Business » Economy http://abcnews.go.com/blogs/business The latest Business news and blog posts from ABC News contributors and bloggers. Fri, 25 Jul 2014 14:45:54 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 Ukraine Effect on Markets? http://abcnews.go.com/blogs/business/2014/07/big-tobacco-fights-back-rj-reynolds-appealing-verdict/ http://abcnews.go.com/blogs/business/2014/07/big-tobacco-fights-back-rj-reynolds-appealing-verdict/#comments Mon, 21 Jul 2014 15:02:35 +0000 ABC News http://abcnews.go.com/blogs/business/?p=120513 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 http://abcnews.go.com/blogs/business/2014/07/june-unemployment-rate-drops/ http://abcnews.go.com/blogs/business/2014/07/june-unemployment-rate-drops/#comments Thu, 03 Jul 2014 13:17:10 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=120407 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 http://abcnews.go.com/blogs/business/2014/06/gold-in-demand-markets-play-it-safe-amid-iraq-woes/ http://abcnews.go.com/blogs/business/2014/06/gold-in-demand-markets-play-it-safe-amid-iraq-woes/#comments Fri, 20 Jun 2014 13:40:10 +0000 ABC News http://abcnews.go.com/blogs/business/?p=120311 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 http://abcnews.go.com/blogs/business/2014/06/vinyls-popularity-lifts-turntable-sales/ http://abcnews.go.com/blogs/business/2014/06/vinyls-popularity-lifts-turntable-sales/#comments Wed, 18 Jun 2014 15:25:49 +0000 Troy Mcmullen http://abcnews.go.com/blogs/business/?p=119843 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 http://abcnews.go.com/blogs/business/2014/06/trade-deficit-up-in-april/ http://abcnews.go.com/blogs/business/2014/06/trade-deficit-up-in-april/#comments Wed, 04 Jun 2014 13:53:08 +0000 ABC News http://abcnews.go.com/blogs/business/?p=120146 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 http://abcnews.go.com/blogs/business/2014/06/obama-seeks-1-billion-for-european-defense/ http://abcnews.go.com/blogs/business/2014/06/obama-seeks-1-billion-for-european-defense/#comments Tue, 03 Jun 2014 12:23:15 +0000 ABC News http://abcnews.go.com/blogs/business/?p=120142 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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More GM Recalls Expected, This Time on Newer Models http://abcnews.go.com/blogs/business/2014/05/more-gm-recalls-expected/ http://abcnews.go.com/blogs/business/2014/05/more-gm-recalls-expected/#comments Wed, 21 May 2014 11:59:17 +0000 Richard Davies http://abcnews.go.com/blogs/business/?p=120011 AP General Motors1 ml 140521 16x9 608 More GM Recalls Expected, This Time on Newer Models

(David Goldman/AP Photo)

Morning Money Memo …

The crisis over recalls at General Motors may be far from over.

America’s biggest auto manufacturer faces more legal and regulatory questions. GM’s stock price is down 20% this year, and it dropped 3.5% Tuesday after more recalls were announced involving 2.4 million cars and trucks.

The company is in the middle of a safety review across its line-up of cars and trucks. More recalls are expected. GM spokesman Alan Adler said the company is making progress on reviewing older investigations, “but work is continuing.” More federal and state regulatory investigations are underway.

So far GM has announced 29 recalls, but they don’t appear to have had a big impact on sales, which rose 7% in April.

Akshay Anand, an industry analyst with Kelley Blue Book, said Tuesday’s order to dealers to stop selling the 2015 Cadillac Escalade and 2014 Buick Enclave, Chevrolet Traverse and GMC Acadia until they’re repaired could give more buyers pause.

The initial recalls covered older models, such as the discontinued Cobalt; now they’re affecting newer models. GM expects to take a $400 million charge in this quarter to pay for the cost of repairs. That’s twice as much as the company announced last week.

Another big retailer reported disappointing earnings. Thanks largely to a tax change, first quarter profits rose 16% at Lowes, America’s second-largest home improvement chain.

But adjusted profit and revenue missed analysts’ estimates as bad weather kept customers from stores. Weak retail results pushed Wall Street stock averages down Tuesday. The Dow Jones Index dropped 137 points. The Nasdaq fell 23 points. But stock futures are higher this morning and the big stock S&P 500 is still up more than 1% for the year.

Citigroup wants to boost its mortgage business, reversing a recent slide in mortgage share. “We think today we are below our natural market share,” said Jane Fraser, head of the giant bank’s home loan division. Citi, which scaled back lending after the housing crisis, will be “extremely careful” about the quality of its lending, Fraser said in a speech.

Netflix is expanding into 6 more European nations, including Germany and France. The company ended March with 48 million video subscribers — including nearly 13 million outside the U.S.

Google also has overseas expansion plans. Following questions from government regulators, Google revealed that $20 billion to $30 billion is being set aside for the acquisition of foreign companies and technology rights held outside the U.S.

Richard Davies is a business correspondent for ABC News Radio

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5 Bitcoin Warning Signs In New Federal Investor Alert http://abcnews.go.com/blogs/business/2014/05/5-bitcoin-warning-signs-in-new-federal-investor-alert/ http://abcnews.go.com/blogs/business/2014/05/5-bitcoin-warning-signs-in-new-federal-investor-alert/#comments Wed, 07 May 2014 20:46:01 +0000 Alyssa Newcomb http://abcnews.go.com/blogs/business/?p=119835 GTY bitcoin sr 140507 16x9 608 5 Bitcoin Warning Signs In New Federal Investor Alert

(Image Credit: Sean Gallup/Getty Images)

The U.S. Securities and Exchange Commission today issued an investor alert on Bitcoins, including a laundry list of reasons today why investors should tread carefully and why people who hold Bitcoins might be targeted by scammers.

Among the reasons why the feds aren’t bullish on Bitcoin and other cryptocurrencies:

Too New: “Potential investors can be easily enticed with the promise of high returns in a new investment space and also may be less skeptical when assessing something novel, new and cutting-edge,” the SEC said.

Not Insured: Bitcoins held in a digital wallet aren’t insured. By contrast, most U.S. bank accounts are insured by the Federal Deposit Insurance Corporation.

Questionable Stability: Crytocurrencies have a history of volatility. The exchange rate of Bitcoin has previously dropped 50 percent in one day, according to the SEC.

Future Regulation Could Be a Problem: Cryptocurrencies aren’t government regulated, however future regulation abroad could present an issue.

Security Issues: The same way a pickpocket can snatch your purse, a hacker can go after significantly larger sums of money in a person’s digital wallet. Hacks, malware and other security bugs could also cause the exchanges to shut down temporarily or permanently — leaving the question of how a person could retrieve their money.

The warning also mentioned Mt. Gox, the Bitcoin exchange in Japan that collapsed earlier this year after hackers apparently stole hundreds of millions of dollars worth of cryptocurrency.

“Many Bitcoin users participating on the exchange are left with little recourse,” the SEC warning said.

The SEC has previously issued a warning about Bitcoin-related Ponzi schemes.

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Recession-Leery Fed Stays the Course Despite Economic Gains http://abcnews.go.com/blogs/business/2014/05/recession-leary-fed-stays-the-course-despite-economic-gains/ http://abcnews.go.com/blogs/business/2014/05/recession-leary-fed-stays-the-course-despite-economic-gains/#comments Wed, 07 May 2014 16:33:34 +0000 Matthew Larotonda http://abcnews.go.com/blogs/business/?p=119815 GTY Janet Yellen mar 140507 16x9 608 Recession Leery Fed Stays the Course Despite Economic Gains

(Credit: Drew Angerer/Getty Images)

WASHINGTON – The economy and job market are improving but borrowing rates are expected to remain low for the foreseeable future, the Federal Reserve announced today.

And even though unemployment is down to 6.3 percent and “conditions have improved appreciably,” there will be no major changes in Obama administration fiscal policies, Fed chairwoman Janet Yellen told Congress today.

“Even with its recent declines, the unemployment rate continues to be elevated,” she told members of the Joint Economic Committee. “Moreover, both the share of the labor force that has been unemployed for more than six months and the number of individuals who work part time but would prefer a full-time job are at historically high levels.”

Yellen also pointed to slow growth in worker wages and a flattening in the housing market as reasons for staying the course. Borrowing rates have remained at record lows, near zero, for over six years.

But the chairwoman indicated that, as expected, the Obama administration is gradually pulling back some measures implemented to counter the recession, including the cessation of its bond buying program later this year. Responding to questions on the Fed’s exit strategy from committee chairman Rep. Kevin Brady, R-Texas, Yellen indicated the program would end by fall.

“We have indicated that as long as we continue to see improvements in the labor market and we believe the outlook is for continued progress and as long as we continue to believe and see evidence that inflation will move back up over time to our 2 percent [inflation] longer run objective, we anticipate continuing to reduce the pace of our asset purchases in measured steps,” she said.

Yellen said it will be a “considerable time” after that when the reserve would consider normalizing borrowing rates. The Fed has been purchasing the assets in an effort to keep rates low: The central bank approved reducing its monthly purchases last week by $10 billion down to $45 billion. It is the fourth reduction from the original $85 billion.

Today marked Yellen’s first testimony on Capitol Hill since assuming office in February. She is scheduled to return Thursday to speak before the Senate Budget Committee.

The Associated Press contributed to this report.

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Behind the Billions: 8 Things You Never Knew About Warren Buffett http://abcnews.go.com/blogs/business/2014/04/behind-the-billions-8-things-you-never-knew-about-warren-buffett/ http://abcnews.go.com/blogs/business/2014/04/behind-the-billions-8-things-you-never-knew-about-warren-buffett/#comments Thu, 24 Apr 2014 17:08:24 +0000 Nicole Sawyer http://abcnews.go.com/blogs/business/?p=119544

Warren Buffett, a self-made billionaire known as the “Oracle of Omaha,” was practically born a businessman in 1930 in Omaha, Neb. With money earned from his paper route, he made his first investment at age 11, dabbling in stocks and buying acres of land in Nebraska to rent to merchant farmers for a profit.

That was the beginning of the financial machine. He has now amassed a fortune exceeding $65 billion, making him No. 3 on Forbes’ most recent list of the world’s billionaires.

Some of Buffett’s top holdings include Wells Fargo and Coca-Cola. His strategy: to hold well-managed, undervalued companies for life.

Buffett might be one of the richest men in the world and one of most respected investors, but behind the billions, he also has the biggest heart. He teamed up with Bill Gates in 2012 to pledge to give away most of his wealth to philanthropic causes.

ABC News’ chief business and economics correspondent Rebecca Jarvis, who also hosts the hit digital show “Real Biz,” met up with Buffett, 83, at one of his charitable events. His annual “Power Lunch” at Smith & Wollensky in New York City to benefit San Francisco’s glide foundation. Since 2000 he’s raised more than 16 million dollars to help hungry displaced families.

The New York Times reported this week that America’s middle class is no longer the richest in the world. So Javis asked him how he can still be bullish on the United States. Buffett admitted the news wasn’t good, but stuck by his bullish stance, saying, “We are a very, very, very rich country and its [national GDP] has gone up in my lifetime, one person’s lifetime six for one in real terms, not inflation, but real terms.”

When Jarvis pressed him about wealth inequality, Buffett admitted the rich are getting richer and the middle-class gap is widening.

“It is really true that particularly the ultra-rich have gotten far, far wealthier and more and more the national pie has moved to them and away from the middle class,” he added.

He went on to explain that the disparity in the United States is a “natural consequence of a market system” that will encourage people to go into the right jobs and develop more skills so they don’t get left behind.

But Jarvis also wanted to have a little fun with Warren so she did a little “Real Biz Rapid Fire,” asking him about his smartphone; maybe not so smart, and who he’d like to have lunch with in Omaha.

Check out his never-before heard answers below.

ABC warren buffett rebecca jarvis sk 140424 16x9 608 Behind the Billions: 8 Things You Never Knew About Warren Buffett

What did Warren Buffett tell Rebecca Jarvis? (Photo Credit: Nicole Sawyer/ABC News)

1. Are you an Apple or a Samsung man?

Buffett whipped out an old flip phone that was falling apart and joked, “Alexander Graham Bell gave me this phone”

2. Do you tweet?

Buffett doesn’t tweet. “I’ve had five tweets, and another person did them for me.”

3. What does Buffett buy on Amazon?

Buffett loves books and he has his assistant buy books for him. He says he has so many books in his library, “It’s too much trouble to try to find it in my library so I just buy another copy.”

4. Which industry that we rely on today is going to be gone by the time our grandchildren grow up? For example, will cars still rely on gas?

Buffett thinks we should say goodbye to gas as we know it. “Over time that will diminish dramatically.”

5. What are we going to be surprised has barely changed 50 years from now?

“Human nature. People will be doing exactly the same foolish things they do now.”

6. What’s in Warren’s wallet?

Cash. Five $100 bills.

7. Are we going to be a cash society in five years?

Yes, cash is not going away.  “We’ll use cash. We’ll have loads of credit cards and lots of systems of payment, but we’ll have a lot of cash.”

8. Whom would you rather lunch with at Piccolo’s Italian steakhouse in your hometown of Omaha? Mark Zuckerberg (Facebook founder) or Mark Cuban (NBA’s Dallas Mavericks owner)?

“Probably Mark Cuban because I would understand more of what he was saying. We would talk basketball and probably gambling, a few things like that.”

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