Bulgaria tries to contain bank run

The small European Union nation has been experiencing a bank run over the last few days.

LONDON (CNNMoney)

Officials blamed the rush to withdraw deposits on a coordinated attempt by individuals to destabilize the banking system by spreading unfounded rumors via social media, emails and text messages.

"There is no cause or reason to give way to panic. There is no banking crisis, there is a crisis of trust and there is a criminal attack," said Bulgaria's President Rosen Plevneliev in a public address on Sunday after the arrests were made.

It all started roughly 10 days ago when messages began circulating warning people that the country's financial system was unstable. Bulgaria's Corporate Commercial Bank ran out of money and was placed under state control.

The collapse revived memories of a previous Bulgarian banking crash in the 1990s, and as the rumors kept coming another Bulgarian bank -- First Investment Bank -- was overwhelmed by people rushing to withdraw their savings.

That bank was forced to close temporarily on Friday after its branches and ATMs were drained.

In response, the central bank said over the weekend it would provide a credit line worth 3.3 billion Bulgarian lev ($2.3 billion) to the country's banks to reassure people about the safety of their savings.

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It also lashed out at the Bulgarians suspected of fueling the bank run.

"We insist that the competent authorities ... apply the full force of the law against the disseminators of false and malicious rumors and speculation."

According to the country's national security agency, one of the messages sent around said: "Corporate Commercial Bank IS NOT THE ONLY bank in [a] liquidity crisis ... Deposits of citizens will be lost or sacrificed [to save] the Bulgarian economy."

Bulgaria is one of the poorest countries in the European Union. Its economy barely grew in 2013 and it has struggled with high unemployment, corruption and an aging population. However, the International Monetary Fund and EU view its banking system as relatively stable.

"The banking system in Bulgaria is well capitalized and liquid. No spillovers to the rest of the region are expected," said an IMF spokesperson.

The country of 7.6 million people is readying itself for snap parliamentary elections on October 5 after facing weeks of political uncertainty. Some parts of the country have also experienced fatal flash flooding and mudslides this month.

--CNN's Radina Gigova contributed to this report

First Published: June 30, 2014: 11:31 AM ET

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Why you don't need to buy extra car rental insurance

NEW YORK (CNNMoney)

Often times, people end up buying supplemental insurance protection that they really don't need, said Odysseas Papadimitriou, CEO of credit card comparison site, CardHub.com. That can add anywhere from $15 to $30 a day to the cost of a rental.

Related: Best travel site rewards programs

"The majority of consumers are covered by their own auto insurance, but they may not know it," he said. "They may be spending extra money when they don't have to."

And those who aren't covered by their own insurance, are likely covered by their credit card, he said. All four major credit card issuers, Visa (V), American Express (AXP), MasterCard (MA) and Discover (DFS), provide some form of rental car insurance coverage. Although, MasterCard issues a few cards that don't offer coverage.

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CardHub rated the card issuers based on the extent and length of the coverage they provide, how clearly they state what's covered and how easy it is to get claims paid. American Express (AXP) received the highest rating of 90% for its car rental insurance; Discover (DFS) was second at 88%; MasterCard (MA) third at 79%; and Visa (V) ranked last at 74%.

To make sure you get covered, you must charge your entire car rental on your credit card and decline the supplemental collision damage coverage offered by the rental company. If you sign up for that insurance, you won't be covered by the credit card company.

Coverage from your credit card comes with restrictions, though, said Papadimitriou. Several types of vehicles aren't covered, including trucks with open beds and off-road vehicles, as well as exotic or expensive cars like Ferraris or Jaguars. And American Express doesn't cover certain popular SUVs, such as Chevy Suburbans, Ford Expeditions and Range Rovers.

Related: The riskiest spots for natural disasters in the U.S.

Visa and MasterCard may not cover damages that occur on dirt or gravel roads and other cards don't cover wheels and rims. Some card issuers cap rental periods at 15 days, after which the insurance lapses. None of the card issuers will insure a rental car for more than 30 days straight.

Rental cars in some countries are not eligible for credit card insurance. The ones most often named include Ireland, Israel, Italy, Jamaica and Australia.

One other important note: Unless your personal auto insurance also covers business use, your personal policy won't cover damage caused when you're renting a car for a business trip.

Drivers who aren't sure about their coverage should call their credit card company before they leave for their trip.

First Published: June 30, 2014: 6:04 AM ET

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Consumer Reports rates some Graco strollers "don't buy"

Consumer Reports says that some Graco strollers, including the Ready2Grow Classic Connect LX, can't handle the tilt test.

NEW YORK (CNNMoney)

"We've tested more than 160 strollers, single and double, that are listed in our ratings, and this is the only one where the brake gave way," said John Galeotafiore, head of stroller testing for Consumer Reports, in a video on the nonprofit organization's web site.

Models including the Ready2Grow Classic Connect LX, and the Classic Connect, Click Connect LX and Click Connect have all been rated "don't buy."

The strollers were tested on a tilt table, and the brake gave way when the angle was raised to 18 degrees.

The organization suggested that consumers who have already purchased these strollers should request a refund from Graco.

Graco called Consumer Reports' testing methods "unreasonably excessive."

"While we share a common commitment to the safety of families that use our products, we strongly disagree with Consumer Reports' assertion that our Ready2Grow Classic Connect stroller is unsafe," a spokeswoman told CNNMoney.

She said the test "far surpasses" current federal guidelines, and she said Graco was upgrading the brake system to conform with more rigorous federal safety standards that will go into effect in September 2015.

Consumer Reports rates another Graco stroller, the FastAction Fold Duo Click Connect, as a "best buy."

Related: How New York's 1% get their kids into pre-school

First Published: June 30, 2014: 9:37 AM ET

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Adrenaline rush! GoPro surges again

NEW YORK (CNNMoney)

Shares of GoPro (GPRO) were up nearly 8% in late morning trading Monday. The stock has gone up dramatically in its first three days as a public company, surging more than 60% from its offering price.

GoPro went public to much fanfare on Thursday. But is buying the stock at these levels now more dangerous than jumping out of an airplane with a GoPro Hero camera on your head?

The only Wall Street analyst who currently covers the company says he's a little worried about the stock's meteoric rise. But he adds it might be a mistake for long-term investors to get too caught up in valuation concerns.

Charlie Anderson, an analyst with Dougherty & Co. who initiated coverage on GoPro just before its initial public offering last week, said he's still a fan of the stock -- even though it's now well above his target price of $28 a share. GoPro priced its IPO at $24 and is now trading around $39.

He conceded that the stock is "obviously trading on euphoria," but he thinks that the reason for this is because there is such a small supply of shares available.

The company sold about 18 million of its 123 million shares outstanding during the offering. Anderson said that because that was a mere sliver of the company's stock, investors that didn't get a piece of the offering before the IPO were forced to buy it once it started trading. That has driven the price higher.

Anderson thinks that many big hedge funds and mutual funds do not want to miss out on GoPro because it should be able to report strong results for the next few quarters. He's predicting sales growth of nearly 20% this year. And GoPro, unlike many other hot tech IPOs, is profitable.

Still, isn't GoPro a bit frothy at this point?

Shares are trading at about 50 times his earnings forecasts for this year. And with a market value of about $4.8 billion, GoPro is worth more than several well-known companies in the S&P 500, including Cablevision (CVC), GameStop (GME) and Urban Outfitters (URBN).

There are obvious risks for GoPro besides valuation too. What happens if Apple (AAPL, Tech30) and Samsung start building more durable smartphones with even better cameras? Won't that hurt GoPro?

Remember the Flip Video camera that was all the rage a few years ago? Cisco (CSCO, Tech30) bought the company ... only to watch the camera quickly lose relevance once it became easy to shoot and upload videos on the iPhone and other smartphones.

There's also the tale of Garmin (GRMN). The GPS maker's shares are worth only about half of their peak price from 2007. Like Flip Video, Garmin no longer was a must-buy for consumers once free navigation apps like MapQuest, Waze and Google Maps became available.

Anderson isn't expecting GoPro to suffer the same fate though.

"Why did Flip go away and Garmin decline? Both of those devices were subsumed by the smartphone," he said. "GoPro does not have the same risk. Nobody is strapping their iPhone to their helmet while riding a surfboard."

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It's a good point. Anderson also noted that his estimates for the stock are likely to be lower than many other Wall Street analysts. Anderson does not work for one of the investment banks that was involved in helping to take GoPro public. That's why he's allowed to launch coverage now. Analysts at the underwriters have to wait 25 days before they can issue their first reports.

Analysts at firms that are involved in IPO underwriting tend to be a little more bullish than those who don't have the proverbial skin in the game.

"I would not be shocked if the bankers have higher estimates," he said. "This stock is going to be so volatile but it is set up for a great quarter. I would hate for people to worry about valuation with great numbers ahead of it."

He said that investors who didn't buy momentum stocks like Chipotle (CMG) and Google (GOOGL, Tech30) when they went pubic now realize with hindsight that worrying about their valuations back then was silly.

Comparing GoPro to Google and Chipotle is high praise. So if you enjoy a good adrenaline rush, GoPro may be the right stock for you. But it's still not for the faint of heart.

First Published: June 30, 2014: 12:07 PM ET

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BNP Paribas braces for $9 billion fine: reports

BNP Paribas CEO Jean-Laurent Bonnafe.

LONDON (CNNMoney)

The punishment for helping clients dodge sanctions on Iran, Sudan and Cuba will also include a temporary ban on BNP Paribas (BNPQF) clearing payments in dollars, starting in January, the Financial Times reported Monday.

"I want to say it clearly here: we will receive a heavy penalty," BNP Chief Executive Officer Jean-Laurent Bonnafe was quoted as saying by Reuters in an internal email to staff.

BNP Paribas declined to comment.

U.S. authorities are expected to reveal details of the settlement later Monday, concluding a long-running criminal investigation.

The settlement between the bank and prosecutors had been expected for months. Shares in the bank edged about 0.5% higher in Paris, having fallen more than 12% so far this year in anticipation.

BNP Paribas had previously set aside $1.1 billion to cover the costs of any penalties arising from the U.S. investigation, but warned in late April that the fines could far exceed that amount.

The Wall Street Journal said the bank would have to slash its dividend and raise billions of euros by issuing bonds.

The fine dwarfs HSBC (HSBC)'s $1.9 billion penalty in 2012 for similar offenses, and the $2.6 billion Credit Suisse (CS) paid in May to settle tax evasion claims.

The settlement comes at a sensitive time for European banks, which are under pressure to increase lending to get the economy moving, while shoring up their finances ahead of region-wide stress tests due later this year.

Earlier this month, Jean Claude Trichet, former president of the European Central Bank, told CNN that a penalty in the range of $10 billion could carry risks for the global banking system. He said this kind of fine was neither fair, just, nor proportionate.

Standard and Poor's has warned it could cut the bank's long term credit rating once it reviewed the size of the fine and the nature of any additional penalties.

First Published: June 30, 2014: 5:58 AM ET

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Hong Kong's 'Occupy' takes on Beijing

Black-clad lawyers gather at Hong Kong's Court of Final Appeal to protest Beijing's influence.

HONG KONG (CNNMoney)

The pro-democracy protests, which recall the Occupy Wall Street movement in New York, have divided the powerful business community. Some worry that they could deter investors.

Tuesday's march to the city's business district takes place on the 17th anniversary of Hong Kong's handover from British to Chinese rule, and could attract hundreds of thousands of protesters.

Political and economic tensions in the territory have been rising recently, fanned by Beijing's release of a controversial white paper asserting its control.

City activists accuse China of reneging on its "one country, two systems" pledge that was a condition of Hong Kong's return in 1997.

Hong Kong enjoys a high level of economic autonomy, but Beijing's critics say it is encroaching on judicial and political freedoms. On Friday, 1,800 of the city's lawyers, dressed in black, marched in protest.

Bigger flash points are likely over the next few months before a decision over how Hong Kong will elect its next chief executive, the city's highest office.

Pro-democracy activists want Hong Kong residents to elect the chief executive directly. Beijing is said to favor a process that would allow it to screen candidates.

The most visible pro-democracy group -- Occupy Central With Love and Peace -- conducted an unofficial election of its own this month, drawing nearly 790,000 voters, or almost a quarter of the electorate.

The group is also planning a demonstration and other acts of civil disobedience designed to snarl traffic and disrupt operations in the central business district.

Related: Why Occupy Wall Street fizzled

Although they share a moniker, Hong Kong's "Occupy" supporters are not affiliated with the protest movement that got its start in Manhattan's Zuccotti Park. The groups share concerns over rising income inequality, but the Hong Kong group's immediate goal is to secure full voting rights.

"Hong Kong people really want to show to China, to the whole world, that we are determined to have full democracy," organizer Benny Tai told CNN on Monday.

The group's plan to "occupy Central" has set many in the city's establishment on edge.

Hong Kong affiliates of the big four accounting firms -- Deloitte, Ernst & Young, PricewaterhouseCoopers and KPMG -- placed an advertisement in local newspapers last week, trumpeting their opposition to the movement.

"We are concerned that Occupy Central will have a negative effect on the rule of law, social order and the economy of Hong Kong," they said in the ad. "We worry that this would cause international and local investors to relocate their Hong Kong's headquarters or even relocate their businesses."

The highly unusual public intervention by multinational companies in local politics drew widespread criticism. The Financial Times reported that the firms' head offices were not made aware of the plan prior to publication.

Paul Gillis, a professor at Peking University's Guanghua School of Management, wrote on his blog that the "arrogance of the firms is stunning" and the decision would diminish their brand value.

Some employees of the accounting firms shot back Monday -- taking out an ad of their own in support of Occupy Central.

First Published: June 30, 2014: 7:02 AM ET

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Should happiness, more than GDP, define a nation's success?

The tiny nation of Bhutan started measuring "gross national happiness" in the 1970s. More recently, public experts have started to tout the importance of measuring citizens' well-being in addition to GDP.

NEW YORK (CNNMoney)

But in recent years, there's been a quest to define and measure it, especially in the context of a prosperous economy.

That's because economic growth as measured by gross domestic product doesn't really tell us much about citizens' general well-being.

"For example, traffic jams may increase GDP as a result of the increased use of gasoline, but obviously not the quality of life," according to a report by an international commission chaired by Nobel Prize-winning economist Joseph Stiglitz.

The assumption is that the more economic growth the better. Legislators are forever debating the merits of a measure on the basis of whether it would create jobs and boost GDP.

But rarely do you hear lawmakers debate whether a measure will boost or detract from citizens' well-being, of which income is just one part.

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Take North Dakota. Its economy has doubled in the past 25 years thanks to a massive oil boom. Incomes have soared, but so have prices, traffic, crime, and housing shortages.

Well-being, of course, relies on many factors -- from health and education, to environment and culture, to the quality of governance, your community and how you use your time.

There's a growing international chorus that thinks this kind of well-being should be measured and used as a guide when formulating policy and tracking social progress.

The tiny nation of Bhutan pioneered the effort, adopting a "gross national happiness index" decades ago.

The rest of the world has been slow to catch on. But there have been nascent efforts in recent years to address the issue.

In 2011, the U.N. General Assembly passed a resolution encouraging countries to measure their citizens' happiness and use that measure to help guide public policies.

More recently, the Organization for Economic Cooperation and Development (OECD) has created guidelines for nations that want to measure well-being.

In the United States, four states -- Maryland, Vermont, Oregon and Colorado -- have developed a "genuine progress indicator," according to Demos, a left-leaning think tank.

The GPI seeks to quantify in a consistent way the cost and value of factors not measured by GDP.

For instance, Maryland -- which was the first state to adopt a GPI -- is seeking to assess, among other things, the "environmental and social costs of what we buy, [and] the quality-of-life impacts of how we live."

Some cities and towns, meanwhile, have started their own "happiness initiatives," distributing gross happiness surveys to residents to give local policymakers a sense of the level of their constituents satisfaction in different areas.

It doesn't appear that there will be any kind of universal agreement to measure citizens' happiness and well-being anytime soon.

But proponents -- such as the Sustainable Development Solutions Network (SDSN) -- are trying to make the economic case to governments as to why they should.

"Happy people live longer, are more productive, earn more, and are also better citizens. Well-being should be developed both for its own sake and for its side-effects," SDSN noted in its 2013 World Happiness Report.

First Published: June 30, 2014: 7:06 AM ET

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Enough with Millennials. Here's what Gen X thinks

Gen X is the forgotten generation.

NEW YORK (CNNMoney)

They are called Gen X, but they are often overlooked by pollsters, the media and just about everyone else.

Born between 1964 and 1980, Gen X got its name from a 1991 book Generation X: Tales for an Accelerated Culture, by Canadian author Douglas Coupland.

When they were coming of age in the 1990s, they were considered slackers and aimless. But then, they were just forgotten.

The Pew Research Center recently shed some light on what it termed "America's neglected middle child." Turns out they are less likely to be married than the Baby Boomers, but more religious than Millennials.

When it comes to social and political views, the liberal Millennials didn't spring from nowhere. Gen Xers were already leaning that way, breaking from the more button-down Baby Boomers.

But even Gen Xers aren't sure what their cohort stands for, according to Paul Taylor, Pew's executive vice president for special projects. They are less likely than Millennials and Baby Boomers to think their generation is unique, and they don't have as firm a view on what makes them special.

There's are reasons why Gen X is so often ignored, said Taylor. There are fewer of them: Just 65 million, compared to 77 million Boomers and roughly 83 million Millennials. And they span just 16 years, whereas most generations encompass two decades.

Then again, they may not care either.

"From everything we know about them, they're savvy, skeptical and self-reliant. They're not into preening or pampering, and they just might not give much of a hoot what others think of them. Or whether others think of them at all," Taylor wrote.

First Published: June 30, 2014: 9:40 AM ET

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GM offers victims more than $1 million

NEW YORK (CNNMoney)

The automaker will give another $300,000 for each surviving spouse and dependent, in addition to a sum of money that will be determined by the victims' earning potential.

The automaker also said that it will not cap the total amount of money it will pay to the compensation fund.

At least 13 people died, and many more were injured as result of a faulty ignition switch installed in 2.6 million GM cars.

The automaker is also offering money to those injured in crashes that were caused by the defect in the cars.

Attorney Kenneth Feinberg, who devised compensation plans for victims after 9/11 and the BP oil spill, issued the details at a press conference Monday, about four months after GM recalled the affected vehicles. He was hired by GM (GM) in April as a consultant.

The 13 people that GM says were killed as a result of the ignition switch flaw died when the front airbags failed to deploy.

But Feinberg said for the first time today that any passengers killed or hurt are also eligible for compensation.

Additionally, the passengers and drivers in any other cars involved in a crash are all eligible, as are any pedestrians involved.

Victims may file a claim even if their own negligence, such as speeding or driving drunk, contributed to the crash.

GM employees first knew that the ignition switches were malfunctioning back in 2004. But the automaker didn't issue a recall until a decade later. Some deaths and injuries could have been avoided had the recall been issued sooner.

Payouts to those who suffered serious, life-altering injuries will be determined on a case-by-case basis. Those with less serious injuries will be paid depending on the number of nights they spent at the hospital. Someone who spent one night in the hospital will receive $20,000, while someone hospitalized 32 nights or more will be paid $500,000.

The compensation plan does with a caveat: Any victim who accepts the money waives their right to sue GM. The program is voluntary, and victims can bypass the whole program and take GM straight to court instead.

But taking the automaker to court could be an uphill battle since a bankruptcy court gave the company a liability shield for incidents that happened prior to its filing in 2009.

Anyone who lost a loved one or was seriously injured in a crash related to the recall can file a claim with GM between Aug. 1 and Dec. 31, 2014.

Feinberg also said he will hold a private meeting with any claimant that wishes to do so.

First Published: June 30, 2014: 10:20 AM ET

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Stock market flirts with new records

NEW YORK (CNNMoney)

After starting in the red, a bullish report on home sales helped lift stocks slightly.

Here's what to keep an eye on Monday:

1. Halftime report: The S&P 500 is up modestly, erasing earlier losses after strong real estate news. The Dow Jones Industrial Average is hovering around flat, and the Nasdaq extended its early gains and is up about 0.2%.

The broad index needs to only end above 1,962.87 to log its 23rd record close of the year (it's currently right around that point). The Dow needs to land above 16,947.08 for its 12th record close.

Monday marks the end of the month, quarter and first half of 2014. The year started ominously due to emerging market concerns and severe winter weather, but things have turned around on Wall Street along with the warmer temperatures.

Related: The 2014 half-time report

The S&P 500 is up 6% during the first six months of 2014, even after losing some ground last week. Of course, the first-half rally pales in comparison with 2013 when the S&P 500 soared 12.6% by this point.

Volatility has all but vanished on Wall Street. The VIX, or so-called "fear gauge," recently plunged to seven-year lows and remains at just over 11 -- which is far lower than its historical average of about 20.

Related: Fear & Greed Index still extremely greedy

2. More housing hopes: Wall Street cheered new signs of progress in the very important housing market. The National Association of Realtors said U.S. pending home sales jumped 6.1% in May, representing the biggest monthly increase since April 2010. Economists had been anticipating a more modest increase.

The bullish housing news lifted shares of home builders like Lennar (LEN), KB Home (KBH) and PulteGroup (PHM).

3. Stock movers -- Yahoo, American Apparel, Mannkind: Yahoo (YHOO, Tech30) enjoyed a 2% bump after the Internet company was upgraded to "overweight" by Piper Jaffray.

While Yahoo's core business remains "challenged," analyst Gene Munster said his bullish call is based on the belief that the company's stake in Alibaba is "undervalued." Last week, the Chinese e-commerce giant revealed plans to list its highly anticipated initial public offering on the New York Stock Exchange.

American Apparel (APP) tumbled 15% after the company announced plans to adopt a shareholder rights plan in an effort to prevented ousted chairman Dov Charney from seizing control.

Related: Founders in hot water at American Apparel, Lululemon

Shares of MannKind (MNKD) soared 10% after the company said the Food and Drug Administration approved a powder form of insulin that is inhaled.

U.S. Steel (X) shed 1% as investors react to the company being kicked out of the S&P 500. The steel maker, an original member of the S&P 500, is being replaced by Martin Marietta Materials (MLM), which traded about 2% higher on Monday.

PPG Industries (PPG) logged a 3% gain after unveiling plans to acquire a Mexican coatings company for about $2.3 billion.

Bank of New York Mellon (BK) advanced nearly 3% as activist investor Nelson Peltz and his Trian Partners revealed a $1.05 billion stake in the financial company.

4. Investors yawn at Facebook, BNP headlines: Facebook (FB, Tech30) is in hot water after it was revealed the social network conducted a 'mood' experiment on users without their knowledge or explicit consent. Facebook's terms of service give the company permission to conduct this kind of research, but many users have reacted with anger.

Wall Street, however, was unmoved by the drama. Facebook's stock is flat.

The U.S. Department of Justice is expected to announce a multi-billion dollar settlement with French banking giant BNP Paribas (BNPQY) on Monday. The bank has been subject to a long running criminal investigation over accusations that it breached U.S. sanctions on Iran, Sudan and other countries. Shares of BNP rose slightly in Paris.

5. Dubai crumbles, Bulgaria booms: Investors continue to give Dubai's stock market a big thumbs down.

The DFM General Index plunged 4.4% on Monday due to worries about property stocks, especially contracting giant Arabtec Holdings. Dubai plummeted 22% in June, its worst month since 2008.

On the other hand, Bulgaria's stock market raced almost 5% higher after the European Union gave the green light to the country providing $2.3 billion in state aid for banks. The move follows a series of arrests of men accused of fueling bank runs.

Other European markets were mixed in midday trading. Asian markets closed mixed. The main loser of the day was Australia's ASX All Ordinaries index, which dropped by 0.9%.

It's also worth keeping an eye on Argentina's markets. The country faces a Monday deadline to pay two groups of bondholders. The way things unfold from here will determine Argentina's ability to move past its 2001 default and regain access to foreign funds.

First Published: June 30, 2014: 9:50 AM ET

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American Apparel's ousted CEO fights back

NEW YORK (CNNMoney)

In a letter to the company's board, Glaser, who heads Glaser-Weil's litigation department, claims American Apparel "violated its legal and contractual obligations to Mr. Charney in numerous respects" that have resulted in "substantial professional, reputational and financial injuries to Mr. Charney."

Charney, who founded American Apparel (APP) in 1998, was ousted by the board last week.

According to sources familiar with the situation, Charney was given two options: either step aside quietly and take a creative role that would pay around $1 million a year, or face being fired with cause.

"By presenting Mr. Charney with this absurd and unreasonable demand, the Company acted in a manner that was not merely unconscionable but illegal," Glaser claims in her letter to the board.

Last week, American Apparel board member Allan Mayer told CNNMoney that the board had learned earlier this year of "disturbing" information that suggested "misconduct" by Charney.

Related: 'Disturbing misconduct' at American Apparel

Charney was notorious for controversial behavior, including a series of sexual harassment suits filed by employees in recent years.

Mayer said the board was aware of these reports, but said this time it had "concrete facts," which led to an internal investigation.

A person with knowledge of the internal investigation said it was related to Charney's response to allegations of sexual harassment.

Mayer told CNNMoney last week that the company was prepared for a fight. "[Charney] certainly indicated that he was not going to accept it," he said.

Both Mayer and Charney declined to comment for this story.

Glaser was also unavailable for immediate comment.

Related: American Apparel ousts founder, CEO

American Apparel has been struggling for years. Company shares, which topped $15 as recently as 2007, now trade for less than $1.

Mayer thinks the firing will ultimately be a plus for the struggling retailer.

"There are people who will tell you that Dov's reputation was a real drag on the company. There were people and firms unwilling to do business because Dov ran the company," said Mayer. "Since we announced the decision, we've been contacted by mainstream, top of the line, institutions that have not been interested in supporting us."

Glaser is demanding a meeting with the board no later than Monday, June 23, "to negotiate a process whereby Mr. Charney will be fully reinstated to his positions within the Company and to attempt to negotiate a process whereby Mr. Charney's business reputation can be restored."

First Published: June 21, 2014: 2:46 PM ET

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No. 2 Republican hates Export-Import bank

Boeing is one of several U.S. companies that benefit from export subsidies by the Export-Import Bank.

NEW YORK (CNNMoney)

Rep. Kevin McCarthy told Fox News on Sunday that the private sector can do "what the Ex-Im Bank does."

The Export-Import Bank is an 80-year-old federal agency, which provides loans and guarantees to foreign countries so they can buy U.S. products.

In essence, the federal government subsidizes exports to give U.S. corporations a leg up against foreign companies, especially if they receive their own government subsidies, like those in China.

These guarantees have helped finance sales of Boeing (BA)'s 787 Dreamliners to India, Poland and Ethiopia and General Electric (GE) trains to Pakistan.

Related: U.S. economy shrinks, but it's not a big deal

In 2012, Congress reauthorized the Ex-Im Bank for four years, and raised its loan limits to $140 billion from $100 billion, largely thanks to support from House Majority Leader Eric Cantor.

However, Cantor will soon be out of office after losing a primary in Virginia.

The Ex-Im bank's ability to make new loans runs out this year. Congress will vote to decide whether the bank will continue making new loans or let its borrowing authority to expire.

Five things to know about Kevin McCarthy

McCarthy's criticism of the Ex-Im Bank came in his first national television interview since his election to the job as the next House majority leader.

Conservative Republicans groups like the Heritage Foundation and the libertarian Cato Institute have said the Ex-Im Bank is corporate welfare, because giant companies like Boeing, General Electric, Caterpillar (CAT) and Bechtel account for most of the dollars loaned by the bank.

Big Business groups, like the U.S. Chamber of Commerce and National Association of Manufacturers, say the bank supports higher paying manufacturing jobs and helps the U.S. compete globally.

"Allowing the Ex-Im Bank to close would be a gift to our competitors and would result in the loss of manufacturing in the United States," said Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers.

The White House and the Senate have been supportive of renewing the bank's ability to make loans.

First Published: June 23, 2014: 10:49 AM ET

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Will the Dow crack 17,000 this week?

Click for more market data.

NEW YORK (CNNMoney)

The Dow Jones industrial average is about 50 points away from crossing 17,000 for the first time ever. The blue-chip average closed at a record high Friday, as did the broader S&P 500 index.

The Dow index of 30 of the biggest and best known U.S. brands has been breaking through these "psychologically important" milestones with remarkable speed. It's considered a good gauge of the health of corporate America.

If the Dow crosses 17,000 this week, it will be less than six months after it first crossed 16,000. It rose above 15,000 for the first time just over a year ago.

In 2007, the Dow went from 13,000 to 14,000 in about four months.

But it wasn't always this way. It took about seven years for the Dow to plow through 12,000.

When the Dow rose to 10,000 for the first time in 1999, floor traders broke out commemorative baseball caps to mark the occasion.

Most analysts say the round numbers are not technically important, but they are a good indication of the current mood among investors.

Stocks have been in a bull market for more than five years, and the bulls don't seem ready to throw in the towel any time soon.

CNNMoney's Fear & Greed index is at a level indicating that investors are feeling extremely greedy. The index stood at 95 out of 100 on Friday.

With greed driving the market, fear seems to have vanished.

Related: Where's all the fear in the stock market

The market's so-called "fear gauge," the VIX (VIX), is at the lowest levels since 2007. Some are starting to say that investors are complacent.

Stocks jumped Wednesday after Federal Reserve chief Janet Yellen reiterated that the central bank is unlikely to hike interest rates in the near future.

The Fed's policies, along with a gradually improving economic backdrop, have powered the bull market thus far. Investors seem confident that this fortuitous combination will remain in place for a while longer.

But there are some mixed signals below the surface.

The top performing Dow stock this year is Caterpillar (CAT), which is up 20% since January.

That suggests investors are optimistic about the global economy, since the heavy equipment maker sells products used to construct buildings and infrastructure around the world.

Related: Rich investors worry about stock market

But banks and consumer-oriented companies are among the worst performers on the Dow this year.

Visa (V) is down nearly 6% since January, making it the worst performer in the index. Goldman Sachs (GS) and JPMorgan (JPM) are also down year-to-date.

Bank stocks have had a strong run over the past few years, so it's not surprising to see them underperform. But a healthy banking sector is usually considered a prerequisite for a robust economic recovery.

Wal-Mart (WMT)and Nike (NKE) are also bringing up the rear on the Dow. That suggests investors don't have much confidence in the outlook for consumer spending.

First Published: June 22, 2014: 9:04 AM ET

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This doctor cures hangovers for $250

The I.V. Doctor helping hungover patients after a rough night in the Hamptons.

NEW YORK (CNNMoney)

That's where the I.V. Doctor came in. For a few hundred dollars each, a nurse showed up with half a dozen I.V. bags and brought them back to life.

The I.V. Doctor, a service started in December by New York urologist Dr. Elliot Nadelson and his surgical resident son Adam, totes intravenous hydration and other medicine to help quell hangovers to ailing New Yorkers in luxe Hamptons beach homes, and apartments and offices throughout the city.

Dr. Adam Nadelson said the service has about 60 nurses in the city and 12 more in the Hamptons, who set clients up with about 200 ml of fluid, and any combination of anti-nausea, anti-heartburn and anti-inflammatory or headache medicine. The full cocktail of all the drugs, which Nadelson said is their most popular request, costs $249.

Related: Can enough money buy you eternal youth?

While Nadelson said his clients range from European princesses to Olympic track stars, the majority of those who use his service are in finance. It helps when they're working long hours, entertaining clients late into the night and having to perform at a high level early the next morning.

"They're burning the candle at both ends and this helps them get back on their feet quickly," he said.

That's why Jon, a 31-year-old sales trader at a bank in New York who did not want his last name published, started calling the I.V. Doctor back in January. He was going to an event with clients for the Super Bowl and knew it was going to be a "big night," so he booked an appointment at his office the next morning at 8 a.m.

In a small, discrete conference room at his office, a nurse hooked him up to the I.V. bag while he checked emails for the next 40-or-so minutes, and she left in time for him to start his day.

"Look, it's not a miracle cure. There's nothing that really 100% gets rid of a hangover," he said. "But if you go in feeling like a 2, you come out a half-hour later feeling like a 7. That's a game changer."

Since then, Jon said he's had about a dozen appointments and recommended it to all of his friends. He now books an appointment in advance if he knows he's going out at night, so it's all set up for him at the office the next morning before a hangover can really set in.

Related: For sale: Dream beach homes

Adam Nadelson said the company is about more than just curing the over-served. They visit patients who have food poisoning or the flu, and athletes after big games or races.

But it's also about bringing in a new revenue stream.

"It's much harder to be a successful doctor today," he said, though his father still has three offices in New York. "You're starting to see family practitioners doing Botox on the side for money. This business has no overhead and is really catching on."

The Nadelsons aren't the first to climb up the hangover money tree. Hangover Heaven opened two years ago in Las Vegas, with a clinic open 24 hours a day, seven days a week. The services run from $129 to $239 in the clinic, but those who want a nurse to come to their hotel room will pay an extra $200 during business hours and $300 between 5 p.m. and 9 a.m.

Related: No 99%ers allowed

The Nadelsons aren't settling for just one city. They're expanding to Chicago this summer and are making a big social media play for potential clients in the Hamptons.

Andreottola and his Hamptons guests were satisfied.

"We're the work-hard, play-hard type and everyone said they felt replenished," he said. "Even some of the server girls we hired for a barbeque got it done and they all said they felt better."

First Published: June 23, 2014: 6:05 AM ET

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Should you drain your 401(k) to start a business?

Eric Schneider emptied his 401(k) to start a specialty coffee and tea shop with his wife Nancy in 2012. Two years later, the business is set to log a profit.

NEW YORK (CNNMoney)

Eric Schneider followed it diligently during his 25 years selling commercial insurance. But two years ago, he emptied his nest egg to launch Headrush Roasters Coffee & Tea in Kansas City, Mo.

"I took a big risk, but I don't regret it at all," said Schneider, 49, who co-owns the business with his wife Nancy.

Schneider left his six-figure job in 2010 with $250,000 in his 401(k) and $100,000 in savings. In 2011, he found a vacant building that he thought would be perfect for his coffee shop and roastery. He hoped to lease it, but the owner only wanted to sell.

"I'm a big believer in no debt," he said. "I had paid off my house, my cars. I didn't want to take out a loan to buy the building."

Related: Google unveils marketing platform for business owners

As he researched financing options, he came across ROBS, or Rollovers as Business Startups. These allow people to use the money in their 401(k) to start a business (or buy an existing one) without paying taxes on the withdrawn funds or getting hit with an early withdrawal penalty.

The process can be pretty complicated, however. First, you must incorporate a business and open a new 401(k) plan under it. Then you roll your existing 401(k) funds into the new plan. Since both accounts are tax-exempt, you avoid taking the tax hit.

As owner of the new company, you can now direct what the 401(k) invests in. With ROBS, the new company typically issues shares that you can purchase using money from the 401(k). You're then free to use the cash from that purchase for operational expenses (although owners must pay their own salaries out of revenue, not from the 401(k) funds).

While the IRS does not consider ROBS an "abusive tax-avoidance transaction," the agency calls the arrangement "questionable" and has strict compliance standards to avoid penalties (and audits).

Related: I opened 40 businesses in 35 years

Because the process was so involved, Schneider signed up with Bellevue, Wash.-based Guidant Financial, which is among a handful of financing firms that help entrepreneurs set up ROBS.

Guidant began offering ROBS in 2004, and it has become the firm's signature product.

Cofounder David Nilssen said his firm has had 9,000 entrepreneurs take advantage of the financing option, and 80% of them are still in business after four years.

But the firm's services don't come cheap. Guidant charges clients $4,995 initially and $119 a month for advisory services after that. (While that's not required, the complexity of the arrangement means most entrepreneurs keep the accounts with Guidant to ensures regular compliance.)

"This option isn't for everyone," said Nilssen. "There's a niche market for it, and individuals who've accumulated enough assets in life are more open to it."

He said their ROBS clients are typically between 40 and 60 years old, own their own homes and have advanced degrees with a combined household income of over $75,000.

"60% of them are first-time entrepreneurs who are choosing a second career," he said.

Still, Stuart Ritter, senior financial planner and vice president with T. Rowe Price, said ROBS can be risky.

"With ROBS, you're putting 100% of your retirement saving into a single security," he said. "People really have to think about this."

Related: The best nations for women entrepreneurs

It can also be difficult for entrepreneurs to rebuild their nest egg.

Chrissy and Mike Mayhew opened Beach House Miracles, a renovation firm, in Ocean View, Del., in 2008. They didn't have capital so they funded the startup using $100,000 from their 401(k).

Today, they have five employees and logged $1 million in revenue last year. But even though the business has been successful, they have yet to start contributing to their retirement plan.

Still, they're comfortable with their decision. "The gamble paid off for us," Chrissy said.

Do you have what it takes to be rich?

Meanwhile, Schneider was able to buy the building with the $250,000 from his 401(k). He spent his $100,000 in savings on remodeling and equipment and opened Headrush in 2012.

If he ever sells the business, he'll put the money back into the 401(k) plan. If the business fails, he won't have to pay a penalty but he also won't have his retirement cushion.

So far, things are going well.

After two years in business, the company is set to log a profit this year. It has seven employees and is looking to open more locations.

"It's been a win-win for me, the government and the economy," Schneider said. "I've created a business, the government is collecting taxes on my business and I'm hiring people."

First Published: June 23, 2014: 6:08 AM ET

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Stocks: 5 things to know before the open

Click on chart to track premarkets

LONDON (CNNMoney)

Here are the five things you need to know before the opening bell rings in New York:

1. Oil prices strengthening: Crude oil prices rose Monday as investors worry about militants taking over large parts of Iraq. The country, which is a major oil producer, has been thrown into an intensifying conflict as members of the militant group ISIS battle with Iraq forces.

Dominique Barbet, an economist at BNP Paribas, said rising energy prices "will not only add to the production cost of industry, but also put pressure on households' purchasing power," after new data showed the manufacturing and services sector in France continued to slow.

Related: Fear & Greed Index still extremely greedy

2. Stocks sliding: Rising oil prices are not helping market sentiment. U.S. stock futures were weak ahead of the open and European markets were all in the red. Asian markets ended with mixed results despite the strongest reading of Chinese manufacturing activity in seven months.

3. An American in France: Shares in General Electric (GE) were getting a slight boost in premarket trading after Alstom (ALSMY) agreed to sell its energy operations to the U.S group, under a revised proposal that gives the French government a minority stake in some parts of the business.

The original proposal had faced opposition from some French politicians worried about GE taking control of critical French infrastructure. Alstom said the new deal would give the French government "veto [powers] and other governance rights over issues relating to security and nuclear plant technology in France."

Related: CNNMoney's Tech30

4. Economic announcements: Investors are awaiting U.S. existing home sales figures to be posted at 10 a.m. ET. The monthly data will give an indication of how the real estate market fared in May.

5. Friday recap: U.S. stocks closed higher Friday. The S&P 500 and the Dow Jones Industrial Average both broke records, while the Nasdaq also made gains. At the close on Friday, the Dow was about 50 points away from crossing 17,000 for the first time ever. Friday marked the Dow's 11th record close for the year.

First Published: June 23, 2014: 5:07 AM ET

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Aereo's Supreme Court destiny

NEW YORK (CNNMoney)

That's obvious now, two years after the streaming TV service came online in New York City and incurred the collective wrath of all the country's major broadcasters. The court's ruling in the copyright infringement case could come as soon as Wednesday; a victory for Aereo could have profound effects on the television business.

At first, I didn't see what the big deal was. I was ambivalent, and briefly even downright dismissive, when a public relations person contacted me in February 2012 and offered an embargoed look at the startup. I worked at The New York Times at the time, and she wanted me to write the very first story about Aereo's launch. "Time is of the essence," she said, because a media briefing was scheduled for Valentine's Day.

I hesitated, but she insisted that I come to the headquarters of Barry Diller's IAC (IACI) for an in-person demonstration of the product, which she called an "online TV platform." Once I was there, I understood. "Surprisingly high-quality signal," I scribbled in my notebook. "Place- and time-shifting!"

Aereo empowered users to both place-shift broadcast TV (by making it portable via a smart phone) and time-shift it (by including an Internet digital video recorder). The service scoops up public signals of local TV stations and retransmits them to paying subscribers via the Internet. The broadcasters say this amounts to copyright theft on a grand scale; Aereo's backers say it is perfectly legal.

Related: What the heck is Aereo, anyway?

Looking back at my notes from February 2012, the contours of the eventual legal case are evident. "It's an antenna per person," Aereo founder and CEO Chet Kanojia told me. "It's a private exhibition of that content." (The broadcasters say it is a public exhibition, which is a violation of copyright law.)

When we first spoke, Kanojia had already been working on Aereo in stealth for well over a year. Diller, his biggest financial backer, had gotten involved in the summer of 2011.

In an interview for my story, I asked Diller about the potential for legal action against the service. He wouldn't comment directly. But he told me that "when I first heard about this, I thought, 'There must be something wrong here. This can't be.' And I kept scratching at it, as did our lawyers — every lawyer we could find. And I could not find a flaw."

Diller said he didn't expect Aereo to "break the neck of cable-satellite," but that it would present an alternative to a hefty monthly cable bill by providing a small bundle of broadcast TV. That helped to sell my editors on the story.

What intrigued me most about Aereo was the statement it made to broadcasters and cable companies. It was as if Kanojia was saying, "This is the way TV should be -- streamed to any device, anytime, live or on-demand, inside or outside the home, no set-top-box or rabbit ears needed."

Legal action seemed inevitable. During Kanojia's demo, I raised the specter of lawsuits. "We understand that when you try to take something meaningful on, you have to be prepared for challenges," Kanojia said, somewhat sidestepping the question.

Notably, he did say that the company had "talked to everybody, shown them what we're doing" -- he meant local station owners -- and "invited discussion, invited criticism."

When I contacted those local stations and asked them to comment on launch day, they were mum. But they were paying close attention -- they filed two lawsuits against Aereo on the first day of March 2012, two weeks before the service even became available to the public in New York City.

"A plaintiffs' win in this case will ensure the continued availability of this programming to the viewing public," the broadcasters' main Washington lobbying group said when the suits were filed. (Was the group foreshadowing what CBS (CBS), Fox (FOXA) and Univision warned in 2013 -- that their stations might leave the public airwaves if Aereo wins?)

Some observers immediately predicted that the case would make its way to the Supreme Court. At the South by Southwest conference in mid-March 2012, Diller called the suits "absolutely predictable," a case of protectionist behavior by the broadcasters.

"It's going to be a great fight," he said.

And it has been, culminating in a hearing this April at the Supreme Court. Afterward, the normally affable Kanojia declined to say much to the reporters waiting for him on the courthouse steps.

"It's over," he said, as he and his family walked to a waiting car.

Is it? The justices of the Supreme Court will tell us very soon.

First Published: June 23, 2014: 8:06 AM ET

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Oil prices spark economic growth concerns

LONDON (CNNMoney)

Crude oil prices in London and New York touched levels not seen since last September after militants from the Islamic State in Iraq and Syria (ISIS) seized city after city over the weekend as they continued their march towards Baghdad.

Costlier energy could spell trouble for European economies still struggling to regain momentum after the region's debt crisis.

Growth in the eurozone has slowed to its weakest pace in six months, according to a June survey of purchasing managers released Monday. Companies across manufacturing and services reported higher input prices.

"Both sectors reported higher oil prices as a key cause of rising costs," survey compiler Markit noted.

Related: Latest on Iraq crisis

Rising energy costs may ease fears of deflation, which prompted the European Central Bank to unveil an unprecedented range of stimulus measures earlier this month.

But they add to worries about growth in countries such as France, where business activity contracted for a second month running in June.

"Most important is the rise of energy prices," said Dominique Barbet at BNP Paribas, commenting on the weak French data. "This will not only add to the production cost of industry, but also put pressure on households' purchasing power."

Related: Gas prices rising but glut coming

The rapid advance of ISIS across northern and western Iraq this month has had little effect so far on exports of crude oil from OPEC's second biggest producer.

But prices have risen above $107 a barrel on the Nymex on fear that supplies could be hit later this year, just as world demand peaks. Prices are up 16% so far this year.

Even if ISIS is prevented from pushing into southern Iraq, which produces the vast majority of the country's 2.5 million barrels per day of exports, energy experts say output could fall back as foreign oil companies withdraw staff due to security concerns.

World growth forecasts have already been cut for 2014, in part due to the deep winter freeze which caused the U.S. economy to shrink in the first quarter.

Further sustained gains in oil prices could make for a weaker rebound in the second half. And it's not just major Western economies that would feel the pinch.

China is expected to surpass the U.S. as the world's biggest importer of oil this year. India, Asia's third biggest economy, is also highly sensitive to rising energy prices.

Operating conditions in China's vast manufacturing industry improved for the first time in six months in June, according to HSBC's preliminary survey of purchasing managers.

But that's likely due to a recent mini-stimulus package, which may do little more than sustain growth at 7.4%, the rate seen in the first quarter. The government has targeted growth of 7.5% this year.

First Published: June 23, 2014: 7:08 AM ET

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Iraq, oil price fears spook market

NEW YORK (CNNMoney)

The Dow Jones Industrial Average is more than 40 points lower heading into lunch. The S&P 500 and the Nasdaq are also down more than 0.1% each.

Many hope this could be the week the Dow cross the 17,000 mark for the first time, but it's not looking promising today. It's largely a psychological barrier, but it would be another point in the market's phenomenal bull run that saw the Dow close above 16,000 for the first time just seven months ago.

Related: What does Dow 17,000 mean, anyway?

Here are the top things to watch in today's trading:

1. Worrying signs from Europe: There's a tension in the markets between encouraging economic news in the U.S. and discouraging news in Europe after the release of manufacturing measures in America, France, Germany and the Eurozone.

Things are looking up in the U.S. America's purchasing managers index (PMI) came in above expectations and is pointing toward growth in the sector the second half of the year. Additionally, the Federal Reserve Bank of Chicago released an index of economic activity that also pointed toward growth.

In Europe, however, things are continuing to slow. France, Germany and the Eurozone all saw their PMIs come in below expectations.

"At the end of the day, stock markets are driven by profit growth, and profit growth isn't following through on the economic data," said Mark Luschini, chief market strategist for Janney Capital. He said Europe's troubles were backing into U.S. equities.

CNNMoney's Fear & Greed Index in extreme greed

2. Turmoil in the fashion industry -- Lululemon & American Apparel: Lululemon shares are bouncing this morning after the Wall Street Journal reported that the company's founder Chip Wilson hired Goldman Sachs to help him strengthen his role at the company, where he is the largest shareholder. Lululemon (LULU) shares are up around 3.5%

American Apparel (APP) shares are flat on rumors that the company make be a potential takeover target. It's the latest twist impacting the brand. Last week the company fired controversial CEO Dov Charney. Now Charney has fired back, writing a letter to the board challenging his dismissal. The company continues to struggle with its turnaround plan. The stock is trading for less than $1.

Related: American Apparel's ousted CEO fights back

3. Real estate picks up: The National Association of Realtors released data Monday showing that the pace of May existing home sales rose to 4.89 million a year, which is above the market's expectations for an annual rate of 4.73 million. Homebuilder stocks like Toll Brothers, (TOL) PulteGroup (PHM) and Lennar (LEN) are all positive.

The NAR said that May's uptick, at nearly 5%, was the fastest month-to-month growth since August 2011.

"Home buyers are benefiting from slower price growth due to the much-needed, rising inventory levels seen since the beginning of the year," said Lawrence Yun, the NAR's chief economist. "Moreover, sales were helped by the improving job market and the temporary but slight decline in mortgage rates."

4. Big deal for Micros: Computer giant Oracle purchased MICROS Systems (MCRS), one of its largest customers, for more than $5 billion. Micros specializes in providing software applications to the hospitality and retail sectors, and has worked with Oracle for more than 15 years. Oracle shares are flat, and Micros stock is up 3%.

Related: CNNMoney's Tech 30 index slightly higher Monday

5. Oh la la -- GE finally snags French prize: General Electric (GE) has finally closed the deal on French company Alstrom (ALSMY) to the tune of $17 billion, much more than its initial $13.5 billion bid. The French government had opposed the deal because it was concerned the merger would lead to job losses and a dilution of Alstom's French Brand. GE stock is down 1%, and Alstom's French shares closed about 4% lower.

6. Buying power in energy stocks: Wisconsin Energy (WEC) announced this morning that it will acquire Integrys Energy Group (TEG) for for $71 per share in order to increase its natural gas business and its footprint in the Great Lakes region. Wisconsin's stock is down around 2%, and Integrys shares have jumped over 13% to nearly $70.

7. BNP Paribas on verge of settlement with U.S.: The bank is on the cusp of a $9 billion settlement with the U.S. Justice Department on allegations that it did business with off-limits countries. The French bank's shares ended the day nearly flat. There are fears that the fine could hurt BNP's credit rating.

8. Oil prices: As fighting in Iraq intensifies and Israel continues launching rockets into Syria in retaliation for the killing of an Israel teen, keep an eye on oil prices. After a steady rise last week, WTI crude oil has backed away from the $107 barrier and is now down almost 0.8% for the day.

Related: Rising oil prices trigger economic growth concerns

9. International Markets: European stocks are largely down, with the FTSE 100 closing 0.36% down. Asian markets are also a mixed bag, as are Chinese stocks are doing well after the country's manufacturing sector showed its first expansion in six months. The Hang Seng fell 1.7%, but shares traded in Shenzen were up nearly 1.1%.

First Published: June 23, 2014: 10:08 AM ET

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CNN to study drone use for reporting

Is this the future of journalism? CNN and the Georgia Institute of Technology are studying drone use for newsgathering.

NEW YORK (CNNMoney)

In a press release, the partners called it a "research initiative" and said they will share data with the Federal Aviation Authority "as it considers regulations that will allow for the safe and effective operation of UAVs by media outlets."

The announcement comes amid widespread interest in newsrooms across the country in what's been dubbed "drone journalism," and equally widespread uncertainty about the legality of it. The FAA. has severely limited the use of drones for commercial purposes, including newsgathering. It is due to develop new drone rules by September 2015.

"Our hope is that by working cooperatively to share knowledge, we can accelerate the process for CNN and other media organizations to safely integrate this new technology into their coverage plans," David Vigilante, CNN's senior vice president for legal, said in a statement. "It's a natural opportunity to work with our neighbors at Georgia Tech, who have experience and insights into this area."

CNN and the university said the project work would start sometime this summer. "The effort will evaluate the technology, personnel and safety needs to operate effectively in the national air space," according to the press release. (CNN and CNNMoney are owned by Time Warner.)

"We're excited to be engaging with CNN to study the newsgathering applications for UAVs and look forward to working with one of the most respected news operations in the world," said Mike Heiges, principal research engineer at the Georgia Tech Research Institute.

Reporters, producers and journalism professors have proposed a great variety of drone uses, from documenting the aftermath of natural disasters to investigating the misuse of federal lands.

But some early efforts have been stymied by the FAA. The University of Missouri's drone journalism program, for instance, received a cease and desist letter last year.

"According to the rules that we've been presented by the FAA, it's very restrictive for news stories," said Matthew Dickinson, a co-founder of the program.

News outlets would have to essentially predict where news will happen 60 to 90 days ahead of time, then apply for a permit to fly a drone there.

For the time being, most drone videos seen on television news -- like overhead shots of a tornado's trail through a town -- are filmed by individuals who then hand them over to journalists. Some media outlets have been reluctant to use such footage, due to the legal uncertainties.

First Published: June 23, 2014: 12:02 PM ET

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Stocks: 4 things to know before the open

Click on chart to track premarkets

LONDON (CNNMoney)

Here are the four things you need to know ahead of the opening bell:

1. Stocks take a hit, oil and gold prices strengthen: U.S. stock futures were in negative territory and all the key European stock markets were lower Monday as the latest trouble in Ukraine and fighting in Iraq dominated the news. Prices for gold and oil were higher.

Russia said it will cut off gas exports to Ukraine. The price of natural gas was up by around 1%.

Meanwhile, oil prices were on the rise as militants extended their control in Iraq.

"Pictures of atrocities in Iraq, the breakdown of talks between Ukraine and [Russia's state-owned gas supplier] Gazprom, even scandal within the Polish central bank ... it all makes for a risk averse start to the week," said Kit Juckes, a strategist at Societe Generale.

2. Potential market movers -- Starbucks, Medtronic, Covidien: Starbucks (SBUX) shares were lower by roughly 2% in premarket trading. The company announced Sunday night that it will begin paying up to $30,000 per employee for college courses.

Medtronic (MDT) shares surged 11% in premarket trading after the company announced it will buy Ireland-based Covidien for $42.9 billion.

Related: Fear & Greed Index still extremely greedy

3. Economic data: The U.S. Federal Reserve will release its monthly industrial production report at 9:15 a.m. ET.

The Federal Reserve will discuss monetary policy on Tuesday and Wednesday. The meeting will be closely watched by investors.

Related: CNNMoney's Tech30

4. Friday trading recap: U.S. stocks closed higher Friday. The Dow, S&P 500 and Nasdaq all made modest gains.

First Published: June 16, 2014: 5:08 AM ET

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Comcast is turning your home router into a public Wi-Fi hotspot

It's been one year since Comcast started its monster project to blanket the entire nation with continuous Wi-Fi coverage. Imagine waves of wireless Internet emitting from every home.

NEW YORK (CNNMoney)

It's potentially creepy and annoying. But the upside is Internet everywhere.

It's been one year since Comcast (CMCSA) started its monster project to blanket residential and commercial areas with continuous Wi-Fi coverage. Imagine waves of wireless Internet emitting from every home, business and public waiting area.

Comcast has been swapping out customers' old routers with new ones capable of doubling as public hotspots. So far, the company has turned 3 million home devices into public ones. By year's end it plans to activate that feature on the other 5 million already installed.

Anyone with an Xfinity account can register their devices (laptop, tablet, phone) and the public network will always keep them registered -- at a friend's home, coffee shop or bus stop. No more asking for your cousin's Wi-Fi network password.

Related: CNNMoney's cybersecurity magazine

But what about privacy? It seems like Comcast did this the right way.

Outsiders never get access to your private, password-protected home network. Each box has two separate antennae, Comcast explained. That means criminals can't jump from the public channel into your network and spy on you.

And don't expect every passing stranger to get access. The Wi-Fi signal is no stronger than it is now, so anyone camped in your front yard will have a difficult time tapping into the public network. This system was meant for guests at home, not on the street.

As for strangers tapping your router for illegal activity: Comcast said you'll be guilt-free if the FBI comes knocking. Anyone hooking up to the "Xfinity Wi-Fi" public network must sign in with their own traceable, Comcast customer credentials.

Still, no system is foolproof, and this could be unnecessary exposure to potential harm. Craig Young, a computer security researcher at Tripwire, has tested the top 50 routers on the market right now. He found that two-thirds of them have serious weaknesses. If a hacker finds one in this Comcast box, all bets are off.

"If you're opening up another access point, it increases the likelihood that someone can tamper with your router," he said.

Related: Stalker is a creepy look at you, online

What about connection speed? Having several people tapping a single machine tends to clog up the Wi-Fi. Comcast says it found a way to make this work.

With two separate networks, each antenna has its own data speed cap. Comcast said the private channel provides whatever speed customers already pay to get (most have 25 Megabits per second). The public hotspot channel is given 15 Mbps and allows up to five people to connect at a time.

That means having your data-hungry friends over shouldn't slow down your Netflix (NFLX, Tech30) stream.

Comcast spokesman Charlie Douglas promised "there's more than enough capacity" in the cables connecting to people's homes to make this work.

"You shouldn't experience any conflict between the two networks," he said. "It's something our engineers thought about carefully. The last thing we want to allow is to create a bad user experience."

Comcast's project that started in northern New Jersey has now spread to Boston, Chicago, Houston, Indianapolis, Minneapolis, Philadelphia, San Francisco, Seattle and elsewhere.

"Before this, there was no value in having Internet when you're not at home," Douglas said. "Every time you left the house you walked away from your subscription. But with all these hotspot locations, you can connect to the Internet remotely. Everyone's device is mobile. It makes a lot of sense."

But what if you hate the idea of your private boxes turned into public hotspots? You can turn it off by calling Comcast or logging into your account online. The company says fewer than 1% of customers have done that so far.

First Published: June 16, 2014: 7:09 AM ET

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GM victims' families face tough choices

WASHINGTON (CNNMoney)

Natasha Weigel, 18, and friend Amy Rademaker, 15, died from their injuries in October 2006 after their Chevrolet Cobalt hit a tree in St. Croix County, Wis.

In coming months, their parents must decide what they want from General Motors (GM), who they sued in March.

The two families recently agreed to freeze their lawsuit for a few months until they hear from GM about its plans to compensate families of victims who died because of faulty ignition switches. Compensation expert Kenneth Feinberg is working on drafting a plan.

Though they were both in the same car, GM only counts Amy on their list of 13 deaths from ignition switch failures. That's because GM counts only those in the front seat of cars whose airbags didn't inflate.

Related: Two died in 2006 Cobalt crash. But GM counts only one

Natasha is not on the list of confirmed deaths tied to the recalls, because she was in the backseat, which didn't have airbags.

It took GM 10 years after it learned about the faulty switches to issue the recalls. The crisis has triggered congressional and criminal probes. GM has said it will cost at least $1.7 billion to repair the recalled cars, and it may have to pay out millions to crash victims and their families.

It's unclear if Feinberg will include victims like Natasha in his plan to compensate victims.

For the two families, however, it's not an easy choice.

Moving forward with the lawsuit will cost them thousands of dollars in legal fees. Plus there's the risk they may get nothing from the lawsuit even though their attorney, Robert Hilliard of Texas, said they and other families he represents have a good case.

Related: 1 in 10 U.S. cars and trucks recalled

Neither girls' parents have said what kind of money they want from GM. However, they want GM to acknowledge its misdeeds killed their daughters, according to interviews with CNN's Poppy Harlow.

"What I want them to do is, for our case, to acknowledge Natasha's death," said Jayne Rimer, Natasha's mother. "I don't need an amount of money, because you will never replace our daughter's life. I want you to acknowledge that my daughter died in your car."

Margie Beskau, mother of Amy Rademaker, said it's impossible to put a value on being robbed of a chance to see her daughter grow up and get married.

"If we get money, fantastic. But it's not gonna bring my daughter back. It's not gonna bring Natasha back," Beskau said.

GM declined to comment on the lawsuit. But spokesman Greg Martin said that GM is "taking steps to treat these victims and their families with compassion, decency and fairness."

First Published: June 16, 2014: 10:17 AM ET

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Iraq crisis keeps a lid on stocks

NEW YORK (CNNMoney)

Stocks ticked lower on Monday as fears the violence in the Middle East could fuel a spike in energy prices overshadowed enthusiasm for a flurry of M&A activity.

Here are the four things you need to know:

1. Iraq jitters continue: The Dow Jones industrial average, S&P 500 and Nasdaq indexes are trading flat to slightly lower, with the Dow off about 50 points (0.3%). It's shaping up to be a seesaw trading day as investors weigh different pieces of news.

Related: CNNMoney's Fear & Greed Index still in 'extreme greed' mode

Oil prices ticked above $107 a barrel Monday amid concerns the fighting in Iraq could threaten the country's ability to export oil. Natural gas prices fell about 1%, but investors will continue to monitor for signs of higher energy costs to Western consumers and businesses.

There are also worries that images reportedly showing the mass execution of Iraqi soldiers could spawn an all-out sectarian civil war in the country. The White House said it is considering military options and may even work with Iran to help Baghdad fend off the terrorist threat.

"Last week's fast-paced developments in Iraq have the potential to turn into a serious threat for the bull market," Ed Yardeni, president of Yardeni Research, wrote in a note to clients. "My hunch is that the latest geopolitical crisis could set the market up for yet another relief rally."

Meanwhile, Russia said it has cut off supplies to Ukraine after negotiators failed to fix a payment dispute before a key deadline.

Related: Russia cuts off natural gas supplies to Ukraine

"Pictures of atrocities in Iraq, the breakdown of talks between Ukraine and [Russia's state-owned gas supplier] Gazprom, even scandal within the Polish central bank ... it all makes for a risk averse start to the week," said Kit Juckes, a strategist at Societe Generale.

The geopolitical concerns helped drive European and Asian stock markets mostly lower on Monday.

2. Merger mania: On the positive side, cheap borrowing rates and tax policy continue to drive M&A (merger and acquisition) activity.

Medical device giant Medtronic (MDT) unveiled a $42.9 billion takeover Irish rival Covidien (COV). The deal is the latest "tax inversion" combination aimed at taking advantage of relatively low tax rates in some foreign countries by relocating corporate headquarters. Covidien popped 20% on the news.

"Corporate America getting tired of waiting for comprehensive tax reform and choosing instead to move abroad $COV $MDT. Well good for them," wrote Stocktwits user flounder.

Related: Medtronic buys Covidien for $42.9 billion

There were also a number of smaller deals flying around.

Level 3 Communications (LVLT) agreed to scoop up business ethernet provider TW Telecom (TWTC) for $5.7 billion in cash and stock. TW stock jumped over 8% Monday.

Steven Spencer on Stocktwits wondered if there was something fishy about the trading of TW stock

"#SEC really needs to take a look at friday's trading activity in $TWTC. #insidertrading," he wrote.

Williams Cos. (WMB) spiked 23% as investors cheered the energy company's $6 billion deal to take full control of Access Midstream Partners (ACMP).

In the tech world, SanDisk (SNDK) inked a $1.21 billion buyout of smaller data-storage company Fusion-io (FIO), representing a 21% premium on its closing price on Friday.

3. Corporate movers -- Yahoo, Tesla & Goodyear: Yahoo (YHOO, Tech30) retreated 5% after Alibaba, the Chinese e-commerce giant it owns a chunk of, revealed new details of its planned initial public offering. The latest documents show Alibaba's revenue growth has slowed, though it was still up 39% year-over-year.

Related: Alibaba grows 39%, but is that good enough?

Shares of Tesla (TSLA) drove 3% higher, extending its 2014 rally to 41%. Investors have largely shrugged off an initial negative reaction to Tesla's plans to share patents with competitors.

Goodyear Tire (GT) revved 3% higher after Barron's said the tire maker's stock could surge 50% within two years thanks to stronger demand.

4. Focusing on the economy: Home builders like PulteGroup (PHM) and Lennar (LEN) ticked higher after an industry group said home builder sentiment has climbed to the highest level since January.

Manufacturing activity in the New York area gained momentum in June, a new report showed. The New York Fed's manufacturing index unexpectedly ticked up this month to 19.28 from 19.01.

Investors are also looking ahead to Wednesday's Federal Reserve decision. The central bank is expected to once again dial back its bond-buying program even as it dims its economic growth outlook.

Likewise, the International Monetary Fund trimmed its forecast for U.S. economic growth this year to 2% amid the struggling housing market. Despite the gloomier view, the IMF still expects the U.S. to grow 3% next year.

First Published: June 16, 2014: 9:49 AM ET

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Medtronic buys Covidien for $42.9 billion

HONG KONG (CNNMoney)

Covidien shareholders will be paid $93.22 per share, a 29% premium over the company's closing stock price on Friday.

Medtronic said the combined company will be headquartered in Ireland, where Covidien is based. Medtronic (MDT) had been based in Minneapolis.

The proposed merger is the latest in a series of transactions that have allowed U.S. companies to relocate their headquarters to countries with lower tax rates. Ireland's main tax rate for corporations is 12.5%; the 35% U.S. federal rate is among the highest in the world.

Relocating is not as simple as opening an office in London or Ireland and telling authorities your tax base has changed. The U.S. has blocked this strategy, so a corporate takeover is required.

Other countries that are known for low corporate taxes are Switzerland, Singapore and Luxembourg. Most companies veer away from France because of its historically high taxes.

Related: Has the U.K. become a tax haven?

Health care companies have been particularly aggressive in pursuing so-called inversions. Pfizer (PFE) was the latest high-profile example; it tried to take over the British pharmaceutical firm AstraZeneca.

American and French media giants Omnicom (OMC) and Publicis (PGPEF) also planned a mega-merger that would have seen the new firm domiciled in the U.K., though the deal was called off.

The exodus of American companies has spurred a political backlash, and many in Washington are looking at ways to reverse the trend. So far, various proposals in Congress to make it harder for companies to domicile elsewhere have faltered.

Related: Firms warned not to leave U.S. for lower taxes

Medtronic, perhaps in an effort to ward off criticism, announced $10 billion in new U.S. research and development commitments on Sunday.

The deal will also provide a use for billions in profits earned outside the U.S. that Medtronic has kept offshore. The funds would have been taxed at a steep rate if they were returned to the U.S.

Medtronic said the merger would significantly expand its product portfolio, help the company reach new markets and generate significant free cash flow. The deal still faces regulatory approval from multiple agencies and countries, including the U.S., the European Union and China.

First Published: June 15, 2014: 11:13 PM ET

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Russia cuts off natural gas supplies to Ukraine

HONG KONG (CNNMoney)

Representatives from Ukraine, Russia and the European Union held meetings over the weekend in an effort to avert the crisis, but no agreement was reached.

Gazprom said Monday that Ukraine's total debt is $4.5 billion. The state-owned gas firm will now only deliver gas that Ukraine has paid for in advance.

"At this moment no payments for old debt or June were paid," said Gazprom spokesman Sergey Kupriyanov. "All charts show zeroes."

Both sides said they have filed claims with an international arbitration court in Stockholm.

While Gazprom hiked the price it charges Ukraine by about 80% to $485.50 per thousand cubic meters of gas in April, some concessions have been offered during recent talks. Gazprom charged European countries an average of $377.50 per thousand cubic meters in 2013.

Related: Europe leans more heavily on Russian gas

The gas dispute between Moscow and Kiev has escalated as relations between the two countries have deteriorated.

Europe and the U.S. have imposed sanctions on Russia for its annexation of Crimea, while analysts have accused Russia of using natural gas supplies as a political tool.

In recent weeks, violence has again flared in eastern Ukraine as government forces clashed with pro-Russian militants. The military conflict was clearly having an effect on gas negotiations.

"We will not subsidize Russian Gazprom," Ukrainian Prime Minister Arseniy Yatsenyuk said Monday. "Ukrainians will not take out of their pockets $5 billion annually for Russia to use this money to buy weapons, tanks and jets and bomb Ukrainian territories."

Related: Russia looks to Asia for trade cushion

Europe relies on Russia for more than 30% of its gas, and half of that is pumped through Ukraine. Analysts worry that a disruption in supplies to Ukraine could hurt European companies and households.

Kupriyanov said Monday that "gas designated for European consumers is flowing in full accordance with the contract's figures."

-- CNN's Matthew Chance and Radina Gigova contributed reporting.

First Published: June 16, 2014: 3:11 AM ET

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Alibaba grows 39%, but is that good enough?

NEW YORK (CNNMoney)

The sprawling Internet company's robust revenue growth appears to have hit a speed bump in the first three months of 2014, according to amended documents filed Monday with the Securities and Exchange Commission.

Alibaba said total revenue grew 39% in the first quarter of 2014 from the same period a year earlier. In the fourth quarter of 2013, revenue was up nearly 62% compared with the year before.

The news weighed on shares of Yahoo (YHOO, Tech30), which has a 23% stake in Alibaba. Shares were down 5% in early trading.

Alibaba also named all nine of its future board members, including Yahoo co-founder Jerry Yang and Mike Evans, a top banker at Goldman Sachs (GS).

Related: Five things to know about Alibaba

The first-quarter data comes as Alibaba prepares to make its debut as a public company. It filed for an IPO in the United States earlier this year.

The filing did not contain any new details on how many U.S.-listed shares Alibaba will offer or at what price. But analysts have said it could haul in more than the $16 billion Facebook (FB, Tech30) raised in its 2012 IPO.

The whole company could be worth more than $170 billion, and some sky-high estimates are now pushing the $200 billion mark.

Alibaba is often described as a combination of Amazon (AMZN, Tech30) and eBay (EBAY, Tech30), with some PayPal sprinkled in to boot. But the shorthand fails to capture the breadth of the company's diverse business model.

Related: Alibaba makes U.S. debut with 11 Main

By one estimate, almost four out of every five dollars spent online in China happen in Alibaba's marketplaces.

The company's top two e-commerce sites, Taobao and Tmall, attract more than 100 million unique visitors each day. According to the filing, Taobao handled transactions worth 295 billion renminbi (about $47 billion) in the first quarter, while Tmall's market volume was 135 billion renminbi ($22 billion).

But Alibaba is more than its flagship marketplaces -- it also runs a wholesale operation and a cloud computing business. The company is also linked to a hugely popular digital payment service, Alipay. In a first step into finance, Alipay has started to offer investment funds. Alibaba even operates a taxi-hailing app.

Alibaba recently launched a new, invitation-only online shopping hub in the United States called 11Main.com. In China, the company continues to expand it's reach, announcing last week that it bought up the remaining stakes of UCWeb to take full control of the Chinese mobile internet software company.

-- CNN Money's Charles Riley and Matt Egan contributed to this report.

First Published: June 16, 2014: 10:02 AM ET

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Cops can access your connected home data

The home screen for AT&T's "Digital Life" system.

NEW YORK (CNNMoney)

Smart home technology is the latest craze among big tech and telecom companies, which are rolling out products that allow people to remotely control things like lights and locks and view footage from security cameras via mobile devices. Apple (AAPL, Tech30) became the latest company to get in on the act earlier this month, unveiling a new software platform called HomeKit that will allow people to manage their connected devices with their iPads or iPhones.

Companies like AT&T (T, Tech30), Verizon (VZ, Tech30) and Time Warner Cable (TWC) already offer smart home systems. Google (GOOGL, Tech30), meanwhile, bought connected device maker Nest Labs earlier this year and has reportedly looked into purchasing security camera maker Dropcam as well.

But smart home customers might be unaware that their security footage is being stored in some cases, and that it can be used against them in legal proceedings.

Related: Apple's HomeKit is safer, but not hack-proof

"We're seeing law enforcement across a variety of areas arguing that they should be able to access information with lower standards than before the electronic age," said Jay Stanley, a senior policy analyst with the American Civil Liberties Union.

"If a lot of information is flowing out of your home, it provides a window into the things you're doing in your private space," he added.

Tech companies already get thousands of requests for customer data each year from government intelligence agencies as well as traditional law enforcement for things like email and phone records. Once home security footage begins being stored on companies' servers, there's no reason why cops wouldn't seek that out as well.

That means you may want to study the terms of service from your smart home provider to see what kinds of requirements they place on government and law enforcement data requests.

There are generally two ways the government or cops can get their hands on smart home data: search warrants and subpoenas. Warrants are authorized by judges when prosecutors show there is "probable cause" to believe that a specific piece of evidence they're seeking may be related to criminal activity. The standard for subpoenas is much lower, generally requiring only that the information being sought be relevant to an investigation. Some subpoenas require that the subject of the information request be notified and given a chance to challenge it, though some do not.

Related: CNNMoney's cybersecurity magazine

AT&T spokeswoman Gretchen Schultz said that if law enforcement officials are seeking smart home footage in a criminal investigation, the company requires them to provide a search warrant before the video is released. If the request comes in the form of a civil subpoena, she added, AT&T requires consent from the customer in question.

Time Warner Cable said it requires a subpoena before releasing pictures or video footage from its smart home system to law enforcement.

Dropcam declined to comment on how it handles government video requests, though it said footage is stored for only 30 days at a maximum. Apple declined to comment, while Verizon did not respond to requests for comment.

"People should be asking what steps the companies are taking to encrypt and make sure that their information is private," said Hanni Fakhoury, an attorney with the Electronic Frontier Foundation. "Consumers really should be looking for companies that say they will only turn over footage with a search warrant."

There's also the possibility of smart home footage being sought by plaintiffs in civil cases. Location data from toll tags like E-ZPass, for example, has previously been used in divorce proceedings.

"Any time there's a data trail being generated, litigants in all varieties of litigation, civil or criminal, will want to get their hands on it," Fakhoury said.

First Published: June 16, 2014: 7:14 AM ET

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