Health care spending growth is at a record low. Here's the catch.

NEW YORK (CNNMoney)

What's less clear is why -- the weak economy or cost-control measures, including the earliest provisions of the Affordable Care Act. Since health care spending is a major driver of the federal deficit, that's a pretty critical question.

The experts at the Kaiser Family Foundation and Altarum Institute are among the first to tease out how much each factor contributed to the slowdown. Their conclusion: about three-quarters is due to the lackluster economy. The rest stems from efforts to keep spending down, including measures introduced in the 2010 "Obamacare" law.

America's national health care spending grew by 3.9% each year from 2009 to 2011, the lowest rate since the federal government began keeping these records in 1960. That slow growth appears to have continued into 2012, when expenditures totaled an estimated $2.8 trillion.

The biggest driver of the slowdown is that people spend less on health care in weak economic times, said Larry Levitt, senior vice president at Kaiser. Those who lose their jobs often lose coverage and hold off on seeing the doctor, and even workers with company-sponsored plans may still face large out-of-pocket costs that they'd rather avoid unless absolutely necessary.

"When people feel less secure, they are more hesitant to use the health care system," Levitt said.

Companies have tried to curb their spending, too, by raising deductibles and co-pays, as well moving toward high-deductible plans, through which enrollees must typically spend a few thousand dollars before coverage kicks in. A growing number of companies have also instituted disease management or wellness efforts that aim to cut costs by keeping workers healthier.

Related story: A doctor says 'I gave up on health care in America'

Most of Obamacare's provisions have yet to be implemented, but some of the early ones are already having an effect, Levitt said. Insurance companies, hospitals and other providers are seeing smaller payment increases, while insurers are limited in what they can spend on administrative costs and must submit any premium increases of more than 10% for review by state or federal experts.

Here's the catch: This dampened spending pattern is unlikely to last much longer. As the economy picks up, health care spending is expected to increase, rising to an annual growth rate of more than 7% annually by the end of the decade, Kaiser predicts. As their finances get better, Americans are likely to return to their more typical patterns of visiting doctors, getting tests done and the like.

New spending control measures, including Obamacare, may temper that looming increase. Further trimming of provider rate hikes, along with additional efforts to coordinate care and pay providers fixed rates for treating a given illness instead of paying per individual test or treatment, may also help, Levitt said.

The fact that Obamacare's early provisions have already had an impact is an encouraging sign, said Josh Gordon, policy director at the Concord Coalition.

"It shows policy levers can be pulled to slow health care spending down," he said.

First Published: April 29, 2013: 5:58 AM ET

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Income, spending both up

Spending and income both rose in March.

NEW YORK (CNNMoney)

The Commerce Department reported that income rose at a 0.2% rate in the month, slower than a 1.1% rise in February. Spending also grew at a 0.2% rate, down from the 0.7% increase the previous month.

The February income reading had been distorted by some unique events the previous two months. Some companies moved up dividend and bonus payments normally made in January to the end of 2012 so the recipients wouldn't be hit with a rise in taxes set to take place on Jan. 1.

Related: US economy revved up, but it's probably temporary

That caused a big increase in the income numbers in December, followed by a sharp drop in January and a rebound to more normal levels in February. So the March reading was the first in several months not to have the month-to-month change be distorted by the one-time event.

Some economists had forecast a drop in the pace of spending in the face of federal spending cuts and furloughs of some federal workers known as the sequester.

First Published: April 29, 2013: 8:55 AM ET

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Stocks: Starting week on a high note

Click on chart to track premarkets

NEW YORK (CNNMoney)

Expectations of a further rate cut from the European Central Bank and continued monetary support from the Federal Reserve later this week gave additional support to the market.

"The ECB meeting may be the most interesting event this week," wrote Marc Chandler, strategist for Brown Brothers Harriman. "The ECB indicated earlier this month that if economic data worsened, it was prepared to cut the refi rate."

U.S. stock futures were higher Monday.

Investors mulled reports on U.S. personal income and spending, which both rose 0.2% in March, according to the government. Personal income was expected to have increased 0.4% last month and personal spending was expected to have slipped 0.1%, according to a consensus of economist forecasts compiled by Briefing.com.

On Friday, the government reported that the U.S. economy grew at an annual pace of 2.5% in the first quarter.

Stocks are on track to end April with gains this week, which would mark the fourth straight month of gains this year.

Consumer spending, which alone accounts for roughly two-thirds of GDP, rose at a 3.2% annual pace, the fastest pace since the end of 2010. But the data also shows that consumers funded that spending in part by saving less.

At 10 a.m. ET, the National Association of Realtors will release data on pending home sales.

Related: Fear & Greed Index, idling in neutral

In corporate news, controversial supplements company Herbalife (HLF) and gun maker Sturm Ruger (RGR) are set to release their quarterly results after the close. Ruger's stock rose in premarket trading.

JPMorgan Chase (JPM, Fortune 500) announced Sunday that another of CEO Jamie Dimon's key executives, co-chief operating officer Frank Bisignano, is leaving the firm and will be replaced by Matt Zames.

U.S. stocks finished mixed Friday.

European markets were higher in morning trading after Enrico Letta was sworn in as Italy's prime minister, ending weeks of political deadlock and uncertainty in a country mired by recession.

Related: World's five hottest stock markets

Greek lawmakers agreed to cut thousands of government jobs to secure another $11.5 billion in bailout funds.

Markets in Hong Kong added 0.1%. Exchanges in Shanghai and Tokyo were closed for a holiday.

First Published: April 29, 2013: 5:19 AM ET

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Spending cut bright spot: Fewer IRS audits

NEW YORK (CNNMoney)

The cuts, known as the sequester, will wipe $600 million from the IRS's budget this year, forcing the agency's nearly 100,000 employees to be furloughed without pay for up to seven days.

Five furlough days have been identified so far -- beginning on May 24 and they will be spread out among separate pay periods, according to the National Treasury Employees Union.

Not only will these furloughs shrink paychecks for IRS workers, but they will also make it harder for taxpayers to receive the assistance they need and enforcement efforts will be significantly reduced as well, IRS Acting Commissioner Steve Miller said in congressional testimony earlier this month.

Related: Spending cuts -- Reality of furloughs hits home

"[W]ithout a change in the current budget environment, the American people will see erosion in our ability to serve them, and the Federal government will see fewer receipts from our enforcement activities," he said.

Translation for taxpayers: you're less likely to be audited, said Mark W. Everson, vice chairman of tax service firm alliantgroup and former head of the IRS.

"Of course this has an impact on the number of audits," said Everson. "If you have someone working on 20 audits, if they're not working as many days it's going to take longer to finish those and they're not starting new ones."

Related: How to survive a tax audit

The irony is that by limiting audits, the sequestration is limiting the revenue that flows into the government's coffers, he said.

Audits have already been on the decline due to budget cuts at the IRS over the last few years. Last year, for example, the number of audits dropped by 5% to about 1.5 million.

Your odds of being audited still rise significantly with the more income you have, however. While the overall chance of being audited is 1%, those odds jump to 18% for people with income of $5 million or more and 27% for taxpayers earning $10 million or more.

Related: 12 tax audit red flags

And if you do get audited, don't think the IRS is going to be lax just because it's squeezed on resources.

"The [IRS] won't start [as many] new audits, but I think it will be equally rigorous in the ones it conducts, so don't think that they won't be as thorough as they once were," said Everson.

First Published: April 29, 2013: 6:02 AM ET

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Legal marijuana's all-cash business and secret banking

SEATTLE (CNNMoney)

Banks and credit card companies are staying away from marijuana businesses, forcing growers and sellers to deal mostly in cash. In response, when pot businesses deal with banks, it's usually in disguise.

That's just one byproduct of the nation's mismatched drug laws.

Washington State has long allowed for medical marijuana, and it legalized pot for recreational use last year. But financial institutions still face intense pressure from federal authorities, because pot is illegal under the nation's Controlled Substances Act. Banks that deal with cannabis businesses open themselves up to accusations of money laundering, so they avoid it altogether.

Related: Is marijuana legal or not?

But forcing businesses into cash-only transactions brings about all sorts of problems -- it undermines the state's efforts to tax the industry and creates security risks at stores.

The Northwest Patient Resource Center, a Seattle store that grows and sells cannabis, ran into its first hardship last year when it could no longer process customers' credit cards. Davis, the center's CEO, said American Express and Discover dropped him in the fall. Visa and Mastercard soon followed.

Davis resorted to buying his own ATM machine. Every night, he refills it with a few thousand dollars of his own cash. He deposits the rest at his bank the next day. The practice makes Davis uneasy.

"The more cash you have sitting around, the more of a target you are," he said.

Last September, he received a letter from his bank -- which he prefers to not name -- that made matters worse: "After a thorough assessment and evaluation, it is with deep regret that [we] will cease offering banking services for medical marijuana/cannabis businesses and/or facilities," it read.

Davis hasn't banked openly ever since.

To create distance between him and the pot business, he started an unrelated holding company.

More than a dozen interviews with dispensaries and growers in Washington show this kind of secret banking is a common practice.

CNNMoney asked the nation's largest retail banks with operations in Washington about their policies for small marijuana businesses. HSBC didn't respond. JPMorgan Chase (JPM, Fortune 500), U.S. Bancorp (USB, Fortune 500) and Wells Fargo (WFC, Fortune 500) said they don't serve the industry, citing federal law. Bank of America (BAC, Fortune 500) didn't respond but has previously stated that it turned away marijuana-related business clients after warnings from the U.S. Drug Enforcement Administration five years ago.

However, more than a dozen cannabis businesses have told CNNMoney they all keep corporate accounts at Chase, U.S. Bank and Wells Fargo, in addition to small, local banks.

Even those companies that only indirectly deal with the marijuana industry have a banking problem.

Canna Security is an alarm system provider for the industry. CEO Daniel Williams explains that all of his clients use cash, so he's forced to take his payments that way. He often shows up to his bank -- a major national bank -- holding a bag filled with $10,000.

A loan officer there once suggested Williams apply for a credit line, one he desperately needs to expand his business. The bank later got cold feet.

Williams said having the financial community turn its back on the industry "almost makes it impossible to run a proper and legitimate business."

Related: Legal marijuana's need for high security

Greta Carter has also been forced to bank in secret. Although she doesn't sell marijuana, her wellness center is wholly tied to the pot industry. It partners with dispensaries, who then offer the center's services, such as massage therapy and acupuncture.

When a major bank came by for a visit, she and others scrambled to hide any poster or drawing featuring marijuana's ubiquitous green leaf. Carter had worked at Citi (C, Fortune 500), helping develop new products, like debit cards.

"Those of us that have banking are doing it covertly," she said. "The irony is that these people are trying to come out of the shadows."

Businesses have found ways to circumvent credit card processors. Some use Square, a point-of-sale device that works on tablets and smartphones. Others use debit card machines that look like credit card terminals but function like ATMs.

For the most part, though, weed is bought with paper money. That could hinder Washington's ability to properly tax pot businesses, because the state will have a difficult time tracking sales.

Washington hopes to prevent that by controlling and closely monitoring how much marijuana is produced, said Pat Kohler, director at the state agency regulating the industry.

But the pot industry will still face considerable incentive to dodge the law.

"Forces are conspiring to keep it in the black market," Davis said.

In the meantime, he does what he can to protect himself. The Northwest pot dispensary has reinforced concrete walls, motion detectors and cameras everywhere. Teller windows are made of thick, ballistic acrylic glass. The place is built like a fortress -- which is appropriate. It's a former bank.

First Published: April 29, 2013: 9:27 AM ET

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Legal marijuana's need for high security

The high value of marijuana, and the cash that businesses are forced to keep around, makes them a target for thieves.

SEATTLE (CNNMoney)

Without extensive security, a pot dispensary is nothing more than a giant target. A pound of weed goes for more than $2,000 wholesale. And federal pressure on banks forces growers and stores to rely almost entirely on cash.

A robber who swipes the jars on display alone could make away with $20,000 of product, plus whatever stacks of bills are behind the counter.

Dispensaries bulk up as much as they can.

A typical store has more than a dozen cameras, motion detectors, infrared sensors and flood lights. Some even line the ceilings with tripwire to avoid rooftop burglars sawing their way in. At most dispensaries, no one gets in without passing by three doors, showing identification and presenting a doctor's note.

But that security is hard to maintain. Some store owners who use ADT, the nation's largest security provider, say the company has dropped them in recent months. ADT told CNNMoney it won't "sell security services to businesses engaged in the marijuana industry because it is still illegal under federal law."

Related: Is marijuana legal or not?

Kevin Griffin, founder of West Coast Wellness, said ADT dropped him without warning in mid-April. He still has a silent panic alarm button Velcro-strapped beneath the front desk -- but it doesn't call anyone.

Griffin blasts ADT, saying, "They already knew what we were. We were completely transparent. It's not fair to put us in a jam and not give us any time to prepare."

The security needs create an opportunity for startups like Canna Security, a Colorado company currently expanding to Washington. It's founder, Daniel Williams, recalls the video cameras that catch footage of what pot stores and growers are up against.

There were teenagers who rammed an Audi into a warehouse, bursting through its door. They walk out having discovered that the marijuana plants they intended on stealing were actually moved elsewhere the previous day.

Then came the cat burglar who cut a hole in the roof of another marijuana warehouse and rappelled down from the rooftop. After filling a duffel bag full of the stuff, he realized the doors were locked from the outside. He couldn't climb back up to escape.

Next came the ninjas who robbed a dispensary in broad daylight then sped off on street bikes.

"We get the goofballs," Williams said.

But Williams stresses that the losses to these businesses are no joke. Demand for his services is on the rise. Williams' employees are working 12-hour shifts every day, installing cameras and alarm systems across both states.

His biggest concern is his inability to finance his company's rapid growth. Williams discovered that when his bank -- which gladly accepted his cash deposits -- recently denied him a credit line.

"I'm concerned that we'll get too much business and won't be able to manage it," he said. "It gets frustrating when I get a whole new channel of business and funding isn't there to adjust to it."

Related: Legal marijuana: An all-cash business

Meanwhile, dispensaries like West Coast Wellness have few options. For Griffin, this heightened level of risk is nothing new. It's an industry on the fringes of legality, and uncertainty is the name of the game. He reminds this reporter that he stands much to lose from robbers as from federal authorities eager to shut him down.

"They're worse than criminals," Griffin said. "They have the right to walk through the front door and take whatever they want."

First Published: April 29, 2013: 9:28 AM ET

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Even when 'legal,' marijuana is risky business

Washington State legalized marijuana, but it's still illegal to the federal government. That makes growing it -- and selling it -- complicated.

SEATTLE (CNNMoney)

At the local level, pot businesses are often welcomed by politicians and sheriffs alike. Medical marijuana is legal in 18 states and the District of Columbia. Most recently, Colorado and Washington legalized it for recreational use too.

But pot is still listed in the nation's Controlled Substances Act. Federal raids of pot businesses in those states continue at feverish pace. In 2012 alone, federal agencies seized more than 2,500 indoor grow operations, killing close to 300,000 plants.

"The feds are saying one thing. The states are saying another," said Sean Cecil, a criminal defense attorney in Seattle. He is also a member of the Cannabis Defense Coalition, which raises awareness of pot laws.

The situation makes the so-called legal marijuana industry a risky one. A dispensary could be in full compliance with state laws, but the feds could still raid them.

Related: Marijuana: An all-cash business

Still, not every grower, seller and user is a federal target. Top U.S. Justice Department officials have issued two memos -- orders, essentially -- explaining how federal prosecutors are to deal with state-legalized marijuana.

One, in 2009, says U.S. attorneys shouldn't make it a priority to prosecute caregivers and seriously ill patients abiding by state laws.

"Prosecution of [patients and caregivers] in clear and unambiguous compliance with existing state law... is unlikely to be an efficient use of limited federal resources," it states.

But another memo, issued in 2011, clarified that those protections don't extend to business owners.

"Persons who are in the business of cultivating, selling or distributing marijuana, and those who knowingly facilitate such activities, are in violation of the Controlled Substances Act, regardless of state law," it says.

So, what happens to a raided business?

If a dispensary or grow farm is raided, plants are destroyed. Cash and equipment is confiscated. Business owners are jailed and often face mandatory minimum sentences of five years or more in federal prison.

Those on the periphery face dangers as well. Investors in a business could lose money they put into the operation. And banks that deal with cannabis businesses open themselves up to accusations of money laundering.

First Published: April 29, 2013: 9:28 AM ET

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Italian markets cheered by new government

New Italian Prime Minister Enrico Letta wins investor approval but faces huge economic challenges.

LONDON (CNNMoney)

Center-left Prime Minister Enrico Letta was sworn in Sunday to head a broad coalition of ministers from his own party and members of Silvio Berlusconi's center-right party.

In a speech to parliament Monday, Letta stressed the need to stimulate growth and create jobs, but said Italy couldn't borrow its way out of trouble.

"After more than a decade without growth, we can't wait any longer for a policy of recovery," he said. "Without growth and without cohesion, Italy is lost."

Letta's appointment ends two months of political stalemate and removes the prospect, for now at least, of a prolonged period of instability -- despite doubts about the coalition's durability and uncertainty over how it will achieve its economic goals.

Italian markets rallied, with Milan's benchmark index gaining 2% and outperforming its European peers. The index has been the strongest of all major European markets over the past month, although it is still lagging so far this year.

Italy also sold three billion euros in 10-year bonds at a yield of 3.94%, down from nearly 4.7% a month ago and their lowest level since October 2010.

Related: If not now, when will ECB cut rates

Bonds in weaker eurozone states have been rallying for months, supported by the European Central Bank's backstop pledge last year and hyper-loose monetary policy in Japan and the United States, which has prompted investors to look for higher returns elsewhere.

"Italian sovereign debt is benefiting from the effects of central bank liquidity support and political stability of sorts," said Nicholas Spiro, managing director of Spiro Sovereign Strategy.

The eurozone's third-biggest economy was brought to the brink of collapse in late 2011 when yields on its huge debt pile climbed to unsustainable levels around 7%.

Tax increases and spending cuts by a technocrat government led by Mario Monti reassured investors. But they led to a backlash against austerity in February's elections, boosting support for comedian Beppe Grillo's protest movement and leaving no party able to form a government on its own.

Related: Austerity debate rages in Europe

Letta wants to adjust Italy's unpopular austerity drive, and Berlusconi has campaigned for a tax on property to be reversed, but it is unclear how the new government would make up for the revenue shortfall and the backdrop continues to deteriorate.

"Post-crisis sentiment toward Italy has never been better, but the economic conditions have never been worse," said Spiro.

Government borrowing totals about two trillion euros, equal to around 127% of gross domestic product, a ratio surpassed in the eurozone only by Greece. The economy hasn't grown for years, unemployment is near 12% and rising, and living standards for many are tumbling.

Letta said he would cut some taxes on the young and new employees, reform the property tax, and cancel a planned increase in the value-added tax, acknowledging that easing the austerity drive without piling on more debt would be a challenge.

"While the latest news is positive for markets, the task of the new prime minister won't be an easy one," noted UniCredit economist Loredana Federico.

The priorities for Letta's government mirror those of 87-year old Italian President Giorgio Napolitano, who was persuaded to accept a second term after parliament failed to agree on an alternative.

Napolitano established two expert committees to work on overhauling Italy's convoluted electoral system and political institutions, and making structural reforms to restore competitiveness, boost growth and make a dent in the debt mountain.

--CNN's Hada Messia contributed to this article

First Published: April 29, 2013: 8:16 AM ET

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EU bans some pesticides to save its bees

Campaigners dressed as bees swarmed Parliament Square in London to show their support for a ban on pesticides that are said to hurt the bee population.

LONDON (CNNMoney)

The European Commission will roll out the ban across all 27 member states at the end of the year, after scientific studies showed that three kinds of pesticides -- clothianidin, imidacloprid and thiametoxam -- damaged the bee population.

The EU's health and consumer commissioner, Tonio Borg, said he would do everything in his power to ensure the bee population was protected, adding that bees are "vital to our ecosystem and contribute over 22 billion euros annually to European agriculture."

People dressed in bee costumes had been swarming around European capitals ahead of the decision, trying to drum up support for the restrictions.

"This decision is a significant victory for common sense and our beleaguered bee populations," said Andrew Pendleton, a campaigner at Friends of the Earth. "Restricting the use of these pesticides could be an historic milestone on the road to recovery for these crucial pollinators."

Related: Climate change will cause turbulence for airlines and passengers

Syngenta (SYT) and Bayer (BAYRY), who produce these pesticides, had been lobbying against the ban.

Syngenta's chief operating officer, John Atkin, said the ban was based on poor science and ignored evidence that the pesticides do not damage bees' health.

"Instead of banning these products, the commission should now take the opportunity to address the real reasons for bee health decline: Disease, viruses and loss of habitat and nutrition," he said in a statement.

The scientific community is still debating whether laboratory-based studies accurately demonstrate that pesticides harm the bee population in the wild. But even though some maintain that the science is inconclusive, the European Commission said it wanted to err on the side of safety.

"The science is sufficiently strong to make it worth taking certain measures now. The costs in the short term are worth it given the potential costs over the long term," said European Commission spokesman Roger Waite.

First Published: April 29, 2013: 11:40 AM ET

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Wall Street lifted by Italy, housing data

Click the chart for more stock market data.

NEW YORK (CNNMoney)

Early Monday, European investors cheered the formation of a new Italian government, ending weeks of political deadlock and uncertainty in a country mired by recession.

Italian stocks rallied more than 2% after Enrico Letta was sworn in as Italy's prime minister. The news also pushed Italian bond yields to their lowest levels in more than two years.

The Dow Jones industrial average edged up 0.4% and the S&P 500 added 0.5%. The Nasdaq gained 0.8%, reaching its highest level since November 2000.

A better-than-expected report on pending home sales also fueled U.S. stocks. Sales jumped 1.5% in March, according to the National Association of Realtors, stronger than the 0.1% rise economists were expecting.

U.S. stocks are on track to end April with gains this week, which would mark the fourth straight positive month this year.

Click here for more on stocks, oil, gold, and bonds

Expectations of a further rate cut from the European Central Bank and continued monetary support from the Federal Reserve later this week were also lending support.

"The ECB meeting may be the most interesting event this week," wrote Marc Chandler, strategist for Brown Brothers Harriman, adding that the ECB indicated earlier this month that if economic data worsened, it was prepared to cut interest rates.

Related: World's five hottest stock markets

What's moving: Shares of Moody's (MCO), Standard and Poor's parent McGraw Hill (MHP, Fortune 500) and Morgan Stanley (MS, Fortune 500) were big gainers after the firms settled two outstanding lawsuits, dating back to the financial crisis, that accused them of misleading investors about the risks involved with buying bonds backed by subprime mortgages.

J.C. Penney (JCP, Fortune 500) shares rose after the struggling retailer officially said it had secured a $1.75 billion loan from Goldman Sachs. Shares were also boosted by a New York Post report that claimed "at least" two major hedge funds have taken significant stakes in Penney, with one's investment worth over $10 billion.

In other corporate news, JPMorgan Chase (JPM, Fortune 500) announced Sunday that another of CEO Jamie Dimon's key executives, co-chief operating officer Frank Bisignano, is leaving the firm.

Earnings continue to roll in, with controversial supplements company Herbalife (HLF) and gun maker Sturm Ruger (RGR) set to release their quarterly results after the close.

First Published: April 29, 2013: 9:45 AM ET

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U.K. may have slipped into a third recession

Bitterly cold weather hit retail sales and construction in the U.K. last month.

LONDON (CNNMoney)

Most economists expect the world's sixth-largest economy to narrowly avoid a second consecutive quarter of contraction when the first estimate of first-quarter output is released on Thursday. But the chances of a surprise are high.

The U.K.'s gross domestic product fell by 0.3% in the final quarter of 2012. A triple-dip recession would be unprecedented, and pile pressure on finance minister George Osborne to spread the pain of government spending cuts over a longer period of time.

UBS economist Amit Kara said he expected U.K. GDP to show zero growth, but cautioned that the cold weather could spring a shock and send the economy into reverse again.

"There are large risks to this forecast because of the unusually cold weather in March, and if we are wrong, and the UK economy does slip into recession once again, the triple dip will have become reality," he wrote in a research note.

A recovery in the dominant services sector was likely to have been canceled out by a "weather-related" collapse in construction, noted Nomura's UK economist Philip Rush, who also expects no growth in the quarter.

Retail sales were also weaker than expected in March, falling 0.7% on the previous month as British consumers, already squeezed by falling real incomes, stayed at home during the unusually cold spell.

Related: Time for world to kick cheap money habit?

The U.K. economy contracted for five consecutive quarters from the second quarter of 2008, and was back in recession for nine months in late 2011 and early 2012 when the eurozone debt crisis was raging.

The International Monetary Fund cut its forecast for U.K. growth in 2013 by 0.3% last week citing depressed demand, and said the government should think about taking a more flexible approach to cutting the budget deficit. On Friday, Fitch Ratings downgraded U.K. debt to 'AA+' from 'AAA', citing the impact of weak growth on debt and deficit levels.

Related: Debt's impact on growth: the debate continues

Finance Minister George Osborne has stuck resolutely to the path of austerity, arguing that a policy of fiscal discipline and cheap central bank money will ultimately bear fruit.

A new recession would also raise the chances of further stimulus from the Bank of England, which has held interest rates at a record low of 0.5% since March 2009 and bought £375 billion of government bonds.

Governor Mervyn King and two fellow members of the Bank of England's monetary policy committee were outvoted again this month when they argued in favour of extending the bond purchases by a further £25 billion. The bank last added to its bond-buying program in July 2012.

First Published: April 22, 2013: 3:28 AM ET

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Next-generation ATMs boast video chat, exact change

Bank of America is rolling out Teller Assist machines that allow customers to video chat with bank tellers and receive exact change down to the penny.

NEW YORK (CNNMoney)

By investing in "new-fangled ATMs," banks are hoping to keep customers coming back and cut costs at the same time, said Mark Schwanhausser, a senior financial services analyst at Javelin Strategy.

It costs banks an average of $1.25 to conduct an ATM transaction, compared to $4.25 each time a customer makes a transaction with a teller at a branch, Javelin found. And while costs may rise for more advanced ATMs, it's still likely to be cheaper than in-person banking, said Schwanhausser.

Plus, ATMs that perform many of the functions that tellers do could allow banks to reduce staffing. "But they're not looking at it as a way to replace tellers completely -- it's a way to give the customer the choice," he said.

Related: ATM fees on the rise

At Bank of America (BAC, Fortune 500) new Teller Assist machines, for example, you can swipe your debit card, credit card, driver's license or photo ID for authentication and then a live teller -- physically based in Delaware or Florida -- pops up on the screen to assist you.

You can then cash checks and receive exact change down to the cent. You can also withdraw cash in $1, $5, $20 and $100 bills. And soon, you'll be able to split deposits between accounts and make loan and credit card payments. To perform most of the more advanced functions, you need to be video chatting with a teller. But you can always perform standard transactions -- like getting $40 -- without connecting to an agent.

The bank says the machines will be able to perform about 80% of the services a traditional teller can, and they will be open longer than traditional bank branches -- from 7 a.m. to 10 p.m. on weekdays and 8 a.m. to 5 p.m. on weekends. Currently in 12 locations in Boston, the bank plans to place the ATMs in branch lobbies, 24-hour areas and drive-through locations across the country this year.

Related: Say goodbye to more bank branches

Earlier this year, Citi (C, Fortune 500) unveiled new Citibank Express machines in Asia that allow customers to log in using their fingerprints and open accounts and apply for loans and credit cards using videoconferencing. They may also eventually be able to print new credit and debit cards. The bank plans to expand the machines globally later this year, though it won't reveal specific countries yet.

Meanwhile, Wells Fargo (WFC, Fortune 500) is introducing ATMs with 19-inch screens that will be open 24 hours and dispense $1, $5, $20 and $100 bills, instead of only $20 bills like traditional ATMs. The first new ATM was opened in Washington, D.C., on April 15, and the bank plans to expand to other U.S. locations.

It is also updating the interface on existing ATMs so that screens are personalized for each customer -- for example, it will give you the option to withdraw $80 right away if that's the amount you typically request and it will show you how much cash you've taken out over the past month.

Related: New ATMs dispense $1 and $5 bills

Chase (JPM, Fortune 500) also has a new model of ATM that allows customers to receive exact change and to pay credit card bills. It has opened about 650 of these "self-service kiosks" so far and plans to have around 900 by the end of the year. It is currently piloting the option of dispensing coins in addition to bills and is "evaluating options" regarding videoconferencing services.

PNC (PNC, Fortune 500), meanwhile, has upgraded more than half of its 7,200 ATMs over the past year to dole out change down to the dollar.

Schwanhausser said he wouldn't be surprised to see a growing number of banks investing in more advanced ATMs.

"If people gravitate toward that and there's enough volume there, I would expect ATMs to take on a greater roll in banking," he said.

First Published: April 22, 2013: 6:05 AM ET

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Hog Wild: Harley-Davidson sales are rolling again

(Fortune)

Amid booming sales in the mid-1990s, Harley was pronounced a growth stock, on a par with, say, Hewlett-Packard. Then in the late '90s and early '00s, orders began outpacing production, and used prices shot up, leading analysts to the conclusion that Harley really ought to be considered a maker of luxury goods, like Tiffany. That bubble burst in the downturn of 2007-2009 when plummeting sales (down 50% in North America alone) downgraded Harley in the eyes of investors to the ranks of a mere cyclical stock like Ford Motor (F, Fortune 500).

Now Harley (HOG, Fortune 500) is rolling again after reporting solid increases in revenues and earnings for 2012. Its shares have risen 13.6% in the past six months, and in February, Harley raised its dividend 35.5%. Accordingly, market analysts have reclassified Harley as a dividend growth stock along the lines of companies such as Philip Morris International (PM, Fortune 500).

What hasn't changed over the years is Harley's consistent and durable devotion to its brand and its century-old history. It single-mindedly focuses on its heritage and traditions, caters to owners who already identify with the brand, and creates endless variations and updates of its existing model range to snare repeat customers. Along with companies like Mercedes-Benz and Rolex, Harley is a master at marketing the past.

Its advertising is studded with words like "legendary," "heritage," and "traditional." Harley products seldom deviate from what is considered the "classic" era of motorcycle styling with its attitude of rebellion. Marlon Brando rode a Triumph, not a Harley, in 1953's The Wild One, but the outlaw biker image he created has been embraced by Harley ever since. Want to be bold, make no compromises, and never apologize, as the company promises in its ads? Ride a Harley.

MORE: 15 of the chunkiest cars on the road

This year has brought Harley's obsessive attention with itself to the forefront. It is celebrating its 110th anniversary by holding a series of rallies for its fans around the world and launching a dozen anniversary bikes -- limited editions of existing models decked out with special paint and badging -- that will carry price premiums as high as $2,500. Says Harley in its promotional material: "We're putting the rebel spirit on display for the world to see." Literally. Harley is staging rallies in, among other places, exotic locations like New Zealand, South Africa, Kuala Lumpur, and Brazil, in addition to its traditionally raucous events in Daytona Beach and Sturgis, S.D. The celebration concludes with a six-day event over Labor Day weekend in Milwaukee. Harley urges its fans to unite over their shared passion for "freedom, self-expression, and epic adventure."

Harley came by its scrappy attitude the hard way. It hasn't all been a smooth ride from its founding in a Milwaukee machine shop where 22-year-old William S. Harley and his friend Arthur Davidson attached a small gasoline engine to a regular bicycle frame in 1903. The company barely survived the Depression -- sales fell from 21,000 in 1929 to 3,703 in 1933 -- and nearly wilted again in the 1970s and '80s under assault from Japanese makers like Honda, Kawasaki, and Yamaha. Late-life diversions into the Buell and MV Agusta specialty brands flopped and were discontinued in 2009.

Today, Harley is on a more solid footing. It sells more than 30 different models in six product categories, ranging in price from $8,000 to nearly $40,000 -- all of them classified as heavyweight bikes whose engines displace more than 650 cc. Its buyers know what to expect: The air-cooled V-twin engine that is Harley's mainstay is almost as old as the company itself, having been devised in 1909. Quality remains an issue. According to Consumer Reports, Harley owners experience a serious problem twice as often as owners of some Japanese bikes. Still, its customers remain exceptionally loyal, with 75% saying they would buy their bike again.

Sales are ticking upward again after a deep slump. Harley-Davidson shipped 247,625 motorcycles in 2012, up 6.2% from 2011, and it forecasts a similar gain in 2013. That's a far cry from the motorcycle maker's peak in 2006 when Harley shipped near 350,000 bikes -- but a healthy improvement over 2009, when sales bottomed at 223,023. More than one third of Harley's sales are made overseas.

MORE: What to expect at the Shanghai auto show

Thanks to an ongoing restructuring begun in 2009, Harley has been expanding its profitability. The company's gross margins have improved from 32.3% in 2009 to 34.8% in 2012. Analysts figure that production efficiency at Harley plants has increased markedly, from 33 bikes per employee per year a decade ago to more than 41 now. For more cost-effective production, Harley has set up two assembly plants outside the U.S. -- one in Brazil and the other in India. These facilities help the company assemble parts locally and avoid import tariffs.

With its core audience of middle-aged males graying -- their average age is probably north of 50 -- Harley has been trying to expand its appeal to include young adults, women, and minorities. It refers to these demographic categories as "outreach customers." Though still small, their numbers grew faster than those of core customers in 2012.

It probably isn't surprising that Harley is making few concessions in order to broaden its owner base; any outreach customers will find their new bikes come wrapped in the rebel lifestyle. In 2009, Harley introduced a bare-bones retro-bike called the Iron 883 Sportster and priced it at $7,999 to attract new customers. But it didn't try to soften its bad-boy image with any "You meet the nicest people on a Honda"-style ad campaign. In its promotional material, Harley links the 883 to the original Sportster, introduced in 1957, with its retro style and "gritty, old-school garage features" and warned that "this blacked-out bruiser is a raw, aggressive throwback. No chrome no apologies -- just an authentic ride and old school style." It seems that Harley knows its customers -- and itself -- only too well to change its ways.

First Published: April 22, 2013: 6:10 AM ET

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U.K. moves to block Europe's Tobin tax

The U.K. is going to court to try to stop 11 EU states implementing a financial transactions tax.

LONDON (CNNMoney)

The U.K. has challenged the proposal at the European Court of Justice, the EU's highest court, just days after the world's leading financial centers wrote to G20 finance ministers urging them to oppose the tax or risk damaging feeble economic growth.

The U.K. government said it wasn't opposed in principle to a global tax on trading but believed the EU proposal would hurt jobs and growth and hit savings and pensions.

"While we will not participate in a Europe-only tax, we have also said we will not stand in the way of other countries, but only if the rights of countries not taking part are respected," said a U.K. Treasury spokesperson, adding that the proposal did not meet those requirements.

Many European governments are desperate to identify new sources of revenue to plug holes in their budgets, made larger by the recession, without placing further burden on individuals. They also face popular pressure to ensure the banking industry pays a bigger share of the cost of dealing with the economic fallout of the financial crisis.

Such levies are often dubbed "Tobin taxes" after Nobel Prize winning economist James Tobin, who proposed taxing foreign exchange transactions in the 1970s to curb speculation.

Even though the U.K. won't participate, opponents argue the tax will push up the cost of trading because it will be levied on transactions with EU banks operating in London, and the higher costs will be passed on to companies and individuals.

Financial industry lobbyists are fighting back. In the joint letter to the G20 meeting last week, associations representing New York, London, Hong Kong and other major markets said the proposed tax would hurt the world economy at a time of significant uncertainty.

Eleven EU countries agreed to enact the tax to raise billions of euros from the financial services industry and deter speculation. It's the first time the EU has introduced a new tax without the support of all members.

The Association for Financial Markets in Europe, one of the signatories to the G20 letter, welcomed the U.K. decision to mount a legal challenge.

"All the evidence shows that the tax will have serious harmful economic effects," the association's chief executive, Simon Lewis, said in a statement.

The countries planning to introduce the tax include the eurozone's top four economies -- Germany, France, Italy and Spain. They decided to press ahead after attempts to get EU-wide agreement failed.

While the tax is only set at 0.1% of financial transactions and 0.01% of derivatives, analysts say it could have big economic consequences that will reverberate around the world. If levied on each party to a transaction, the costs could spiral out of control.

The tax will apply to all transactions where the buyer or seller resides in one of the 11 nations, and also if a security is issued in one of participating countries.

First Published: April 22, 2013: 8:56 AM ET

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Paying for Finn: A special-needs child

The cost of son Finn's care has forced author Jeff Howe and his family to make some tough choices.

(Money Magazine)

I don't mean that in an every-child-is-unique-as-a-snowflake way. I mean that my wife, Alysia, and I are pretty sure that Finn hails from some distant, unknown planet.

The cost of Finn

As the Howes have learned, not only is paying for a child with special needs hugely expensive, but the costs don't end when the child becomes an adult.

WHAT FINN COSTS NOW A YEAR
Caregiver	$9,555
Diapers	1,800
Out-of-pocket care	5,400
Occupational therapy	10,200
WHAT FINN MAY COST IN THE FUTURE
Cost of lifetime care for an autistic person	$2.3 million
Behavioral therapy for children with autism	$40,000 - $60,000 a year
Cost of an adult with autism living in a residential facility	$50,000 - $100,000 a year

His favorite foods include dirt and discarded water balloons. He spends hours a day in a headstand. He giggles maniacally at any expression of pain or distress. Recently I caught him shattering our water glasses on the patio. While I went for the broom, he dumped a quart of milk onto our kitchen floor. I tried to scold him, but he was already engrossed in one of his favorite hobbies: smelling his right foot.

What's wrong with this child? There are a lot of ways to answer that question.

We have some acronyms, for instance: He's been diagnosed with CVI (cortical vision impairment), ASD (autism spectrum disorder), and DCD (developmental cognitive disability). My favorite, PDD-NOS (pervasive developmental delay not otherwise specified), is the most accurate. It's doctor-speak for "We have no earthly idea what's wrong with your child."

I often find myself grasping for otherworldly metaphors to explain our experience. Imagine E.T. came to your house but never figured out how to phone home. No spaceship. No tearful departure. Just you, the other humans in the house, and E.T. He can't really communicate, so domestic dramas take place through wild gestures and improvised sign language.

"We are not of his world," Alysia and I tell ourselves. "And he is not of ours." The best we can do is help our alien child negotiate the baffling planet on which he's found himself.

A quarter of U.S. households have a member with special needs. More than 8% of kids under 15 have a disability, and half of those are deemed severe.

What we share in common with the parents of all those special-needs children is that our kids have almost nothing in common: Within the "autism spectrum" alone there is far more diversity than there is within the rest of the human population. As one clinical psychologist told me, "Saying you study autism is like saying you study the world of non-elephant animals."

Special-needs parents do share one thing: the eviscerating cost of our children. It's one of the awful ironies of this unchosen life. Not only do we divorce more frequently and suffer from more mental health problems, but we pay dearly for the privilege.

According to Autism Speaks, the cost of caring for an autistic person over his or her lifetime is $2.3 million. Families shoulder much of that burden, and the strain on state and federal governments threatens to tear away whatever safety net remains.

Some of the expenses can be tabulated, like the $1,800 a year we spend on diapers for our 5-year-old or the $24,000 a year we pay for a caregiver we wouldn't otherwise employ.

Related: Paying for special needs

Others are harder to calculate. Finn mutilates toys, shreds books into confetti, shatters picture frames, and tears at our emotions in ways we can't fathom. Is my budding rheumatism at age 42 a product of this long-term stress? Then there are the inevitable tensions between Alysia (who is also 42) and me, as we claw at each other for some small pocket of oxygen -- a night out with friends, a few days of escape, a quiet place to work in an otherwise suffocating environment.

Despite it all -- the broken glass, the tantrums, the bite marks, the feces Pollocked across his bedroom wall -- I quite love my sweet, strange boy. There are mornings when I get up early and steal into Finn's room. I drift back off to sleep, but wake to find him smiling mysteriously and running his hand over my cheek, entranced by the sensation of stubble against his inner arm. Then he giggles and tries to do a headstand on my stomach. Finn is my son, and I love him. It has come as unwelcome news, then, that it's not clear how we'll afford to give him everything he so desperately needs.

Paying for Finn (cont.)

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Stocks: More earnings on deck

Click on chart to track premarkets

NEW YORK (CNNMoney)

U.S. stock futures were up slightly.

Caterpillar (CAT, Fortune 500), considered a bellwether for the global economy because of its size and reach, missed earnings and revenue forecasts. The mining and construction equipment maker also trimmed its earnings outlook for the year, citing a slowdown in mining.

Meanwhile, oil services firm Halliburton (HAL, Fortune 500) handily beat earnings and revenue estimates.

Netflix (NFLX), which is hoping for a boost from its "House of Cards" video series, is on deck to report after the close.

Analysts expect earnings for S&P 500 companies to rise by 2% for the first quarter, according to S&P Capital IQ. But earnings season is far from over. So far, 104 S&P 500 companies have reported, with 70 beating forecasts, 23 missing and 11 coming in in line.

Aside from earnings, shares of Power One Inc. (PWER) surged more than 50% after Swiss company ABB (ABB) agreed to buy the solar power company in a $1 billion deal.

Related: Fear & Greed Index firmly in fear

Investors will also get another glimpse into the health of the housing market Monday, when the National Association of Realtors releases the latest data on existing home sales at 10 a.m. ET. Housing reports have been somewhat mixed lately, giving investors reason to pause.

Gold may be back in the spotlight. After last week's rout, the precious metal was up 2%, to $1,428.30 an ounce. That helped push the SPDR Gold Shares Trust (GLD) ETF up nearly 4%, and shares of gold miner Randgold (GOLD) spiked 2%.

U.S. stocks finished higher Friday, though all three major indexes suffered their worst week of the year so far, dropping more than 2%.

European markets were higher in morning trading, supported by hopes that Italy may soon have a new government after President Giorgio Napolitano was elected for a second term. Asian markets were mixed, with the Shanghai Composite declining 0.1% and the Hang Seng adding 0.1%.

Japan's Nikkei rose 1.9% and the yen fell to almost 100 against the U.S. dollar after the G-20 gave its blessing to Japan's new monetary policy experiment.

First Published: April 22, 2013: 5:12 AM ET

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Paying for special needs

Finn Howe is in occupational therapy now. He's likely to need some kind of therapy, as well as full-time care, for the rest of his life.

NEW YORK (Money Magazine)

Start building a financial safety net with these steps:

Tap your local resources.

Every state has a federally funded Community Parent Resource Center to help special-needs parents obtain services, understand their rights, and connect with local resources.

Visit parentcenternetwork.org to find your local center.

Get your estate plan in order.

Work with a planner who specializes in special-needs families (find one using the specialty filter at findanadvisor.napfa.org) to determine how much insurance you'll need, and look into a second-to-die whole life policy, which can be as much as 30% cheaper.

Ask your planner to recommend a lawyer (or find one at specialneedsalliance.org), and work with her to draw up a will specifying a guardian for your child through adulthood.

Set up a needs trust.

Once your child reaches age 18, and assuming he has assets of less than $2,000, he can get benefits like Supplemental Social Security ($500 to $700 a month) and Medicaid to cover residential care and work programs.

Related: Paying for Finn: A special-needs child

Setting up a special-needs trust will ensure that any inheritance from you or other family members stays out of his name.

"You want to make sure that nothing you do limits their eligibility for government benefits," says Greg Zibricky, author of The F.A.M.I.L.Y. Autism Guide: Your Financial Blueprint for Autism.

.......................

Raising a special-needs child is frustrating, chaotic, rewarding -- and very, very expensive. In "Paying for Finn," the author shares his family's challenges caring for their severely autistic son.

First Published: April 22, 2013: 8:45 AM ET

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Solar jobs outnumber ranchers in Texas, actors in California

A new map tallies up the number of solar-energy workers in each state.

NEW YORK (CNNMoney)

Those stats come from solar research group The Solar Foundation, which rolled out a map last week showing which states have the most solar jobs. Unsurprisingly, sunny states like California and Arizona are near the top of the list. But some Northern states like New Jersey and Michigan -- not known for their splendid weather -- also show a high number of solar jobs.

What those states lack in climate they make up for in high electricity prices and favorable tax and regulatory policies, which attracts solar developers, said Andrea Luecke, executive director of The Solar Foundation.

Solar supporters are going on the offensive about their field's jobs angle. The industry receives considerable government support, and talking about its employment advantages broadens the conversation beyond global warming.

Related: China trounces U.S. in green energy investments

In addition to tallying up solar jobs by state, The Solar Foundation's map contains information like how many solar companies are headquartered in each state and what their local workers are doing.

Nationwide, nearly half of all solar works are employed installing solar panels. That job pays about $18 an hour, or nearly $38,000 a year -- a bit more than the median national wage of $34,750, according to the Bureau of Labor Statistics. (BLS was the source the Solar Foundation used for its numbers on coal miners, actors and ranchers. The agency confirmed the numbers, though it said its own survey could miss workers in those industries who are self-employed or mis-categorized.)

About a quarter of the nation's solar workers are employed in solar panel manufacturing, while most of the rest do development, sales and marketing.

Wyoming has the fewest solar workers, at 50. Utah is billed as the biggest underachiever, employing just 290 workers despite being the 7th sunniest state in the country.

Nationwide, the solar industry says it employs 119,000 people, up 13% from the year before -- one of the fastest growth rates for any industry.

It's a stat that the industry's supporters like to tout.

Like many energy sources, solar receives support from the federal government. In 2010, more than $1 billion in federal money went to the solar industry, according to the Energy Information Administration. The funds cover a variety of initiatives, including job training programs, tax breaks amounting to 30% of a project's cost, and federal loan guarantees.

"There's been so much controversy around investment in green jobs," Luecke said. "People want to see the results."

First Published: April 22, 2013: 9:21 AM ET

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Home sales slip in March

Home sales slipped slightly in March but were much higher than levels a year ago.

NEW YORK (CNNMoney)

The Realtors' report on the sale of previously owned homes Monday showed the annual sales rate in March came in at 492,000, down 0.6% from February, but up 10.3% from a year ago.

Recent months have seen improvement in a number of market fundamentals that have lead to a recovery in the housing market. Those factors include a drop in foreclosures, near record-low mortgage rates, rising home prices and a drop in unemployment. All are helping to bring more buyers back into the market. The recovery in housing also has led to a rebound in home building and stronger new-home sales, but the market for previously owned homes dwarfs the new-home market.

Related: 3 reasons the housing recovery may not last

Monday's report provided further evidence of this improvement in market fundamentals. Sales of distressed home fell to 21% of the market from 25% of the sales in February, and 29% a year ago.

Distressed sales include both the sale of foreclosed homes and short sales, which are sold for less than the amount owed on the mortgage. The median price of a home sold in the month rose 6% from February and 11% from a year ago to $184,300. And homes were on the market for an average of about two months, down from 91 days a year ago.

"Multiple bidding is becoming more common, and more homes are selling above the asking price," said Gary Thomas, president of the Realtors.

First Published: April 22, 2013: 10:29 AM ET

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Investors disappointed by housing report

Click the chart for more stock market data.

NEW YORK (CNNMoney)

The Dow Jones industrial average and S&P 500 edged down 0.4%, while the tech-heavy Nasdaq slipped 0.2%.

Investors were disappointed after an industry report showed that existing home sales slipped 0.6% in March from the prior month, to a 4.92 million annual rate. Analysts expected the sales rate to rise.

Mixed company news was also drawing investors' attention.

The Dow's decline was led by a 2% drop in shares of General Electric (GE, Fortune 500) after JPMorgan Chase downgraded the stock to neutral.

Meanwhile, technology stocks were big gainers Monday. Shares of Microsoft (MSFT, Fortune 500) rose almost 4% after CNBC reported that hedge fund ValueAct was going to announce it was taking a $2 billion stake in the company. That would make ValueAct Microsoft's biggest shareholder.

Related: I lost $2,000 on Apple, but still betting on recovery

On the earnings front, Caterpillar (CAT, Fortune 500), considered a bellwether for the global economy because of its size and reach, missed profit and revenue forecasts. The mining and construction equipment maker also trimmed its earnings outlook for the year, citing a slowdown in mining. Despite the weakness, shares of the Dow component rose slightly higher.

Oil services firm Halliburton (HAL, Fortune 500) handily beat earnings and revenue estimates. The stock climbed more than 3%, making it among the top gainers in the S&P 500.

Shares of Netflix (NFLX) were up more than 3%. The company, which is hoping for a boost from its "House of Cards" video series, is on deck to report earning after the close.

Analysts expect earnings for S&P 500 companies to rise by 2% for the first quarter, according to S&P Capital IQ. But earnings season is far from over. So far, 104 S&P 500 companies have reported, with 70 beating forecasts, 23 missing and 11 coming in in line.

Aside from earnings, shares of Power One Inc. (PWER) surged more than 50% after Swiss company ABB (ABB) agreed to buy the solar power company in a $1 billion deal.

Related: Fear & Greed Index firmly in fear

Gold was also back in the spotlight. After last week's rout, the precious metal was up almost 2%, to $1,420 an ounce. That helped push the SPDR Gold Shares Trust ETF (GLD) up more thant 1%, and shares of gold miner Randgold (GOLD) spiked more than 3%.

European markets were higher in afternoon trading, supported by hopes that Italy may soon have a new government after President Giorgio Napolitano was elected for a second term. Asian markets were mixed, with the Shanghai Composite declining 0.1% and the Hang Seng adding 0.1%.

Japan's Nikkei rose 1.9% and the yen fell to almost 100 against the U.S. dollar after the G-20 gave its blessing to Japan's new monetary policy experiment.

The dollar rose against the euro, and was flat versus the British pound and the Japanese yen.

Oil priced edged slightly higher.

The price on the 10-year Treasury edged up, pushing the yield down to 1.69% from 1.70% late Friday.

First Published: April 22, 2013: 9:57 AM ET

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Citigroup profit spikes 30%

Citigroup's shares are up 30% since CEO Michael Corbat took over in October 2012.

NEW YORK (CNNMoney)

For most banks, beating analysts' estimates is nice but Citigroup is not most banks. It struggled under former CEO Vikram Pandit to gain any traction after a near-death experience during the financial crisis.

Last quarter, Citi's new CEO, Michael Corbat, failed to meet analyst expectations during his first reporting period as CEO. Now it seems that he's starting to make progress.

Citigroup (C, Fortune 500) reported a 30% jump in first-quarter net income to $3.8 billion, or $1.23 a share, and a 6% increase in revenue, to $20.5 billion, helped by strength in investment banking.

Related: JPMorgan Chase fails to impress Wall Street

It looks like Wall Street believes in Corbat so far.

Citigroup's shares rose more than 2% Monday, after rising more than 30% since Corbat took over in October 2012. Under Pandit's five-year reign, Citigroup's shares lost roughly 90% of their value.

"Achieving consistent, high-quality earnings is one of my top priorities and these results are encouraging," Corbat said in a statement.

Citi's investment banking revenue jumped, despite a slip in trading revenue.

The bank increased its retail banking lending as well as deposits, but lower margins on loans cut into the bank's profits. Citi also saw negligible profits in its consumer banking business.

On a call with reporters Monday, Citi's chief financial officer, John Gerspach, said he remains concerned about the economic recovery. "There's not a real confident consumer driving the economy," he said.

Related: Wells Fargo beats expectations even as home lending slows

Corbat announced an ambitious cost-cutting plan in December, which included 11,000 layoffs. At the time, Citigroup said the changes would lower expenses by $1.1 billion per year by 2014.

While expenses rose 1% in the latest quarter, they were down 10% from the prior three-month period. Gerspach said the rise in expenses this quarter was largely due to setting aside more for "incentive compensation," adding that the bank's cost-cutting efforts were on track.

Citigroup is the third bank to report earnings, following JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500). Both banks failed to impress Wall Street with their results last week.

Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500) and Bank of America (BAC, Fortune 500) will release results later this week.

First Published: April 15, 2013: 8:30 AM ET

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Rethinking health care with PatientsLikeMe

Jamie (left) and Ben Heywood

(Fortune)

Would you call your website a social network?

Jamie: I struggle with this definition. We do have social-networking components, but it's not the core of what we do. The Internet has sparked a technological shift to allow greater collaboration across diverse populations with common goals. There are new methods of crowd collaboration. Wikipedia, for example, is a winning method for group editing a particular style of article. For pithy, tight answers you have Quora or Yahoo Answers (YHOO, Fortune 500). Then you have Facebook (FB) or MySpace for social entertainment. In the end, though, these are all just ways of enhancing collaboration. What PatientsLikeMe does is combine these with the actual measurement of medicine, which amplifies the value of the networking. Yes, we are a patient network, but we are also a real-time research platform.

You've asked my next question: How effectively do you deploy those tools?

Jamie: Again, it's a bit complicated. Let's look at three "social networks" that have people with MS on them. There are about 400,000 people with the condition in the U.S. Roughly 300,000 of them are likely on Facebook. Roughly 30,000 of them are on PatientsLikeMe. Large clinical trials have 2,000 people. Each network has a different social architecture. Facebook, if it put its mind to it, could probably identify roughly half the population (with errors) based on their behavior. So Facebook, in some ways, is the largest registry of MS patients in the world. We're the second. A trial is the third. Each involves a different social contract for participants and a different set of tools. Our tools allow people to manage their health, compare where they are to others like them, learn about new treatments, and contribute data directly to research.

And how valuable are these networks?

Jamie: A clinical-trial year's worth of data is very valuable, and pharma pays tens of thousands for each one. On PatientsLikeMe, we call these patient-outcome years defined as the duration of how well you can confidently assert that you know the health of a patient; each data point from each patient over time adds to this measurement. The question this answers is, How well do you confidently know someone's health status? The patient contributing data to her own measurement of health is not just helping herself, but allowing others to learn from what she does.

Ben: Our goal ultimately is that every patient's decision is informed by every patient before them. It works because we're radically open about it. We tell our members exactly what we do with their data, where it's going, and for what purpose.

That has to do with selling patient data to drug companies. How would you guys describe your business?

Jamie: What we're really trying to do is launch the beginning of personalized discovery in the same way personalized computing has revolutionized so much of our lives. I lived through the beginning of the computer age, and I've owned pretty much every PC ever built. At the beginning of this era, the mainframe computer people would sort of laugh at those of us using the personal computers -- they thought it was cute. I remember at the time thinking these people just didn't get it. It's just like that now in personalized discovery.

So there's going to be an explosion in this industry soon, a revolution, is what you're saying?

Jamie: My sense of déjà vu in terms of what happened in personal computing and what is happening in biology is so screamingly strong. Biology is a mainframe business: It takes big labs, big budgets, and big teams, and the age of personalized biology is booting up now. The American Gut Project, 23andMe, the Personal Genome Project -- you can see it in this small minority of people beginning to engage in lightweight research. What people often miss, though, is if you look at the cost curves in biology they're going faster than Moore's law. People need to understand how little we know about health care and biology. Today, the person who can tell you something actionable is the doctor. That's not going to last much longer because data is going to change from observations to big data that's evaluated in real time. How is that going to affect the medical space? Who will be best able to interpret your MRI? The radiologist? Or a computer? It's just a question of time.

MORE: Social media comes to health care

Ben: It's an innovator's dilemma. Right now, we are all creating what is considered lower quality medical evidence. It's getting better and better. Look at the last three years at PatientsLikeMe: Three years ago the world saw us as just a social network for patients. Now we're a viable clinical-research platform that has published 30 peer-reviewed research studies. We have a much broader population of early adopters, and we're helping clinicians and researchers and patients to develop better and better tools to measure health.

So what does all this change mean for you, for PatientsLikeMe, right now?

Jamie: We're starting to do work with a lot of nonprofits, and they're migrating some of their work to us. We're building a set of platforms for rare diseases, with their registries on our system. All of this partially comes back to and extends from what we offer pharma -- building disease-based communities -- to learn from patients whether their drugs work or not, and for whom. There are other people who need that insight, namely clinicians, researchers, nonprofits, and payers (including government). So we're starting to look at this as clusters -- once you know and you care about a disease and you want to measure it well, you can activate a network, a global registry where patients and the entire research industry (including pharma) are collaborating. The next question is, What's the best path to get there?

Do you have that path mapped out?

Ben: This is not Web 2.0, unfortunately. I don't think two kids in a garage are going to solve health care. Health care is not so simple -- there are very complex issues to be solved.

Jamie: Innovation in health care is extremely hard. If you have an idea, and not a device, you have to prove it to Nature or the New England Journal of Medicine for it to begin to be accepted. It's a completely inhospitable environment for engineers or inventors. There is this mistaken assumption that if you make people better, you'll get paid for it. That's only true for patented devices and drugs. In health care information services, you have to be both innovative around a business model and be able to meet the standards of medicine. That's in addition to having a good idea. It's an almost impossible set of barriers that are very hard to navigate.

Why is that?

Jamie: It's the consequence of a broken market. As I said, this is not a market where if you make people better you get paid for it. If health care bought cars, it would go to a factory, look at the machines, and pay the operators as much as they wanted without checking to see if they're putting the parts together correctly. How many hospitals in this country know the percentage of the patients they gave hip replacements to five years ago who can walk today, or even if they're still alive? The answer is close to none. I bet Ford knows 90% of the cars they made five years are okay.

Ben: Information is fundamentally different if it comes from a patient. If they bring it into the health care and medical research system, it will drive change faster. Patient value should drive the market value of products and services. What we're trying to do is understand patient value, and this is something no one understands well. We are a long way from getting where we want to go, but you have got to start by measuring what you want to understand -- which is what it is that patient value.

First Published: April 15, 2013: 6:28 AM ET

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Top-earning hedge-fund chief takes home $2.2 billion in 2012

Appaloosa Management's David Tepper was the top-earning hedge-fund manager in 2012, taking home $2.2 billion.

NEW YORK (CNNMoney)

The 12th annual "rich list" placed David Tepper, founder of the New Jersey-based Appaloosa Management, atop its ranking. Institutional Investor said he made $2.2 billion in 2012.

Three others earned more than $1 billion apiece: Bridgewater Associates' Raymond Dalio with $1.7 billion, SAC Capital Advisors' Steven Cohen with $1.4 billion and Renaissance Technologies' James Simons with $1.1 billion.

The rankings are based on combined earnings from performance fees and management fees. All managers on the list earned at least $200 million, up from a minimum of $100 million from a year earlier.

Related: Investors are back with a vengeance

It may seem striking that managers took home such hefty paychecks, considering that the average hedge fund returned just 6.2% in 2012, according to Hedge Fund Research, in a year when the S&P 500 gained 13%.

But while the payout numbers are high, the combined $14.14 billion earned by the ranked managers is the lowest sum since 2008. Last year's number was down just slightly from 2011.

There was only one new kid on the block on this year's list: Discovery Capital Management's Robert Citrone made it into the rankings for the first time.

Several of 2011's top earners disappeared from this year's list, including Carl Icahn, after he returned his investors' money in 2011 and only invested with his fund's own capital.

First Published: April 15, 2013: 9:25 AM ET

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Dish launches $25.5 billion bid for Sprint

Dish announced a $25.5 billion bid for Sprint early Monday.

NEW YORK (CNNMoney)

The offer is an attempt to top another bid for Sprint: $20.1 billion for a 70% stake from Japanese tech company Softbank (SFTBF). That offer, which Sprint accepted in October, was intended to give Sprint a much needed cash infusion to stave off a possible bankruptcy.

Sprint (S, Fortune 500) said it had no comment. Its shares shot up nearly 15% and Dish shares were up 3.4%.

Dish Chairman Charlie Ergen said the combination would create a company that offers customers the greatest possible bandwidth for video and other data.

He said while cable companies do a good job providing bandwidth inside homes and wireless companies provide bandwidth outside of homes, no company allows for the efficient combination of that bandwidth.

"The pipes are fairly clogged," Ergen said. "If you're going to have a lot of data, you better have a big pipe -- no one is going to have a bigger pipe than Dish Sprint."

The bid for Sprint would also give Dish another coveted target, wireless broadband provider Clearwire (CLWR).

Dish had a brief bidding war earlier this year with Sprint for Clearwire, but Clearwire decided to accept Sprint's offer. Sprint already owned a 50% stake in Clearwire before the bidding war began.

Dish said its bid for Sprint represents a 13% premium over the Softbank offer. Ergen said Dish would also be "more than willing to spend" an additional $600 million to pay the breakup fee that Softbank is due if that deal falls through because of Dish's offer.

Analyst Amy Yong of MacQuarie Research said that there are many questions about Dish's plans for Sprint that make it difficult to judge who will be the winning bidder.

The wireless sector has been going through a number of deals in recent years, and Dish has reportedly been interested in finding a partner in the sector.

"Charlie's a poker player by trade," Yong said of Dish Chairman Charlie Ergen. "This might just be his way of getting all the other wireless companies talking with him."

First Published: April 15, 2013: 7:23 AM ET

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What is Dish thinking with Sprint offer?

NEW YORK (CNNMoney)

The satellite company offered $25.5 billion to buy Sprint (S, Fortune 500), the No. 3 cell phone company in the United States, Monday morning. Dish has already courted T-Mobile, Clearwire (CLWR) and MetroPCS (PCS, Fortune 500). The company is clearly desperate for a wireless network.

Why is Dish (DISH, Fortune 500) so set on becoming a cell phone provider? Because Dish has been sitting on a large chunk of increasingly valuable -- but as of yet unused -- wireless spectrum for about three decades, and it is beginning to burn a hole in the company's pocket.

In the 1980s, the Federal Communications Commission set aside chunks of airwaves for satellite telephone service. Though that business never really took off, Dish has amassed a large portion of wireless spectrum through a series of deals over the past few decades. The FCC approved a proposal by Dish to use this spectrum for cell phone communications last December.

Dish must now launch a cellular network that covers 70% of the population that its spectrum covers within the next seven years, or its FCC license will expire. That means Dish has three options.

Build a wireless network from scratch: That's the least likely to happen. Wireless carriers spend tens of billions of dollars each year building out and maintaining their infrastructure.

The advantage of starting from scratch at this late juncture is that Dish would be able to build a cheaper, far-more-efficient 4G network right off the bat without the need to service outdated 2G and 3G networks. But reaching 70% of the nation in seven years would still be costly and next to impossible without help.

Buy a wireless company: Dish is sitting on a cash hoard close to $10 billion, and CEO Charlie Ergen has proven recently with his various offers that he's not afraid to use it.

Buying a cell phone provider would provide Dish with the network infrastructure and wireless expertise that it lacks. But cell phone companies not named AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500) are struggling, and Dish would be inheriting a host of financial woes no matter what provider it buys.

Sell the spectrum: Ergen has long maintained that he has no interest in selling. He thinks that offering a so-called quad-play (TV, Internet, traditional landline phone and wireless service) is the best way to attract customers and keep them paying monthly subscriptions.

Selling could be incredibly lucrative for Dish. Verizon bought spectrum last year from a group that included Comcast (CMCSA) and Time Warner Cable (TWC, Fortune 500) for $3.9 billion. Dish currently values its spectrum at $3.2 billion. But the opportunity for Dish to profit from using that spectrum could be much greater down the road if it holds on to it.

"I think Dish wants something from Sprint that we are not really thinking about or talking about today," said Jeff Kagan, an independent wireless analyst. "It's not just about selling handsets to consumers, but in all the innovation that wireless represents."

If the future of technology is in wireless, Dish apparently would rather be a part of it than sell its stake too early.

First Published: April 15, 2013: 10:45 AM ET

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Fewer businesses provide health insurance

NEW YORK (CNNMoney)

The share of small companies providing insurance plummeted from 47% to 38% between the years 2000 and 2011, according to a report from the Robert Wood Johnson Foundation.

The proportion of all companies offering insurance slid from 59% to 52%.

Annual premiums paid by individuals doubled from $2,490 to $5,081, while family premiums rose even more, from $6,415 to $14,447.

As a result, fewer companies are offering health insurance, and fewer employees are taking it.

Related: Businesses could shun Obamacare exchanges

The Robert Wood Johnson Foundation defined a small business along new health reform guidelines: those with fewer than 50 employees. The organization is a long-time supporter of health care reform.

"Small businesses just have so many pressures," said John Lumpkin, the foundation's senior vice president. "When they're facing these economic crunches, one of the things they have to cut to survive is health insurance."

Tiny companies have a harder time dealing with rising insurance costs for two reasons. These firms typically have smaller profit margins. Additionally, insurance companies charge them higher rates. That's because insurers view each company as a separate pool of risk, and smaller companies have fewer employees to spread out that risk.

"You're not going to get the same discount as a large business," Lumpkin explained. "In the insurance market, the number of people that you have determines your leverage."

In total, 11 million people lost insurance during an 11-year period. The number of people whose work provided insurance dropped from 170 million to 159 million.

Related: What companies need to know about Obamacare

Will Obamacare halt the rise in premiums? No one knows yet. But there are two prevailing theories.

Obamacare forces insurance companies to provide coverage to all, including those with preexisting conditions and dangerous habits, such as smoking. Critics fear that will drive up premiums.

However, Obamacare's individual mandate also forces everyone to buy insurance or face penalties, which spreads out risks and costs. Supporters think that will make insurance cheaper.

What is clear is that some health reform measures are already facing setbacks. The Small Business Health Options Program is supposed to let business owners choose a level of coverage and have their workers pick among competing plans that qualify. However, regulators have recently proposed changes that could cause small businesses to avoid Obamacare exchanges.

First Published: April 15, 2013: 10:52 AM ET

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Gold plunges to two-year low

Click chart for more on commodities prices.

LONDON (CNNMoney)

Monday's broad decline was sparked by slowing growth in China. The world's second biggest economy grew by 7.7% in the first quarter of the year, down from 7.9% in the fourth quarter of 2012.

The growth number was higher than the Chinese government's target for 2013 but much weaker than the 8% most economists were expecting.

Other China data also raised doubts about the health of the global economy - industrial production slowed to 8.9% in March against economists' forecasts for about 10%.

The weak China data could mean reduced demand for commodities from the world's second biggest economy and subdued inflationary pressures. Gold is often viewed as a safe store of value when prices are rising.

Related: Weak yen drives Japan gold rush

Gold lost more than $100 an ounce to trade below $1,400, continuing Friday's sharp sell-off, when the precious metal slumped 5%. It is now in bear market territory, having fallen 27% from its record high in September 2011.

Other metals including silver, copper and platinum were also weaker, and oil lost 3%.

Mining stocks such as Randgold (GOLD) and Kincross (KGC) and gold-backed exchange traded funds including SPDR Gold Shares (GLD) and Market Vectors Gold Miners (GDX) were all hit hard.

Related: New markets milestones in sight

Investors have been turning their backs on gold recently and pouring money stocks funds instead as equity markets in the United States have gone on a record-breaking run.

Reports last week that Cyprus may sell gold worth 400 million euros as part of an international rescue added to the exodus, in part because of concerns that other European central banks with much bigger reserves may do the same.

Last week, Goldman Sachs and Deutsche Bank cut their forecasts for the price of gold, citing improving prospects for the U.S. economy, which would reduce the need for further monetary stimulus.

First Published: April 15, 2013: 7:25 AM ET

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Google's new bid to avoid EU fine

New proposals from Google to satisfy EU antitrust concerns will be made public shortly.

LONDON (CNNMoney)

The proposed changes come after the EU's top competition authority launched an investigation in November 2010, prompted by complaints from competitors that Google (GOOG, Fortune 500) was unfairly dominating the online market.

The goal of the investigation and proposed remedies is to ensure Google's search results fairly represent other websites, online services and search engines, instead of heavily promoting Google's own products.

Google will offer to label its own specialist services and provide "visible" links to rival search engines, creating noticeably different results in Europe, according to media reports.

The European Commission is preparing to release Google's proposal to market players and competitors and will invite them to comment on the proposal, said Antoine Colombani, a spokesman for EU Competition Commissioner Joaquin Almunia.

The Commission will take the feedback into consideration before making a final ruling in the Google case, Colombani said. The EU has the power to fine the search giant up to 10% of sales.

Related: Shodan: The scariest search engine on the Internet

Critics are already voicing their concerns, saying the proposal may not go far enough in tackling Google's online dominance.

Google's proposal may "look good on paper" but will ultimately work to their own advantage and help them solidify their dominance in online search and information, said David Wood, a legal adviser to the Initiative for a Competitive Online Marketplace, a lobby group backed by Microsoft (MSFT, Fortune 500) and other tech companies.

Wood is also concerned that Google will not make changes to its US-facing site, Google.com, which could be accessed by people across Europe.

"It's essential that these remedies are applied globally," he said. "We don't know what compliance and enforcement mechanisms there would be."

The U.S. government concluded a two-year investigation into Google earlier this year with a ruling that the search engine company did not breach U.S. antitrust laws.

FairSearch, which also represents Google rivals such as Nokia (NOK) and TripAdvisor, reiterated that it was concerned about Google giving preferential treatment to its own specialist sites, which "harms competition and consumers."

"We will comment on [Google's] remedies after the Commission shares them," said Thomas Vinje, legal counsel and spokesman for Fairsearch Europe.

FairSearch recently made an additional antitrust complaint against Google, accusing the company of using its Android operating system to "monopolize the mobile marketplace and control consumer data".

First Published: April 15, 2013: 11:16 AM ET

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Stocks slump on weak Chinese data

Click the chart for more stock market data.

NEW YORK (CNNMoney)

That's how investors were feeling Monday, after they awoke to disappointing news that China's economic growth had slowed in the first quarter.

Stocks around the globe sold off, gold prices plunged, and investors sought safety in U.S. Treasuries. The yield on the 10-year Treasury note slid to 1.71%.

The Dow Jones industrial average fell 0.4%, while the S&P 500 and the Nasdaq both slipped 0.6%.

The sell-off in gold spilled over to mining stocks. Shares of Newmont Mining (NEM, Fortune 500), Rio Tinto (RIO), Freeport-McMoran Cooper and Gold (FCX, Fortune 500), and Rangold Resources (GOLD) dropped more than 5%. Popular gold ETF SPDR Gold Trust (GLD) fell 5%.

What happened in China? The Chinese economy grew 7.7% in the first quarter, compared with a year earlier. That was weaker than the 8% growth economists had been expecting, and because it reflected weak global demand for Chinese goods and services, the news also drove stocks in Asia and Europe lower.

The Shanghai Composite lost 1.1%, the Hang Seng declined 1.4% and the Nikkei dropped 1.6%. European markets took their cue from Asia, with London's FTSE falling 0.9%.

China is the world's second-largest economy after the United States, and is considered one of the top engines of global economic growth. Case in point: 7.7% growth per year is considered weak there, whereas lately, the U.S. economy would be lucky to grow around 3% a year.

A separate report also showed industrial production growth slowed sharply in China in March. Heavy manufacturing related to steel, power and telecommunications equipment showed the most weakness.

The Australian and New Zealand dollars both fell against the U.S. dollar following the weak China data since both countries rely heavily on China as an importer of their raw materials. news.

Bracing for barrage of bank and tech earnings. On the flipside, good news came from Citigroup (C, Fortune 500), after the bank reported a better-than-expected 30% jump in net income, to $3.8 billion. Revenue also topped forecasts, rising 6% in the latest quarter. Citigroup shares rose 3% in morning trading.

Goldman Sachs (GS, Fortune 500), Bank of America (BAC, Fortune 500) and Morgan Stanley (MS, Fortune 500) are on tap to report results later this week. Tech giants will also report results later this week, with Yahoo (YHOO, Fortune 500), Google (GOOG, Fortune 500) and Microsoft (MSFT, Fortune 500)all on deck.

Related: Fear & Greed Index slides into neutral

In corporate news Monday, Dish (DISH, Fortune 500) said it is bidding $25.5 billion to buy Sprint Nextel (S, Fortune 500), countering an agreement between Sprint and Japan's Softbank. Sprint's stock price surged 15.8% in morning trading.

Thermo Fisher Scientific (TMO, Fortune 500) signed an agreement to acquire Life Technologies (LIFE) in a deal valued at $13.6 billion, plus debt. Life Technologies shares rose 8% and Thermo Fisher rose 4%.

Mixed bag of economic news. A major survey of U.S. homebuilders showed the housing recovery may have lost some of its steam in March. The news weighed on shares of homebuilders. Hovnanian (HOV), Lennar (LEN), DR Horton (DHI) and Toll Brothers (TOL) were all lower.

Separately, the New York Fed released its monthly manufacturing survey showing that conditions for New York manufacturers improved slightly in April. The indexes for general business conditions and new orders remained positive, despite modest month-to-month declines.

In case you wondering: 心情不好 is "bad mood" in Chinese. That's pronounced sin-chin-bu-hao.

First Published: April 15, 2013: 9:55 AM ET

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