Business » Economy The latest Business news and blog posts from ABC News contributors and bloggers. Fri, 19 Sep 2014 19:34:49 +0000 en hourly 1 3 ‘Real Money’ Tips to Read Before You Buy a Car Wed, 17 Sep 2014 21:30:12 +0000 ABC News

The Smiths of Atlanta have a full house, four young children going in four different directions and just one car to get them where they need to go.

Maria Smith, a stay-at-home mother, said the family’s car – a 2006 Honda Odyssey – had 160,000 miles on the odometer.

“We drive everywhere,” she told ABC News. “We travel a lot.”

She and husband Cedric Smith, an IT specialist, said they were in the market for a safe, used car but did not want to be taken for a spin.

“Buying a car was one of the most stressful experiences ever,” she said. “I mean, honestly, I’ve been putting it off for a long time because I just, I hate the idea of it.”

Tricia Whitlock of the popular tech blog Hypepotamus said consumers could put the brakes on car-buying stress by following her simple tips.

1. Find out what others are paying for the exact same car, new or used, with apps like True Car, and use the information to negotiate at the dealership.

2. Know when to buy. Good times are the end of the month or the end of the year. And avoid Saturdays.

“You’re much better going in the middle of the month, picking a car that’s right for you and then going back at the end of the month when those sales guys are going to be hitting their quotas,” Whitlock said.

3. Buy online. If you want to avoid the middleman when buying a used car, and save thousands of dollars, consider purchasing a car at an online dealership like Carvana. Carvana does a 150-point inspection on its used cars so there are no surprises for the consumers.

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Here’s How to Minimize the Student Loans ‘Ruining Our Lives’ Fri, 22 Aug 2014 19:53:45 +0000 ABC News ABC News’ John Kapetaneas reports:

About 20 million college students will begin classes nationwide this fall, with more than a few of them taking out federal and private loans to finance their education. Total U.S. student debt stands upwards of $1 trillion in 2014, outpacing even national consumer credit card debt, having risen 14 percent in the past year.

“How about we don’t have learning experiences that involve ruining our lives,” says Zac Bissonnette, a personal finance writer and author of the best-selling book “Debt Free U.”

Universities are not helping to lower students’ educational borrowing costs, as average tuition has risen 27 percent at public universities and 14 percent at private universities in the past five years, according to The College Board Annual Survey of Colleges. But whether you’re just starting college in the fall or already in, there are ways for you to lighten the financial burden, Bissonnette and others point out.

READ: 7 Ways Debt Is Bad for Your Health

Senate Group Reaches Tentative Deal on Student Loans

Obama Extends Student Loan Debt Relief to More Borrowers

He advocates attending the most affordable school a student can, which may not always be the most prestigious school, while simultaneously minimizing any incurred debt by forgoing credit cards and working to pay off any accrued debt while in school.

“You can absolutely ruin your life with the decision about where you go to college when you’re 17 years old because you borrowed too much money,” Bissonnette says. “You’re not going to ruin your life by going to a less prestigious college than you could. The place where you ruin your life is by borrowing too much money.”

While such advice may be geared more toward helping high school students nationwide in preparing their future college decisions, current college students with existing debt may find themselves underserved, particularly if they have no desire to switch schools.

Meanwhile, estimates that $3,000 of student loan debt accrues every second, while the average borrower in 2013 owes $32,500. While the old maxim may still hold true, school comes first, many students are finding they must work throughout the school year in order to bear the costs of their education.

A 2013 survey conducted by Citigroup and Seventeen Magazine found that nearly 80 percent of college students worked while attending school, with the average student working roughly 19 hours per week. With the pressures of schoolwork and consistent employment to contend with, often before their 21st birthday, a mounting debt burden adds another piece to a seemingly unsolvable puzzle for a generation looking for a learning experience.

“If you’re going back to school and you’re a junior or senior, it’s not too late to change the path that you’re on,” says Joe Mihalic, creator of the popular blog No More Harvard Debt, and author of “Destroy Student Debt: A Combat Guide to Freedom.”

Mihalic argues that students with more schooling to finance should not panic but, rather, should focus on getting a positive return on investment for their degree. “Some people bristle when they hear people say learning isn’t about return on investment,” Mihalic says. “And I agree, it’s not always about that. But if you are spending the money, then you’ve already invested. So you have to take responsibility for the amount of debt you’ve incurred, and you have to generate a return.”

Students with considerable loan burdens should utilize programs, courses and majors that have a track record of producing positive ROI for their graduate, Mihalic argues. “You can follow your passion and pursue something arts based, but you should have a plan to generate revenue for your work after you graduate. Whereas a business or engineering or technical degree can add value immediately.”

Regardless of a student’s ultimate choice of school, major or overall learning experience, both authors maintain the absolute need for financial education in young people, particularly where spending decisions are concerned. While the thought of making financial decisions may seem ominous to students disinterested in the topic, there are critical lessons that all students should know.

“You don’t have to know a lot about money to be good with money,” Bissonnette says. “Basically, having a lot in savings is good; debt’s usually bad. And you have to really believe that in order to not make stupid decisions.”

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Taser (TASR) Shares Jump With Ferguson Unrest Tue, 19 Aug 2014 12:45:26 +0000 Richard Davies  

ht taser kab 140819 16x9 608 Taser (TASR) Shares Jump With Ferguson Unrest

                         (Photo Credit:

Morning Money Memo:

The unrest in Ferguson, Missouri, is having a dramatic effect on shares of Taser International Inc. (TASR). The Scottsdale, Arizona-based company, best known for its electroshock “stun” guns, has seen its share price jump 19 percent in the past five trading days. Investors are betting that allegations of heavy-handed police tactics, including the shooting of an unarmed teenager, will lead to a big increase in sales of Taser’s “body cameras” that can be worn by officers while on patrol.

The latest sign of U.S. economic revival comes in the second-quarter earnings report by America’s biggest home improvement chain. Profits at Home Depot jumped 14 percent thanks to a rebound in its spring selling season. Sales at U.S. stores open at least a year jumped 6.4 percent and the retailer raised its full-year profit estimate. Spring is the biggest season for home-improvement retailers, as homeowners and others work on their yards and gardens. While the season started off cold and stormy, weather improved and shoppers headed out to stores to pick up supplies. The report from Home Depot beat Wall Street forecasts. The company’s share price is up more than 3 percent this morning.

U.S. and international stock markets continue to rise. Analysts say improved home builder sentiment and renewed efforts to broker a cease-fire in Ukraine are among the reasons. The high-technology dominated Nasdaq index is at its highest level in 14 years.

Orange juice sales continue to drop as consumers turn to other drinks for refreshment. “U.S. orange-juice sales fell to the lowest level on record,” The Wall Street Journal reports. Sports and energy-drink sales have surged. Consumers purchased 9.2 percent less orange juice in the four weeks ending Aug. 2, compared with a similar period a year ago, according to Nielsen data published by the Florida Department of Citrus.

The California utility Pacific Gas and Electric has pleaded not guilty to charges in a new indictment. The firm is accused of lying to federal investigators looking into a fatal pipeline explosion in a San Francisco Bay-area neighborhood. The blast in 2010 killed eight people. The company says an obstruction of justice charge was the result of a paperwork error that was quickly corrected.

Richard Davies Business Correspondent ABC News Radio Twitter: daviesnow

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Unemployment Rate Creeps Up Amid Possible Silver Lining Fri, 01 Aug 2014 13:30:57 +0000 ABC News Morning Money Memo…

ABC News’ Richard Davies and John Kapetaneas report:

For the sixth straight month, U.S. employers added more than 200,000 new jobs.

The July employment report from The Labor Department was slightly weaker than expected, but new job totals for both May and June were revised higher.

The U.S. employment rate rose to 6.2 percent “but this disappointment needs to be looked at in the context of more people moving into the labor market, which is often an encouraging sign,” says Chris Williamson, chief economist at Markit, a financial information firm.

Average job gains over the past six months reached 244,000 in July, the best average in eight years. Manufacturing and construction added more jobs than in previous months.

“There is clearly a high degree of slack left in the labor market, however, as average employee earnings rose just 2.0 percent on a year ago,” said Williamson.

Hourly wages were unchanged last month. Long-term unemployment remained well above average while many discouraged workers laid off during the recession have not returned to the labor market.

World Markets Appear Sluggish

The bull market is “bearing” it’s ugly teeth, as markets worldwide dropped this morning.

Following Thursday’s 317-point drop in the Dow and news of an Argentinean default, traders from Milan to Moscow have responded by trading lower across the board. European and Asian markets are down, with German and Italian markets falling more than 100 points each. Markets in Hong Kong and India also dropped significantly. Gold is up slightly to 1,285 per ounce.

Dow futures, which were in the green early this morning, fell dramatically more than 100 points, then rebounded somewhat.

New Boss at Target

Target is looking for a fresh start, announcing Thursday that former Pepsi executive Brian Cornell will serve as the company’s next CEO. Cornell will succeed longtime Target executive Gregg Steinhafel, who left the company in May amid the massive data breach that affected more than 100 million customers. Cornell will inherit a laundry list of challenges, not the least of which is the company’s rebound following the breach, as well as improving declining traffic at Target stores.

Shunning Cereal?

Consumers are shunning their sweet tooth, at least when it comes to their morning breakfast options. Cereal maker Kellogg’s reported earnings fell 16 percent in the second quarter, with North American sales falling 3.7 percent. The Wall Street Journal reported that consumers are increasingly turning away from breakfast cereals in favor of higher protein options, such as Greek yogurt. Kellogg’s stock dropped 6 percent during Thursday’s trading day.

High Hopes for ‘Guardians of the Galaxy’

Marvel is looking to spice up the summer box office slump with the release of this weekend’s “Guardians of the Galaxy.” The space-based odyssey had a $170 million budget and seems to have little competition. Analysts expect it to pull in a cool $75 million this weekend, which would bode well for a struggling summer box office that has seen its ticket sales drop 20 percent from last year, according to Box Office Mojo. The James Brown biopic “Get On Up” also comes out today, and is expected to pull in around $15 million.

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Ukraine Effect on Markets? Mon, 21 Jul 2014 15:02:35 +0000 ABC News ABC News’ John Kapetaneas reports:

Morning Money Memo …

The crisis in Ukraine is shaking many economies across the globe this morning, although not nearly the level seen this past Friday.

Markets in Europe were down across the board, with Italian and German markets leading the way. U.S. markets were down more than 100 points early in the trading day, while Asian markets were mostly mixed.

Though the conflict in eastern Ukraine appeared to have minimal effect during the previous month, the two-day decline of some markets following the downing of MH17 on Thursday and the ensuing political turmoil may hurt some economies more than others.

“As tensions increase to a point where we’re looking for further sanctions against Russia, and this particular geopolitical hot spot that is Ukraine, I think you’re going to see a much larger impact on the core of Europe,” said Art Hogan, chief market strategist for Wunderlich Securities. “What we’re trying to do is compact the cause and effect on markets of one event. Tensions will, in fact, increase as we struggle to find answers and place blame. That’s going to have an overall dark cloud over most markets.”

It’s not all negative news for the  U.S. economy in the week ahead, however. As a wealth of economic data is released this week, including the Consumer Price Index, new home sales and durable goods, in addition to scores of S&P 500 companies reporting earnings results, the turnaround at least in the U.S. and countries with lower exposure to Russia could be relatively quick.

“I would venture to guess part of our attention will placed on that micro versus the global macro, and that will manifest itself in the way stocks trade at least in the United States,” said Hogan.

In earnings news: Halliburton stock was up this morning following second quarter earnings that met expectations and exceeded revenue forecasts for the quarter. Six Flags also posted revenue growth of 14 percent. Other companies reporting today were to include Netflix and Chipotle.

Big Tobacco Fights Back

The country’s second-largest cigarette maker, R.J. Reynolds Tobacco, said it will appeal Friday’s jury verdict ordering the company to pay $23.6 billion in punitive damages to the widow of a former smoker who died 18 years ago from lung cancer.

The verdict came just as Reynolds’ parent company, Reynolds American Inc., announced that it was purchasing the country’s next-largest cigarette maker, Lorillard Tobacco.

A lawyer for the plaintiff said that big tobacco “cannot continue to lie to the American people” with regard to the addictiveness of cigarettes.

J. Jeffrey Raborn, an executive for Reynolds, called the verdict “grossly excessive and impermissible under state and constitutional law.”

Fees Up for Flying 

Get ready to shell out more cash for your next flight. The TSA more than doubled its fees today, from $2.50 to $5.60 for most flights, while passengers with a layover longer than four hours will pay an additional fee. The $10 fee cap was also eliminated. But don’t go blaming the people in blue just yet. Congress approved the increase in to raise an estimated $16 billion to $17 billion over the next decade.

‘Apes’ Reigns Supreme Again

“Dawn of the Planet of the Apes” ruled the box office for the second weekend in a row, earning an estimated $36 million, putting the POTA reboot well over $100 million. Horror-thriller “The Purge” finished second with $28 million, and Disney’s “Planes: Fire & Rescue” was third with $18 million.

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June Unemployment Rate Drops Thu, 03 Jul 2014 13:17:10 +0000 Richard Davies Morning Money Memo…

The jobs market is heating up with a stronger than expected June employment report today from the Labor Department.

The U.S. economy added 288,000 jobs and the unemployment rate dropped from 6.3 percent to 6.1 percent. June was the fifth month in a row when more than 200,000 new jobs were added. That’s stronger than last year’s jobs market.

“I don’t see any reason why this shouldn’t continue, even improve,” said Mark Zandi, chief economist at Moody’s Analytics. “Early in the economic recovery, most of the job growth was among low-paying jobs. Now, it’s high-paying jobs and even some middle-paying jobs. A lot of that’s related to what’s going on in housing and construction and government.”

Businesses are taking on more workers and limiting job cuts. Jobs were added in health care, professional and business services, retail, bars and restaurants. Some local government jobs were also added, primarily in the education sector.

The workforce participation rate remained the same, which was not so encouraging. An increase in this rate would be another strong sign for the job market.

The global outplacement consulting firm Challenger, Gray & Christmas said, “June job cuts were 20 percent lower than the same month a year ago.”

Obama: Banks Need More Rules

Almost four years after Congress passed the Dodd-Frank reform bill in response to the financial crisis, banks are still in need of more rules, President Obama said.

Bank customers need to be better protected against failed risk-taking, he said, adding that bank traders can still make huge bonuses on high-risk trades. If the bets go bad, the president told APM’s Marketplace, “everybody else is left holding the bag.”

Obama did not specify what changes he would recommend. Recently, he has met with groups of economists, including Stanford’s Anat Admati, who has called for banning large banks from making payouts to shareholders until they can better deal with any losses.

Amazon vs. FTC Over Sales to Kids

Amazon appears prepared to go to court against the Federal Trade Commission. The online giant is defending itself against charges that it has not done enough to prevent children from making unauthorized in-app purchases.

Amazon said it had already refunded money to parents who complained. Apple agreed to a $32.5 million fine in January over a similar matter.

Bitcoin Boost

Silicon Valley venture capitalist Tim Draper has snapped up nearly 30,000 bitcoins in a government auction. He plans to sell the digital currency in countries trying to build stronger economies. Draper prevailed over 44 other bidders registered for an auction of bitcoins seized last year from Silk Road, a website that stockpiled the currency while selling illegal drugs.

China Loosens Up on Currency

China has announced a new step toward easing its tight currency controls, allowing banks to set their own exchange rates in dealings with customers. Today’s announcement was the latest in a series of moves intended to make China’s government-controlled financial system more market-oriented.

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Gold in Demand, Markets Play It Safe Amid Iraq Woes Fri, 20 Jun 2014 13:40:10 +0000 ABC News GTY Stock Echange TG 140620 16x9 608 Gold in Demand, Markets Play It Safe Amid Iraq Woes

                       (Photo Credit: Andrew Burton/Getty Images)

ABC News’ John Kapetaneas reports:

As the Dow slowly creeps its way toward 17,000, European investors are rushing back to the safety of gold, pushing its value up to $1,313 this morning. Markets in Europe and Asia were mixed today, while U.S. markets are looking toward a slightly higher opening. With tensions in Iraq escalating, and oil prices moving higher, all eyes will be on the Middle East this final trading day of the week.

Smartphone makers keep customers wanting more. After holding back its highly anticipated announcement of a possible “smartwatch” earlier this month, Apple is planning multiple versions of the wearable technology to be released this fall in order to keep up with possible launches by Google and Samsung, the Wall Street Journal reported this morning. The mobile-device makers are also trickling into “kill switch” territory to deter possible thefts, a feature introduced to iPhones that has reduced the number of thefts in the past year. Also looking to stay relevant, Blackberry announced plans to introduce new phones and technology this year, shortly after the company posted an unexpected profit. Blackberry shares rose nearly 10 percent to $9.09 Thursday; the stock traded at over $230 in 2007.

Harley Davidson rumbles into the green movement. The historically loud and proud motorcycle maker unveiled this week its whisper-quiet electric prototype, dubbed Project Livewire. A stark diversion from its historically thunderous engines, Livewire operates without making much more than a peep. “Think fighter jet on an aircraft carrier,” senior vice president Mark-Hans Richer said in a news release. The concept super-bike is not yet available to the public; the company instead will take Livewire on a multicity tour this year and next to gain feedback on the project. But will Harley’s hardcore customers go for this drastic difference? For the moment, the company seems convinced they can make the concept work. “Project Livewire is a bold statement for us as a company and a brand,” Richer said.

U.S. government deals a big blow to big college. The Department of Education announced increased oversight of Corinthian Colleges Inc., one of the largest for-profit education corporations in the country, for failing to address concerns about its marketing practices. The concerns raised by the government range from falsifying job placement data to altering academic records.  ”The Department’s foremost interest is to protect students and make sure they are educated by institutions that operate in accordance with our standards,” U.S. Education Under Secretary Ted Mitchell said.

In response to the oversights, the Wall Street Journal is reporting this morning that Corinthian may be forced to close its doors. Company shares fell a staggering 67 percent Thursday, after falling over 60 percent in the past year. The imposed oversight will also delay requested federal funds for up to three weeks. Corinthian enrolls 72,000 students nationwide and receives $1.4 billion in federal financial aid annually. School officials could not immediately be reached for comment.

This weekend’s box office pits the legendary Clint Eastwood and his “Jersey Boys,” the big screen adaptation of the hit Broadway play, against the star-studded sequel “Think Like a Man Too.” Despite its Tony Award-winning origins, Eastwood’s classic is not expected to top the Kevin Hart comedy, which is looking to pull in $30 million this weekend.

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Vinyl’s Popularity Lifts Turntable Sales Wed, 18 Jun 2014 15:25:49 +0000 Troy Mcmullen Music aficionados have long touted the virtues of vinyl, arguing that CD’s and MP’3s are no match for the depth and warmth of sound offered by the grooves inside an LP.

Now, as the popularity of vinyl soars, companies that cater to the medium are tapping into the fastest-growing music sales format by offering everything from battery-powered record players that come in a rainbow of colors to sleek mahogany turntables with LED displays and iPod jacks,

“We’ve seen sales of turntables rise right along with record sales,” says Liz Braun, vice president of sales and marketing at Crosley, the Louisville, Kentucky based manufacturer of a broad array of turntables. The company, which also sells jukeboxes, radios and headphones, has seen double-digit sales growth in its turntable sector the past several years, says Ms. Braun. “Just about every model is seeing a surge in popularity and that mirrors the rise in popularity of vinyl records.”

ht peants record player kab 140604 16x9 608 Vinyls Popularity Lifts Turntable Sales

Crosley Peanuts Record Player

Deer Park Distributors, an exclusive distributor of Crosley products, including Crosley turntables, told the New York Times that six years ago, his company had accounts with just 25 independent record stores, but now the firm works with more than 500. A company executive estimates that turntable sales at those stores will reach $2 million this year.

The broad array of innovative turntable designs arrive as sales of vinyl have shot up 32% from 2012 to 2013 to more than six million, according to sales tracking system Nielsen SoundScan. Some of that rise can be attributed to D.J’s, who have always seen vinyl as the medium of choice. But the surge underscores how vinyl  has now moved into the mainstream with newly minted teens who were born after CDs were introduced in the 1980s and adults who are older enough to remember vinyl’s heyday joining the ranks of avid collectors.

Record companies are also releasing more music on vinyl, including major releases that have CD, MP3 and vinyl versions. French electronica duo Daft Punk released “Random Access Memories” with 19,000 of its first-week sales of  339,000 on vinyl, according to Nielsen SoundScan. Indie rockers The National sold 7,000 vinyl copies of its latest album, “Trouble Will Find Me,” and 10,000 Vampire Weekend LP’s were sold for the band’s latest album “Modern Vampires of the City.”

“As more record labels release popular music on vinyl and turntable designs become even more accessible the marketplace will only grow,” adds Ms Braun of Crosley. “We see the sector only gaining strength.”

One of the most sought-after items at Crosley is the Crosley x Peanuts turntable. The limited edition item features exclusive Peanuts artwork printed on the cover. The belt-driven turntable has a three speed play, manual return tone arm, and built-in speakers. It includes RCA and headphone output and NP6 needle and power supply.

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Trade Deficit Up in April Wed, 04 Jun 2014 13:53:08 +0000 ABC News Morning Money Memo …

ABC News’ John Kapetaneas reports:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the U.S. trade deficit rose by $3 billion in April.

The government announced total April exports of $193.3 billion and imports of $240.6 billion resulting in a goods and services deficit of $47.2 billion, up from March’s revised deficit of $44.2 billion.

April exports were $0.3 billion less than March exports of $193.7 billion.

April imports were $2.7 billion more than March imports of $237.8 billion.

In April, the goods deficit increased $3.3 billion from March to $65.8 billion, and the services surplus increased $0.2 billion from March to $18.6 billion.

Exports of goods decreased $0.6 billion to $135.1 billion, and imports of goods increased $2.7 billion to $200.9 billion.

Exports of services increased $0.3 billion to $58.2 billion, and imports of services increased $0.1 billion to $39.7 billion.

What’s in the Fed’s Little Beige Book?

Markets will have an eye on the Fed report this afternoon, expected to highlight a strengthening labor market and positive data from the automotive sector, and to clarify Fed concerns about investor risks and the overall low market volatility.

April’s Beige Book previously reported improved economic conditions in most of the country, highlighting increases in manufacturing and consumer spending, while the mixed agricultural sector reflected difficult winter weather conditions.

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Obama Seeks $1 Billion for European Defense Tue, 03 Jun 2014 12:23:15 +0000 ABC News By John Kapetaneas

Morning Money Memo…

 The president announced this morning that the United States has backed a $1 billion fund to fortify European security measurements, calling European security the “cornerstone of our security.” Speaking from Warsaw as part of his four day trip through Europe, the president will be looking to address growing concerns over Ukraine and the increasing tensions with Russia.  The White House, meanwhile, is continuing to face increased pressure over the terms of American POW Bowe Bergdahl’s release. Many in Washington have come out against the decision to negotiate with the Taliban, calling the release of five high value Guantanamo prisoners too steep of a price and a danger to U.S. national security.

U.S. markets are beginning the trading day at record highs, but how long will it last? After both the Dow and S&P 500 closed out the day at their highest level yet, futures are pointing to a  lower opening this morning on Wall Street.

Apple underwhelmed fans at the WWDC, many of whom were hoping for a wearable technology to make an appearance. But, even though an iWatch is not in the immediate future, the company delivered noticeable upgrades with its iOS8 improvements, which means saying goodbye to Autocorrect problems, and hello to the new Health and HomeKit apps.

Pressure will be coming down harder on the NFL now, as Hall of Fame quarterback Dan Marino joins the growing list of litigants in a multi-million dollar concussion lawsuit.  The Miami Dolphins legend says that he was affected by hits to the head throughout his 17-year professional career, and that the NFL turned a “blind eye” to the issue. To date over 4,500 former players have sued the league for concussion related issues. The NFL agreed to a $765 million settlement back in August, only to have it rejected by a federal judge. Other Hall of Famers to bring up concussion suits include Eric Dickerson and Tony Dorsett.

What is, oh so close!  Jeopardy wunderkind Julia Collins, holder of 20 straight victories, saw her epic winning streak come to a dramatic end last night. Julia bet it all on Final Jeopardy, guessing that Michael Chabon was the last Academy Award winner for their own novel. The answer, of course, was John Irving of “The Cider House Rules”, costing Julia the game and putting the kibosh on her hunt of Ken Jennings’s elusive 74-game winning streak. But don’t feel too bad for Julia. She’ll be getting a check for $428,100 for her efforts, which is not a bad months work in anybody’s book.


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