report's findings, calling them "baseless." CNNMoney met last week with Scott Sykes, the company's vice president for corporate media affairs, in Hong Kong. What follows is an edited transcript of the conversation.

What was your reaction to the House Intelligence Committee report?

It is just very disappointing. We engaged with the committee in good faith throughout the investigation. We had in-person meetings in Shenzhen, Washington and Hong Kong. One of our top executives appeared at a congressional hearing and we even provided a list of our shareholders.

But the committee completely ignored the really important and pertinent facts. We've been in business for 25 years. We've never had any security issues. If we did have security problems, we wouldn't have gotten to be a $32 billion company.

The committee also ignored the fact that companies like Huawei and Ericsson (ERIC) and Cisco (CSCO, Fortune 500) are transnational businesses. We all use essentially the same components, in the same proportion, from the globally interdependent supply chain.

If the report and the investigation was really about broadly protecting the integrity and the security of the telecommunications infrastructure in the United States, then all vendors, no matter their country of origin, should be looked at equally and fairly and transparently, with the same criteria applied to everybody.

Related: What makes China telecom Huawei so scary?

We are already participating in good faith in the U.S. market. We spent $6.6 billion just last year with American companies, and their components go into our products. We opened an office in 2001 in Plano, Texas. Today we have 13 offices. We employ 1,800 people in the U.S. We're bringing jobs, competition and really good technology for a really good price.

Where does Huawei go from here?

We need to keep talking and sharing our story. We want to be open and transparent. We are a private company that is 100% employee owned. We are not a state-owned enterprise like many large companies in China.

We are really taking great strides to be open and transparent because we know it's important. We put out an annual report that details our financials, even though, as a private company, we are not required to do so.

It has been suggested that listing Huawei on an international exchange would take some heat off the company. Have you hired bankers to look at options?

No, we have no plans of doing that. Of course we consider many things at many times. We are a commercial company, and it would behoove us to consider lots of things, but as far as the recent reports, you can put that in the category of rumor.

What else can you do to encourage trust? Can you show governments your source code?

Yes, and we are already doing that today. In the United Kingdom, we have been the sole supplier of equipment for the national broadband network for six years, with no security problems.

As part of our operation there, we have a cybersecurity assurance center. Inside that center, officials from the government can look inside the source code of our equipment, and do whatever they like to feel assured about the security of our products.

Yesterday, an independent chairman of our business indicated a willingness to do the same thing in Australia.

Related: The trouble with China's Huawei

Many, if not all, of our competitors would not do that. For a tech company, the source code is your secret sauce and your intellectual property.

Did the House Intelligence Committee ask to see your source code?

There was no specific request as far as I know. But are we willing to do it? Of course. In other places we have always been willing to be open and share our source code. Let us know what you need to feel secure, and we'll do it. That's the bottom line.

The House committee claimed to have uncovered criminal wrongdoing by Huawei officials, including fraud and bribery. Their report said those cases would be referred to the Justice Department. Have you been contacted by any law enforcement officials?

What are these allegations? That part of the report is classified, and we haven't seen any allegations. If there are specific allegations, we would be happy to respond. We cannot respond to what we don't know.

But have have you been contacted by the Justice Department?

No, not that I know of. This is the thing -- if there are facts, if there is evidence -- the United States is a country ruled by law. Let's be fair. If you've got something to say, put your cards on the table. Let's go. What are the facts?

I think the whole thing is just really, really disappointing. It's very frustrating.

What I can say is that we have never engaged in any cyberhacking, malfeasance, or other nefarious activity on behalf of the Chinese government or any government.

We are an international company. Seventy percent of our revenue today comes from outside China. If we were ever thought or proved to be doing that kind of nonsense, we would lose 70% of our business overnight. And we don't want to do that.

Are you seeing much return on your lobbying and public relations efforts in Washington?

I think it is having an impact. For many years, we were terrible at telling our own story, and that has contributed to misunderstandings. There is still a lot of room for improvement, but in the past five years we've gotten much, much better.

The reality is that in the last 10 years, cybersecurity has become a major concern. And countries are beginning to see telecom infrastructure as a national asset.

But all vendors need to be looked at the same way under exactly the same kind of criteria. Every vendor's source code should be tested. If that's going to be the criteria for Huawei, it should be the rules for everybody. Let's be fair.

Is there a risk that, despite your investments and lobbying, the U.S. market will never open to Huawei?

The tone is slowly changing. I think the fact we are engaging is helping, and telling our story is helping.

We are doing everything we can think of. We are engaging, talking and giving our perspective. We are sharing information about our company financials, our corporate governance structure and our executive leadership.

We are hopeful that, while it might take some time, our situation will change. Part of it is that relationships and comfort take time to develop. There are still people in the United States who have never heard of our company. It will take some time.

Huawei founder Ren Zhengfei is notoriously media-shy. Would more openness on his part help improve the company's position with U.S. lawmakers?

It is true that he has never given any media interviews. And I would speculate that he probably never will, at least not in any prolific way.

You can point to a number of reasons to explain that. His generation -- he is 68 -- this is the way things were done. He has built this business from nothing to a $32 billion company in the space of 25 years. He has never done media interviews, and the company has done exceedingly well.

It's kind of like: "Tell me why I should?" To top of page

First Published: October 28, 2012: 10:29 PM ET


12.08 | 0 komentar | Read More

Top U.S. supercomputer guns for fastest in world

NEW YORK (CNNMoney) -- A new kind of global arms race is unfolding -- and this one is measured in petaflops.

Titan, the U.S. Department of Energy's top open science computer, is going live on Monday with an upgrade that will likely make it the fastest supercomputer on the planet. At 20 petaflops -- that's 20 quadrillion calculations each second -- Titan outperforms by four petaflops the DOE's Sequoia supercomputer, which has held the crown since June. The official "Top 500" ranking of the world's fastest supercomputers will be announced next month.

The United States is back on top of the computing world after ceding ground to Japan, China and Germany over the past three years.

That's not just a badge of honor: It's also critical to national security and the country's economic viability. Titan will help U.S. scientists pioneer research into climate change, biofuels, nuclear energy, new materials and other crucial fields, which will help them create the next wave of car batteries, switchgrass ethanol and improved weather forecasting tools -- all developed in America.

Formerly known as Jaguar, the Cray (CRAY) supercomputer at the DOE's Oak Ridge National Laboratory got a major upgrade and an appropriately intimidating new name.

Titan replaced its predecessor's 224,256 central processing units (CPUs) with 299,008 faster CPUs made by AMD (AMD, Fortune 500), along with 18,688 graphics processing units (GPUs) made by Nvidia (NVDA). The GPUs serve as accelerators to the CPUs. That's why Titan has just a third more central processors and the same number of computing nodes and cabinets as Jaguar, but delivers 10 times the performance.

Even more crucially, Titan's processors are five times more energy-efficient than their predecessors.

Related story: What it's like to play with the Jaguar supercomputer

Power constraints are the biggest challenge in the race to maximize speed. Running at just 2.3 petaflops, Jaguar required 7 megawatts of energy -- the same amount of electricity required to power 7,000 homes. The cost of simply plugging in Jaguar was $7 million last year.

If Jaguar had been expanded with CPUs, not GPUs, a 20 petaflop machine would have required 60 megawatts of power, at a cost of $60 million. That would have been a dealbreaker.

The Oak Ridge National Laboratory says Titan's energy costs are very slightly higher than Jaguar's. The system's design is "a responsible move toward lowering our carbon footprint," says Jeff Nichols, laboratory director at the Oak Ridge National Laboratory.

The GPUs powering Titan aren't special. They're actually same the hardware that's in high-end consumer PCs, popularized by hardcore PC gamers.

It's not the first time gaming has helped supercomputing. IBM's (IBM, Fortune 500) RoadRunner supercomputer at the Los Alamos National Laboratory runs on the same processors used in the Sony (SNE) PlayStation 3.

"It costs billions of dollars to develop high-performance computing processors, and there's no way to make that money back," says Steve Scott, chief technology officer at Nvidia. "We couldn't do what we're doing without a consumer business for these processors."

So what's the DOE's plan for all of Titan's new speed and power?

The Oak Ridge National Laboratory plans to stay focused on the 40 projects currently using the supercomputer. Instead of tens of millions of CPU hours, each project will get hundreds of millions.

That will help researchers accelerate their breakthroughs. Still, it's only a matter of time before they'll want more. By 2016, the Department of Energy will be upgrading Titan to its successor, which it hopes will reach 200 petaflops -- 10 times the speed of Titan.

"Demand will never stop," Scott says. "Once we're on the verge of an exaflop" -- that's 1 quintillion calculations per second -- "scientists will be talking about their demand for a zettaflop." To top of page

First Published: October 29, 2012: 12:15 AM ET


12.08 | 0 komentar | Read More

9 more banks under scrutiny in Libor investigation

Written By limadu on Minggu, 28 Oktober 2012 | 12.08

NEW YORK (CNNMoney) -- A state investigation into whether some of the world's biggest banks manipulated key global interest rates has widened to 16 institutions, according to a source familiar with the matter.

New York state Attorney General Eric Schneiderman issued subpoenas to nine banks in late August as part of an investigation into alleged manipulation of the London Interbank Offered Rate, or Libor, according to the source, who was not authorized to speak publicly.

The Libor process generates rates, based on a survey of banks, that are used as benchmarks for roughly $10 trillion of loans and some $350 trillion of derivatives.

In June, U.K. bank Barclays (BCS) admitted to manipulating Libor to appear stronger during the financial crisis and to benefit its traders' positions. As part of a settlement with U.S. and U.K. regulators, the bank agreed to pay $453 million.

Related: Explaining the Libor interest rate mess

Since then, other banks involved in setting Libor have come under scrutiny. Schneiderman previously subpoenaed Barclays, Citigroup (C, Fortune 500), Deutsche Bank (DB), HSBC (HBC), JPMorgan (JPM, Fortune 500), Royal Bank of Scotland (RBS) and UBS (UBS) in July and early August.

The newly disclosed subpoenas were sent to Bank of America (BAC, Fortune 500), Credit Suisse (CS), Societe Generale (SCGLF), Royal Bank of Canada (RY), Rabobank, Norinchukin Bank, Lloyds Banking Group PLC (LLDTF), Bank of Tokyo Mitsubishi UFJ and WestLB.

A spokesman for U.K.-based Lloyds said in a statement that the bank was "assisting various regulators in their ongoing investigations. And a spokesman for WestLB, now known as Portigon, said the firm "continue[s] as always to help the regulators in any enquiries they may have."

Royal Bank of Canada spokeswoman Rina Cortese said RBC had "determined that our Libor submissions reflected our cost of funds," meaning the bank did not attempt to manipulate the rate.

The other banks either declined to comment or did not immediately respond to requests for comment.

Schneiderman is leading the investigation along with Connecticut state Attorney General George Jepsen. The two have also been in contact with a number of their counterparts in other states.

"The investigation can now be described as a large, well coordinated multistate investigation that includes Attorneys General throughout the U.S.," Jaclyn Falkowski, a spokeswoman for Jepsen, said in a statement. "A primary focus of the multistate's [sic] investigation is to identify whether state and municipal issuers with financial instruments pegged to Libor and other benchmark interest rates have been harmed by the alleged conduct and, if so, to seek recovery of those taxpayer funds."

The Baltimore city government is already the lead plaintiff in a class-action suit against Barclays and other banks alleging that the city lost money due to Libor manipulation. The comptroller of Nassau County in New York has claimed the alleged fraud might have cost his county as much as $13 million on deals related to $600 million of outstanding bonds.

Federal authorities are also investigating the matter, as are some officials overseas. All told, analysts believe the banks implicated in the scandal will rack up billions in losses from pending litigation and regulatory penalties.

CNNMoney's Catherine Tymkiw contributed reporting. To top of page

First Published: October 26, 2012: 2:46 PM ET


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Rajaratnam associate to pay SEC insider fine

Another associate of Raj Rajaratnam has been charged with insider trading by the Securities and Exchange Commission.

NEW YORK (CNNMoney) -- The Securities and Exchange Commission says that a former chief financial officer of Xilinx Inc. has agreed to pay a $1.75 million fine to settle charges he passed inside information to Raj Rajaratnam's hedge fund.

The SEC said Friday that Kris Chellam told Rajaratnam in December 2006 that chipmaker Xilinx (XLNX) would be lowering its revenue guidance two days ahead of the official announcement. Chellam served as chief financial officer of Xilinx between 1998 and 2005 and was a major investor in the Galleon hedge fund run by Rajaratnam, according to the complaint.

The SEC says he was also hired by Galleon the spring after giving it the insider information about Xilinx.

Immediately after Chellam let Rajaratnam know the insider information, Galleon began shorting shares of Xilinx stock. When shares fell 6% on the guidance, Galleon made a profit of nearly $1 million on its short position, according to the SEC.

"Chellam was entrusted with sensitive company information that he divulged to Rajaratnam knowing full well that Rajaratnam would trade on it," said Sanjay Wadhwa, associate director of the SEC's New York regional office, in a statement.

Related: Hall of shame: Eddie Murray charged with insider trading

Rajaratnam was convicted of 14 counts of insider trading in May 2011. He was sentenced to 11 years in prison, a record for insider trading, and ordered to pay a record fine of nearly $93 million. Rajaratnam, who suffers from diabetes and kidney disease, is serving at the Devens Federal Medical Center in Massachusetts.

The case against him has netted a number of associates, most famously Rajat Gupta, the consummate corporate insider and former director at Goldman Sachs (GS, Fortune 500) and Procter & Gamble Co (PG, Fortune 500),. Gupta was convicted in June of passing information to Rajaratnam, and sentenced to two years in prison on Wednesday.

The $1.75 million fine Chellam has agreed to pay is subject to court approval. The SEC handles civil cases, not criminal cases. Its statement made no mention of the possibility of criminal charges being filed against Chellam.

Efforts to reach Chellam for comment were not immediately successful. To top of page

First Published: October 26, 2012: 3:43 PM ET


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Do I need to invest in stocks for retirement?

NEW YORK (CNNMoney) -- Can I skip investing in stocks altogether during retirement if I have saved a lot? -- Andrew C., Florida

After seeing stocks plummet almost 60% between late 2007 and early 2009, I understand why you may want to avoid them. And you can, as long as you're able to live comfortably on a very low withdrawal rate.

With a 100% bond portfolio, taking out 3% of your portfolio's value initially and then adjusting that amount annually for inflation would leave you with roughly an 80% chance of your money lasting 30 years.

But is such a low withdrawal rate realistic? For most retirees, I think not. And once you start taking out more -- even going from 3% to 4% -- avoiding stocks reduces your return potential so much that it leaves you vulnerable to running out of dough early.

That said, you don't have to go overboard. Invest half your savings in stocks and half in bonds -- close to what 401(k) participants in their 60s do on average, according to the Employee Benefit Research Institute -- and you have just under an 80% chance of your portfolio lasting at least 30 years, assuming a 4% withdrawal plan. Even if you reduce your stocks to 30% of your portfolio, that probability falls to just 70%.

Related: Worried about the fiscal cliff: Should I sell?

So why go with anything more than the absolute lowest amount of stocks necessary? Leaning a bit more toward equities may enhance your financial security in other ways.

One benefit is that stocks can help you maintain a higher balance in your retirement accounts than a more conservative mix would (see graphic above).

Having a cushion as you enter your later years can provide a margin of safety in case you run into higher-than-expected health care costs or other unanticipated expenses.

What's more, in the event your spending creeps up, a more stock-heavy portfolio may be better able to absorb the higher outlays. Boosting your withdrawals with a more conservative mix is far more likely to send your nest egg to an early demise.

Related: Make your retirement savings last

You've also got to consider your own circumstances. With few resources beyond your investments -- no pension or little home equity -- you may want to opt for a less aggressive mix. Just remember the price for playing it too safe. To top of page

First Published: October 26, 2012: 1:52 PM ET


12.08 | 0 komentar | Read More

Rajaratnam associate to pay SEC insider fine

Written By limadu on Sabtu, 27 Oktober 2012 | 12.08

Another associate of Raj Rajaratnam has been charged with insider trading by the Securities and Exchange Commission.

NEW YORK (CNNMoney) -- The Securities and Exchange Commission says that a former chief financial officer of Xilinx Inc. has agreed to pay a $1.75 million fine to settle charges he passed inside information to Raj Rajaratnam's hedge fund.

The SEC said Friday that Kris Chellam told Rajaratnam in December 2006 that chipmaker Xilinx (XLNX) would be lowering its revenue guidance two days ahead of the official announcement. Chellam served as chief financial officer of Xilinx between 1998 and 2005 and was a major investor in the Galleon hedge fund run by Rajaratnam, according to the complaint.

The SEC says he was also hired by Galleon the spring after giving it the insider information about Xilinx.

Immediately after Chellam let Rajaratnam know the insider information, Galleon began shorting shares of Xilinx stock. When shares fell 6% on the guidance, Galleon made a profit of nearly $1 million on its short position, according to the SEC.

"Chellam was entrusted with sensitive company information that he divulged to Rajaratnam knowing full well that Rajaratnam would trade on it," said Sanjay Wadhwa, associate director of the SEC's New York regional office, in a statement.

Related: Hall of shame: Eddie Murray charged with insider trading

Rajaratnam was convicted of 14 counts of insider trading in May 2011. He was sentenced to 11 years in prison, a record for insider trading, and ordered to pay a record fine of nearly $93 million. Rajaratnam, who suffers from diabetes and kidney disease, is serving at the Devens Federal Medical Center in Massachusetts.

The case against him has netted a number of associates, most famously Rajat Gupta, the consummate corporate insider and former director at Goldman Sachs (GS, Fortune 500) and Procter & Gamble Co (PG, Fortune 500),. Gupta was convicted in June of passing information to Rajaratnam, and sentenced to two years in prison on Wednesday.

The $1.75 million fine Chellam has agreed to pay is subject to court approval. The SEC handles civil cases, not criminal cases. Its statement made no mention of the possibility of criminal charges being filed against Chellam.

Efforts to reach Chellam for comment were not immediately successful. To top of page

First Published: October 26, 2012: 3:43 PM ET


12.08 | 0 komentar | Read More

Do I need to invest in stocks for retirement?

NEW YORK (CNNMoney) -- Can I skip investing in stocks altogether during retirement if I have saved a lot? -- Andrew C., Florida

After seeing stocks plummet almost 60% between late 2007 and early 2009, I understand why you may want to avoid them. And you can, as long as you're able to live comfortably on a very low withdrawal rate.

With a 100% bond portfolio, taking out 3% of your portfolio's value initially and then adjusting that amount annually for inflation would leave you with roughly an 80% chance of your money lasting 30 years.

But is such a low withdrawal rate realistic? For most retirees, I think not. And once you start taking out more -- even going from 3% to 4% -- avoiding stocks reduces your return potential so much that it leaves you vulnerable to running out of dough early.

That said, you don't have to go overboard. Invest half your savings in stocks and half in bonds -- close to what 401(k) participants in their 60s do on average, according to the Employee Benefit Research Institute -- and you have just under an 80% chance of your portfolio lasting at least 30 years, assuming a 4% withdrawal plan. Even if you reduce your stocks to 30% of your portfolio, that probability falls to just 70%.

Related: Worried about the fiscal cliff: Should I sell?

So why go with anything more than the absolute lowest amount of stocks necessary? Leaning a bit more toward equities may enhance your financial security in other ways.

One benefit is that stocks can help you maintain a higher balance in your retirement accounts than a more conservative mix would (see graphic above).

Having a cushion as you enter your later years can provide a margin of safety in case you run into higher-than-expected health care costs or other unanticipated expenses.

What's more, in the event your spending creeps up, a more stock-heavy portfolio may be better able to absorb the higher outlays. Boosting your withdrawals with a more conservative mix is far more likely to send your nest egg to an early demise.

Related: Make your retirement savings last

You've also got to consider your own circumstances. With few resources beyond your investments -- no pension or little home equity -- you may want to opt for a less aggressive mix. Just remember the price for playing it too safe. To top of page

First Published: October 26, 2012: 1:52 PM ET


12.08 | 0 komentar | Read More

S&P downgrades BNP Paribas, 2 other French banks

Written By limadu on Jumat, 26 Oktober 2012 | 12.08

BNP was one of three major French banks downgraded by S&P Thursday.

NEW YORK (CNNMoney) -- Credit agency Standard & Poor's has cut its ratings on BNP Paribas and two other major French banks, citing the rising economic risks that they face.

The downgrade, which came after the market closed in Paris Thursday, also cut the ratings for Banque Solfea and Cofidis.

"We see them as more exposed to this more difficult European environment," said the statement from S&P. "In our view, the economic risks under which French banks operate are increasing, leaving [them] moderately more exposed to the potential of a more protracted recession in the eurozone."

The downgrades might not be the last to hit France's banking system. While S&P left the credit ratings unchanged for 11 other major banks, it changed the outlook on those ratings to negative from stable, suggesting that future downgrades were possible. That group includes Societe Generale, Credit Agricole and Allianz Banque.

Related: Moody's puts European Union on notice

France, the No. 2 economy in the EU behind Germany, is facing a stagnant economy, although it's not in as much trouble as many other countries that are struggling with the European sovereign debt crisis. Its gross domestic product, the broad measure of its economic activity, has been unchanged since the third quarter of last year, although that's better than 0.2% decline in GDP that the eurozone as a whole posted for the second quarter. Many nations in Europe are now mired in recession. And France's unemployment rate in August was 10.6%, only slightly better than the 11.4% rate across the eurozone.

Related: Something's rotten in Paris

But the global and European banking system is so interconnected that the problems in countries like Spain, Italy and Greece can affect the outlook for banks in other countries. Last week European leaders agreed to a eurozone-wide banking supervisor in 2013.

In June, credit agency Moody's downgraded 15 major banks around the globe, including BNP, as well as U.S. banking giants such as Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500), Goldman Sachs (GS, Fortune 500), JPMorgan Chase (JPM, Fortune 500) and Morgan Stanley (MS, Fortune 500). S&P had downgraded those banks in November of 2011. To top of page

First Published: October 25, 2012: 3:56 PM ET


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Yahoo CEO Marissa Mayer buys Justin Bieber-backed startup Stamped

Marissa Mayer touted her newest purchase, Stamped, on her Instagram account.

NEW YORK (CNNMoney) -- Yahoo has acquired its first company under the leadership of new CEO Marissa Mayer: Stamped, a New York startup backed by a roster of celebrity investors, including Ryan Seacrest and Justin Bieber.

Launched just over a year ago, Stamped created a mobile recommendations platform that allowed customers to "stamp" everything from a favorite restaurant to a beloved song.

Yahoo (YHOO, Fortune 500) isn't keeping the product, though. It will shut down by the end of the deal, Stamped's founders wrote Thursday in a message announcing the deal.

The deal was strictly a talent acquisition. Stamped's nine employees all plan to join Yahoo and will head a New York-based engineering and product team.

"After everything we learned from building Stamped, we're excited to start work again on something big, mobile, and new," the founders wrote.

The deal fits with the mobile-first strategy Mayer laid out earlier this week on Yahoo's quarterly earnings call. Yahoo "hasn't capitalized on the mobile opportunity," she said, calling it Yahoo's new "top priority."

The price of the acquisition was not disclosed. A source close to the company says Stamped had more than one offer on the table and chose Yahoo because of the team's past experience with Mayer.

"As a team of mostly former Googlers, we've all worked with and are big fans of Marissa," Stamped's founders wrote on their website. "So when an opportunity arose to become a part of the team at Yahoo, we jumped."

The crew is already looking to hire additional engineers and designers to expand Yahoo's New York presence. To top of page

First Published: October 25, 2012: 5:05 PM ET


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Apple earnings disappoint, but holiday season will be a blowout

NEW YORK (CNNMoney) -- Apple's earnings were mixed for its fourth fiscal quarter, but the company is looking ahead to a record-shattering holiday season.

Apple earned $8.2 billion in the quarter ended September 29 on sales of $36 billion. That profit came up short of analysts' expectations, and Apple (AAPL, Fortune 500) shares dropped in after-hours trading before coming back near breakeven.

The company's forecast for next quarter, however, was a blockbuster. Apple said it expects sales of around $52 billion, up 12% from last year's holiday quarter.

That would be the highest quarterly sales ever reported by a tech company. (It's still slightly less revenue than Wall Street analysts were anticipating, but Apple has a history of issuing conservative guidance and then blowing past it.)

Apple's iPhone sales for the quarter were just shy of 27 million, up 58% compared to last year. The iPhone 5 debuted at the tail end of the quarter, and Apple has had trouble keeping up with demand for it. Earlier this month, Verizon (VZ, Fortune 500) blamed Apple's iPhone 5 supply constraints for the surprisingly low number of iPhone 5s that Verizon sold in their first week on shelves.

Sales of other Apple devices were mixed. The iPad tablet came in at 14 million, lower than what most analysts polled by Fortune were expecting. Last quarter, Apple sold a record 17 million iPads after the third-generation device debuted in the U.S. in March.

In a surprise move this week, Apple rendered that seven-month-old iPad obsolete. During an event unveiling the 7.9-inch iPad mini, Apple also announced a slightly updated fourth-generation traditional iPad with a faster processor and U.S. 4G/LTE coverage.

Sales of Mac computers remained steady, at 4.9 million units. The iPod continued to decline, dropping 19% over the year to 5.3 million sold.

Apple has long broken out sales figures for each iGadget. Taken over several years, they reflect the changing device landscape as the world becomes more mobile. Mac computers have generally remained flat and iPod music players are declining, but iPad sales have steadily risen. The iPhone, Apple's bestselling device, soars in quarters during which a new model is released.

On a post-earnings conference call with analysts, CEO Tim Cook revealed that the iPad accounted for $7.5 billion of the company's revenue last quarter. He also took a shot at another tablet, Microsoft's (MSFT, Fortune 500) brand new Surface.

"I haven't played with a Surface yet, but what we're reading about it is it's a fairly compromised, confusing product," Cook said.

Several analysts asked questions related to the iPad mini, particularly about why Apple priced the device at $329 -- leaving breathing room for the $199 7-inch tablets from Amazon (AMZN, Fortune 500), Google (GOOG, Fortune 500) and Samsung.

Apple had clearly prepared for the question. Both Cook and CFO Peter Oppenheimer struck a defensive tone.

"The difference between the iPad mini and the competition is profound," Oppenheimer said, in a tone suggesting that he was reading from written remarks.

He later added: "We didn't set out to build a smaller, cheaper tablet. We set out to build the full iPad experience."

Cook was more blunt.

"We would not make one of the 7-inch tablets," he said. "We just don't think they're good products."

Well before analysts had the chance to grill Apple executives, pundits spent the week debating the $329 price point on the iPad mini, which has a 7.9-inch screen. As Daring Fireball blogger John Gruber put it: "'Better but costs more' is a gamble. 'Better and costs the same or less' is a sure thing. To top of page

First Published: October 25, 2012: 5:24 PM ET


12.08 | 0 komentar | Read More

Zynga surges on higher sales, casino gaming plans

Written By limadu on Kamis, 25 Oktober 2012 | 12.08

NEW YORK (CNNMoney) -- Expectations for social gaming company Zynga were pretty low before their third quarter earnings report Thursday. But sales topped forecasts, sending Zynga (ZNGA) shares up more than 15% in after hours trading.

Zynga, best known for FarmVille and other -Ville franchises, reported sales of $317 million for the quarter. That was up 3% from a year ago and surpassed the $256 million in sales that analysts polled by Thomson Reuters were predicting.

The company reported a net loss of $52 million, but excluding the compensation costs, Zynga broke even, in line with expectations.

In addition, the company announced a partnership with bwin.party, an international gaming operator that will enable real money casino games like poker, slots, and roulette in the U.K. That opens up a potentially lucrative new revenue stream for Zynga.

"We view this as a first step into real money gaming." Zynga CFO Dave Wehner said on the earnings call. "We believe it's a good first step, but only a first step towards what we think is a big opportunity for Zynga."

The earnings report comes a day after the company laid off 5% of its employees and said it would shut down 13 games under the Zynga umbrella. Several weeks ago, the company lowered its outlook for 2012, citing delays in launching news games and reduced expectations for web games.

Zynga CEO Mark Pincus said Zynga's last couple of months have been "challenging," on the earnings call but highlighted the success of the company's newest game FarmVille 2, calling the 3D web-based game a "breakthrough."

The company has lost more than three-quarters of its market value this year. As such, Zynga also announced Thursday that it was planning to repurchase $200 million's worth of Zynga shares. Stock buybacks often are viewed favorably by investors since they reduce a company's share count and increase earnings per share.

Zynga has struggled to keep users shelling out cash for virtual goods on its biggest platform: Facebook (FB). On Facebook's earnings call, CEO Mark Zuckerberg cited trouble with gaming.

"Overall gaming on Facebook isn't doing as well as I'd like," he told investors during the call. According to Zuckerberg, Facebook posted a 20% decline in payments revenue from Zynga over the past year.

As more gamers switch to their smartphones, Zynga has focused on mobile, acquiring gaming company OMGPop, the maker of the popular game Draw Something. But Zynga CEO Mark Pincus said the game had "underperformed versus our early expectation" when Zynga cut its guidance earlier this month. To top of page

First Published: October 24, 2012: 4:37 PM ET


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Ex-Goldman director Gupta gets two years for insider trading

Rajat Gupta leaves court last year.

NEW YORK (CNNMoney) -- Former Goldman Sachs board member Rajat Gupta received a two-year prison sentence Wednesday in the highest-profile case yet of the government's ongoing insider trading crackdown.

The sentence marks the culmination of a stunning fall from grace for Gupta, 63, a consummate corporate insider who served on the boards of Goldman Sachs (GS, Fortune 500) and Procter & Gamble (PG, Fortune 500). He also headed marquee consulting firm McKinsey & Co. and chaired The Global Fund, an international public health organization.

The court received over 400 letters in support of Gupta ahead of the sentencing from backers including Microsoft (MSFT, Fortune 500) founder Bill Gates and former United Nations secretary general Kofi Annan.

"With today's sentence, Rajat Gupta now must face the grave consequences of his crime -- a term of imprisonment," Manhattan U.S. Attorney Preet Bharara said in a statement. "His conduct has forever tarnished a once-sterling reputation that took years to cultivate."

Gupta was found guilty in June of leaking information from Goldman board meetings during 2008 to hedge fund manager Raj Rajaratnam, who began serving an 11-year sentence for insider trading last year. Prosecutors said that in one instance, Gupta called Rajaratnam just 16 seconds after disconnecting from a conference call in which Goldman's board approved a crucial $5 billion investment from Warren Buffett's Berkshire Hathaway.

In his sentencing order, Judge Jed Rakoff called this "the functional equivalent of stabbing Goldman in the back."

Speaking in court Wednesday, Gupta said the months since his arrest last year were among "the most challenging of my life."

"I regret terribly the impact on my family, friends, and institutions that are dear to me," he said.

Gupta is not accused of profiting directly by tipping to his friend and associate Rajaratnam, though Rakoff wrote that Gupta "viewed it as an avenue to future benefits, opportunities, and even excitement."

As in other recent insider trading cases, the prosecution relied in part on evidence from wiretaps, which hadn't traditionally been used in insider trading cases and have proven controversial during the current crackdown. Since August 2009, federal authorities have secured 72 indictments and 69 convictions or guilty pleas in insider trading cases.

In addition to the prison term, Gupta faces a year of supervised release and a $5 million fine. He is due to report to prison in January.

Prosecutors had requested that Gupta receive eight to ten years in prison. The defense, pointing to Gupta's extensive history of charitable work, had requested probation, during which he would agree to work full-time at a humanitarian organization in Rwanda or a shelter in New York.

"I think there are some people out there who will say, 'Jeez, this is a light sentence and this guy got off,'" said Richard Scheff, a veteran defense attorney and chairman of the law firm Montgomery McCracken. "I think what it demonstrates is a careful balancing by the judge."

Gupta's lawyers have previously announced plans to appeal.

"Mr. Gupta maintains his innocence and will vigorously pursue an appeal," attorney Gary Naftalis said in a statement Wednesday. "We continue to believe that the facts of this case demonstrate that Mr. Gupta is innocent of all of these charges, and that he has always acted with honesty and integrity."

CNN's Jordana Ossad contributed reporting. To top of page

First Published: October 24, 2012: 4:34 PM ET


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Foreclosures fall in 62% of U.S. cities

NEW YORK (CNNMoney) -- Foreclosures fell in nearly two-thirds of the nation's largest metro areas during the third quarter, according to RealtyTrac Thursday.

With 62% of the nation's 212 largest markets seeing foreclosure activity shrink during the latest quarter, the ongoing decline is yet another sign that the housing market is starting to stabilize.

During September, foreclosure activity in 58% of the major metro markets had even dropped below September 2007 levels.

The numbers indicate that "most of the nation's housing markets are past the worst of the foreclosure problem," Daren Blomquist, RealtyTrac's vice president said in the report.

Major cities like San Francisco, Detroit, Los Angeles, Phoenix and San Diego saw foreclosures fall by double-digit percentages of 26% or more.

Related: Best Places to Live: Where homes are affordable

Stockton, Calif., which saw a 21% decline in foreclosures, still managed to claim the nation's highest foreclosure rate, however. "That foreclosures there are still the highest in the country speaks to how severe the problem was," said Blomquist.

Other California cities in the top 10, Riverside, Vallejo, Modesto, Merced, Bakersfield and Sacramento, all posted year-over-year declines of between 22% and 34%.

Yet, there are still some trouble spots, particularly in Florida.

In Miami, which had the 10th highest foreclosure rate, filings rose 11%. In Jacksonville, foreclosures were up 32%, Palm Bay saw a 64% increase, Tampa was up 43% and Orlando notched a 15% jump.

Blomquist attributed Florida's problems to the after effects of the robo-signing scandal. Florida is a "judicial state," where foreclosures get processed through the courts. Lenders hesitated to bring foreclosure cases before a judge until they were confident their paperwork would stand up to the stepped-up scrutiny that followed the scandal. But now that new rules have been put in place through the $25 billion mortgage settlement, they are playing catch-up.

Of the metro areas with the 20 highest foreclosure rates, all are still in California, Arizona, Nevada and Florida, with two notable exceptions. Chicago saw a 34% jump from a year-ago, and had the ninth highest foreclosure rate. Atlanta had the 15th highest rate. The good news there: Foreclosures fell 20% year-over-year.

Related: Government: We plan to sue more banks

In Las Vegas, filings fell dramatically -- 71% -- because of state legislation passed last year that requires lenders to file affidavits vouching for their paperwork and their foreclosure action against a borrower, Blomquist said.

Many lenders now bypass the foreclosure process entirely in Nevada, working with troubled borrowers to arrange short sales even before filing notices of default. That's not all good news, however. "[For cities like Las Vegas,] it's a shift in the way the distress is handled rather than the distress evaporating," said Blomquist. To top of page

First Published: October 25, 2012: 12:45 AM ET


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Federal agency to police debt collectors

Written By limadu on Rabu, 24 Oktober 2012 | 12.08

Consumer Financial Protection Bureau will regulate debt collectors starting Jan. 2.

WASHINGTON (CNNMoney) -- For the first time in history, debt collectors -- the guys who hound you over unpaid bills -- are about to get a tough federal regulator scouring their books.

The Consumer Financial Protection Bureau on Wednesday finalized a new rule to oversee and regulate the largest U.S. debt collection agencies, starting Jan. 2.

The move could impact consumers nationwide. Some 30 million Americans have debt under collection, with average unpaid debt around $1,500, according to the bureau.

Under the new rule, examiners from the consumer agency can march into the offices of large debt collectors to ensure they're giving consumers a fair shake. They can evaluate debt collectors to make sure they are clearly and accurately identifying themselves, truthfully disclosing the amount of debt owed, and not attempting to collect debt that doesn't exist or has been paid off.

Related: More Americans delaying retirement until their 80s

Thanks to the Dodd-Frank financial reform act, the consumer financial watchdog can already create and enforce rules on the debt collection industry.

The new rule will give it special oversight power over companies with more than $10 million in receipts.

"Millions of consumers are affected by debt collection, and we want to make sure they are treated fairly," said CFPB Director Richard Cordray in a statement. "We want all companies to realize that the better business choice is to follow the law — not break it."

The bureau says the rule will impact about 175 companies, which account for about 60% of debt that is collected.

However, that still means that a large number of the 4,500 debt collection companies in the United States will escape the bureau's close oversight, because a vast majority of them are small companies.

The consumer financial watchdog, which was launched last year, has recently gone after credit card companies American Express (AXP, Fortune 500), Discover (DFS, Fortune 500) and Capital (COF, Fortune 500) One to refund millions of dollars back to their customers for deceptive practices. To top of page

First Published: October 24, 2012: 12:00 AM ET


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Tuition at public colleges rises 4.8%

NEW YORK (CNNMoney) -- Tuition hikes, stagnant federal aid and increases in other expenses have pushed public college costs to new heights yet again this year, according to a College Board report out Wednesday.

To attend an in-state public college for the 2012-13 academic year, the average overall cost (or "sticker price") for students who don't receive any financial aid rose 3.8% to a record $22,261, according to the report.

Tuition accounted for about half of that increase. Public university tuition and fees alone rose 4.8% to $8,655. In addition, higher dorm, cafeteria, books and other expenses added significantly to the overall increase.

While about two-thirds of full-time students receive grants or federal tax breaks, many are likely to have to foot more of the bill themselves this year. The College Board's economists estimate that financial aid budgets stayed flat, leaving students less money to cover rising college costs.

As a result, the net price (the cost after scholarships, grants and federal tax benefits) that in-state students at public colleges will pay this year rose 4.6% to an average of $16,510.

That's more than twice the rate of inflation, which rose just 2% over the last 12 months.

Related: How much will that college really cost?

While the rate of public college tuition hikes has steadily fallen from the 9% rate seen in 2008, Sandy Baum, an economist and lead author of the College Board's report, said not to expect much more of an improvement. "Tuition is going to keep rising faster than inflation," she said.

The College Board crunched the numbers to explain why college prices keep rising faster than just about everything else in the economy.

States have cut the aid they are giving to colleges by a total of $15.2 billion since 2007, or 17.4%. At the same time, the number of students enrolled in college has risen 12%. That means the average public college gets a tax subsidy of only $6,600 per student, down from $9,300 just five years ago.

The dramatic increases in public college tuition over the years have made up only about two-thirds of those subsidy losses, the College Board said.

Related: Extreme ways to pay for college

Private colleges haven't had to make up for state budget cuts, but have been raising prices to cover increased expenses.

Tuition and fees climbed 4.2% at four-year private schools to an average of $29,056 this year. Overall prices were 4% higher at $43,289. But with more than 80% of students receiving scholarships or grants, the average private college student will pay a net price of about $27,600 -- a 5.6% increase from last year, the College Board estimated.

Some of the fastest rising costs on private college campuses are employee health care, insurance premiums and technology, said David L. Warren, president of the National Association of Independent Colleges and Universities. Colleges have also been investing in student services, like mental health counseling, and programs aimed at boosting graduation rates, he said.

In addition, both public and private universities have been raising dorm and cafeteria prices at a rate of about 2% more than inflation each year for the last decade. A year's room and board at a typical public university has risen 65% over the last 10 years to an average of $9,200. Meanwhile, private college living costs have climbed 54% to an average of $10,460.

Vennie Gore, assistant vice president for residential and hospitality services at Michigan State University and president of the Association of College and University Housing Officers -- International, says schools like his have to raise dorm costs to fund repairs, upgrade older dorms and build new residence halls that meet today's students' expectations for technology, privacy and space.

Gore says students don't like the old-style dorms with big shared bathrooms. In new dorms, two rooms typically share a single smaller bathroom, he says. New dorms also typically provide more common areas for cooking, studying and other activities. Finally, "things we used to see as luxuries, such as Internet, and cable, they see as basic necessities or utilities," he said.

Related: How does your community college stack up?

One bright spot in the College Board report were the findings from community colleges, which enroll 26% of full-time college students. While tuition at community colleges climbed an average of $168, or 5.6%, this year to $3,131, students appear to be getting enough aid to cover most of their costs.

The College Board estimated that the average community college student received enough grants and tax breaks to cover the typical tuition and all but $10 of the average $1,230 bill for textbooks and school supplies.

Despite the rising costs and resulting student loan debt, a college education is still worth it, said the College Board's Baum. "There's a really high return" to investing in a good college education, she said. To top of page

The average cost of college: 2012-13

Tuition & fees $3,131 $8,655 $29,056
Room, board, books, etc. $12,453 $13,606 $14,233
Total cost $15,584 $22,261 $43,289
Net price (after scholarships, grants, aid) $4,350 $5,750 $15,680

Source: The College Board's Trends in College Pricing 2012 and Trends in Student Aid 2012 reports.

First Published: October 24, 2012: 12:06 AM ET


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Barnes & Noble customer data stolen

HONG KONG (CNNMoney) -- Barnes & Noble said Wednesday that a data breach at 63 of its stores may have compromised the credit card information of its customers.

The bookseller said in a statement that one PIN pad device used by customers to swipe credit and debit cards had been compromised in each affected store.

Mary Ellen Keating, a spokeswoman for the chain, said the problem was discovered last month. In order to not impede an ongoing investigation, authorities had requested Barnes & Noble not disclose the breach, she said. The retailer notified the FBI and U.S. Attorney for the Southern District of New York of the breach.

It was not immediately clear how many customers are affected, or whether the data was being used to make unauthorized purchases. The company said it had disconnected all PIN pads from its stores nationwide by Sept.14.

The affected stores are located in California, Florida, Illinois, Massachusetts, New Jersey, Connecticut, New York, Pennsylvania and Rhode Island.

Barnes & Noble (BKS, Fortune 500) said in a statement that customers who shopped at one of the stores should change their debit card PIN and notify their bank if any unauthorized charges are made.

Related: If you're using 'Password1,'' change it. Now.

The chain is "working with banks, payment card brands and issuers to identify accounts that may have been compromised, so banks and issuers can employ enhanced fraud security measures on potentially impacted accounts," the statement said.

Cybercrime is a serious and growing problem in the U.S. and the issue has attracted the attention of the nation's top law enforcement officials.

FBI Director Robert Mueller said earlier this year that while terrorism remains the bureau's top priority, cyberthreats could soon pose the greatest threat to the U.S.

"There are only two types of companies: those that have been hacked, and those that will be. Even that is merging into one category: those that have been hacked and will be again," Mueller said.

Yet businesses are often loathe to report security breaches. They'd generally rather handle problems privately than risk exposure and a time-consuming investigation.

-- CNN's Chandler Friedman contributed to this report. To top of page

First Published: October 24, 2012: 12:36 AM ET


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Filing for a patent: New rules to know

Written By limadu on Selasa, 23 Oktober 2012 | 12.08

NEW YORK (CNNMoney) -- Charley Moore is founder and executive chairman of Rocket Lawyer, an online legal service that specializes in working with startups, small businesses and independent entrepreneurs.

As an entrepreneur, protecting your inventions against the competition is one of the most important things you need to do. If you don't, you put your hard work and good ideas at risk.

Patents are both offensive and defensive weapons in the increasingly cutthroat modern business environment. So, take a few minutes to educate yourself. You won't regret it.

Last year's America Invents Act brought the most important changes to patent law since Thomas Jefferson wrote patents into the Constitution in 1787.

Here's what you need to know.

First-to file: The new law takes us from a first-to-invent to a first-to-file system. In other words, patents are awarded to the entity that files first; the starting block is the date of application, not the date of invention. So, if you've invented something, file as quickly as possible. It's also a good idea to consult with a lawyer and formulate a game plan from the beginning.

A good plan can start with what's known as a provisional patent. They are quicker, easier and cheaper than the alternative -- a non-provisional, or full, patent. And if you file for a complete patent within one year of your provisional, you can use the provisional filing date to get ahead of the competition. (Related story: What Kodak's patents produced)

Fees: When you need to file fast, cost needn't slow you down.

There are fees for both provisional and full patents. Small entities enjoy discounted fees, however. Also, if you are a small entity, an additional fee for paper filing is cut in half. But this additional fee does not apply if businesses, regardless of size, file their patent application online.

Depending on the size of your business, the fee for a provisional patent might be as low as $125 and $530 for a full patent.

Fast track: If you really want to be speedy, there's a new fast-track option open to small entities for $4,800.

Even better, if you qualify as a "micro-entity," you might be eligible for a 50% discount. A "micro-entity" is a small entity where the applicant is not the named inventor on more than four other patent applications, and neither the applicant's annual income, nor the income of the entity, is three times larger than the U.S. median income.

Where to go: The new law requires the U.S. Patent and Trademark Office to establish at least three satellite locations by September 2014. That's a good development, because geographic diversity can make the patent system easier for small businesses to navigate.

For example, potential offices in Denver and Silicon Valley are better placed to help the inventors near them than a single faraway office in Washington, D.C. And examiners who live in the community will be more connected to local entrepreneurs and their issues.

Review process: So that's how to navigate the new "first to file" system. But what happens if you don't file first?

To be sure, in such cases, the road to protecting your invention will be longer and rockier. But all hope isn't lost. The new law includes two review processes to challenge patents you believe infringe on your idea.

The first is called a post-grant review. That gives you nine months to petition the Patent Office if you think an existing patent includes something that you invented first. But there's a catch -- the review costs $35,800. So think carefully and file quickly to avoid this situation.

The other way to challenge the validity of current patents if you were beaten to the punch is to ask the patent office for an "inter partes review."

For this review, you have nine months from the time the patent is issued, or after the end of a post-grant review. To avoid lengthy and costly battles, a ruling must be made within one year from when the patent was granted. The review costs $27,200.

--Rocket Lawyer's Eva Arevuo also contributed to this article. To top of page

First Published: October 22, 2012: 4:56 PM ET


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One more Washington agency drops BlackBerry

BlackBerry is losing customers in Washington.

WASHINGTON (CNNMoney) -- U.S. Immigration and Customs Enforcement is the latest federal agency to drop BlackBerry smart phones for its employees, adding to the woes of maker Research in Motion (RIMM).

BlackBerry still remains the smart phone of choice for Capitol Hill, but cracks are appearing in RIM's stronghold among federal agencies.

The federal immigrations agency said last week it had bought $2.1 million Apple (AAPL, Fortune 500) iPhones for its 17,676 users, saying that RIM's technology "can no longer meet" its needs.

Earlier this year, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the National Oceanic and Atmospheric Administration also announced they were switching from BlackBerrys to iPhones for their staffers.

It's bad news for RIM, which has already weathered a big drop in corporate users, a market it once dominated. In the past year, major corporations, ranging from Yahoo (YHOO, Fortune 500) to Halliburton (HAL, Fortune 500), have decided to stop using BlackBerrys for their staff.

RIM has come under a lot of criticism for being too slow in revamping its operating system. It is launching a new BlackBerry 10 next year.

RIM wouldn't talk about the effect of the fast-shrinking federal usage on its business. Rather, it pointed out that the company still has a million government customers in North America, some 400,000 of whom have upgraded their BlackBerrys in the past year.

"Government organizations globally have relied on the security of the BlackBerry solution for over a decade," said Paul Lucier, vice president of RIM government solutions in a statement.

Carl Howe, a technology analyst with Yankee Group, said RIM can weather the losses because of its reputation of maintaining a highly secure system.

"For anyone who is really interested in high security systems, BlackBerry really remains the gold standard," Howe said.

Still, RIM appears to be hemorrhaging customers all around.

Federal contractor Booz Allen Hamilton (BAH, Fortune 500) also decided last week it would no longer use BlackBerry mobile devices, confirmed spokesman James Fisher. Most of Booz Allen's 25,000 employees use personal smart phones to check company mail. Those who have BlackBerrys will no longer be able to access company email, Fisher said.

Booz Allen advises the U.S. Army, Navy, Air Force and Department of Homeland Security. To top of page

First Published: October 22, 2012: 4:55 PM ET


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