U.S. expats cry foul over tax system

Bob Simison, a U.S. expat in Australia (with his wife, Sarah) says it takes him 40 hours to prepare his taxes each year.

HONG KONG (CNNMoney)

Unlike citizens of most other countries, Americans are legally obligated to file U.S. taxes each year, even if they are living and earning income overseas.

Problem is most expats are also required to pay taxes in their country of residence. This means two huge piles of paperwork, two sets of deadlines and one giant struggle to keep pace with a complex mess of ever-changing regulations.

"As soon as I moved overseas, that's when things got very complicated," said James Rosenberg, an IT professional who owns a business in South Korea.

While living in the U.S., the Iowa native was able to prepare his returns using TurboTax. That's no longer the case -- Rosenberg's taxes are now so complicated he has been forced to hire an accountant.

Rosenberg isn't alone. American expats told CNNMoney they are overwhelmed by filing requirements, and many are struggling to find accurate and up-to-date information. Some said they were given conflicting instructions by the IRS, or received bad advice from independent tax advisers.

Some expats said they are so exasperated by the current system that they are considering a move back to the U.S. -- or in other cases, starting the process to renounce their American citizenship.

Related story: Americans turn in passports as new tax law hits

Divesh Agarwal, an American living in India, said he has not been able to find a local accountant who knows enough about American tax law to handle his return. Agarwal said he spends hours scouring the Internet for tax tips because he doesn't want to spend thousands of dollars on an accountant.

"I don't see any improvement, I only see it getting worse," Agarwal said.

Americans are generally exempt from paying tax on their first $95,000 in foreign income, but they are still required to file a return. And there are a number of things aside from salary that the IRS considers income, such as housing allowances or school stipends -- benefits that companies often use to entice Americans to move abroad.

Air Force veteran Gordon Peters found this out the hard way. None of the tax advisers he consulted before taking a gig in Beijing earlier this year mentioned that he would be taxed on benefits.

Peters had received a housing and education benefit as part of his compensation package as a medical director. The unexpected tax burden, he said, has just about erased his disposable income.

"I make a fairly nice wage, but we end up having to count pennies at the end of the month," Peters said.

Related story: Banks lock out Americans over new tax law

Sometimes, even the IRS is a source of confusion for expats.

Bob Simison, who has lived in Australia for nearly a decade, said he was spending 40 hours a year to prepare his returns -- even though his income wasn't high enough to owe anything to Uncle Sam.

Then the IRS sent him a bill for thousands of dollars in unpaid taxes.

Simison believed the IRS had made a mistake, but was unable to find an accountant in Australia with the knowledge to help. So he contacted the agency himself. Simison said the process was "atrocious" -- and he was given conflicting instructions, and then an even larger bill, before the dispute was resolved a year later with help from a U.S. senator.

"The process is far more complex than it needs to be," Simison said. "We're just normal people. We don't have big business interests, no huge savings accounts, no heavy investments or anything."

In recent years, the burden has become even greater as new laws designed to crack down on overseas tax cheats have pushed even more paperwork on expats.

Related story: Branson: My island life isn't a tax dodge

When asked by CNNMoney to comment about the tax troubles that expats face, the IRS responded with a link to information about paying taxes while abroad.

The burden is leaving some expats with a tough decision to make -- and advocacy groups are quick to point out an increase in Americans who chose to renounce their citizenship.

Others, like Peters, are considering giving up their careers abroad in order to return to the U.S. to reduce their tax pains.

"If it continues like this, I'm going to have to say that it was a great experiment, but it can't continue," he said. "The tax law makes it very unattractive for Americans to go abroad."

First Published: October 30, 2013: 10:04 PM ET

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Bank of America warns of fresh U.S. lawsuit

Bank of America says it is it is under increasing scrutiny from U.S. regulators over mortgage bonds.

NEW YORK (CNNMoney)

BofA revealed in a securities filing Wednesday that staff from a U.S. Attorney's office have disclosed plans to recommend that the Department of Justice file a civil lawsuit against the bank related to the packaging and sale of mortgage bonds.

Such securities played a key role in the 2008 financial crisis, failing in huge numbers as the housing market collapsed. Wall Street firms have since been deluged with lawsuits alleging that they misrepresented the quality of risky mortgages when they sold these securities.

Related: European banks under fire in global forex probe

The Justice Department already has another civil lawsuit pending against Bank of America over a mortgage bond offering that was announced in August, and the Charlotte-based firm will likely be on the hook for billions of dollars' worth of future settlements.

The news comes as rival mega-bank JPMorgan (JPM, Fortune 500) remains in talks with the DOJ and other government officials over a potential multi-billion-dollar settlement related to mortgage-backed securities. JPMorgan agreed to pay $5.1 billion to government-backed housing finance firms Fannie Mae and Freddie Mac in a related settlement last week.

Bank of America (BAC, Fortune 500)spokesman Lawrence Grayson declined to comment. The Department of Justice did not immediately respond to a request for comment.

First Published: October 30, 2013: 8:07 PM ET

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China is on oil and gas shopping spree

Chinese companies have moved into oil production in the Caspian Sea.

HONG KONG (CNNMoney)

Of the 10 biggest foreign mergers or acquisitions by Chinese companies this year, seven have been in the energy sector, according to data from Dealogic.

The targets range widely in their geography. The state-owned China National Petrochemical Corporation has invested almost $10 billion in 2013 in oil and gas fields in Mozambique and Kazakhstan. Another state-owned company, Sinopec (SHI), spent $3.1 billion on a 33% stake in Apache's (APA, Fortune 500) Egypt fields.

So far in 2013, over 20% of oil and gas deals globally have involved a Chinese firm, said Brian Lidsky, a managing director at Houston-based data provider PLS Inc. That's a record for China.

The same trend was on display in 2012, capped by the blockbuster $15 billion purchase of by Canada's Nexen by China National Offshore Oil Corporation (CEO) -- a big play for oil sand and shale gas.

Analysts say the emphasis on the energy sector can be attributed to China's shift away from coal and a domestic shortfall in energy production. Companies need to look beyond China's borders for resources.

The move abroad has not always been smooth. The state-owned CNOOC, for example, was forced to abandon an $18 billion bid for California-based Unocal in 2005 amid heavy political pressure in the United States. Since then, Chinese firms have largely shied away from wholesale purchases of U.S. companies.

Yet Chinese firms have also benefited from large-scale changes in the oil industry. In recent years, American companies have focused more on the shale gas boom in North America, opening the door for Chinese firms in countries like Iraq, Mozambique and Egypt.

Related story: Let China pump Iraq's oil

In Iraq, Exxon Mobil (XOM, Fortune 500), BP (BP), Royal Dutch Shell (RDSA) and other international oil firms haven't been more aggressive in bidding for contracts because the terms are pretty lousy.

But Chinese oil companies have been willing to pick up the slack -- signing deals in which royalties, taxes and other fees typically take 90% or more of a firm's profit.

There are few reasons to think China's interest in the energy sector will subside. China is the most populous country on earth with 1.3 billion citizens. It already consumes more oil than any other country save the United States. And it's set to soon surpass the United States as the world's largest oil importer.

The country is also rapidly urbanizing, with hundreds of millions of Chinese moving from rural areas to the cities. China is also adding millions of cars to the roads each year, a trend that only adds to demand for oil-based products.

CNNMoney's Steve Hargreaves contributed to this report

First Published: October 30, 2013: 10:36 PM ET

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Obamacare deadlines clarified

Customers who enroll in coverage by March 31 won't be on the hook for a "shared responsibility payment."

NEW YORK (CNNMoney)

That's the 2014 deadline to apply for coverage and not face tax penalties under an extension announced late Monday by the Obama administration.

The six-week delay resolves two conflicting dates: the open enrollment window extended beyond the deadline to obtain coverage. The extension does not involve people covered under employer health plans or government coverage such as Medicare or Medicaid.

Coverage through the health exchanges begins Jan. 1, but customers don't have to enroll in a plan that quickly. The Affordable Care Act allows individuals to go without coverage for up to three months at a time. It also specifies a mid-month application deadline for coverage to begin the next month.

Related: Obamacare pricier for individual buyers

The law says the open enrollment window is open through March 31. But if individuals waited until that day to register, their coverage wouldn't begin until May, long after the three-month clock that started Jan. 1 reached zero.

That meant a Feb. 15 application deadline.

The extension removes this confusion.

Related: Silicon Valley could have built a better site

Faced with a malfunctioning website and confusion over the deadline, the agency running the insurance marketplace said it would give customers the extra time.

The penalty is known as the "shared responsibility payment." Someone who is required to but does not have health coverage in 2014 would pay it in their taxes due April 15, 2015. It is $95 or 1% of income, whichever is greater, and increases quickly -- to at least $325 for 2015 and $695 for 2016.

First Published: October 29, 2013: 2:43 PM ET

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Obamacare site has another 'outage'

Marilyn Tavenner, head of the agency overseeing the site, testified at a congressional hearing Tuesday.

NEW YORK (CNNMoney)

Verizon, which provides some technology services behind HealthCare.gov, said federal officials asked the company to provide additional computing and storage ability.

"At the request of HHS's deputy CIO, we are now undertaking infrastructure maintenance, which should be complete overnight," spokesman Jeffrey Nelson said. "We anticipate the strengthened infrastructure will help eliminate application downtimes."

An official with the agency that oversees HealthCare.gov acknowledged the systems outage, and said the website would be brought back online when maintenance was complete.

A spokeswoman from the Connecticut state exchange said the outage was preventing users from completing the full registration process, but some functions were still working.

Verizon had no immediate response to questions about how customers using the site would be impacted.

On Sunday, an outage traced back to Verizon left customers unable to apply for coverage. The snafu affected the federally-run HealthCare.gov and more a dozen state-run sites. Fourteen states and the District of Columbia are running their own insurance marketplaces; the other 36 states use the federal exchange.

Since going live on Oct. 1, major issues with HealthCare.gov have prevented people from registering and applying for coverage.

Related: Security hole found in Obamacare website

Marilyn Tavenner, head of the government agency overseeing the site, told lawmakers at a hearing that the massive issues were a "surprise" and "did not show up in testing."

"We know that consumers are eager to purchase this coverage and to the millions of Americans who have attempted to use HealthCare.gov to shop and enroll in health care coverage, I want to apologize to you that the website has not worked as well as it should," she said.

President Obama said technical teams were "working out the kinks in the system," and a former White House official he appointed to oversee the repairs said the site would be working for "vast majority" of users next month.

First Published: October 29, 2013: 10:02 PM ET

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What information is the government buying about you?

The federal government can use the salary and pay information provided by The Work Number to determine a person's eligibility for a variety of government benefits.

NEW YORK (CNNMoney)

Recently, the U.S. government started using a database called The Work Number as part of a pilot program that helps it determine who is eligible for government benefits like food stamps and Social Security disability benefits, according to a report by the nonprofit World Privacy Forum.

Owned by credit bureau, Equifax, The Work Number's database houses 54 million active salary and employment records, and more than 175 million historical records, according to the company. The firm collects payroll data from more than 2,500 U.S. employers and then sells it to companies like credit card issuers, property managers and auto lenders.

Related: What your zip code reveals about you

Last year, the federal government started using The Work Number's database as part of its "Do Not Pay Business Center," a pilot program launched by the U.S. Treasury Department aimed at reducing fraud and other improper government payments. While it's unclear which agencies are taking part in the Do Not Pay program, the database could be used to determine income eligibility for most federal government benefits, from housing aid to disaster assistance, said Pam Dixon, executive director of the nonprofit World Privacy Forum.

A Treasury Department spokesperson wasn't immediately available for comment.

Meanwhile, social service agencies on a state level are already using the massive database to check income eligibility for welfare and other state-run aid programs, according to The Work Number website.

The problem is, many workers don't know how their information is being shared. Some employers obtain consent before turning over payroll data to The Work Number, but others make reporting the information mandatory, said Dixon. "You sign up, thinking [your information is] being used to verify your salary by an employer," Dixon said. "Meanwhile, it's going to the U.S. government."

Related: Find out what Big Data knows about you (it may be very wrong)

There are also a host of privacy concerns, according to Dixon and report co-author Robert Gellman, an attorney specializing in privacy rights.

One of the biggest worries: Commercial databases, like The Work Number's, do not have to meet the same strict privacy and accuracy standards that government-operated databases, such as the Social Security Administration's Death Master File, do. Yet, federal agencies are using the information anyway. As a result, they say there is no guarantee that the information is accurate.

"What happens if a commercial data broker has really messy files because a person has an identify theft problem and then that information is used by law enforcement or used to determine government eligibility?" Dixon asked. "These people will fall through the cracks and end up really getting hurt."

Related: Buy a dead person's identity from Social Security for $10

An Equifax spokeswoman said that ensuring the accuracy of its information is "paramount to the success of The Work Number" and "is an enormous responsibility" that is also required under the Fair Credit Reporting Act, which governs consumer credit information. She added that workers can also review their information and dispute any errors.

Yet despite consumer protection laws, financial products like credit reports remain riddled with errors, Dixon said. A recent FTC study found that as many as 42 million Americans have errors on their credit reports. Other commercial marketing databases, which are subject to few regulations, are also home to incorrect information.

Under a regulation issued earlier this year by the U.S. Office of Management and Budget, The Work Number will need to meet some privacy and accuracy standards before it can become a permanent part of the Do Not Pay program -- a big win for privacy advocates.

However, Dixon is worried the rule won't go far enough since it doesn't provide all of the strict government protections and won't apply to other government uses of commercial databases.

"There could be real consequences at this point," she said.

First Published: October 30, 2013: 12:04 AM ET

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Amid criticism, Wal-Mart touts promotions for workers

Wal-Mart says it will promote more than 25,000 employees by the end of January.

NEW YORK (CNNMoney)

The retail giant announced plans to promote more than 25,000 of its roughly 1.3 million U.S. employees by the end of January, bringing its annual tally to more than 160,000 promotions this year, roughly the same as last year.

The promotions will affect employees in both hourly and management positions and will come with higher pay and increased responsibilities, Wal-Mart said.

The announcement comes just days after a Democratic lawmaker criticized the firm's executives as "welfare kings," citing the store's average full-time hourly wage of $12.83, or roughly $26,000 a year.

Wal-Mart has said that more than 475,000 of its employees make more than $26,000 a year, leading critics to point out that many additional employees must make less than that amount.

Related: 10 big holiday hirers

Wal-Mart said it offers competitive wages and the ability to build a career, citing that 75% of store management started as hourly workers.

"Like most Americans, our associates want good jobs and access to a better life," CEO Bill Simon said in a statement.

More than 40,000 assistant managers earn $50,000 a year, on average, while more than 4,000 store managers earn an average of $170,000 annually, according to Wal-Mart.

Still, the vast majority of Wal-Mart's employees - roughly 1 million nationwide -- are hourly workers, according to a company spokesperson.

Criticism isn't new for the country's largest private employer, which has faced labor protests organized by the United Food & Commercial Workers union, calling for a minimum full-time pay of at least $25,000 a year.

First Published: October 29, 2013: 12:37 AM ET

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Barack Obama's tweets hacked

Hackers from the Syrian Electronic Army claimed responsibility for re-directing links sent by President Barack Obama to a pro-Assad video.

NEW YORK (CNNMoney)

One tweet about immigration reform was supposed to send followers to an article from The Washington Post. Instead, it linked to a video montage of terror attacks, starting with the attacks on 9/11.

In a statement to CNNMoney, the hacktivist group known as the Syrian Electronic Army took responsibility for the hack, claiming to have broken into the president's ShortSwitch account -- a link-shortening service.

The account, @BarackObama, is used by the president's Organizing For Action campaign.

"OFA links that were posted on Twitter/Facebook was hacked and redirected to a video showing the truth about Syria," a member of the Syrian Electronic Army told CNNMoney. The hacktivist group claims that it gained access to multiple OFA email accounts, in addition to MyBarackObama.com and donate.barackobama.com.

Related story: News links on Washington Post, Time and CNN hacked

The two manipulated tweets were retweeted hundreds of times. The links were compromised for part of Monday afternoon before they were once again directed to their intended targets.

The hack was likely accomplished by a phishing attack launched against members of Organizing for Action. A member of the SEA sent CNNMoney a screenshot of an organizer's inbox confirming they had accessed her email. CNNMoney also received screenshots confirming their ability to re-direct links and access BarackObama.com.

An official from Organizing for Action acknowledged the attack, telling CNN that "an account to our link shortener was hacked." A spokesman fro ShortSwitch said the site itself wasn't hacked, but the company believes OFA's account credentials were obtained elsewhere.

The SEA, which is comprised of hackers supporting Syrian President Bashar al-Assad, have hacked several high profile Twitter handles and advertisements in the past.

Though the hack of the president's tweets was relatively minor, security expert David Kennedy said the SEA could expose more if they gained access to other Website and Twitter management tools for the OFA campaign.

First Published: October 28, 2013: 5:44 PM ET

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Meet Alibaba, Yahoo's Chinese secret weapon

Yahoo shares are up 90% over the past year, but analysts say that's largely because of its stake in buzzy Chinese e-commerce giant Alibaba.

NEW YORK (CNNMoney)

Much of Yahoo's bounceback can be chalked up to its stake in a company called Alibaba -- an investment that Yahoo made in 2005 when Mayer was still a Google (GOOG, Fortune 500) executive and founder Jerry Yang was still "chief Yahoo."

Yahoo (YHOO, Fortune 500) owns 24% of Alibaba, an e-commerce giant that has been described as China's Amazon, eBay and PayPal wrapped in one.

In truth, Alibaba is a mix of all of those -- and more. Its nine distinct businesses span all parts of the e-commerce chain, from supplier marketplaces to online shopping destinations to payment processing.

Alibaba is already huge, and unlike Yahoo, it's growing. Alibaba's second-quarter sales jumped a whopping 61% over the year, and net income soared 145%.

That massive size and scope make Alibaba one of the hottest companies in China, and investors are salivating over Alibaba's impending initial public offering. Hong Kong's stock exchange is even considering changing a regulatory rule in order to score Alibaba's IPO.

Alibaba's growth is in stark contrast to Yahoo, which remains in the throes of a turnaround. Earlier this month Yahoo reported that its third-quarter sales and profit both fell over the year.

But investors sent the stock higher because Yahoo revealed it won't need to sell as much of its Alibaba stake in the IPO as it previously believed. In fact, Yahoo's shares are up 90% over the past year despite continued troubles in its core advertising business.

"The valuation upside is being driven by Alibaba, while Yahoo itself drags results down," Indigo Equity Research analyst Nick Landell-Mills wrote in a research note after Yahoo's third-quarter results.

Related story: How Yahoo CEO Mayer fixed 1,000 problems

A look at Alibaba's nine main businesses explains why Yahoo investors are elated about the company.

Online shopping: Taobao Marketplace, Alibaba's crown jewel is a massive online shopping site with 760 million product listings. According to ranking site Alexa, it's the 13th most popular site on the Internet.

Luxury goods: Tmall is Alibaba's fancier brand-name marketplace, which features products from 70,000 global brands including Nike (NKE, Fortune 500), Gap (GPS, Fortune 500) and Adidas.

Online payments: Alipay, Alibaba's version of PayPal is the most widely used third-party online payment platform in China.

Daily deals: Juhuasuan is Alibaba's version of Groupon (GRPN): It offers deals on both goods and local activities.

Search engine for shopping: ETao is a search engine dedicated solely to online shopping. Users can search for products, discounts coupons, hotel stays, rebates and more.

Small business suppliers: Alibaba.com, launched in 1999, is a trading site that connects small businesses with suppliers.

E-commerce for small businesses: 1688.com focuses on wholesaling and product sourcing for small businesses -- particularly for sellers on the Taobao platforms.

Wholesale: AliExpress, launched in 2010, is a low-cost wholesale marketplace.

Cloud computing: The four-year-old Aliyun.com sells cloud computing and data management services.

Alibaba is expected to go public in the near future. When that happens, Yahoo investors hope they are handsomely rewarded.

First Published: October 29, 2013: 12:42 AM ET

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Obamacare malfunction shuts down application tool

Health Secretary Kathleen Sebelius touted the "Hub" as one piece of Obamacare that was working -- one day before it broke.

NEW YORK (CNNMoney)

Joanne Peters, a spokeswoman for the Department of Health and Human Services, said a vendor networking issue at Verizon subsidiary Terremark was to blame. Peters said the vendor had "experienced a failure in a networking component," and the attempted fix crashed the system.

Peters said that HHS chief Kathleen Sebelius had discussed the problem with Verizon CEO Lowell McAdam.

Verizon (VZ, Fortune 500) spokesman Jeff Nelson said his company was working on the issue and it would be "fixed as quickly as possible."

The outage was the latest issue to hit the troubled HealthCare.gov. Since a disappointing debut on Oct. 1, some users have been unable to create accounts or sign up for coverage.

Related: To fix Obamacare website, blow it up, start over

This malfunction impacted the "Data Services Hub," which connects the website to IRS and other databases used to determine eligibility. On Saturday, HHS Secretary Kathleen Sebelius touted the "hub" as one of the Obamacare technologies that was working.

The malfunction not only impacted the troubled federal website, but also hit some state-based exchanges. Peters said the problem was "likely impacting several other sites," and Kathleen Tallarita of the Connecticut insurance marketplace said some customers there could not sign up. Fourteen states and the District of Columbia elected to set up their own exchanges, which have been largely error-free.

Related: Contractors paid over $300 million for Obamacare site

President Barack Obama said in a speech last week teams were "working out the kinks in the system." He appointed former White House budget official Jeffrey Zients to oversee the repairs. Zients said the site would be working for "vast majority" of users next month.

First Published: October 27, 2013: 8:16 PM ET

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New York will stockpile gas to prevent storm outages

Lines outside some gas stations stretched for miles.

NEW YORK (CNNMoney)

Gov. Andrew Cuomo on Saturday announced the state would create a Strategic Gasoline Reserve -- a $10 million pilot program that includes tanks for the fuel on Long Island. Should outages occur in an emergency elsewhere, the gas could be delivered, he said.

It's being called the first such state-based fuel reserve in the nation.

Lines outside of gas stations stretched for miles in the tri-state area after the fatal late-October storm slammed the East Coast and left millions without power. Portions of New York and New Jersey rationed gas as people mobbed stations seeking fuel for vehicles and generators. Emergency responders also found themselves without enough fuel.

Related: Ravaged by Sandy but back in business

Four days after the storm hit, AAA estimated between 60% and 65% of gas stations in the region were not operational.

Many stations were left without power to pump the gas from underground tanks. Others ran out of fuel, and some resupply efforts were hindered by traffic jams. In June, Cuomo announced $17 million to help more gas stations install the emergency generators.

His office said in a similar emergency, "gasoline from the reserve will be released to meet fuel needs while the industry recovers from a disruption in routine operations."

A contract with Northville Industries, the private company slated to store the fuel, needs to be finalized, the governor's office said.

First Published: October 27, 2013: 2:03 PM ET

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This could be the largest Fed stimulus yet

NEW YORK (CNNMoney)

The Fed was expected to wind down its third round of quantitative easing, known as QE3, at the end of this year. But most predictions are now well into 2014, with some as far out as June.

Economists largely believe the government shutdown and debt ceiling debate have forced the Fed's hand, creating a weaker economic outlook and muddying the data the central bank relies on to make decisions.

Given this environment and the leadership transition as Ben Bernanke's term ends in January, the Fed will likely continue its current stimulus program at full blast -- buying $85 billion in bonds each month -- until at least March 2014.

That means QE3 could total around $1.6 trillion, calculates Paul Ashworth of Capital Economics. That's more than either of its two predecessors. In contrast, QE1 totaled $1.5 trillion and the second round of stimulus added up to about $600 billion.

Related: 3 reasons why Fed may not taper until 2014

"There is a danger that the Fed has missed its window of opportunity," Ashworth said in a note. "If it's waiting for some degree of fiscal certainty, this really could turn into QEternity."

With bond purchases of this magnitude, the risks to financial stability are rising.

Stocks:

Most of the money created by the Fed is gathering dust in bank reserves and has not been making its way out to Main Street. Since the Fed launched its latest bond-buying program in September 2012, bank reserves have increased by about $800 billion, whereas the currency circulating in the economy has increased by only $80 billion.

Meanwhile, repeated rounds of quantitative easing have fueled stock gains to the point where some economists say prices may no longer be reasonable.

"Asset prices are higher than they should be based on fundamentals. Companies are making profits, but they're not making profits off of higher sales -- they're making profits off of constraining costs and particularly labor," said Catherine Mann, a finance professor at Brandeis University and a former Fed economist.

The longer QE continues, the more dramatic stocks could fall once the end of stimulus is in sight.

Real estate:

Perhaps the most noticeable impact on Main Street has been on the real estate market. Amid the Fed's ongoing stimulus efforts, new homebuyers with pristine credit scores have been able to lock in 30-year mortgages at the lowest rates in history, and homeowners with existing mortgages were able to trim their monthly payments by refinancing.

Once the Fed decides to slow and then end QE3, rates could quickly shoot up. Such was the situation this summer, when investors thought the central bank was ready to begin tapering its asset purchases in July or September.

The average rate on a 30-year mortgage spiked from 3.35% the first week in May, to 4.5% just eight weeks later.

When the Fed decided not to begin tapering in September, rates slowly started falling again.

The same thing could happen in 2014, and the rise in rates could be even more dramatic, which could put the reins on the housing recovery.

"Eventually the housing market is going to have to fly on its own in an environment of higher interest rates," said Zach Pandl, senior interest rates strategist at Columbia Management. "The Fed would like that process to be very gradual, but we learned earlier this year that they cannot guarantee a gradual rise in interest rates."

Related: Fed warned of global risks to tapering

Emerging markets:

There are global risks as well. Low interest rates in the U.S. had sent investors flocking to emerging markets for higher gains abroad. Continued stimulus could fuel this trend further, but once the Fed starts unwinding the stimulus, investors may be quick to pull their money out of these countries.

This summer, the mere hint of a so-called "taper" was enough to spark fears of a financial crisis in places like India, Brazil and Indonesia. What will happen if stimulus is even larger, and the taper eventually does become a reality?

The Fed meets this week to re-evaluate its policies, but little news is expected out of that meeting when it ends Wednesday.

First Published: October 28, 2013: 12:51 AM ET

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JPMorgan paying $5.1 billion to Fannie, Freddie over mortgages

It's been a rough year for JPMorgan.

NEW YORK (CNNMoney)

The bank has also been in talks with the Justice Department and other government officials over another potential settlement based on similar claims. That settlement will likely be even more expensive for JPMorgan.

The claims relate to conduct at JPMorgan and at Bear Stearns and Washington Mutual, which JPMorgan purchased in 2008. At issue are allegations that the firms sold risky mortgages and mortgage securities while misrepresenting their quality.

Among the purchasers were Fannie Mae and Freddie Mac, the government-backed housing finance giants that required a massive bailout in 2008 when their housing investments soured.

The deal was announced by the Federal Housing Finance Agency, which has overseen Fannie and Freddie since their 2008 rescue.

Agency head Edward DeMarco said the accord "provides greater certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers."

"This is a significant step as the government and JPMorgan Chase move to address outstanding mortgage-related issues," DeMarco said.

The firm reached the agreement without admitting or denying wrongdoing.

Related: More banks in crosshairs

JPMorgan will pay $4 billion to resolve claims related to the alleged misrepresentation of mortgage-backed securities -- investment products created by bundling payments from individual loans.

It will also repurchase $1.1 billion worth of mortgages sold to Fannie and Freddie between 2000 and 2008 that the firms say do not meet their quality standards.

JPMorgan (JPM, Fortune 500)said the settlements "are an important step towards a broader resolution of the firm's [mortgage-backed-securities]-related matters with governmental entities, and reflect significant efforts by the Department of Justice and other federal and state governmental agencies."

JPMorgan acquired Washington Mutual in 2008 after the failed bank had been taken over by the Federal Deposit Insurance Corporation. It's unclear whether JPMorgan will be able to pursue reimbursement claims with the FDIC for the portion of the settlement related to WaMu.

This issue has been a point of contention in JPMorgan's negotiations with the Justice Department, which wants to prevent the bank from passing on any settlement costs.

Securities sold by WaMu accounted for roughly $1.15 billion worth of the FHFA settlement.

Related: Half of nation's foreclosed homes still occupied

Investors initially shrugged off the news, which has been rumored for weeks. JPMorgan shares were up slightly in after-hours trading Friday, and have gained 20% so far this year.

JPMorgan is just one of 18 banks sued by the FHFA back in 2011 over the alleged misrepresentation of mortgage-backed securities, and is only the fourth to reach a settlement.

UBS (UBS) agreed to a settlement with the FHFA in July for $885 million. The agency has also settled with Citigroup (C, Fortune 500) and General Electric (GE, Fortune 500) for undisclosed sums.

JPMorgan is large enough to easily absorb the settlement costs. It's the biggest bank in the nation, with assets of $2.5 trillion and net income of $21.3 billion in 2012.

The bank has been buffeted by legal problems in the past few months, however.

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

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

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

First Published: October 25, 2013: 5:26 PM ET

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United fined $1.1 million over Chicago delays

Passengers were stuck on planes for stretches ranging from just over three hours to nearly four-and-a-half hours.

NEW YORK (CNNMoney)

The DOT said the penalty is the largest for such a violation since a rule limiting long tarmac delays took effect in April 2010. The rule states that U.S. airlines with with 30 or more passenger seats on their domestic flights can't allow their planes to remain on the tarmac for more than three hours without giving passengers the opportunity to disembark.

Passengers on 13 United flights were stuck on their planes during severe thunderstorms on July 13, 2012 for stretches ranging from just over three hours to nearly four-and-a-half hours. Bathrooms were inaccessible on two planes for portions of the delays, the DOT said.

"It is unacceptable for passengers to be stranded in planes on the tarmac for hours on end," Transportation Secretary Anthony Foxx said in a statement.

Related: Toyota settles acceleration case after $3 million jury verdict

United said it was "committed to complying with the tarmac delay regulations, and we continue to improve our procedures while maintaining the safety of our customers and co-workers."

The fine amounts to a slap on the wrist for a company that reported $590 million in profits for the third quarter.

Correction: An earlier version of this story incorrectly stated that United was pursuing a merger with US Airways. The proposed merger is between American Airlines and US Airways.

First Published: October 25, 2013: 2:42 PM ET

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Feds seize $28 million in bitcoins from alleged Silk Road operator

There are currently about 11.9 million bitcoins in circulation, according to the website Blockchain.

NEW YORK (CNNMoney)

Bitcoin, which allows users to conduct online transactions while obscuring their identities, was the only currency accepted on Silk Road. Law enforcement officials arrested the site's alleged proprietor, Ross Ulbricht, earlier this month, and have shuttered the operation.

Ulbricht faces a potentially lengthy prison sentence for charges ranging from narcotics trafficking to computer hacking to money laundering. Federal officials have now seized over $33.6 million worth of bitcoins in connection with the case.

"This seizure sends a clear notice to those who think they can commit crimes and conceal the fruits of their criminal activities in digital anonymity," IRS Special-Agent-in-Charge Toni Weirauch said in a statement.

Ulbricht's lawyer could not be reached for comment.

Related: How porn links and Ben Bernanke slipped into Bitcoin's code

Silk Road operated on an anonymous network known as Tor, making activity on the site virtually untraceable.

The use of bitcoin gave buyers and sellers an extra layer of protection. The currency is anonymous, decentralized and can only be used in digital form.

To process bitcoin transactions, Silk Road used what the FBI described as a "tumbler," a complex system that used countless dummy transactions to digitally conceal a payment's origins.

Over the past two and a half years, federal officials say the site generated sales of more than 9.5 million bitcoins, a sum valued at about $1.8 billion at Friday's exchange rate. In addition to illegal drugs, the site offered weapons, hacking software and other illicit products.

Bitcoin surged in value earlier this year, when a banking crisis in Cyprus shook confidence in government-issued currencies.

First Published: October 25, 2013: 9:31 PM ET

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JPMorgan paying $5.1 billion to Fannie, Freddie over mortgages

It's been a rough year for JPMorgan.

NEW YORK (CNNMoney)

The bank has also been in talks with the Justice Department and other government officials over another potential settlement based on similar claims. That settlement will likely be even more expensive for JPMorgan.

The claims relate to conduct at JPMorgan and at Bear Stearns and Washington Mutual, which JPMorgan purchased in 2008. At issue are allegations that the firms sold risky mortgages and mortgage securities while misrepresenting their quality.

Among the purchasers were Fannie Mae and Freddie Mac, the government-backed housing finance giants that required a massive bailout in 2008 when their housing investments soured.

The deal was announced by the Federal Housing Finance Agency, which has overseen Fannie and Freddie since their 2008 rescue.

Agency head Edward DeMarco said the accord "provides greater certainty in the marketplace and is in line with our responsibility for preserving and conserving Fannie Mae's and Freddie Mac's assets on behalf of taxpayers."

"This is a significant step as the government and JPMorgan Chase move to address outstanding mortgage-related issues," DeMarco said.

The firm reached the agreement without admitting or denying wrongdoing.

Related: More banks in crosshairs

JPMorgan will pay $4 billion to resolve claims related to the alleged misrepresentation of mortgage-backed securities -- investment products created by bundling payments from individual loans.

It will also repurchase $1.1 billion worth of mortgages sold to Fannie and Freddie between 2000 and 2008 that the firms say do not meet their quality standards.

JPMorgan (JPM, Fortune 500)said the settlements "are an important step towards a broader resolution of the firm's [mortgage-backed-securities]-related matters with governmental entities, and reflect significant efforts by the Department of Justice and other federal and state governmental agencies."

JPMorgan acquired Washington Mutual in 2008 after the failed bank had been taken over by the Federal Deposit Insurance Corporation. It's unclear whether JPMorgan will be able to pursue reimbursement claims with the FDIC for the portion of the settlement related to WaMu.

This issue has been a point of contention in JPMorgan's negotiations with the Justice Department, which wants to prevent the bank from passing on any settlement costs.

Securities sold by WaMu accounted for roughly $1.15 billion worth of the FHFA settlement.

Related: Half of nation's foreclosed homes still occupied

Investors initially shrugged off the news, which has been rumored for weeks. JPMorgan shares were up slightly in after-hours trading Friday, and have gained 20% so far this year.

JPMorgan is just one of 18 banks sued by the FHFA back in 2011 over the alleged misrepresentation of mortgage-backed securities, and is only the fourth to reach a settlement.

UBS (UBS) agreed to a settlement with the FHFA in July for $885 million. The agency has also settled with Citigroup (C, Fortune 500) and General Electric (GE, Fortune 500) for undisclosed sums.

JPMorgan is large enough to easily absorb the settlement costs. It's the biggest bank in the nation, with assets of $2.5 trillion and net income of $21.3 billion in 2012.

The bank has been buffeted by legal problems in the past few months, however.

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

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

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

First Published: October 25, 2013: 5:26 PM ET

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United fined $1.1 million over Chicago delays

Passengers were stuck on planes for stretches ranging from just over three hours to nearly four-and-a-half hours.

NEW YORK (CNNMoney)

The DOT said the penalty is the largest for such a violation since a rule limiting long tarmac delays took effect in April 2010. The rule states that U.S. airlines with with 30 or more passenger seats on their domestic flights can't allow their planes to remain on the tarmac for more than three hours without giving passengers the opportunity to disembark.

Passengers on 13 United flights were stuck on their planes during severe thunderstorms on July 13, 2012 for stretches ranging from just over three hours to nearly four-and-a-half hours. Bathrooms were inaccessible on two planes for portions of the delays, the DOT said.

"It is unacceptable for passengers to be stranded in planes on the tarmac for hours on end," Transportation Secretary Anthony Foxx said in a statement.

Related: Toyota settles acceleration case after $3 million jury verdict

United said it was "committed to complying with the tarmac delay regulations, and we continue to improve our procedures while maintaining the safety of our customers and co-workers."

The fine amounts to a slap on the wrist for a company that reported $590 million in profits for the third quarter.

Correction: An earlier version of this story incorrectly stated that United was pursuing a merger with US Airways. The proposed merger is between American Airlines and US Airways.

First Published: October 25, 2013: 2:42 PM ET

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Feds seize $28 million in bitcoins from alleged Silk Road operator

There are currently about 11.9 million bitcoins in circulation, according to the website Blockchain.

NEW YORK (CNNMoney)

Bitcoin, which allows users to conduct online transactions while obscuring their identities, was the only currency accepted on Silk Road. Law enforcement officials arrested the site's alleged proprietor, Ross Ulbricht, earlier this month, and have shuttered the operation.

Ulbricht faces a potentially lengthy prison sentence for charges ranging from narcotics trafficking to computer hacking to money laundering. Federal officials have now seized over $33.6 million worth of bitcoins in connection with the case.

"This seizure sends a clear notice to those who think they can commit crimes and conceal the fruits of their criminal activities in digital anonymity," IRS Special-Agent-in-Charge Toni Weirauch said in a statement.

Ulbricht's lawyer could not be reached for comment.

Related: How porn links and Ben Bernanke slipped into Bitcoin's code

Silk Road operated on an anonymous network known as Tor, making activity on the site virtually untraceable.

The use of bitcoin gave buyers and sellers an extra layer of protection. The currency is anonymous, decentralized and can only be used in digital form.

To process bitcoin transactions, Silk Road used what the FBI described as a "tumbler," a complex system that used countless dummy transactions to digitally conceal a payment's origins.

Over the past two and a half years, federal officials say the site generated sales of more than 9.5 million bitcoins, a sum valued at about $1.8 billion at Friday's exchange rate. In addition to illegal drugs, the site offered weapons, hacking software and other illicit products.

Bitcoin surged in value earlier this year, when a banking crisis in Cyprus shook confidence in government-issued currencies.

First Published: October 25, 2013: 9:31 PM ET

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Zynga surges 12% after sales beat projections

Zynga is best known for the social media game FarmVille.

NEW YORK (CNNMoney)

Shares of the social gaming company surged 12% in after-hours trading Thursday after it reported third-quarter sales of $202.6 million, beating the analyst projection of $187.9 million. The company also posted a smaller-than-expected loss -- $16 million, or two cents a share, against a projection of four cents.

Zynga still faces a difficult road ahead, having struggled to replicate earlier successes like FarmVille and Words With Friends.

The company's daily active user total slipped 23% versus the second quarter to 30 million, and 49% versus a year ago. Monthly active users fell to 133 million, from 311 million a year ago.

Related: Twitter sets IPO stock price

Zynga (ZNGA) CEO Don Mattrick said the company is "working hard to compete more aggressively on the web, move to mobile and develop new hits, and I am happy with the early progress we have made."

Zynga announced multiple rounds of layoffs earlier this year, and co-founder Mark Pincus stepped down as CEO at the beginning of July.

The company raised hopes among investors last year by applying for an online gambling license, exploring a new potential revenue source. But Zynga dropped those plans in July, focusing on its core social gaming business.

Related: Microsoft profit jumps 17%

Zynga has offered online gambling in the U.K. since April.

First Published: October 24, 2013: 5:52 PM ET

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U.S. lagging behind on gender equality

Women hold 98 of the 535 seats in Congress -- just 18%. That's far fewer than in some other countries, which is one reason why the United States ranks in the middle of the pack on gender equality.

NEW YORK (CNNMoney)

The U.S. has a larger gender gap than 22 other countries including Germany, Ireland, Nicaragua and Cuba, according to a World Economic Forum report released Thursday.

The report rates 136 countries on gender equality, and factors in four categories: economic opportunity, educational attainment, health and political empowerment.

By that metric, Iceland has had the narrowest gender gap for five straight years. Other Nordic countries like Finland, Norway and Sweden follow close behind.

Related: See an interactive map of the gender gap

Why wasn't the U.S. even close to the top? While the country scores high on economic opportunity and education for women, it scores poorly on political empowerment.

Not only has the United States never had a female president, women still make up far less than half of Congress.

This year, women hold 98 of 535 seats in Congress. That's just 18%.

In contrast, Iceland scores the highest in the world for political empowerment of women. Female heads of state led the country for 20 out of the last 50 years. Women also make up about 40% of the country's parliament.

Places like Cuba and Nicaragua also have a far greater percentage of women serving in their legislatures than in the U.S.

India and Ireland had female heads of state lead their countries 21 out of the last 50 years.

Related: Best countries for working moms and dads

Iceland and other Nordic countries consistently score high on gender surveys. Their labor force participation rates for women are among the highest in the world, salary gaps between women and men are narrow and women have abundant opportunities to rise to positions of leadership, the report said.

These countries also have generous paid parental leave policies, and ensure workers are given plentiful vacation time.

The United States does give some workers the right to 12 weeks off from work after the birth of a child, but pay is not guaranteed. It's also the only developed nation that doesn't guarantee workers paid vacation time.

First Published: October 24, 2013: 6:04 PM ET

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Instagram reveals its new ads

Instagram is adding a new feature: advertisements.

HONG KONG (CNNMoney)

The photo-sharing network Instagram on Thursday pulled back the curtain on a sample ad that will appear in users' feeds during the coming week. The ad, which looks much like a normal Instagram post, will carry a designation as "sponsored" content.

The Facebook-owned app said that the first ads will come from companies that are already active Instagram users, including Adidas (ADDDF), Ben & Jerry's, Burberry (BBRYF), General Electric (GE, Fortune 500), Levi's, Lexus, Macy's (M, Fortune 500), Michael Kors, PayPal and Starwood Hotels (HOT, Fortune 500).

Instagram announced in early October that it would begin rolling out ads, but few details have been available until now.

"We want ads to be creative and engaging," the company said in an announcement. "We want to show ads from businesses that are interesting to you."

Related story: TSA's gun policy: Confiscate it, Instagram it

Instagram plans to tap into user activity in an effort to show more relevant ads. Users will be able to hide ads they aren't interested in, and have the option to provide feedback.

Instagram now has about 150 million people on its network, continuing to grow after being acquired by Facebook (FB, Fortune 500) for $1 billion in April 2012.

--CNN's Elizabeth Landers contributed to this story

First Published: October 24, 2013: 11:36 PM ET

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McDonald's helps workers get food stamps

McDonald's workers have been protesting for higher wages and better hours since last November.

NEW YORK (CNNMoney)

The hamburger chain pretty much admits that in a call made by a worker to "McResources"-- a helpline set up for its workers.

The advocacy group Low Pay is not Ok recorded a phone call made to the helpline by one McDonald's worker Nancy Salgado. The group circulated an edited video of the recording. CNNMoney reviewed the full recording of the call.

Salgado, who has worked at a Chicago McDonald's for 10 years and makes $8.25 an hour, asked the McResources representative a number of questions related to getting assistance to pay for her heating bill, her groceries and her sister's medical expenses. Salgado told the representative that she was recording the call for her sister.

The helpline operator never asked Salgado how much she made per hour, and how many hours per week she worked beyond the fact that she was a full-time employee. But she said that Salgado "definitely should be able to qualify for both food stamps and heating assistance."

The representative then pointed her toward a number of resources in Chicago, such as food pantries and a program that would help cover some of her heating bill. She said she would email her specific phone numbers and programs.

Related: The real budgets of McDonald's workers

The operator also explained that the McResources Line is available to help McDonald's workers who need help navigating the process of getting public assistance. The helpline's phone number is posted in fliers at many McDonald's locations.

But the line is not open to all McDonald's workers. Franchise owners need to pay for the service in order for their employees to use it.

Salgado's franchise owner in Chicago, for example, had not paid for the service. The operator said that none of the Chicago franchises had.

"We can be a good program," the operator said. "We can do a lot of the leg work that takes a lot of the stresses off of you making a million phone calls trying to find services."

News of the McResources Line comes a week after a report found that more than half of fast food workers have to rely on public assistance programs since their wages aren't enough to support them.

The report estimated that this public aid carries a $7 billion price tag for taxpayers each year.

A separate report by the National Employment Law Project released on the same day showed that McDonald's alone was responsible for $1.2 billion of that $7 billion alone.

The recorded phone call supports what the reports found and also the claims of hundreds of fast food workers that their pay is too low, they don't get scheduled for enough hours and they get no benefits. Since last November, workers have organized protests around the country, including New York City, Los Angeles, Memphis and Detroit calling for a minimum wage of $15 an hour and the right to organize without retaliation.

Earlier this year, McDonald's came under fire for releasing a budget planning guide for its employees. The sample budget it provided didn't account for either food or gasoline, a big expense for low income workers. The budget also left room for an income from a second job, which many called an admission by the fast food giant that its workers can't live on wages from one job at McDonald's.

McDonald's did not return a request for comment.

First Published: October 23, 2013: 5:09 PM ET

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Countrywide defrauded Fannie and Freddie, jury rules

Bank of America acquired Countrywide in 2008.

NEW YORK (CNNMoney)

A former Countrywide executive, Rebecca Mairone, was also found liable in the case.

The Justice Department lawsuit concerned a Countrywide program established in 2007 called the High-Speed Swim Lane -- nicknamed "the Hustle" -- that prosecutors say was "intentionally designed to process loans at high speed and without quality checkpoints, and generated thousands of fraudulent and otherwise defective residential mortgage loans." Borrowers were able to secure mortgages in many cases without even having their income verified.

These loans were then misrepresented as high-quality to Fannie and Freddie, who were told Countrywide had "strengthened its underwriting guidelines and scaled back on risker loan products," the complaint says.

Bank of America (BAC, Fortune 500) acquired Countrywide in 2008 and is now responsible for its liabilities. Fannie and Freddie suffered "hundreds of millions of dollars in losses" after borrowers whose mortgages they purchased from Countrywide defaulted, according to the suit.

Judge Jed Rakoff has yet to determine penalties in the case, which will be limited to fines because the charges were civil rather than criminal.

Manhattan U.S. Attorney Preet Bharara said the Countrywide program "treated quality control and underwriting as a joke."

"In a rush to feed at the trough of easy mortgage money on the eve of the financial crisis, Bank of America purchased Countrywide, thinking it had gobbled up a cash cow," Bharara said in a statement. "That profit, however, was built on fraud, as the jury unanimously found."

Related: More banks in the crosshairs after JPM deal

The U.S. joined a whistleblower lawsuit filed by Edward O'Donnell, a former Countrywide executive who claims to have complained repeatedly about loan quality standards at the firm. O'Donnell could be awarded up to $1.6 million as a portion of the damages.

Bank of America spokesman Lawrence Grayson said the decision "concerned a single Countrywide program that lasted several months and ended before Bank of America's acquisition of the company."

"We will evaluate our options for appeal," Grayson said.

Mairone formerly served as chief operating officer of Countrywide's Full Spectrum Lending division. Prosecutors say the "Hustle" program was implemented under her direction.

Marc Mukasey, a lawyer for Mairone, called her "a model of honesty, integrity and ethics" and said the defense team would appeal.

"She never engaged in any fraud because there was no fraud," Mukasey said in an email.

Bank of America reached a $10.3 billion settlement with Fannie Mae earlier this year over questionable Countrywide loans originated between 2001 and 2008.

JPMorgan (JPM, Fortune 500), meanwhile, is currently in talks with the government over a potential multi-billion-dollar settlement that would resolve claims that the bank misrepresented mortgage-backed securities sold to Fannie and Freddie ahead of the crisis.

The Federal Housing Finance Agency, which has overseen Fannie and Freddie since their 2008 bailout, has also filed lawsuits against more than a dozen other banks over mortgage securities sold to the firms.

First Published: October 23, 2013: 6:01 PM ET

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China factories power ahead

HONG KONG (CNNMoney)

HSBC said on Thursday that its "flash" measure of sentiment among manufacturing purchasing managers advanced to 50.9 in October, its highest level in seven months.

The index is an early gauge of the health of the sector, which is seen as a bellwether for China's export-heavy economy.

It had fallen below 50 for months, but finally perked up again in August and September. Any number under 50 indicates a slower pace of manufacturing activity.

HSBC's China economist Hongbin Qu said that the index rose "on the back of broad-based modest improvements."

"This momentum is likely to continue in the coming months, creating favorable conditions for speeding up structural reforms," he said.

China reported last week that third quarter economic growth hit 7.8%, which should take some pressure off the country's leaders as they seek to execute painful structural reforms.

Related story: Alarm bells ring over China's debt problem

The country averaged growth of around 10% a year in the past three decades, propelling it up the list of biggest economies, generating wealth for its growing middle class and boosting global trade.

The third quarter result all but confirms that Beijing will meet its 7.5% annual growth target for the year. But questions remain about the quality of growth achieved.

Related: Smog chokes Chinese city of 11 million

As China seeks more sustainable growth, it is trying to shift from an export-driven model toward one led by consumption. Economists believe the path ahead could be rather bumpy.

One major headwind is the country's addiction to credit -- which shows no signs of slowing, even as debt piles up.

First Published: October 23, 2013: 11:00 PM ET

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Carl Icahn dumps more than half of his Netflix stake

Activist investor Carl Icahn

NEW YORK (CNNMoney)

A year ago this month, the activist investor directly bought or took out options on 5.5 million Netflix shares, representing a 10% stake in the company. Icahn has now sold off 5.5% of that stake, he disclosed in a regulatory filing late Tuesday. Netflix shares fell more than 2% in after-hours trading on the news.

Netflix shares are up a stunning 460% since Icahn bought his stake.

As he is wont to do, Icahn tweeted about the sale of his "block of NFLX." He thanked Netflix executives and staffers, as well as Kevin Spacey, the star of the buzzy Netflix-original series "House of Cards."

Icahn and Netflix weren't so chummy when the investor purchased his stake in 2012. Icahn is known for exerting his will on the companies he takes an interest in, and when he bought his Netflix shares, he said the company would be a nice takeover target for a larger company looking to add streaming video to their portfolio.

Related story: Netflix CEO: Settle down about our stock

Netflix was spooked. Just one week later, the company announced it had adopted a "stockholder rights plan" designed to prevent activist shareholders from launching a hostile takeover.

The plan, known as a "poison pill," would kick in if an individual or group tried to buy a sizable chunk of the company without approval from Netflix's board. If that happened, Netflix (NFLX) could opt to flood the market with new shares and make a takeover prohibitively expensive.

Icahn lashed back at Netflix at that time, calling the move "discriminatory" and blasting the company's board for having too much power over shareholders.

But Netflix began to turn around soon after Icahn bought his stake, so the investor made his money and the company remained independent.

Late Monday, Netflix reported third-quarter earnings that handily beat Wall Street estimates.

First Published: October 22, 2013: 6:22 PM ET

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More banks in the crosshairs after JPM deal

JPMorgan posted a loss for the third quarter as a result of its myriad legal problems.

NEW YORK (CNNMoney)

The settlement, which has yet to be finalized, relates to mortgage-backed securities sold by JPMorgan and the firms it later purchased, Bear Stearns and Washington Mutual. These securities, created by bundling payments from individual mortgages, were a key cause of the financial crisis, failing in huge numbers as the housing market imploded and borrowers defaulted on their loans.

The pending settlement, which has been billed as the largest ever for a financial firm, drew JPMorgan CEO Jamie Dimon personally to the Justice Department last month for negotiations with Attorney General Eric Holder. But several billion dollars' worth of the deal under discussion relate to a lawsuit filed by the Federal Housing Finance Agency on behalf of Fannie Mae and Freddie Mac.

The agency has a number of other big banks in the crosshairs as well. JPMorgan (JPM, Fortune 500) was just one of 18 financial institutions the FHFA sued back in 2011, accusing them of selling Fannie and Freddie securities that "had different and more risky characteristics than the descriptions contained in the marketing and sales materials."

Related: JPMorgan's fine is bad news for BofA, Wells

Fannie and Freddie, the government-backed housing finance firms, sustained massive losses on mortgage-backed securities as the housing market imploded, requiring a bailout of over $187 billion. The firms have been controlled by the FHFA since their 2008 rescue.

Swiss lender UBS (UBS) has already reached an $885 million settlement with the FHFA in connection with losses Fannie and Freddie sustained on over $6.4 billion worth of mortgage securities. The agency also settled for undisclosed sums earlier this year with Citigroup (C, Fortune 500) and General Electric (GE, Fortune 500).

The FHFA is reportedly seeking $4 billion from JPMorgan to resolve its claims over $33 billion worth of securities sold to Fannie and Freddie by JPMorgan, Bear and WaMu.

Bank of America (BAC, Fortune 500), which acquired Countrywide and Merrill Lynch during the crisis era, could be on the hook for even more. The Charlotte-based firm is facing claims from the FHFA over $57 billion worth of mortgage bonds.

In all, the 18 FHFA lawsuits cover more than $200 billion in allegedly misrepresented securities.

The question of whether any individual bankers will be held to account in is another matter. Thus far, criminal cases related to the packaging and sale of mortgage-backed securities have been conspicuously absent.

The proposed JPMorgan settlement covers only civil charges, and would not settle the question of whether any individual executives engaged in wrongdoing. There is an ongoing federal criminal probe based in Sacramento, Calif., the state where Washington Mutual was based.

JPMorgan originally sought to be protected from any criminal charges as part of this deal, but that request was rejected by the government.

First Published: October 23, 2013: 12:39 AM ET

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