Finance and Economic

The idea popped into Laura Stude’s head when she happened on a stack of legacy books while shopping last year for a Mother’s Day gift.

Eyeing the blank-paged journals, with prompts for parents and grandparents to reminisce about their lives, Laura Stude pondered a 21st Century alternative.

“Instead of writing something that no one could read or might get burned in a house fire, I thought ‘How cool would it be if you could put something online,’” Stude recalled.

The thought became a concept that Stude thought might appeal to appeal to the aging baby boomer population.

Last week, she decided to see if it had legs.

Startup Weekend, an event that has gained popularity at worldwide venues since the economy turned the mega-corporation world on its head, made its St. Louis debut a week ago tonight when 41 entrepreneurs brought an equal number of business proposals to a downtown incubator for information technology ventures.

Each arrived with a 60-second pitch outlining the strategies they envisioned as money-makers, the next social media phenomena or, in the case of one participant hoping to “create a better world through kindness and community,” a software application aligned with an over-arching goal of “changing the world.”

The proposals were put to a vote.

When the balloting was completed, teams headed by the 12 finalists - Stude included - adjourned to the conference rooms where they would spend nearly every hour of the next two days perfecting entrepreneurial ventures. Their ideas ranged from an application to synchronize smart phones with concert arena light shows to a software program designed to promote better childhood behavior.

It was Super Bowl weekend for would-be entrepreneurs like Alex Kliman, 26, sales representative by day and formulator of grand ideas by night.

“I’m one of those people who thinks they have a million dollar idea every time they wake up,” said the Dogtown resident, the creator of the pulsating “event-driven” smart phone program he envisions illuminating the concert halls and sporting venues of the future.

It became clear from the get go that time is the enemy at Startup Weekends: Come Sunday night, a panel of four judges would observe presentations from each team and select a winner based on originality, feasibility, marketability and, not least, financial viability.

The stakes were not high.

When I asked the St. Louis Regional Chamber and Growth Association executive who helped coordinate the weekend about the first place prize, Jay DeLong responded by patting me on the back.

OK, there was a bit more incentive than that.

But not much: The teams were vying for a break on the rent for incubator office space, gift certificates from downtown businesses and tee-shirts.

Still, the contestants went at it like a million bucks was on the line, working until midnight Saturday despite a schedule that called for adjournment in the early evening.

Most of the teams were comprised of total strangers.

Carl Foster of  Chicago joined forces with University City’s Stude because the idea he brought to the table - which didn’t muster enough votes - closely matched her online legacy book project.

With an eye toward the myriad obstacles standing in the way of successful start-ups, Stude assembled a crew capable of covering all the bases from software and website development to marketing to projected financial outcomes.

“Everybody brought a unique skill that moved the chains forward,” she said.

The team didn’t let her down.

They looked for ways to fine-tune the band-width to accommodate baby-boomers who prefer video over the written word business cards. They tweaked Stude’s four-minute presentation the judges and convinced the team leader to abandon her pet name for the project - “Time in a Bottle” - in favor of “StoryBucket.”

Laura Stude went before the judges shortly before 6 o’clock Sunday night.

“Do it before you croak,” she said, launching the presentation with the catch phrase formulated by the team barely an hour before. “Fill the bucket, before you kick the bucket.”

Supported by a PowerPoint presentation, she walked the judges through the various attributes of the project, in particular a process that is a marked upgrade over the arcane pen and paper.

The wait for the judges’ decision, slightly more than hour, seemed interminable for a 100-plus would-be entrepreneurs who’d spent the last two days burning through creative energy like coal.

Dragging out the tension a few minutes longer, the judges reviewed each entry prior to announcing the winners.

They praised StoryBucket, but advised that success rested on the ability to differentiate itself from Facebook, Flickr and other social media that lend themselves to story sharing.

It served as a hint of what lay ahead.

The winning team, “Analytic Just-Us” began the weekend as an amorphous proposal for a comprehensive database to provide background to attorneys preparing civil and criminal cases.

By Sunday the idea had evolved into an entry with the potential to analyze the decisions of juries and judges in every corner of the country.

“What Money Ball was for baseball this will be for lawyers,” predicted Andrew Winship, a St. Louis attorney and a member of the “Analytic Just-Us” team.

Though judges didn’t rank StoryBucket among the top five ideas, Stude remained upbeat. An idea born of happenstance during a shopping excursion had survived two days of intense scrutiny and readjustment.

Even more encouraging, Stude received word via Twitter following her presentation that an investor might be interested in helping her further pursue the StoryBucket proposal.

“If nothing else, it was good for affirmation,” said Stude, vowing, “this is just the start.”

QUOTE OF THE WEEK

“It’s a real culture shock. After tax, $150,000 is not much. It probably won’t even pay for the private-school education tabs for their kids. It’s going to be a tough time of readjustment.” - New York compensation consultant James Reda on the hardships reduced bonuses incur on Wall Street executives.

Source: The New York Post

BY THE NUMBERS

5.6 million - Number of health care sector jobs the U.S. economy is expected to add from 2010-2012.

Source: The U.S. Bureau of Labor Statistics’ Employment Projections

FINAL WORD

“I call myself frayed white collar - part of the privileged poor. I have a college degree, a career and an array of middle-class, working-class and more economically privileged friends; together we are a fairly good representation of the 97 percent, or maybe the 95 percent. And most of us are hard-pressed; even my teacher friends, making about $60,000 a year, are perpetually flat-lined economically, eking across each month’s finish line thanks to credit cards.” - Christopher D. Cook in an essay on the humility of applying for food stamps.

Source: Salon

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Total U.S. money market mutual fund assets fell $14.68 billion to $2.679 trillion for the week ended Wednesday, Investment Company Institute said.

Assets of the nation’s retail money market mutual funds fell $5.73 billion to $929.14 billion, the Washington-based mutual fund trade group said. Assets of taxable money market funds in the retail category fell $3.89 billion to $733.47 billion. Tax-exempt retail fund assets fell $1.84 billion to $195.67 billion.

Meanwhile, assets of institutional money market funds fell $8.95 billion to $1.750 trillion. Among institutional funds, taxable money market fund assets fell $8.13 billion to $1.653 trillion; assets of tax-exempt funds fell $820 million to $96.20 billion.

The seven-day average yield on money market mutual funds was 0.02 percent in the week ended Tuesday, unchanged from the previous week, said Money Fund Report. The 30-day average yield was also unchanged at 0 guaranteed online personal loans.02 percent.

The seven-day compounded yield was flat at 0.02 percent, as was the 30-day compounded yield at 0.02 percent, Money Fund Report said.

The average maturity of the portfolios held by money market mutual funds was unchanged from the previous week at 44 days.

Bankrate.com said its survey of 100 leading commercial banks, savings and loan associations and savings banks in the nation’s 10 largest markets showed the annual percentage yield available on money market accounts was unchanged at 0.13 percent from the previous week.

Bankrate.com said the annual percentage yield on six-month certificates of deposit was unchanged from the previous week at 0.22 percent.

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Millionaires can be just like everyone else. At least when it comes to paying taxes.

Mitt Romney released records this week that show he pays a tax rate of about 15 percent of his income. The relatively low figure is raising eyebrows because it’s on par with the rate paid by many middle-class households. That’s despite the Republican presidential candidate’s impressive income of $45 million over the past two years.

The disparity seems to fly in the face of the basic rule that tax rates move in tandem with wages; the more you earn, the more you pay. So Romney’s disclosure may stir suspicions that the system is tilted toward the rich.

In his State of the Union speech Tuesday night, President Barack Obama focused on the issue by noting that a quarter of all millionaires pay lower tax rates than millions of middle-class households.

“We need to change our tax code so that people like me, and an awful lot of members of Congress, pay our fair share of taxes,” Obama said in a speech that repeatedly touched on the gap between the rich and poor.

On average, the wealthy pay taxes at a much higher rate than the middle-class individuals. But the primary reason that many pay a lower tax rate is that more of their income comes from investments, which is generally taxed at a far lower rate than wages.

Even if investment income doesn’t play a big role in your finances, understanding the basics of how tax rates work can help even the average wage earner save hundreds, if not thousands of dollars a year.

Here’s an overview of what you need to know:

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TAX RATE BASICS

Although it’s common to grumble about taxes, taxpayers often don’t know precisely what percentage of their income goes to the government. So an essential starting point is to look at how tax rates are applied.

Taxpayers can currently fall into one of six federal tax brackets depending on their taxable income. This amount includes items such as wages and distributions from retirement accounts. The tax rate for each bracket ranges from 10 percent to 35 percent. This is the most basic building block of tax planning because your taxable income can be reduced considerably by various credits, exemptions and deductions.

Here’s the breakdown of how much single filers would pay in federal income taxes depending on their taxable income for 2011:

1. 10 percent - income up to $8,500

2. 15 percent - over $8,500 up to $34,500

3. 25 percent - over $34,500 up to $83,600

4. 28 percent - over $83,600 up to $174,000

5. 33 percent - over $174,400 up to $379,150

6. 35 percent - amount over $379,150

Keep in mind that these are marginal rates, meaning your income is taxed in tiers. The first $10,000 you earn, for example, is taxed at a lower rate than the next $10,000.

So let’s say you earned $100,000, putting you in the 28 percent tax bracket. This doesn’t mean you’d fork over $28,000 in federal income taxes. It means that the amount you earn above a certain threshold is taxed at 28 percent. Your federal income taxes would actually be closer to about 22 percent of your income.

The current federal rates are set to expire at the end of this year. If Congress doesn’t act by then, the rates would revert to levels from before the Bush-era tax cuts, which ranged from 15 percent to 39.6 percent.

For now, federal income tax rates overall are near historic lows, says Joseph Rosenberg, a research associate at the Tax Policy Center in Washington, D.C. He also said that nearly half of Americans do not pay any federal income taxes as a result of various exemptions given to those with dependents and limited incomes.

Federal income taxes are only a piece of the larger tax picture, however. Payroll taxes, which go toward Social Security and Medicare, eat up another 5.65 percent of wages. That rate returns to 7.65 percent if the payroll tax cut pushed by Obama isn’t extended past February.

State taxes are another factor and can vary widely, with rates ranging from as low as 3.4 percent in Indiana to 11 percent in Hawaii and Oregon, according to H&R Block’s Tax Institute. A handful of states, including Alaska and Florida, do not have an income tax.

THE EXCEPTIONS

Not all income is taxed at the rates outlined above. A key exception is any money earned from long-term investments, such as stocks, mutual funds and real estate held for at least a year. This income is classified as capital gains and is taxed at a flat 15 percent. That’s regardless of whether it’s $100 or $1 million.

“This is why someone who’s a millionaire might have an effective tax rate that’s lower,” said Gil Charney, a tax analyst with H&R Block’s Tax Institute. “A higher percentage of their income is going to be from long-term investment income.”

In Romney’s case, a chunk of his income in 2010 and 2011 came from Bain Capital, the private equity firm he founded and managed between 1984 and 1999.

Bain still pays Romney “carried interest,” which is a classification of pay for managers of hedge fund and private equity firms. Critics say this type of compensation and should be taxed as salary at ordinary rates. But as it stands, carried interest is considered capital gains because it’s profit in excess of what investors paid into the fund, Charney said.

The tax rate for capital gains wasn’t always 15 percent. The rate has moved up and down through the years. In the 1970s, for example, the figure was close to 40 percent. And if Congress doesn’t act by the end of the year, the capital gains tax rate will revert back to 20 percent.

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REDUCING TAXES

Tax rates are subject to political influences. But there are a few standby strategies taxpayers can use for reducing their tax bill.

A key tactic is to reduce taxable income; this is why financial planners are such advocates of maximizing contributions to 401(k) accounts. Workers can reduce their taxable income by as much as $17,000 a year. For traditional individual retirement accounts, the maximum contribution is $5,000 a year.

Most large employers also let workers set aside up to $5,000 of pre-tax wages in a health care flexible spending account. This money can be used for a variety of medical costs, including co-pays, prescription drugs and supplies such as cold packs.

There are also numerous tax breaks for donations and education and health care costs that you may incur anyway.

Not everyone will be able to get their tax rate down to 15 percent. Yet there are numerous steps you can take to minimize your tax bill.

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The stock market has had an impressive January. The staid companies that make up the Dow Jones industrial average have gained 4 percent in three weeks, and the broader market has done even better.

But the Nasdaq composite _ a collection of technology stocks whose dot-com heyday was more than a decade ago _ has left them both in the dust.

That’s no surprise when you consider tech stocks took a licking last year. Tech companies tend to carry more risk _ a problem for the Nasdaq during last year’s market gyrations. As investors regain confidence in the economy, riskier plays are doing well.

But experts say the Nasdaq’s gains reflect long-term currents that could lift tech stocks through 2012 and beyond. Many companies put off replacing worn-out technology during the recession. To compete and survive, they need to invest in tech.

There’s also a growing global market for technology as more nations try to reduce labor costs by automating everything from factories to cash registers.

And the biggest tech companies face less competition these days when they try to acquire smaller companies. Many of their mid-sized rivals for those deals were weeded out after the dot-com bust and the financial crisis.

In the market for mergers and acquisitions, established players like IBM and Oracle can be picky about buying only those companies that will increase their earnings _ and probably their stock prices.

In other words, it’s not all about Microsoft-style titans and trendy social media companies like LinkedIn and Zynga. The Nasdaq contains more than 3,000 companies, many of them relative startups compared with the companies in the Standard & Poor’s 500 index.

For the year _ just 13 trading days old _ the Nasdaq composite is up 7 percent, compared with 4.6 percent for the S&P 500 and 4.1 percent for the Dow.

“It looks like it’s going to be their year, or at least their month,” says Michael Vogelzang, chief investment officer at Boston Advisors LLC.

The Nasdaq sank 1.8 percent last year, while the Dow rose 5.5 percent and the S&P was flat. That left tech stocks relatively cheap, giving them more space to rise as the broader market rallied. Oracle is up 11.9 percent this year, Microsoft 14.5 percent.

Vogelzang and others say the tech rally has further to go.

“If you want to make your company more productive, you have to turn to the world of technology for that,” says Kim Caughey Forrest, senior analyst with Fort Pitt Capital Group.

She expects the S&P 500’s tech sector to outperform the broader market because of strong demand from U.S. companies, developing nations such as China and even cash-strapped European governments. As China’s banking system exploded to serve a growing middle class, banks there spent big on IBM technology, she noted.

“Nobody questions whether they need the latest and greatest technology anymore. They know they need to keep up their technology spending,” says Eric Gebaide, managing director of Innovation Advisors, a tech-focused investment bank and strategic advisory firm.

Gebaide and others mentioned many companies’ efforts to move their computing and data storage off-site _ trends known as “cloud computing” and “virtualization.” Long-distance computing is cheaper, but it requires technology.

But why are tech stocks rallying now? The cloud computing transition has been under way for years, and spending by companies has driven much of the U.S. recovery since the economy emerged from recession in June 2009.

It’s all about the investment cycle, says Jack Ablin, chief investment officer with Harris Private Bank. He says investors are finally willing to “flex their speculative muscles in a market that isn’t falling apart in the way they feared last year.”

Last year, some of the best-performing stocks were consumer staples and utilities _ lower-risk industries where demand is consistent even the economy is slow. This year, utilities in the S&P are down 3.7 percent, while tech companies are up 6 percent.

The move out of so-called defensive stocks, the ones you want to own in a slow economy, is a sign that investors are willing to embrace risk again.

“You’re getting this big market rotation,” Vogelzang says. “People made money last year in the boring, stable industries, and they’re saying, `Hey, I better get on this economy train while I can.’”

Tech companies learned hard lessons from the dot-com bust of the early 2000s and the 2008 financial crisis, says Gebaide of Innovation Advisors. They hold more cash than most types of companies and carry less debt. That leaves them less vulnerable to bankruptcy or a loss of investor confidence.

Given its twice-stung discipline, tech is positioned to drive the economy _ “perhaps the best it has been as a sector in the past 20 years,” Gebaide says.

The biggest threat to the industry, Gebaide says, is a slowdown in the early investment that helps startups grow into viable companies. Those early dollars used to offer massive returns to savvy investors when a good pick went public.

Today, the upside for venture capitalists is limited because far fewer companies are going public in big stock offerings. The bar is much higher after dot-com era debacles like Pets.com. Before underwriting a deal or buying chunks of stock, banks and investors want to see millions in annual revenue and established customer bases. It’s tough for younger tech companies to meet those standards.

Peter Falvey, managing director of Morgan Keegan Technology Group, says there’s plenty of capital, entrepreneurship and good ideas to keep companies’ bottom lines _ and stock prices _ rising.

Falvey’s group specializes in tech mergers and acquisitions _ the kinds of deals that allow IBM or Oracle to bring a small competitor’s product to a wider audience and add to their own earnings. Last year was the best for M&A in his group’s 11-year history, and this year’s deal pipeline already is stronger than last year’s was at this time, he says.

A company like IBM “has huge amounts of capital and a global customer base, plus complete hardware-software services,” Falvey says. “Once you put a small company into that machine, IBM can do really well with it.”

The industry’s earlier downturns also helped big companies by weeding out smaller players. The number of publicly traded tech companies has decreased by a third since 2000, Gebaide says. Now the big dogs can pick and choose more carefully, acquiring only businesses that are almost certain to increase their profits.

To be sure, high-tech companies are higher-risk investments, and they could lose value quickly if the market tanks because of a debt catastrophe in Europe or something unforeseen.

“People love tech until we get an economic shock, or negative economic statistics start to come out,” Vogelzang says. “Then all of a sudden, people will say, `Whoa, I need to go buy some utilities again.”

But investors should take tech’s success at this stage as a promising sign, says Ryan Detrick, senior technical strategist with Schaeffer’s Investment Research. He says higher-risk bets like tech stocks tend to rise as the market enters a phase of long-term growth.

Housing, tech and small-company stocks all have risen faster than broad indexes since October, Detrick says. Those sectors are sensitive to improving economic data, he says.

“When you start to see tech taking charge, that’s definitely a potential step in the right direction for future gains, potentially for the whole year,” Detrick says. “Those are the sectors you want to see lead a bull market.”

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Berkshire Hathaway Inc.’s energy business agreed to buy an 81-megawatt wind power project from Invenergy Wind LLC to expand production in Illinois.

The Bishop Hill II project, which is under construction, will use 50 General Electric Co. 1.62-megawatt turbines, according to a statement Friday from Berkshire’s MidAmerican Energy Holdings Co. in Omaha, Neb.

Berkshire, led by Warren Buffett, has been expanding renewable production at the energy unit, which also produces power with coal and natural gas. Mid-American has invested about $6 billion in wind generation and built or acquired more than 3,300 megawatts of the renewable energy source in states including Iowa, Wyoming, Washington and Oregon since 2004. Last month, the unit agreed to buy the $2 billion Topaz solar project in California from First Solar Inc payday loans.

Wind “meets current and future energy needs in an environmentally efficient and cost-effective manner,” said MidAmerican Chairman and Chief Executive Greg Abel.

The Bishop Hill II wind project is near the town of Galva, Ill., about 40 miles northwest of Peoria. The project is expected to be in commercial operation in the fourth quarter. A unit of Ameren Corp. in Illinois has agreed to buy electricity from the project under a 20-year power-purchase agreement. Terms of the Invenergy deal weren’t disclosed.

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The number of Americans filing for new jobless benefits dropped to a near four-year low last week, pointing to some building up of momentum in the labor market and the economy.

But the upbeat economic outlook was dampened by other data on Thursday showing a drop in new residential construction in December after hefty gains the prior month.

Initial claims for state unemployment benefits plunged 50,000 to a seasonally adjusted 352,000, the lowest level since April 2008, the Labor Department said.

That was the largest drop since September 2005 and took claims within spitting distance of the 350,000 mark that economists say would signal strong job growth.

The four-week moving average of claims, considered to be a better measure of labor market trends, dropped 3,500 to 379,000 last week. Analysts had expected initial claims to fall only to 385,000.

“We have to see if there are some seasonality issues involved here, but on the surface this number looks to be very positive and is pretty much consistent with other data we’ve seen recently that suggest improvement in underlying fundamentals in the U.S.,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange.

U.S. stock futures added to gains after the data, while Treasury debt prices widened losses.

Last week’s claims data covered the survey period for January nonfarm payrolls and claims dropped by 14,000 between the December and January survey periods.

Payrolls increased 200,000 in December, with the unemployment rate dropping to a near three-year low of 8.5 percent.

The claims data builds on a rash of stronger-than-expected economic signals and could further temper expectations among some economists that the Federal Reserve could launch a fresh round of bond buying to spur the recovery.

The Fed meets next week and no policy action is expected, outside from the possibility the central bank may signal it will keep overnight rates pressed to zero for longer than had previously been expected.

But with continued signs of stress in the housing market, the U.S. central bank will stay very much in the picture.

Housing starts fell 4.1 percent to a seasonally adjusted annual rate of 657,000 units in December, the Commerce Department said in a separate report guaranteed payday loans. Economists had expected housing starts to fall to a 680,000-unit rate.

Permits for future home construction slipped 0.1 percent to an annual rate of 679,000 units last month.

“Housing continues to bounce along at the bottom, suggesting that housing is not going to recover for several years to come. If we are relying on housing to drive this recovery it seems we will continue on this tepid path for a very long time,” said Lindsey Piegza, an economist at FTN Financial in New York.

INFLATION STILL MUTED

In another report, the Labor Department said its Consumer Price Index was unchanged in December for a second straight month.

Core CPI - excluding food and energy - inched up 0.1 percent after rising up 0.2 percent in November. That was in line with economists’ expectations.

Last month, overall inflation was held back by gasoline prices, which fell 2.0 percent - declining for a third straight month. Food prices rose a modest 0.2 percent after nudging up 0.1 percent in November.

Overall consumer prices rose 3.0 percent year-on-year after increasing 3.4 percent in November. That was in line with economists’ expectations.

Core consumer prices were last month dampened by new motor vehicle costs, which fell 0.2 percent - the third straight month of declines. Prices for used cars and trucks dropped 0.9 percent, falling a fourth month in a row.

Apparel prices slipped 0.1 percent, indicating discounting by retailers to attract holiday shoppers. Apparel prices rose 0.6 percent in November.

But housing costs held up, with owners’ equivalent rent rising 0.2 percent last month, reflecting the rising demand for rental apartments as the weak housing market pushes Americans away from home ownership. This category rose 0.1 percent in November.

In the 12 months to December, core CPI increased 2.2 percent after rising by the same margin in November. This measure has rebounded from a record low of 0.6 percent in October.

The Fed would like to see core inflation at 2 percent or a little under, although the price measure its follows most closely tends to run below the core CPI.

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An email landed in my inbox the other day from a startup called Timehop. In that email, there were pieces of my online life posted a year ago that day.

"Feeling inspired," I had tweeted January 6 , 2010. And then there was a picture I had posted of my best friend sitting at our favorite local restaurant in the East Village, the one that months later closed its doors after 20 years.

The next day, I received an email documenting a tweet I’d sent to another good friend leaving CNN. "We’re losing a good one," I tweeted him in farewell. Later that day, I posted a picture of my favorite building lit by afternoon sunlight in what has now become my old neighborhood.

Nostalgic? Just a bit.

That’s why Timehop is betting our social media history will become more important in a world where much of our lives are documented online.

Sign up and connect your Twitter, Foursquare, Facebook, and Instagram account and every morning a piece of your social media history will land in your inbox showing what you tweeted a year ago on that date, the pictures you posted, and the places you were.

"We’re producing enough content in digital form that we have a digital past," Timehop co-founder Jonathan Wegener said. "You’re following your own life story, which is pretty interesting." Wegener added that Timehop has tens of thousands of subscribers.

The interest in eventually looking back online is part of the reason Facebook overhauled its interface to create Timeline, a new version of the site that would also serve as a digital scrapbook and essentially, a story of our lives.

Until Facebook launched Timeline, it was tough to view your past actions on the service.

"We knew people wanted to dig back in," Meredith Chin, manager of product communications at Facebook said. "We wanted people to be able to see a return on investment they put in over the years and also look back and reflect things that were important to them."

Companies like Foursquare and Twitter don’t allow users an easy way of looking back at old tweets and check-ins, and Timehop hopes to position itself as the place to do that.

"Everyone’s focused on real time and there’s an incredibly powerful product to be built on the past," Wegener said. "That’s the product we’re building."

Code Year draws 200,000 aspiring programmers

Timehop was a spin off of 4SquareAnd7YearsAgo, which was originally built out of a Foursquare hackathon in February of last year. That service simply sent you reminders of your Foursquare check-ins in the past credit reports free.

Wegener was a part of the latest Techstars class, an influential incubator program in New York that matches entrepreneurs with mentors. He was working on another startup called FriendsList, which was meant to take on Craigslist.

Wegener said Timehop was always a side startup but people just latched on to it. So he stopped working on FriendsList and is now working on Timehop full time with two other coworkers. He wouldn’t comment on VC funding.

The service uses the public APIs from social networks like Twitter and Foursquare to collect that data and send it to users in a daily email.

"What’s the point?" you might ask. I thought the same, but in a world where our musings are tweeted and our favorite moments shared on our smartphones, it doesn’t hurt to have a little reminder of where we were a year ago.

Wegener says the gentle digital reminders from the past in a daily email are "emotionally powerful," citing users who are reliving their child’s birth and viewing pictures they posted a year earlier.

But what happens when we don’t want to be reminded of the past? What if the daily reminder mentions an ex-boyfriend or someone who has since died?

Wegener admitted that’s been a problem for Timehop. "We’ve had a surprising number of people unsubscribing due to people not wanting to relive a tough patch of history," he said.

The crew is currently working on a filter that would allow users more control over their reminders and a snooze feature that would turn off the service temporarily.

Wegener, who has spent nearly a year on the project, says the tweets we send, the pictures we post, and the other bits of media we’ve started creating on a daily basis will ultimately gain value.

"The content you create gains value with time. So whether it’s a photograph or tweet, it becomes more emotional with time — it ages like wine," he said.

Of course, the philosophy must be backed by a business plan and it’s not clear whether Timehop will be able to pull that off. Timehop eventually hopes to make money from advertising. Wegener said there is also potential for virtual gifts connected with a service that celebrates the past.

Only time will tell if our digital past will be a success in the future. We’ll sign up for Timehop and check back in a year. 

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J.C. Penney Co. named board member Thomas J. Engibous, former head of Texas Instruments, as the department store chain’s new chairman. He succeeds Myron E. Ullman III, former chief executive and chairman, who is finishing up his reign at Penney’s.

The announcement adds the finishing touches to a major management transformation at the mid-price retailer.

Ullman, who became Penney’s CEO in 2004, gave up that title Nov. 1 to Ron Johnson, a former executive at Apple Inc. who took over merchandising and marketing responsibilities and then planned to assume the rest of the responsibilities Feb. 1. During the three-month transition period, Ullman served as executive chairman.

The company said that Engibous will become chairman Jan. 28, which marks the end of Penney’s fiscal year.

Under Ullman, J.C. Penney added popular brands like European clothing line MNG by Mango and Sephora cosmetics. But the department store chain is still struggling to be more inviting. The department store chain posted disappointing holiday sales as it has faced stiff competition from Macy’s Inc. and other clothing sellers.

J.C. Penney reported that revenue at stores open at least a year rose 0.3 percent in December, missing the company’s expectations. This figure is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed. The company also said on Thursday that it expects to lose money in the fourth quarter personal loans for people with bad credit.

Engibous said in a statement on Tuesday that he will help J.C. Penney as it looks to lure more shoppers to its stores.

Engibous is a retired chairman and former CEO of Texas Instruments Inc. He has been a J.C. Penney board member since 1999 and has served as lead independent director and presiding director since 2008.

Johnson said in prepared remarks that Engibous has been invaluable to him in his early days leading the retailer and expects him to assist in the company’s quest to build itself into “America’s Favorite Store.”

The company took one step toward revitalizing itself last month when it announced that it is buying a 16.6 percent stake in Martha Stewart Living Omnimedia Inc. for $38.5 million. Starting in February 2013, mini-Martha Stewart shops will appear inside most of J.C. Penney stores, and the companies will operate a joint website. Later this month, Johnson is expected to unveil plans on a new pricing strategy and other broad-sweeping intitiatives.

J.C. Penney runs more than 1,100 stores in the U.S. and Puerto Rico.

Shares slipped 8 cents to $34.49 in morning trading.

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The U.S. Treasury again shied away from labeling China a currency manipulator on Tuesday, but it rapped the country for not moving quickly enough on exchange rate reforms.

Some U.S. politicians have argued that China has gained an unfair competitive edge in global markets by keeping the yuan artificially low to boost exports, and pressure has mounted in Congress for President Barack Obama to punish China.

But the administration prefers to tread softly and use diplomacy to effect change. The U.S. Treasury, in a semi-annual report, as usual said that statutes covering a designation of currency manipulator “have not been met with respect to China.”

It repeated its standard line that appreciation in the yuan has been too slow, calling it “insufficient.”

“Treasury will closely monitor the pace of appreciation and press for policy changes that yield greater exchange rate flexibility, a level playing field, and a sustained shift to domestic demand-led growth,” it said in the report to Congress on international economic and exchange rate policies.

The value of the yuan, which Beijing manages closely, has risen 4 percent against the dollar this year and 7.7 percent since China dropped a firm peg against the greenback in June 2010. The Peterson Institute for International Economics recently estimated the yuan was undervalued by 24 percent against the dollar, down from 28 percent earlier in the year. It attributed the change to both Beijing’s policy of gradual currency appreciation and higher Chinese inflation.

At the heart of the friction between the two countries is a U.S. trade deficit with China that swelled in 2010 to a record $273.1 billion from about $226.9 billion in 2009. The cumulative Jan-Oct deficit with China is on track to top that this year, running at around $245.5 billion.

The Senate this year for the first time passed a bill that would require the administration to slap penalties on Chinese imports if it fails to adopt market-based exchange rates. While the measure has made no progress in the lower chamber and is unlikely to become law, it shows the mounting U.S. frustration with its vital trade partner.

President Obama at the November APEC meetings, in his toughest words yet, told President Hu Jintao that China must play by global trade rules and act like “a grown-up.”

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But U.S. Treasury Secretary Timothy Geithner has said the law on the FX report, which requires the administration to determine whether U.S. trade partners are deliberately undervaluing their currencies, is a poor tool to push Beijing on the yuan.

Instead, the United States prefers to argue for change at its regular closed-door meetings with Chinese officials. It also uses international economic forums, such as the Group of 20 leading nations and the International Monetary Fund, to ramp up public pressure on Beijing to move more quickly to a more-flexible currency.

China is the biggest foreign holder of U.S. Treasuries, with about $1.1 trillion, a position that gives it leverage in international economic negotiations. Foreign exchange traders had not expected a change of U.S. tactics.

“It’s not very surprising. It’s sort of sliding it in under the radar. They’re (Treasury) really not in a position to make any major moves at this point,” said Sean Incremona, an economist at 4Cast in New York.

The Treasury Department has not labeled a country a currency manipulator since July 1994, when it cited China. A designation would require the United States to step up negotiations with Beijing on the yuan’s value.

The yuan slipped on Tuesday as strong dollar demand from corporations offset a record high mid-point fixed by the People’s Bank of China. The central bank set an all-time high dollar/yuan mid-point in an apparent move to let the yuan rise a little more at the end of 2011 so as to make the yuan’s full-year nominal appreciation look bigger, traders said.

Some U.S. manufacturers, which have been hit hardest by competition from China and other emerging economies, would still prefer the U.S. government to take a harder line.

“China’s currency is still enormously undervalued,” said Scott Paul, executive director of the Alliance for American Manufacturing, an industry lobby for hard-hit textile, steel and labor groups.

“I’m disappointed that President Obama has now formally refused six times to cite China for its currency manipulation, a practice which has contributed to the loss of hundreds of thousands of American manufacturing jobs.”

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