World financial news

Federal agents raided the offices of three investment firms, officials said Monday, with the raids coming amid widespread speculation of hedge-fund insider trading allegations.

The names of the companies were not made public, but a law enforcement official with knowledge of the investigation said the addresses of the raids matched the addresses of Diamondback Capital Management LLC in Stamford, Connecticut; Loch Capital Management in Boston; and Level Global Investors LP in New York.

The official addresses of those firms were listed in a U.S. Securities and Exchange Commission statement filed on Sept. 30.

"The FBI is conducting court-authorized search warrants in an ongoing investigation," the official told CNN, but declined to comment on whether the raids were part of a wider insider-trading investigation payday loans.

Monday’s raid comes on the heels of a 2009 case, when federal prosecutors charged hedge-fund billionaire Raj Rajaratnam of the Galleon Group and others with reaping millions from illegal trading between 2006 and 2009. Rajaratnam has pleaded not guilty.

Diamondback Capital Management, Level Global Investors, and Loch Capital Management could not be immediately reached for comment. 

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U.S. Treasury Secretary Timothy F. Geithner said the Obama administration would oppose any effort to strip the Federal Reserve of its mandate to pursue full employment and warned Republicans against politicizing the central bank.

“It is very important to keep politics out of monetary policy,” Geithner said in an interview airing on Bloomberg Television’s “Political Capital with Al Hunt” this weekend. “You want to be very careful not to take steps that hurt our credibility.”

The Republican congressional leadership, including John Boehner, nominated as the next House speaker, has criticized the Fed’s plan to buy $600 billion in assets, saying it would fuel inflation and asset bubbles. Senator Bob Corker, a Tennessee Republican who serves on the Banking Committee, said he favors confining the Fed’s mandate to promoting price stability.

Geithner, 49, declined to say what compromise the Obama administration would be willing to consider on extending Bush- era tax cuts, while ruling out making permanent the reductions for the wealthiest Americans.

“It is not responsible, and I could not recommend to the president in good conscience, that we go out and borrow $700 billion to make those high-end tax cuts permanent,” Geithner said.

He said he doesn’t think the tax cuts for the middle class will be allowed to expire in December, or that all of the tax cuts, including those for the wealthy, will be extended permanently.

General Motors

On General Motors Co., Geithner said the government would get back “a very substantial part” of its investment and all the money the Obama administration spent on bailing out the automaker. Taxpayers put about $13.4 billion into GM under former President George W. Bush and $36.1 billion under Obama.

GM, which went bankrupt last year after almost a century on the New York Stock Exchange, raised more than $20 billion in an initial public offering Nov. 18.

Asked about Europe, Geithner said a financial rescue of Ireland could mark an end to the continent’s sovereign debt crisis. Officials from the European Union, International Monetary Fund and European Central Bank spent a second day in Dublin yesterday discussing a possible bailout of Irish banks.

“I believe they will achieve that because this government, Ireland has demonstrated that they are willing to do some very, very difficult, very, very hard things to dig their way out of this mess,” Geithner said . “And leaders of Europe have made some very tough political choices.”

China Currency

He said China is allowing its currency to strengthen, and that “we want to make sure they sustain that.”

The Fed’s monetary easing, which Chinese officials have said weakened the dollar, hasn’t hurt U.S. efforts to convince China to let the yuan rise, Geithner said. The yuan has gained about 2.6 percent against the dollar since Sept. 1.

Fed Chairman Ben S. Bernanke defended the monetary stimulus in a speech in Frankfurt yesterday and in a meeting with U.S. senators Nov. 17.

The best way to underpin the dollar and support the global recovery “is through policies that lead to a resumption of robust growth in a context of price stability in the United States,” Bernanke said in his speech.

The asset purchases will be used in a way that’s “measured and responsive to economic conditions,” Bernanke said. Fed officials are “unwaveringly committed to price stability” and don’t seek inflation higher than the level of “2 percent or a bit less” that most policy makers see as consistent with the Fed’s legislative mandate, he said.

Letter to Bernanke

Also this week, 23 people, including former Republican government officials and economists, urged Bernanke to halt the stimulus. Among those who signed the letter: Douglas Holtz- Eakin, a former Congressional Budget Office director; Weekly Standard Editor William Kristol, and Stanford University Professor John Taylor, creator of a monetary-policy formula on interest rates used by the Fed.

The Republican attacks on the Fed have been among the harshest since the central bank rushed to rescue the financial system with support for Bear Stearns Cos. and American International Group Inc. during the financial crisis.

“It is very important that we respect and honor what the Congress did when it set up our independent central bank with a mandate to keep prices low and stable over time and to make sure” it promotes “sustainable economic growth,” said Geithner, who was president of the Federal Reserve Bank of New York before taking over as Treasury secretary last year.

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Research In Motion???s BlackBerry PlayBook, the tablet designed to compete with the iPad from Apple, is winning corporate customers months before its debut.

Insurer Sun Life Financial has agreed to buy as many as 1,000 PlayBooks, and the Canadian banking unit of ING Groep says it is also committed to purchasing the device. Companies including Manulife Financial are testing the product, set to go on sale next quarter.

RIM first found success selling its BlackBerry smartphone to companies and is counting on such endorsements as it tries to challenge Apple???s dominance of the booming tablet market. RIM, based in Waterloo, Ontario, is betting on the PlayBook???s security features, such as e-mail encryption, to win over companies used to working with the BlackBerry.

???The encryption was really the clincher in opting for the PlayBook,??? said Tom Reid, a Sun Life senior vice president. Sun Life plans to buy 500 to 1,000 PlayBooks initially and may increase that number as it begins to use it more widely, he said.

Natalie Harrison, an Apple spokeswoman, had no immediate comment. Last month, Apple said more than 65 per cent of the Fortune 100 companies are deploying or piloting the iPad, including Procter & Gamble, Lowe???s and Hyatt Hotels 500 payday loan.

Apple sold 3 million iPads in the first 80 days after the product debuted in April, showing there???s demand for a device that straddles the gap between laptops and smartphones like the BlackBerry and iPhone. Apple had a 95 per cent share of the tablet market last quarter, according to Strategy Analytics.

Besides adding a revenue source, the PlayBook is a chance for RIM to regain some momentum from Apple, whose iPhone has stolen market share from the BlackBerry and is beginning to win some corporate customers. Citigroup and Bank of America are considering whether to let employees use the iPhone as an alternative to the BlackBerry, three people familiar with the plans said this month.

Toronto-based Sun Life, Canada???s third-largest insurer, plans to let new pension plan members register directly on the RIM tablet and has already built a PlayBook application, the world???s first, Reid said.

For Amsterdam-based ING???s Canadian unit, familiarity with the BlackBerry makes the PlayBook appealing, Chief Information Officer Charaka Kithulegoda said.

???The PlayBook fits very nicely into the current infrastructure, architecture, security policies, everything that we have in place,??? said Kithulegoda. ???At the end of the day it comes down to these things.???

He said ING aims to buy an undisclosed number of PlayBooks for employees and is also building a banking app for customers.

The tablet is expected to connect to ING???s BlackBerry server computer ???out of the box,??? meaning the company won???t have many of the security worries it would face with an unfamiliar device, Kithulegoda said.

The PlayBook will sell for ???under??? $500, said RIM co-Chief Executive Officer Jim Balsillie. The iPad starts at $499 for a model with 16 gigabytes of memory and the price climbs for versions with more storage. The initial PlayBook version will connect to the Internet through either a Wi-Fi connection or by tethering it to a user???s BlackBerry.

Manulife, North America???s third-largest insurer, is testing the PlayBook as part of RIM???s PlayBook early-developer program, said Tom Nunn, a spokesman for the Toronto-based company. Manulife plans to use the PlayBook ???to leverage our past investment??? in BlackBerrys, said Nunn no credit check payday loans.

PlayBook features built to appeal to business users are its twin cameras that enable videoconferencing, and a 7-inch screen that makes the device more portable and easier to fit in a bag or jacket pocket than the iPad.

Apple CEO Steve Jobs said last month devices like the PlayBook are ???dead on arrival??? because they are too small to compete with the iPad, which has a 9.7-inch screen.

That prompted RIM to post a clip of the PlayBook???s performance on the Web, comparing it to the iPad in performing several tasks, including surfing the Web and playing video. Balsillie said the clip shows the PlayBook is three to four times faster than its Apple rival.

ING???s Kithulegoda is sold on the PlayBook???s features. He just wants it to come to market faster and said he???s in talks with RIM to get the PlayBook as soon as he can for a trial.

???Yesterday would have been better, but I???ll settle for next year,??? he said.

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OTTAWA???The Competition Bureau is seeking to impose more than $10 million in penalties against Rogers’ Communications Inc. (TSX: RCI.B) for allegedly using misleading advertising to promote its new Chatr discount mobile service.

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General Motors returned to life as a public company Thursday with a stock offering worth potentially US$23 billion, considerably more than anticipated when the largest U.S. automaker began preparing for its IPO.

The stock started public trading above the IPO price. In New York, the stock (NYSE: GM) was at US$35.72 and in Toronto (TSX: GMM.U) they were at US$35.84 shortly after the markets opened Thursday.

GM set a price of US$33 per common share on Wednesday, at the high end of a range and a day after it raised the number of shares it will offer to satisfy investor demand.

The U.S. government, the Canadian federal and Ontario governments and other owners will raise a total of $18.2 billion by selling at the IPO price. GM will raise another $5 billion by selling 100 million preferred shares at $50 each.

The U.S. Treasury is unloading more than 400 million shares of GM, reducing its stake in the company from 61 per cent to about 33 per cent. The stock sold through the IPO would be worth about $13.6 billion.

Canada???s federal and Ontario governments have owned a combined 11.67 per cent of General Motors since last year???s bailout of the automaker. They???re reducing that stake to below 10 per cent by selling about 35 million shares through the IPO.

Canadian Industry Minister Tony Clement and Finance Minister Jim Flaherty have said they???re in no hurry to sell more GM shares at this time, since they been advised that the stock may be worth more in future.

The head of GM Canada??? largest union, CAW national president Ken Lewenza, said Thursday he supports the idea of having a continuing government role in the auto sector.

???We would encourage the Canadian government to take their time,??? Lewenza said in an interview with BNN, a specialty business cable channel.

???In fact, we would encourage the Canadian government to do what other countries are doing, like in China and Korea, and have some stake in the automobile industry.???

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Loehmann’s Inc. filed for bankruptcy Monday after the discount designer clothing retailer reached an agreement with creditors to restructure its debt.

The New York-based company, which has 45 stores in 12 U.S. states and Washington, D.C., expects to remain in business during the Chapter 11 process and plans to emerge from bankruptcy in the first quarter of next year.

Loehmann’s said it made the decision to file after reaching an agreement with Whippoorwill Associates Inc., which owns 70% of its senior secured notes, and its current owner, Istithmar World.

The plan will "substantially reduce the company’s debt and recapitalize its balance sheet," Loehmann’s said in a statement.

Istithmar World, a private equity company owned by state-sponsored investment vehicle Dubai World, bought Loehmann’s in 2006.

As part of the agreement, Istithmar and Whippoorwill Associates will invest $25 million into the company after restructuring.

Under the terms of the deal, Loehmann’s bondholders will exchange their notes for 51% common equity in the company. Istithmar will own the remaining 49%.

Loehmann’s existing credit facility lender, Crystal Financial, will provide $45 million in financing to support the company during restructuring.

In court documents filed Monday in New York, Loehmann’s estimated that its assets and liabilities were both in the range of $500 million to $1 billion.

Among the largest creditors Loehmann’s listed in its filing were well-known brand names including Urban Outfitters, Juicy Couture, Steve Madden and Calvin Klein. The company estimates that it owes money to between 1,000 and 5,000 creditors.

This marks the second trip to bankruptcy court for Loehmann’s this decade. Loehmann’s previously filed Chapter 11 in 1999 and emerged in 2000. 

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India’s inflation slowed in October to the lowest level in nine months, reducing pressure on the central bank to extend Asia’s fastest round of interest-rate increases this year.

The benchmark wholesale-price index rose 8.58 percent from a year earlier after an 8.62 percent increase in September, according to a commerce ministry statement in New Delhi today. The median forecast of 22 economists in a Bloomberg News survey was for an 8.5 percent gain.

Governor Duvvuri Subbarao, who raised rates on Nov. 2 for the sixth time this year, said the central bank may refrain from boosting them for three months, partly to ward off the risk of inflation-stoking capital inflows from overseas. The Reserve Bank of India also wants to assess the impact of the monetary tightening on consumer demand. The government said on Nov. 12 factory output growth dropped to a 16-month low in September.

“We see an interest-rate pause for now,” Indranil Pan, chief economist at Kotak Mahindra Bank Ltd. in Mumbai, said before the report. “They will resume raising rates next year if inflation does not drop fast enough.”

India’s central bank is aiming to cool inflation to 6 percent by March 31.

Stocks, Rupee

Stocks, bonds and the rupee were little changed after the report. The Bombay Stock Exchange’s Sensitive Index rose 0.1 percent to 20,184.24 as of 12:10 p.m. in Mumbai. The rupee fell 0.7 percent to 45.1 against the dollar on concern that weakening industrial output will moderate capital flows into the nation’s assets. The yield on the 12-year government bond was unchanged at 8.06 percent.

So far this year, the interest-rate differential between India and advanced countries spurred an unprecedented $10 billion inflow into rupee debt, strengthening the currency by 4.2 percent against the dollar since Sept. 1. Overseas funds also invested a record $28.5 billion into Indian stocks since Jan payday loan lenders. 1 on prospects of faster economic expansion in the South Asian nation, driving the stock index to near a record.

Rate Differential

The Reserve Bank’s benchmark repurchase rate is 6.25 percent. By comparison, the U.S. Federal Reserve’s target for overnight interbank loans is zero to 0.25 percent, where it has been since December 2008. The Fed Nov. 3 left unchanged its pledge to keep rates low for an “extended period” and said it will buy an additional $600 billion of Treasuries through June.

The Bank of Japan last month unveiled a 5 trillion-yen ($61 billion) fund that will buy government and corporate debt, as well as invest in real-estate investment trusts and exchange- traded funds to spur growth.

Shubhada Rao, chief economist at Yes Bank in Mumbai, said India’s central bank may pause its rate-increase cycle for an “extended” period as counterparts abroad ease their monetary policies.

“Also, there has been some moderation in industrial output and food inflation has also fallen in recent weeks,” Rao said. “Therefore, we think rates have seen their peak in India.”

India’s industrial output rose 4.4 percent in September after growing 6.9 percent in August, the statistics office said on Nov. 12.

Steel Authority of India Ltd., the nation’s second biggest producer, and rival JSW Steel Ltd., said they cut prices of flat products, used to make cars, by as much as 2 percent for November.

India’s food inflation slowed to a one-year low of 12.3 percent in the week ended Oct. 30. Food prices in India are declining after the country received the heaviest rainfall in three years in the June to September monsoon season, helping spur farm production.

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Ireland conceded Monday it is in talks with other European Union governments about how to tackle its debt crisis, but continued to deny it is negotiating a potential rescue from the EU bailout fund.

With fears mounting that Ireland could become the next eurozone country after Greece to be bailed out, the Department of Finance said in a statement it was pursuing “contacts at official level.” Aides to Finance Minister Brian Lenihan, however, emphasized Ireland has no need for emergency aid given it has enough funds to operate through mid-2011.

Finance department officials declined to comment on Irish media reports that the government is discussing whether the EU fund could be used to support the short-term cash needs of particular Irish banks, rather than the state.

Lenihan is traveling Tuesday to Brussels to discuss the Irish crisis _ and its impact on the rising debt costs of other European nations _ with fellow finance ministers across the 27-nation union.

The Irish Independent newspaper reported that Lenihan plans to ask other finance ministers about the possibility of using the euro750 billion ($1.05 trillion) European Financial Stability Facility to funnel short-term aid directly to debt-crippled Irish banks, rather than to government coffers. The newspaper, which did not name its sources, said the strategy would allow Lenihan “to save face while maintaining control of the economy.”

On Sunday, Irish Justice Minister Dermot Ahern denied widespread reports that Ireland was negotiating terms of a bailout package, describing them as “total fiction.” The reports, largely emanating from unidentified sources in Brussels, said the potential scope of a rescue deal would range from euro60 billion to euro80 billion.

Ireland is struggling to prop up its banks and simultaneously to slash a deficit that has ballooned this year to a staggering 32 percent of GDP, a record for post-war Europe. Much of that 2010 deficit involves Ireland’s euro45 billion support to five banks. Three of those banks have already been nationalized, and Allied Irish Banks appears certain to be nationalized too within weeks. Only Bank of Ireland has been able to borrow money on the open market.

EU chiefs are anxious to quell market fears of an eventual Irish debt default. Those fears are driving up the borrowing costs of other EU nations saddled with red ink, notably Greece, Spain and Portugal.

Analysts said investors needed the finance ministers in Brussels to offer a clear path forward for Ireland, otherwise they would continue to dump the bonds of EU’s peripheral nations in favor of German bunds.

“While there is ongoing uncertainty in relation to the need or desire for EU aid, volatility in the Irish bond market looks set to continue,” Dublin-based Glas Securities said in a statement.

The yield, or interest rate, on Ireland’s 10-year bonds was little changed in early Monday trading. The contract opened at 8.14 percent and oscillated in a narrow range of 8.13-8.22 percent, reflecting investors’ uncertainty over the rumors of an EU aid offer.

Irish politicians said the current terms for taking EU aid were hardly ideal for Ireland. They noted that the loans would require repayment or refinancing within three years, and simultaneously would cripple Ireland’s ability to borrow money on the bond market.

“If you take a bailout, you lose control of your economic policy for three to five years, and the bailout fund is three-year money,” said Joan Burton, finance spokeswoman for the opposition Labour Party. “If you’re on three-year money, you keep reaching cliffs over and over again.”

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There???s no cooling off period when buying new or used cars. You can lose your deposit if you change your mind later.

Contracts have to say ???Sales Final??? in large type next to your signature under Ontario???s motor vehicle dealers act.

You can get out of a deal within 90 days only if a dealer misrepresents a car. Grounds for a refund include incorrect disclosure of the mileage, make and model year, and lack of disclosure that a car has been branded as a write-off after an accident or has been used as a daily rental, police cruiser or taxi.

Despite the extra protection, some people still ask On Your Side to help with car dealer disputes.

Gillian Reiss put down a $1,000 deposit at a Kia dealer for a demo car, which would be cleaned up before delivery.

But she found the car was still dirty and dusty. The back seat had a scratch in the leather and the passenger door had a small dent.

She decided to cancel, not realizing that her deposit could go to pay for the dealer???s expenses incurred in selling the vehicle.

Consumers can ask dealers to itemize these expenses, known under the law as ???liquidated damages.???

Reiss didn???t get to that stage. She received a refund after I sent her complaint to Kia Canada and the Ontario Motor Vehicle Industry Council (OMVIC).

In another case, I helped Debbie Schopp and her 25-year-old daughter get back a $500 deposit from Auto Showplace, a used car dealer in Toronto.

The daughter had signed a deal to buy a car for $6,500, as long as it passed a mechanical inspection. But her father, a mechanic, said the car was too old (2002) and the mileage too high (130,000 kilometres).

She then settled on a 2004 model with 91,000 kilometres at the same dealer, subject to mechanical inspection somewhere else.

???The next morning, my daughter wakes up and says, ???Mom, the car is too expensive. It???s too much stress for me and I???ve changed my mind.??? Now she doesn???t want the car at all,??? her mother told me.

She called OMVIC and filed a complaint about not getting back her deposit. But she admitted to not reading the paperwork, which weakened her case.

???Three people wrote up the numbers on the contract. All three knew we did not read the papers at all and no one warned us that it was a purchase agreement,??? Schopp said.

I contacted OMVIC on her behalf. Soon after, the dealer sold the second car and gave back her $500 deposit.

???The story had a good ending,??? said Kevin Bavelaar, Auto Showplace owner and an OMVIC director for 10 years.

???My advice to customers is to read the contract, which says Sales Final in prominent type.???

Shalini Lalbeharry contacted me about last-minute changes to her lease rate for a 2010 Nissan Murano.

The dealer had offered her zero down, a 48-month term at 1.9 per cent and payments of $550 a month.

But when she came to pick up the car, she was told that Nissan had raised the lease rate to 4.9 per cent, pushing up her payments to $580 a month.

???I trusted in the document I signed and bargained in good faith. The dealer ambushed me with the changes,??? she said.

???My choices were to get back my $1,000 deposit or have a new agreement drafted at $580 a month.???

Didier Marsaud, Nissan???s senior manager of corporate communications, reviewed the case and came back quickly with good news.

???As the customer???s bill of sale was finalized with the old finance rate, Nissan Canada will honour that rate of 1.9 per cent,??? he said.

If you???re putting down a deposit, know what you???re getting into and how to get out. In a dispute, contact OMVIC at 416-226-4500 or 1-800-943-6002. You can file a complaint online at www.omvic.on.ca.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca.

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Google is known to hire the best and the brightest Silicon Valley has to offer, but hanging onto that talent can be a struggle. Google’s bold move to boost morale — a 10% across-the-board pay raise — has already cost it one worker: The employee who leaked the news.

Google CEO Eric Schmidt announced the salary hike in a memo late Tuesday, a copy of which was obtained by Fortune. The memo was also leaked to Business Insider, which broke the news. Within hours, Google notified its staff that it had terminated the leaker, several sources told CNNMoney. A Google spokesman declined to comment on the issue, or on the memo.

"While we don’t typically comment on internal matters, we do believe that competitive compensation plans are important to the future of the company," Google’s spokesman said in a prepared statement.

In the past few weeks, Google has lost top minds such as YouTube co-founder and CEO Chad Hurley, AdMob co-founder Omar Hamoui, and Google Maps and Wave creator Lars Rasmussen.

When Rasmussen left, he told the Sydney Morning Herald that Google’s growing size hindered its employees’ ability to get things accomplished. Google has a headcount of nearly 25,000. Rasmussen is heading to Facebook, which has a staff of just over 2,000.

He’s hardly the only one. Of the more than 1,900 Facebook employees with resumes on LinkedIn, 300 — around 15% of Facebook’s staff — list Google as a past employer.

The company’s Google alumni network goes straight to the top: Facebook’s No. 2 is Sheryl Sandberg, Google’s former chief of sales and operations. And in June, former Google Product Manager Bret Taylor became Facebook’s chief technology officer.

So, facing both internal and external pressures, Google (GOOG, Fortune 500) made an unprecedented move to keep its employees happy and in place. Companies have been more likely in recent years to cut salaries for their entire staff than to raise them.

Bucking the Valley’s revolving door trend

The problem of keeping talent is hardly Google’s alone to bear. Microsoft and Yahoo (YHOO, Fortune 500) have also had heavy defections to Facebook, according to LinkedIn data. And Google has been on the beneficiary side as well, picking up a large number of former Microsoft (MSFT, Fortune 500), IBM (IBM, Fortune 500) and Yahoo employees.

"In the Valley, that’s always been part of the drill," said Joel Achramowicz, analyst at Blaylock Robert Van. "Everyone’s losing people to everyone. It’s part of the cross-fertilization that occurs."

Analysts say Google is facing what all Silicon Valley companies struggle with when they graduate from startup status and into the realm of Big Tech.

"It’s the danger of being successful," said Carl Howe, analyst at Yankee Group. "You can get away with a lot of stuff when only your reputation and a few thousand dollars are on the line, but when you threaten massive income streams, you get a bit more cautious. You don’t want to lose everything you worked for."

The bureaucratic smothering Rasmussen cited in his departure has been a mounting problem at Google for several years.

Exhibit A: Dodgeball, the location-based social network that Google bought in 2005. Frustrated by Google’s lack of movement on the technology, the company’s founders quit just two years later, giving Google a big thumbs down. They both now work on Foursquare.

Every large company faces such challenges, though their solutions can take radically different forms. Google has been working to reorganize its structure, creating smaller teams that aim to give employees more autonomy. That’s one reason why so many of Google’s products are in beta. Not everything needs approval from top bosses like co-founders Larry Page and Sergei Brin.

That’s very different from Apple’s approach. At Apple (AAPL, Fortune 500), employees fight to get their ideas passed through many layers before they become products, with refinement and criticism at each step. Steve Jobs has the final say on essentially everything, analysts say — and most fledgling creations die along the way.

Each approach has its benefits and drawbacks. Google’s system strikes some employees as too chaotic, making it hard to get things done, according to Howe. On the flip side, zanier projects like robot cars serve an important morale-building purpose, on top of generating interesting research results. They often inspire engineers, and position the company as a cool and innovative place to work.

Like many of Silicon Valley’s Goliaths, Google is sitting on a mountain of cash — more than $33 billion as of Sept. 30. Right now, cash earns next to nothing when it’s parked in conservative investments, so companies are looking for other ways to generate returns. Some are doing share buybacks, others are upping or creating dividends, and many are hunting for acqusitions.

Google likes to snap up startups, but its salary bump sends an intriguing message: The company thinks the best place to invest its cash is in its existing staff.  

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