Big money gets in on Cabinet nomination fights

WASHINGTON — As former Sen. Chuck Hagel seeks to fend off critics aiming to derail his confirmation as Defense secretary, he has an incongruous ally: a Pittsburgh philanthropist who made his fortune as one of the world's top horse-race bettors.

Bill Benter, a prolific donor to Democrats and liberal groups who keeps a low public profile, financed an ad campaign by a group of centrist national security veterans who hailed Hagel's "bipartisanship and independence of conscience and mind."

Benter's backing of Hagel, who will appear Thursday before the Senate Armed Services Committee, comes as a small number of extremely rich donors are increasingly engaging in independent efforts to shape national politics. The trend has rapidly accelerated in campaigns since federal court decisions in 2010 opened the door to unfettered political spending by corporations and wealthy individuals.

Now the money wars have moved into a new venue: the debate over Cabinet nominees, who traditionally have not had to endure a rough-and-tumble campaign to get confirmed. Some of the players are financed by deep-pocketed interests whose identities are unknown.

A cluster of opaque groups, some of which recently sprang into existence, have run television ads blasting Hagel as weak on Israel and hostile to gays. His critics include some of the conservative advocacy organizations that fought vigorously against President Obama's reelection, such as the Iowa-based American Future Fund, whose donors remain a mystery.

The anti-Hagel campaign, reminiscent of fierce battles over Supreme Court nominees such as Robert H. Bork in 1987, alarmed longtime colleagues of the former Nebraska senator, a Republican.

"This isn't good for America," said Gary Hart, a former Democratic senator from Colorado. "It is terribly poisonous. And it just starts a very, very bad precedent."

Hart and other former top government officials who are part of a loosely organized council called the Bipartisan Group wrote a letter defending Hagel, which Benter had published in a half-page ad in the Washington Post. Benter, a backer of the liberal pro-Israel group J Street, also paid to place the bipartisan group's message for a week in Politico's Playbook, an email digest of political news that is a must-read among capital insiders.

The intense fight over Hagel spotlights how wealthy interests are seeking to shape policy even beyond campaigns and traditional lobbying.

"It's a sign of the times and foreshadows what we're going to see a lot more of in regards to appointments and issue fights," said Robert Weissman, president of Public Citizen, which advocates for campaign finance reform. "Obviously, anyone who spends huge amounts of money to advocate for a Cabinet official is going to have a reasonable expectation of special access to that person."

Administration officials, who requested anonymity to discuss the nomination process, dismissed the notion that Hagel would be indebted to Benter, noting that a wide array of prominent foreign policy veterans have endorsed the former senator to lead the Pentagon.

Benter, whose role in the Hagel fight was first reported by Foreign Policy magazine, did not respond to interview requests. Messages left for him were returned by Tony Podesta, a prominent Washington lobbyist, who described Benter as "an active citizen" who was asked by the Bipartisan Group to spread its message.

Podesta would not say how much Benter had spent, but added that the campaign did not include any lobbying. "In the greater scheme of things, it was a pittance," he said.

A math whiz who parlayed his knack for statistics into a computerized system that helped him win untold millions betting on horse races in Hong Kong, Benter has given more than $450,000 to Democrats and liberal political groups in the last decade, according to Federal Election Commission reports.

Benter now runs a medical transcription company in Pittsburgh, where he is a regular on the opera scene and gives generously to cultural and educational institutions, according to financial records and published reports.

He keeps a low profile in national politics, but his name surfaced two years ago when the Washington Times reported that a Hong Kong business associate of Benter, named Consolacion Esdicul, had donated more than $800,000 to J Street at Benter's behest. She was the group's biggest donor in the 2008-09 fiscal year.

Associates said they did not think Benter knew Hagel personally or had any business interests in the defense industry. They said he appeared motivated to jump into the controversy after seeing the attacks mounted against Hagel.

"He said he was very upset because he felt there was a great deal of distortion of the facts and personal attacks that were unwarranted," said Henry Siegman, president of the New York-based U.S./Middle East Project, who was contacted by Benter about organizing a pro-Hagel effort. "He is not someone to the best of my knowledge involved in defense issues per se. His concern is American policy in the region."

Siegman reached out to members of the Bipartisan Group, an advisory council to his group that has included former national security advisors Brent Scowcroft and Zbigniew Brzezinski, as well as Hagel. Siegman said its members decided there was a need to clarify positions Hagel had taken on the Israel-Palestinian negotiations as part of the group, and Benter offered to pay to publicize the group's defense of his record.

Siegman said he thought the campaign Benter financed had some impact on Hagel's behalf.

"I hope that at the very least he calls him and thanks him," he said.

matea.gold@latimes.com

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Boeing's Batteries Draw Criticism as Dreamliner Probe Continues

Boeing’s chief executive said the company is working around the clock investigating a battery problem that has grounded 787 Dreamliners worldwide, saying the company “will get to the bottom of it.” The comments come two weeks after the fleet was grounded, and concern is growing on the cost to airlines with earth-bound airplanes, and to the reputation of the airplane and Boeing itself.

Company president and CEO Jim McNerney was predictably optimistic, even upbeat, during a quarterly earnings call that focused heavily on the investigation by Boeing, the FAA and others. Hundreds of experts from around the world are working with Boeing to determine just what led to two battery fires aboard Dreamliners earlier this month. Although the problem prompted the grounding of all 50 Dreamliners in service, and many — including Tesla Motors and SpaceX CEO Elon Musk — have been critical of Boeing’s use of lithium-ion batteries, the company continues building Dreamliners even as investigators work around the clock to find the root cause of the problem.

“We will get to the bottom of it, and in so doing will restore confidence in the 787,” McNerney said Wednesday. He added that the company continues to believe in the use of lithium-ion batteries that are critical to the design of 787, the most electric airliner to ever fly. “We feel good about the battery technology and the fit for the airplane.”

McNerney remains confident the company will determine just what led to “thermal runaway” events aboard two Dreamliners. The first occurred in Boston on January 7 when a battery caught fire after passengers had deplaned. The second came one week later when smoke from a burning battery forced a pilots to make an emergency landing in Japan. The result has been the first grounding of a U.S. airplane commercial airline fleet since 1979. And despite the optimism from Boeing, there is no indication from investigators or the Federal Aviation Administration that the grounding will be lifted any time soon.

Outside of Boeing, some are less optimistic that Boeing used the right design for its lithium-ion batteries, which the aircraft manufacturer chose for their energy density. Musk, whose companies use lithium-ion batteries extensively, has been among the most vocal.

“Unfortunately, the pack architecture supplied to Boeing is inherently unsafe” Musk wrote in an email to Flightglobal. “Large cells without enough space between them to isolate against the cell-to-cell thermal domino effect means it is simply a matter of time before there are more incidents of this nature.”

Boeing uses a 63-pound Li-ion battery largely as a backup power source for several systems within the Dreamliner, which is among the most technologically advanced passenger aircraft ever built. The batteries, like those in the Tesla Roadster and Model S automobiles and aboard SpaceX rockets, use cobalt oxide chemistry for maximum power density. But Tesla and SpaceX use battery packs comprised of thousands of cylindrical 18650 cells, each roughly the size of a AA battery. The cells have been refined through more than 15 years of manufacturing and use in consumer products such as laptops and power tools. Tesla and SpaceX closely control the charging, output and temperature of the cells using a sophisticated power management system.

The lithium-ion battery used by Boeing is comprised of just eight cells housed in a single container. Musk says Tesla and SpaceX engineers isolate the cells to prevent a fire in one from spreading to others. He is critical of Boeing’s design, saying the size and packaging of the cells makes thermal runaway in one or more cells much more likely to result in the entire pack catching fire.

Musk is not alone in raising these issues. The relatively simple looking design of the Boeing battery, manufactured by the Japanese firm GS Yuasa, immediately caught the attention of lithium-ion battery expert Dr. K.M. Abraham. Abraham has been researching and producing lithium-ion batteries since 1976 and says proper design is critical for both power output and safety.

“It did not look like a sophisticated battery pack to me” Abraham said of his first impression after seeing a photo of a Dreamliner battery. The 32-volt Boeing battery uses eight 3.7 volt cells housed in a single metal container.

The manufacturing process is also a major concern, according to Abraham. The 18650 cells used by Tesla and others experienced quality control problems early on, and it was more than a decade before the design and manufacturing was refined. These days, failure rates are extremely low — less than one in a million, said Abraham. He agrees the design used by Tesla reduces the chance of a thermal runaway resulting in a larger event.

“They use a smaller cell approach, but I think it is a much safer way of doing that,” he said of Tesla. “They use a modular construction. Once a cell goes, it is isolated, there is no large runaway.”

The National Transportation Safety Board released more information about its investigation and examination of the batteries aboard the plane that caught fire in Boston. Last week the agency said it found evidence of a short in the charred remains of the battery that caught fire. This week, the NTSB is continuing its examination with a microscopic look at the region affected by the internal short circuit and thermal damage. The agency is also looking at a second undamaged battery in the plane. It is looking for any evidence of “in-service damage and manufacturing defects.”

The NTSB did say it found no problems with charger unit used with the batteries on the Boston 787 or the auxiliary power unit.

All Nippon Airways, which was the first to buy Dreamliners, says it replaced 10 of the batteries on its fleet of 17 Dreamliners in the months leading up to the Dreamliner’s grounding. The airline says it notified Boeing of the battery replacements, but did not tell safety regulators because the bad batteries showed low charge and other performance issues and were not considered a safety issue according to The New York Times.

McNerney acknowledged today that the replacement rate of Dreamliner batteries was “slightly higher” than anticipated, but emphasized the batteries were replaced for maintenance reasons, not safety concerns. The comment was largely a response to a story in the Seattle Times that said Boeing had to return more than 100 of the lithium-ion batteries to GS Yusasa. The $16,000 batteries were returned because they had been run down and could not be recharged. Some of the batteries had exceeded their expiration date, but many were losing capability much earlier than expected according to the Times. It is unclear how many batteries needed to be replaced because of quality problems, or how many were replaced due to the design which shuts down the battery in the event it is drained too far.

The 32-volt batteries have a cutoff system that effectively shuts down the battery if the charge falls below 15 percent. Normally the system is designed to prevent this from happening, but as is the case with a flashlight or car door, if something is accidentally left on in a 787 and is drawing battery power, the 63 pound batteries can reach that critical 15 percent cutoff.

Boeing continues to assuring customers and shareholders that the problem will be resolved soon. It said production on both 787 assembly lines continues, and the company believes it will increase production to its scheduled rate of 10 airplanes monthly by year’s end.

The eight airlines with grounded Dreamliners continue to shuffle other aircraft to try and make up for the missing seats in their fleet. ANA is using 777s for some of its 787 routes, while United has brought in 737s for domestic flights that were using the Dreamliner and is also using 777s on longer international flights.

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Final cut: The gems and stars left off the Oscars list

(Reuters) – If I could remove any word from Oscar conversations, it would be “snubbed.” It’s catchy and makes good headline fodder, but it implies that a cabal of Academy members sat in a room and consciously decided to ostracize this actor or that moviemaker. These ballots are filled out by 6,000 to 7,000 voters, ranging from visual effects experts to screenwriters to studio chiefs. I can’t envision secret meetings to decide the fate of each candidate.

Jamie Foxx (“Django Unchained”) and veteran French star Jean-Louis Trintignant were both considered serious contenders for a Best Actor nomination; neither made the final cut, even though Trintignant’s co-star in “Amour,” Emmanuelle Riva, was nominated for Best Actress. At one point, the gifted John Hawkes was touted as a shoo-in for his brilliant performance in “The Sessions.” But I’ve learned never to use the word “shoo-in” where the Oscars are concerned.

There were fewer surprises in the Best Actress category, although some pundits had predicted Helen Mirren for “Hitchcock,” Marion Cotillard for the French import “Rust and Bone” and Rachel Weisz, who won the New York Film Critics’ award, for “The Deep Blue Sea.” As it happens, they took a collective backseat to the youngest female ever nominated in this category, 9-year-old Quvenzhané Wallis (“Beasts of the Southern Wild”) and the oldest, 82-year-old Riva.

The always-crowded Supporting Actor and Actress rosters excluded such prominent figures as Nicole Kidman, Leonardo DiCaprio, Samuel L. Jackson and Maggie Smith, while admitting Philip Seymour Hoffman for what is clearly a leading role in “The Master.”

But the biggest buzz concerns this year’s Best Director lineup. Experienced Oscar watchers could see this brewing, as the current Oscar setup has a built-in dilemma. To understand it, one need only do the math: With the Academy of Motion Picture Arts and Sciences now enabling nine films to compete for Best Picture — in fact, they allow as many as 10 — but retaining only five slots for Best Director, at least four world-class filmmakers are guaranteed to be left out in the cold. How those four happened to be Kathryn Bigelow, Ben Affleck, Tom Hooper and Quentin Tarantino this year is anybody’s guess.

Only members of the director’s branch get to nominate directors; that’s an elite group of fewer than 400 people. The same constituency didn’t cite Affleck for his terrific movie “The Town” a few years ago but did support Bigelow and Hooper, who went on to win for “The Hurt Locker” and “The King’s Speech,” respectively. They were early boosters of Tarantino, who won an Oscar for Best Screenplay for “Pulp Fiction” in 1994 and was nominated for Best Director for his last film, “Inglorious Basterds.” It may be true that they’ve undervalued Ben Affleck, but there is no logic to the omission of the three other Best Picture directors.

What’s more, the Academy’s director lineup doesn’t coincide with that of the Directors Guild of America, which historically, and almost invariably, has forecast the Oscar winner. But that was before the Academy opened up the Best Picture category beyond its traditional five slots, so now all bets are off. (For the record, this year’s DGA nominees are Affleck, Bigelow, Hooper, Ang Lee and Steven Spielberg.)

WHAT ABOUT ‘TED’?

Every round of Oscar nominations brings its share of surprises and disappointments. Many people I know were counting on Judi Dench to be up for Best Supporting Actress, which would have made her the first person to be singled out for a performance in a James Bond movie in that series’ 50-year history. There was also great enthusiasm for Javier Bardem‘s performance as the movie’s colorfully sinister villain. Both Dench and Bardem are former winners, so the Academy actors’ branch clearly appreciates them … just not enough to make this year’s finals. Even so, “Skyfall” earned a record five nominations, including one for Thomas Newman’s rousing music score and one for cinematographer Roger Deakins, who has been nominated 10 times and never taken home one of those gold statuettes. (It’s the first time around for Adele, who sang and co-wrote the movie’s theme song.)

Over the course of the year, a handful of other films elicited critical notice that might have led to Oscar recognition: Richard Linklater’s “Bernie” offered Jack Black an unusually juicy part as a real-life Texas character who may or may not have murdered his older female companion. Novelist Stephen Chbosky’s adaptation of his best-selling book “The Perks of Being a Wallflower” earned warm reviews for its deeply felt look at high school outcasts. Co-star Ezra Miller has been singled out in particular amid a talented young cast. Two of the best performances of the year were given by Jake Gyllenhaal and Michael Peña in David Ayer’s vibrant L.A. cop drama “End of Watch,” but their work has been largely overlooked. Fortunately, Peña is in the running for an Independent Spirit Award as Best Supporting Actor.

Christopher Nolan loyalists are still miffed that the filmmaker has been nominated for two of his screenplays (“Memento” and “Inception”) but never recognized as Best Director — and that the finale in his Batman trilogy, “The Dark Knight Rises,” did not earn a Best Picture nod this year.

Omissions don’t come only in the boldface categories that attract the lion’s share of attention. It’s understandable that “The Hobbit: An Unexpected Journey,” “Life of Pi,” Marvel’s “The Avengers,” “Prometheus” and “Snow White and the Huntsman” are competing for Best Achievement in Visual Effects. But if you stop and think about it, was there a more convincing or persuasive use of “movie magic” this year than a teddy bear come to life sharing the screen with Mark Wahlberg in Seth MacFarlane’s “Ted”? To me, that’s the most amazing kind of trickery, because you’re forced to believe what your brain tells you can’t be true. Yet “Ted” didn’t even make the Academy’s short list before the final five contenders were chosen.

For my money, there is one 2012 release that has truly been robbed. It happens to be a box-office blockbuster, which offers its creators (and backers) some consolation, I’m sure. Still, “The Avengers” is the best comic book superhero movie of this, or possibly, any year, in large part because of Joss Whedon’s sensationally smart, funny screenplay. There is none of the self-seriousness that mars “The Dark Knight Rises” or the hollowness of earlier Marvel efforts like “Thor.” It doesn’t run out of steam like “Captain America” or simply repeat itself like “Iron Man 2.”

Whedon pulls off the formidable feat of assembling an all-star cast of characters and giving each a purpose. He takes a two-dimensional villain from “Thor” and makes him truly menacing. He breathes new life into the lumbering Hulk. He makes us care about all these characters and gives them a cause worth fighting (and rooting) for. On top of that, he infuses his screenplay with a welcome dose of humor, including some of the funniest moments ever found in an ostensibly serious superhero saga. (Here’s a sample exchange. Bruce Banner: I don’t think we should be focusing on Loki. That guy’s brain is a bag full of cats. You can smell crazy on him. Thor: Have a care how you speak! Loki is beyond reason, but he is of Asgard and he is my brother! Natasha Romanoff: He killed 80 people in two days. Thor: He’s adopted.)

Moviegoers around the world loved the result, and even critics sang its praises. But aside from a nomination for its excellent visual effects, the movie was shut out. Normally, this wouldn’t be shocking, as the Academy tends to shun popcorn movies except in the technical categories, but “The Avengers” is no ordinary popcorn movie.

Then again, if the Oscars followed a predictable path — mine or anyone else’s — they wouldn’t be the Oscars. The final surprises will be unveiled on February 24.

Film critic and historian Leonard Maltin is perhaps best known for his annual paperback reference book, “Leonard Maltin’s Movie Guide.” He hosts “Maltin on Movies” for Reelz, introduces films on Comcast and teaches as the University of Southern California School for Cinematic Arts. He has written many books on film and holds court at www.leonardmaltin.com.

(Editing by Kathy Jones, Arlene Getz and Douglas Royalty)

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Well: Myths of Weight Loss Are Plentiful, Researcher Says

If schools reinstated physical education classes, a lot of fat children would lose weight. And they might never have gotten fat in the first place if their mothers had just breast fed them when they were babies. But be warned: obese people should definitely steer clear of crash diets. And they can lose more than 50 pounds in five years simply by walking a mile a day.

Those are among the myths and unproven assumptions about obesity and weight loss that have been repeated so often and with such conviction that even scientists like David B. Allison, who directs the Nutrition Obesity Research Center at the University of Alabama at Birmingham, have fallen for some of them.

Now, he is trying to set the record straight. In an article published online today in The New England Journal of Medicine, he and his colleagues lay out seven myths and six unsubstantiated presumptions about obesity. They also list nine facts that, unfortunately, promise little in the way of quick fixes for the weight-obsessed. Example: “Trying to go on a diet or recommending that someone go on a diet does not generally work well in the long term.”

Obesity experts applauded this plain-spoken effort to dispel widespread confusion about obesity. The field, they say, has become something of a quagmire.

“In my view,” said Dr. Jeffrey M. Friedman, a Rockefeller University obesity researcher, “there is more misinformation pretending to be fact in this field than in any other I can think of.”

Others agreed, saying it was about time someone tried to set the record straight.

“I feel like cheering,” said Madelyn Fernstrom, founding director of the University of Pittsburgh Weight Management Center. When it comes to obesity beliefs, she said, “We are spinning out of control.”

Steven N. Blair, an exercise and obesity researcher at the University of South Carolina, said his own students believe many of the myths. “I like to challenge my students. Can you show me the data? Too often that doesn’t come into it.”

Dr. Allison sought to establish what is known to be unequivocally true about obesity and weight loss.

His first thought was that, of course, weighing oneself daily helped control weight. He checked for the conclusive studies he knew must exist. They did not.

“My goodness, after 50-plus years of studying obesity in earnest and all the public wringing of hands, why don’t we know this answer?” Dr. Allison asked. “What’s striking is how easy it would be to check. Take a couple of thousand people and randomly assign them to weigh themselves every day or not.”

Yet it has not been done.

Instead, people often rely on weak studies that get repeated ad infinitum. It is commonly thought, for example, that people who eat breakfast are thinner. But that notion is based on studies of people who happened to eat breakfast. Researchers then asked if they were fatter or thinner than people who happened not to eat breakfast — and found an association between eating breakfast and being thinner. But such studies can be misleading because the two groups might be different in other ways that cause the breakfast eaters to be thinner. But no one has randomly assigned people to eat breakfast or not, which could cinch the argument.

So, Dr. Allison asks, why do yet another study of the association between thinness and breakfast? “Yet, I can tell you that in the last two weeks I saw an association study of breakfast eating in Islamabad and another in Inner Mongolia and another in a country I never heard of.”

“Why are we doing these?” Dr. Allison asked. “All that time and effort is essentially wasted. The question is: ‘Is it a causal association?’” To get the answer, he added, “Do the clinical trial.”

He decided to do it himself, with university research funds. A few hundred people will be recruited and will be randomly assigned to one of three groups. Some will be told to eat breakfast every day, others to skip breakfast, and the third group will be given vague advice about whether to eat it or not.

As he delved into the obesity literature, Dr. Allison began to ask himself why some myths and misconceptions are so commonplace. Often, he decided, the beliefs reflected a “reasonableness bias.” The advice sounds so reasonable it must be true. For example, the idea that people do the best on weight-loss programs if they set reasonable goals sounds so sensible.

“We all want to be reasonable,” Dr. Allison said. But, he said, when he examined weight-loss studies he found no consistent association between the ambitiousness of the goal and how much weight was lost and how long it had stayed off. This myth, though, illustrates the tricky ground weight-loss programs have to navigate when advising dieters. The problem is that on average people do not lose much – 10 percent of their weight is typical – but setting 10 percent as a goal is not necessarily the best strategy. A very few lose a lot more and some people may be inspired by the thought of a really life-changing weight loss.

“If a patient says, ‘Do you think it is reasonable for me to lose 25 percent of my body weight,’ the honest answer is, ‘No. Not without surgery,’” Dr. Allison said. But, he said, “If a patient says, ‘My goal is to lose 25 percent of my body weight,’ I would say, ‘Go for it.’”

Yet all this negativism bothers people, Dr. Allison conceded. When he talks about his findings to scientists, they often say: “O.K., you’ve convinced us. But what can we do? We’ve got to do something.” He replies that scientists have an ethical duty to make clear what is established and what is speculation. And while it is fine to recommend things like bike paths or weighing yourself daily, scientists must make sure they preface their advice with the caveat that these things seem sensible but have not been proven.

Among the best established methods is weight-loss surgery, which, of course, is not right for most people. But surgeons have done careful studies to show that on average people lose substanial amounts of weight and their health improves, Dr. Allison said. For dieters, the best results occur with structured programs, like ones that supply complete meals or meal replacements.

In the meantime, Dr. Allison said, it is incumbent upon scientists to change their ways. “We need to do rigorous studies,” he said. “We need to stop doing association studies after an association has clearly been demonstrated.”

“I never said we have to wait for perfect knowledge,” Dr. Allison said. But, as John Lennon said, “Just give me some truth.”

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Facebook Beats Forecasts on Earnings and Revenue

SAN FRANCISCO — Facebook made a lot of money in the last quarter. It also spent a lot. And that made investors once again cautious about the company.

After an eight-month roller coaster ride on the public markets, Facebook did well in the fourth quarter of 2012 by aggressively ramping up advertisements aimed at its users, including on mobile phones. In its financial report on Wednesday, it beat expectations, increasing revenue by a handsome 40 percent from the same period a year ago.

But its expenses also climbed rapidly as the company hired engineers and built data centers, causing profit to dip from the last quarter in 2011. With that, Wall Street lost some enthusiasm.

Facebook shares, which had closed at $31.24 on Wednesday, fell more than 3 percent in after-hours trading after the results were released.

In recent weeks, the stock had recovered much of the ground it lost in the eight months since its introduction last year.

“The quarter was a little like a cold shower after you’ve been out all night — it’s something that makes you sober up very quickly,” said Jordan Rohan, an analyst at Stifel Nicolaus, adding that the numbers made it clear that Facebook intended to spend more “to go after the opportunities before them.”

In the conference call with analysts after the earnings report, Mark Zuckerberg, chief executive of Facebook, cautioned Wall Street that profit might not grow as fast as investors would like. That, he said, was because Facebook would continue to spend money hiring people and building products for the future, like the new search tool it introduced earlier this month. “It’s important to start planting seeds,” he said.

The most closely watched part of the earnings report was how much money the company brought in from its mobile users; most people log in to the site using their cellphones. Facebook said advertising on the mobile newsfeed accounted for 23 percent of its advertising revenue, up from 14 percent in the third quarter but slightly lower than some analysts had forecast.

Mr. Zuckerberg predicted that the company would eventually make more money on every minute spent on the Facebook mobile app than on the desktop computer.

Facebook reported fourth-quarter revenue of $1.59 billion, compared with $1.52 billion predicted by analysts surveyed by Bloomberg. The company earned $64 million in net income, or 3 cents a share. Excluding certain items, Facebook said it had a net income of $426 million in the fourth quarter, or 17 cents a share, beating analysts’ expectations by 2 cents.

Facebook’s biggest, long-term challenge remains how to profit from the enormous piles of personal data of its one billion users without alienating them or inviting the wrath of government regulators in the United States and abroad. The company reported on Wednesday that it had 1.06 billion active users — those who log in at least once a month.

Secondarily, it must figure out a way to profit abroad. Most of its revenue still comes from North America and to a lesser extent Europe.

Despite the stock’s decline after the earnings report, it is still much recovered since last year’s slump. It opened at $38 a share last May, but shortly after that, the stock plummeted as Wall Street soured on its ability to increase profit as fast as investors wanted. Shares sank to half the public offering price last September.

But the company focused on its advertising business and released a series of new products aimed at taking on some of its biggest rivals, including Google and Apple. Mr. Zuckerberg took the initiative to reassure investors it had their interests at heart. The improvement in the share price in recent weeks suggests that the company’s charm offensive is paying off.

In the last few months, Facebook has floated several trial balloons aimed at pleasing Wall Street and, in particular, convincing investors that it can thrive in the mobile era.

It offered marketers more refined targeting options, including Facebook Exchange, which allows companies to track users as they are browsing and shopping for products around the Web and lets companies show advertisements for those products when the users log back on to Facebook.

Before Christmas last year, in a bid to step into territory dominated by Amazon, it introduced the Gifts application, which lets users buy goods and services for their Facebook friends, and in turn, share with the company an extremely valuable piece of data: their credit card numbers. The company made clear in the conference call on Wednesday that this would not be an immediate moneymaker.

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Pacific Palisades newspaper junkie buys his own

At 6:45 a.m., Alan Smolinisky pads out to his driveway in a hillside cul-de-sac just west of the Getty Villa.

He wears black-and-white-checked flannel pajama bottoms and a pristinely white T-shirt that glows like a beacon in the muted light. In one arm, he carries 15-month-old Charlie, named for billionaire investor Charles Munger.

Bending carefully toward the concrete apron, Smolinisky lets Charlie scoop up three newspapers stuffed in plastic bags.

As Charlie sucks on a bottle in the kitchen, Smolinisky unwraps the Los Angeles Times, the Wall Street Journal and the Financial Times, separating sections into carefully considered piles — news, features, markets coverage. By day's end, he will have spent five hours reading them cover to cover.

Smolinisky, 33, is a newspaper junkie. He abides by Munger's philosophy that high achievers in the financial world tend to be voracious readers.

"I love knowing everything going on everywhere in the world," said Smolinisky, a real estate entrepreneur who keeps a peacock blue Bentley and a red Ferrari in his garage. Late last year, he satisfied a decade-long dream, paying seven figures for the Palisadian-Post. The weekly has chronicled life in Pacific Palisades since 1928 and has been losing money. Smolinisky aims to turn it around.

"Pacific Palisades is my favorite place on Earth, and the Palisadian-Post is my favorite newspaper," he said. "I have a moral obligation to make sure this newspaper arrives every Thursday for as long as I live."

::

At a time when his peers have mostly traded paper for pixels, Smolinisky doesn't own an iPad or a Kindle. He's not much for social media and says he has never used Facebook or Twitter. So it seemed fitting that he chose to buy this decidedly low-tech, old-school paper.

The broadsheet has endeared itself to residents by recording quotidian happenings — births, marriages and deaths, with a panoply of soccer games, high school graduations and Fourth of July parades in between. The paper covers each year's first Palisadian baby, the Mr. and Miss Palisades contest, young residents' accomplishments and 50^th wedding anniversaries.

Bill Bruns, managing editor since 1993, likes to joke that, if a resident of Brentwood won a Nobel Prize, the paper would not cover the story. But if the person lived in the Palisades the news would land on the front page.

When Smolinisky and his friends were tykes, the Pali-Post ran photos of their T-ball and soccer games. When he was a teen, it carried stories about A&A Productions, a company he co-founded that put on dances in the Palisades.

"All the other papers are so serious and scary," he said. "The Palisadian-Post was never like that. It always had this hyper-local, fun attitude of 'we are the luckiest people on Earth to live in such an amazing, crime-free community.' "

What other publication, he mused, would write about where the Department of Water and Power would put its new electrical substation? Or about the colorful gingerbread-themed house on Sunset Boulevard? Or the house across the street from the gingerbread-themed house, the one where the Iranian immigrant erected dozens of Iranian and U.S. flags and a banner reading "Long Live Iran and United States Peace."

Page 2 each week features "Your Two Cents Worth," a column of brief, unsigned questions and opinions from readers. After hearing from readers and editors how popular the sound-off column was, Smolinisky allotted more space.

Donna Vaccarino, an architect, heard Smolinisky speak at a community meeting and was impressed by his pride in owning the paper. "We all want to help him make it a success," she said.

Smolinisky bought the publication and its office building on Via de la Paz. The deal included the Post's money-losing commercial printing business, which he shuttered. He has told the staff he wants to make the paper profitable so that he can restore full-time status to 16 employees, including seven in the newsroom, who have endured years of shortened hours and pay. (An eighth newsroom employee, the copy editor, volunteers her time.)

Smolinisky has learned some quick lessons in newspaper economics. An equipment broker inspected the 37-foot-long Goss printing press in the concrete-lined back shop. It was valued 30 years ago at nearly $400,000. The broker named a price: $15,000.

The fledgling newspaper man was elated at first, having feared that the bulky machine had no value. Then the realization dawned. That was the price he'd have to pay somebody to haul the press away. For now, it remains in place.

Smolinisky finds he doesn't get much done when he's in the newsroom. "I sort of worship the writers and just like to watch them and listen to what they are up to," he said.

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<em>The Hobbit</em> Earns More in Worldwide Box Office Than <em>Fellowship</em> or <em>Two Towers</em>

Movie critics of America, foreign audiences would just like to remind you that you’re not the boss of them, thank you very much. After all, not only did the critics complain when Peter Jackson expanded J.R.R. Tolkien’s The Hobbit into three movies (although, please remember: it could be worse), but the first of those movies failed to make the grade for many professional moviegoers, with this particular parish describing it as “attempting to recreate the Lord of the Rings trilogy with the nostalgic desperation of a college freshman trying to get back together with his high school girlfriend.”

So, you’d think that such a disappointing movie would be a flop at the box office, right? Guess again: As of this last weekend, The Hobbit: An Unexpected Journey has made more money worldwide than either Lord of the Rings: The Fellowship of the Ring or Lord of the Rings: The Two Towers managed in their entire time in movie theaters.

The international box office total for The Hobbit is currently $939,862,965, with almost 69 percent of that amount coming from non-U.S. audiences ($646,300,000, to be specific), continuing the upwards trend of Jackson’s Middle-earth movies. In comparison, The Fellowship of the Ring made $869,349,688 in terms of worldwide box office ($555,985,574 of which came from moviegoers outside of the U.S.; that’s 64 percent of the total for the less math-inclined amongst you), and The Two Towers collected a total of $923,285,627 from the world’s box office, with 63.2 percent of that amount ($583,495,746) coming from non-domestic release.

The only Tolkien movie to have made more money worldwide than The Hobbit is 2005′s Lord of the Rings: Return of the King, which grossed a total of $1,119,110,941 internationally during its time in theaters, with 66.3 percent of that – or $742,083,616 in practical terms – coming from non-American theaters.

In the U.S. alone, things are a little different. Currently, The Hobbit is lagging behind all three of Jackson’s earlier Tolkien movies, with “just” $293,562,965 in domestic box office, although there are all manner of reasons for that, not least of which is the fact that it is still in the middle of its theater run, only in release for 46 days versus the 243 days, 250 days and 170 days that Fellowship, Towers and Return enjoyed, respectively.

At current rate — it made $8,948,729 last week alone, and remains in the box office top 10 more than a month after release — it’s likely that The Hobbit will end up eclipsing The Fellowship of the Ring (Total domestic gross: $313,364,114) at least before leaving theaters, if not also The Two Towers (Total domestic gross: $339,789,881). Return of the King, however, can likely relax on its throne made of the $377,027,325 it brought in from American audiences during its time in theaters.

So, what can be learned from this? Perhaps we should chalk it up to the power of a recognizable brand; note that each successive Lord of the Rings movie was more financially successful than the one before, and that The Hobbit was seemingly unaffected by poor reviews ahead of release. In fact, it had the most impressive U.S. opening weekend, with $84,617,303 — significantly higher than even Return of the King‘s $72,629,713 and almost twice that of Fellowship of the Ring‘s $47,211,490.

Some things may simply be critic-proof, which likely comes as a relief to Warner Bros. with two more Hobbits waiting in the wings for 2013 and 2014 respectively. If the box office returns hold up, maybe talk of a final trilogy based upon material in The Silmarillion won’t seem as outlandish after all.

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Justin Timberlake’s new album ’20/20′ is due out in March

(Reuters) – Singer-turned-actor Justin Timberlake has set a March date for his comeback album – his first in more than six years.

RCA Records said on Tuesday “The 20/20 Experience,” the former N’Sync boy band member’s follow-up to 2006′s “FutureSex/LoveSounds” and only his third album ever, would be released on March 19.

In recent years, Timberlake, 31, has focused more on films and business ventures ranging from restaurants to a clothing line, and reviving social networking site Myspace, of which he is part owner. He remarked in a recent video that creating music involved “physical torture” for him.

“Suit & Tie,” the first single off his forthcoming album, fell short of sales expectations for its first week. The song, featuring rapper Jay-Z, sold 314,000 downloads last week. Industry experts had expected about 350,000 downloads.

Top menswear designer Tom Ford collaborated with Timberlake, designing suits worn in the “Suit & Tie” video as well as styling the production and the release’s artwork.

Timberlake will perform his first concert in five years during a private Super Bowl-weekend event in New Orleans on February 2 at an invitation-only concert.

Timberlake posted on Twitter about the forthcoming game, saying among other things: “This is gonna be a GREAT Super Bowl!” and “Oh wait … I don’t have tickets. Dammit! Anybody know anybody?? LOL!”

(Reporting by Chris Michaud; Editing by Jill Serjeant and Philip Barbara)

Music News Headlines – Yahoo! News

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To Open Eyes, W-2s List Cost of Health Plans

WASHINGTON — As workers open their W-2 forms this month, many will see a new box with information on the total cost of employer-sponsored health insurance coverage. To some, it will be a surprise, perhaps even a shock.

Workers often have little idea how much they and their employers are paying for coverage. In many cases, economists say, workers give up cash compensation to get and keep health benefits.

The disclosures, required by the 2010 health care law, are meant to make workers more cost-conscious. Health benefits are still tax-free. But labor unions and employer groups say it could be easier to tax them in the future, now that employers must report their value to the government.

The new information appears in Box 12 of the standard W-2 form, with a two-letter code, DD. The box shows the “cost of employer-sponsored health coverage.” And that amount is not taxable, the Internal Revenue Service says on the back of the form.

Jay J. Makled, a union steward for the United Automobile Workers at the Ford plant in Dearborn, Mich., described his reaction after seeing that his health coverage cost nearly $16,000 last year: “It’s quite expensive. I was surprised to see how much the company was paying for that benefit.”

Hourly employees represented by the union there said they generally did not pay any of the premium.

The number on the W-2 form is supposed to reflect the part of the cost paid by the employer and the part paid by the employee.

Prof. Nicole Huberfeld, an expert on health law at the University of Kentucky, who received her W-2 form on Monday, said, “Most people who get health insurance from their employers have no idea how much it costs.”

“People are often shocked when they see the cost, $12,000 to $16,000 a year,” Ms. Huberfeld said. “Many Americans believe this is something they get free. But employers pay lower wages because they provide insurance.”

In 2012, according to an annual survey by the Kaiser Family Foundation, premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage. Over five years, the costs have increased 25 percent for individual coverage and 30 percent for family coverage.

“Health coverage is a big piece of people’s income and a large part of the social welfare budget,” said C. Eugene Steuerle, a tax economist at the Urban Institute. “But the benefits are not taxable, and most of the spending is hidden, so we don’t consider the trade-offs. If we want to get control of health care costs, people have to be aware of them.”

That is the goal of the disclosure requirement, which was proposed by a bipartisan group of senators: two Republicans, Charles E. Grassley of Iowa and Michael B. Enzi of Wyoming, and two Democrats, Max Baucus of Montana and Ron Wyden of Oregon.

Congress acted after Peter R. Orszag, then the director of the Congressional Budget Office, told lawmakers: “The economic evidence is overwhelming, the theory is overwhelming, that when your firm pays for your health insurance, you actually pay through reduced take-home pay. The firm is not giving that to you for free.”

The tax-free treatment of employer-provided health benefits is the largest tax break in the tax code, costing the government roughly $180 billion a year in lost revenue, or 80 percent more than the home mortgage interest deduction, according to the administration.

Katie W. Mahoney, the executive director of health policy at the U.S. Chamber of Commerce, said, “It’s useful for employees to know the value of coverage their employers provide.” But she said some employers worried that reporting the benefit on the W-2 form could lead to taxing the benefit.

“That’s not the intent of the current requirement,” Ms. Mahoney said. “But once the information is collected by the government, it’s very easy for another administration to have a different intent.”

An employee of the A.F.L.-C.I.O. whose health coverage was listed as costing more than $20,000 said: “That knocks my socks off. When I saw the number, my eyes popped out. I appreciate my employer all the more.”

The employee said he had been told not to discuss the cost publicly because the union did not want to suggest that some employees had “Cadillac coverage.”

An employer that fails to comply with the reporting requirement could be subject to penalties of $200 per W-2 form, up to a maximum of $3 million, tax lawyers said.

Employers are exempt from the reporting obligation if they are required to file fewer than 250 W-2 forms, the I.R.S. said. That could change, but the agency said employers would be given at least six months’ notice.

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European Cloud Over Ford

DETROIT — Last year, Ford Motor broke ranks with other auto companies when it announced major cuts in its troubled European operations, including the closing of three factories, to address a sharp downturn in sales on the continent and an oversupply of vehicles.

On Tuesday, Ford, the second-biggest American automaker, behind General Motors, startled the industry again by predicting that Europe, a critical market, would get worse before it begins improving later this year.

Ford said European auto sales, including commercial vehicles, could fall as low as 13 million this year, and its own annual losses in the region could reach $2 billion. Europe is Ford’s second-largest market, after North America.

“The industry did 14 million last year, and that was the worst in 20 years,” Bob Shanks, Ford’s chief financial officer, said in an interview. “But the industry is continuing to decline, and we think 13 million is the trough.”

The dire predictions for Europe overshadowed what were otherwise positive fourth-quarter results, which Ford reported on Tuesday.

The company reported a 54 percent gain in adjusted fourth-quarter profit as strong earnings in North America compensated for heavy losses in Europe. Ford said it earned $1.6 billion in the fourth quarter of 2012 compared to $1.03 billion a year earlier, excluding the impact of tax-valuation allowances in 2011. Those allowances inflated last year’s fourth-quarter net income to $13.6 billion.

For the full year, Ford said it earned $5.67 billion, a 5 percent drop from $5.97 billion in 2011, not including the tax-valuation changes, which increased the 2011 earnings to $20.2 billion.

The auto market in Western Europe remains abysmal, but some analysts agree with Ford’s assessment that sales may be close to their low point and could start to recover late this year as the euro zone crisis subsides.

Analysts at Goldman Sachs forecast that European auto sales would fall an additional 2.2 percent in 2013, to 12.9 million vehicles. But they will rise 3.9 percent in 2014, Goldman predicted, as car buyers start to feel more secure about their economic prospects.

In the meantime, though, companies like General Motors’ Opel unit and PSA Peugeot Citröen are trying to make broad reductions in jobs and production capacity.

The recovery, if it comes, could be too late for many workers and even some of the manufacturers.

The companies that have suffered the most are those that depend on the mass market and on southern Europe, including Fiat, Peugeot and Renault. Steady declines in sales since 2007 have left two-thirds of European auto plants operating at a loss, Goldman Sachs analysts estimated.

North American sales have been a bright spot for the world’s automakers, and Ford is no exception. Ford’s overall revenue in the fourth quarter was $36.5 billion, a 5 percent increase from $34.6 billion in the same period a year earlier. For all of 2012, revenue was $134.3 billion, 1 percent less than $136.3 billion in 2011.

Healthy sales of new vehicles in North America resulted in good profit margins, particularly in the United States, where the overall industry grew 13 percent last year.

Ford said it had $1.87 billion in pretax earnings in North America during the quarter, a 110 percent increase from $889 million in the fourth quarter of 2011. For all of 2012, Ford had pretax profit of $8.34 billion in North America, compared to $6.19 billion in 2011.

But the company’s European operations continued to struggle as overall demand plunged, particularly in southern Europe.Ford reported a $732 million pretax loss in Europe for the fourth quarter, compared with a $190 million loss in the same period in 2011.

For all of 2012, Ford said it had a pretax loss of $1.75 billion in the region. By comparison, the company reported a loss of $27 million in Europe for all of 2011.

Investors, apparently shaken by the scale of the losses and Ford’s dismal forecast for 2013, sent the automaker’s shares down nearly 5 percent to $13.14 in Tuesday’s trading.

Jack Ewing contributed reporting from Frankfurt.

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