Healthy food chain helps kids get off the streets

Erik Oberholtzer (center) with graduates from the Sustainable Life Project.

NEW YORK (CNNMoney)

Then he met Erik Oberholtzer. As CEO and co-founder of California restaurant chain Tender Greens, Oberholtzer had been trying for years to figure out how to help young people like Saurbier get back on their feet.

Last year, Oberholtzer's company started a charitable program dubbed the Sustainable Life Project. The three-month program targets young people ages 18 to 24 who are transitioning out of foster care, who may be homeless or who could easily end up in prison or prostitution.

The young people visit artisan food makers, urban farmers and food-processing facilities to learn about the sources of their food. They get culinary arts training from restaurant chefs, and they receive a paid internship inside one of the company's 12 restaurants. Those who do well in an interview get a full-time job with the company.

Related: Turning America's street guns into jewelry

Sauerbier learned about the program last January through Coventry House, a local nonprofit that helps homeless teens. The nonprofit connects Tender Greens with youth that are likely to succeed. And the restaurant chain then conducts interviews and takes up to eight students every three months.

Saurbier is one of 15 youths who have graduated from the Sustainable Life Project since it started, and one of 10 who have landed restaurant jobs.

The program changed his life. Saurbier lost 50 pounds after learning how to eat healthy and now prepares salads at a Tender Greens restaurant in Hollywood. He is now training for other kitchen jobs and working to get his GED. He wants to become a chef.

"I had seen so much pain in my life," says Saurbier. "This is more than a job. It opened my eyes to see opportunity."

Related: Startups emerge behind bars

Oberholtzer started the program at a time when many CEOs were focused on surviving the recession. But Tender Greens was in the midst of a rapid expansion. The company grew from $7.3 million and 115 employees in 2009 to $28 million in revenues and 450 employees in 2013.

Despite the challenges of fast growth, Oberholtzer felt compelled to do more to help struggling youths after volunteering to cook for the homeless on Los Angeles' West side. "You can either complain or do something," he says.

Getting the program started was daunting. Oberholtzer decided to put it under the umbrella of Tender Greens instead of establishing a separate non-profit. It's allowed them to be more flexible with the program.

"We handle it much the same way we would handle a paid intern from a university," he says.

Sustainable Life Project takes no donations and instead relies on company revenue, donated food and the time of Tender Green's staff. The HR and finance executives handle administration and chefs teach culinary and job skills. Those involved in the program spend between two and four hours a week on it.

Related: Why 'do good' businesses are blowing up

Other than the time, Oberholtzer says the program isn't costly to run. Tender Greens pays students an hourly wage for their internship and covers transportation costs for farm visits. The rest of the program is incorporated into the company's daily workflow.

Fermin Arias, Tender Green's regional chef, spends about four to eight hours a week running the program. Much of the time is spent listening to the young people and offering advice like how to dress for a job interview or how to talk to people at work.

"Some show up for interviews in street clothes with a skateboard," says Arias. "They may not do this as a career, but hopefully the takeaway is they learn how to eat right and communicate with society."

So far, the program hasn't hindered Tender Green's growth trajectory: The chain will open six new California restaurants in 2014. In fact, the Sustainable Life Project has become woven into the company culture, where employees are inspired to use their skills and passion for healthy food to bring about change. It took a lot of work to get it going, but Oberholtzer says the results have been worth it.

"These kids just want a break," says Oberholtzer. "As long as they show up and work hard, the restaurant is a family for them."

First Published: December 23, 2013: 8:15 AM ET

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Apple inks China Mobile deal

HONG KONG (CNNMoney)

The two companies said the iPhone 5s and 5c will be available there beginning January 17. The mobile company and Apple (AAPL, Fortune 500) will take pre-registrations starting on Wednesday. The companies did not announce prices for the phones, which went on sale in the U.S. in September.

Completion of the deal greatly expands Apple's reach in the world's most populous country and provides access to a previously untapped revenue stream.

Related: Coolest gadgets of 2013

China Mobile (CHL) is the world's largest carrier by subscribers, with around 700 million users -- or more than twice the population of the U.S. Apple executives have long courted the mobile carrier, and analysts have deemed the partnership a must-have for Apple as it seeks to gain devoted fans among China's rapidly growing middle class.

The country of 1.3 billion is Apple's largest market outside the United States, but the iPhone maker has stumbled there, losing ground in the smartphone race to rivals including Xiaomi that offer cheaper phones.

Even before the deal was struck, analysts at Cantor Fitzgerald estimated that 35 million to 40 million iPhones were in use on China Mobile's network. Cantor estimated that Apple could sell an additional 20 to 24 million iPhones to China Mobile over the first calendar year of a deal.

Related: Apple supplier under scrutiny over death

Apple is No. 1 or No. 2 in almost all other countries where it sells the iPhone, but has lagged behind its competitors in China. Samsung and Nokia, for example, both typically beat Apple in terms of smartphone sales in China. A host of local brands, including Lenovo, Coolpad, Huawei and ZTE have also topped Apple in recent quarters.

Smartphones are popular in China, but 4G data service has been slow to arrive. The first 4G networks in China were only recently powered up. China Mobile said it would have 4G services in 16 cities by the end of this year, and expand to 340 cities next year.

Even in the face of intense competition, Apple CEO Tim Cook has maintained his optimism about Apple's business in the region.

"I continue to believe that in the arc of time here, China is a huge opportunity for Apple," Cook said earlier this year.

-- Sophia Yan contributed reporting.

First Published: December 22, 2013: 5:31 PM ET

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Cracker Barrel reverses decision to pull Duck Dynasty products

Phil Robertson, patriarch of the Robertson family and the "Duck Commander."

NEW YORK (CNNMoney)

The popular Duck Dynasty television show and Duck Commander products took center stage in a controversy over comments made by Phil Robertson. As patriarch of the family and founder of the company, he stars in the A&E reality show based on his Louisiana life and company.

Cracker Barrel (CBRL), a chain of over 600 Southern-themed restaurants and stores, said Friday it "removed selected products which we were concerned might offend some of our guests while we evaluate the situation."

Two days later, it had evaluated the situation.

"Our intent was to avoid offending, but that's just what we've done," the company announced. "Today, we are putting all our Duck Dynasty products back in our stores."

It cited messages of support, including on social media, for Robertson, a hunter who is known as the Duck Commander and for 40 years has sold the duck calls he designed.

"You told us we made a mistake," Cracker Barrel said. "And, you weren't shy about it."

Within hours, a version of the announcement posted to Facebook had been shared tens of thousands of times.

Related: Duck Dynasty is a retail powerhouse

Cracker Barrel's website doesn't list the calls, which look like whistles and retail on the Duck Commander website for between $10 and $150. But Cracker Barrel does sell t-shirts, a talking keychain and camouflage jelly beans with the Duck Commander logo. It also stocks Robertson's autobiography, his wife's cookbook and a mug bearing his catchphrase: "Happy happy happy."

Jeff Eller, a spokesman for Cracker Barrel, said products with the television show branding had been pulled but were now in stock again. He said stores offer a broader selection of Duck Dynasty products than does the website.

Robertson stirred controversy with comments he made in a GQ interview about homosexuality, bestiality and race.

A&E said he was indefinitely suspended from the show, but did not clarify what that meant for the announced January debut of a fifth season. It said the fourth season premiere had nearly 12 million viewers, making it the no. 1 nonfiction series in cable history.

First Published: December 22, 2013: 4:49 PM ET

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Military competition shows off the latest robots

Homestead, Fla. (CNNMoney)

They're slow. They trip and fall. Some even break their ankles or wrists.

The latest in robotics was on display the past few days at a racetrack just south of Miami, Fla., part of a $2 million competition funded by the U.S. military.

Engineering teams from high-tech companies and top universities showed off their designs, ranging from crawling models that look like spiders to heavy, hulking humanoids.

In all, 13 teams were competing for a $2 million award from the U.S. Defense Advanced Research Projects Agency to be handed out next year.

Related: Google moves into military robotics

Competitors ranged from well-funded researchers at the Massachusetts Institute of Technology to hobbyists with Team Mojavaton in Colorado. They even came from abroad, including the Japanese startup Schaft (recently bought by Google (GOOG, Fortune 500)) and Hong Kong University.

Throughout the demonstrations, the smell of oil hung in the air as robots made their way across test tracks. The aim was to test how well the machines could open doors, turn valves and keep their balance on uneven terrain.

The engines of some of the robots made a low hum, while others let off a high-pitched wail.

There were seven copies of the Atlas robot -- a two-legged, 300-pound creation by Boston Dynamics, which was acquired by Google last week. All looked alike, but each performed differently, because the software teams had designed different versions of its brain.

Related: 7 robots too expensive (or lethal) to own

A robot called Thor, built by Virginia Tech, looked oddly human while driving a four-wheeled buggy through a winding track -- its right arm turning the steering wheel and its left arm hanging casually off the side.

In fact, many engineers are racing to build robots with human-like dimensions and functionality so they can step through doorways, climb ladders and turn pressure valves.

The need for such robots was made urgent in the aftermath of the Fukushima nuclear power plant disaster in Japan, when cleanup crews needed machines to venture into zones too dangerous for humans, said Arati Prabhakar, head of DARPA.

Engineers say robots able to perform simple human tasks would lead to applications well beyond rescue and disaster mitigation, however.

The scientists building these bots see a robust future for robotics in home health care and precision manufacturing, but they are leery to predict when that will happen.

Even if robotics has a long way to go, Google's entry was seen by those at the DARPA challenge as a sign the field is about to explode with advancement.

"This robotics challenge will change the way people perceive humanoid robots," said Dennis Hong, a mechanical engineering professor at Virginia Tech. "I envision them doing dishes, talking out the trash, doing the laundry. The future is quite near, but we've got a long way to go."

First Published: December 22, 2013: 8:30 PM ET

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China's $50 billion move to avert cash crunch

Chinese markets slid last week on talk of a cash crunch at some of the country's banks.

HONG KONG (CNNMoney)

Some banks in the world's second largest economy have been struggling to secure funds as the end of the year approaches, a time when they usually need extra cash to meet minimum deposit requirements, and as companies seek more money for operations.

Investors were spooked late last week as indicators of tight liquidity surged to heights last seen in June, when Chinese markets were roiled by a major credit crunch. In response, the People's Bank of China said that it had pushed more than 300 billion yuan ($49.4 billion) to select banks in an effort to avoid bank defaults.

It took the unusual step of announcing the move on Weibo, China's equivalent of Twitter.

Related story: China pledges greater role for markets

"The fragile nature of [China's] financial system remains a challenge for the central bank and poses a threat to the economy," said Nomura's China economist Zhiwei Zhang. Although the central bank's emergency action will likely prevent a repeat of June's credit crunch, it is still possible that some banks will be unable to make payments to each other next year, he said.

When and whether China's central bank intervenes at times like this is an example of the many challenges the country faces as it shifts toward a more sustainable growth model after decades of rapid expansion fueled by cheap credit and export-led growth.

Some analysts have criticized the central bank for acting late; an earlier move could have been more effective in countering the seasonal shortage of cash.

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

Others say the central bank's apparent reluctance to inject emergency cash is one way of reining in excessive lending. By keeping money tight, and thereby pushing interbank borrowing rates up, Beijing is forcing banks to curb risky loans and adjust to a more market-oriented environment.

It's also a way to flush out reckless shadow banking in China -- largely unregulated lending often to small and mid-sized companies, organizations typically ignored by the big state-owned banks..

Either way, investors may finally be warming to the central bank's actions. The Shanghai Composite rose 0.24% Monday, breaking a nine-day slide. The index lost out last week as global markets cheered the U.S. central bank's decision to pare back stimulus, a decision seen as a vote of confidence in the health of the global economy.

First Published: December 23, 2013: 4:43 AM ET

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Stocks: No holding back the Santa rally

Click on chart to track premarkets

NEW YORK (CNNMoney)

U.S. stock futures were looking buoyant ahead of Monday's opening bell, indicating markets could hit another record high before the holiday break.

The S&P 500, Dow Jones industrial average and Nasdaq were all moving higher, with the Nasdaq looking like it could pop up by nearly 1% when markets open.

The Nasdaq is getting a boost from Apple (AAPL, Fortune 500), with shares in the iPhone maker surging by 3% in pre-market trading after the company announced Sunday it had inked an important sales deal in China.

Also, Facebook (FB, Fortune 500) kicks off its first day of trading as part of the S&P 500, making it easier for investors to own shares.

Related: Apple inks China Mobile deal

Investors may also be feeling increasingly confident after the head of the International Monetary Fund, Christine Lagarde, said her organization was much more upbeat about the U.S. economic recovery.

"We see a lot more certainty for 2014," Lagarde said in an interview Sunday on NBC. She said the IMF would raise its forecast for the U.S. economy, in part because Congress had struck a deal on the budget and the Federal Reserve had managed its decision to begin reducing monetary stimulus effectively.

Related: Fear & Greed Index stuck in neutral

Further gains Monday would build upon a strong performance on Friday, when markets hit fresh record highs.

Looking to the day ahead, the U.S. Commerce Department will release its monthly reports on personal income and spending at 8:30 a.m. ET. At 9:55, the University of Michigan and Thomson Reuters will release data on U.S. consumer sentiment.

There are no big corporate earnings announcements expected Monday.

Related: Countdown to Obamacare deadlines

On international markets, China has been grabbing the headlines as investors continue to worry about a cash crunch. However, the Chinese central bank said it had pumped liquidity into the system, leading Asian stock markets to notch up modest gains Monday.

The main European markets were moving higher in morning trading.

The Tokyo Stock Exchange was closed for a holiday.

First Published: December 23, 2013: 5:25 AM ET

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Imagine the Fed tweeting the taper

China's central bank used its new Weibo account to announce it was pumping $50 billion into the country's financial system.

HONG KONG (CNNMoney)

China's central bank has only been microblogging for three weeks, and it's already taking to social media to make major policy announcements.

Facing a cash crunch for the second time this year, the People's Bank of China posted a series of messages on Weibo -- the country's answer to Twitter -- last week, saying it was providing almost $50 billion to select banks to help them make payments owed to each other.

The first post, on Thursday, said the central bank was injecting additional liquidity into the system but gave no details. Investors had to wait until a second Weibo post late Friday night to find out how much cash was being provided.

But the damage had already been done. Interbank lending rates soared, and the Shanghai Composite fell for a ninth consecutive session.

Related story: China's $50 billion move to avert cash crunch

That might be comparable to the Fed using Twitter (TWTR) to make last week's announcement -- in 130 characters or less -- that it was dialing back its bond-buying program.

"Fed tapers by $10 billion starting in January" would have captured the essentials in a tweet, but it was the lengthy explanatory statement and news conference with Ben Bernanke that gave investors the guidance they needed.

Such policy decisions in China are typically splashed on the pages of official state media, and the decision to use Weibo appears to have caught many by surprise.

It's hard to say when investors realized the magnitude of the online announcement by China's central bank, which only launched its microblog account on Dec. 1.

Still, it seems the market is catching up fast. Just three weeks and 33 posts in, China's central bank already counts 396,205 followers. (The Fed falls short, clocking in with 110,635 followers on Twitter.)

Related story: Twitter needs an Asian strategy

The social media savvy reaches beyond China's central bank into other areas of financial activity. The China Securities Regulatory Commission, for example, has already built up a following of 1.4 million on Weibo after joining on Oct. 15.

The central bank cash infusion to the banking system came after investors were spooked as indicators of tight liquidity surged to heights last seen in June, when Chinese markets were roiled by a major credit crunch.

First Published: December 23, 2013: 7:24 AM ET

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Stocks: No holding back the Santa rally

Click the chart for more stock market data.

NEW YORK (CNNMoney)

The Dow and S&P 500 rose to new records early Monday, while the Nasdaq climbed to a fresh 13-year high.

The Nasdaq got a boost from Apple (AAPL, Fortune 500)'s stock surging 3%, after the company announced it had inked an important sales deal in China.

The tech-laden index also got a lift from social media company Facebook (FB, Fortune 500), which debuted as part of the S&P 500. Shares were up almost 2% in early trading as investors added the stock to their index funds.

Shares of retailers Men's Warehouse (MW) and Jos. A. Bank (JOSB) fell. Jos. A Bank rejected last month's buyout offer from Men's Warehouse.

Related: Apple inks China Mobile deal

Investors are also feeling increasingly confident after the head of the International Monetary Fund, Christine Lagarde, said her organization was much more upbeat about the U.S. economic recovery.

"We see a lot more certainty for 2014," Lagarde said in an interview Sunday on NBC. She said the IMF would raise its forecast for the U.S. economy, in part because Congress had passed a budget and the Federal Reserve decided to begin reducing monetary stimulus based on the improving U.S. job market.

Related: Fear & Greed Index stuck in neutral

The day's gains build upon a strong performance last week. All three indexes jumped between 2% and 3% last week, thanks to a huge taper-inspired rally and a stronger-than-expected reading on U.S. economic growth during the third quarter.

While a so-called Santa Claus rally may continue to fuel stocks in record territory, trading volume is expected to remain light due to the holiday-shortened week. The market is only open for a half-day trading on Tuesday (Christmas Eve) and is closed on Wednesday for Christmas.

Related: Countdown to Obamacare deadlines

In international markets, China has been grabbing the headlines as investors continue to worry about a cash crunch. However, the Chinese central bank said it had pumped liquidity into the system, leading Asian stock markets to notch up modest gains Monday.

The main European markets were moving higher in afternoon trading. The Tokyo Stock Exchange was closed for a holiday.

First Published: December 23, 2013: 9:53 AM ET

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P2P lending: What's to worry?

The model looks promising but regulators need to provide more guidance so investors are protected, says former FDIC chairman Sheila Bair.

(Money Magazine)

Investors are making good money extending credit to their fellow Americans via peer-to-peer lending platforms (P2P), such as Lending Club and Prosper. P2P is also good news for borrowers -- most of whom are consolidating debts -- because they can often get interest rates lower than those offered by banks.

Mon dieu! Decent investor returns. Cheaper loan rates. Could this actually be a good financial innovation? Perhaps, but I see some causes for concern.

Securities regulators fret about potential fraud, since the companies don't always document borrower incomes. The cops also worry that investors can't understand how the companies determine the likelihood of default. Says David Massey, North Carolina's Deputy Securities Administrator: "Peer-to-peer investors generally don't have direct access to the information that might let them know whether they're buying into a loan that's going to pay them back, or whether they're taking a flier on a situation that's going to end in a default."

Lending Club CEO Renaud Laplanche acknowledges that about 30% of Lending Club's borrowers do not verify income, but he notes that this is clearly disclosed to investors. "When we ask borrowers with the highest credit quality to verify their income, they often prefer to not do the extra work and just drop out of the process," he explains.

Related: Play banker to your peers

He also says unverified loans perform slightly better than verified ones.

A lower vetting bar gives P2Ps an advantage over community banks, which argue that P2Ps can underprice them not because the newcomers have built a better mousetrap, but because they have fewer regulatory costs. To be sure, failing to document 30% of their borrowers' incomes would land the banks in the doghouse pretty fast.

To their credit, the leadership of both LC and Prosper seem to be taking regulatory issues seriously, for nothing could disrupt the P2P model faster than a headline-grabbing scandal.

Related: Boost your career in 2014

Lending Club's planned IPO next year will let it offer its platform nationally to investors, up from 27 states now. The Securities and Exchange Commission should work with states to develop standards for default loss projections. And bank and consumer regulators should try to rationalize income documentation standards for all lenders, bank and nonbank alike, particularly given the country's dreadful experience with undocumented subprime mortgages.

The competitive impact on community banks also deserves attention, since we don't know how well P2P will hold up in a downturn. Investors may flee as defaults rise. In that case, borrowers may again need to turn to community banks, which did a far better job of maintaining loan balances during the financial crisis than did the mega-institutions.

Let's hope that the local guys are still around and that less regulated competitors haven't already done them in.

First Published: December 23, 2013: 10:18 AM ET

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Play banker to your peers

Nowadays, peer-to-peer lenders mainly use matching tools to select loans -- either one by one or in a bundle -- based on criteria like credit rating or desired return.

(Money Magazine)

Your bank makes money off borrowers. Now you have the opportunity to do the same.

One of today's hottest investments, peer-to-peer lending, involves making loans to strangers over the Internet and counting on them to pay you back with interest.

The concept may be a bit wacky, but the returns reported by sites specializing in this transaction -- from 7% to 14% -- are nothing to scoff at.

No wonder the two biggest P2P sites are growing like gangbusters. With Wall Street firms and pension funds pouring in money as well, Lending Club is on track to issue $2 billion of loans this year, nearly tripling business over last year.

Prosper recently handled nearly $50 million in loans in a month, a 300% increase since early 2012. "A few years ago I would have laughed at the idea that these sites would revolutionize banking," says Curtis Arnold, co-author of The Complete Idiot's Guide to Person-to-Person Lending. "They haven't yet, but I'm not laughing anymore." Here's what to know before opening your wallet:

How P2P works: To start investing, you simply transfer money to an account on one of the sites, then pick loans to fund.

When Prosper launched in 2006, borrowers were urged to write in personal stories. Nowadays the process is more formal: Lenders mainly use matching tools to select loans -- either one by one or in a bundle -- based on criteria like credit rating or desired return. (Most borrowers are looking to refi credit card debt anyway.)

Loans are in three- and five-year terms. And the sites both use a default investment of $25, though you can opt to fund more of any given loan. Pricing is based on risk, so loans to borrowers with the worst credit offer the best interest rates.

Once a loan is fully funded, you'll get monthly payments in your account -- principal plus interest, less a 1% fee. Keep in mind that interest is taxable at your income tax rate, though you can opt to direct the money to an IRA to defer taxes.

Related: P2P lending: What's to worry?

A few hurdles: First, not every state permits individuals to lend. Lending Club is open to lenders in 27 states; Prosper is in 30 states plus D.C.

Even if you are able to participate, you might have trouble finding loans because of the recent influx of institutional investors.

"Depending on how much you're looking to invest and how specific you are about the characteristics, it can take up to a few weeks to deploy money in my experience," says Marc Prosser, publisher of LearnBonds.com and a Lending Club investor.

What risks you face: For the average-risk loan on Lending Club, returns recently averaged 8% to 9%, with a default rate of 3.5% to 4%. By contrast, junk bonds, which had a similar default rate this year, were yielding 6%.

But P2P default rates apply only to the past few years, when the economy has been on an upswing; should it falter, the percentage of defaults could rise dramatically, says Joanna Pratt, VP of investing for consumer finance site Nerdwallet.com.

In 2009, for example, Prosper's default rate hit almost 30% (though its rate is now similar to Lending Club's). Moreover, adds Colorado Springs financial planner Allan Roth, "A peer loan is unsecured. If it defaults, your money is gone."

Some consumer advocates also think the industry needs more regulation.

How to do it right: Spread your bets. Lending Club and Prosper both urge investors to diversify as much as possible. Pratt agrees: "Resist the urge to put all of your eggs in one basket." The graphic at bottom shows how investing in more loans reduces your risk.

Related: Free FICO credit scores coming to millions

Stick to higher quality. Should the economy turn, the lowest-grade loans will likely see the largest spike in defaults, so it's better to stay in the middle to upper range -- lower A to C on the sites' rating scales. (The highest A loans often don't pay much more than safer options.)

Stay small. Until P2P lending is more time-tested, says Roth, it's best to limit your investment to less than 5% of your total portfolio. "Don't bank the future of your family on this," he adds.

More loans, smoother returns

The less you diversify, the greater your chances of losing money. Below are the average returns on Prosper based on the number of loans held.

Number of loans	Minimum return	Average return	Maximum return
50 to 99 loans	-23%	9%	26%
100 to 149 loans	-4%	9%	26%
150 to 199 loans	1%	9%	26%

Notes: Returns are annualized as of Sept. 31, 2013, and include loans booked from July 2009 to June 2013.
Source: Prosper

First Published: December 23, 2013: 10:15 AM ET

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More private college presidents earning over $1 million

University of Chicago president Robert Zimmer ranked as the highest-paid president of 2011.

NEW YORK (CNNMoney)

A record 42 private college presidents saw their earnings top $1 million in 2011, according to a report released Sunday by the Chronicle of Higher Education. This is up from 36 presidents whose compensation topped $1 million in 2010. The data is based on the most recent tax filings available from the 500 private colleges with the biggest endowments.

The median total compensation, which includes salary, deferred compensation and other one-time payments, came in at $410,523, which is up 3.2% from 2010.

Related: Average student loan debt tops $29,000

University of Chicago president Robert Zimmer was the highest-paid president -- raking in $3.4 million. His base salary was $918,00, but much of his pay package came from deferred compensation.

Deferred compensation is tax-deferred money set aside until a specified date, and a growing number of universities use these packages to retain top talent.

Coming in at Number 2 was Joseph Aoun of Northeastern University, who was granted a $2 million retirement benefit that won't be disbursed until he leaves the university. Excluding that money, his compensation was a little more than $1 million.

Dennis Murray, who has been president of Marist College for 35 years, was third on the list. The majority of his compensation came from a one-time payment of $2 million from a deferred retirement plan that had been set up in 2001. It was supposed to come due the year he retired, which he had expected to be 2011. But he decided not to leave, so he received that money while still president.

Related: Homeless college students seek shelter during breaks

Other presidents in the highest-paid club include Lee Bollinger of Columbia University, who helped the school avoid budget cuts with the most successful fundraising campaign in its history; and former Tufts president Lawrence Bacow, whose compensation included a one-time lump-sum payment of $1.7 million upon his departure.

Among public schools, only four presidents earned compensation exceeding $1 million in 2012. Graham Spanier, the former head of Pennsylvania State University, topped the list at $2.9 million. The median pay packages of public school presidents are slightly higher than private schools, at $441,392.

These multimillion-dollar presidential pay packages continue to be doled out despite how unaffordable college has become for many Americans. Student loan debt now exceeds $1 trillion, and the average college graduate owes more than $29,000 in student loans.

First Published: December 15, 2013: 6:59 PM ET

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Paul Ryan: Stay tuned for GOP debt ceiling demands

Ryan, left, and Murray negotiated a deal to avoid another government shutdown, but the debt limit looms.

NEW YORK (CNNMoney)

The House Budget chairman said that Republicans will gather after the holidays "and discuss exactly what it is we're going to try and get" for voting to suspend or raise the legal limit on federal borrowing.

Last week, the two parties largely put the usual hostilities aside as Ryan, a Republican, and Senate counterpart Patty Murray, a Democrat, struck a budget deal that avoids a shutdown until 2015. It has passed the House and is expected to pass the Senate.

But they didn't resolve the government's debt limit.

"We don't want nothing out of this debt limit," Ryan said in a solo appearance on Fox. "We're going to decide what it is we can accomplish out of this debt limit fight."

Related: 5 ways Washington dysfunction can affect your money

He suggested Republicans would again push to pare back the president's health care law, but gave no specifics.

With Ryan by her aside in a joint appearance on NBC, Murray said of the debt ceiling, "We'll take that road when we get there."

The October deal that reopened the government suspended the debt limit until February 7. The government will be barred from borrowing additional funds starting February 8, leaving Treasury Secretary Jack Lew only with "extraordinary measures" that are not likely to last more than about a month.

On Sunday, Murray and Ryan agreed a key accomplishment of the two-year deal was removing the threat of a government shutdown. A debt default could rock the global economy, but wouldn't immediately shut the federal government down.

President Obama has repeatedly dismissed the idea of negotiating over the debt limit or over the health care law. At a forum in November, he said, "I think that the way our system is set up is like a loaded gun, and once people thought we can get leverage on policy disputes by threatening default, that was an extraordinarily dangerous precedent."

First Published: December 15, 2013: 4:41 PM ET

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China factories stuck in cruise control

China's factories have lost some momentum in the final months of the year.

HONG KONG (CNNMoney)

HSBC said on Monday that its "flash" measure of sentiment among manufacturing purchasing managers fell to 50.5 in December, a three-month low.

The index is an early gauge of the health of the sector, which is seen as a bellwether for China's export-heavy economy. Any number above 50 indicates an expansion in manufacturing activity.

HSBC's China economist Hongbin Qu said that while the index has dropped from last month's final reading, 50.5 still remains above average for the third quarter. "[T]he recovering trend of the manufacturing sector starting from July still holds up," he said.

Related story: Europe's golden visas lure rich Chinese

Other analysts said that sluggishness in the manufacturing sector suggests economic growth has started to weaken, a trend that will continue into next year.

"We believe this trend will continue in first half of 2014, as market interest rates keep rising and pushing up financing costs for corporates," said Zhiwei Zhang, an economist at Nomura.

Beijing is likely to closely monitor the manufacturing sector for any continued signs of weakness, which could complicate reform efforts.

China's party leaders have spent much of the year plotting a course for economic reform that aims to deliver results by 2020.

Beijing's plan calls for opening its financial markets and promoting greater foreign investment. The leadership also hinted at changes in how companies file for stock market listings, the introduction of a bank deposit insurance scheme and an acceleration of interest rate liberalization.

The roadmap seeks to roll back government control of state-owned enterprises and allow for greater competition with private firms.

Related story: Asia stumble a major risk for global economy

Still, some questions remain, especially on looming issues including a rise in local government debt.

In addition, the country's consensus-driven approach to policymaking could make for slow progress in translating the roadmap into real change for private companies, consumers and foreign investors.

First Published: December 15, 2013: 9:59 PM ET

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The $2 million home theater

NEW YORK (CNNMoney)

Americans spent $14 billion on home theaters this year, up about 10% from last year, according to the Custom Electronic Design & Installation Association (CEDIA). And while the average home theater cost roughly $26,000 to get up and running, it's the ultra-luxe category -- ones that cost a half-million dollars or more -- that's seeing the biggest growth.

"Our guys do $2 million-plus installations all the time," said Ron Fleming, a sales director at the Custom Electronic Design & Installation Association (CEDIA).

The most expensive theater Jeremy Kipnis, of Connecticut-based Kipnis studios, has built so far was for an Argentine tycoon and cost $6 million.

Related: Million-dollar housing markets

Just building the room to house the 30-seat theater alone cost $2 million or so. The projector system, screen and content delivery technology cost almost $2 million, and the sound system was another $2 million.

Helping to fuel this high-end trend are online services that deliver access to movies as soon as they are released in public theaters.

"The rich and famous don't want to fight in line to see a movie," said Kipnis. Instead these wealthy families can watch new releases in the comfort of their home.

Related: American Dream homes: What you'll pay in 10 cities

Prima Cinema, which sends first-run films over the Internet to its clients, contractually limits a home theater's size to no more than 25 seats due to the licensing agreements attached to many films. The service is pricey: Prima charges about $35,000 for the hardware and $500 for a 24-hour rental.

"I was a little taken aback by the cost," said Karen Freedman, who uses the Prima system in her Los Angeles home. But the $500 rental fee pales in comparison with the half million or so she paid to VIA International to build her 16-seat home theater.

And Freedman, a real estate developer who is married to an entertainment industry exec, said she has turned the screenings into events. She invites friends over for viewings, serving up catered meals or snacks.

Related: Rich people getting cheaper mortgages than you

While gaining access to first-run films are of importance to some, others are all about ambiance.

Sci-fi themes are common, with theaters designed to look like the bridge of the Starship Enterprise. Others are built to look like Bruce Wayne's Batcave or with a "Pirates of the Caribbean" motif.

Donny Hackett designs home theaters in and around the Nashville area that range from a half-dozen seats to as many as 15 and are priced from $50,000 to $200,000. His design themes range from Paris cityscapes to Tennessee Titans to 1950's diner.

He has had a dozen clients ask him to incorporate his "Titanic" motif into their installations. It features a tracery domed ceiling, like from the movie set, with 1,000 fiber optic stars. Others give him carte blanche on the design.

"I've been lucky,"he said. "They give me a blank slate and I provide the accents that surround the technology."

First Published: December 16, 2013: 4:04 AM ET

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What your wireless carrier knows about you

NEW YORK (CNNMoney)

What your phone knows about you -- where you are, what you're searching for and what you like -- is mouthwatering for advertisers. Combined with other third-party data, including your age and salary range, marketers are using cell phone customers' information to make decisions about how they advertise.

Though all four major carriers sell their customers' smartphone data, Verizon's (VZ, Fortune 500) year-old Precision Market Insights program is the farthest-reaching. Here's how the Precision program works, according to Verizon spokeswoman Debi Lewis:

When you sign up for Verizon service, you agree to let the company use your location, Web searches, app usage and other data for its Precision Marketing Insights program (you can later opt out). Verizon sends that data to an internal database, matching it up with a deep trove of demographic information about you from companies including data giant Experian. The data are stripped of any personally identifying information, aggregated into categories and are placed into reports for Precision customers to use.

The one-two combination of phone activity and personal demographic information paint a revealing portrait of subscribers' habits for marketers.

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

Maybe you're the owner of the Phoenix Suns basketball team (a Precision Insights customer), and you're interested in the types of people who go to the US Airways Center for a game. How many of them have attended your team's games in the past? Do they make enough money to think about buying a season ticket? During the game, are fans ages 25-55 searching for restaurants near the stadium?

Or maybe you're more interested in what happens after the game. Do most attendees get on the train, or do they catch a cab? Do male fans tend to head to a particular local bar for a post-game drink?

Verizon's Precision reports can offer answers for those previously unanswerable questions.

Using Precision, the Suns determined its fans tend to be tech-savvy travel enthusiasts with a household income of $50,000 or more. About 22% of the crowd for Suns games in March were out-of-towners, and 13% of spring training attendees also went to a Suns game. Verizon says Precision helped the Suns gained a 35% "lift" in identifying people who might buy season tickets.

Verizon shared sample Precision reports with CNNMoney that show marketers can look at a variety of data, including moviegoers or people who attended a "pop star concert" based on their income, age range, ethnicity, primary language and even whether children are living in the household. A "heat map" shows where those customers are located. Marketers can also choose from among 800 "attributes" -- including both mobile data and demographic information -- to define a target group they're looking for, such as "young professionals."

The Suns are among a "few dozen large brands" that have partnered with Precision, according to Verizon.

Related story: What your zip code reveals about you

AT&T (T, Fortune 500) and T-Mobile (TMUS) told CNNMoney they sell anonymized and aggregated data, but they would not comment in more detail about those services. Sprint (S, Fortune 500)declined to comment for this story.

The fact that the carriers' programs are based on the sharing of deeply personal details can be unsettling to customers. Lewis, the Verizon spokeswoman, stressed that the data can't be traced back to an individual, and that subscribers have the ability to opt out of sharing their data.

One privacy expert says that isn't enough. Peter Eckersley, the technology projects director of the digital rights advocate Electronic Frontier Foundation, thinks the data being shared are too valuable for carriers to share without active approval from users.

"The default setting is for you to share information that reveals incredibly intimate details of your life: where you go to church, which nightclubs you frequent, where you fall asleep every night," Eckersley said. "The fact that you have to actively opt out of something like this is ludicrous."

Concerns aside, the reality is that the sale of customers' personal data is an increasingly lucrative business across all sorts of industries. Credit card companies, junk mailers and loads of other marketers have long used anonymized data to make money.

Now, technology is changing the business of big data -- and Verizon and others are harnessing tech to make customers' information even more valuable.

First Published: December 16, 2013: 6:33 AM ET

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Stocks: Fed decision around the corner

Click on chart to track premarkets

NEW YORK (CNNMoney)

U.S. stock futures were modestly higher ahead of the opening bell.

Investors are treading cautiously as they wait to see whether the Federal Reserve will begin cutting back on its massive stimulus program -- which has supported stock markets around the world -- as economic data continue to improve.

"[A] growing minority now believe that the Federal Reserve could start to taper at this week's meeting," said Kathleen Brooks, a research director at Forex.com. "Only a few weeks ago this was virtually unheard of, with most traders and investors looking at late Q1-Q2 2014 for the Fed to start tapering."

The Fed has been pumping $85 billion per month into the financial system since September 2012. It will announce any policy changes after it wraps up its two-day meeting Wednesday afternoon.

Related: Markets are ready for the Fed

In corporate news, Google (GOOG, Fortune 500) agreed to buy military robot maker Boston Dynamics, a builder of military robots.

Shares of Sprint (S, Fortune 500) rose in premarket trading following reports from The Wall Street Journal that it was working on a deal to acquire T-Mobile (TMUS).

AIG (AIG, Fortune 500) reached an agreement to sell its airline leasing business to AerCap Holdings (AER) for $5.4 billion.

On the economic data front, the New York branch of the Federal Reserve is set to release its monthly manufacturing survey at 8:30 a.m. ET Monday, while the Labor Department will release its revised estimate of third quarter productivity.

At 9:15 a.m. ET, the Census Bureau will publish its monthly reports on industrial production and capacity utilization.

Related: Fear & Greed Index feels fear

U.S. stocks finished a losing week with a whimper.

European markets were climbing in morning trading, with Germany's benchmark Dax index up by roughly 0.6%.

Asian markets ended with losses. The Nikkei in Japan slumped by 1.6% as the yen strengthened, hitting companies that depend on exports.

First Published: December 16, 2013: 5:18 AM ET

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Google moves into military robotics

LONDON (CNNMoney)

Boston Dynamics founder Marc Raibert confirmed the purchase to CNNMoney.

"We are excited and looking forward to taking robotics the next couple of steps, working as part of Google's gangbuster team," he said.

The purchase is part of Google's (GOOG, Fortune 500) broader push into the field of robotics, led by Andy Rubin, the man responsible for developing the Android platform for smartphones.

Google has quietly purchased another seven robotics firms over the past six months, with some of the companies heralding the start of a "robot revolution."

Related: Big tech scrambles for Israeli firms

Raibert declined to comment on the price Google paid for his company, and wouldn't elaborate on plans for product development.

Boston Dynamics has built a strong reputation for its heavy-duty robots that can run faster than Usain Bolt, climb walls like a gecko and jump as high as 30 feet.

It works with the U.S. military to develop advanced robots and has close ties with the Defense Advanced Research Projects Agency, or DARPA.

The firm has won nearly $140 million in contracts from the U.S. Department of Defense since 2000, according to the USASpending.gov website. Over the same period, Google made less than $300,000 from defense contracts.

Related: Sony files patent for a "SmartWig"

The acquisition comes as technology firms step up their experimentation with using robotics to offer services: Amazon (AMZN, Fortune 500) announced earlier this month that it was hoping to use unmanned aerial vehicles -- or drones -- to make deliveries to customers.

Google has already entered the race to commercialize driverless cars. Nevada became the first U.S. state to license the vehicles last year.

Google CEO and co-founder Larry Page wrote in a public post this month that he was excited about Andy Rubin's newest project.

"It is still very early days for this, but I can't wait to see the progress," he wrote.

Boston Dynamics was founded in 1992 after being spun out from the Massachusetts Institute of Technology.

-- CNNMoney's Mark Thompson contributed to this report.

First Published: December 16, 2013: 7:52 AM ET

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Startup's sales hit $90 million in 3 years

Halo2Cloud's co-founders Garold Miller [left] and Dan Weinstein said the startup's pocket charger for mobile devices has scored $90 million in sales in just 3 years.

NEW YORK (CNNMoney)

Co-founders Garold Miller and Dan Weinstein debuted the gadget on QVC on Nov. 27, 2011. The device, which comes in multi-colored metallics and animal prints, set a network record for most units sold in a day.

"We sold 305,000 chargers on the first day," said Miller.

Fast-forward to Dec. 1, 2013, and they did it again. The company's newer, more powerful Halo charger became QVC's biggest one-day seller ever with 380,000 chargers for a total of $19 million in sales.

The startup, which became profitable in 2012, logged $90 million in sales this year, up from just $1.6 million in its first year.

The Glastonbury, Conn.-based company has already sold millions of its chargers and is constantly ramping up production to meet demand, said Miller. While the chargers are manufactured in China, Halo2Cloud is also adding more jobs in the U.S. The firm currently has 18 employees, and Miller said they expect to hire 30 new people next year.

Related: 6 ways you can use 3D printers

Miller and Weinstein said they wanted to launch a product that makes life easier at a time when the proliferation of cellphones has "created a huge need for portable power."

"Let's face it. There are probably more mobile devices in America than there are people," said Miller.

In 2010, Weinstein, an engineer by training, and Miller, who had previously launched a jewelry design firm, got to work on inventing a portable charger that was "not just a plain square box."

"We wanted it to be a powerful product that was simple to use, sleek and could become a fashion statement," said Miller.

Related: It's crunch time for this 93-year-old candy maker

The original $30 Halo charger is the size of a lipstick tube and offers a six-hour charge for cellphones, e-readers, Bluetooth headsets and gaming devices. The charger itself can be repowered in a car or on a computer via any USB port.

The newest models include the slightly larger $66 Halo Pocket Power 5500, which can charge a phone and iPad simultaneously, and the Starlight 3000, which comes with a built-in LED flashlight. 90% of Halo2Cloud's sales come through QVC, although the chargers are also sold through Staples (SPLS, Fortune 500), Amazon (AMZN, Fortune 500), SkyMall and the company's website.

While the entrepreneurs are stunned at how quickly their chargers have captured consumers' attention, they're very aware that tech products can become obsolete just as fast.

So they're seeking out licensing deals with big brands like Disney (DIS, Fortune 500) and the NFL to expand the market for Halo chargers. They're also trying to break into the luxury market through partnerships with high-end brands.

"We have to keep innovating," said Weinstein. "We're doing what we can to stay ahead of the curve."

First Published: December 16, 2013: 3:54 AM ET

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Dow jumps 150 points

Click the chart for more stock market data.

NEW YORK (CNNMoney)

But they didn't seem too worried Monday. The Dow jumped more than 150 points, or 1%, in early trading Monday, while the S&P 500 and Nasdaq also rose nearly 1%.

The gains were broad-based, with 27 out of 30 Dow members higher, and more than 80% of the S&P 500 booking gains.

The Fed's bond buying has supported stock markets around the world, and more investors believe the Fed will move sooner rather than later as economic data continue to improve.

"[A] growing minority now believe that the Federal Reserve could start to taper at this week's meeting," said Kathleen Brooks, a research director at Forex.com, adding that only a few weeks ago, most on Wall Street were expecting the Fed to announce tapering in the early part of 2014. By that time, Janet Yellen will be leading the Fed, succeeding Ben Bernanke, whose term expires at the end of January.

The Fed has been pumping trillions into the economy since December 2008. It's been injecting $85 billion per month since September 2012 through its third round of bond purchases, a program known as quantitative easing.

Related: Markets are ready for the Fed

In corporate news, AIG (AIG, Fortune 500) rose after the insurer reached an agreement to sell its airline leasing business to AerCap Holdings (AER) for $5.4 billion. AerCap surged on the news as well.

Shares of Sprint (S, Fortune 500) rose following reports from The Wall Street Journal that it was working on a deal to acquire T-Mobile (TMUS).

Google (GOOG, Fortune 500) agreed to buy Boston Dynamics, a builder of military robots.

Related: Fear & Greed Index shows Fear

European markets climbed in morning trading, with Germany's benchmark Dax index up by roughly 0.6%. Asian markets ended with losses. Japan's Nikkei slumped by 1.6% as the yen strengthened, hitting companies that depend on exports.

First Published: December 16, 2013: 9:50 AM ET

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Trader turns $1,500 to $1 million in 3 years

Tim Grittani (left) began day trading penny stocks with $1,500 three years ago. By following the lessons of penny stock guru Tim Sykes (right), Grittani has raked in over $1 million in profits.

NEW YORK (CNNMoney)

How did he do it? Not by buying and selling stocks of large and well-known companies like Apple (AAPL, Fortune 500) or Ford (F, Fortune 500). Instead, Grittani trades penny stocks -- very small companies that typically have a price below $1.

He's the first to admit that it's a risky strategy. And it's not for everyone.

"I've been trading every single day for almost three years, and it's been a slow, day-to-day process," Grittani said. He spends the entire trading day in front of a computer screen, in order to buy and sell stocks at the right time. He is sometimes in and out of stocks within minutes, and the longest he ever holds shares is a few days.

So why trade penny stocks? Many of these companies are speculative because they are thinly traded, usually over the counter instead of on major exchanges like the New York Stock Exchange. The Securities and Exchange Commission warns that "investors in penny stocks should be prepared for the possibility that they may lose their whole investment."

Plus, penny stocks are notorious for being part of so-called pump-and-dump schemes, in which scammers buy up shares and then promote it as the next hot stock on blogs, message boards, and e-mails. Once the stock price is artificially pumped up by all the talk, the scammers sell their stake, leaving unsuspecting investors with big losses.

Related: 5 most common financial scams

But Grittani has been able to profit because it's such an inefficient market. He knows what to look for and recognizes how to make money out of pump-and-dump scams without doing any pumping or dumping himself.

In fact, the trade that officially pushed the value of his portfolio over $1 million was a short bet against a company that had been the target of a pump-and-dump scheme. When investors short stocks, they borrow shares and sell them with the hope of buying it back later a lower price and pocketing the difference.

Grittani had noticed shares of a company called Nutranomics, which trade over the counter under the symbol NNRX, had shot up due to what he felt was the manipulation of scammers: the stock had tripled in just a month. Last Monday, Grittani detected that the stock was losing momentum, and he felt that at the very least a small pullback was imminent.

Sure enough, the stock tumbled almost 60% in the span of 23 minutes. Though he didn't benefit from the entire plunge, Grittani walked away $8,000 in ten minutes.

Related: Invest your way to $1 million

Grittani learned about penny stocks from Tim Sykes, who is famous for turning his Bar Mitzvah gift money of about $12,000 into millions by day-trading penny stocks while in college. For the past five years, Sykes his been teaching his strategies through the sale of instructional newsletters and video lessons.

Grittani first learned about Sykes in early 2011, when he was a senior finance major at Marquette University in Milwaukee.

Earlier on in college, Grittani played poker and made wagers on sports games to make money. He had some luck, including a $9,000 win from a sports bet. But he lost all of that over the course of a year and decided he needed to quit gambling. So he took a shot at investing.

"I started by opening an account with $500 to see what I could pick up on my own," said Grittani. "But within a few weeks I lost half my account and decided I needed some outside help."

Grittani scoured the internet and eventually came upon Syke's story. He spent a few months learning about Syke's theories and eventually started trading. The first few months were rough. At one point he was $1,300 in the hole. But within six months, Grittani made his first big winning trade.

After receiving an e-mail about what he felt was a pump-and-dump scheme targeting Amwest Imaging, Grittani plowed $3,000 into the company. Figuring that it would eventually collapse, he sold his stake within 10 minutes. But that was enough to book a 70% gain, or $2,000. (Amwest Imaging has since changed its name to Intertech Solutions, trading under the symbol ITEC.)

"That's the kind of volatility penny stocks have when they are promoted. The key is to buy them ahead of the crowd," said Grittani.

Related: What does it take to be wealthy? $5 million

But Grittani and Sykes both go out of their way to point out that trading in penny stocks is not the same as long-term investing. This is not a strategy for your retirement accounts.

"I think it's mainly for people who are gamblers," said Sykes, who taught himself all about trading. "But at casinos you play with low odds. With penny stocks, there are patterns that are very predictable."

Along those lines, Grittani's biggest win over the past few years was a quick trade in Fannie Mae (FNMA, Fortune 500). While there wasn't a particular news catalyst that prompted him to look at the government-sponsored mortgage giant, Grittani spotted increased volume and activity that suggested the stock would tank and then bounce back. Through a combination of long and short trades, he raked in $215,000 in one day.

So what's next for Grittani now that he's hit the $1 million mark? He plans to continue to day trading for at least another two years before taking time off to travel.

And though he's earned a million in trading profits, Grittani says he'd like to eventually get to the point where his personal net worth exceeds $1 million. He currently estimates he's worth $650,000, and anticipates he'll reach his goal "within the next year or two."

First Published: December 16, 2013: 11:05 AM ET

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How 2013 shaped up

NEW YORK (Money Magazine)

Here's what Money magazine's December 2012 issue said would happen -- and how the year turned out.

STOCKS

The outlook. Since the Fed wasn't expected to raise rates, equities were predicted to climb -- by a modest 8%.

What happened. The Fed didn't raise rates, and stocks kept rallying. Equities, though, soared much more than expected -- 25%.

BONDS

The outlook. Long-term rates were expected to rise, so investors were warned to wean their exposure to government debt, especially Treasuries.

Related: Best new ways to make money

What happened. Market interest rates did rise, and funds that invest in long-term U.S. Treasury bonds lost more than 10% through early November.

HOUSING

The outlook. Real estate looked as if it was finally stabilizing. Since buyers were ready to come off the sidelines, prices were expected to rise 1%.

Related: Best new ways to save money

What happened. The housing market did stabilize. But as demand rose, sellers were slow to list their homes. Tight supply sent prices soaring 12%.

CAREERS

The outlook. Your prospects for finding new work and getting raises were set to improve slightly. Overall, the economy was expected to create a modest 173,000 new jobs a month.

What happened. The labor market did improve in fits and starts as housing started to recover. The economy produced 190,000 new jobs a month.

Make more in 2014

The economy: What's ahead in 2014
Stocks: Where to make money in 2014
Bonds: Tweak your mix in 2014
Real estate: Look for value in in 2014
Jobs: Boost your career in 2014

First Published: December 9, 2013: 9:44 AM ET

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Real estate: Look for value in in 2014

NEW YORK (Money Magazine)

The good news for housing is that price gains next year are expected to be only about half as strong as in 2013, when sellers stayed on the sidelines. Yes, that's good news. "For a sustainable recovery you want to see more balance between buyers and sellers," says David Stiff, chief economist at CoreLogic Case-Shiller, which is forecasting a 6.8% rise in the median home value for 2014.

Inventory is already improving. Nationwide, the number of homes for sale in September rose 1.8% vs. a year earlier, according to the National Association of Realtors. That's the first increase since late 2011. In Los Angeles, Atlanta, and Orlando, inventory was 10% or higher than a year earlier.

"It will still be a sellers' market in 2014, given how far we have before inventory is back to normal," says Jed Kolko, chief economist at Trulia, noting the supply of homes in September was still about 15% below historical norms. "But it will not be as extreme as 2013," he says.

Buyers will also enjoy an advantage next year as real estate investors are expected to be less of a factor. Why? In an improving market, there are fewer distressed homes, which they covet. According to the Campbell/Inside Mortgage Finance HousingPulse Tracking survey, the investor share of residential home purchases fell from 23% earlier this year to 17% in September. In a more balanced market like this, here's what you can do to get an edge:

BUYERS

Waiting for more inventory can make sense if you have a dream home in mind. But in 2014 there will be a price for delay -- 30-year fixed-rate mortgages are forecast to climb from today's 4.5% to more than 5%.

Work with a fast closer. Qualifying for loans is easier now, but speed is another issue. Franklin, Tenn., agent Patty Latham says she will not work with buyers using a particular lender that has missed several deadlines. For speed, Virginia agent Rob Wittman suggests sticking with local lenders with ties to nearby appraisers.

Related: Was my home a good investment?

What's fast? John Wheaton at Guaranteed Rate says, "Where 45 days was the norm, you can get an express closing in 20 days and even faster."

Lead with a credible offer. At a time of multiple bids, low-balling isn't the way to go. "The reality is, sellers don't have to come back to you with a counter if they've got better bids," Wittman says. Of course, you don't want to overpay either. Even in markets that are starting to experience bidding wars, such as L.A. and Boston, final sales prices are still typically about 1% below asking. Use that and your agent's local knowledge and go in with a respectable bid.

OWNERS

If you like your home and are not in a rush to sell, you have great flexibility. For instance, your rising home equity will make it easier to borrow against the property. That can help pay for deferred maintenance or home renovations you've been eyeing for years -- which will only add value when you eventually put your home on the market.

Remodel within reason. Home-improvement spending is expected to grow by double digits through mid-2014, according to Harvard's Joint Center for Housing Studies. Atop the wish list: bathroom and kitchen jobs.

Keep resale in mind. While the focus was on value at the market lows, today "homes with all the fixings are the ones attracting multiple buyers," says McLean, Va., real estate broker Jon Wolford. So, yes, you can splurge a bit, but don't go crazy. Remodeling Magazine's cost-vs.-value survey found that moderate kitchen remodels ($57,500) recouped 69% of their cost, close to what minor jobs paid back. Over-the-top projects ($111,000), though, recouped less than 60%.

Take advantage of low home-equity rates. While 30-year mortgages rose nearly a point this year, rates on home-equity lines of credit have fallen a bit to 5.1%. That's because HELOCs are tied to short-term rates that the Fed isn't likely to hike until 2015.

If you'll need to repay your loan over many years, though, go with a fixed-rate home-equity loan. Today's 6.25% average is about 0.25 points lower than a year ago, as lenders are now more interested in doing deals, says Keith Gumbinger at HSH.com. Credit unions can be the best place to shop for home-equity loans. The average credit union rate is 5.75%.

SELLERS

List too early and you'll leave gains on the table. Wait too long and rising borrowing costs might put an end to bidding wars. You can't time the market perfectly, but you can keep an eye on inventory trends. Ask your agent to give you a monthly report on the number of listings compared with closings. Housing trends play out gradually.

Once you see a big uptick in listings relative to closings, you'll know price gains are getting ready to slow -- and that it's time to act.

Related: New mortgage rules may mean less choice

Price it right the first time. Don't waste your time by listing too high only to have to wait and lower the price. "Buyers are smart these days -- they know where the market is, and now that rates are higher, they aren't going to bite on a list price above recent comparables," says Sara Fischer, an agent with Redfin based in San Diego. The real estate site Zillow reports that about one-third of listed homes in August had a price drop, up from 26% earlier this year.

Play tour guide for the appraiser. If your buyer's lender gets an appraisal that comes in lower than the agreed-upon price, you're in for plenty of headaches -- even in an improving market. You'll have to lower the price, the buyer will have to cough up a bigger down payment, or worst case, the deal might collapse, sending you back to square one.

Fischer recommends that sellers be present when appraisers come by. "They don't want to listen to the agent," she says. "But if you're the owner and can walk them through all the improvements, that can help the appraiser better understand what has gone into the home." She recommends handing the appraiser a spreadsheet of all upgrades, listing when they were done and the scope of each project.

Make More in 2014

The economy: What's ahead in 2014
Stocks: Where to make money in 2014
Bonds: Tweak your mix in 2014
Jobs: Boost your career in 2014
How 2013 shaped up

First Published: December 9, 2013: 9:55 AM ET

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The economy: What's ahead in 2014

NEW YORK (Money Magazine)

There are plenty of moves you can make with your money to play to these strengths, even if the economy pulls some punches.

In Money magazine's Make More in 2014, you'll learn how to play to the economy's strengths while making the necessary adjustments to navigate the stock and bond markets at a time of lofty valuations, the real estate market at a time of rising borrowing costs, and the job market at a time of new opportunities.

The outlook

There comes a point in every feel-good story when the protagonist, after being beaten down or put upon for years, finally musters the strength to get up off the floor and face the challenges at hand. At long last, that's where the economy finds itself today.

No one is predicting herculean growth in 2014. The consensus among forecasters surveyed by the National Association for Business Economics is that U.S. gross domestic product will actually expand a bit slower than the average rate of growth since 1930.

Yet for an economy that has performed slightly worse than expected in 2013 -- and that has faced one calamity after another since the global financial panic -- next year should mark the first time since the housing market's collapse that growth reaches the 3% mark, which has historically served as the dividing line between strength and weakness.

Plus, "the underlying fundamentals in the U.S. economy are stronger than the numbers would suggest," says Tim Hopper, chief economist for the investment manager TIAA-CREF. For instance, as housing roars back to life, consumer spending and job creation should also see a boost.

Related: Best new ways to make money

For instance, as housing roars back to life, consumer spending and job creation should also see a boost. To see how -- and for other positive signs -- consider the following.

1. Europe is coming back

The continent's economy is expected to expand about 1% next year. That's not exactly sizzling, but corporate profits there are recovering much faster.

Past 10 years
GDP: 0.9%
Earnings: 8.1%

Past 3 years
GDP: 0.2%
Earnings: 3.1%

Next 3-5 years
GDP: 1.4%
Earnings: 10.1%
Sources: Bloomberg, Eurostat

2. Housing is back

Each new home that's built creates about three new jobs, and new construction is expected to exceed 1 million units for the first time since the crisis. (See table below.)

3. Policymakers will back off

The Fed stated it will start raising rates only after unemployment falls to 6.5%. Even if job creation picks up, that could take over a year.

When will unemployment hit 6.5%?
If the monthly rate of job creation is....
300,000: 1st quarter 2014
250,000: 4th quarter 2014
200,000: 3rd quarter 2015
150,000: 1st quarter 2018
Notes: For unemployment rate calculation, labor force participation is assumed to grow from 63.6% to 64.2% by 2014. CBO projections are used thereafter. Source: The Hamilton Project

Make More in 2014

Stocks: Where to make money in 2014
Bonds: Tweak your mix in 2014
Real estate: Look for value in in 2014
Jobs: Boost your career in 2014
How 2013 shaped up

Housing and job creation

2014*	2,367,000	1,160,000
2013*	2,269,500	950,000
2012	2,193,000	781,000
2011	2,103,000	609,000
2010	1,022,000	587,000
2009	-5,052,000	554,000
2008	-3,617,000	906,000
2007	1,115,000	1,360,000
2006	2,071,000	1,800,000
2005	2,484,000	2,070,000
2004	2,019,000	1,960,000

Note: 2013 and 2014 figures are estimates. Sources: Bureau of Labor Statistics, Census Bureau, National Association for Business Economics

First Published: December 9, 2013: 10:08 AM ET

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Bonds: Tweak your mix in 2014

NEW YORK (Money Magazine)

A strengthening economy is usually bad news for bonds. Sure enough, when long-term interest rates rose 1.3 points from May to September, the average bond fund slumped more than 4%. The good news is that much of the rate pain is already baked in for 2014. Ten-year Treasury yields are expected to climb more modestly, by 0.7 point next year.

Rather than cutting back on bonds, tweak your mix. Charles Schwab fixed-income strategist Kathy Jones suggests shifting about 20% out of government-bond-centric funds and into these other options:

THE STRATEGY: Give munis a second chance

On top of the rockiness caused by rising interest rates, state and municipal debt suffered from investor jitters when Detroit declared bankruptcy in December and fiscal problems surfaced in Puerto Rico. For the year, though, muni funds lost only about 2%. Meanwhile, less than 1% of issues are in default, and state and city coffers are improving now that the economy is getting into gear.

YOUR BEST MOVE

Take advantage of the jitters. A 10-year AA-rated muni yields 2.78%, compared with 2.6% for an equivalent Treasury. That's before the tax break. If you're in the 25% federal bracket, that's like earning 3.7%.

Related: Best new ways to save money

MONEY 70 fund Vanguard Intermediate-Term Tax Exempt (VWITX) has a higher-than-average credit rating of A. Yet it has beaten 70% or more of its peers over the past one, three, and 10 years.

THE STRATEGY: Stay classy

When the economy improves, the traditional play is to take on more risk. High-yielding junk bonds, though, have fared so well lately that they're no longer a terrific deal.

Plus, high-yield debt has become junkier lately. Through the first 10 months of the year, issuance of non-investment-grade bonds with looser-than-normal repayment rules was at the highest level since 2007. "That tells us the sector is a little overdone, and high-quality bonds are more compelling now," says Jones.

YOUR BEST MOVE

Go corporate. Since government bonds still sport low yields and are most sensitive to rising rates, replace some of your exposure with a portfolio like SPDR Barclays Intermediate Term Corporate Bond ETF (ITR). The fund paid a 2.9% yield over the past 12 months -- a half point better than the Treasury-heavy Vanguard Total Bond Market Index Fund.

THE STRATEGY: Hold the middle ground

Yields are still so low on debt maturing in less than three years that you're losing out to inflation. Yet bonds maturing in more than 10 years could lose value even if rates rise modestly next year.

YOUR BEST MOVE

Focus on five. A good balance is found in funds with a duration -- a measure of rate sensitivity that you can look up at Morningstar.com -- of five years, such as USAA Intermediate-Term Bond (USIBX) .

Make More in 2014

The economy: What's ahead in 2014
Stocks: Where to make money in 2014
Real estate: Look for value in in 2014
Jobs: Boost your career in 2014
How 2013 shaped up

First Published: December 9, 2013: 9:58 AM ET

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Jobs: Boost your career in 2014

NEW YORK (Money Magazine)

"Strong" may not be the first word that comes to mind when you think of the labor market. After a promising start in 2013, the pace of job creation slowed during the year. Slowly but surely, though, the labor market is expected to firm up in 2014, economists say, with the rate of monthly job creation projected to return to about 200,000.

If that's the case, the unemployment rate is likely to fall modestly, from 7.3% to 6.8% by the end of 2014. While not a tremendous change, that would mark the lowest level in five years.

Those looking for work also face less competition today, in part since people have gradually found jobs in this recovery -- and since some have simply dropped out of the labor force. There are three job seekers for every opening, down from seven in the depths of the recession in 2009.

"We see an accelerating pace in the economy and employment," says NABE president Jack Kleinhenz.

For the college educated and professionals who are highly skilled, the picture is brighter still. The unemployment rate for workers with a bachelor's degree or higher is 3.7%, down from 5.1% three years ago.

Related: Best Jobs in America

Meanwhile, employers are having a tough time finding qualified candidates to fill jobs, particularly those with expertise in accounting, IT, mobile application development, business analytics, and regulatory compliance.

If you have skills or experience in demand, "this is a good time to make a move," says Joanie Ruge, senior VP of market development at Monster.com.

THE STRATEGY: Leverage employer fears of losing talent

The vast majority of companies are worried about losing highly skilled workers, according to a survey by outplacement firm OI Partners. No wonder star performers got raises this year that were more than 75% larger than what average performers received. Seize this opportunity.

YOUR BEST MOVE

Be an "intraperneur." Forty-two percent of new jobs are being filled by internal candidates, up from 28% in 2007, according to CareerXRoads -- in part because it's still cheaper to hire from within. So work your intrapreneurial skills. Let the decision-makers know what your goals are and sign up for cross-departmental projects that will expand your network.

THE STRATEGY: Don't waste your next move

You're probably feeling more secure in your job than you have in a while. Just 15% of workers say they're worried that they or their co-workers will be laid off in the next six months, down from 26% in 2009, according to Glassdoor's employment confidence survey.

Related: Steady paycheck or dream career? Have both

Meanwhile, a growing number of workers are quitting on their own as confidence about finding new work grows.

YOUR BEST MOVE

Play hard to get. With the desperation factor down, you don't have to jump at the first offer. Sure, a modest bump in pay is nice. But will the new job boost your skills, title, and most important, management responsibilities? Over the course of a career, the median lifetime pay for managers amounts to nearly $1 million more than for nonmanagers, according to PayScale.com.

At the very least, find out if the job is a good steppingstone. Use LinkedIn.com to research the career trajectory of people who have held that job and ask current employees about the firm's record at developing talent. "You want to be playing chess, not checkers, with your career," says Rusty Rueff, a career expert at Glassdoor.

Ask for more. More than two in five workers did not haggle over their current salary. They may not have felt secure enough to try. Now that your hand is improving, don't be afraid to seek higher pay when going for a new job. Rueff recommends asking for at least a 10% bump.

THE STRATEGY: Cast a wider net

In the financial crisis, managers seeking better pay or opportunities were hamstrung not just by the soft labor market, but also by a lousy housing market that made it hard to unload homes to move. That's changing. The percentage of managers and execs relocating for new jobs doubled to 14% in the first half of 2013 from a year earlier, owing to real estate's rebound, according to the outplacement firm Challenger Gray & Christmas.

YOUR BEST MOVE

Get ready to relocate. Job searches for senior managers and execs 51 to 60 typically take five months, says outplacement firm BPI Group. Moving will give you an edge, says Challenger CEO John Challenger. Executive searches by recruiters rose 21% this year, with strong growth in the Southwest, Southeast, and Midwest, according to ExecuNet, an online recruitment network for $100,000-plus-a-year managers. Moving may be easier now too, especially if the kids are grown and you're looking to downsize your home.

THE PENDULUM SWINGS

Here's a sign workers are gaining some leverage in the job market: Businesses are worried about losing top talent.

Companies reporting rising turnover
2012: 30%
2013: 51%
Note: Seasonally adjusted. Sources: BLS, Job Openings and Labor Turnover Survey, OI Partners

Make More in 2014

The economy: What's ahead in 2014
Stocks: Where to make money in 2014
Bonds: Tweak your mix in 2014
Real estate: Look for value in in 2014
How 2013 shaped up

First Published: December 9, 2013: 9:48 AM ET

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Snowden docs had NYTimes exec fearing for his life

The New York Times has partnered with other media outlets to release top-secret documents detailing the extent of unwarranted government surveillance. It's a frightening task.

NEW YORK (CNNMoney)

Rajiv Pant, chief technology officer at The New York Times (NYT), thought he could be killed for it.

It was the IT help request from hell. British newspaper The Guardian provided the Times with top-secret electronic documents exposed by former National Security Agency contractor Edward Snowden. Pant oversaw the handoff between the Guardian and the New York Times.

At the recent AppSec USA cybersecurity conference, the Times' chief technology officer described those tense initial moments.

Related: Online privacy is dead

The Times had to quietly sneak hard drives containing the top-secret documents back to its New York headquarters. Pant didn't explain how the newspaper did it but said, "We smuggled it into the country, basically."

After the Times set up a special, highly guarded room to isolate the sensitive files, Pant made sure he didn't take a single peak as the PowerPoint slides and files made their way into the newsroom's computers.

"It can get scary. I told myself: 'I don't want to see anything on those drives. I could be putting my life at risk,'" Pant said.

When pressed to further explain his fears, Pant said he's worried about how far the U.S. government will go to hunt down anyone who's seen this batch of classified data without a clearance.

Then came the most harrowing part. Pant had to buy extra hard drives to serve as backup copies of the top-secret files. He made his way to a local Radioshack (RSH) (there's one directly in front of the New York Times' building).

He was about to purchase a hard drive on his credit card when he realized that the same government secretly monitoring journalists' phone records could also be tracking their purchases. He grabbed five other random items and bought them in cash.

"You almost become paranoid," Pant said.

His fears about retribution aren't completely the stuff of tinfoil hat conspiracy theorists. Federal prosecutors have filed charges against Snowden, citing the 1917 Espionage Act. Congressman Peter King, a Republican from New York, has called for the prosecution of Glenn Greenwald, the Guardian journalist who first exposed Snowden's revelations.

And this week, the Guardian's top editor, Alan Rusbridger, told British Parliament that the government has engaged in a campaign of intimidation against his organization. Politicians have threatened prosecution, and officials demanded that the Guardian destroy hardware housing top-secret documents. Rusbridger said his staff complied in August, taking to the basement and using power tools to ruin the hard drives -- under the careful watch of two agents from Britain's NSA equivalent, the Government Communications Headquarters, or GCHQ.

First Published: December 9, 2013: 9:55 AM ET

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The myth of the American Dream

NEW YORK (CNNMoney)

It's easier to rise above the class you're born into in countries like Japan, Germany, Australia, and the Scandinavian nations, according to research from University of Ottawa economist and current Russell Sage Foundation Fellow Miles Corak.

Among the major developed countries, only in Italy and the United Kingdom is there less economic mobility, according to Corak.

The research measures "intergenerational earnings elasticity" -- a type of economic mobility that measures the correlation between what your parents make and what you make one generation later -- in a number of different countries around the world.

Most Americans born into the lower class stay in the lower class.

Economists aren't certain exactly why some countries have a greater degree of mobility than others, but they do point to certain similarities.

Greater current inequality: The more unequal a society is currently, the greater the chance that the children will be stuck in the same sphere. This is because wealthy families are able to provide things like tutors and extracurricular activities -- and the time to pursue them -- that poorer families often cannot.

Also, education matters a lot more now than it did 100 years ago in terms of getting a good job.

"The rich can pump a lot more money into their kids' future," said Corak.

This helps explain why counties like China, India and many South American nations also exhibit relatively little economic mobility.

Families: Having a stable home life is also associated with the ability to climb the economic ladder, said Corak. The United States tends to have higher rates of divorce, single-parent homes, and teenage pregnancy than many other industrialized counties.

Social policies: Counties that redistribute wealth -- through, say, higher taxes on the rich and more spending on the poor -- tend to have greater social mobility, said Francisco Ferreira, an economist at the World Bank.

This is especially true when it comes to education spending. Critics have long contended that the U.S. system for funding education -- where school funding is largely based on property taxes -- perpetuates inequality far more so than a system that taxes the whole country for schools, then redistributes that money to the districts that are most needy.

Related: Why the highest paid people make so much money

If why Americans have a harder time making it into the middle class is a bit of a mystery to economists, why Americans cling to the belief that it's still easy to do is even more baffling.

It could be because, during the late 1800s and early 1900, the United States was a much more mobile country than Britain, said Jason Long, an economist at Wheaton College in Illinois.

"It's clear that Americans still believe that America has exceptional mobility, and that's not true," said Long. He calling it "vexing" that "lots of people could be systematically mistaken about verifiable, factual information."

But no society has total mobility. Class is always going to be somewhat correlated to one's upbringing, Corak noted.

First Published: December 9, 2013: 7:00 AM ET

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What correction? Stocks continue to rally

Click here for more market data.

NEW YORK (CNNMoney)

The Dow Jones Industrial Average, S&P 500 and Nasdaq all moved slightly higher.

The strong jobs report showed the U.S. unemployment rate fell to 7% in November -- the lowest level in five years -- as more people said they were getting jobs and joining the labor force. Markets surged, with the Dow rallying by nearly 200 points.

And there was more positive news for the global economy over the weekend in the form of the first major world trade deal in nearly 20 years.

Related: No news may be good news for stocks

On Monday, investors welcomed the debut of the largest air carrier in the world, as American Airlines Group, the airline giant born from the American Airlines and US Airways merger, began trading on the Nasdaq under the new symbol AAL.

Shares of American Airlines group surged 9% out of the gate. The deal, which cleared a series of legal hurdles, including an antitrust lawsuit this fall from the Justice Department and a last-minute challenge from a consumer group, was inked Monday morning before the opening bell.

Related: American Airlines, US Airways to form largest air carrier

Sysco (SYY, Fortune 500) soared more than 16% after the company announced plans to buy rival US Foods for $3.5 billion, bringing together two of the largest food distributors in the country.

McDonald's (MCD, Fortune 500) fell more than 1% egven though the fast-food chain reporting a slight increase in global sales.

Related: Fear & Greed Index still shows greed

European markets were mostly higher in midday trading, while Asian markets ended with gains.

First Published: December 9, 2013: 9:42 AM ET

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