Hot startup Coin has 3 big problems

Will this card be the only one you ever need in your wallet again? Startup Coin hopes so.

NEW YORK (CNNMoney)

Coin revealed itself to the world with a gorgeously produced video that lays out how the card will work: Swipe your credit, debit or rewards card through an attachment on your smartphone, snap a picture of the front and back, and the card's information is stored in Coin. Simple, right?

Once your cards are stored, you can use Coin's digital display to select which of them you'd like to use to pay. Merchants swipe Coin just as they would a regular card.

In short, Coin aims to solve the problem of too many cards in a fat wallet. That may not sound like a major issue to solve, but loads of people loved Coin's premise and pre-ordered the device for $50 ahead of its slated summer 2014 release (when it will cost $100).

So yes, the hottest new startup product doesn't exactly exist yet. It's a common phenomenon in the Kickstarter world we live in.

But CEO and founder Kanishk Parashar told CNNMoney that the company hit its fundraising goal of $50,000 worth of pre-orders in just 40 minutes last Thursday.

The company -- which is backed by investors including Y Combinator and K9 Ventures -- has been testing working prototypes of Coin and is "two iterations away" from being ready to manufacture, Parashar said.

Still, it's hardly clear that Coin can meet its promised launch date of next summer. As with any buzzy product that hasn't yet been released, various problems could prop up. There's already a similar "all-in-one" card called the Protean Echo that got some tech-press love in August 2012. But the Echo website still lists the product as "Coming Soon!"

But even if Coin makes it to consumers on time, here are three other hurdles it must overcome before you can cut up all your credit cards for good.

Coin won't work if your phone is dead: Yup. The current iteration of Coin "locks up" if it's away from your smartphone for more than 10 minutes ... or if your phone's battery has run out.

It's a security measure to ensure that you don't lose your card, which is a valid concern. (Your phone will even send you a notification if you do leave your Coin behind at a bar.) But having to depend on battery-guzzling smartphones in order to pay for dinner is an obvious problem.

The company is working on a way to let users re-activate Coin from the card itself, even if a phone is far away or out of juice. But that feature hasn't been worked out yet.

Related story: How to successfully launch a second startup

Credit card companies might nix it: Coin hasn't secured approval with any of the major credit card issuers and networks it hopes to work with, nor has the company gotten a sense of whether the industry would embrace it.

Parashar said Coin has had "some conversations with some credit card companies," but he wouldn't reveal whether they were major issuers or how they felt about his product.

Why hasn't Coin had more wide-ranging discussions? "We're a really small company, and these are really large banks," Parashar said. "We will talk more when Coin is further along."

But one could argue Coin won't get further along if nobody wants to partner with it.

If major credit cards see Coin as a liability or ripe for fraud -- after all, the actual issued card isn't being presented -- Coin would be sunk.

Even the mighty Google (GOOG, Fortune 500) received an industry wrist slap in August 2012, when it expanded its mobile Wallet program. Google said all major credit cards had signed on, but American Express (AXP, Fortune 500) fired back with a statement that it hadn't approved a partnership and was still learning about Google's technology.

But Parashar insisted he has "no concerns" that credit card companies won't endorse Coin. The product already encrypts credit card information, he said, and Coin is working on "two more features to curb the possibility of fraudulent activity." Visa (V, Fortune 500), MasterCard (MA, Fortune 500), AmEx and Discover (DFS, Fortune 500) either declined to comment about Coin or didn't reply to requests.

Merchants might be stumped: Coin's design is slick, but it really doesn't look like the familiar old credit cards merchants are used to accepting. No raised-up numbers. No hologram.

"When we pay with Coin in San Francisco, as part of our testing, we are always accepted gladly," Parashar said.

And while it's true that other new mobile payment solutions like Square are becoming more common with retailers, it's easy to see how merchants outside of the Bay Area tech scene might be skeptical of a credit card that doesn't look like anything they've seen before.

Yet Coin doesn't plan to reach out to merchants to facilitate a nationwide rollout.

"We don't plan to go out of our way to educate the merchant world about it, because we're focused on the consumer side," Parashar said. "And anyone who works on the merchant side is also a consumer anyway."

Coin has set lofty goals in attempting to tackle the payments industry. But it'll take more than hype to completely revamp the wallet.

First Published: November 17, 2013: 11:14 AM ET

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1 million PlayStation 4's sold in first 24 hours

NEW YORK (CNNMoney)

The game system is Sony's first in seven years and includes new social features, streaming video apps and a touch pad on the controller. It is compatible with about 20 games, but the catalog is expected to expand by the end of the year.

It's one of two hot game systems going head-to-head this holiday season. Microsoft's Xbox One goes on sale this coming Friday.

Sony says it expects to sell 5 million PlayStation 4's by the end of March and analysts expect demand will outpace the supply through Christmas.

-- CNNMoney's Chris Isidore contributed to this report

First Published: November 17, 2013: 6:28 PM ET

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China lifts curtain on landmark reform agenda

A Chinese political meeting has set the tone on a range of social and economic initiatives.

HONG KONG (CNNMoney)

The laundry list of reforms -- which include 60 specific tasks -- is the result of a four-day meeting of top Communist Party officials led by President Xi Jinping. Held in Beijing, the summit was the first major opportunity for Xi to decisively push his party toward the painful economic reforms needed to maintain economic growth.

For a while, it looked like the meeting might not produce a meaningful roadmap. An initial outline published Tuesday lacked specifics, and seemed to raise more questions than it answered. But the latest report from the government details a range of social and economic initiatives, accompanied by more specifics than many analysts had expected.

For some, the summit was seen as a make-or-break moment. After decades of exponential expansion, China's economy is entering a period of slower growth, and Beijing is under pressure to address issues that threaten further development and social stability. Economists say China must find a way to balance growth by moving away from an economic model in which cheap credit and exports drive growth. Instead, Beijing should encourage domestic consumption and innovation.

Related story: China pledges greater role for markets

"Questions will remain over implementation," said Mark Williams and Qinwei Wang of Capital Economics. "But this is the most impressive statement of reform intentions that we've seen this century."

Beijing's plan calls for opening its financial markets and promoting greater foreign investment. The document also hints at changes in how companies file for stock market listings, the introduction of a bank deposit insurance scheme and an acceleration of interest rate liberalization. The roadmap seeks to roll back government control of state-owned enterprises and allow for greater competition with private firms.

Related story: What was missing in China's reform plan

The government also said it would gradually reform the country's household registration system, known as hukou, which affects everything from employment to social benefits. Other initiatives tackle China's pollution problem, promote social security programs, and call for a relaxation of the one-child policy. Started in 1980, the program was intended to arrest explosive population growth, but has since led to other issues including a diminishing supply of workers. The plan also seeks to abolish labor camps.

China's markets rallied on the news, with the benchmark Shanghai Composite jumping almost 3% on Monday.

Still, some questions remain. Although the second document was more detailed than analysts expected, it is silent on other looming issues including a rise in local government debt.

Related story: China cuts ribbon on free trade zone

Putting the plan into action could also prove to be rather difficult. The country's consensus-driven approach to policymaking could make for slow progress in translating the principles adopted at last week's meeting into real change for private companies, consumers and foreign investors.

And while the one-party system might avoid Washington-style gridlock, reformers still need to get regional and local governments on their side and convince party conservatives that change is for the better.

"A policy document, however weighty and well put-together, does not in itself change anything on the ground," said Capital Economics.

First Published: November 18, 2013: 2:13 AM ET

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Geithner takes private equity job

Tim Geithner, who stepped down as Treasury Secretary in January, will start in March as president and managing director of private equity firm Warburg Pincus.

NEW YORK (CNNMoney)

Warburg Pincus, a firm engaged in buying and selling companies, said Saturday that Geithner will start at the firm as president and managing director in March.

Geithner told the Wall Street Journal, which first reported the move, that he will play a "substantive role in helping ... manage the firm."

In a statement, Warburg Pincus said Geithner will "work closely" with its co-chief executives on strategy, management and investing.

A mainstay of President Obama's first-term cabinet, Geithner was an architect of the government's response to the financial crisis.

Geithner was widely associated with the TARP bank rescue, which was ushered through Congress by former Treasury Secretary Henry Paulson and then managed by Geithner after the Bush-Obama transition.

The controversial TARP was seen by some as a bailout of fat cat bankers. And some credited it with stabilizing the economy and helping avoid a deeper recession.

The day word leaked that Obama would name Geithner to lead Treasury, in the tumultuous period after the 2008 election, the Dow gained nearly 500 points.

When the crisis began, Geithner was president of the New York Federal Reserve, which helps oversee Wall Street. All told, he ran the New York Fed from 2003 until 2009.

Geithner, 52, left Washington in January 2013 and was succeeded by Jack Lew as Treasury chief. He first went to work at Treasury in 1988 and was later a top deputy to Treasury secretaries Robert Rubin and Larry Summers.

Reports surfaced after he left office that Geithner is writing a book about the financial crisis.

Warburg Pincus, established nearly 50 years ago, is a top player in private equity and manages $35 billion in assets.

In a deal this summer, Warburg sold eyecare specialist Bausch & Lomb to Valeant Pharmaceuticals for $8.7 billion. Years earlier, Warburg had led a private takeover of Bausch & Lomb.

Warburg did not disclose Geithner's compensation.

First Published: November 16, 2013: 8:08 AM ET

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JPMorgan reaches $4.5 billion settlement with mortgage investors

JPMorgan is the nation's largest bank by assets.

NEW YORK (CNNMoney)

The deal resolves one of JPMorgan's many legal headaches in connection with securities tied to risky mortgages it allegedly sold while misrepresenting their quality. The bank called it "another important step" in addressing these issues.

The settlement still requires approval from a court and from the trustees who managed the mortgage pools. The payment would be allocated by a financial expert chosen by the trustees.

The deal relates only to JPMorgan (JPM, Fortune 500) and Bear Stearns, and does not include securities associated with Washington Mutual. JPMorgan acquired ailing Bear and WaMu during the financial turmoil of 2008.

Mortgage-backed securities and related derivatives were a key cause of the financial crisis, saddling financial institutions with huge losses as the housing market cratered.

Related: Probe targets JPMorgan hiring in China

The group of 21 investors includes BlackRock, PIMCO and government-backed housing finance firms Fannie Mae and Freddie Mac.

Fannie and Freddie were involved in a separate agreement with JPMorgan over crisis-era mortgage securities last month in which the bank agreed to pay $5.1 billion.

The Justice Department is also in talks with JPMorgan over a potential multi-billion-dollar settlement on the same issue.

JPMorgan said it believed it had set aside sufficient reserves to pay for Friday's settlement and any additional litigation over mortgage-backed securities.

It's been a busy year for JPMorgan's legal department.

The firm has paid over $1 billion in fines in connection with last year's "London Whale" trading debacle, and $80 million more over allegedly unfair credit-card-billing practices.

In July, the bank agreed to pay $410 million to settle charges that it manipulated electricity prices in California and the Midwest. It is also facing scrutiny over its hiring practices in China and its alleged involvement in the Libor rate-fixing scandal.

JPMorgan posted a loss for the third quarter based on its massive legal expenses. CEO Jamie Dimon called the loss "painful" and warned that litigation costs could continue to be a drag on earnings at the nation's largest bank for several quarters.

First Published: November 15, 2013: 6:05 PM ET

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Corvette named Automobile of the Year

NEW YORK (CNNMoney)

The new Corvette has more power and better fuel economy than last year's model. It's powered by a 6.2-liter V8 engine that can put out as much as 460 horsepower but that can also get 29 miles per gallon in highway cruising.

"The Corvette has long been a tremendous performance value wrapped in an all-American package," the magazine says in its review of the car. "Now, however, with new-found sophistication and user-friendliness, the [new Corvette] should melt the barriers that have kept away so many driving enthusiasts."

Related Video: And the sexiest car of the year is...

Automobile magazine editor-in-chief Jean Jennings lauded the Corvette's overall design, performance, quality and comfort.

"The automobile of the year has to set a standard," she said. "It has to break a category in a way that really excites us," she said.

Related: Maserati Ghibli: Easier-access Italian luxury

The new Corvette should finally repair the image that Corvette has had for years as a car that only appealed to those seeking a flashy look, not real performance and sophistication.

The new car's interior, in particular, is a break from Corvettes of the past, which, even when they offered serious performance, were disappointingly cheap, she said.

In CNNMoney's own test drive of the new Corvette, we found it be a huge improvement over an already very credible sports car. The new interior has a much nicer design and higher quality than the outgoing model, while the car feels quicker, better balanced and more intuitive to drive.

Prices for the base Stingray start at just under $52,000.

Quiz: Which car is faster?

To be eligible for the award, a car must be completely or substantially new for the new model year. This is the second major award for General Motors (GM, Fortune 500) in recent weeks. The Cadillac CTS was named Motor Trend's Car of the Year earlier this month. Motor Trend and Automobile Magazine are both owned by Source Interlink, but the two magazines operate independently.

At the same time that it announced the award for the Corvette, Automobile announced that it was naming Tadge Juechter, lead engineer on the Corvette, as its Man of the Year.

First Published: November 16, 2013: 8:49 AM ET

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Forbes explores sale

Steve Forbes, who could be the last member of his family to own the business magazine started by his grandfather. The company is exploring a possible sale.

NEW YORK (CNNMoney)

A letter sent to employees Friday by Forbes Media president and CEO Mike Perlis said the move is prompted by "more than a few over the transom indications of interest" to buy the company.

"The frequency and serious nature of these overtures have brought us to a decision point," he said in the letter.

Its flagship property, Forbes, with a circulation of 933,000, is the third largest U.S. business magazine, according to the Alliance for Audited Media. It lags Time Warner's Money magazine and Bloomberg Businessweek, owned by financial publisher Bloomberg. It has about 370 employees.

Related: Saudi prince vs. Forbes in billionaire brawl

Print media has been a difficult business in recent years due to losses of both readers and advertisers to online media.

Forbes' ad revenue for the first 9 months of the year fell 7.5% to $165.7 million, according to the Association of Magazine Media, and the ad pages in the print edition have fallen 12.5%.

Perlis' letter said that digital revenue at the company is expected to increase this year. The company also owns a number of web sites beyond Forbes.com, including Investopedia.com, and the RealClear family of sites such as RealClearPolitics.

Related: Forbes' 400 richest Americans

But if Forbes is sold, it would join a trend of print properties being sold.

In March Time Warner (TWX, Fortune 500), which is also owner of CNNMoney, announced its plans to spin off its Time Inc. publishing unit, the nation's largest magazine publisher, in a deal set to close early next year. That unit includes both Money and Fortune magazines.

Newsweek, the news magazine whose print version was abandoned late last year, was sold in August by IAC (IACI) to another all-digital news company, IBT Media.

Major newspapers have also been put on the block and sold this year. Amazon (AMZN, Fortune 500) founder Jeff Bezos is buying the Washington Post for $250 million in a deal announced in August, and the New York Times Co. (NYT) announced it would sell the Boston Globe for only $70 million to Boston Red Sox owner John Henry, despite having paid $1.1 billion for the paper in 1991.

In June, the former News Corp. took the name 21st Century Fox (FOX) and spun off its print publications such as the Wall Street Journal, the New York Post and several London newspapers into a new News Corp. (NWS)

Forbes was started by B.C. Forbes in 1917. His son, Malcolm, succeeded him as publisher. He handed it down to his son, Steve, who is still chairman and editor in chief. But two years ago, Perlis was brought in as the first non-family member to serve as CEO of the company.

The Forbes family also sold a minority stake in the company to investment firm Elevation Partners -- which includes rock singer Bono among its partners -- in August 2006. Elevation did not return a call seeking a comment on the sales plans.

First Published: November 15, 2013: 2:21 PM ET

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EPA proposes cut to ethanol requirement for gasoline

Most gas sold in the U.S. contains up to 10% ethanol.

NEW YORK (CNNMoney)

A law passed by Congress in 2007 had called for the inclusion of 18.15 billion gallons of renewable fuel in 2014, but on Friday, the EPA proposed that this level be reduced to between 15.00 and 15.52 billion.

The standard had previously been increasing every year, with the 2013 requirement set at 16.55 billion gallons.

Lawmakers passed the 2007 legislation with the aim of increasing renewable fuel production and reducing dependence on foreign oil. But recent gasoline consumption has been less than Congress anticipated at the time, due to factors like the economic downturn and improvements in fuel economy.

As a result, adherence to the law's original standards next year would mean that the total ethanol required would exceed the amount that could be blended into conventional gasoline -- a problem known as the "blend wall."

Nearly all gas sold in the U.S. is "E10" fuel, which contains up to 10% ethanol.

Related: U.S. to become top oil producer by 2015

EPA administrator Gina McCarthy said the Obama administration continued to support increased biofuel production and use.

"We look forward to working with all stakeholders to develop a final rule that maintains the strength and promise of the [Renewable Fuel Standards] program," she said.

The proposal is subject to a 60-day public comment period, and could later be changed.

The ethanol mandate has been a boon for corn farmers and big agricultural companies that profit from higher corn demand, and has also drawn praise from policymakers who want to wean the U.S. off imported oil from the Middle East and elsewhere.

But the law also has a variety of critics.

The oil industry doesn't like it because ethanol reduces its market share. Livestock producers don't like it because it drives up the price of corn, which is used to feed cows, chicken and pigs.

Many environmentalists oppose it as well. They doubt that corn-based ethanol is any better for the planet than conventional gasoline, as its production requires the clearance of land and results in deforestation. They also argue that higher corn prices likely contribute to global hunger.

First Published: November 15, 2013: 4:58 PM ET

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JPMorgan reaches $4.5 billion settlement with mortgage investors

JPMorgan is the nation's largest bank by assets.

NEW YORK (CNNMoney)

The deal resolves one of JPMorgan's many legal headaches in connection with securities tied to risky mortgages it allegedly sold while misrepresenting their quality. The bank called it "another important step" in addressing these issues.

The settlement still requires approval from a court and from the trustees who managed the mortgage pools. The payment would be allocated by a financial expert chosen by the trustees.

The deal relates only to JPMorgan (JPM, Fortune 500) and Bear Stearns, and does not include securities associated with Washington Mutual. JPMorgan acquired ailing Bear and WaMu during the financial turmoil of 2008.

Mortgage-backed securities and related derivatives were a key cause of the financial crisis, saddling financial institutions with huge losses as the housing market cratered.

Related: Probe targets JPMorgan hiring in China

The group of 21 investors includes BlackRock, PIMCO and government-backed housing finance firms Fannie Mae and Freddie Mac.

Fannie and Freddie were involved in a separate agreement with JPMorgan over crisis-era mortgage securities last month in which the bank agreed to pay $5.1 billion.

The Justice Department is also in talks with JPMorgan over a potential multi-billion-dollar settlement on the same issue.

JPMorgan said it believed it had set aside sufficient reserves to pay for Friday's settlement and any additional litigation over mortgage-backed securities.

It's been a busy year for JPMorgan's legal department.

The firm has paid over $1 billion in fines in connection with last year's "London Whale" trading debacle, and $80 million more over allegedly unfair credit-card-billing practices.

In July, the bank agreed to pay $410 million to settle charges that it manipulated electricity prices in California and the Midwest. It is also facing scrutiny over its hiring practices in China and its alleged involvement in the Libor rate-fixing scandal.

JPMorgan posted a loss for the third quarter based on its massive legal expenses. CEO Jamie Dimon called the loss "painful" and warned that litigation costs could continue to be a drag on earnings at the nation's largest bank for several quarters.

First Published: November 15, 2013: 6:05 PM ET

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Save money on holiday expenses

Thanksgiving Day airfares surged 8.2% in September alone.

(Money Magazine)

With airlines cutting back on seats, Turkey Day fares in late September were 8.2% costlier than a year earlier, reports CheapAir.com. And that price differential could hit 20% by November. Use these travel, shopping, and giving strategies, then, to make it through 2013 with more cash left over.

More holiday tips

Fly a day less traveled. Save a bundle by avoiding the standard Wednesday-to-Sunday rush, says CheapAir CEO Jeff Klee. A Monday return, for example, cuts $90 from the $593 average domestic fare.

Related: 3 fun and cheap road trips

Get a delayed discount. Use the free deal-alert web app Hukkster to bookmark each gift you buy, and you'll be notified if the store cuts the price. Then ask for cash back. Most national retailers offer 15- or 30-day price adjustments, says co-founder Erica Bell.

Magnify your charity. Give more, painlessly, by adding a matching gift from your employer. At least $10 billion in workplace matches go unclaimed annually, though 65% of big companies offer them. Yours doesn't? Find givers who do at matchingdonations.org.

First Published: November 14, 2013: 4:15 PM ET

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