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Bank of America Reaches $404 Million Settlement With Freddie Mac

Wall Street Journal Online - Mon, 12/02/2013 - 7:38pm
Bank of America agreed to pay $404 million to Freddie Mac to resolve claims stemming from mortgage loans the bank sold to Freddie over the past decade.
Categories: Financial News

Hilton Says It Could Raise $2.4 Billion in IPO

Time Magazine Latest Money News - Mon, 12/02/2013 - 5:55pm
(NEW YORK) — Hilton Worldwide Holdings Inc. said Monday that it could raise as much as $2.37 billion, making it one of the year’s biggest IPOs. The hotel operator said in a regulatory filing that the offering of 112.8 million shares is expected to price between $18 and $21 each. Hilton is offering about 64.1 million shares, and selling shareholders are offering 48.7 million shares. Selling additional shares to banks could put the IPO’s proceeds at as much as $2.72 billion. The initial public offering comes as the hotel industry has started to recover over the past two years from its battering during the recession and as the IPO market heats up. Roughly 200 companies have gone public in 2013 as markets hit record highs. If it prices above the middle of the expected range, Hilton will have the second- or third-largest IPO this year, surpassing Twitter’s $2.1 billion haul last month. It would trail oil and gas pipeline company Plains GP Holdings LP, which raised $2.9 billion in October. Depending on where it prices and if bankers buy up Hilton’s extra stock, it could also best Pfizer’s spinoff, Zoetis, which raised $2.6 billion in January. But assuming shares price at $19.50, the middle of the range, Hilton anticipates net proceeds of about $1.21 billion, which it plans to use to repay debt. That price would give the McLean, Va.-based company a value of about $19.2 billion. Hilton was taken private by The Blackstone Group, an investment firm, in October 2007 for $20 billion. Blackstone will still own a majority of the voting power of shares eligible to vote in the election of board members, according to the filing. The recession began soon after Blackstone bought Hilton. Hotel operators were hurt by a drop in business travel, fewer vacationers, falling real estate prices and a general oversupply in the U.S. market. In the past two years, the industry has started to turn around as business travel is improving and room rates are rising. Hilton has 4,080 hotels, resorts and timeshare
Categories: Financial News

FCC Chair Hints at Spectrum-Allocation Idea

Wall Street Journal Online - Mon, 12/02/2013 - 5:48pm
FCC chief Tom Wheeler indicated he might support limiting big carriers like AT&T and Verizon Wireless from amassing airwaves at a coming spectrum auction, in good news for T-Mobile and Sprint.
Categories: Financial News

Cravath, Swaine & Moore to Pay Bonuses At 2012 Levels

Wall Street Journal Online - Mon, 12/02/2013 - 5:44pm
Elite New York law firm plans to pay associate attorneys the same bonuses it paid in 2012, reflecting a cautious outlook
Categories: Financial News

Ratings Sag for Cable-TV Business News

Wall Street Journal Online - Mon, 12/02/2013 - 5:37pm
Viewership is weak at business-focused cable TV channels CNBC, Fox and Bloomberg, in part a reflection of the way individual investors have ceded stock trading to large institutional investors.
Categories: Financial News

Amazon’s Drone Strike

Time Magazine Latest Money News - Mon, 12/02/2013 - 5:15pm
Amazon founder Jeff Bezos upped the ante in the delivery wars Sunday. On CBS 60 Minutes, Bezos revealed “Amazon Prime Air,” the company’s plan to launch a fleet of drones capable of gingerly dropping a 5-pound-or-less package at your doorstep half an hour after you order it. But Amazon’s move into drone-delivery isn’t just out-of-the-box business thinking; it’s an ambitious volley in the race to make deliveries faster than anyone else. As Michael Toscano, CEO of the Association for Unmanned Vehicle Systems International told TIME, “This is a leadership issue, and [Amazon] is taking a leadership role. Once this is opened up everybody will do it.” Like most drone-related news that periodically sets the Internet abuzz, Amazon’s announcement is a lot of hype—by Bezos’ own admission the system is half a decade away, at least. But it’s also a signal the Internet commerce goliath sees the writing on the wall. Near-instant delivery is poised to do to online retail what Amazon has been doing to brick-and-mortar retail for a decade, and Bezos doesn’t want to see Amazon go the way of Borders bookstore. If you live in an urban area—the kind of place near one of Amazon’s “fulfillment centers” from which it might someday send a drone to your doorstep—options abound to have stuff delivered to you the same day, or sooner, from area stores. As companies like Ebay Now, Deliv, Postmates, and Task Rabbit move in on the same-day delivery market, Amazon’s convenience advantage gets shaved away. With their big-box locations, Target and Walmart still have a network of “fulfillment centers” to inspire Bezos’ envy. Which is why Bezos announced Amazon Prime Air long before the system will be in operation. Once the technology, and regulatory permission exists, what’s to stop other retailers already angling on the delivery market from getting into drone delivery? As Slate’s Matt Yglesias noted Monday, “The question is whether ‘good enough’ drones will be available before Amazon manages to put all these companies out of business. Unless Amazon itself can be the company that develops the drones.” Which is
Categories: Financial News

Apple Buys Twitter Analytics Firm Topsy for $200 Million

Time Magazine Latest Money News - Mon, 12/02/2013 - 5:10pm
Apple Inc. acquired the Twitter analytics firm Topsy — which uses tweets to determine consumer attitudes — for about $200 million on Monday. An Apple spokeswoman confirmed the deal to the Wall Street Journal, though the company’s plan for the firms were not discussed. Topsy, however, is one of a few companies that have access to the “firehose,” or every one of the billions of tweets posted to the service since 2006. The information is used by groups to determine how users feel about certain products and who influences consumer behavior. It also offers exact counts of who is tweeting what, which could have a huge impact on Apple platforms. While it is unclear exactly how Apple plans to integrate Topsy data, TechCrunch posits that Apple may use it analyze tweets in order “to recommend apps on a more personal basis, rather than ‘generically’ to everyone.” What’s more, “Apple could theoretically use social data to help advertisers display ads to more relevant viewers.” The San Francisco startup was founded in 2007 by its chief technology officer Vipul Ved Prakash, along with Rishab Aiyer Ghosh, Gary Iwatani and Justin Foutts. [Wall Street Journal]
Categories: Financial News

Take Off, Amazon: 5 Companies Already Trying Drone Deliveries

Time Magazine Latest Money News - Mon, 12/02/2013 - 5:01pm
Jeff Bezos’ announcement Sunday that Amazon is planning to start delivering products by unmanned aerial vehicles set the Internet whirring like a fleet of delivery drones. Amazon won’t be delivering anything until the Federal Aviation Administration issues regulations governing the commercial use of drones, which won’t happen until 2015 at the earliest. Still, Amazon’s announcement, complete with a flashy video supposedly taken during a “recent test flight,” wasn’t the first time a company has drummed up press by announcing drone delivery. For instance… BurritoBomber Like many drone “delivery” systems, the BurritoBomber claims that it will let you place a burrito order from your smartphone and drop a delicious delicacy from above. If you order from them, we hope you’re standing in a big empty field, because parachute technology may not have quite the precision of a delivery driver. Oppikoppi South Africa’s OppiKoppi music festival claims to have dropped ice-cold beers from the sky, delivered safely to thirsty festival goers via parachute. See above for our big open field disclaimer but hey, cold beer from the sky? We’re not complaining. DonerCopter The doner is Germany’s version of the burrito. Use your imagination. DomiCopter Dominos Pizza’s drone will kindly deliver a pizza to the earth’s surface for you, skipping the whole parachute situation entirely. Flirtey If for some reason you want textbooks rather than food delivered to you by drone (what kind of monster are you?) this Australian startup could be your thing. Just stay away from subjects requiring big heavy textbooks. And don’t buy an e-reader, to which textbooks of the future could be digitally delivered sans drone.
Categories: Financial News

Daimler, Lagardère to Stand Trial in EADS Case

Wall Street Journal Online - Mon, 12/02/2013 - 4:53pm
French media company Lagardère and German car maker Daimler are set to face trial on charges of alleged insider trading of shares in European Aeronautic Defence & Space in 2006.
Categories: Financial News

Shift on Nonconforming Mortgages

Wall Street Journal Online - Mon, 12/02/2013 - 4:16pm
Some of the nation's largest banks will offer loans that don't conform to new gold-standard lending definitions under sweeping mortgage regulations set to take effect next month, reversing course after industry leaders had earlier suggested that banks might further curtail lending.
Categories: Financial News

23andMe Stops Genetic Test Marketing

Wall Street Journal Online - Mon, 12/02/2013 - 4:14pm
Genetic-test maker 23andMe said it stopped all marketing of its service last week in response to a U.S. regulatory order.
Categories: Financial News

Stocks Down As Dow Notches Biggest Drop Since Early November

Time Magazine Latest Money News - Mon, 12/02/2013 - 3:59pm
Stocks fell Monday, bucking a trend of record-breaking gains, amid mixed reports on Black Friday shopping and concerns that the Federal Reserve might soon end its stimulus policy. The Dow Jones Industrial Average fell more than it has since Nov. 7,  dropping 77 points, or 0.5%, to 16008. The S&P 500 index fell 4.9 points, or 0.3%, to 1800. Stocks fell despite—or because—of some improving economic markers that sparked concern that the Fed might decide the economy no longer needs its stimulus boosts. [Wall Street Journal]
Categories: Financial News

Goldman, J.P. Morgan Capital Plans Get Nod

Wall Street Journal Online - Mon, 12/02/2013 - 3:45pm
Goldman Sachs and J.P. Morgan won approval from the Fed on their capital plans, a move designed to ensure they have the wherewithal to withstand a period of economic or financial stress.
Categories: Financial News

Good Sign for Growth? Factories Humming

Wall Street Journal Online - Mon, 12/02/2013 - 3:15pm
U.S. factories expanded in November for the sixth straight month, signaling stronger demand at home and abroad that could boost growth prospects into next year.
Categories: Financial News

Twitter Shares Draw Lukewarm Ratings

Wall Street Journal Online - Mon, 12/02/2013 - 3:04pm
As the five lead underwriters for Twitter Inc.'s IPO rolled out their first research reports on the stock, only two gave Twitter a ratings equivalent of "buy."
Categories: Financial News

OPEC Feels Effects of Shale Boom

Wall Street Journal Online - Mon, 12/02/2013 - 3:01pm
Officials from Saudi Arabia and other Persian Gulf oil nations said for the first time Monday that the prices they charge in the U.S. were hurt by a shale production boom.
Categories: Financial News

Fast Food Protests Planned in 100 Cities Thursday

Time Magazine Latest Money News - Mon, 12/02/2013 - 2:27pm
An organized labor movement that began at a single New York McDonald’s about a year ago is planned to spread to around 100 cities this week. Fast-food workers nationwide are redoubling their efforts to earn higher wages with a more aggressive set of one-day strikes that organizers say will hit every region of the U.S. Low-wage workers at restaurants such as McDonald’s, Wendy’s and other fast food chains are expected to walk off the job on Thursday. The workers are demanding an increase in pay to $15 per hour—what they call a living wage—and the right to unionize. The federal minimum wage is currently $7.25 per hour, and fast food workers earn an average hourly wage of about $9, according to the Bureau of Labor Statistics. Over the course of the last year, the fast-food protests, which are being backed by union groups such as the Service Employees International Union, have expanded greatly in scope. Last November about 200 workers went on strike in New York, a number that was already the “biggest wave of job actions in the history of America’s fast-food industry,” according to the New York Times. By July thousands of workers in seven other cities had also engaged in strikes. A daylong strike at the end of August spread to more than 50 cities, including places in the union-averse Deep South. On Thursday, Charleston, South Carolina and Providence, Rhode Island and Pittsburgh, Pennsylvania will be among the new locations where workers will strike, according to organizers. (MORE: Fast Food Strikes Go Viral: Workers Expected to Strike in 35 Cities) During previous protests, the National Restaurant Association, the restaurant industry’s lobbying arm, has pointed out that only 5 percent of fast food workers earn the federal minimum wage and most employees earning entry-level wages are under 25. At least one fast food executives has claimed that a $15 per hour wage would kill jobs. It’s hard to say just how much a doubling of wages would affect menu prices because most individual fast-food locations are franchised to
Categories: Financial News

Calm Black Friday: Only 1 Death, 15 Injuries Attributed to Big Shopping Day

Time Magazine Latest Money News - Mon, 12/02/2013 - 2:26pm
The official Black Friday tallies are in. On the negative side (for retailers and the economy), shoppers spent less than expected; yet on the plus side (in terms of safety and for the sake of humanity), there were fewer shopping-related casualties than there have been in the past. Every holiday season, it seems like the same story: Chaotic, violent scenes at shopping malls pop up during the Thanksgiving-Black Friday weekend as reliably as overhyped deals from retailers. Sure enough, brawls and assaults were reported soon after the stores launched Black Friday sales on Thanksgiving night. Even so, for the most part, Black Friday 2013 was fairly subdued—in some cases, shoppers used words like “quiet” and “relaxed” to describe the scene. “People are even nice to each other,” said one woman who was out shopping with her 10-year-old daughter early on Friday morning at the Town Center at Boca Raton, Fla., according to the Sun Sentinel. “It seems quiet,” she said. “This is beautiful. People are even nice to each other.” Another consumer, quoted at a mall in Fort Lauderale, said that Black Friday seemed “like a regular shopping day.” Likewise, “Shoppers in the D.C. region were surprised at how calm retail outlets were on Black Friday,” the Washington Post noted. (MORE: What You Need to Know About Cyber Monday) One explanation for why Black Friday wasn’t quite as crazed as it’s been in the past is that, thanks to the expansion of stores opening on Thanksgiving and Black Friday deals starting a week or more early, the usual Black Friday rush was dispersed over time. “The earlier start absolutely has helped,” one shopper at the Arundel Mills in Maryland told the Baltimore Sun. “It’s much more relaxed.” Another big reason why Black Friday was more relaxed (dare we say pleasant?) at malls this year is that more consumers turned online to do their shopping. According to the National Retail Federation, American shoppers spent an average of $407.02 from Thursday through Sunday, down from $423.55 for the same period in 2012.
Categories: Financial News

Treasury Delays Bill Sale Due to Glitch

Wall Street Journal Online - Mon, 12/02/2013 - 1:51pm
Officials cited an error that occurred during a test of its system.
Categories: Financial News

Meet the Two Retail Giants That Won’t Let You Buy Online Today

Time Magazine Latest Money News - Mon, 12/02/2013 - 1:00pm
Shoppers won’t find any Cyber Monday deals today at Ross or Marshalls, the two discount retailers. Sure, they want your business. But you’ll have to get in your car and visit one of their bricks and mortar stores. Unlike virtually every other national retail chain, neither Ross nor Marshalls sells online. Yes, you read that right. Online shopping isn’t an option – not today or any day. Ross and Marshalls are among a handful of big stores that have avoided e-commerce, or at least got a late start. Their take-it-slow strategy is a sharp contrast to the intense online focus of rivals, many of which have been selling on the Web for close to 15 years. How can a retro retailer survive in the digital age? It depends. “If you’re a company that competes very heavily with Amazon, there is no option,” said Sucharita Mulpuru-Kodali, an analyst with Forrester Research. “But if you have unique products or you’re focused on your stores, you can afford to be a holdout.” Despite its outsized reputation, online shopping plays a relatively small role in retailing. E-commerce accounted for only 5.9 percent of overall retail sales in the third quarter, up from 4.7 percent a year earlier, according to the U.S. Commerce Department. Still, many bricks and mortar stores pay close attention to their online businesses and spend lavishly on them. Technology, staff and giant warehouses filled with merchandise are costly. A number of retailers have also gone so far as to open research labs in Silicon Valley to stay on the cutting edge of innovation. Bricks and mortar stores vary widely in their success online. Nordstrom’s direct sales business, which includes e-commerce, makes up nearly 14 percent of the company’s overall revenue. But for others, e-commerce remains insignificant. Target, for example, has said that online accounts for less than 2 percent of its overall sales. Whatever the case, the hype over online retailing reaches its annual zenith today. For the past eight years, the e-commerce industry has made a big marketing push the
Categories: Financial News


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