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Stocks could shrug off banking blues

Written By limadu on Kamis, 27 Maret 2014 | 23.53

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NEW YORK (CNNMoney)

Aside from the banks, and despite a sorry market performance the day before, U.S. stock futures were slightly higher ahead of the opening bell.

The Federal Reserve rejected Citigroup's (C, Fortune 500) capital plan Wednesday, saying it was troubled by the bank's inability to predict how much it could lose in a severe economic downturn. It banned the bank from any dividend hikes or share repurchases for the next year.

Citi was among 30 large banks required to submit capital plans for an annual stress tests. The Fed approved 25 plans. Citi and four other banks faced rejections.

The Fed also slammed the U.S. units of European banks like Royal Bank of Scotland (RBS), HSBC (HSBC) and Santander. (SOVPRC)

"The bottom line is that these [five] banks will have to improve internal controls," said Joseph Dickerson, European banking analyst with Jefferies.

Related: Fear & Greed Index backslides into fear

Trading volume could also be higher than normal in Bank of America (BAC, Fortune 500) shares after it announced that first-quarter results would take a hit due to a $9.5 billion settlement with the Federal Housing Finance Agency. The deal settles all litigation between Bank of America and the agency over mortgage-backed securities.

Investors are waiting on the U.S. government to report initial jobless claims at 8:30 a.m. ET. The final estimate of fourth quarter GDP will be released at the same time.

On the earnings front, Gamestop (GME, Fortune 500) will report earnings before the opening bell.

Accenture (ACN)shares rose in premarket trading despite the decline in quarterly net income reported by the technology services company, which was recently hired to work on the Obamacare website.

Lululemon (LULU) edged down after the yogawear maker reported quarterly increases in revenue and net income, but also a slide in same-store sales.

"Lululemon's same-store sales go negative for 4Q13, a once unthinkable development," wrote Brian Sozzi, chief equities strategist for Belus Capital Advisors.

Investors will also be watching King Digital Entertainment (KING). Shares of the maker of online game Candy Crush Saga took a beating after going public Wednesday.

Related: CNNMoney's Tech30

U.S. stocks ended lower Wednesday. The Nasdaq fell more than 1% and the Dow Jones industrial average and S&P 500 also finished in the red.

European markets were lower in Thursday midday trading.

The International Monetary Fund said it was throwing Ukraine an $18 billion lifeline.

Asian markets ended with mixed results.

Shares in tech company Tencent (TCEHY) in Hong Kong fell by nearly 6%, leading Asian Internet companies lower. Investors and traders have been growing concerned that valuations have become too rich in the Asian tech, media and telecommunications sector. To top of page

First Published: March 27, 2014: 6:09 AM ET


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From farmers' markets to mass market

three twins ice cream

Neil Gottleib's ice cream business didn't take off until he started selling at the local farmers' market.

NEW YORK (CNNMoney)

"The location was terrible," said Gottlieb, founder of Petaluma, Calif.-based Three Twins Ice Cream.

He needed to get in front of people. He knew if they could taste his organic ice cream -- made with just milk, eggs, cream and sugar -- they'd be hooked. He decided that the Berkeley Farmers' Market, where hundreds of people bought food every Saturday, would be the best place to set up shop.

Gottlieb filled out an application, provided some details on the product, received a health permit and was accepted within a few weeks.

He was just hoping to make enough money to pay his rent. Little did he know that selling at the market would get him into grocery stores across the country.

Related: Big Gay Ice Cream's business secrets

Most people think of farmers' markets as a place to pick up healthy food from mom-and-pop-operations, but it can also be a breeding ground for entrepreneurship.

In fact, grocery stores often visit them looking for new ideas, said Harv Singh, a "forager" for Whole Foods' Northern California region.

"A farmers' market is like an incubator for food companies," he said.

Jennifer Carlson knew her organic baby food was a hit soon after she started selling it at a local Calgary farmers' market.

In 2008, after two years selling at the market, she was raking in $30,000 a month and eventually had 10 people working for her.

She left the farmers' market in 2008 to work on expanding her company, Baby Gourmet Foods Inc., across Canada, and in 2010 her products hit Wal-Mart (WMT, Fortune 500) shelves. Now, her product is in 2,600 U.S. stores, and Baby Gourmet Foods made $13 million in revenue in 2013.

Carlson credits her success to those early days at the market, because it helped her understand what customers wanted. She had no budget for focus groups or marketing, so she relied on face-to-face feedback.

Increased traffic to her booth was also sign that word was spreading.

"It was clear to me from the feedback that I was receiving from moms that they wanted a product like this," she says. "I started to realize that I could do this on a mass level."

Related: Small businesses embrace bitcoin

Companies that start at a farmer's market do have an advantage, said Singh. These operations connect with thousands of customers each week and are able to do research and development through daily interactions at the market. However, moving from the farmers' market to mass market is still a lot of work.

While Singh's first priority is finding food that's different than what's already in their stores, not everyone is ready to take their product national.

"I try and find out what kind of scalability they have," he said. "Are they ready for retail? Most small vendors aren't."

Before Carlson approached Wal-Mart, she had to figure out how to package her food so it wouldn't go bad on the shelves, while not compromising quality.

Gottleib was making $75,000 a year at the farmers' market when Whole Foods (WFM, Fortune 500) "discovered" him. In order to fill shelves across America, he had to build a 4,200-square-foot factory.

If a company can scale up, though, they'll be ahead of the competition, said Singh.

Nearly a decade after Gottleib's foray into the Berkeley Farmers' Market, Three Twins Ice cream now has four shops in California, products in 3,000 stores, 85 employees and about $7 million in annual revenue.

While he could have stopped selling at the market years ago, he hasn't given up his Saturday spot. His parents run the booth, and it still brings in about $40,000 a year.

He likes having the direct line to his customers.

"At the store, people either buy it or don't," he said. "At the market you can see them put the food in their mouths." To top of page

First Published: March 27, 2014: 6:56 AM ET


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Austin tops list of fastest growing cities

metro areas austin instory

Austin's massive University of Texas is known for its engineering and computer science programs, which has attracted a number of big tech companies looking to recruit young talent.

NEW YORK (CNNMoney)

New data released this week by the U.S. Census Bureau crunches population counts in the 12 months leading up to July 1, 2013.

Which city is growing fastest?

Austin tops the list of the 10 fastest growing cities, based on an analysis of population growth data from the Census Bureau.

Austin 1.9 million 2.6%
Houston 6.3 million 2.2%
Raleigh, N.C. 1.2 million 2.2%
Orlando 2.3 million 2%
San Antonio 2.3 million 1.9%
Denver 2.7 million 1.9%
Nashville 1.8 million 1.8%
Charlotte, N.C. 2.3 million 1.8%
Oklahoma City 1.3 million 1.7%
Phoenix 4.4 million 1.6%

Source: Based on U.S. Census Bureau population data for July 1, 2012 through July 1, 2013. Rankings are based on largest percentage population growth in metro areas with a population of one million or more.

Among metro areas of one million residents or more, Austin topped the list.

Austin's massive University of Texas is known for its engineering and computer science programs, which have spawned many local tech businesses and incubators. It has also attracted a number of bigger tech companies looking to recruit young talent.

In January, the city's unemployment rate fell to 4.7%.

Slide show: 10 fastest growing cities

Oil booms helped other cities make the top ten.

With oil hovering around $100 a barrel and new drilling techniques making it possible to tap vast reserves, Houston, San Antonio and Oklahoma City are all reaping the benefits of big oil money and the jobs that come with it.

Meanwhile, some cities, including Phoenix and Orlando, are bouncing back from years of economic uncertainty.

Related: How far will your salary go in another city?

Phoenix was one of the hardest hit cities during the foreclosure crisis. Now home prices are on the rise and formerly idle construction workers are back on the job rehabbing once-distressed properties.

And in Orlando, where one-third of the area's jobs are tied to tourism, nearly 57 million visitors arrived last year, up from 43 million in 2009 -- a sign that the economy and Orlando's fortunes have turned the corner. To top of page

First Published: March 27, 2014: 10:51 AM ET


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Ukraine to get $18 billion rescue from IMF

ukraine imf

Ukraine will receive as much as $18 billion in aid from the International Monetary Fund. The country was on the brink of bankruptcy.

LONDON (CNNMoney)

Kiev has been running dangerously low on cash to pay for imports and service its debts since the ousting of pro-Moscow former President Vitkor Yanukovych last month, which killed off a $15 billion financial lifeline from Russia.

With economic turmoil rising following Russia's annexation of Crimea, Ukraine was facing bankruptcy and a slump in output.

Foreign exchange reserves have been decimated by a sharp fall in exports and by attempts -- now abandoned -- to prop up the hrvynia currency. At the beginning of March, Ukraine had only enough cash to finance two months' worth of imports.

"The IMF package should be sufficient to prevent the country falling into a full-blown balance of payments crisis, in which the hrvynia would drop sharply and output would collapse," said William Jackson, emerging market economist at Capital Economics.

In return for the bailout, Ukraine will implement a program of unpopular reforms aimed at stabilizing the economy and creating the conditions for a return to sustained growth.

Related: Soros: Ukraine needs EU Marshall Plan

Central to the program are commitments by Ukraine to tackle corruption -- a major concern of international lenders -- and reforming the country's energy market, including the gradual withdrawal of subsidies on natural gas.

"Importantly, this will be accompanied by scaled up social protection to mitigate the impact on the most vulnerable," the IMF said in a statement.

Speaking to lawmakers, Prime Minister Arseniy Yatsenyuk said the reform program would include spending cuts that will cost 24,000 government jobs, higher rates of income tax, privatization and constitutional reform.

The economy would shrink by 3% this year, he forecast, if Ukraine enacted the reforms attached to the IMF package.

"If we do not, it is minus 10% GDP and default," he said.

Four million households would receive some form of government assistance, he added.

The IMF said the focus for this year would be on stabilizing Ukraine's financial position. In 2015-16, spending cuts will be made at a pace "commensurate with the speed of the economic recovery and protecting the vulnerable."

The IMF has been burned in Ukraine before. A previous program was suspended in 2011 after the government failed to meet deadlines to raise household energy prices.

Ukraine's allies in the West are trying to strike a balance -- insisting on measures to make the economy more competitive, while avoiding the kind of harsh austerity that could provoke a popular backlash.

With Russian troops massing on Ukraine borders, Kiev will want to avoid stoking discontent in eastern cities such as Luhansk and Donetsk, which have substantial Russian minorities.

"Years of mass unemployment in Donetsk is not what Europe needs to keep the situation calm," wrote Berenberg chief economist Holger Schmieding in a note.

Related: Recession warning for Russia

Analysts estimate Ukraine needs $12 billion to $13 billion this year alone to pay for imports and service debt -- including a $1 billion bond falling due in June, and arrears on Russian gas imports.

The IMF loans, which need to be approved by the fund's board in April, could unlock financial help from other international organizations that was made conditional on an IMF deal, making for total support of $27 billion.

The EU has offered Ukraine financial assistance worth $15 billion over the next two years, in the form of loans, grants, investments and trade concessions. The U.S. has promised $1 billion in loan guarantees, and the World Bank is talking about backing infrastructure and social security projects worth $3 billion.

-- CNN's Victoria Butenko in Kiev and CNNMoney's Alanna Petroff contributed to this article. To top of page

First Published: March 27, 2014: 5:10 AM ET


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$2 billion for Oculus? That's cheap!

NEW YORK (CNNMoney)

For Facebook (FB, Fortune 500), buying Oculus was an opportunity to expand beyond its core business. Oculus' virtual reality headset is in a growing category of wearable technology that many industry experts expect to be the Next Big Thing. If that pans out, that's $2 billion well spent.

For Oculus, Facebook provides the company with much-needed speed.

Oculus CEO Palmer Luckey wasted no time on a conference call with analysts on Monday in mentioning the access to resources that Facebook could provide. The deal would allow Oculus to build better hardware faster and cheaper.

And really, that's what this allegiance is about: racing to be the first to plant the flag in virtual moondust.

A single announcement -- Sony's announcement of the Project Morpheus virtual reality headset two weeks ago -- almost certainly accelerated whatever plans Oculus and Facebook had for the virtual reality space. The Facebook-Oculus deal is widely reported to have come together in just a matter of days.

Sony (SNE) poses a big threat to Oculus, because the technology giant has everything Oculus did not: financial resources, manufacturing and retail channels, and a PlayStation gaming platform that is mature and successful.

Related: Facebook to buy virtual reality company Oculus for $2 billion

Until selling the company to Facebook, Oculus hadn't been in any real rush to hit store shelves. At last year's E3 video game expo, Oculus mentioned that it was intently focused on getting the technology and the platform right before even thinking about putting its product in consumers' hands. The only people using Oculus today are developers, engineers and tinkerers who supported the company's Kickstarter crowdfunding project.

Left undisturbed, Oculus likely could have held out much longer before selling -- perhaps for a lot more money than $2 billion. Though the young company fetched a nice sum from Facebook, Oculus is among the most innovative gadget makers in the $100 billion video game industry. Oculus isn't the biggest company in the virtual reality space, but it has the best, boldest ideas and people.

Oculus' virtual reality technology has enormous potential. One day,sports fans could immerse themselves into games, and video conferencing could become virtual conferencing. Movies could become interactive -- turning your head could affect the outcome of the plot. And a trip to the doctor for a minor illness could be carried out from the comfort of your own living room.

Related: Facebook and Google in tech Cold War

Of course, this could all go wrong. The technology could hit a wall and never deliver on its promise.

Already, there has been some backlash to its decision to sell to Facebook. Markus Persson, the creator of successful video game franchise Minecraft, canceled plans for a VR version of his breakout game. Elsewhere around the internet, you can find plenty of disgruntled gamers who are wary of Facebook's motives.

But it was clear that Oculus was going to have a hard time waging this war alone, and the only way to determine the extent of its potential was to join a much larger federation. To top of page

First Published: March 27, 2014: 7:55 AM ET


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McDonald's seeks to supersize its growth

mcdonalds stock

McDonald's is struggling to add new menu items that sell well enough to boost same-store sales.

(Money Magazine)

Over the past 12 months, McDonald's (MCD, Fortune 500) stock has returned less than 3%. That compares with an average 21% return for restaurant stocks. Part of the problem is that growth is always harder for a big, mature business -- and with a market value of $93 billion, McDonald's is larger than its two biggest rivals -- Starbucks (SBUX, Fortune 500) and Yum Brands (YUM, Fortune 500) -- combined.

Share of profits by region

McDonald's 4% 96%
Yum Brands 35% 65%

Source: Analyst estimate

But the company has found ways to boost sales before. Job No. 1: Freshen up the menu.

Want wings with that?

McDonald's has had trouble finding new menu items that diners want.

McDonald's is no longer the basic burger, fries, and soda joint you remember from your childhood. Facing new upscale competitors, it responded by adding salads, wraps, and specialty coffees to the menu. This worked for a while: U.S. same-store sales climbed an annual average of 5% from 2003 to 2011, according to the brokerage Raymond James.

Related: McDonald's workers sue for wage theft

But lately the Oak Brook, Ill., company has struggled to find "the next big thing," says Edward Jones analyst Jack Russo. Recent new items like chicken wings haven't been a hit. (And until McDonald's settles on the right mix, the added complexity in the kitchen from new items "slows down the drive-thru," says Russo.)

U.S. same-store sales, though high at an average $2.5 million, have plateaued.

A partial bet on China

The country is important to the chain but still not the main event.

The U.S. market is well saturated, leaving McDonald's stuck fighting for share with both fancier brands like Chipotle and low-cost Taco Bell fare. So an obvious avenue for future growth is the vast new Chinese market. Last year, 20% of the chain's store openings were in China.

But China remains a "smaller piece of a much bigger business," says Morgan Stanley analyst John Glass. He estimates the country represents up to 4% of profits.

Related: McDonald's and Taco Bell rethink breakfast

Competitor Yum Brands, which owns Taco Bell, KFC, and Pizza Hut, gets a third of its earnings from China. That makes McDonald's a less risky play -- Yum saw a 4% drop in revenues last year in part because of a bird flu outbreak, for example -- but also means there's less potential for fast profit gains.

No shortage of cash

A steady flow helps the company pay back its investors.

Since 1976, McDonald's has consistently delivered cash back to shareholders in the form of dividends or share repurchases. Today the stock offers an attractive dividend yield of 3.4%. And there's every reason to think that the business will keep delivering a strong income.

McDonald's is built to generate consistent cash. When a franchisee launches a new store, the company often purchases the land and collects rent on top of franchise fees. So even in tough times, the "downside is relatively limited," says Westwood Holdings portfolio manager Matthew Lockridge.

If management can find that elusive new hit product and deliver improved growth, that plus a reliable payout may satisfy value-minded investors. To top of page

First Published: March 27, 2014: 9:28 AM ET


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Now you can use Bitcoin to buy a smart rifle

NEW YORK (CNNMoney)

Austin, Texas-based gun maker TrackingPoint announced Thursday that it's accepting Bitcoin for its smartscope rifles, which allow novices to accurately shoot targets at 1,000 yards.

Bitcoin is a digital currency that's gaining popularity for being independent of any government -- and difficult to trace to actual people.

But Oren Schauble, TrackingPoint's sales and marketing director, says the company still knows who its customers are, since they have to pass FBI background checks.

TrackingPoint decided to give Bitcoin a try after several customers inquired about it. "It was easy to set up, and we are genuinely interested in seeing the response," said Schauble.

Related: What is Bitcoin?

A local gun shop in Austin has also started accepting Bitcoins. Michael Cargill, owner of Central Texas Gun Works, said he's processed twenty Bitcoin transactions since January.

Cargill echoed Schauble's point about anonymous buyers. "They still have to go into our gun store, or the gun store that we ship to, and you still have to do the background check," said Cargill.

TrackingPoint and Central Texas Gun Works both handle payments through Coinvoice, a Bitcoin e-commerce processor. Coinvoice immediately converts clients' Bitcoins into dollars, which reduces the risk of being exposed to the volatile currency. Bitcoin is a relatively new currency that can rarely be used to pay suppliers. Plus, its value fluctuates wildly. In recent months, the value of one Bitcoin has ranged from $500 to $1,100.

Related: See a TrackingPoint rifle in action

Jake Yocom-Piatt, CEO of Conformal Systems, which runs Coinvoice, said companies rely entirely on banks to process Bitcoin transactions, but that some banks refuse to process the back end of a gun purchase made with Bitcoin. He adds that the bank Coinvoice works with is the rare exception.

But, Jake Yocom-Piatt adds, "If PayPal and credit card companies can process [these types of] payments, I don't see why there's any problem with us processing Bitcoin payments for them." To top of page

First Published: March 27, 2014: 9:05 AM ET


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Stocks flat as banks in spotlight

dow 1030

Click the chart for more markets data.

NEW YORK (CNNMoney)

The Dow and S&P 500 ticked up slightly, while the Nasdaq was barely in the red.

On Wednesday, the Federal Reserve rejected Citigroup's capital plan, saying it was troubled by the bank's inability to predict how much it could lose in a severe economic downturn. It banned the bank from any dividend hikes or share repurchases for the next year.

Citigroup (C, Fortune 500) shares dropped over 4% Thursday.

Citi was among 30 large banks required to submit capital plans for an annual stress tests. The Fed approved 25 plans. Citi and four other smaller banks were turned down.

Related: Fear & Greed Index backslides into fear

But Bank of America (BAC, Fortune 500) shares rose after it announced an increase in its dividend and a new stock buyback plan. The bank also unveiled a $9.5 billion settlement with the Federal Housing Finance Agency. The deal settles all litigation between Bank of America and the agency over the use of mortgage-backed securities in the run up to the housing meltdown.

On the earnings front, Lululemon (LULU) popped after the yogawear maker reported quarterly increases in revenue and net income. The stock was up over 8% mid-morning even though it also had a slide in same-store sales.

Brian Sozzi of Belus Capital Advisors, wrote that this decline for the athletic wear maker was a "once unthinkable development."

GameStop (GME, Fortune 500) shares tanked after the video game retailer missed earnings estimates and gave a lackluster outlook for the current quarter. The company was hit hard by WalMart's (WMT, Fortune 500) announcement last month that it would buy used video games, a business which is traditionally Gamestop's bread and butter.

Accenture (ACN) dropped about 7% after reporting a decline in quarterly net income. The technology services company was recently hired to work on the Obamacare website.

BlackBerry (BBRY) was downgraded to a "sell" by an analyst at Société Générale. Shares slumped on the news. The stock has had a rough go of it in recent years, but has rallied around 20% this year on hopes of a turnaround. The company will report its latest quarterly results on Friday morning.

King Digital Entertainment (KING) shares dipped again. The maker of online game Candy Crush Saga took a beating in its initial public offering on Wednesday. Despite an IPO price of $22.50, the stock is trading under $19.

Related: CNNMoney's Tech 30

European markets were mostly lower in afternoon trading. The International Monetary Fund said it was throwing Ukraine an $18 billion lifeline.

Asian markets ended with mixed results. Shares in tech company Tencent (TCEHY), a popular Asian internet portal, fell by nearly 6% in Hong Kong. Investors and traders have been growing concerned that valuations have become too rich in the Asian tech sector ... much like investors in the U.S. have regarding the likes of Facebook (FB, Fortune 500) and Twitter (TWTR). To top of page

First Published: March 27, 2014: 9:55 AM ET


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Economy continues its sub par recovery

gdp data 032714

The economic recovery slowed in the fourth quarter, according to the government.

NEW YORK (CNNMoney)

Gross Domestic Product (GDP) -- the broadest measure of economic activity -- grew at a 2.6% annual pace in the fourth quarter, according to revised data released by the Commerce Department on Thursday.

The growth rate is slightly better than the 2.4% estimate published in February, but it was still down from 3.2% originally reported in January. The final revision matched economists' expectations.

The report said consumer spending and exports helped growth in the fourth quarter, but the overall economy was hindered by a big drop in federal and local government spending, as well as declines in private inventory investment.

Related: Yellen blames it on the weather.

The fourth quarter was dominated by federal spending cuts and the government shutdown in October. But the headwind in the first quarter is likely to come from Mother Nature rather than Uncle Sam.

Economists say colder-than-normal weather has put a damper on growth during the winter months. Government data have pointed to weak job growth, as well as declines in retail sales, new home construction and manufacturing.

Still, many experts expect the economy to regain momentum in the spring.

The economy had been picking up steam before uncertainty in Washington put the breaks on growth. In the third quarter, GDP expanded at 4.1%. To top of page

First Published: March 27, 2014: 9:09 AM ET


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Alli weight-loss drug recalled for tampering

glaxosmithkline alli

GlaxoSmithKline is recalling diet drug Alli after reports of tampering in seven states.

NEW YORK (CNNMoney)

GlaxoSmithKline (GLAXF), the British company that makes the drug, said in a statement Thursday the recall comes after complaints from customers in seven states.

"A range of tablets and capsules of various shapes and colors were reported to be found inside bottles," the company said. "Additionally, some bottles inside the outer carton were missing labels and had tamper-evident seals that were not authentic."

GlaxoSmithKline spokeswoman Deborah Bolding said that 20 tampered bottles were reported to the company by 12 customers. She did not say whether anyone had consumed the fake pills, but she did say that no one got sick.

"We have received no reports of serious illness from the consumers who have reported these tampered products," she said.

The company is assessing the tampered products to try and find out what they are, she said.

Related: Obamacare's amazing comeback

GlaxoSmithKline described authentic Alli as a turquoise blue capsule with a dark blue band imprinted with the text "60 Orlistat," which is the active compound that prevents the absorption of fat.

The London-based company said the questionable Alli was purchased in retail stores in Alabama, Florida, Louisiana, Mississippi, New York, North Carolina and Texas. Bolding said the drug is also sold in Europe, but there are no reports of tampering outside the U.S.

The company said it's conducting an investigation with the Food and Drug Administration.

Back in 2010, the FDA warned that a counterfeit version of Alli that was being sold online was potentially harmful to dieters.

To top of page

First Published: March 27, 2014: 10:58 AM ET


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The Fortune interview: Tom Brokaw

Written By limadu on Kamis, 20 Maret 2014 | 23.53

BRO07 tom brokaw

Brokaw in his office in Rockefeller Center in 2013

(Fortune)

Even now, at 74, he's still on the air at NBC for breaking news, as well as on special features for Today and for the recent Winter Olympics in Sochi. He has also become a bestselling author, most famously with The Greatest Generation, about those who came of age during the Depression and went on to fight World War II. That voice of his is probably the reason he's also the only broadcaster to earn treatment on The Simpsons, as well as on Family Guy, where his pronunciation of words with the letter l was hilariously parodied ("I'd love to lick a lemon lollipop in Lillehammer").

MORE: A giant of the broadcast generation - Brokaw in photos

These days, while working on a new book, Brokaw is also fighting multiple myeloma. He received that diagnosis last summer, after he was medevaced out of his 1,000-acre ranch in Montana with severe back pain. Brokaw says he was determined to keep the diagnosis private because "I wanted to concentrate on getting well -- and I didn't want to become the celebrity disease of the week"; but when the news was about to leak, he publicly disclosed the cancer in mid-January.

In a series of conversations with Fortune's David A. Kaplan, he reflected on more than 50 years in broadcasting and a personal life that early on hardly seemed destined for greatness. In his Rockefeller Center office filled with memorabilia of history and family, he talked about journalism, celebrity, public service, Warren Buffett, David Letterman, and who does the best Brokaw imitation. Edited excerpts:

Fortune: If a bus hits me on my way out today, this will be a perfect career bookend. I once interviewed Walter Cronkite for my high school paper. It was my first interview with somebody famous.

Brokaw: I adored Walter. I never was at CBS, but we ended up becoming friends. I was one of his eulogists. [Cronkite died in 2009, at 92.] Think about the adulation showered over him -- oh, man -- and the fame that came with it.

How did he handle it?

He loved being Walter Cronkite. There was nothing wrong with that because of the way in which he embraced it. I was a big fan. Think of the run he had, in the midst of whatever was going on: flying missions in World War II, Nuremburg, J.F.K., all the way to the end of the 20th century.

How did he come to know you?

I was unknown because I came to Washington from the West. I started covering Watergate. Immodestly, I'd say I did it pretty well, in part because it was hard to go wrong. Walter was keeping track. I remember the first thing he said to me: "I don't know anybody who can go out there without any script on a big complicated run of stories -- and just get it right."

Was he a mentor?

No. My mentor in the transition from the old Gabriel Heatter and John Cameron Swayze way of doing things was David Brinkley. He brought an entirely different style to what we were doing. He was able to sit at a desk on a night when all hell was breaking loose -- like for an election -- and with elegance in his language convey to you personally what was going on. It was one-on-one. We became quite close, in part because he realized I was tuning into him in a way the other correspondents were not.

Less so Cronkite or Huntley?

They were more old school. One time Walter came over here to tape something. We were having this great conversation, but when it came time for him to say, "On June 6, 1944," he went right into Walter Cronkite voice. [Brokaw imitates.] David didn't do that.

How did Brinkley do it?

There's a famous example. At their convention in 1968, the Republicans were trying to patch things up and arranged for [Richard] Nixon and [Nelson] Rockefeller to come in at the same time and walk through the crowd. And [NBC News president] Reuven Frank said into David's ear, "Give me a little something that will sum this up." And David said, "If that isn't love, it'll have to do until the real thing comes along." And then he shut up. He nailed it.

BEER, COEDS, AND MEREDITH

Do you love being Tom Brokaw?

Oh, you know, what's not to love? But not for the reasons a lot of people would guess. Fifty-one years ago I married an astonishing, gifted woman, Meredith.

You met when?

We were both 15. My dad was a construction foreman [for the Army Corps of Engineers], and we moved to a little town on the Missouri River named Yankton, S.D. I saw her picture. She was stunningly beautiful, gifted, smart, a cheerleader, a musician. She was a straight arrow. I was more than a bit of a wild child.

At 15?

Close. Anyway, she and I went through high school together and stayed good friends. She went on to become Miss South Dakota. I went completely off-track. I got interested in her, and she gave me what they now call the Heisman -- don't come near me. [Brokaw laughs and puts his arms in front of himself, as in the pose of the Heisman Trophy.] It was a handwritten letter: "I'm not interested." "I don't know what you're doing with your life." "Don't call, don't show up."

But otherwise it was positive?

It was a wake-up call. It was crushing to be rejected by Meredith. So I straightened out my life.

And she noticed?

About six months later, typical Meredith, she came to me and said, "I probably was out of line." I said, "No, I had it coming." We had a date that Sunday night. Six months later we were married.

What had you done to fix your life?

I quit drinking so much, and I showed up for life. I'd been just racing through. I don't want you to over-interpret this, but I was kind of a whiz kid: governor of Boys State, an athlete, the outstanding ROTC cadet. I was an enigma because when I decided to turn it on, I could hit it out of the park. I think part of what happened is I was just in overload in terms of expectations. A friend said, "You could ride that charm pony, Tom, all day long and get away with more than most people." And then I went off the high board. Meredith pulled me back. It's the single most important thing that happened to me.

It sounds like something you've thought about.

What I've thought about is, How in the hell did I let that happen in the first place? I once described my skid as an "ankle bracelet I continue to wear every day of my life -- wasting the opportunities that were given to me." I was drinking beer and chasing coeds every night.

Did you save that letter from her?

No, dammit, I didn't.

MIDWESTERN ROOTS

How did you adjust to fame?

Very easily. When I was 20 and in college and had my first job in television -- working weekends [for NBC affiliate KTIV] in Sioux City [Iowa] -- I was making $65 a week. People would see me outside a cafeteria trying to figure out what I could get for Sunday breakfast for $1.20. But they were very excited because I was on television, and they'd come over. They'd all had a good meal. They'd walk away, and I thought, "Well, that tells you all you need to know about the value of being a public person -- I can't afford to go into the cafeteria."

You get paid in compliments but not in coin.

That lesson never left me. It put everything in perspective for me. So I parked the whole business of celebrity at that point. There is a kind of radioactive celebrity these days, in which you become larger than you deserve to be. Everybody knows who you are, where you're going, and when.

How did you get your first full-time job?

I was lucky. There was a job at a station in Omaha [for NBC affiliate KMTV]. Bill "Doc" Farber made sure I got to the interview. This guy, right here [he points to a bronze statue on his desk, alongside two other statues, of Lincoln and Churchill]. He was head of the political science department at the University of South Dakota. He's still a heroic figure on campus; he may have turned out more Rhodes scholars than anybody in a school that size in the country. [Farber died in 2007.] We drove down together. I came home with the morning-news job.

Did you come across Warren Buffett in Omaha?

No. We've laughed about it. Meredith taught English at Omaha Central. She was very good at it. She taught with Warren's aunt. We like to say that we knew the Buffett who could diagram a sentence but not the one who was making a lot of people very rich.

And then you went to Atlanta?

I learned a lot in 2½ years in Omaha -- you would do the tornadoes, [Barry] Goldwater came a lot, one of the Wallendas fell from a sway bar and died -- but I wanted to get to the network. In 1965, I went to Atlanta [to NBC affiliate WSB], which was in the middle of everything. All hell was breaking loose in the civil rights movement. After six months NBC said, "You might as well come work for us."

In L.A.?

Yes. I was 25. In those days, the network operated differently. I wasn't just a local reporter -- I was part of the network team. I did a lot of reports for Huntley-Brinkley, and I briefed David on political stuff when he came out. I got thrown into fast waters. I worked hard. It was a great break for me -- the rise of [Ronald] Reagan, the Watts riots, the antiwar movement, the counterculture. I got to be a part of it and hold my own.

You're good-looking and have a baritone voice, but there was other network talent. Why you?

I had this unusual mix of curiosity, the ability to write in ways people understood, and when I appeared, viewers seemed to trust me to get them through some cataclysmic changes. In Los Angeles, I had the good fortune of anchoring the news right before Johnny Carson came on, so to see him the Hollywood stars watched me first.

Like?

Rob Reiner was one. Cary Grant, Henry Fonda, Roz Russell. Next thing you know, they're including Meredith and me in their social circle. Meredith had George Burns as a partner at a dinner party one night. We enjoyed it, but then we'd happily go back to our real lives.

IN THE ANCHOR'S CHAIR

After six years in L.A. you became White House correspondent and then host of Today before taking over as the anchor of NBC Nightly News, in 1982, for more than two decades. Is the anchor job different now?

There's much more of an emphasis on being known as a star today. I think people of my generation became journalists -- you know, right after the broadcast pioneer fathers -- because we wanted to report the big stories. I grew up at a time when if I had strayed, I'd get cuffed by people like Peter Lisagor [the Washington bureau chief of the Chicago Daily News in the 1960s and 1970s] or other print journalists who effectively raised me. We lived next door to Scotty Reston [of the New York Times], who would lean out his kitchen window and talk to me about what had happened at the White House that day. Those people became my models. It's just a different time and ecosystem now.

Are you at all ambivalent when you go on Letterman or Jon Stewart? News anchors didn't used to do that.

Walter went on the Mary Tyler Moore Show, but, no, I'm not. With Letterman, I know that we're going to drive hard on the news of the day in some fashion, and he's going to give me an opportunity to say things I'd like to say. It's on my terms. We have a good relationship -- he's an old friend.

Was 9/11 the biggest story of your time?

It was easily the toughest single story for lots of reasons, but the most enduring big story will be the collapse of the Soviet Union and the rise of China. Those are stories that can define an epoch.

When you say "toughest," you mean emotionally or reportorially?

Because you had to hold it together emotionally, you had to get it right, and you didn't know where you were getting it from a lot of that day. You were out there on the end of the gangplank, trying to keep the audience informed and not do something dumb. When the towers were still standing, having grown up around construction, I said, "At some point those towers are going to have to be brought down." And immediately I thought, "God, I've gone too far." And then moments later they came down.

THE BUSINESS OF JOURNALISM

You've been outspoken about the trajectory of journalism. Isn't there something salutary about having more news outlets?

I don't see myself as the generational scold. But I reserve the right to make observations, just as others reserve the right to make theirs. You know, I don't wake up in the morning and ask, "How do I nail them today?"

When you've counseled on-air to rein in commentary during election coverage, did you get off-air blowback from Chris Matthews or Keith Olbermann?

Keith wasn't happy with me because we would make these elaborate arrangements about how far he'd go, and then instantly he'd cross the line. I did think that on the night he told the President to shut the hell up that he'd gone too far. He may still carry a note I wrote to him when we first got going with MSNBC saying he'd done a very good job on election night with all the returns coming in.

He carries around the note?

He pulls it out whenever my name comes up: "This is what he wrote to me, and then this is what he said on the air." It's tiresome.

So Bob Costas carries around a Mickey Mantle baseball card and Keith Olbermann carries around a note from Tom Brokaw?

Yes, but Bob carries around Mickey in a sacred way.

Could you have been a print journalist? You still would've seen the things you saw, talked to everybody, visited exciting places.

That's a question I've asked myself a lot. But you have to remember that when I came into the field, broadcast journalism was exploding. Especially where I lived, the opportunities were far greater in TV and radio than in print.

If the Times had called to ask, "Come be a foreign correspondent for us"?

Well, I've been able do lots of print. Not just the books, but op-ed and magazine pieces over the years: about being there when the Berlin Wall came down, about health care for veterans.

It sounds as if it's an irritant that you're not given enough credit for your writing abilities.

It's a mild itch at best.

If you had been a print journalist, how much would you have missed being on the box?

A little bit. The box gives me a kick. It's a different verbal skill set altogether. It's my natural place to be.

Thinking on your feet?

Right. At the end of the day, what you're doing is just trying (1) to get it right, (2) in a way that engages people, and (3) make sure it lingers. You can do that in the printed word, but it's not the same.

But you appreciate the appeal of writing.

Books are changing too. I'm thinking about a new one, and I'm looking first at forms. Tom Friedman [a New York Times columnist] and I had a three-hour dinner with Jeff Bezos [the CEO of Amazon] this summer about the range of choices now available in electronic publishing. It was just before his [Bezos's] purchase of the Washington Post was announced. Not a peep from him -- Tom and I laughed what ace reporters we were.

If you were 20 again, would you still head toward TV?

I might go to work for Bloomberg because they've got so much range. They're on television, they're digital, they're business, they're political. They're the biggest presence in Washington. But I seem to have the tools for exactly what I've been doing for 50 years, so I'd probably do it again.

Is news too fast now?

Look at all the tweeting stuff. My wife and I were in an auto accident [in 2009]. It could've been very serious for us. Tragically, a woman was killed. The next day, when you typed in our names in Google, there were about 200 websites referring to the accident.

Whereas 20 years ago ...

The auto accident would've gotten a line or two in the Daily News, and that would've been it. But not 200 hits. And then everybody's invited to comment!

Part of that isn't increased curiosity -- only technology enabling its fulfillment, no?

No, the web has created it.

Are you described the new world or lamenting it?

It is a reality, and I'm lamenting it. But I'm also embracing it. I'm not going to turn things back. What's missing is dialogue among us. There isn't a nanosecond between what happens and what people say about it and then a reaction to that. I would like to see more use of the digital universe for fact checking, for contemplative discussion.

LINDSAY LOHAN AND THE TODAY SHOW

Have you relented on the matter of White House Correspondents Dinners?

Are you kidding?

I'm just checking. So you didn't go this year?

[Laughs.] No. I hate it in a way that I can't adequately convey. I have a reasonably manageable ego, but I can't believe people see this as a wonderful exercise. It's so repulsive and so antithetical to who we should be. It's astonishing. It really is.

Do you find yourself revisiting this issue a lot?

I had a memorable moment during a dinner in my early days. It was a different culture in the ballroom, with people who had something to say: Lee Iacocca on my right and P.X. Kelley, the commandant of the Marines, on my left. Across from me was Philip Hart from Michigan, one of the last of the great senators. We were having a good time, laughing back and forth. And he looked at me and said, "Mr. Brokaw, how old are you?" And I said, "I'm 33." And he said, "That's just great." It was a snapshot of a moment. You don't have those anymore, where a senior senator says to a young correspondent, "I want to know a little bit more about you."

Now you can have Lindsay Lohan saying so!

I mean, how much worse can it be than to get Lindsay Lohan?

Any thoughts on the current travails of Today?

Yeah, but I'm not going to share them with you. [Laughs.] You think things are tough now? When I took it over in 1976, it had been a monopoly for 25 years. They had not changed a writer or producer or concept. And then Good Morning America came along. I was a traditional newsman. Jane Pauley [the new co-host] was, you know, barely out of college. I remember one morning we had a harpsichordist on in a long gold brocade dress. And even I understood this wasn't how you produce a morning show.

What happened?

We went down hard. GMA took over. And then Steve Friedman came in [as executive producer] and said we'll get this thing back on top. Politics is probably my strongest suit, and we caught the wave going into [Ronald] Reagan's election in 1980.

Are Today's problems cyclical?

They're not. But it's like fashion or music. You lose your touch. I talk to the staff about it. The other day they were really hot. You had Matt [Lauer] on with a really good interview with Justin Timberlake. And they had Sting in the studio doing a song. They're retooling, and they'll be back.

Better than a harpsichord?

Yeah, better than the harpsichord.

Do you watch The Newsroom on HBO?

A little bit. It's a well-scripted show, but I don't think it touches what we do. It's Aaron [Sorkin's] wish that newsrooms would behave that way.

What do you read every day?

I'm a hopscotcher -- I read around. I Google a lot of stuff. I don't read print newspapers as much as I used to. Politico. Sometimes Redstate and BuzzFeed. I've got to stop the middle-of-the-night reading because it's just too easy to wake up and reach over and get your iPad and get hooked.

You retired in 2004 at 64. In retrospect, was it the right call?

When I left, part of the reasoning was seasonal. I wanted to be able to go pheasant hunting in the fall, which is a sweeps period, and I couldn't take days off in the middle of the week. I wanted to go fishing for steelhead in British Columbia, biking in New Zealand. This year alone we were in Africa for a week, and trips to Argentina, Chile, and Antarctica. And we spend a lot of time in Montana. I didn't want to wait until I was 75 or 85. My back was a reminder that time is catching up with me. [That back pain was the key indication of the onset of multiple myeloma.]

How are you doing with your health?

I'm encouraged with the progress I'm making in treatment. But I do want to keep it a private matter.

THE GREATEST GENERATION

Why did you get interested in writing about the military?

I wasn't actually there on the 40th anniversary of D-Day. I was on the beach a little earlier. Sam Gibbons, a congressman from Florida, came over to me and pulled out a cricket that the 101st Airborne carried. It went click, click. Gibbons said, "I was here 40 years ago." And I said, "Tell me what happened." As he did, tears started streaming down his face. His wife came over and said, "Sam, you don't have to do this." He said, "Yes, I do." He told stories the next half-hour she'd never heard before.

That was the impetus for The Greatest Generation?

It took me a while. I started collecting these stories. I was scheduled to write another book for Random House but told them, "I have this other idea." And they said, "Stop what you're doing and do that."

It was an epiphany?

It was. In fairness, I road-tested it. I did it in commencement addresses several times. It was at Yale Class Day that I called it "The Greatest Generation."

Your phrase?

Totally my phrase.

Why did the book work so well?

Ken Burns has the best line about me. He said, "You gave them permission to talk."

Why are people comfortable with you?

I've never understood it. I think Midwesterners -- the Johnny Carsons, the Harry Reasoners -- do well because we grew up in the middle of the country. We look both ways, east and west, north and south. [Someone] said I have an affidavit face -- "You look at it and know he's telling you the truth."

THE VOICE

Who does the best Brokaw imitation?

Ed Helms, the guy who used to be on Jon Stewart. I don't even know him. One night Letterman turned to him and said, "Say it: 'Meredith and I want you to come visit us at the ranch, David.' " He did me pitch-perfectly.

I can't remember Peter Jennings ever being done.

Mine is distinctive. It's gotten me where I am. I can't complain. To top of page

First Published: March 20, 2014: 9:40 AM ET


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Hyatt's one-person welcoming committee

GRE07 hyatt

From left: Meetings team setting up at the Hyatt Regency McCormick Place, Chicago; Hyatt Chicago Magnificent Mile

(Fortune)

Starting a new job can be downright nerve-racking, much like being the new kid at school. Hyatt Hotels decided to zap the jitters from the equation by developing a friendlier process that pairs an experienced staff member with new hires for their first day on the job. New associates at the Hyatt Regency Resort Maui get an "Aloha!" and a lei, and at the Hyatt Regency Hill Country in San Antonio they bound off on a scavenger hunt through the resort. At the Hyatt Regency Phoenix new hires will find Brittany Hauk or one of her colleagues waiting for them with a card, ready to show them the ropes.


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Bill Clinton on leadership

(Fortune)

What does leadership mean to you?

Leadership means bringing people together in pursuit of a common cause, developing a plan to achieve it, and staying with it until the goal is achieved. If the leader holds a public or private position with other defined responsibilities, leadership also requires the ability to carry out those tasks and to respond to unforeseen problems and opportunities when they arise. It is helpful to be able to clearly articulate a vision of where you want to go, develop a realistic strategy to get there, and attract talented, committed people with a wide variety of knowledge, perspectives, and skills to do what needs to be done. In the modern world, I believe lasting positive results are more likely to occur when leaders practice inclusion and cooperation rather than authoritarian unilateralism. Even those who lead the way don't have all the answers.

MORE: World's Greatest Leaders

What attributes do leaders share?

Steadfastness in pursuit of a goal, flexibility in determining how best to achieve it. The courage to make a hard decision, and the confidence to stay with it and explain it. The common sense to listen to others and involve them. And the strength to admit it when you make a mistake or when a given policy is not working. You have to be able to trust others, and trust your instincts as well as your intellect. Finally, if the objective is to get something done on a matter that is both important and controversial, you have to be able to compromise as well as know the lines you can't cross.

How did you learn to be a leader?

I learned when I was very young to respect the human dignity of everyone I met, to observe them closely and listen to them carefully. From the adults in my extended family I learned that everybody has a story but not everyone can tell it. I learned that most of life's greatest wounds are self-inflicted, that trying and failing is far better than not trying at all, that everyone makes mistakes but most people are basically good. As a boy growing up in the civil rights years, then during Vietnam, I came to see politics as a way to help other people make their own life stories better. All along the way I learned a lot from other leaders, especially those who befriended me and shared their own experiences. Yitzhak Rabin reminded me that you don't make peace with your friends. Nelson Mandela told me and showed me that you can't be a great leader if you're driven by resentment and hatred, no matter how justified those feelings are. To be free to lead, you have to let a lot of things go. I'm grateful to them and everyone else who taught me to look for the dreams and hurts, hopes and fears, in the eyes of everyone I met.

MORE: Gen. George W. Casey on leading in a 'VUCA' world

Who are the great leaders in your mind?

There are too many to mention so I'll stick with a few. Nelson Mandela and Yitzhak Rabin were great for the reasons I mentioned and many more. Helmut Kohl oversaw the reunification of Germany, the European Union, and the creation of the eurozone.

Bill and Melinda Gates have built their amazing foundation, which is saving and lifting countless lives, driven by the principle that every life has equal value. They've selflessly given their money, time, and know-how to help solve global health and development problems. Muhammad Yunus and Fazle Abed have empowered huge numbers of poor people to live more productive lives.

Aung San Suu Kyi's dignified determination helped open her country to the world and inspired women and girls across the world.

This story is from the April 7, 2014 issue of Fortune. To top of page

First Published: March 20, 2014: 7:47 AM ET


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This drone can steal what's on your phone

NEW YORK (CNNMoney)

Hackers have developed a drone that can steal the contents of your smartphone -- from your location data to your Amazon (AMZN, Fortune 500) password -- and they've been testing it out in the skies of London. The research will be presented next week at the Black Hat Asia cybersecurity conference in Singapore.

The technology equipped on the drone, known as Snoopy, looks for mobile devices with Wi-Fi settings turned on.

Snoopy takes advantage of a feature built into all smartphones and tablets: When mobile devices try to connect to the Internet, they look for networks they've accessed in the past.

"Their phone will very noisily be shouting out the name of every network its ever connected to," Sensepost security researcher Glenn Wilkinson said. "They'll be shouting out, 'Starbucks, are you there?...McDonald's Free Wi-Fi, are you there?"

Related: Get your documents by drone in Dubai

That's when Snoopy can swoop into action (and be its most devious, even more than the cartoon dog): the drone can send back a signal pretending to be networks you've connected to in the past. Devices two feet apart could both make connections with the quadcopter, each thinking it is a different, trusted Wi-Fi network. When the phones connect to the drone, Snoopy will intercept everything they send and receive.

"Your phone connects to me and then I can see all of your traffic," Wilkinson said.

That includes the sites you visit, credit card information entered or saved on different sites, location data, usernames and passwords. Each phone has a unique identification number, or MAC address, which the drone uses to tie the traffic to the device.

The names of the networks the phones visit can also be telling.

"I've seen somebody looking for 'Bank X' corporate Wi-Fi," Wilkinson said. "Now we know that that person works at that bank."

CNNMoney took Snoopy out for a spin in London on a Saturday afternoon in March and Wilkinson was able to show us what he believed to be the homes of several people who had walked underneath the drone. In less than an hour of flying, he obtained network names and GPS coordinates for about 150 mobile devices.

He was also able to obtain usernames and passwords for Amazon, PayPal and Yahoo (YAHOF) accounts created for the purposes of our reporting so that we could verify the claims without stealing from passersby.

Related: Amazon drones? Time for a reality check

Collecting metadata, or the device IDs and network names, is probably not illegal, according to the Electronic Frontier Foundation. Intercepting usernames, passwords and credit card information with the intent of using them would likely violate wiretapping and identity theft laws.

Wilkinson, who developed the technology with Daniel Cuthbert at Sensepost Research Labs, says he is an ethical hacker. The purpose of this research is to raise awareness of the vulnerabilities of smart devices.

Installing the technology on drones creates a powerful threat because drones are mobile and often out of sight for pedestrians, enabling them to follow people undetected.

While most of the applications of this hack are creepy, it could also be used for law enforcement and public safety. During a riot, a drone could fly overhead and identify looters, for example.

Users can protect themselves by shutting off Wi-Fi connections and forcing their devices to ask before they join networks. To top of page

First Published: March 20, 2014: 8:10 AM ET


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Yearning for leadership

(Fortune)

The world yearns for such leadership. Only 21% of those surveyed globally say they trust business leaders to "make ethical and moral decisions," says the Edelman communication firm's latest Trust Barometer; only 15% trust government leaders to do so. Maybe the problem is that as the world changes and challenges multiply faster, delivering great leadership is getting harder. We hear it from others and feel it ourselves: The leaders we need are frequently just not there. So we went in search of them.

The great news is, we found scores of extraordinary individuals -- so many that it was hard to winnow down our selections to just 50. (We've included one three-way tie.) We found inspiring, impressive leaders in every field of endeavor across the globe. On six continents -- in business, government, the military, philanthropy, religion -- we identified men and women, young and old, who are leading the way people want to be led. Crave to be led. Some, like the Pope, are world famous; many you've never heard of.

MORE: The World's 50 Greatest Leaders

Choosing them necessarily required judgment. "There is no formula for leadership," says Leading Marines, a book that all U.S. Marines are required to read, and on this we may regard the Marines as authoritative. So we cast our net broadly to include leaders of strictly hierarchical organizations (including the Marines) as well as others whose followers may owe no formal duty to the leader but who look to that person for inspiration and guidance. Some of our leaders, such as Alibaba chief Jack Ma (No. 16), are visionaries who inspire others to follow them toward a goal only they may see clearly; others, like Ford CEO Alan Mulally (No. 3), rescue institutions in trouble. Some, such as sports coaches, compete and win; others, like social entrepreneurs, cooperate and give.

We have drawn a distinction between leaders and people who are admirable and powerful but who are not transformative leaders. Simply running a large organization or serving in an influential role does not meet the threshold to be on this list. All candidates had to be currently active; thus no retirees or recently deceased great leaders, such as Nelson Mandela. We asked several noted leadership experts to suggest candidates, combined their ideas with others turned up by Fortune reporters, and vetted our nominees with experts in their respective fields. Then we made our final judgments based on the reality that while leadership can't be measured, we all know it when we see it.

"A leader's job is to define reality and give hope," says American Express CEO Ken Chenault (No. 18). In an environment that often feels leader-deficient, our list exposes the reality that the world is actually filled with knockout leaders. And does it ever give hope.

This story is from the April 7, 2014 issue of Fortune. To top of page

First Published: March 20, 2014: 7:50 AM ET


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Leading in a 'VUCA' world

LIS07 general george casey

Gen. Casey leaves a meeting with Iraqi army officers in Baghdad, February 2007.

(Fortune)

In reality, VUCA has never been more relevant, for the military and for business. I experienced VUCA environments in Bosnia (1996), in Kosovo (2000), and in Iraq (2004-07). Leading grew progressively more difficult in those conflicts, with Iraq unquestionably the toughest. I believe that my experiences leading in those environments can benefit business leaders.

The reason is that the primary function of any leader is to point the way ahead. I've learned that doing so in VUCA environments is extraordinarily difficult. Leaders need to "see around corners" -- to see something significant about the future that others don't see. Yet the more VUCA the environment, the harder it is for leaders themselves to comprehend the situation, let alone articulate a clear way forward. VUCA environments thus become invitations for inaction -- people are befuddled by the turmoil and don't act. And to succeed, you must act!

Effective action begins with a clear statement of what needs to be accomplished. As the commander in Iraq and later as the Army Chief of Staff, I made the No. 1 question I asked: "What are we really trying to accomplish?" The higher in the organization I was, the more complex the issues became and the harder it was for me to answer that question clearly and succinctly. I had to force myself to get clarity in my own mind so that I could clearly articulate to my subordinates how I saw things and what I wanted them to do. I found that the clearer I could be -- even if I wasn't exactly right -- the better we executed. Without a clear focus, there was no common purpose, and without common purpose, there wasn't effective execution. In war -- and business -- that is fatal.

MORE: The World's 50 Greatest Leaders

Consider my experience in Iraq. When I took command in July 2004, I had about 30 days to come to grips with the new environment, build a relationship with the new Iraqi government, and develop a plan for succeeding, all the while keeping a burgeoning insurgency at bay. I had a lot on my plate.

Then, almost immediately, we confronted a countrywide uprising after a young Marine made a wrong turn and drove too close to a militia leader's house in the key city of Najaf, home to the Imam Ali Mosque, the third-holiest site in Shia Islam. In response the militia leader, Muqtada al-Sadr, whose forces had been terrorizing the population of Najaf for months, rapidly mobilized his forces in Najaf, Baghdad, and southern Iraq, and fighting escalated. That's volatility.

With an inexperienced Iraqi government, a mere two battalions in the Iraqi army, 162,000 coalition forces from 33 countries engaged in a form of combat for which they had not prepared, in a culture they didn't fully understand or appreciate, and against a diverse and committed enemy, our ability to achieve our desired outcome was hugely uncertain. In addition, Iraq was the most complex environment I had ever experienced. I had to consider not only what the U.S. government wanted but also how our decisions would affect the Iraqi government, our coalition of 33 countries, and the varying Iraqi factions -- and that was just our side. In war the enemy has a vote. On almost every issue I had to consider multiple and competing internal and external variables that, if I chose incorrectly, could produce undesirable outcomes.

MORE: World's Greatest Leaders: 9 dynamic duos

Ambiguity? The reporting that I received was all over the map -- Sadr had been killed! No, he was just wounded. An errant bomb had damaged the mosque! No, it was the hotel next door. The Iraqi Special Forces had arrived! No, they were still on the way.

VUCA conditions conspired to postpone action. Yet I had to act fast because my troops were under attack.

Over the years I had developed an offensive mindset -- I worked aggressively and opportunistically to gain an advantage. That attitude kept me from being cowed by the complexity and ambiguity of the situation, and I was able to perform a leader's first duty -- to point a clear way ahead. I quickly saw the battle for Najaf as an opportunity for the new Iraqi government to demonstrate its strength. In less than 24 hours, I consulted with the Prime Minister and instructed my forces to restore Iraqi government control of Najaf, which in the following weeks they did. The Prime Minister had his first victory.

I got the chance to apply what I had learned in Iraq when I became the Army Chief of Staff in 2007. As I began developing my vision to guide the Army through my four-year tenure, I initially thought it would be something flashy, like "America's Army -- an agile, disciplined warrior team, dominant across the spectrum of 21st-century conflict." I couldn't have been more wrong.

In a four-month tour of the Army, talking with men and women of all ranks, I found an organization stretched by six years of war and facing another five to 10 years of continual deployments. Over 3,000 soldiers had given their lives, leaving 10,000 surviving family members. Another 25,000 soldiers had been wounded, some 5,000 seriously enough to require long-term care. We also were just beginning to come to grips with the impacts of posttraumatic stress and traumatic brain injury on thousands of soldiers. In all the turbulence, readiness suffered. The magnificent volunteer force that we had built so painstakingly since the early 1970s was seriously frayed.

MORE: 20 of Hollywood's greatest fictional leaders

I came to see the Army as out of balance -- so weighed down by current demands that we couldn't adequately care for soldiers or prepare for the future. I realized that when you are out of balance, there is only one thing to do: Get back in balance. I thus arrived at a simple -- and clear -- vision statement: "Put the Army Back in Balance." It wasn't quite so glamorous a vision as I had originally imagined, but because it was clear, it guided a Herculean Army-wide effort that left us in a fundamentally different and better position four years later.

Leaders are human and possess only so much intellectual and emotional energy. To succeed in a VUCA world, we must expend that energy in the areas that produce the highest payoff for our organizations. Our first priority must be developing and articulating a clear vision to drive our organizations' actions. The clearer leaders can be about what they want to accomplish, the better their organizations will execute in the volatility, uncertainty, complexity, and ambiguity of today's global business environment.

George W. Casey Jr. was Army Chief of Staff and Commanding General of the Multinational Force in Iraq. He is now a consultant with the Minot Group and a Distinguished Senior Lecturer of Leadership at Cornell.

This story is from the April 7, 2014 issue of Fortune. To top of page

First Published: March 20, 2014: 7:52 AM ET


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European IPOs boom as bull market runs

LONDON (CNNMoney)

Initial public offerings on exchanges in the U.K., the Netherlands, Denmark and Spain have raised $12.4 billion so far this year, easily surpassing the $9.2 billion raised in the United States, according to data from Dealogic.

The London Stock Exchange has seen a parade of offerings, raising 10 times as much as during the same period last year, according to Thomson Reuters (TRI) data.

Other European exchanges such as Euronext in Paris have also hosted big IPOs, unlike 2013 when new issues were few and far between.

As the bull market in equities continues into its fifth year, and the eurozone crisis fades, companies see this as an ideal time to raise money and investors are happy to snap up new shares.

"There had been a lack of new names and companies over the last five years [in Europe]," said Matt Toole, head of Thomson Reuters' deal intelligence unit. "Investors are looking for those new names to put in their portfolio and companies are lining up to sell shares."

Related: Yee-haw! Riding the mechanical bull market

The IPO rush is also being fueled by private equity firms looking to cash out of their investments.

"The whole [private equity] market is talking about the IPO window," said Ernst & Young's European IPO expert Martin Steinbach. "If you have an exit window, you take the chance."

Attractive valuations in Europe may be playing a part too. London's FTSE 350 index is currently trading at 14 times earnings, compared with 16.5 times for the S&P 500.

Related: Royal Mail delivers... for investors

A global IPO boom got underway in late 2013 as investors became increasingly confident in the economic outlook and central banks continued to pump cheap money into markets. Over $40 billion has been raised globally so far this year, twice as much as at the same point in 2013.

That trend continues for now as investors expect markets to remain firm, despite geopolitical tensions, slower growth in China and prospects of tighter monetary policy in the U.S. and U.K.

Internet, e-commerce and retail companies are leading the charge in London. U.K.-based online food delivery service Just Eat said this week it planned to issue shares. The firm could be worth as much as $1.5 billion, according to reports.

"There's more risk appetite. Investors are looking for growth, and that's represented through technology [firms]," said Ernst & Young's Steinbach.

Last year's successful Twitter (TWTR) IPO in the U.S. helped boost the pipeline of tech offerings. Dealogic data shows 26 tech firms have raised nearly $6 billion in IPOs around the world this year, with more to come.

Candy Crush maker King goes public next week in New York, and China's Alibaba has said it also plans to list in the U.S.

Related: China's Alibaba picks U.S. for IPO

There's been a crush of new IPOs from mainland China after Beijing lifted a year-long ban in late 2013. Dealogic data shows 62 Chinese companies have raised roughly $7.3 billion on global exchanges since the start of the year. To top of page

First Published: March 20, 2014: 9:30 AM ET


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Yellen spoke, stocks listened

Dow 10

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NEW YORK (CNNMoney)

The Dow Jones industrial average, the S&P 500 and the Nasdaq edged higher in morning trading, recovering from earlier weakness.

Investors are still digesting the outcome of the Federal Reserve's policy meeting Wednesday -- the first under the direction of chair Janet Yellen.

The official statement was as expected: The Fed will continue reducing its bond buying in April and the central bank will now base its interest rate policy on inflation data and a broad array of labor market indicators, instead of the unemployment rate alone.

But investors seized on a passing remark Yellen made during a press conference following the meeting. While the Fed plans to keep interest rates near zero for a "considerable period" after its bond buying program ends this fall, Yellen suggested that period could amount to just six months.

"Some clumsy moments at the podium by the new Fed Chair led to a more tumultuous day for the markets than many had expected," said Mike Wallace, an economist at Action Economics. Investors were also caught off guard by new forecasts from hawkish Fed officials about when a potential rate hike could occur, he added.

European markets were moving down in afternoon trading Thursday, while Asian markets closed with losses.

Related: Fear & Greed Index still in neutral

But while the stock market took a hit, the dollar rallied as a result of Yellen's comments and "the fact that the Federal Reserve sounded more hawkish than expected," according to Marc Chandler, currency strategist for Brown Brothers Harriman, who titled his market report, "Dollar rally as Yellen lays an egg."

The Chinese yuan hit a one-year low against the dollar.

Related: CNNMoney's Tech30

In economic news, the U.S. government said initial claims for unemployment benefits rose last week. An index of manufacturing activity by the Federal Reserve Bank of Philadelphia bounced back in March. The National Association of Realtors said rising prices and cold weather weighed on sales of existing homes in February.

In corporate news, Homebuilder Lennar (LEN) issued a strong report and said new orders in the latest quarter rose 10%. But the stock fell in early trading. Shares of other residential construction companies were also lower, including KB Home (KBH), D.R. Horton (DHI) and Hovnanian (HOV)

Shares of companies that make 3D printers fell after ExOne (XONE) reported a larger-than-expected loss and issued an outlook that disappointed investors. 3D Systems (DDD)and Voxeljet (VJET)were caught in the downdraft.

Burlington Stores (BURL) reported a quarterly jump in same-store sales and adjusted net income year-to-year. Shares of Guess (GES) fell after the apparel maker's revenue forecasts fell below analyst expectations. Dow company Nike (NKE, Fortune 500) will report after the market closes. To top of page

First Published: March 20, 2014: 9:44 AM ET


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Icahn softens demands in eBay fight

carl-icahn-ebay-paypal

Carl Icahn is now looking for eBay to spin off just 20% of PayPal.

NEW YORK (CNNMoney)

The activist investor has abandoned his push for eBay (EBAY, Fortune 500) to spin PayPal off into its own company. Instead, he proposed Wednesday that eBay conduct an IPO for PayPal in which only 20% of shares would be sold to the public.

"Over the last few weeks, we have raised a number of troubling questions regarding corporate governance at eBay," Icahn said in an open letter to the company's shareholders. "Sadly, in our opinion, these questions have never been adequately answered by eBay."

"PayPal is a tremendous company, but it is on the verge of going to war against strong adversaries, and only with the benefits of being an independent company, as described above, will PayPal be capable of winning that war," he added.

EBay said it was "glad to see that Mr. Icahn now seems to agree that a full separation of PayPal is not a good idea," and that a partial separation "is not a new idea."

Related: Carl Icahn gives Apple the world's most obvious product advice

"As the lines between online and offline commerce continue to blur, the competitive advantages of PayPal and eBay together are more important than ever," eBay said.

Icahn believes PayPal is undervalued as a unit of eBay, and that it would benefit from a focused, independent management team. The fight has grown increasingly bitter since he revealed a 0.82% stake in eBay earlier this year and began his push for a spin-off.

Icahn has argued that eBay is mismanaged, and that board members Marc Andreessen and Scott Cook face conflicts of interest.

EBay has called Icahn's claims "unsubstantiated." In a blog post this week, Andreessen posted an article accusing Icahn of stripping the assets of defunct airline TWA and running the company into the ground. To top of page

First Published: March 20, 2014: 11:46 AM ET


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GM's recall costs: $300 million...and counting

NEW YORK (CNNMoney)

One indication of that: News on Wednesday that Toyota will pay $1.2 billion to settle a criminal probe into its own recalls four years ago.

GM is also the subject Congressional and criminal probes into why it took 10 years to recall some of its cars over faulty ignition switches.

General Motors (GM, Fortune 500) will likely face criminal settlements worth "at least hundreds of millions" and possibly $1 billion, said Alec Gutierrez, analyst with Kelley Blue Book.

GM is shielded from liability for corporate wrongdoing that took place before its 2009 bankruptcy filing. Technically, the General Motors that existed before the bankruptcy is a different legal entity than today's GM.

But the current GM waited nearly five years after bankruptcy before it recalled 1.6 million vehicles with faulty ignition switches. Meanwhile, more incidents, accidents and fatalities continued to occur. That exposes the automaker to steep civil and criminal fines.

Related: GM - steps to a recall nightmare

GM's turnaround over the last five years has put it in a strong enough financial position to weather additional costs. The automaker has $20 billion in cash on hand.

Toyota has nearly $60 billion in cash, making it the world's richest automaker. Its recall experience may indicate what's ahead for GM.

Related: GM might not pay for recall deaths

Toyota initially estimated that its 2010 recall would cost $2 billion in repairs and lost revenue. But penalties beyond those expenses quickly piled up.

In addition to Wednesday's $1.2 billion criminal settlement, Toyota paid a record $66 million fine to the National Highway Traffic Safety Administration. It also forked over $1.1 billion to settle a class action suit, and had to pay to settle civil personal injury lawsuits.

General Motors declined to comment on the cost of the recalls beyond the estimate it's already released. To top of page

First Published: March 20, 2014: 11:42 AM ET


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Amazon increases price of Prime

Written By limadu on Kamis, 13 Maret 2014 | 23.53

amazon prime boxes

Amazon is increasing the annual fee for an Amazon Prime membership by $20.

NEW YORK (CNNMoney)

Amazon (AMZN, Fortune 500) announced the annual membership will now cost $99 a year, up from $79. A student membership will cost $49 annually.

In February, Amazon said it was considering raising the price to $119 a year.

Prime members get two-day shipping on a large number of Amazon items at no extra cost, plus the ability to borrow Kindle books and stream movies and television shows.

The company said blamed the increase on increase fuel and shipping costs. While gas prices are lower than they were a year ago, the company said the price of Amazon Prime hasn't changed since it started nine years ago.

The company also said that it has increased the benefits of the program, now offering free shipping on 19 million items, up from only 1 million nine years ago. It also introduced its video streaming service in 2011 and recently launched Amazon-produced shows.

Related: Everything must close - store closings on the rise

Amazon's quick, free delivery and wide product offering is causing major problems for traditional brick and mortar retailers. There are risks that some Prime members will drop the service with the higher fee. But Prime membership might still make sense at the higher rate, depending on how often they take advantage of the free two-day shipping option.

Related: Why Amazon is goosing prime memberships

The company says that the Prime offering has become so popular, with tens of millions of members, that it limited new Prime membership sign-ups during peak periods in December.

The price increase has the potential to bring in hundreds of millions of dollars of additional revenue for Amazon. Meanwhile, the company is looking to start same-day delivery and is moving into new areas, such as online grocery sales.

Amazon has a grocery delivery service, Prime Fresh, in the Los Angeles and San Francisco areas. The service includes Prime membership and will continue to cost $299 a year. To top of page

First Published: March 13, 2014: 8:17 AM ET


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Stocks: Edging higher but caution remains

sp 500 futures 715

Click on chart to track premarkets

NEW YORK (CNNMoney)

U.S. stock futures were pointing up and greed is still driving investors, according to CNNMoney's Fear & Greed index.

But some are becoming more cautious and are buying into gold -- a perceived safe-haven asset.

Gold prices have risen by nearly 8% over the past month amid market volatility, geopolitical uncertainty and concerns about a slowdown in China. Gold prices were rising by $2.50 an ounce early Thursday.

"The tone is one of an environment of rising caution, but no real fear," said Mike O'Rourke, chief market strategist at JonesTrading.

Related: Fear & Greed Index gets greedy

Looking ahead to the economic news of the day, the U.S. government will publish weekly jobless claims numbers and February retail sales, both at 8:30 a.m. ET.

On the corporate side, Plug Power (PLUG) will report earnings before the open. It's a highly speculative stock that's enjoyed a massive run as of late and was continuing to climb in premarket trading.

Aeropostale (ARO) will report results after the close.

U.S. stocks were little changed Wednesday. The Dow fell 12 points in its third consecutive day of declines while the S&P 500 and Nasdaq edged higher.

Related: CNNMoney's Tech30

Both European and Asian stock markets were showing mixed results Thursday.

Worries about a slowdown in China -- the world's second largest economy -- spooked international investors Wednesday.

Economic data out Thursday did little to reassure investors, raising further questions about China's growth rate.

"For China, the question is whether the [government] authorities are in control of the slowdown, or if it starts controlling them," said Simon Smith, chief economist at FxPro. To top of page

First Published: March 13, 2014: 6:27 AM ET


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Big techs use cash to buy ... Treasuries?

tech cash

Apple, Microsoft, Google and Cisco have a ton of cash ... and most of it is being held overseas.

NEW YORK (CNNMoney)

Those tech companies have more than $100 billion in U.S. bonds, according to a report released Thursday by The Bureau of Investigative Journalism, a not-for-profit, privately funded reporting outfit in London. Due to U.S. tax laws, much of that cash is held in overseas subsidiaries -- and it is likely that some of that cash is being used to purchase U.S. bonds.

The group used data from annual filings that companies are required to send the Securities and Exchange Commission. All told, Apple (AAPL, Fortune 500), Microsoft (MSFT, Fortune 500), Google (GOOG, Fortune 500) and Cisco (CSCO, Fortune 500) have $250 billion in cash abroad.

If these firms are buying U.S. debt with that money, then U.S. taxpayers are on the hook for hundreds of millions in debt payments to the same U.S. companies they already buy billions of dollars from in iPads, software and routers.

"It means American taxpayers are effectively rewarding U.S.-based technology firms for avoiding taxes," said Nick Mathiason, the author of The Bureau of Investigative Journalism report.

But the situation isn't a surprise -- or even a problem -- according to international tax experts.

"U.S. corporations can defer taxes by keeping earnings abroad and they can continue to defer the tax by buying U.S. Treasuries," said Michael Knoll, a professor at the University of Pennsylvania Law School.

Related: Apple grilled about tax havens

While there is a debate on Capitol Hill regarding repatriation -- or bringing cash home to the U.S. that was earned overseas -- Knoll said that there are some benefits from having big companies owning U.S. debt. After all, the yield on a bond goes down when investors are buying bonds. So the bond purchases may help keep interest rates low.

Some argue that the 35% tax rate on foreign profits should be lowered to encourage U.S. companies to bring that money back home. But others think Congress should impose rules that penalize companies for shifting earnings out of the United States.

What Apple, Microsoft, Google and Cisco are doing is perfectly legal. And the companies stressed that it's up to Congress to enact new rules if they aren't happy about the practice of parking cash overseas.

An Apple spokeswoman said that CEO Tim Cook told the Senate last year that the company complies not just with the laws but "with the spirit of the laws." Cook also noted in that testimony that Apple paid nearly $6 billion in federal taxes in 2012.

Google told CNNMoney that "if politicians don't like the laws, they have the power to change them."

A Microsoft spokesman pointed to Congressional testimony in 2012 from Bill Sample, the company's vice president of worldwide tax. "We believe the U.S. should reform its tax rules to support the ability of worldwide American businesses to compete in global markets and invest in the U.S," he said at the time.

Cisco spokesman Scott Gerber said that "the rest of the world encourages businesses to bring back their foreign earnings at very low rates" and added that the U.S. "should level the playing field, modernize the system, and make it more competitive with the rest of the world."

But Mathiason thinks this is a bigger deal than the companies are making it out to be.

"This is tangible evidence of a tax system in urgent need of reform so that the government has funds to invest in public services, infrastructure and productive investment," he said. "I think the American public will be shocked that its government pays hundreds of billions of dollars in interest to giant tech companies who are keeping vast sums of cash offshore sheltered from tax." To top of page

First Published: March 13, 2014: 4:55 AM ET


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App lets you speed-read 'Harry Potter' in an hour

NEW YORK (CNNMoney)

Instead of showing you lines of text the way we're all accustomed to, Spritz shows you the words one at a time -- at rapid-fire speeds.

The app lets you set the speed between 250 words per minute and 1000 wpm. At the top speed, a reader could speed through the first Harry Potter novel in just over an hour.

When we read, our eyes normally have to send time moving from word to word -- line to line. With Spritz your eyes don't have to waste any time moving - the screen shows all the words in nearly the exact same place, one after another.

I took Spritz for a spin around Manhattan with my iPad and asked New Yorkers to try it out. The reaction was mixed.

"I'm actually kind of amazed that I can read that fast," one person told me.

Related: 9 website pioneers

Another woman looked a little dazed as she stared at Spritz. "I'm feeling a little nauseous," she said laughingly.

Experts are critical of this method of speed-reading, dubbed Rapid Serial Visual Presentation, or RSVP. They say this has been tried and studied before, and what you gain in speed with RSVP, you lose in understanding and retention.

"If played at very high speeds, around 300 to 500 wpm, this is going to produce problems in comprehension," according to Michael Masson, a psychologist at the University of Victoria who has has carried out studies on RSVP. "The difficulty is it's not just the rate at which we see words, but it also takes time for us to comprehend what those words mean once we start putting them together."

There are other speed-reading apps with similar technology to Spritz on the market, including Velocity for iOS and Spreeder. Spritz believes its advantage over these other companies is the way its technology aligns the words: each one with a letter in red. Spritz says this gives the eyes a point to focus on and "triggers the brain to recognize the word and process its meaning."

Even with that red focal point, speed-reading experts remain skeptical of Spritz.

"There's still going to be the limited factor of the time that we need to form meaningful ideas out of a sequence of words," Masson said.

There is no stand-alone Spritz app yet, but Samsung's latest Galaxy S5 smartphone and Gear 2 smartwatch come with Spritz' technology pre-installed to read emails.

Spritz plans to license the technology to online newspapers and ereaders. It's free on Samsung for now, but eventually, Spritz might charge users a subscription fee.

"Eventually there will be a nominal fee to use Spritz app, sort of like WhatsApp," said Frank Waldman, Spritz's CEO. "It starts out as a free app -- what we're more focused on is just getting people reading this way."

If you Spritzers really can get up to 1,000 words per minute, War and Peace might take just a day to read. Whether they'll remember anything they just read is another question. To top of page

First Published: March 13, 2014: 6:53 AM ET


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