Sterling's wife wants to claim Clippers ownership - report

Shelly Sterling, center, the estranged wife of L.A. Clippers owner Donald Sterling, wants to retain ownership of the team according to a published report.

NEW YORK (CNNMoney)

Shelly Sterling told the L.A. Times that the sanctions that National Basketball Association Commissioner Adam Silver imposed on Donald Sterling don't apply to her or her family. Therefore she should be able to retain ownership of the team.

Silver announced April 29 that he was imposing a lifetime ban on Donald Sterling, fining him $2.5 million and asking the league's other owners to force Sterling to sell the team after he was recorded making racist comments to his girlfriend. But Silver said at that time that the punishment did not apply to Sterling's family members.

"This ruling applies specifically to Donald Sterling and Donald Sterling's conduct only," he said at the press conference.

CNN contacted Shelly Sterling's representatives, but they did not have an immediate response Thursday morning. Mike Bass, spokesman for the NBA, said the league declined to comment on the report.

Related: What Sterling's ban means for Clippers' finances

About a dozen of the team's sponsors have announced they would cut ties or suspend marketing agreements with the Clippers due to the controversy. Marketers have been slow to return to the team despite Silver's ban.

After Donald Sterling's comments became public, Shelly Sterling issued a statement condemning the remarks, saying that "Our family is devastated by the racist comments made by my estranged husband. My children and I do not share these despicable views or prejudices."

But the L.A. Times had previously reported depositions in which people have accused Shelly Sterling of making her own racist comments.

She and her husband, who made their fortune in real estate, were both named as defendants in a housing discrimination case brought by the Justice Department in 2006. Donald Sterling settled the case with a $2.8 million fine but no admission of guilt in 2009.

Related: Oprah wants to make joint bid for Clippers with Ellison, Geffen

Since Silver's announcement, several high profile bidders have emerged for the team. A spokeswoman for Oprah Winfrey said that she had been in contact with media mogul David Geffen and Oracle (ORCL, Fortune 500) CEO Larry Ellison about a joint bid for the team. Geffen's spokesman also confirmed his interest. Retired boxer Oscar De La Hoya also says he wants to bid on the team.

Sterling reportedly bought the team for only $12 million in 1981. Its current value was estimated at $575 million by Forbes, which tracks team valuations. But Patrick Rishe, a professor of sports business at Webster University, says that the team is worth at least $750 million, and that a bidding war could quickly take the sales price up to $1 billion or more.

First Published: May 8, 2014: 10:30 AM ET

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Mortgage rates hit a 2014 low

NEW YORK (CNNMoney)

The average interest charged to borrowers for a 30-year, fixed rate loan fell to 4.21% from 4.29% last week, according to Freddie Mac's weekly mortgage rate report.

Rates have not been this low since the week of November 7, when they were at 4.16%.

The 15-year, fixed rate mortgage, a popular loan for homeowners refinancing existing mortgages, hit 3.32%, down from 3.38% last week.

Related: Buy vs. rent: What you'll pay in the 10 biggest cities

Global unrest and a weak U.S. economic recovery have kept rates low on U.S. Treasury bonds, which is used as the benchmark to set most consumer interest rates.

"Mortgage rates continued moving down following the decline in 10-year Treasury yields after a dismal report on real GDP growth in the first quarter," according to Freddie's chief economist Frank Nothaft.

Related: 10 most affordable small cities

World events was a key factor.

"The effects of slower growth in China and the unstable situation in Ukraine are all contributing to the ongoing bid for Treasury debt, driving yields down and pulling mortgage rates down too," said Keith Gumbinger, vice president of HSH.com, a mortgage information firm.

It is, of course, good news for homebuyers. Payments on a $200,000 30-year, fixed-rate mortgage would be only $979 a month at a rate of 4.21%. Borrowers with rates closer to the historical norm of 6% would pay about $1,200 a month.

Related: Nearly half of home sales are all cash

But continuing strict lending standards has limited the positive impact of low rates on the housing market recovery, according to Lawrence Yun, chief economist for the National Association of Realtors.

"The low rates are very good for people with high credit scores," he said. "But credit is still very tight for borrowers with lower scores. Many people would like to buy, but can't obtain financing."

These low rates are still significantly up off the record low set in May 2013, when the 30-year hit a rock-bottom 3.35%.

First Published: May 8, 2014: 10:00 AM ET

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Who will be Target's next CEO?

The COO of Microsoft, CEO of Neiman Marcus, and soon to be ex-CEO of Ford are all names mentioned as potential candidates for Target 's next CEO.

NEW YORK (CNNMoney)

Sound funny? Not when you think about the fact that Target (TGT, Fortune 500) is still trying to recover from a massive data breach, that exposed personal data of thousands of customers to hackers.

A technology background could even be a requirement for the next CEO as executive search firm Korn Ferry starts the hunt for a candidate.

"Kevin Turner, the (chief operating officer) of Microsoft (MSFT, Fortune 500) would be an interesting choice for Target," said Paula Rosenblum, managing partner at Retail Systems Research.

After all, Turner got his start at retail giant Wal-Mart (WMT, Fortune 500), a direct rival of Target. There, he rose through the ranks to become chief information officer and also CEO of its Sam's Club division, before he joined Microsoft.

Other names being tossed around are: Karen Katz , CEO of Neiman Marcus, and Alan Mulally, soon to be ex-CEO of Ford (F, Fortune 500).

Related: Interim Target CEO: Shoppers are safe

With a reputation of delivering high style at low prices, Target needs someone at the helm who has proven they can deliver the right "aspirational" message to consumers, said Les Berglass, chairman of Berglass & Associates, an executive search firm that specializes in the retail business. Berglass placed CEO Sharen Turney at Victoria's Secret, a division of L Brands (LB).

That's where Katz may fit in. She has been CEO since 2010 at Neiman, the luxury retail store. Running a larger company like Target would not only be a new challenge but also a big move up for her. Target is a $70 billion business, compared to Neiman's $4.6 billion.

Then there's Mulally, who everyone knows will be available for his next innings, come July.

Related: Target CEO falls on his sword

Mulally doesn't have a retail background, but he might not need it if he can "set the right tone" for employees and find the right people to work with, according to John Wood, vice chairman at executive search firm Heidrick and Struggles.

Wood wouldn't speculate on Mulally's prospects, but said his reputation for candor makes him a great candidate.

"He is responsible for the current culture at Ford -- one of transparency," said Wood.

Mulally is putting the finishing touches on a successful run at Ford, which announced last week that Mark Fields would take over in July as its next CEO.

Neither Microsoft's Turner, nor Neiman Marcus' Katz would comment for this story. Ford said:"Alan has not decided on his plans after retiring from Ford."

If Target hires an outsider, it would be a first for the company, which notoriously hires from within. However, the data breach and its repercussions have done so much harm that Target's board might have little choice.

"We are looking at all industries. Innovation is incredibly important to Target," said Dustee Jenkins, a Target spokesman.

Related: 5 of the biggest-ever credit card hacks

The company hired a technology consultant from outside as its new chief information officer this month. It says it's looking outside the company for two other newly created top positions in the security division.

At least one retail expert is skeptical of going outside for the top job.

Target needs a retail expert from within, and maybe hire a second CEO to run the technology side of things, according to Howard Davidowitz, principal at Davidowitz & Associates, a national retail consulting company and investment bank.

Given the magnitude of issues there, which includes an increasing threat of fast-growing rival Amazon.com (AMZN, Fortune 500), Davidowitz believes that it might not be possible for just one person to handle Target's top job.

"The person does not exist. You have to go to Mars," he said.

First Published: May 8, 2014: 10:42 AM ET

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Janet Yellen's big concern: Housing slowdown

NEW YORK (CNNMoney)

"One cautionary note, though, is that readings on housing activity -- a sector that has been recovering since 2011 -- have remained disappointing so far this year and will bear watching," she told the Joint Economic Committee in prepared remarks Wednesday.

The housing sector was a key part of the economic recovery last year but has since fallen short of economists' expectations.

Building permits -- a gauge of future home construction -- fell 2.4% in March, and existing home sales were flat. Economists had expected both these indicators would improve more, especially after blizzards and a cold winter put the housing sector largely on hold.

Yellen cautioned that the the warmer weather may not be enough to turn things around.

"The recent flattening out in housing activity could prove more protracted than currently expected rather than resuming its earlier pace of recovery," she said.

Related: Fed says economy improving a little

The Federal Reserve has kept its key short-term interest rate near zero since 2008 in an effort to stimulate more spending in the U.S. economy.

Low interest rates make it cheaper for businesses and consumers to take out loans, including mortgages. One of the most potent ways the Fed impacts the economy is through the housing market, where record-low mortgage rates had been spurring a recovery for the last two years.

While mortgage rates are still near historic lows, they have been rising since last summer, as the Fed slows its stimulative policies by buying fewer bonds each month.

As for the broader economy, Yellen isn't too worried. The U.S. economy stalled in the first quarter, growing at merely a 0.1% annual rate, but she blames the weakness largely on the harsh winter.

"I see that pause as mostly reflecting transitory factors, including the effects of the unusually cold and snowy winter weather," she said.

"With the harsh winter behind us, many recent indicators suggest that a rebound in spending and production is already under way, putting the overall economy on track for solid growth in the current quarter," she added.

Overall, Yellen expects the economy to grow faster this year than it did last year and the unemployment rate to continue declining gradually. As of March, the unemployment rate was at 6.3%, still well above its pre-recession range between 4% and 5%.

Related: Hiring is up in April

"While conditions in the labor market have improved appreciably, they are still far from satisfactory," Yellen said, expressing concerns about the long-term unemployed, stagnant wages and part-time workers who would prefer to work full time.

U.S. stocks started the day higher, turned negative when Yellen started speaking and have now rebounded a bit. The Dow is back in positive territory.

First Published: May 7, 2014: 10:26 AM ET

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Detroit bankruptcy costs hit $36 million

Lawyers representing the city of Detroit outside of bankruptcy court.

NEW YORK (CNNMoney)

The report by the independent fee examiner accounts for costs incurred from the city's initial filing on July 18, 2013 through the end of last year. The city spent $13 million during the first three months of the proceedings, and Tuesday's filing shows bills from lawyers and other consultants jumped 61% in the last quarter of the year.

The city's fee examiner Robert Fishman said in his report that the costs, while substantial, were reasonable and in line with the complexity and quality of the services provided.

The largest payments went to Jones Day, the bankruptcy law firm representing the city in court. It has billed the city $16.6 million in fees through the end of last year, and another $734,000 in expenses. That combined bill accounts for just less than half of the city's total costs so far.

Related: Detroit vote - Key to comeback

Kevyn Orr, the emergency manager appointed last year by Michigan Gov. Rick Snyder to oversee the city's finances, is a former partner at Jones Day. He has said the firm is charging the city at less than it normally would. Top partners at the firm billed the city at a rate of $825 an hour, according to the filing, while documents indicate that Jones Day partners have billed $1,000 an hour in other bankruptcy cases.

Jones Day's fees jumped 58% in the fourth quarter, because that's when the bankruptcy court held a hearing on whether the city would be allowed to use the bankruptcy process to shed billions in debt and restructure its finances.

The first two quarters of 2014 should also prove costly, since the city, its lawyers and consultants have been negotiating with various unions, pension funds and banks to reach cost-cutting settlements.

Related: Detroit's residents have the least debt

Restructuring firm Conway MacKenzie had the second largest bill, charging the city $5.3 million in fees and $17,000 in expenses through the end of last year. Its top partners billed at a rate of $425 an hour.

The report does not cover all the expenses of the bankruptcy process. For example, the bill for work that accounting firm Ernst & Young has performed since the start of the bankruptcy has yet to be finalized.

And the report does not include the $275,000 annual salary that Orr is being paid, or the salaries of other members of the emergency manager's staff, because those are being paid by the state of Michigan, not the city.

Finally, there is no estimate on the cost of time spent by city employees on the bankruptcy case, or on what the city paid auction house Christie's to appraise the value of all the artwork in the Detroit Institute of Arts, the city-owned museum. The bill for fee examiner Robert Fishman bill is also not included in the report.

First Published: May 7, 2014: 10:37 AM ET

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Target's interim CEO: Customers are safe

NEW YORK (CNNMoney)

Mulligan, who spoke in an exclusive TV interview with CNN's Poppy Harlow, was named Target's (TGT, Fortune 500) interim CEO on Monday. He had been the company's chief financial officer. Mulligan replaced Gregg Steinhafel, who left the company as it deals with the aftermath of a massive data breach that occurred late last year.

Hackers exposed data of millions of Target customers who had used their credit and debit cards at the stores during the busy holiday shopping season. The breach led to federal investigations and Target executives have testify before Congress.

Mulligan listed the steps the company had taken since then, including hiring a new chief information officer, accelerating the introduction of safer credit card technology, and working on remediation steps to keep such an event from happening again in the future.

Mulligan acknowledged that Target's challenges are far from over, "We know we have let tour customers down, but we want them to be confident when they shop at Target."

Related: 4 steps to ensure your credit card is safe

It wasn't clear if Target had identified who was behind the data breach, but Mulligan said there had been no further hacking damage: "We have no evidence that any other customer data was removed from the system."

Mulligan said there were no layoffs due to the data breach.

On the timing of Gregg Steinhafel's departure earlier this week, Mulligan simply said that, "It was a conversation between Gregg and the board."

Mulligan said even though he was the interim CEO, the company will not stand still as it looks for another CEO.

"Interim is not idle," he said.

When asked about his stance on the minimum wage debate, Mulligan said Target is focused on paying a competitive wage, but that there needs to be a balance with job creation.

As for the economic hit from the data breach, Mulligan said same store traffic fell in the weeks after the breach but that Target has seen a significant improvement recently. Target's first quarter earnings are due in a few weeks.

First Published: May 7, 2014: 10:25 AM ET

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Beware the Russia risk, warns Europe

Tensions with Russian President Vladamir Putin threaten to hit Europe's economic recovery.

LONDON (CNNMoney)

Growing tensions with Russia could hit growth in Europe this year and next, warned the European Commission in its latest outlook.

"Should further rising tensions with Russia lead to major disruptions in oil and gas supplies with a sharp rise in prices, the negative impact on a number of Member states could be sizeable," the Commission said.

Russia is facing off with the U.S. and Europe over the worsening situation in Ukraine. Western leaders accuse Russia of helping encourage protests and lawlessness in Eastern Ukraine -- a claim which Russian officials have staunchly denied.

The U.S. and Europe have each slapped sanctions on many Russian companies and individuals. Meanwhile, Russia has warned that its natural gas exports to Europe could suffer as it considers cutting off gas to Ukraine -- a key transit route for gas to Europe.

Related: Russia sets Ukraine gas bill deadline

Things look brighter for the broader European economy.

Taking Russia out of the equation, growth across the European Union is expected to hit 1.6% this year and 2% next year, compared with 0.1% in 2013. And the Commission expects the 18-nation eurozone to see growth of 1.2% this year and 1.7% in 2015.

While Russia is the newest risk to Europe's economy, it's hardly the only one.

Low inflation has consistently been a key threat.

The European Commission expects inflation in the euro area to decline to 0.8% in 2014 before rising to 1.2% next year. The Commission had previously expected a much healthier 1.5% inflation rate for 2014.

The latest expectations are also well below the target set by the European Central Bank, which is aiming for inflation just below 2% in the medium term.

Declining commodity prices, a strengthening euro, and weak labor market conditions in some countries have been the major culprits.

In March, eurozone inflation fell to 0.5%, its lowest level since November 2009.

First Published: May 5, 2014: 9:55 AM ET

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