| By Jamie O'Leary | Tuesday, July 30th 2013, 17:44 GMT |
Audi has lost its appeal against Mattias Ekstrom's disqualification from his Norisring DTM victory earlier this month
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| By Jonathan Noble | Tuesday, July 30th 2013, 17:05 GMT |
Ferrari insists there is no breakdown in its relationship with Fernando Alonso - despite president Luca di Montezemolo's unhappiness at comments made by the Spaniard
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Mark Glendenning | Tuesday, July 30th 2013, 17:52 GMT |
Oriol Servia will return to the cockpit for Panther Racing at Mid-Ohio this weekend as Ryan Briscoe continues to recover from injuries sustained in a crash in Toronto
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| Monday, July 29th 2013, 14:53 GMT |
Yamaha remains hopeful of retaining Cal Crutchlow for the 2014 MotoGP championship, and expects the Briton to make a decision on his future before the Indianapolis round in mid-August.
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Kevin Turner | Monday, July 29th 2013, 15:53 GMT |
American tin-top racer Robb Holland will return to the British Touring Car Championship at Snetterton this weekend, driving a Team Hard Vauxhall Insignia
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Pablo Elizalde and Jonathan Noble | Monday, July 29th 2013, 16:38 GMT |
Ferrari president Luca di Montezemolo has warned Fernando Alonso about his conduct following comments made by the Spaniard during the Hungarian Grand Prix weekend
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Jonathan Noble | Sunday, July 28th 2013, 18:28 GMT |
Red Bull is considering Fernando Alonso as a potential team-mate to Sebastian Vettel for 2014 after it emerged secret talks took place between the Spaniard's management and the team at the Hungarian Grand Prix
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| By Connell Sanders Jr | Sunday, July 28th 2013, 20:02 GMT |
Ryan Newman defeated Jimmie Johnson in the NASCAR Sprint Cup's Brickyard 400 at Indianapolis
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Subscribe to Premier Sports TV to watch all Sprint Cup events live in the UK. Visit www.premiersports.tv for more information.
| By Jonathan Noble and Edd Straw | Saturday, July 27th 2013, 17:45 GMT |
Romain Grosjean and Lotus will keep third on the Hungarian Grand Prix after stewards accepted that damage caused a floor infringement
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| By Jonathan Noble | Saturday, July 27th 2013, 18:35 GMT |
Formula 1 teams are meeting ahead of the Hungarian Grand Prix to try to finalise next year's pre-season build-up plans - with Dubai set to hold two tests
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| By Connell Sanders Jr | Saturday, July 27th 2013, 21:04 GMT |
Ryan Newman claimed his first pole in nearly two years in qualifying for the NASCAR Sprint Cup's Indianapolis round
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Subscribe to Premier Sports TV to watch all Sprint Cup events live in the UK. Visit www.premiersports.tv for more information.
A Detroit Red Wings game at Joe Louis Arena, the team's current home.
NEW YORK (CNNMoney)
Advocates of the arena say it's the kind of economic development needed to attract both people and private investment dollars into downtown Detroit. It's an argument that has convinced Michigan Gov. Rick Snyder and Kevyn Orr, the emergency manager he appointed to oversee the city's finances, to stick with the plan. Orr said Detroit's bankruptcy filing won't halt the arena plans.
"I know there's a lot of emotional concern about should we be spending the money," said Orr. "But frankly that's part of the economic development. We need jobs. If it is as productive as it's supposed to be, that's going to be a boon to the city."
But critics say the project won't have enough economic impact to justify the cost, and that it's the wrong spending priority for a city facing dire economic conditions.
Detroit city services are already stretched extremely thin. On average, police take about an hour to respond to calls for help, and 40% of street lights are shut off to save money.
"If you want people to live in the city, and not just visit to go to games, you have to invest in schools, in having the police to respond to calls," said Gretchen Whitmer, the Democratic leader in the state senate. "There are so many investments that should trump a sports stadium."
Additionally, Orr wants to make deep cuts to both the pensions and health care coverage promised to city employees and retirees.
The state legislature approved the taxpayer funding for the arena in December. The controversial vote split Detroit's own legislative delegation. Whitmer argues that the matter should be reconsidered given the city's worsening finances.
"If the vote was held today, since the bankruptcy, I wouldn't put my money on it passing," she said.
Related: Why Obama won't bailout Detroit
The arena will be paid for with a $450 million bond issue that will be repaid over the next 30 years. Taxpayers will be paying almost two-thirds of the cost of the arena -- $283 million -- and private developers will cover the rest. Including interest, it's projected that there will be a total of $444 million in taxpayer funds spent on the project.
Additionally, the developer has committed to spending another $200 million to build retail, office, residential and hotel space as part of the project. The construction is expected to create about 8,000 construction jobs with work due to start next year.
Most of the tax money going into the project would otherwise be going into Detroit schools, which are also under state control due to their dire finances. But the lost money is slated to be made up for by the state government according to Michigan's school-funding formula.
"The schools won't lose a dollar," said Robert Rossbach, spokesman for the Detroit Economic Growth Corp., the non-profit agency overseeing the project. "It was designed to have minimal impact on city of Detroit operations."
Mark Rosentraub, a University of Michigan professor and an expert on the economic impact of sports teams, did a study for the arena developers, and estimates that it would create more than $1 billion of direct spending in Detroit during the next 30 years. He said many stadium and arena projects have minimal impact on local economies because they're already thriving or because of poor location.
But he argues that this one -- in a depressed city next to football and baseball stadiums -- will encourage a lot of private investment in restaurants, bars and other entertainment venues.
Related: Detroit entrepreneurs make case for their bankrupt city
The Joe Louis Arena where the Red Wings now play is antiquated by modern arena standards, and is relatively isolated from the downtown area where the new arena is to be built.
"The problem behind the financial issues of Detroit has been a flight of capital to the suburban areas," he said. "We have to bring foot traffic and investment back to Detroit. This is exactly what it needs."
Typically, a team threatens to move out of a city in order to get government officials to agree to a publicly financed new home, but the Red Wings have not made that threat.
Andrew Zimbalist, a Smith College economics professor and a sports business expert, said the Red Wings are one of the few profitable teams in the National Hockey League, and there is no chance they would want to leave Detroit, even for the suburbs.
-- CNN's Poppy Harlow contributed to this story
First Published: July 26, 2013: 9:16 AM ET
Mining helium in Montana with a rig owned by Bo Sears and Weil Resources Group
(Fortune)
The price of crude helium set by the federal government has skyrocketed in the past three years, jumping from $64.75 to $84 per 1,000 cubic feet, as supplies of the element have tightened amid increasing demand, primarily in Asia. The price crunch could get much worse as the Bureau of Land Management -- which supplies about 30% of the global supply of helium -- prepares to shut down the federal helium reserve outside Amarillo, Texas.
NEW YORK (CNNMoney)
SAC Capital was represented by attorneys from two top New York law firms: Willkie Farr & Gallagher and Paul, Weiss, Rifkind, Wharton & Garrison. The hearing was held before U.S. District Court Judge Laura Taylor Swain.
Swain set Sept. 24 for the next hearing in the case.
U.S. Attorney Preet Bharara brought criminal charges against the firm Thursday accusing it of engaging in a pattern of insider trading that was "on a scale without known precedent in the hedge fund industry." Six former portfolio managers or research analysts from SAC have already pleaded guilty to insider trading while at the firm, with two more awaiting trial.
Related: SAC indictment depicts lawless culture
A spokesman for the firm said Thursday that the firm's employees who have pleaded guilty do not "reflect the honesty, integrity and character of the thousands of men and women who have worked at SAC over the past 21 years."
Steven Cohen, the billionaire founder and CEO of SAC, was not at Friday's hearing.
Cohen himself does not face criminal charges although the Securities and Exchange Commission has filed civil charges against him. Bharara would not rule out the possibility of future charges against Cohen, saying that the investigation is ongoing.
Related: The unknown future of SAC and billionaire Steve Cohen
The U.S. Attorney is seeking forfeiture of at least hundreds of millions of dollars from the firm.
First Published: July 26, 2013: 12:00 PM ET
LONDON (CNNMoney)
Now one of the leading players in this £2.2 billion (£3.4 billion) industry, Wonga, has come under spiritual attack.
The head of the Church of England has joined a chorus of criticism from regulators and politicians over irresponsible lending by the industry, and he's launched a campaign to quash Wonga and its peers.
Archbishop of Canterbury Justin Welby, a former senior oil executive and now spiritual leader for tens of millions of Anglicans worldwide, said he would allow credit unions to set up shop on church property with the aim of putting Wonga and its peers out of business.
Welby, who is a member of the U.K. parliamentary commission on banking standards, said in an interview with Total Politics that he had told the head of Wonga: "We're not in the business of trying to legislate you out of existence, we're trying to compete you out of existence."
Related: Sneaky credit card charges can cost you hundreds
The archbishop, top politicians and U.K. regulators, including the Office of Fair Trading and the Competition Commission, are concerned that payday lenders make it easy for customers to take out loans, but charge exorbitant rates of interest that push people into a downward spiral of debt.
By contrast, member-owned credit unions charge lower borrowing rates, but it's harder to access their loans because they're not as savvy with their marketing and online presence.
To put the situation in perspective, a consumer who borrowed £400 from a credit union for a month would repay roughly £409, plus a fee to join the credit union. The same loan from Wonga would cost £527, plus a £5.50 fee.
The annual percentage rate (APR) for the credit union loan would be 26.8%, while for Wonga it would be nearly 6,000%.
Related: Fix costly credit report errors
Wonga says the comparison is meaningless because its loans have much shorter terms than a year. It says it pursues responsible lending practices, declines many loan applications, and its customers have a default rate of 7%, which is comparable to credit card companies.
"We work hard to lend only to the people who can pay us back," it said in a statement.
Still, the U.K.'s Competition Commission is in the process of investigating the payday industry as a whole, and the British government is investing up to £38 million in credit unions to help them gain a competitive edge.
The Association of British Credit Unions says the money will help its members develop the systems they need to make their loans easier to access.
The Office of Fair Trading completed a review of the payday industry in March, issuing a scathing attack on payday practices and reporting that many lenders were not complying with industry rules.
A handful of these lenders have since left the payday market and some surrendered their consumer credit licenses altogether.
Welby's broadside lost some of its impact Friday after it was revealed that the church's own pension fund had invested in one of Wonga's backers. The church said an independent inquiry would look into this "serious inconsistency."
First Published: July 26, 2013: 11:27 AM ET
Companies that provide health care benefits to their employees will face new regulations in 2014.
NEW YORK (Money Magazine)
The result: You could could see richer health care benefits.
Next year's health care goodies...
• No annual or lifetime cap on what your plan pays out.
• Children with preexisting conditions can no longer be denied coverage.
• You must be allowed to sign up for your company plan within 90 days of being hired as a full-time worker.
• After you spend $6,350 in network for a single, $12,700 for a family, in 2014, care is covered in full in most cases.
• Access to state-based insurance exchanges, with the promise of more affordable insurance
Related: Your health plan: The next frontier
...And why you may not get them
Your employer, however, might escape some of the new Federal rules, at least for a while. Here's how:
Related: Obamacare delay passes insurance burden onto workers
First Published: July 26, 2013: 4:14 PM ET
To help offset rising health care costs, employers are offering workers incentives to live healthier lifestyles.
(Money Magazine)
His firm's insurance premiums were increasing by double digits every year; sick days were on the rise. He started with a newsletter and lunch lectures on healthy habits. Next up: a fitness center and fresh fruit in place of the vending machines. He offered the staff free on-site checkups that measured blood pressure, cholesterol, and more, but only 30% got one that first year. So Ollis raised the stakes.
A roll of the dice
With a high-deductible plan, you're betting on your future health. If you need only preventive care, you'll save $1,829. If you need lots of care, you'll spend an extra $469.
| Type of plan | Premium | Deductible |
| High-deductible | $3,720 | $4,068 |
| Traditional PPO | $4,410 | $1,770 |
Notes: Average annual costs or family plan; assumes 28% tax bracket and funding HSA up to deductible. Source: KFF
Now employees who do the health assessment and adopt an exercise regimen, among other things, qualify for a health plan with a $250 deductible; the company pays the full premium.
Workers who sit out face a $5,000 deductible and owe 25% of the premium. Every employee has hit the gym, started walking, taken up yoga, or the like.
"I don't think it is unreasonable," says Ollis, "to say if I am going to pay for your health care, I have some expectations for you to be reasonably working on your health."
Working out to save money is only the beginning. Soon you could be sweating over a lot more aspects of your health coverage.
For years, in the face of rising insurance costs, employers have been shifting more of the bill to you by raising your premiums, deductibles, and co-pays. Now businesses are taking a new tack, going after high health care costs at the source and enlisting you in the fight -- whether you want to be in it or not.
Related: Your company's next health plan
From the day you pick a policy to every time you make a doctor's appointment, your employer will push you to stay healthy, use fewer medical services, and patronize those providers who can deliver care more efficiently.
"I have been doing this for 26 years and can't remember another time when so many complex changes were happening," says Edward Kaplan, who oversees the health benefits department for Segal Consulting.
Health reform is giving companies another impetus to pare back. The most generous insurance plans, the thinking goes, drive up health care spending because so much care is covered. So, starting in 2018, those high-end plans will face a steep tax (the so-called Cadillac tax), and firms are acting now to avoid the levy in five years.
Some of those shifts you're already seeing; others are years away. All require more from you: more decisions, more tradeoffs, and potentially more costs to bear. You need to know how to handle what's coming your way.
You may not be able to afford your own doctor
Today you can visit an in- or out-of-network doctor and hospital. You'll spend more to venture to an outsider, yet why bother? In-network choices often include the bulk of providers in town. Soon that freedom may come at a cost.
Even within the same city or the same insurance network, prices vary widely from doctor to doctor, and the most expensive care isn't always deemed best.
"Consumers associate higher cost with higher quality, and the research shows that isn't always true," says Peter Hussey, a senior policy researcher at the research firm Rand.
To get you to skip certain top-shelf providers, and the ones who are trigger-happy when it comes to prescribing tests, insurers are naming favorites, a list that might include a third to half of your current in-network doctors.
These doctors all meet the insurer's care criteria -- Aetna, for example, rates doctors on how often they provide recommended care and screenings, such as diabetes management, and hospitals on their mistakes and readmission rates. And they do it for less than many of their peers.
Related: Obamacare delay passes insurance burden onto workers
Agree to stick to the narrower list, and you can shave 10% to 20% off your premium. You'll probably still be able to see an outsider, but you might have to pay 40% or more of the bill instead of 20%; with some policies, you'll pay 100%.
A third of large-company plans may have this option by 2014, says benefits consultant Towers Watson, up from just over one in 10 now.
In a variation on this, a few big firms, including Wal-Mart and PepsiCo, are picking up the tab for employees who agree to travel to major medical centers like the Cleveland Clinic, where the firms have negotiated bundled rates, to have complex procedures such as heart surgery.
What you should do
See who you'll miss. Opting for fewer choices may mean saying goodbye to the practitioners you know, though that doesn't mean you've been getting poor care -- quality measures capture only one slice of a doctor's practice.
What's more, local big-name and academic medical centers are often left out, says Andy Marino, who leads the development of the networks for Florida Blue. If you want the freedom to get care at any one of them after a serious diagnosis, this plan isn't for you.
Meet the new folks. To learn more about the providers your insurer deems a good value, start on its website, which often has costs and quality stats. For the hospitals on the list, use the Hospital Compare tool at medicare.gov, which reports on quality measures such as readmissions, complications, mortality rates, and patient satisfaction.
By 2014, Medicare plans to vastly improve a Doctor Compare tool. Until then, you can get a sense of a doctor's bedside manner, at least, through patient reviews at Vitals.com and Healthgrades.com.
More: You'll get a budget to pick your own plan
Click for more market data.
NEW YORK (CNNMoney)
After being down more than 150 points in the morning, the Dow Jones industrial average ended the day with a gain of 3 points. That was just enough for the index to end higher for a fifth week.
The S&P 500 added 1 point, closing just below its all-time high. For the week, however, the S&P ended basically unchanged.
The Nasdaq gained 8 points for the day, and nearly 1% for the week.
After a pullback in June, stocks hit record highs this month as Chairman Ben Bernanke and other Fed officials downplayed concerns about the central bank's $85 billion-per-month bond buying program.
This week, investors sifted through a slew of reports on corporate earnings and rewarded companies that beat expectations.
But the tone was cautious Friday as investors looked ahead to next week's meeting of top Fed officials and the government's monthly jobs report.
"Investors are taking profits now and waiting to see how next week shakes out," said J.J. Kinahan, chief derivatives strategist at TD Ameritrade. "Why take unnecessary risk heading into it?"
Click here for more on stocks, bonds, commodities and currencies
Earnings are a mixed bag: Tech shares have been the biggest drivers this week, boosted by strong earnings from Apple (AAPL, Fortune 500) and Facebook (FB). But weak results from Amazon (AMZN, Fortune 500) and Expedia (EXPE) put pressure on the sector Friday.
Expedia shares plunged after the online travel company plunged 24% on a worse-than-expected earnings report.
Amazon shares were lower after the online retailer posted a surprise loss. And Zynga's (ZNGA) stock sank after the online gaming company issued a weak outlook for the third quarter and said it's not going to pursue online gambling in the United States.
But the losses were offset by shares of Activision Blizzard (ATVI), which surged more than 21% after the maker of games such as World of Warcraft and Call of Duty said it was striking out on its own through an $8.2 billion deal.
Starbucks (SBUX, Fortune 500) shares rose after the coffee merchant delivered better-than-expected quarterly earnings and sales.
Related: Fear & Greed Index, still greedy
Halliburton (HAL, Fortune 500) stock rose nearly 4% after the Justice Department said the oilfield services firm would plead guilty to destroying computer test results that had been sought as evidence in the Deepwater Horizon disaster.
Tesla Motors (TSLA) shares gained after Deutsche Ban (DB)k upgraded the electric car maker.
Among the companies scheduled to report next week are energy giants Exxon (XOM, Fortune 500) and Chevron (CVX, Fortune 500).
More than half of the companies in the S&P 500 have reported results for the second quarter, with 66% of them topping analysts expectations, according to S&P Capital IQ.
Earnings growth has been strongest in the financial and consumer discretionary sectors, while materials and telecommunications companies have seen profits decline.
In economic news, the University of Michigan and Thomson Reuters said a key measure of consumer sentiment rose to 85.1 in July, the highest level in six years.
Related: What's next for SAC?
Overseas markets: European markets ended mostly lower, though shares of Pearson (PSO) and LVMH (LVMHF) rose after the companies posting better-than-expected earnings.
In Asia, Japan's benchmark Nikkei index fell by 3% as the yen strengthened. Japan's inflation turned positive for the first time in a year, a sign that Abenomics is taking hold.
The performance on Chinese indexes was more muted. Hong Kong's Hang Seng index rose by 0.2% and the Shanghai Composite index declined by 0.5%.
First Published: July 26, 2013: 9:49 AM ET
Steven Cohen's hedge fund SAC Capital was indicted for criminal insider trading.
NEW YORK (CNNMoney)
The U.S. Attorney for Southern District of New York's filing Thursday of civil and criminal charges against Cohen's hedge fund opens the door for the government to seek significant penalties.
"A criminal conviction would forever taint SAC and Steven Cohen, but ultimately the big financial penalties could come from the civil case," said John Coffee, a professor of securities law at Columbia University.
So far Cohen has escaped criminal charges and, as of now, faces no possibility of jail time.
The real penalty now could be a financial blow to the hedge fund manager, whose personal fortune is estimated at roughly $9 billion.
SAC Capital at its height had $15 billion in assets under management. This year, as the government's investigation expanded, up to $5 billion has been withdrawn from the firm, according to published reports. The majority of the firm's money comes from Cohen.
Several securities lawyers said the scope of the government's civil indictment indicate that prosecutors might try to go after all of the firm's assets.
Related: SAC indictment depicts culture of law-breaking
The government gets to that demand by painting a picture of rampant insider trading at a fund where "hundreds of millions of illegal profits" from insider trading were "commingled" with legitimate profits. The government is seeking not just the illegal profits but even legal profits that may have been generated from that money.
The 40-page civil indictment outlines how these profits infiltrate every level of the firm.
"I don't know how easy it will be to prove, but it may be frightening enough to get SAC to seek a settlement," said Coffee.
On Friday, SAC Capital's lawyers pleaded not guilty to the federal criminal charges against the hedge fund. SAC Capital said Thursday that it plans to continue to operate as it works through these matters.
Both SAC and Cohen face fines from several different lawsuits, but the civil penalties sought by the U.S. Attorney's Office are expected to be steepest. The government said the actual figure will be determined at trial, and U.S. Attorney Preet Bharara declined to comment on possible penalties during a news conference Thursday.
Related: Not guilty plea entered by SAC Capital
The government can also seek penalties from its criminal case, but the maximum penalty for each count of securities fraud is $25 million. SAC has been indicted on four counts of securities fraud.
The hedge fund was also indicted on a charge of wire fraud. In that case, the government can seek twice the gains or losses generated from illegal trades.
The indictment only specifies profits from one set of trades in the pharmaceutical companies Elan (ELN) and Wyeth in 2008 and 2009. The profit from those trades was approximately $275 million.
In a separate case against Cohen, the SEC is seeking financial penalties for what it says is a failure to supervise employees engaged in insider trading. Coffee estimates that any penalties from the SEC case would be smaller than those possible in the U.S. Attorney's case.
The SEC has already extracted one penalty from SAC. In March, the firm paid $615 million to the agency to settle insider trading charges.
Bharara has said that the government wants to extract meaningful penalties so this case and other insider trading cases can have a deterrent effect.
First Published: July 26, 2013: 4:27 PM ET
NEW YORK (CNNMoney)
The announcement comes as the bank reportedly nears a settlement with the U.S. government over the manipulation of electricity markets in California.
JPMorgan (JPM, Fortune 500)said it "is pursuing strategic alternatives for its physical commodities business...including, but not limited to: a sale, spin off or strategic partnership."
The move will not affect the bank's trading activities, such as the buying or selling of futures contracts.
Earlier this week, the Senate held a hearing on bank ownership of physical commodities, during which several witnesses said involvement from the big banks is dangerous for the financial system and may be driving up prices for consumers.
The hearing followed a story in the New York Times on Sunday alleging Goldman Sachs (GS, Fortune 500) was stockpiling aluminum in Detroit, leading to higher prices for aluminum products like soda cans and cars.
People familiar with JPMorgan's involvement in California's electricity markets say the bank would bid to deliver electricity to a utility on a future day, and then raise the price, ensuring the power would not get bought.
Consumers would then have to compensate the bank for the cost of making the bid, under California's "make whole provision," which requires ratepayers to cover certain costs incurred by energy sellers.
It's not clear how JPMorgan made money on this arrangement, or if it was technically legal.
The government agency charged with policing electricity markets -- the Federal Energy Regulatory Commission -- and JPMorgan have declined to comment on the case.
Barclays and Deutsche Bank (DB) have also been recently fined by the government for improper electricity trading.
First Published: July 26, 2013: 5:51 PM ET
Starbucks is opening more stores in inland Chinese cities, such as this one in Chengdu, Sichuan Province in Southwest China.
NEW YORK (CNNMoney)
According to its latest quarterly report, Starbucks (SBUX, Fortune 500) saw a 30% year-over-year jump in revenues from its Asia-Pacific region, lifted by outstanding sales in China.
"The very strong sales volumes prove that the coffee concept can succeed in traditional tea-drinking countries," said R J Hottovy, director of consumer equity research at Morningstar, Inc. "It's resonating very well with [inland] cities."
Starbucks' solid sales growth in the region was driven by the 500 new stores it opened in China last year, and its Chinese expansion plans aren't slowing down.
The Seattle-based coffee giant said it plans to open its thousandth store in China by the end the year. In addition to already being in major cities like Beijing and Shanghai, the company says its stores will have penetrated lesser-known cities. By 2014, Starbucks said China will surpass Canada to become the second largest market, after the United States.
Related: Starbucks' caffeine-fueled expansion
In the last five years, overall retail coffee sales in China climbed by 10%, beating growth in Hong Kong, Japan and the 3% global average, according to data from research company Euromonitor International.
Starbucks said its marketing strategy in China is similar to that of its Western markets. It continues to focus on its core food and beverage products while also offering other locally oriented choices.
"The demographics they are targeting are younger and more affluent groups," Hottovy said.
Starbucks opened its first store in Taipei in 1998, followed by its first mainland China store in Beijing in 1999. But the coffee shop market is beginning to heat up. "Increasing competition will be the most pressing issue as more Western coffee brands enter the Chinese market," he said.
In 2012, an average Chinese person consumed about two cups of coffee per year. That's a far cry from the global average of 134 cups a year, according to Euromonitor. Coffee has less than 1% of the Chinese hot-drink market share. By contrast, tea makes up 54% of the market.
"It's still too early to say that coffee is going to replace tea, or that the Chinese flavor profile is changing," said Dana LaMendola, analyst of hot drinks at Euromonitor.
First Published: July 26, 2013: 6:24 PM ET
| By Gary Watkins | Friday, July 26th 2013, 18:11 GMT |
Aston Martin factory driver Stefan Mucke claimed pole position for the Spa 24 Hours
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| By Marcus Simmons | Friday, July 26th 2013, 18:09 GMT |
The British Formula 3 International Series is to revert to 'national' status from the 2014 season
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| Friday, July 26th 2013, 20:03 GMT |
Jan Kopecky continues to lead over Francois Delecour at the end of the opening leg of the Sibiu Rally in Romania
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| By Jonathan Noble | Thursday, July 25th 2013, 17:30 GMT |
Formula 1 teams will now be handed 10-place grid penalties if they allow cars to leave their pits with loose wheels, AUTOSPORT has learned
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| By Mark Glendenning | Thursday, July 25th 2013, 22:32 GMT |
Twin-turbo systems will become mandatory next year as part of an ongoing move to ensure parity between engine manufacturers Honda and Chevrolet in IndyCar
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Mark Glendenning | Thursday, July 25th 2013, 22:51 GMT |
James Davison will make his IndyCar debut with Dale Coyne Racing at next weekend's Mid-Ohio race
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| Wednesday, July 24th 2013, 16:34 GMT |
Hungary preview quotes: Force India
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'); if (google_ads[0].type == "text") { for(i=0; i '; } s += '' + '' + '' + google_ads[i].line1 + '| Wednesday, July 24th 2013, 16:01 GMT |
Jean Todt could face a challenge for his likely bid for a second term as FIA President from one of predecessor Max Mosley's key aides.
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Sam Tremayne | Wednesday, July 24th 2013, 16:41 GMT |
Citroen has revealed the C-Elysee WTCC with which Sebastien Loeb will compete in next year's World Touring Car Championship.
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Jonathan Noble | Tuesday, July 23rd 2013, 11:33 GMT |
The Austrian Grand Prix is set to return to the Formula 1 calendar in 2014, after Spielberg's owner Red Bull revealed a deal had been struck for a July 6 date
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Jonathan Noble | Tuesday, July 23rd 2013, 15:51 GMT |
Formula 1 drivers will have an extra DRS overtaking opportunity in Hungary this weekend with the FIA electing to try out a double zone
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| Tuesday, July 23rd 2013, 17:01 GMT |
Lucas Ordonez and Michael Krumm will test Nissan's Altima V8 Supercar for the first time at Winton on August 12
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Jonathan Noble | Monday, July 22nd 2013, 15:21 GMT |
Formula 1's pitlane speed limit has been officially reduced from the Hungarian Grand Prix, after the FIA's World Motor Sport Council voted in favour of a change in the regulations.
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Matt Beer | Monday, July 22nd 2013, 15:58 GMT |
Jorge Lorenzo admitted he feared his MotoGP career could be over if he crashed again at Laguna Seca after his run of injuries
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Gary Watkins | Monday, July 22nd 2013, 18:52 GMT |
Former grand prix driver Rubens Barrichello will get his first taste of a Daytona prototype on Tuesday ahead of his debut in one of the Grand-Am coupes at Indianapolis this weekend
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| Sunday, July 21st 2013, 18:10 GMT |
Kamui Kobayashi had a heavy crash in a Ferrari Formula 1 car during the Moscow City Racing demonstration event on Sunday
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Dan Cross | Sunday, July 21st 2013, 19:23 GMT |
Pickett Racing's Lucas Luhr and Klaus Graf cruised to their fourth consecutive American Le Mans Series victory at Mosport Park, while GT honours went to Corvette after a hotly contested battle
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| Sunday, July 21st 2013, 21:49 GMT |
Marc Marquez extended his MotoGP championship lead as he claimed a second consecutive race win on his Laguna Seca debut
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Pablo Elizalde | Saturday, July 20th 2013, 18:18 GMT |
Marc Marquez continued to set the pace at Laguna Seca after going quickest in the third practice session for the United States Grand Prix on Saturday
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Dan Cross | Saturday, July 20th 2013, 21:13 GMT |
Klaus Graf and Pickett Racing took their second straight American Le Mans Series pole with another dominant performance at Mosport Park
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Matt Beer | Saturday, July 20th 2013, 21:56 GMT |
Stefan Bradl claimed a shock MotoGP pole at Laguna Seca after Marc Marquez blew his chances with a crash
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
The date on Detroit's bankruptcy filing was changed by hand as the emergency manager rushed to get the filing in before a court blocked it.
NEW YORK (CNNMoney)
Lawyers for pension funds and individual retirees had gone to court Thursday afternoon seeking an order to block Michigan Gov. Rick Snyder from authorizing the largest municipal bankruptcy in the nation's history. Just before the hearing was about to start at 4:11 p.m., the judge's clerk was told by the Michigan Attorney General's office that the filing had been submitted at 4:06 p.m.
Ingham County Circuit Judge Rosemarie Aquilina told the lawyers seeking to block the bankruptcy that "it was my intention to grant you your request completely." But with the filing, their request had become moot.
The bankruptcy filing had been widely expected to come Friday morning. In fact, the paperwork that was filed by Detroit emergency manager Kevyn Orr was dated July 19 date. Orr crossed out the date by hand to change it to July 18 as he signed the document.
Related: What's next for Detroit
Asked about the timing of the filing, Snyder said Thursday evening that the pending court cases were not a major factor in the timing of the bankruptcy. He insisted that he needed to file because the city's financial condition was deteriorating.
"It was time to move forward. With every passing day, the citizens are getting worse services," Snyder said Thursday at a press conference.
Related: Retired Detroit firefighter: 'My pension is what I was promised.'
Orr's reorganization plan argues that the city needs to shed $9.5 billion of its $11.5 billion in unsecured debt in order to be able to pay its bills and make necessary improvements in services. Much of the debt he is targeting for elimination is related to pension benefits and retiree health care coverage required by union contracts. That means retirees and current employees could see deep cuts in their promised benefits. Unions have vowed a legal fight stop a cut benefits.
The judge did issue orders against Snyder and Orr last night to prevent them from taking any further action in the bankruptcy proceedings until she hears arguments in the state court cases. A hearing is scheduled for Monday morning, but now that the case is in federal bankruptcy court, it's not clear if the state judge's orders will hold any sway.
"That's up in the air," said Bill Wertheimer, one of the plaintiff's lawyers in the case. "We're going back up to court this morning to argue about it."
First Published: July 19, 2013: 9:45 AM ET
NEW YORK (CNNMoney)
Now, the city could slash the pension he depends on as it seeks to shed its debts through bankruptcy.
Newberry, 65, said he responded to at least three to four blazes a day as building and car fires ravaged the city. He suffered several injuries that led to his needing hand reconstruction and knee and hip replacements. After he retired in 1994, he worked for Procter & Gamble as a retail merchandiser, but now can no longer hold down a job.
The Traverse City, Mich., resident lives on his $34,000 annual pension, which is subject to federal and state taxes, and a $200-a-month Social Security payment. Since Detroit firefighters didn't participate in Social Security, his federal check is based only on his time in the private sector.
Detroit city employees, retirees: Tell us how this affects you
Detroit Emergency Manager Kevyn Orr has warned there "must be significant cuts" in pensions for both active workers and retirees. Newberry acknowledges everyone will probably have to take a "haircut," but says he and his fellow firefighters and their families shouldn't suffer from the city's fiscal mismanagement.
"I put my money into our pension fund and was promised it would be there by law when I retired," said Newberry. "I sucked up smoke and put my life on the line every day I went to work and have the injuries to prove it. The least the government can do is stand by Michigan law."
Newberry isn't worried as much about what a potential pension reduction means for him. He does need enough money to survive, but he's willing to move out of his condo and live in a trailer.
His biggest concern is that he'd no longer be able to help his seven grandchildren.
"I don't need it for me," he said, choking up. "I want to help my grandchildren go to college."
First Published: July 19, 2013: 8:23 AM ET
Finance ministers from the G-20, including the U.K.'s George Osborne, backed a big change in the way multinational companies are taxed.
LONDON (CNNMoney)
The Group of 20 leading developed and emerging economies gave its support Friday to an action plan drafted by the Organization for Economic Co-operation and Development that will be translated into specific measures over the next two years.
"International tax rules, many of them dating from the 1920s, ensure that businesses don't pay taxes in two countries -- double taxation," OECD Secretary General Angel Gurria said in a statement. "This is laudable, but unfortunately these rules are now being abused to permit double non-taxation."
Revelations that multinationals such as Apple (AAPL, Fortune 500), Google (GOOG, Fortune 500) and Amazon (AMZN, Fortune 500) have been paying very little, if any, tax in countries where they have substantial businesses has led to a storm of protest.
A U.K. parliamentary committee called last month for a full investigation into Google's tax affairs, following a scathing report that also criticized Amazon and Starbucks (SBUX, Fortune 500). Apple has been grilled by lawmakers in Washington.
Related: Starbucks starts paying U.K. tax
Governments have pushed the issue up the global agenda as they struggle with falling revenue in the wake of the financial crisis, and find it ever harder to introduce more spending cuts and tax increases that weigh heavily on local firms and households.
Last month, G-8 leaders pledged to take action, a commitment that was strengthened Friday by the adoption of the OECD plan by G-20 finance ministers meeting in Moscow. It will be discussed by G-20 leaders in September.
Big companies say they operate within the law as it stands, and argue that current rules work in the vast majority of cases. But some organizations representing smaller firms have welcomed the bid to create new global standards.
Related: The myth of Corporate America's offshore cash
"The government should act with international partners to tackle the issue of cross-border corporate tax avoidance," said Steve Radley, director of policy at the EEF, which represents U.K. manufacturers. "EEF welcomes today's report and urges the U.K. and the G-20 generally to respond positively to its central recommendations."
The 15-point action plan will tackle the practice of shifting profits across borders to take advantage of lower taxes. Tax systems haven't kept pace with how companies work in the digital economy and are failing to reflect how profits are made on intangible assets or data.
The OECD said it was aiming to close loopholes that allow companies to "disappear" income for tax purposes by using multiple deductions for the same expense. It will also come up with rules to make it harder for companies to hide profits in offshore subsidiaries.
First Published: July 19, 2013: 10:53 AM ET
NEW YORK (CNNMoney)
It's the city's three casinos that are now crucial to keeping the cash-strapped government functioning during bankruptcy.
Most of the auto industry's Michigan plants are outside of city limits, severely limiting how much tax revenue they contribute to Detroit. General Motors (GM, Fortune 500) is the only automaker with headquarters inside of city limits, and Chrysler Group operates just one plant inside the city.
Filings made by the city in the nation's largest municipal bankruptcy late Thursday show just how dependent the city has become on the monthly infusion of cash from its casino tax. The $11 million Detroit clears from the casino tax every month is "is roughly the equivalent of 30% of the city's total available cash on hand as of June 30, 2013." It also says the casino tax could pay for the city's entire fire department, or about half of the police department.
Related: Detroit files bankruptcy
"With 4 of the top 10 most dangerous neighborhoods in the nation, the city needs access to [the casino] money immediately to ensure public safety and keep its police on the streets and its firefighters responding to fires," said the filing.
Related: Detroit's bankruptcy came with only 5 minutes to spare
The city gave the details about the amount and importance of the casino money because one of its creditors, insurer Syncora Holdings (SYCRF), had previously sought to stop the city from having access to the cash. The city won a court order granting it access to the casino money on July 5. But now that it is in bankruptcy court, it needs the court to OK the continued flow of casino cash to city. The filing said it has reached agreements with other large creditors, including Bank of America (BAC, Fortune 500) unit Merrill Lynch, UBS (UBS) and its major pension funds, to allow it access to the casino cash.
Related: Retired Detroit firefighter: 'My pension is what I was promised
"All parties are aware, the city is cash-starved and insolvent," said the filing.
First Published: July 19, 2013: 11:34 AM ET
Obama bailed out the auto industry four years ago but won't bailout Detroit after it became the largest city to file bankruptcy.
NEW YORK (CNNMoney)
But their hometown won't get a similar bailout, even as Detroit becomes the largest municipal bankruptcy in U.S. history.
While automakers begged for a bailout in 2008 and 2009, Kevyn Orr, the emergency manager appointed to oversee Detroit's finances, told CNN that he never asked the White House for help before deciding to go ahead with the bankruptcy filing.
"We have to solve these problems ourselves. The concept that someone else is going to come in and solve problems of our making isn't exactly productive," he said.
White House Press Secretary Jay Carney wasn't about to promise any help when asked about the bankruptcy Friday.
"You have heard leaders in Michigan say, and we believe they're correct, that this is an issue that has to be resolved between MIchigan and Detroit and the creditors," he said.
Related; Detroit files bankruptcy
There are a couple of differences between the automakers and their hometown.
President George W. Bush, who got the auto bailout rolling, and President Obama, who approved most of the federal support, both could do so without Congressional approval, using money in the Troubled Asset Relief Program (TARP) intended to deal with the overall financial crisis. In fact, Senate Republicans rejected the Bush administration's request for an auto bailout in 2008, forcing him to turn to TARP.
That blank checkbook no longer is available.
It's virtually impossible that Congress would approve a Detroit bailout this time around, especially with so many other local governments around the country facing their own financial problems.
Related: What's next for Detroit
But even if Obama still had the ability to bail out Detroit, it's not likely he would do so, said Jared Bernstein, senior fellow, at the Center for Budget and Policy Priorities, a liberal think tank.
Bernstein was the top economic adviser to Vice President Joseph Biden and on the task force that came up with the bailout plans in 2009. He said the carmakers were bailed out because, after the meltdown in financial markets, there was no money available to fund operations at GM and Chrysler as they reorganized.
Without a bailout, both companies would have closed and liquidated, which would have rippled into bankruptcies and job losses across the rest of the auto industry and the U.S. manufacturing base.
"For the government to intervene, it's a very big deal. You only do so if the alternative is a market failure that will have systemic disruptions to the economy," Bernstein said. "That was the case then. I don't think that's the case here."
Related: Detroit's workers and retirees face big cuts
But the lack of a bailout will cause pain this time around. Specifically, there's a good chance that city employees and retirees will end up with the pension and post-employment health care benefits slashed.
The GM and Chrysler employees and retirees saw their pay and benefits essentially untouched by the bankruptcy process. The federal bailout allowed the Treasury Department to call the shots in bankruptcy court, so management and other creditors did not go after those benefits. That won't be the case this time.
Experts say there will be city retirees in Detroit who lose some of their benefits living next door to retired autoworkers who did not lose theirs.
"I believe [the bankruptcy process] will be effective in this case, even though there will be a lot of pain between here and there," said Bernstein.
-- CNN's Poppy Harlow and Dan Lothian contributed to this report.
First Published: July 19, 2013: 3:15 PM ET
Click chart for more markets data.
NEW YORK (CNNMoney)
The S&P 500 eked out a small gain, while the Dow Jones Industrial Average closed down slightly. The Nasdaq dropped 0.7%.
The Nasdaq finished lower for the week, down 0.3%, after three positive weeks. The index was dragged down by poor quarterly results from Google and Microsoft.
Friday's modest pullback didn't take much away from the mega-rally.
All three indexes are up sharply for the year. The Dow and S&P 500 have gained nearly 19%, while the Nasdaq has rallied almost 20%. (Click here for more on stocks, bonds, commodities and currencies.)
The Dow and S&P added between 0.5% and 0.7% this week, boosted by better-than-expected earnings from the major banks. The Nasdaq
Investors were also comforted by statements by Fed chairman Ben Bernanke on Wednesday. Bernanke said he would keep the Fed's stimulus policies in place for as long as necessary.
Related: Detroit files for bankruptcy
Tech gets trounced: Google (GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500) reported disappointing quarterly numbers after Thursday's closing bell, sending their shares sharply lower.
Microsoft was hit by a big write-down on its Surface tablet.
Good economic indicators from GE, Honeywell: Results from two of the world's biggest industrial companies -- General Electric and Honeywell -- pointed to continuing strength in the global economy.
Honeywell (HON, Fortune 500) raised its outlook for the year, after the company reported better-than-expected earnings.
General Electric (GE, Fortune 500) reported earnings and sales roughly in line with estimates, and said it saw strong growth in U.S. orders.
Whirlpool (WHR, Fortune 500) raised its guidance for the year as the appliance maker reported a significant gain in quarterly sales and profit.
Schlumberger's (SLB) stock rose after the energy company reported a bump in sales and profit, driven by drilling successes on land and deepwater.
Burrito Boost: Chipotle Mexican Grill's (CMG) stock soared after the restaurant chain reported a jump in same-store sales and profits.
Related: Fear & Greed Index, still greedy
In international markets, European indexes ended the day slightly lower.
Asian markets were also weak Friday. China's Shanghai Composite index dipped and Japan's Nikkei each pulled back by 1.5%. But Hong Kong's Hang Seng index managed to edge up by 0.1%.
First Published: July 19, 2013: 9:45 AM ET
The SEC sanctioned Miami for similar conduct in 2003.
NEW YORK (CNNMoney)
The SEC said Michael Boudreaux helped falsify Miami's financial reports for the 2007 and 2008 fiscal years and lied about the city's finances in a series of 2009 bond offerings worth $153.5 million. Boudreaux allegedly orchestrated the unlawful transfer of nearly $38 million out of Miami's capital improvement fund in order to mask deficits in the city's general fund.
The SEC sanctioned Miami for similar conduct in 2003. The case marks the first time the agency has alleged repeated wrongdoing by a city subject to a previous cease-and-desist order.
Related: SEC charges hedge-fund mogul Steve Cohen
"The fact that a city official would enable these false and misleading disclosures to investors merely a few years after Miami had been reprimanded by the SEC for similar misconduct makes this repeat behavior all the more appalling and unacceptable," George Canellos, the SEC's co-director of enforcement, said in a statement.
Lawyers for Miami and Boudreaux did not immediately respond to requests for comment, nor did spokespeople for the city.
Miami was forced to reverse most of the transfers from the capital improvement fund following a report issued by a city watchdog in November 2009, the SEC said. The city subsequently declared a "state of fiscal urgency" and had its debt downgraded by ratings agencies.
The SEC also charged the state of Illinois and the city of Harrisburg, Pa. earlier this year with misrepresenting their finances to investors.
First Published: July 19, 2013: 6:21 PM ET
When the Fed's training wheels come off and yields turn around, position yourself to take advantage of higher rates.
(Money Magazine)
Look at what happened in late May and June after chairman Ben Bernanke said the Fed would, eventually, assuming things get better, start to pare back its aggressive efforts to keep credit flowing. The rally on the Dow, which not long ago had crossed 15,000, pulled back sharply. Treasury rates jumped to a 20-month high by late June. (When yields go up, bond prices go down.)
For bond fund investors, the sell-off meant "their worst month since the Greek financial crisis," according to Lipper analyst Jeff Tjornehoj.
How can so much hang on the ambiguous words of one economist? As you'll see, the Fed has played such an extraordinarily large role in markets since the 2008 crisis that professional traders have a lot of short-term money riding on Bernanke's next move.
Behind all that, though, there's a big issue for long-term investors too. The Fed is suggesting that the economy is finally headed to a healthy new phase, one that doesn't need an extra push from central bankers. The portfolio that worked in the post-2008 emergency years is likely to be a poor fit for what comes next.
Below are answers to the three biggest questions raised by the market's latest Fed frenzy.
What exactly is the Fed doing?
Ordinarily the Fed tries to influence the economy by setting short-term interest rates, cutting them to stoke growth or raising them when inflation looms.
But after the financial crisis, even driving short-term rates essentially to zero didn't do enough to invigorate growth. So the Fed stepped into markets in a bigger way. It bought up trillions of dollars of fixed-income investments, including long-term Treasury bonds and mortgage-backed securities.
Economists have endless debates about how (not to mention how much) this "quantitative easing," or QE, helps the economy. One idea is that it pushes yields on safe-haven assets so low that would-be buyers look instead to riskier investments like junk bonds and stocks, making individual investors feel richer and, it is hoped, more willing to spend and invest.
At least as important, though, is the message such unprecedented intervention sends. "The Fed signaled it was committed to supporting the economy," says Moody's Analytics economist Nate Kelley. "It reassured the markets."
Given both the Fed's big position in bond markets and the complex mental chess games it plays with investors, it's not hard to see why Wall Street has been so skittish lately.
The Fed's intervention can't go on forever. Bernanke's reminders of this have been mild: He hasn't said he'd reverse QE, just slow it.
Still, that's enough to get traders pondering whether other investors want to own risky assets without the Fed's implicit encouragement. "Everybody is worried about what everybody else is doing," says BlackRock chief investment strategist Russ Koesterich. "Volatility is going to be hard to avoid."
Will a Fed shift crush stock market gains?
No one likes to sit through wild up-and-down markets. The important thing for long-term investors to remember, however, is the reason the Fed's talking about slowing QE at all: The economy is gradually looking better.
Unemployment, although still high, has fallen to below 8%, while other measures, such as household spending and the rate of home construction, have ticked up. And all this has happened without stoking inflation, which has hovered below 2%.
That means there's relatively little pressure for the Fed to aggressively choke off growth to keep prices under control.
Related: Stocks that can rise with rates
All that sounds like good news to some Wall Street bulls. They've been arguing that once lingering financial-crisis angst fades, stocks are poised to take off much the way they did in the early 1980s when investors finally overcame the trauma of the Carter-era inflation and oil shocks.
"It's almost a mirror image" of that time, says Oppenheimer chief market strategist John Stoltzfus. He predicts that the Standard & Poor's 500 could climb another 9% by year-end.
That's the bull case. Now for the caveats: First, Bernanke and the Fed could be wrong about the outlook for growth -- they have been before -- and as a result tighten much too early. Second, even if the economic situation bodes well, much of the good news may already be factored into today's prices, thanks to the Fed's prodding.
With the market up about 20% in the past year, stocks have been trading at about 14 times their expected profits over the next year. That's more or less in line with the historical average. This doesn't augur a terrible bear market, but it does suggest more modest long-term gains ahead.
Compared with what appears to be ahead for bonds, however, modest stock gains would count as banner news.
How risky are bonds now?
As the economy gets better, the Fed should allow longer-term interest rates to rise above their historically low levels. Those rates aren't set directly by the Fed, but by the bond market, so things could happen quickly once traders are convinced that the Fed's outlook has shifted and demand higher yields. Since rising yields mean falling prices, investors in bond mutual funds and ETFs could face sharp losses.
Related: Higher mortgage rates won't hurt recovery, Fannie finds
Some have already had a taste of this: When the yield on the 10-year Treasury jumped from 1.66% in early May to 2.41% in mid-June, long-term bond funds lost about 6% of their value.
Janney Montgomery Scott chief fixed-income strategist Guy LeBas expects rates to continue rising; even assuming sluggish economic growth, his firm forecasts rates at 2.7% next year. With yields so low, "it's a lot easier to go up than down," he says.
You can estimate how sharp your losses would be on your bond funds by looking at a statistic called duration. (Find it on the fund quote page at Morningstar.com.) A portfolio with a duration of six years -- about middle of the road for bond funds -- would see a drop of 6% if interest rates rise one percentage point.
This doesn't mean you should forgo fixed income in favor of stocks -- although bonds look risky now, that doesn't make stocks safe. The wiser move is to shift to shorter-duration funds, and even cash or money-market accounts for money you can't afford to lose.
By staying short, you have to miss out on some yield now, at a time when income is painfully hard to get. But when the Fed's training wheels come off and yields turn around, you'll be well positioned to take advantage of higher rates.
First Published: July 19, 2013: 6:24 PM ET
Steve Cohen reportedly has $7 billion of his own money invested with SAC Capital.
NEW YORK (CNNMoney)
The SEC, which cannot levy criminal penalties, is seeking to ban Cohen from overseeing investor funds. He could also face financial penalties and be barred from the financial services industry.
Cohen's hedge-fund firm, SAC Capital, has already agreed to pay the SEC roughly $615 million in connection with alleged insider trading by two portfolio managers, Mathew Martoma and Michael Steinberg.
Martoma and Steinberg have already been charged criminally and are awaiting trial.
"Hedge fund managers are responsible for exercising appropriate supervision over their employees to ensure that their firms comply with the securities laws," Andrew Ceresney, co-director of the SEC's enforcement division, said in a statement. "After learning about red flags indicating potential insider trading by his employees, Steven Cohen allegedly failed to follow up to prevent violations of the law."
Related: Wall Street sheriff says no one too big to indict
SAC spokesman Jonathan Gasthalter said the SEC case "has no merit."
"Steve Cohen acted appropriately at all times and will fight this charge vigorously," Gasthalter said in an email. "The SEC ignores SAC's exceptional supervisory structure, its extensive compliance policies and procedures, and Steve Cohen's strong support for SAC's compliance program."
Cohen's attorney did not immediately respond to a request for comment.
The Justice Department has also been investigating Cohen's firm, and nine of his current or former employees have already been charged with insider trading. Cohen himself has not been charged criminally, however.
Even if Cohen were barred from managing investor funds and working in the financial services industry, he could still manage the massive personal fortune he has invested with SAC. As of May, Cohen accounted for $7 billion of the roughly $15 billion managed by SAC, according to Bloomberg.
The SEC said its investigation "is continuing," and a spokeswoman declined to comment on whether Cohen could face additional charges.
Investigators have been circling Cohen for years in the hope of building a case against him. Analysts said the SEC charges were relatively mild, indicating that the agency couldn't find the evidence to make the more serious allegation that Cohen himself engaged in insider trading.
"This 'fail to supervise' case is as low-level a case as the SEC can bring," said Jacob Frenkel, a former SEC lawyer. "It does not show much for the years of intense scrutiny that have been brought to bear against Cohen."
Frenkel said he expected Cohen to face "only a modest monetary penalty and perhaps a short suspension" from the industry.
Martoma is accused of selling and shorting shares of the pharmaceutical companies Elan (ELN) and Wyeth based on inside information from drug trials that had not been publicized. The trades allegedly allowed SAC to generate profits and avoid losses worth $276 million in total.
In an instant message, Cohen allegedly told analysts at the firm who were skeptical of Martoma's positions that the portfolio manager "has a lot of good relationships in this arena," the SEC says.
Steinberg is accused of insider trading of Dell (DELL, Fortune 500) stock in 2008. The SEC says Cohen was forwarded an email in August of that year from a research analyst who worked under Steinberg and claimed to have a tip "from someone at the company" that Dell's quarterly results would disappoint.
Cohen subsequently sold off his Dell position before the results were released a few days later, case documents allege.
Despite receiving this "highly suspicious email," Cohen "failed to take prompt action to determine whether an employee under his supervision was engaged in unlawful conduct," the SEC said.
CNNMoney's Maureen Farrell and CNN's David Brandt contributed reporting.
First Published: July 19, 2013: 2:33 PM ET
Detroit might have to drop its bankruptcy case if a state court judge's order Friday afternoon is upheld on appeal.
NEW YORK (CNNMoney)
But Michigan Attorney General Bill Schuette said in a statement soon after the decision that he intended an immediate appeal to the Michigan Court of Appeals and would seek to block this latest order from taking effect while the appeal is heard.
The order came in response to motions by lawyers for retirees and pension funds for city workers, who argue the state constitution prohibits cutting pension and retirement benefits, as has been proposed in the bankruptcy case.
Related: Detroit files bankruptcy
The order was from Ingham County Circuit Judge Rosemarie Aquilina, the county that includes the state capital of Lansing. Aquilina had been ready to issue an order Thursday that would have blocked the filing in federal bankruptcy court, but the hearing on the motion to do so started five minutes after the bankruptcy case was filed.
Related: Detroit bankruptcy filing came with only 5 minutes to spare
It's not clear if a state court judge legally can order a party in a federal case to drop that action.
"Obviously there are constitutional issues," said Michael Sweet, a bankruptcy attorney with the California law firm of Fox Rothschild and an expert in municipal bankruptcy cases. "Anyone who thought this case would be resolved quickly was sorely mistaken. There is too much at stake for too many people. Clearly the gloves are coming off."
Detroit became the largest municipal bankruptcy in U.S. history Thursday evening when emergency manager Kevyn Orr filed the case in federal bankruptcy court in Detroit. Orr had been appointed to oversee Detroit's finances by Gov. Rick Snyder. Snyder authorized the bankruptcy filing. Aquilina's order says that Snyder must now order Orr to withdrawal the case.
The American Federation of State, County and Municipal Employees, a union opposed to the bankruptcy filing, praised the judge's ruling.
"There is too much at stake to play political games with the hard-earned retirement security of Detroit's public workers," union president Lee Saunders said in a statement.
CNNMoney's James O'Toole contributed reporting.
First Published: July 19, 2013: 4:23 PM ET
| By Edd Straw | Friday, July 19th 2013, 18:37 GMT |
Susie Wolff believes her pace on her debut in a contemporary Formula 1 car in the Silverstone young driver test justifies Williams's decision to give her a day of running
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Edd Straw and Matt Beer | Friday, July 19th 2013, 19:07 GMT |
Red Bull protege Daniil Kvyat believes his first Formula 1 test with Toro Rosso proved he can be capable of a grand prix future
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Matt Beer | Friday, July 19th 2013, 22:12 GMT |
Marc Marquez belied his lack of Laguna Seca circuit knowledge to go fastest in Friday MotoGP practice at the Californian track
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Jonathan Noble | Thursday, July 18th 2013, 17:48 GMT |
Daniel Ricciardo declared he gave his all at Silverstone on Thursday to show Red Bull that he deserves a 2014 seat
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Jonathan Noble | Thursday, July 18th 2013, 19:19 GMT |
Carlos Sainz Jr refused to get too excited about his star rookie performance for Toro Rosso in the Formula 1 young driver test
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| By Matt Beer | Thursday, July 18th 2013, 20:53 GMT |
Nicky Hayden has confirmed that he will lose his Ducati MotoGP seat at the end of 2013
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| Earlier MOTOGP story | More news | |
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| By Sam Tremayne and Matt Beer | Wednesday, July 17th 2013, 17:58 GMT |
Silverstone Formula 1 young driver test day one pacesetter Kevin Magnussen says he can be satisfied with his speed on Wednesday despite the difficulty of decoding test results
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Sam Tremayne | Wednesday, July 17th 2013, 18:53 GMT |
Alexander Rossi hailed the impact of Caterham's developments after the team elected to trial systems intended for use on its 2014 car during Formula 1's Silverstone young driver test
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Sam Tremayne and Edd Straw | Wednesday, July 17th 2013, 18:55 GMT |
Daniel Juncadella's young driver test outing with Williams at Silverstone has been extended into a second day because of restricted running this morning
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Jonathan Noble | Tuesday, July 16th 2013, 15:04 GMT |
Caterham will run Alexander Rossi and Will Stevens alongside its regular racers at this week's young driver test at Silverstone.
You have viewed over 20 free stories this month. Why stop there? Click here to find out how to continue reading.
| By Jonathan Noble | Tuesday, July 16th 2013, 15:14 GMT |
Mercedes will receive data on Pirelli's findings about its new tyres at the young driver test this week, despite being banned from taking part in it
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| By Jonathan Noble | Tuesday, July 16th 2013, 16:00 GMT |
Marussia has revised its running plans for this week's young driver test to ensure Max Chilton and Jules Bianchi get some mileage.
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| By Matt Beer | Monday, July 15th 2013, 13:28 GMT |
Brian Vickers says a full-time 2014 NASCAR Sprint Cup seat with Michael Waltrip Racing is not a done deal despite his New Hampshire Motor Speedway victory.
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| By Sam Tremayne | Monday, July 15th 2013, 15:40 GMT |
Marc Marquez admits he is shocked to have regained the lead of this year's MotoGP championship.
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| By Jonathan Noble | Monday, July 15th 2013, 16:16 GMT |
Jenson Button and Sergio Perez are to skip this week's test at Silverstone, with McLaren electing to stick with its youngsters instead.
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