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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