Alibaba stock plunged nearly 10 percent after the Chinese e-commerce giant reported sales that disappointed Wall Street and dealt with a regulatory spat in its home country.
Alibaba, which made history last September with the largest initial public offering ever, on Thursday reported results for its fiscal third quarter, which ended Dec. 31. The company racked up sales of $4.2 billion, up 40 percent from the same period a year earlier. But the results disappointed analysts polled by Thomson Reuters, who expected sales of $4.45 billion.
Alibaba's stock price dropped nearly 10 percent on Thursday morning.
Investors also reacted to a Chinese regulatory probe, disclosed in a white paper posted on the website of China's State Administration for Industry and Commerce on Wednesday. The paper said the agency was investigating Alibaba for failing to crack down on counterfeit goods sold on its Taobao online marketplace.
In a statement on its website, the SAIC said it discussed the paper with the company last July, but kept the meeting a secret, in “order not to impede Alibaba’s preparations for its initial public offering.”
Alibaba denied knowledge of the paper on Wednesday, amid accusations from bankers that the company misled investors by hiding the information.
"The first time we saw the white paper was when it was posted on the SAIC web site yesterday," Joe Tsai, Alibaba Group's executive vice chairman, said in a statement on Thursday. "I want to make it absolutely clear that Alibaba has never requested the SAIC to delay the publication of any report."
Paperwork the company filed in the U.S. before its IPO acknowledged investigations by the Chinese government and others into alleged trademark infringement, particularly by third-party sellers who use Taobao. But it did not specifically mention the SAIC report.
Alibaba's stock has been volatile since it went public at $68 a share. It jumped more than 40 percent on its first day of trading. But it has been tumbling from a peak of about $119 in November.
NEW YORK, Jan 25 (Reuters) - The average price of a gallon of gasoline in the United States fell 13.3 cents in the past two weeks, falling to its lowest level since late April 2009, but the end of a months-long slide may be near, according to the Lundberg survey released Sunday.
Prices for regular grade gasoline fell to $2.07 a gallon in the survey dated Jan. 23 from the previous survey on Jan. 9.
The recent drop has taken prices down more than $1.24 a gallon from the same period a year ago, a decline driven by losses in the crude oil market from its June peak.
However, survey publisher Trilby Lundberg noted that the drop in pump prices was less steep than it had been in previous periods and that the price many wholesale customers paid for gasoline rose in the past 10 days, suggesting a bottoming-out or increase in retail gasoline prices could be looming.
"The street price crash is either coming to an end or is already at its bottom," Lundberg said, noting that it would take another substantial slide in the price of oil to reverse the gains in wholesale prices.
Both U.S. and Brent crude futures continued their decline in the past week, after finishing the week ended Jan. 16 up slightly. These shallower price losses were part of the reason why the gasoline price drop was less steep this week and contributed to the gains in wholesale prices.
On Friday, Brent crude closed up at $48.79 a barrel, while U.S. crude settled down 72 cents at $45.59.
The highest price within the survey area in the 48 contiguous U.S. states was recorded in San Francisco at $2.54 per gallon, with the lowest in Albuquerque, New Mexico at $1.73. (Editing by Eric Walsh)
Mark Bertolini, CEO of Aetna, explained how he increased wages for his workers, arguing that taking better care of his employees would in turn lead to better care for Aetna's customers.
Bertolini told HuffPost Live at Davos his company increased wages and adjusted benefits in order to give its employees a better quality of life.
"Not everybody should be at $16 an hour, there may be people who need to be higher," Bertolini said, noting people's lifestyles are directly impacted by how they are paid.
Bertolini's company also implemented yoga and mindfulness practices at work and studied the effect they had on the employees.
"After we completed the [yoga] course, the results were amazing," Bertolini said, saying in addition to weight loss and happier workers, there was an increase in productivity by 69 minutes a month.
"We think it's about a $3,000 a year savings," Bertolini said, noting his company's health care costs actually went down after implementing mindfulness practices.
Below, live updates from the 2015 Davos Annual Meeting:
live blog
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Today 8:58 AM ESTMcAfee On Evolution And Technology
"Evolution has wired us; we have social drives," McAfee said.
"Could there be a piece of technology that figures out an intelligent next question to ask somebody? Yeah," McAfee said.
"For 200 years of industrial technology, we've been making workers obsolete," McAfee said.
McAfee said nobody knows if we're reaching the point where technological developments could lead to unemployment.
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Today 8:56 AM ESTAndrew McAfee At Davos
Andrew McAfee of the MIT Sloan School of Management on HuffPost Live
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Today 8:46 AM ESTBruder On The Barriers Women Face
"We strive to have the majority of our graduates female," EFE's Ron Bruder said.
"I don't think there's an official barrier but there's a social and structural barrier in a lot of these countries toward women," Bruder added.
Bruder said his company creates local foundations, and those foundations tackle those issues on EFE's behalf.
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Today 8:42 AM ESTEFE's McAuliffe And Bruder: Young People Need Jobs
EFE's president and CEO Jamie McAuliffe, along with founder and chair Ron Bruder, sat down with HuffPost Live at Davos on Saturday.
Bruder said it's vital to the global economy that youths have jobs.
McAuliffe said EFE starts with businesses.
"Where are the jobs?" he said.
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Today 8:14 AM EST'Every Woman Has The Opportunity To Be An Activist'
Catchafire Founder & CEO Rachael Chong joins HuffPost Live to share her thoughts on how to get more women to Davos.
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Today 8:11 AM EST'Doing Less, But Better'
Greg McKeown, author of Essentialism: The Disciplined Pursuit of Less, said his book grew out of working with people who are really successful.
"Success can become a catalyst for failure," he said.
McKeown said leaders at Davos have experience with plateauing after achieving professional success. To avoid that, McKeown said, people must find a way to expand their contribution without doing more.
"The whole idea is about doing less, but better," he said.
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Today 8:00 AM ESTOnline Data Is Like Money
"In some sense, we're the next generation of banks," Smith said, noting you wouldn't put your data in a place you don't trust just like you wouldn't deposit your money at a bank you don't feel is stable.
Smith said the most difficult part about investigating a hacking crime is identifying and finding a hacker.
"Our prisons are not full of hackers," Smith said, noting hackers are often in countries outside the U.S.
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Today 7:57 AM ESTBrad Smith At Davos
Brad Smith at Davos
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Today 7:55 AM ESTBrad Smith On Outdated Technology Laws
"2015 needs to be a year for new solutions, and that's what we're proposing. We do need new laws in the United States and in Europe," Smith said. "We're trying to manage 21st century technology issues with laws that were written in the '80s and '90s."
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Today 7:54 AM ESTMicrosoft's Brad Smith On The Sony Hack
Microsoft's Brad Smith said the Sony hack was an example of how the Internet could be used as a way to both fight against and fight for free expression.
"We saw the Internet being used both as a weapon to attack free expression... and as a tool to defend free expression," Smith said.
Brad said lawmakers in the U.S. and Europe need to discuss how to increase online privacy while still providing law enforcement with information they need.
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Today 7:34 AM ESTBusque On Encouraging Women
As an engineer, Busque said she's always worked primarily around men.
"For me, it's never something I've focused on but it definitely is there and is an issue," Busque said.
"I've some very strong female role models, so I think that's an important thing," she added, saying she regularly thinks about how she can encourage women at her own company to take on leadership roles and grow as employees.
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Today 7:30 AM ESTLeah Busque At Davos
Leah Busque on HuffPost Live
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Today 7:29 AM ESTLeah Busque On The Responsibility Of Job Creators
Leah Busque, founder and CEO of TaskRabbit, said as a business leader it's important to consider the quality of the lives you're curating for workers.
"I believe there's been a slippery slope of new companies that have formed in the name of on demand services ... that maybe aren't having as much of a focus as they should on the worker," Busque said.
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Today 7:22 AM EST'We Have To Use Our Voice'
Chong spoke about what it's like to be one of the few women at Davos.
"It's not always easy to stand up and say, 'hey, that was a sexist remark,'" she said.
"I think we have to use our voice," she added. "Particularly with businesswomen, there are so few, and as role models they're so important."
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Today 7:21 AM ESTFrom Investment Banking To Entrepreneur
Chong explained how she left the world of investment banking -- a job she said she actually enjoyed -- to become an entrepreneur.
"While I was banking I still wanted to be able to give back and at the time the only opportunity was, once a year we'd get put on a bus and go build a house," Chong said. "All volunteer work is good, but when you think about maximizing impact, bankers building houses is not necessarily the best use of their time."
"I became really obsessed with then finding a way to volunteer my skills," Chong added.
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Today 7:19 AM EST'It Gives People A Sense Of Purpose'
Chong said the people who volunteer with Catchafire gain something by giving up their time and services.
"It gives people a sense of purpose," Chong said.
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Today 7:18 AM ESTRachael Chong At Davos
Rachael Chong at HuffPost Live
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Today 7:17 AM ESTHow Busy People Make It Work
Rachael Chong, founder and CEO of Catchafire, said it can be hard to get professionals to donate their time, but busy people somehow still make it work.
"The busiest people are the ones who usually fit in the most stuff and are the most productive," she said.
Thanks to @ariannahuff we'll #thrive on the #wef15 #purposejourney in #Davos via #bulletproofcoffee and @thirdmetric pic.twitter.com/qzagkLgR86
— Valerie Keller (@Valerie_Keller_) January 24, 2015
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Today 6:10 AM ESTJean-Philippe Courtois At The World Economic Forum 2015
Microsoft International President Jean-Philippe Courtois joins HuffPost Live to talk about technology at Davos, NSA reform and some exciting products that are on the horizon.
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Today 5:55 AM ESTLesser: Leaders Should Set A Tone
"I just think if leaders don't set a tone about why we do what we do and why we do it in a way that's enriching for all of us, then people just assume all leadership cares about is the bottom line," Lesser said.
Lesser said he tries to lead by example but he's "probably on email too much."
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Today 5:53 AM EST'Totally A Positive'
"In our world, having great talent want to come and want to stay is the single biggest driver of success," Lesser said.
Lesser said empowering millennial workers and making them aware of the impact they'll have on the world through their work has increased the success of BCG.
"I really think the more we've invested to make it a unique work environment... it's totally a positive," Lesser said.
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Today 5:47 AM ESTHow BCG Helped Respond To The Ebola Crisis
Boston Consultant Group president and CEO Rich Lesser and Wendy Woods, global leader of Social Impact for BCG, joined HuffPost Live at Davos on Saturday to share how their company helped the UN respond to the Ebola crisis.
"It's something that we felt most privileged to be a part of," Lesser said.
Woods said it's normal for government entities to reach out to consulting groups, but usually the process takes a lot more time.
"The coordination has been better than I've ever seen it on a global scale," Woods said.
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Today 5:37 AM ESTCourtois: New Devices Are Letting People 'Do Great Stuff'
Courtois said new devices are "enabling people to do more stuff, to do great stuff."
Courtois also spoke about new technology being developed by Microsoft that will allow users to interact with 3D holograms.
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Today 5:33 AM ESTMicosoft's Role After The French Terror Attack
Courtois shared how Microsoft played a role after the recent terror attacks in Paris, partnering with French law enforcement and the FBI to get police information they needed within 45 minutes of the attack's start.
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Today 5:32 AM ESTJean-Philippe Courtois At Davos
Jean-Philippe Courtois on HuffPost Live
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Today 5:32 AM ESTWhat Microsoft's Doing To Protect Customers
Jean-Philippe Courtois, president of Microsoft International, spoke about the steps his company is taking to maintain the public's trust as data moves further into the Cloud.
Courtois said Microsoft has been focusing on several aspects: improving how they anchor the data; certification and compliance of infrastructure; and transparency.
"This is a big deal to actually report back to society what we do with data and how we deal with government requests," Courtois said about being a transparent company.
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Today 5:25 AM ESTValerie Keller and Cheryl Grise At The World Economic Forum 2015
Valerie Keller and Cheryl Grise of the EY Beacon Institute talk with HuffPost Live about how to transform your business through a better sense of purpose.
Mark Bertolini, CEO of Aetna, explained how he increased wages for his workers, arguing that taking better care of his employees would in turn lead to better care for Aetna's customers.
Bertolini told HuffPost Live at Davos his company increased wages and adjusted benefits in order to give its employees a better quality of life.
"Not everybody should be at $16 an hour, there may be people who need to be higher," Bertolini said, noting people's lifestyles are directly impacted by how they are paid.
Bertolini's company also implemented yoga and mindfulness practices at work and studied the effect they had on the employees.
"After we completed the [yoga] course, the results were amazing," Bertolini said, saying in addition to weight loss and happier workers, there was an increase in productivity by 69 minutes a month.
"We think it's about a $3,000 a year savings," Bertolini said, noting his company's health care costs actually went down after implementing mindfulness practices.
Below, live updates from the 2015 Davos Annual Meeting:
live blog
Oldest
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Today 8:58 AM ESTMcAfee On Evolution And Technology
"Evolution has wired us; we have social drives," McAfee said.
"Could there be a piece of technology that figures out an intelligent next question to ask somebody? Yeah," McAfee said.
"For 200 years of industrial technology, we've been making workers obsolete," McAfee said.
McAfee said nobody knows if we're reaching the point where technological developments could lead to unemployment.
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Today 8:56 AM ESTAndrew McAfee At Davos
Andrew McAfee of the MIT Sloan School of Management on HuffPost Live
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Today 8:46 AM ESTBruder On The Barriers Women Face
"We strive to have the majority of our graduates female," EFE's Ron Bruder said.
"I don't think there's an official barrier but there's a social and structural barrier in a lot of these countries toward women," Bruder added.
Bruder said his company creates local foundations, and those foundations tackle those issues on EFE's behalf.
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Today 8:42 AM ESTEFE's McAuliffe And Bruder: Young People Need Jobs
EFE's president and CEO Jamie McAuliffe, along with founder and chair Ron Bruder, sat down with HuffPost Live at Davos on Saturday.
Bruder said it's vital to the global economy that youths have jobs.
McAuliffe said EFE starts with businesses.
"Where are the jobs?" he said.
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Today 8:14 AM EST'Every Woman Has The Opportunity To Be An Activist'
Catchafire Founder & CEO Rachael Chong joins HuffPost Live to share her thoughts on how to get more women to Davos.
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Today 8:11 AM EST'Doing Less, But Better'
Greg McKeown, author of Essentialism: The Disciplined Pursuit of Less, said his book grew out of working with people who are really successful.
"Success can become a catalyst for failure," he said.
McKeown said leaders at Davos have experience with plateauing after achieving professional success. To avoid that, McKeown said, people must find a way to expand their contribution without doing more.
"The whole idea is about doing less, but better," he said.
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Today 8:00 AM ESTOnline Data Is Like Money
"In some sense, we're the next generation of banks," Smith said, noting you wouldn't put your data in a place you don't trust just like you wouldn't deposit your money at a bank you don't feel is stable.
Smith said the most difficult part about investigating a hacking crime is identifying and finding a hacker.
"Our prisons are not full of hackers," Smith said, noting hackers are often in countries outside the U.S.
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Today 7:57 AM ESTBrad Smith At Davos
Brad Smith at Davos
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Today 7:55 AM ESTBrad Smith On Outdated Technology Laws
"2015 needs to be a year for new solutions, and that's what we're proposing. We do need new laws in the United States and in Europe," Smith said. "We're trying to manage 21st century technology issues with laws that were written in the '80s and '90s."
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Today 7:54 AM ESTMicrosoft's Brad Smith On The Sony Hack
Microsoft's Brad Smith said the Sony hack was an example of how the Internet could be used as a way to both fight against and fight for free expression.
"We saw the Internet being used both as a weapon to attack free expression... and as a tool to defend free expression," Smith said.
Brad said lawmakers in the U.S. and Europe need to discuss how to increase online privacy while still providing law enforcement with information they need.
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Today 7:34 AM ESTBusque On Encouraging Women
As an engineer, Busque said she's always worked primarily around men.
"For me, it's never something I've focused on but it definitely is there and is an issue," Busque said.
"I've some very strong female role models, so I think that's an important thing," she added, saying she regularly thinks about how she can encourage women at her own company to take on leadership roles and grow as employees.
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Today 7:30 AM ESTLeah Busque At Davos
Leah Busque on HuffPost Live
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Today 7:29 AM ESTLeah Busque On The Responsibility Of Job Creators
Leah Busque, founder and CEO of TaskRabbit, said as a business leader it's important to consider the quality of the lives you're curating for workers.
"I believe there's been a slippery slope of new companies that have formed in the name of on demand services ... that maybe aren't having as much of a focus as they should on the worker," Busque said.
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Today 7:22 AM EST'We Have To Use Our Voice'
Chong spoke about what it's like to be one of the few women at Davos.
"It's not always easy to stand up and say, 'hey, that was a sexist remark,'" she said.
"I think we have to use our voice," she added. "Particularly with businesswomen, there are so few, and as role models they're so important."
Share this:
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Today 7:21 AM ESTFrom Investment Banking To Entrepreneur
Chong explained how she left the world of investment banking -- a job she said she actually enjoyed -- to become an entrepreneur.
"While I was banking I still wanted to be able to give back and at the time the only opportunity was, once a year we'd get put on a bus and go build a house," Chong said. "All volunteer work is good, but when you think about maximizing impact, bankers building houses is not necessarily the best use of their time."
"I became really obsessed with then finding a way to volunteer my skills," Chong added.
Share this:
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Today 7:19 AM EST'It Gives People A Sense Of Purpose'
Chong said the people who volunteer with Catchafire gain something by giving up their time and services.
"It gives people a sense of purpose," Chong said.
Share this:
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Today 7:18 AM ESTRachael Chong At Davos
Rachael Chong at HuffPost Live
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Today 7:17 AM ESTHow Busy People Make It Work
Rachael Chong, founder and CEO of Catchafire, said it can be hard to get professionals to donate their time, but busy people somehow still make it work.
"The busiest people are the ones who usually fit in the most stuff and are the most productive," she said.
Thanks to @ariannahuff we'll #thrive on the #wef15 #purposejourney in #Davos via #bulletproofcoffee and @thirdmetric pic.twitter.com/qzagkLgR86
— Valerie Keller (@Valerie_Keller_) January 24, 2015
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Today 6:10 AM ESTJean-Philippe Courtois At The World Economic Forum 2015
Microsoft International President Jean-Philippe Courtois joins HuffPost Live to talk about technology at Davos, NSA reform and some exciting products that are on the horizon.
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Today 5:55 AM ESTLesser: Leaders Should Set A Tone
"I just think if leaders don't set a tone about why we do what we do and why we do it in a way that's enriching for all of us, then people just assume all leadership cares about is the bottom line," Lesser said.
Lesser said he tries to lead by example but he's "probably on email too much."
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Today 5:53 AM EST'Totally A Positive'
"In our world, having great talent want to come and want to stay is the single biggest driver of success," Lesser said.
Lesser said empowering millennial workers and making them aware of the impact they'll have on the world through their work has increased the success of BCG.
"I really think the more we've invested to make it a unique work environment... it's totally a positive," Lesser said.
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Today 5:47 AM ESTHow BCG Helped Respond To The Ebola Crisis
Boston Consultant Group president and CEO Rich Lesser and Wendy Woods, global leader of Social Impact for BCG, joined HuffPost Live at Davos on Saturday to share how their company helped the UN respond to the Ebola crisis.
"It's something that we felt most privileged to be a part of," Lesser said.
Woods said it's normal for government entities to reach out to consulting groups, but usually the process takes a lot more time.
"The coordination has been better than I've ever seen it on a global scale," Woods said.
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Today 5:37 AM ESTCourtois: New Devices Are Letting People 'Do Great Stuff'
Courtois said new devices are "enabling people to do more stuff, to do great stuff."
Courtois also spoke about new technology being developed by Microsoft that will allow users to interact with 3D holograms.
Share this:
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Today 5:33 AM ESTMicosoft's Role After The French Terror Attack
Courtois shared how Microsoft played a role after the recent terror attacks in Paris, partnering with French law enforcement and the FBI to get police information they needed within 45 minutes of the attack's start.
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Today 5:32 AM ESTJean-Philippe Courtois At Davos
Jean-Philippe Courtois on HuffPost Live
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Today 5:32 AM ESTWhat Microsoft's Doing To Protect Customers
Jean-Philippe Courtois, president of Microsoft International, spoke about the steps his company is taking to maintain the public's trust as data moves further into the Cloud.
Courtois said Microsoft has been focusing on several aspects: improving how they anchor the data; certification and compliance of infrastructure; and transparency.
"This is a big deal to actually report back to society what we do with data and how we deal with government requests," Courtois said about being a transparent company.
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Today 5:25 AM ESTValerie Keller and Cheryl Grise At The World Economic Forum 2015
Valerie Keller and Cheryl Grise of the EY Beacon Institute talk with HuffPost Live about how to transform your business through a better sense of purpose.
During Thursday night's 'Daily Show," Jon Stewart took on the "Monsters of Money" -- the business and financial leaders who flew to the World Economic Forum in Davos, Switzerland, in a fleet of 1,700 private jets to discuss topics such as climate change.
"As in... can you believe how much climate we've changed?" Stewart wondered aloud.
The summit, he said, is also "a chance for the powerful to reflect on how the world has changed since the devastating financial collapse that many of them caused and/or profited from."
Stewart then went after some of the biggest names in business, including JPMorgan Chase CEO Jamie Dimon and AIG's Steve Miller, both of whom have complained about the new regulations put in place since the 2008 financial crisis.
But Stewart saved the best for last, blasting MetLife for suing the government over it's "too big to fail" status.
Check out the clip above to see Stewart use the insurance company's own marketing materials to prove that they are, in fact, every bit as big as the government says they are.
Finding carnitas during the ongoing Chipotle pork shortage may not be as hard as you originally thought. The Mexican chain is rotating the menu item through all of its restaurants, according to Chris Arnold, a Chipotle spokesman. Though one-third of its restaurants won't be selling carnitas until the shortage ends, that one-third will change periodically, so no restaurants are out of the protein for "extended periods," Arnold wrote in an email.
Chipotle suspended sales of carnitas last week after discovering that one of its pork suppliers wasn’t meeting its standards for responsibly raised meat. The news that the hottest fast food chain in the country was out of one of its few menu items made headlines, with carnitas fans taking to Facebook and Twitter to ask when the protein would be coming back.
When chipotle is out of carnitas pic.twitter.com/gVYZcIAP6N
— abby bova (@abby_bova) January 10, 2015
A carnitas fan mourns the loss.
The announcement also reminded Chipotle fans why they’re drawn to the chain in the first place. The burrito chain’s popularity has skyrocketed in recent years, in part because it sells itself as a fast food restaurant with a conscience -- hawking humanely raised meat and sustainably grown beans. At the same time, traditional fast food chains like McDonald’s are struggling to draw diners into their stores.
Despite Chipotle’s success, the carnitas shortage, which is now in its second week, highlights the challenges of running a large chain committed to serving humanely raised meat when there isn’t a lot of it out there.
Carnitas only make up about 6 percent of the entrees chipotle sells, Arnold said. The spokesman had some advice for those die-hard carnitas fans who want to make sure their local Chipotle is carrying the pork:
During his State of the Union address on Tuesday, President Barack Obama will lay out a plan to extend tax credits to the middle class by hiking taxes on wealthier Americans and big banks, according to senior administration officials.
Under the plan, the capital gains tax for couples with income over $500,000 per year would be raised from its current level of 23.8 percent up to 28. The plan would also strip a tax break, known as a "step-up," that allows heirs to avoid capital gains taxes on large inheritances.
In addition, the plan would institute a new tax on the biggest financial institutions, basing the fee on liabilities in order to discourage risky borrowing. The administration says the fee would hit the roughly 100 banks that have assets of $50 billion or more.
The president's plan would use revenues from those tax code changes to finance credits aimed at the middle class, officials said. That includes extending the earned income tax credits to families without children, which would benefit an estimated 13 million low-income workers, while also tripling the maximum tax credits for child care in low- and middle-income homes.
"This proposal is probably the most impactful way we can address the manifest unfairness in our tax system," an administration official said.
The tax hikes on capital gains would run into heavy opposition from Republicans in the GOP-controlled Congress. Other elements of the president's plan, however, have enjoyed some degree of bipartisan support. House Ways and Means Committee Chairman Dave Camp (R-Mich.) has proposed a similar tax on big banks, and many Republicans favor the idea of broadening the earned income tax credit.
According to officials, the capital gains tax reforms would impact "almost exclusively" the top 1 percent of earners, carving out the majority of middle-income families from the hikes.
In addition to the tax credits, the president's proposals will also include a plan to give more workers access to retirement accounts. Employers with at least 10 workers who don't currently offer their employees a 401(k) would have to enroll them in what's known as an automatic IRA, a plan that Obama has included in previous budgets he's proposed.
Bucking tradition, the White House has been laying out such proposals in advance of the president's speech, rather than surprising viewers with the policy measures on Tuesday. The president has already laid out a proposal to make some community college free and to extend paid leave to more people, including federal workers.
Officials said they have been viewing the past two weeks as an opportunity to begin making the president's case for how to improve the economy for the middle class.
"It's a clearer way for the president to present his vision," said one official.
CORRECTION: This post originally misstated the current top capital gains tax.
The hottest fast food chain in the country has been out of a key menu item for four days at hundreds of its restaurants, and it's still not clear when it will come back.
Chipotle announced Tuesday that about one-third of its more than 1,600 stores would stop selling carnitas, a traditional Mexican dish made by slow-cooking pork until it becomes tender. The popular Mexican chain made the decision earlier this week, after discovering that one of its suppliers didn’t meet its standards for humanely raised pork.
Carnitas is one of just six burrito bases the chain offers.
Chris Arnold, a Chipotle spokesman, wrote in an email that the burrito joint is looking into several different ways to rebuild its supply, including getting more pork from current suppliers, using different cuts of pork (the dish is typically made from the shoulder) and looking for additional suppliers. Carnitas make up about 6 percent of entree orders, he said.
“We are working through those options now, but it’s too soon to say how long this might last,” Arnold said.
It's also too early to tell whether the shortage will hurt Chipotle's bottom line. The company's stock price was down slightly when the market opened the morning after the chain first announced the shortage. Still, at around $711 a share, the Friday stock price was up about 34 percent from the same time last year.
A sign declaring no carnitas at a Manhattan Chipotle Friday.
Despite a sign notifying customers there weren't carnitas, several customers at a Chipotle in Manhattan’s Union Square during Friday's lunch rush said they hadn’t heard about the shortage. Many said they typically order something else; others prioritized ethically treated animals over their tastebuds.
“It would make me not want to come here more if they did have the (carnitas) and (the pork) was mistreated,” 15-year-old carnitas fan Lincoln Barron said after being told the reason behind shortage.
Even if some carnitas lovers do turn elsewhere for their fix, the publicity over the shortage will more than make up for any sales hits. There’s marketing power in scarcity, according to Aaron Allen, the founder of Aaron Allen & Associates, a restaurant consulting firm. Though the pork shortage is unintentional, the fact that carnitas is limited makes it a little bit more special, he said.
More significant, in marketing terms, Chipotle’s decision reminds fans why they like the restaurant in the first place. The Mexican chain sells itself as a place that sells fresh, healthy food. That reputation is a big part of why it's been growing rapidly for the past several months, while places like McDonald's have stagnated.
“It’s not just buzz around some promotional activity,” Allen said. “It’s really reinforcing what the brand stands for.”
Of course, Chipotle will still lose some business while carnitas are gone.
“My desire to be there is significantly diminished if they’re not going to have carnitas or if it’s going to be spotty,” said Doug Ludemann, a 36-year-old who owns an aquarium cleaning business near Minneapolis. “It’s not going to draw me in and make me pay 10 bucks for lunch.”
Still, Ludemann said he respects Chipotle's decision, even it means they don't have the only thing he orders there.
“I wish it didn’t mean that I had to not shop there,” he said. “My hope is that it increases the demand for more humanely produced pork.”
Elon Musk is supposedly building a test track for Hyperloop -- his futuristic high-speed transportation system that would carry people from Los Angeles to San Francisco in about 35 minutes.
The SpaceX founder and Tesla Motors CEO tweeted the following cryptic messages Thursday afternoon:
Will be building a Hyperloop test track for companies and student teams to test out their pods. Most likely in Texas.
— Elon Musk (@elonmusk) January 15, 2015
Also thinking of having an annual student Hyperloop pod racer competition, like Formula SAE http://t.co/HV9BLCoMb8
— Elon Musk (@elonmusk) January 15, 2015
Plans for Hyperloop were originally unveiled in 2013.
NEW YORK (AP) — The Wet Seal Inc. has filed for Chapter 11 bankruptcy protection in an effort to keep its remaining teen clothing stores open.
The announcement Friday comes a little over a week after the chain said that it was closing 338 stores, or about two-thirds of its total.
Fellow teen clothing retailers Delia's Inc. and Deb Stores filed for Chapter 11 bankruptcy in December, further evidence of trouble in a business being hurt by tough competition and changing tastes among teenagers.
Wet Seal had warned last month that it might need to file for bankruptcy protection if it did not resolve its cash issues after reporting another quarter of losses.
Wet Seal and other chains are being hurt by stores like H&M and Forever 21 that are wooing young people with fast-changing selections of low-priced fashion. Teens are also more interested in outfitting themselves with the latest tech gadgets than new jeans.
The retailer began in 1962 as a bikini shack in Newport Beach, California. It was acquired by Canadian retailer Suzy Shier in 1984. The company, which today sells clothing, shoes and accessories aimed at teenage girls, went public in 1990.
Wet Seal expanded with additions such as Contempo Casuals, Arden B. and Zutopia. Wet Seal acquired Contempo in 1995, adding 200 Contempo Casuals stores. All of those stores were converted to the Wet Seal name by 2001.
Wet Seal has dealt with a long-running series of problems. The company restructured in 2013, closing stores, cutting jobs and changing management.
The executive shuffle included hiring retail-industry veteran John Goodman in January 2013 to help refocus the company after it fired former CEO Susan McGalla in July 2012 amid falling sales. Goodman resigned in September 2014, and Wet Seal brought back Ed Thomas, a former president and CEO, to lead the company.
In addition, Wet Seal dealt with a proxy battle in 2012 with an investment group that wasn't happy with its financial performance. And in 2013 the retailer agreed to pay $7.5 million to settle a federal racial discrimination lawsuit filed by three former employees.
Last year, year Wet Seal decided to shut down its Arden B chain, closing some stores and converting some to the Wet Seal name.
"Wet Seal failed for two reasons: a company that failed to stay in tune with their customers and new rivals like H&M that were able to get cooler merchandise to the stores quicker and with slightly better quality than Wet Seal," Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, said.
Bigger retailers like J.C. Penney Co. and Kohl's Corp. also "upped their games" in teen girls clothing, Sozzi said.
Wet Seal hopes to keep operating during bankruptcy. The Foothill Ranch, California-based company was running 173 stores in 42 states and Puerto Rico as of Thursday.
The retailer said that it has arranged a $20 million term loan facility through B. Riley Financial Inc. to help it keep paying its vendors and landlords. That funding still needs to be approved by the U.S. Bankruptcy Court for the District of Delaware.
The agreement would make B. Riley the majority stockholder of Wet Seal once the retailer exits bankruptcy.
Wet Seal estimates its assets to be between $10 million and $50 million, according to its bankruptcy filing. Liabilities are estimated between $100 million and $500 million. The company's largest creditor is Hudson Bay Master Fund Ltd. Other big creditors are primarily its shopping-mall landlords.
Shares of the company tumbled about 3 cents, or 40 percent, to 5 cents in Friday afternoon trading. Companies' common stock often becomes worthless in a bankruptcy reorganization.
Target is pulling out of Canada, the retail giant announced Thursday.
The chain plans to close all 133 of its stores in the country, and has received initial Canadian court approval to go through with the liquidation process. The decision comes after a review by company executives found that Target Canada wouldn’t become profitable until at least 2021, according to a statement by Brian Cornell, the company’s CEO.
“We have determined that it is in the best interest of our business and our shareholders to exit the Canadian market and focus on driving growth and building further momentum in our U.S. business,” Cornell said in the statement, noting that it was “a very difficult decision.” About 17,600 people work at Target Canada.
Target expanded into Canada in 2013 and has been plagued by problems ever since. Canadian shoppers were greeted with empty shelves during Target's first few weeks of operation in the Great White North as the chain couldn’t keep up with demand. Shoppers also complained that prices at the big-box store were too high.
Despite efforts to slash prices -- Target Canada eventually became cheaper than Walmart, according to one study -- and fewer inventory problems, Target’s botched first few weeks in the country left a bad impression and it’s been difficult to turn sales around. After a little more than a year in the country, Target had lost more than $1.5 billion in Canada.
Executives were hoping the holiday season, a crucial time for retailers, would give Target Canada a boost, but Cornell said performance wasn’t good enough to convince executives it made sense to stay in the country.
"Simply put, we were losing money every day," the CEO said in a Q&A on Target's website.
The Canada exit comes as Target is struggling in the United States as well. Once a favorite of middle-class shoppers looking for hip items on the cheap, Target is still working to regain trust after a massive credit card hack at the end of 2013 that compromised personal information of up to 70 million customers.
The chain is also suffering from some of the same ills plaguing other big-box stores. With shopping sites like Amazon and drugstore and pharmacy chains offering many of the same products in a more convenient setting, Target and others are struggling to lure shoppers out to the suburbs and into their stores.
Under the direction of Cornell, who became the company's CEO in July 2014, Target has tried to fight back, offering free shipping during the holiday season and launching a line of smaller stores in urban areas. Target is also getting back to its roots, focusing more on efforts like designer collaborations, which have led some to nickname the chain "Tar-zhay."
This story has been updated to include further detail.
The number of Americans struggling to pay medical bills fell last year for the first time in nearly a decade -- the latest sign that Obamacare is making health care more affordable.
Sixty-four million people, or approximately 35 percent of the U.S. population, said they had trouble paying bills or were stuck paying off medical debt in the past year, according to a new survey by the Commonwealth Fund released on Thursday. That was down from 75 million people, or 41 percent of the population, in 2012. This marks the first time that figure has fallen since 2005, when Commonwealth started keeping track.
Commonwealth attributed the drop partly to expanded access to affordable health insurance made possible by Obamacare. The survey found that the number of uninsured Americans dropped to 29 million people last year, or 16 percent of the population, from 37 million, or 20 percent, in 2010.
The Commonwealth survey, which polled 6,027 U.S. adults in the second half of 2014, is in line with several other studies finding that the uninsured rate is falling.
“These declines are remarkable and unprecedented in the survey’s more than decade-long history,” Sara Collins, the lead author, said in a press release. “They indicate that the Affordable Care Act is beginning to help people afford the health care they need."
As the chart from Commonwealth shows, the percentage of Americans reporting problems paying off medical bills or medical-related debt rose from 2005 to 2012. Rising health-care costs, stagnant income growth and the aggressiveness with which providers go after people who haven't paid their bills all contributed to this growth, according to Commonwealth Fund president David Blumenthal.
The Affordable Care Act has reversed what had been a "deterioration" of the American health-care system, according to Blumenthal.
The survey also found that, for the first time since 2003, there has been a decline in the number of people putting off health care because of the cost. In 2012, a record 80 million people said they didn't visit a doctor or clinic for a medical problem, didn't fill a prescription, skipped a follow-up, treatment or test, or did not get needed specialist care, in order to avoid paying for it. That number fell to 66 million in 2014.
Medical-bill debt, which is often expensive and unexpected, can significantly harm people's credit ratings, as a recent study from the Consumer Financial Protection Bureau pointed out. Nearly 20 percent of credit reports are hurt by overdue medical bills.
McDonald’s latest strategy to get more people in the door: Pull at your heart strings.
The chain, plagued by a rut of sluggish sales, unveiled a new ad Sunday evening during the NFL playoffs and the Golden Globes featuring McDonald’s signs from across the country with feel-good messages like “thank you veterans” and “keep jobs in Toledo.” Critics were swift to deride the spot, creating a parody, calling it “tone deaf” and using Twitter to note the irony of a chain highlighting its role in helping the community when it's constantly embroiled in labor protests and criticism for marketing unhealthy food to kids.
Despite the skeptics, the emotional advertising may actually be the Golden Arches' best hope to draw people in. With chains like Five Guys, Shake Shack and even Chipotle offering quick, fresh and relatively cheap alternatives to McDonald’s, the most salient reasons for many to order a Big Mac are nostalgia and familiarity. And the spot, called "Signs," reminds people of those things, said Barry Klein, a former director of advertising at McDonald’s.
“It’s about time,” said Klein, who helped craft the McDonald’s “You Deserve A Break Today” campaign in the 1970s. “That’s a big step forward in getting back to one of the important reasons for going to McDonald’s -- it’s a nice, pleasant experience, it’s family time and it’s warm and fuzzy.”
From the “You Deserve A Break” campaign to the “Little Sister” ad to McDonald’s “I’m Lovin’ It” slogan, the fast food giant has a history of trying to create an emotional connection with people to bring them in the door. When McDonald’s first rolled out nationally, it wasn’t necessarily any better than any of the other burger joints already out there, said Jason Chambers, a University of Illinois professor who focuses on the history of advertising.
“That notion of experience was an important one,” he said. “It was one of the things that they were using to try to make themselves unique in that category of equals.”
Indeed, the idea that McDonald’s is a family restaurant engaged in the community has “always been a key differentiator for us,” said Deborah Wahl, the company’s chief marketing officer in the U.S. The creative team at Leo Burnett, the agency behind the ad, wanted to emphasize "an asset that McDonald's has that's unique to them," said Susan Credle, the agency's chief creative officer.
"These reader boards from time to time stop being about running the business and start being about supporting the community," she said. "When we found these, we were like, 'This is real, this is not us being creative.'"
McDonald's is also taking a similar approach to its food, emphasizing features of its classic sandwiches that appear authentic, instead of dressing them up to be something they're not, Credle said. The controversial Sunday spot is part of a broader push to revamp McDonald’s “I’m Lovin’ It” campaign, and includes other ads that unapologetically tout the Big Mac as superior to kale and highlight the Quarter Pounder’s unpretentious perfection.
McDonald's new Big Mac ad.
Whal said she's hoping the spots will start a conversation with diners about the chain, which is exactly what the “Signs” ad did, even if much of that conversation was negative.
“It has created a lot of good dialogue and that’s what we’re interested in,” she said. Credle, who said her phone has been buzzing constantly since Sunday, expressed a similar sentiment.
"I'm just glad that people are talking," she said.
Still, buzz and emotion may not be enough to sell burgers. Klein, who now works as a marketing consultant, noted that Budweiser’s iconic clydesdales made viewers feel warm and fuzzy, but they didn’t convince people to switch from craft beers to Bud.
“The big issue to me is, is it too late?” Klein said. “Do the consumers still relate to what’s at the core of the McDonald’s menu? I don’t know the answer to that.”
And as the controversy over the “Signs” spot indicates, the emotional message the chain is trying to send with the ads doesn't match many Americans’ experience with McDonald’s. Part of the success of the “Take A Break” campaign was that at the time, McDonald’s really was a place where “where people could go in, get that break, get that quick meal,” Chambers said.
“Today you just don’t have that, and you’re also confronted with a host of more alternatives and better alternatives,” he said. “I would be very surprised if it moved the needle in any way, shape or form.”
