Saturday mail delivery should stay - U.S.

The U.S. Postal Service must deliver the mail six days a week.

WASHINGTON (CNNMoney) The U.S. Postal Service must deliver the mail six days a week, said Congress' watchdog arm in a Thursday legal opinion.

The legal opinion from the nonpartisan agency throws new questions on the Postmaster General Patrick Donahoe's plans to stop delivering first-class mail, but keep delivering packages and express mail on Saturdays.

The U.S. Government Accountability Office stopped short of saying the U.S. Postal Service's August plan to end most Saturday mail service violates current law.

The U.S. Postal Service says it's not ending six-day delivery, only changing it, since it'll still deliver packages on Saturdays.

However, GAO's report could make it easier to file a lawsuit to stop the U.S. Postal Service, if it decides to continue with service cuts as previously announced.

"We fully expect the Postal Service's board of governors and the postmaster general to follow the law and the expressed will of Congress about maintaining six-day delivery," said Fredric Rolando, president of the National Association of Letter Carriers. "We do not expect to have a legal fight."

When the U.S. Postal Service announced last month it planned to stop delivering and collecting letters and other first-class mail on Saturdays beginning Aug. 5, several lawmakers accused the agency of overstepping its legal authority.

"The GAO legal opinion clearly rejects the Postal Service's attempt to circumvent the law," said Rep. Gerald Connolly of Virginia who asked GAO to review postal service's legal authority.

In the past, the agency had said it needed Congress to change current law to cut Saturday service. After more than two years of waiting for Congress to help, the Postal Service decided to cut Saturday mail, saying the current temporary funding measures gave them a loophole to pursue the changes.

The GAO report said that loophole isn't there and that current law requires the agency to continue 6-day delivery.

U.S. Postal Service spokesman David Partenheimer said the agency disagrees with the GAO opinion. He also said it doesn't address their plan to move to "5-day mail delivery, with 6-day package delivery, during the week of August 5."

That plan would save $2 billion a year, not much compared to the $16 billion loss the organization reported for 2012.

The key culprit for the Postal Service's woes has been a 2006 congressional mandate, under which it has to pre-fund healthcare benefits for future retirees. The USPS has been borrowing billions of dollars from taxpayers to make up for the shortfalls.

At the same time, technological advances have led to a decline in first-class mail, which most consumers use to pay bills and stay in touch.

The situation turned particularly dire last year -- the agency twice defaulted on payments totaling $11 billion, and it exhausted a $15 billion line of credit from the U.S. Treasury.

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Google's Eric Schmidt makes rare visit to Myanmar

Eric Schmidt is making a visit to Myanmar, one of the world's largest untapped tech markets.

HONG KONG (CNNMoney) Google Chairman Eric Schmidt advocated for a free and open Internet Friday during a rare visit by a top-level American executive to Myanmar, a former pariah state that is among the world's least wired.

The country, emerging from decades of military rule and harsh international sanctions, is one of the world's largest untapped markets for tech companies. Internet access is extremely rare, and only a tiny sliver of the country's 50 million residents have access to cell phones.

The trip, part of a longer swing through Asia, comes just two months after Schmidt made a controversial journey to North Korea over the objections of the U.S. State Department.

While in the Myanmar, also known as Burma, Schmidt visited a technology park in Yangon, the country's most populous city.

Schmidt has in the past written at length about the Internet's ability to empower citizens oppressed by autocratic governments, and is now producing a book on the subject. He returned to the theme Friday during a question-and-answer session, saying that "something extraordinary is going to happen in Myanmar."

"By far the best formula

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Russia bails on Cyprus as deadline looms

Cyprus was hoping close business ties with Russia could lead to more financial aid

LONDON (CNNMoney) It looks like a Russian rescue of Cyprus is off the table, at least for now.

Talks between Russian officials and the government of Cyprus broke up early Friday, with no agreement on a cash infusion that could have helped the tiny island nation to secure an EU bailout.

Russian investors were ultimately not interested in the plans proposed by the Cypriot finance minister during a trip to Moscow, Russia's finance minister said Friday, according to state run news agency RIA Novosti.

One proposal was for Russian investors to develop the country's natural gas reserves. But the Russians will stand aside while Cyprus tries to find a way to recapitalize its insolvent banks with help from the so-called troika of European Central Bank, European Commission and International Monetary Fund.

Another way Russia could contribute is by relaxing the terms of an existing

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Stocks: Waiting for Cyprus

Click on chart for market data

NEW YORK (CNNMoney) Stock futures experienced a sudden uplift Friday, after a representative of the Cyprus government said a bailout deal could be reached in the next few hours.

The announcement helped alleviate a cloud of uncertainty that's been looming over Wall Street.

"People like to have a definitive answer, rather than something lurking in the darkness," said Anthony Conroy, head trader at ConvergEx Group.

All eyes are on Cyprus, where lawmakers are discussing new proposals to raise the money the country needs to qualify for its European Union bailout.

"In a few hours, we will be called upon to take the big decisions and reply to the hard dilemmas," said Christos Stylianides, spokesman for the Cypriot government.

U.S. stock futures made gains after Stylianides' comments. Before that, they were flat.

Talks between Russian officials and the Cyprus government broke up early Friday, with no agreement on a cash infusion that could help the island nation secure a

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Are bond funds a ticking time bomb?

If you feel you must have shelter from rising interest rates, shift into a short-term bond index fund.

(Money Magazine) "If interest rates rise, the value of my bond funds will fall. Should I take money out now?" -- Aaron Inouye, San Jose

Pundits have been warning for more than three years that the bond market is a ticking time bomb. But anyone who deserted bonds for the safety of cash back in 2010 has been sorely disappointed, as investment-grade bonds have returned nearly 20% since then, vs. 0.20% for money-market funds.

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While most analysts expect interest rates to climb from today's depressed levels -- they've already inched up about half a percentage point since last summer -- no one knows how far they'll rise and how long that will take.

And even though bonds could face difficult times ahead, bailing out may lead to more problems than staying put.

For one thing, you face the question of where to invest instead.

Stocks? The risk of a severe setback is far greater.

Stock prices have dropped by 50% or more twice during the past 13 years alone. The broad bond market has yet to suffer a 12-month loss greater than 9.2%.

You could always hunker down in Treasury bills, money funds, or short-term CDs and jump back into bonds after rates rise. Do so before rates have finished climbing, though, and you could still face losses; stay in low-yielding cash too long, and you could give up a substantial return. It's the same no-win guessing game that many investors play with stocks.

Related: Don't let a fear of stocks cost you in retirement

My advice: Decide how much of your savings should be in bonds -- likely 10% to 20% if you're young, 50% or more if you're nearing or in retirement. Then stick to that percentage regardless of what prognosticators say rates may do, making a total U.S. bond market index fund (VBMFX) your core holding.

Yes, the value of such a fund will drop by roughly 5% for every percentage point that rates increase. Any initial blow, however, would be cushioned by the bonds' interest payments. Plus, your return would rise as older bonds in the portfolio mature and are replaced by higher-yielding ones.

Related: How a lifetime income annuity works

Still, if you feel you must have shelter from rising rates, shift into a short-term bond index fund (VBISX), which recently yielded just 1.4%, vs. 2.5% for its total bond market counterpart. As rates rise, such a fund should drop roughly half as much.

Finally, since interest rates in other countries don't move in lockstep with rates here, you may be able to get more protection by venturing overseas. The international bond fund on our MONEY 70 list is Templeton Global Bond (TPINX), which lately paid 5.6%. And by midyear Vanguard will introduce an international bond index fund. To be safe, limit foreign bonds to, say, 20% or so of your overall bond portfolio.

But whatever you do, don't abandon bonds altogether: Despite today's low rates, they still deserve a place in your portfolio.

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Get more out of your closet space

To figure out the most effective solution, you need to determine the size of your challenge. Start by weeding out what you don't wear.

(Money Magazine) For those lucky enough to have a spacious walk-in closet, an organizing system is a no-brainer.

There's plenty of space for all manner of sweater shelves, lingerie drawers, shoe cubbies, and tie racks.

So what about the rest of us, who live with reach-in (or squeeze-in) closets? No storage contraption can radically expand inside-the-closet capacity, but you don't necessarily have to install it there.

Here are two ways to create organized and tidy wardrobe cargo space for practically any closet-challenged house.

Thin and restructure

Before you buy any closet gizmo, force yourself to weed out what you don't wear.

"About 70% to 80% of what's in most closets never gets taken off the hanger," says Newton, Mass., professional organizer MJ Rosenthal.

An organizing system will make what remains easier to access.

"The standard pole-and-shelf setup leaves loads of wasted vertical space," says Chesapeake, Va., cabinetmaker David Alderman, who tricks out about 35 closets a year. He typically lowers the pole to four feet high and, above it, installs either a second pole or numerous adjustable shelves designed to keep piles of folded clothing to at most five items tall. When he's working with closets that are deeper than they are wide, he may hang everything from one of the sidewalls.

Related: Find the best handyman for the job

Know that a custom system won't come cheap: You'll pay $800 to $1,200 for a one-door closet, and $1,500 to $2,500 for a double-door.

Almost all are made from melamine -- a waterproof plastic board -- which you can get either in white or a faux-wood finish. Somewhat handy? You can save about 20% with a modular do-it-yourself kit from easyclosets.com or containerstore.com/elfa.

Either way, invest only if you're staying in your home; realtors say this typically isn't an improvement that impresses buyers.

Think outside the closet

Closets that are outrageously undersized require you to look beyond their walls for a solution, says California Closets' chief design officer, Ginny Snook Scott.

If you want something that can move with you, pick up an armoire (for as little as $100 at Ikea).

Related: 4 tips from a serial home remodeler

Alternatively, a closet company or cabinetmaker can craft a built-in wall cabinet for your master bedroom and fill it with hanger poles, shelves, and cubbies. You'll pay about $2,000 to $4,000 for an eight-foot-wide wall of doors and drawers. (You can add a spot to hang your flat-screen TV.)

Because it's useful, attractive, and permanent, it may even yield some payback when it's time to sell -- not bad for something that you'll reap dividends from at least two times a day.

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Meat industry rescues federal workers

The meat and poultry industry came to the rescue of food inspectors who faced 11 days of furloughs this year.

WASHINGTON (CNNMoney) At least one type of government worker has a friend in big business.

Over 9,000 federal food inspectors won't face furloughs after top companies from the meat and poultry industries spoke out in support of them.

In a bill passed by both houses of Congress and sent to President Obama on Thursday, food safety and inspection workers avoided 11 days of furlough, or one day a week from July through September.

So far, they are the only federal workers that Congress has agreed to deliver from furloughs. Close to a million federal workers will be forced to stay home without pay from 3 to 22 days, depending on the agency, thanks to $85 billion in forced budget cuts that took effect March 1.

Meat and poultry heavyweights, including Arkansas-based Tyson Foods (TSN, Fortune 500) and the cattle industry's powerful lobby group, the National Cattlemen's Beef Association, wooed lawmakers -- especially Republicans, some of whom were in no mood to mitigate any part of the sequester, according to congressional aides.

Last week, the National Chicken Council flew in chicken processors from several states, including Georgia, Mississippi, Arkansas and California, who met face-to-face with lawmakers on Capitol Hill.

The groups argued that, unlike other industries that would face only minor disruption, furloughs would lead to a complete shutdown of meat and poultry packing plants on days that the government inspectors stayed home.

The U.S. Department of Agriculture had estimated that 15 days of furloughs for meat inspectors would lead to a loss of $10 billion and cut production by 2 billion pounds of meat, 3 billion pounds of chicken, and 200 million pounds of eggs. People expected it to cause food shortages and possibly price spikes at the grocery store.

"This was a perfect storm, because it would have shut down the food supply and would have affected everyone who eats," said Chase Adams, spokesman for the cattlemen's group, which urged members to write their lawmakers and USDA to keep inspectors on the job.

Sen. Mark Pryor, an Arkansas Democrat, sponsored the amendment saving food inspectors. It was added to a bill that would keep government running through Sept. 30.

Related: 5 federal workers: What job cuts mean to me

One reason why Republicans agreed to save food inspectors was that the measure didn't spend new money, congressional aides say. It came from a $55 million funding shift -- $30 million cut from a program to maintain USDA buildings and $25 million from a new USDA program to upgrade school kitchen equipment.

Pryor and his co-sponsor on the amendment, Sen. Roy Blunt, a Missouri Republican, represent areas with big meat processing plants. Arkansas, alone, has 91 meat slaughter and poultry processing plants that employ 44,000 workers.

The meat and poultry industry is no stranger to winning big on Capitol Hill. Meat and poultry processors have spent more than $28 million on lobbying each year since 2008, according to the Center for Responsive Politics.

Tyson Foods spokesman Gary Mickelson confirmed the company was among those pushing for funding for food inspectors. He called the bill's passage "good news for consumers, farmers, grocery stores, restaurants and meat companies."

Tony Corbo, a senior lobbyist at Washington consumer group Food and Water Watch, said the meat and poultry industry worked the funding bill pretty hard. Though his group is usually on the other side of the industry on issues, he supported saving food inspectors from furloughs.

"You're talking about food safety, and this is going to get everybody's attention, because everybody's got to eat," Corbo said.

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