DealBook: As Unit Pleads Guilty, UBS Pays $1.5 Billion Over Rate Rigging

UBS, the Swiss banking giant, announced a record settlement with global authorities on Wednesday, agreeing to a combined $1.5 billion in fines for its role in a multiyear scheme to manipulate interest rates.

In a sign that officials are increasingly taking a hard line against financial wrongdoing, the Justice Department also secured a guilty plea from the bank’s Japanese subsidiary, sending a warning shot to other big banks suspected of rate rigging. The UBS subsidiary, which agreed to plead to a single count of wire fraud, is the first unit of a big bank to agree to criminal charges in more than a decade.

The cash penalties represented the largest fines to date related to the rate-rigging inquiry. The fine is also one of the biggest sanctions that American and British authorities have ever levied against a financial institution, falling just short of the $1.9 billion payout that HSBC made last week over money laundering accusations.

The severity of the UBS penalties, authorities said, reflected the extent of the problems. The government complaints laid bare a scheme that spanned from 2005 to 2010, describing how the bank reported false rates to squeeze out extra profits and deflect concerns about its health during the financial crisis.

“The findings we have set out in our notice today do not make for pretty reading,” Tracey McDermott, the enforcement director for the Financial Services Authority of Britain, said in a statement. “The integrity of benchmarks,” she said, “are of fundamental importance to both U.K. and international financial markets. UBS traders and managers ignored this.”

The UBS case reflects a pattern of abuse that authorities have uncovered as part of a multi-year investigation into rate-rigging. The inquiry, which has ensnared more than a dozen big banks, is focused on key benchmarks like the London interbank offered rate, or Libor. Such rates are used to help determine the borrowing rates for trillions of dollars of financial products like corporate loans, mortgages and credit cards.

In the UBS matter, the wrongdoing occurred largely within the Japanese unit, where traders colluded with other banks and brokerage firms to tinker with Yen denominated Libor and bolster their returns. During the 2008 financial crisis, UBS managers also “inappropriately gave guidance to those employees charged with submitting interest rates, the purpose being to positively influence the perception of UBS’s creditworthiness,” according to authorities.

In a series of colorful e-mails and phone calls, traders tried to influence the rate-setting process. “I need you to keep it as low as possible,” one UBS trader said to an employee at another brokerage firm in September 2008, according to the complaint filed by the Financial Services Authority. “If you do that,” the trader promised to pay “whatever you want. I’m a man of my word.”

As the employees carried out the alleged manipulation, they also celebrated the efforts, with one trader referring to a partner in the scheme as “superman.” “Be a hero today,” he urged, according the complaint by regulators.

The British and Swiss authorities released their complaints on Wednesday before the bank’s shares began trading in Switzerland. American authorities are expected to release their own complaints later Wednesday in Washington.

In a statement, UBS highlighted its cooperation with the investigation. The firm previously stated that it made provisions of 897 million Swiss francs ($975 million) to cover potential legal and regulatory fines.

“We discovered behavior of certain employees that is unacceptable,” the chief executive of UBS, Sergio P. Ermotti, said in the statement. “We deeply regret this inappropriate and unethical behavior. No amount of profit is more important than the reputation of this firm, and we are committed to doing business with integrity.”

The UBS case provides a lens to view broader problems in the rate-setting process, which affects how consumers and companies borrow money around the world. In June, authorities scored their first Libor settlement, securing a
$450 million payout from Barclays, the big British bank.

The UBS case — the product of cross-border collaboration among regulators and federal prosecutors – is more than triple the earlier fine.

The Commodity Futures Trading Commission and the Justice Department leveled about $1.2 billion in combined fines. The Financial Services Authority of Britain fined the bank $260 million. The Swiss Financial Market Supervisory Authority, which does not have the power to fine, recovered $65 million in the bank’s supposed ill-gotten gains.

The Justice Department’s criminal division, which arranged the guilty plea with the Japanese subsidiary, also struck a non-prosecution agreement with the parent company. The exact total of the penalties was unclear, because the department has not yet released its settlement documents.

The Justice Department’s case is also expected to take aim at some of the bank’s traders, including 33-year-old Thomas Hayes. The Justice Department plans to announce charges against Mr. Hayes, the former UBS and Citigroup trader, who featured prominently in the investigation, according to people with knowledge of the matter. He was arrested in London last week and later released on bail. Other UBS employees have been suspended or fired following an internal investigation.

The fallout from the UBS case is expected to ratchet up the pressure on some of the world’s largest financial institutions and spur settlement talks across the banking industry.

The Royal Bank of Scotland has said it expects to pay fines before its next earnings statement in February, while Deutsche Bank has set aside an undisclosed amount to cover potential penalties. Some American institutions, including Citigroup and JPMorgan Chase, also remain in regulators’ crosshairs.

The UBS case has exposed the systemic problems with the rate-setting process. Over a 6-year period, UBS traders targeted the major currencies that form the Libor system, including the U.S. dollar denominated rate. The bank was also cited for attempting to manipulate other benchmarks like the Euro Interbank Offered Rate, or Euribor, and the Tokyo Interbank Offered Rate, or Tibor.

Much of the activity took place in the bank’s Japanese unit. Authorities said four UBS traders colluded to manipulate submissions to Yen Libor. The individuals made more than 1,900 requests to brokers and other banks to alter the rate, according to regulatory filings. As part of their efforts, UBS employees made quarterly payments of £15,000 ($24,000) to outside brokers involved in the rate-rigging for at least 18 months for their help, the complaint said.

To avoid arousing suspicion, UBS employees routinely made small changes to submissions, the complaint details. The individuals, who communicated with colleagues about the rate-setting through emails and instant messages, also altered rate submissions to benefit traders at other banks.

The Japanese unit’s guilty plea for wire fraud follows frantic last-minute negotiations last week between senior UBS officials and American authorities. The actions detailed in the complaint emboldened the Justice Department to seek the guilty plea from the Japanese unit. By forcing the plea from the firm’s Japanese subsidiary, federal authorities sent a clear message about the level of wrongdoing, but stopped far short of shutting UBS out of the American markets.

Still, the steep sanctions come as a surprise, given the bank’s cooperation with investigators.

Since first announcing that it was the subject of Libor investigations, the Swiss bank has eagerly worked with authorities in a bid for leniency. UBS, for example, had received conditional immunity from the Justice Department’s antitrust unit, a deal that did not apply to the Justice Department’s criminal division.

The case presents the latest setback for UBS.

The Swiss bank already agreed to a $780 million fine in 2009 with American authorities to settle charges that it helped American clients avoid tax. The firm also announced a $2.3 million loss last year related to illegal trading activity by a former employee, Kweku M. Adoboli. Mr. Adoboli subsequently was sentenced to seven years, and British authorities fined UBS $47.5 million over the scandal.

UBS said it expected to report a net loss of up to $2.7 billion in the fourth quarter of the year because of the costs related to Libor and other legal matters. The figure includes around $2.3 billion of provisions of legal and regulatory costs, as well as $548 million in restructuring charges.

In the wake of the Libor scandal, UBS has been forced to beef up its compliance and rate-setting procedures, according to the Swiss regulator. The bank has also fired individuals connected to the rate-rigging

“We are pleased that the authorities gave us credit for the important and positive changes we have already made,” the chairman of UBS, Axel Weber, said in a statement. “I have zero tolerance for inappropriate and unethical behavior of any of our staff.”

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Hard Times in Spain Force Feuding Couples to Delay Divorce

SABADELL, SPAIN — Esther Fernández, 45, was desperate for a divorce. A hairdresser, she had fallen in love with another man, who was dying of cancer.

Her husband, Gaby Cuadrado, 47, had lost his factory job. Selling their house in a depressed market in this sleepy city outside Barcelona was impossible. Neither could afford a second home. They were already struggling to pay their mortgage. An expensive divorce was out of the question.

So for two years she stuck it out, leaving before dawn, hiding from Mr. Cuadrado, who said he became so obsessed with his wife that he would spy on her from his car. She had panic attacks. “I felt trapped,” she said.

It was even worse for him. The situation, Mr. Cuardado said, pushed him to the brink of suicide. “Being forced to live with a woman I loved who had rejected me was psychological torture,” he said. They finally divorced in November, after moving to tiny apartments in bad parts of town.

If marriage is for better or worse, richer or poorer, then these are the worst of times for a poorer Spain. Couples are paying the emotional price, especially when they cannot afford the price of divorce.

Fewer of them can. Accounts from judges, divorce lawyers and therapists — as well as couples themselves — indicate that many Spaniards are staying in troubled relationships longer as a result of an economic crisis that has ground on for nearly five years.

Last year, the number of divorces in Spain dropped 17 percent compared with 2006, according to the Spanish Judicial Council, a national association that represents the country’s judges. The divorce rate jumped in 2006 after changes to the divorce law made it easier to split up in 2005, but it has fallen with the crisis in Spain’s economy, according to the council.

“There is no doubt that the crisis is pushing people to stay together,” said José María Redondo, the council’s spokesman, who attributed the drop in the divorce rate to a burst housing bubble and hard economic times.

The crisis is not only slowing divorces but also transforming the process, according to divorce lawyers. Judges are reducing alimony payments and dueling spouses have moved from fighting over property to sparring over the critical issue of who assumes debts.

Some couples are literally dividing their homes in two, by sticking tape across the floor, said Álvaro Cavia, a leading Barcelona-based divorce lawyer. Unable to afford a divorce, other couples live together even as they engage openly in other romantic relationships.

Squabbles over money — or the lack of it — are the biggest source of contention among couples seeking to mend fraying relationships, according to Myka Pedrero, a family psychologist in a suburb of Barcelona, who counseled Ms. Fernández, her sister.

It is worst for jobless couples, she said, not just because of the money strains, but because they often spend all day together at home, treading on each others’ nerves. When warring couples share the same quarters it is especially confusing for children unable to accept their parents’ break-ups, she said.

“The crisis makes things worse as it adds huge pressures to marriages when you don’t have a job and can’t pay the bills,” she said. “When people who want to split are forced to stay together it pollutes the whole ecosystem that is the family and drives both the man and the woman crazy.”

Until the crisis exploded, legal experts say, divorce was widely accepted as the easiest exit from a bad marriage after decades during which it was prohibited during the Franco dictatorship.

Divorce was first legalized in Spain 1981 but the law required couples to legally separate first, a period of reflection aimed at safeguarding the family in a socially conservative, Catholic country. The change in the law in 2005 has allowed couples to get “express divorces” without any separation. Couples need to have been married for at least three months to qualify.

Even when couples can afford a divorce, the economic crisis has added new complications.

Silvia Taulés contributed reporting from Barcelona.

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Boeheim wins 900th; No. 3 Syracuse 72, Detroit 68

SYRACUSE, N.Y. (AP) — Jim Boeheim called it just another number. The message board in the Carrier Dome didn't agree.

Moments after his third-ranked Syracuse Orange held off Detroit for a 72-68 victory Monday night in the Gotham Classic, making Boeheim just the third Division I men's coach to reach 900 wins, Hall of Famer Dave Bing, Duke coach Mike Krzyzewski and Louisville's Rick Pitino offered congratulations on the big screens inside the Teflon dome as the hometown faithful cheered.

Boeheim, 68 and in his 37th year at his alma mater, is 900-304 and joined an elite fraternity. Krzyzewski (936) and Bob Knight (902) are the only other men's Division I coaches to win that many games.

"To me, it's just a number," said Boeheim, whose first victory was against Harvard in 1976. "If I get 900, have I got to get more? That's why maybe it's just not that important to me because to me it's just a number, and the only number that matters is how this team does."

So far, it's done OK.

James Southerland had 22 points for Syracuse (10-0), which increased its home winning streak to 30 games, longest in the nation. Detroit (6-5), which lost 77-74 at St. John's in the second game of the season and 74-61 at Pitt earlier this month, had its four-game winning streak snapped.

Bing, Boeheim's college roommate, teammate and fellow Hall of Famer, and Roosevelt Bouie, a star on Boeheim's first team in 1976-77, were in the Carrier Dome crowd of 17,902.

Bing was standing tall in the locker room after the game.

"Nobody would have thought when we came here 50 years ago that either one of us would have had the kind of success we've had," said Bing, today the mayor of Detroit. "I'm so pleased and proud of him because he stuck with it. He's proven that he's one of the best coaches ever in college basketball, and he'll be No. 2 shortly."

After a victory that nearly was short-circuited, Boeheim was presented a jersey encased in glass with 900 emblazoned on it.

"I'm happy. I've stayed around long enough. I was a little nervous," Boeheim said at center court. "I'm proud to be here. To win this game is more pressure than I've felt in a long time. I wasn't thinking about losing until the end. That wouldn't have been a good thing to happen, but it very well could have."

Indeed.

Midway through the second half with Syracuse dominating, fans were given placards featuring cardboard cutouts of Boeheim's face with 900 wins printed on the back to wave in celebration. But when the public address announcer in the Carrier Dome invited fans to stick around for the postgame ceremony, the Titans roared back.

Juwan Howard Jr., who finished with 18 points, scored 14 over the last 6 minutes to key a 16-0 run, his two free throws pulling Detroit within 67-63 with 55.1 seconds left after the Titans had trailed by 20 with 6:09 to play.

"You know what, I didn't hear it, but the players probably heard because they sure came alive," Detroit coach Ray McCallum said. "This is a big stage. Guys sitting around the hotel watching television getting ready to play the No. 3 team in the country and they're talking about going for 900 wins, coach Boeheim. That's a lot for a young man to digest."

Michael Carter-Williams hit three of four free throws in the final seconds to secure the win.

"Michael made big-time free throws you've got to make. If he misses a couple, it's a new game. That was the difference," Boeheim said. "We have not been in that situation. Hopefully, we'll learn from that."

Carter-Williams finished with 10 assists and 12 points, his sixth straight double-double.

"It was great to be part of this," Carter-Williams said. "It's a part of history."

Doug Anderson scored 18 points and Nick Minnerath had 13 for Detroit. Ray McCallum Jr., the coach's son and Detroit's leading scorer at 19.4 points per game, finished with nine, while Jason Calliste had seven.

Southerland scored a career-high 35 points, matching a school record with nine 3-pointers, in a win at Arkansas in late November and, after an 0-for-10 slump over three games, found his range again Saturday night with three 3s in a win over Canisius. He finished 5 of 8 from behind the arc against the Titans.

One of the keys to breaking Syracuse's 2-3 zone is hitting the long ball, and Detroit struck out in the first half. The Titans were 0 for 10 and the lone 3 they did make — by McCallum with just over 6 minutes left — was negated by a shot-clock violation.

Detroit could only lament what might have been if a couple had gone in.

"We never gave up. That's a tribute to our team," Howard said. "We had the right attitude. We played a tough opponent. You usually don't want a moral victory, but we can take some positives from this game."

Syracuse plays again Saturday against Temple in Madison Square Garden, and the Orange faithful are likely to be out in numbers as they usually are when the team plays there.

Boeheim was effusive in praise of the support the team has received during his long tenure. Syracuse has had 71 crowds of over 30,000 since the Carrier Dome opened in 1980 and holds the NCAA on-campus record of 34,616, set nearly three years ago against Villanova.

"The support of fans cannot be overestimated," he said. "You have to have that kind of support in your building to bring recruits in, to help you play better. We've had a tremendous loyal fan base. That's why I always felt this was a great place to coach and why I never really thought about going anywhere else. The support from the fans is the No. 1 thing you have to have."

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Recipes for Health: Not-Too-Sweet Wok-Popped Coconut Kettle Corn

Andrew Scrivani for The New York Times

Not-too-sweet coconut kettle corn.

I’m usually not a big fan of sweet kettle corn, but I wanted to make a moderately sweet version because some people love it and it is nice to be able to offer a sweet snack for the holidays. I realized after testing this recipe that I do like kettle corn if it isn’t too sweet. The trick to not burning the sugar when you make kettle corn is to add the sugar off the heat at the end of popping. The wok will be hot enough to caramelize it.

2 tablespoons coconut oil

6 tablespoons popcorn

2 tablespoons raw brown sugar

Kosher salt to taste

1. Place the coconut oil in a 14-inch lidded wok over medium heat. When the coconut oil melts add a few kernels of popcorn and cover. When you hear a kernel pop, quickly lift the lid and pour in all of the popcorn. Cover, turn the heat to medium-low, and cook, shaking the wok constantly, until you no longer hear the kernels popping against the lid. Turn off the heat, uncover and add the sugar and salt. Cover again and shake the wok vigorously for 30 seconds to a minute. Transfer the popcorn to a bowl, and if there is any caramelized sugar on the bottom of the wok scrape it out. Stir or toss the popcorn to distribute the caramelized bits throughout, and serve.

Yield: About 12 cups popcorn

Advance preparation: This is good for a few hours but it will probably disappear more quickly than that.

Nutritional information per cup: 59 calories; 3 grams fat; 2 grams saturated fat; 0 grams polyunsaturated fat; 0 grams monounsaturated fat; 0 milligrams cholesterol; 8 grams carbohydrates; 1 gram dietary fiber; 1 milligram sodium (does not include salt to taste); 1 gram protein

 

​Up Next: Granola

Martha Rose Shulman is the author of “The Very Best of Recipes for Health.”

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Influx of Cash in Asia Raises Familiar Worries

HONG KONG — To all the concerns that cloud Asia’s growth prospects next year — the fiscal measures set to take effect in the United States, the euro zone debt crisis and the uncertain growth trajectories of China and Japan — add one more: a renewed flood of cash into some of the region’s more dynamic economies.

Asia’s fast-growing economies have weathered a tough 2012 relatively well, and economists say that unless the U.S. and euro zone economies take a sharp hit in 2013, the region could pick up steam again next year.

But that good news comes with a price tag. Analysts have begun to warn recently that Asia’s relative economic buoyancy could once again attract large amounts of cash, possibly leading to a repeat of what happened two years ago.

Back then, big inflows, mostly from the West, caused many emerging-market currencies to surge and prompted talk of “currency wars” as central bankers scrambled to keep their currencies from rising too fast.

Now, with growth in Asia picking up, and central banks in developed nations stepping up their efforts to oil the wheels of their beleaguered economies, the influx of cash is again starting to have worrying side effects.

Property prices, for example, have risen across much of the region. The South Korean won has climbed more than 5 percent against the U.S. dollar since late August. The Philippine peso has risen about 4 percent, to its highest level since early 2008. The Taiwan dollar, the Thai baht and the Malaysian ringgit also have strengthened.

“We could be heading back towards where we were in 2010,” said Frederic Neumann, regional economist at HSBC in Hong Kong. “Capital is pouring back into emerging Asia.”

Next year, said Rob Subbaraman, chief economist for Asia ex-Japan at Nomura in Hong Kong, “could be a bumper year” for net capital inflows. “The stars are aligned.”

For many parts of the world, a tide of capital would be a blessing. The United States, Europe and Japan have spent much of the last four years trying to reinvigorate their economies by lowering rates and injecting cash into strained financial systems through purchases of financial assets.

More is in store.

Last Wednesday, the U.S. Federal Reserve announced that it would continue to buy large amounts of Treasury securities and mortgage-backed securities until the job market improved.

Likewise, the Japanese central bank may step up its existing asset-buying and lending program at a policy meeting this week, analysts believe.

Over the years, some of that liquidity has seeped into parts of the world where growth is faster and returns are higher. The amounts of money flowing into developing Asia have, at times, been vast. During the rush in late 2009 and 2010, David Carbon, an economist at DBS in Singapore, estimated, the region saw inflows to the tune of $2 billion a day, for example.

Economists at the Japanese bank Nomura estimate that between early 2009 and mid-2011, net capital inflows to Asia, excluding Japan, totaled $783 billion — far more than the $573 billion that came in during the preceding five years.

The renewed inflows in recent months have not been so large. Moreover, not all countries have attracted cash in equal measure. Investors have been wary this year of India’s seeming inability to push through important economic overhauls, for example. That has caused the rupee to sag more than 11 percent since February. China, meanwhile, restricts incoming foreign investments to relatively small amounts.

Elsewhere in the region, however, there are signs of renewed pressure.

An index compiled by Nomura that gauges capital inflow pressures has risen in recent months, said Mr. Subbaraman, the Nomura economist. Although it remains below where it was during the spike in 2010, it is now at its highest since May 2011.

Said Mr. Neumann of HSBC, “currencies have strengthened despite resistant central banks, real estate markets are frothing away, and lending to consumers and companies has accelerated.”

All of that has reignited the concerns that traditionally accompany major — and potentially fickle — capital inflows.

For exporters, stronger currencies are a headache, as they make the exporters’ goods more expensive for consumers elsewhere.

For ordinary citizens, rising property prices make homes increasingly unaffordable. Soaring property prices are also vulnerable to painful reversals if conditions change.

Underscoring that point, the International Monetary Fund warned on Wednesday that a sharp rise in house prices in Hong Kong raised “the risk of an abrupt correction.”

Likewise, a big increase this year in corporate bond issuance — while a positive in that it supports growth and diversifies corporate funding — bears risks.

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Obama Expected to Name Kerry as Secretary of State

WASHINGTON — President Obama is leaning strongly toward naming John Kerry, the Massachusetts senator and unsuccessful Democratic nominee for president eight years ago, to succeed Hillary Rodham Clinton as secretary of state, according to administration officials and friends of Mr. Kerry.

But the announcement will be delayed, at least until later this week and maybe beyond, because of the Connecticut school shooting and what one official called “some discomfort” with the idea of Mr. Obama’s announcing a national security team in which the top posts are almost exclusively held by white men.

The American ambassador to the United Nations, Susan E. Rice, who is black and was considered Mr. Obama’s leading candidate for the job, withdrew her name from consideration last week after opposition to her nomination grew in the Senate.

For Mr. Kerry, 69, the appointment would fulfill an ambition that dates back many years. He had hoped for the post when Mr. Obama was first elected in 2008; since then, he has shepherded the passage of a critical arms-control treaty and conducted a series of quiet missions on behalf of the president, notably at moments of crisis with Afghanistan and Pakistan.

But he would be entering an administration whose primary foreign policy strategies are already set, even as it tries to use American leverage in dealing with a Middle East that is veering toward hard-line Islamist governments and an Iran that is getting perilously close to a nuclear capability.

With Ms. Rice out of the running, Mr. Kerry’s appointment “is the working presumption,” said a senior State Department official who has been preparing for the transition to a new secretary. But White House officials said the deal was not entirely done, because the lineup currently envisioned — with former Senator Chuck Hagel to head the Defense Department and the acting C.I.A. director, Michael J. Morell, likely to be named to the post permanently — looks a bit too much like national security teams of a previous era.

For Mr. Obama, a national security team led by Mr. Kerry and Mr. Hagel, and their longtime colleague in the Senate, Vice President Joseph R. Biden Jr., would be deeply experienced but also, in many ways, deeply conventional. All three were in the Senate during the cold war, long before Mr. Obama came on the political scene. All describe themselves as pragmatists rather than ideologues, and all became skeptics, then critics, of the American experiment in Iraq from the early days of the war.

Still, administration officials said, for now there are no serious candidates for the State Department job other than Mr. Kerry. He would be the first white man to serve in the post since Warren Christopher left the job in early 1997. His successors have been Madeleine K. Albright, Colin Powell, Condoleezza Rice and Mrs. Clinton.

Mr. Kerry’s colleagues in the Senate have said that he would sail through confirmation hearings. Senator John McCain, Republican of Arizona, has already begun jokingly calling Mr. Kerry “Mr. Secretary.” Both men are veterans of the Vietnam War and worked together to provide President Bill Clinton with political cover to grant diplomatic recognition to Vietnam. Mr. McCain said of Mr. Kerry recently that he would most likely win a large number of Republican votes for confirmation.

The issue of the composition of Mr. Obama’s team arose anew when Ms. Rice withdrew. If she keeps her current post as ambassador to the United Nations, she will remain in Mr. Obama’s cabinet and on his national security team. She is also considered the likely successor to Thomas E. Donilon as national security adviser. But Mr. Donilon does not intend to leave that post for a year or two, his friends say, unless he is named White House chief of staff.

Michèle A. Flournoy, a former under secretary of defense for policy, remains a candidate to become the first female defense secretary. But in internal discussions, White House officials have said that the challenge of the next few years will be working with Congress to shrink the defense budget and kill some major cold war-era weapons systems. For that, Mr. Hagel, a Republican from Nebraska, is seen as better able to win votes from his former colleagues.

Ms. Flournoy has also been mentioned as a possible C.I.A. director, but Mr. Morell, who ran the analysis division of the agency, is the favorite of C.I.A. officials. “Mike has been concerned about the over-militarization of the C.I.A.,” a senior military officer who has dealt with him said recently. “And so are many at the agency, who fear they have wandered too far from the job of analyzing trends and obtaining secrets.”

John Brennan, a close aide to Mr. Obama and a former agency station chief in Saudi Arabia who has directed counterterrorism activity from his basement White House office, is also a candidate for C.I.A. director. But officials note that his current post already gives him sway over all 18 intelligence agencies.

Mr. Kerry has worked hard to deepen his relationship with Mr. Obama. The president has at times considered him long-winded and a throwback to a previous generation of diplomats, aides said. But Mr. Kerry impressed Mr. Obama and Mr. Donilon when he was sent to deal with Hamid Karzai, the famously unpredictable president of Afghanistan, after Mr. Karzai’s supporters rigged a presidential election in 2009 and refused a second round of voting.

Mr. Kerry also visited Pakistan several times to try to ease recurrent tensions, including a two-week visit after the raid that killed Osama bin Laden. Pakistani officials tried to get Mr. Kerry to write what they called a “blood oath” that the United States would never take action to seize Pakistan’s nuclear arsenal. Mr. Kerry found a diplomatic way out, saying the United States had no “designs” on Pakistan’s weapons.

“It meant nothing,” a member of Mr. Obama’s national security team said later. “And it solved the crisis. Quite artfully.”

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iPad shipments could reach 100 million in 2013

Apple (AAPL) sold 42.8 million iPad tablets into channels through the first three quarters of 2012 and the most recent estimates suggest the company could ship 26 million more iPads during the holiday quarter. If Apple does manage to hit that record, total iPad shipments on the year would reach 68.8 million units. As impressive as that would be, however, DisplaySearch analyst David Hsieh thinks 2013 iPad sales could climb as high as 100 million units as iPad mini demand explodes.

[More from BGR: Has the iPhone peaked? Apple’s iPhone 4S seen outselling iPhone 5]

In 2012, Hsieh estimates that 9.7-inch iPad panel shipments — that is, shipments of iPad displays from suppliers to Apple’s manufacturing partners —  will have totaled 70 million units, including 23 million iPad 2 displays and 47 million third- and fourth-generation iPad panels. He also believes Apple’s suppliers will ship 13.6 million iPad mini displays by the end of the year.

[More from BGR: Sony’s PlayStation 4 could lose to the next Xbox before it’s even released]

Next year, however, the analyst sees Apple hitting a major milestone.

“In 2013, it is likely that Apple will adjust its product portfolio to meet the strong demand for the iPad mini,” Hsieh wrote in a post on DisplaySearch’s blog. ”We believe that Apple is targeting total iPad shipments of 100 million in 2013, half accounted for by the iPad mini, and 40 million new iPad and 10 million iPad 2, as production continues at least until the middle of 2013.”

DisplaySearch estimates that more than 170 million tablets will ship in 2013 and Apple’s iPad will account for 60% of the market.

This article was originally published by BGR

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49ers clinch playoff berth, 41-34 over Patriots

FOXBOROUGH, Mass. (AP) — Jim Harbaugh might have learned more about his San Francisco 49ers during 20 minutes of sleepwalking than at any other time in his two years as their coach.

His 49ers turned a nearly historic collapse into a stunning victory and a playoff berth. They withstood a 28-point comeback by the New England Patriots to win 41-34 on Sunday night in the rain.

"Our team has now hung in in a lot of big-time pressure games," Harbaugh said. "They've overcome adversity. They've shown they can do that."

Michael Crabtree took a short pass from Colin Kaepernick and sped around cornerback Kyle Arrington for a 38-yard touchdown with 6:25 to go, then David Akers made a 28-yard field goal to clinch it.

"We can win a shootout," Crabtree said. "Whatever it takes, that's our motto. ... We feel like we can do anything, sky's the limit."

The 49ers (10-3-1) own at least a wild-card spot and play at Seattle next week with a chance to win the NFC West. A loss would bring the division race down to the final weekend.

Kaepernick threw for four touchdowns, two to Crabtree, who had 107 yards receiving. The defense rattled Tom Brady at times, but also yielded 443 yards passing in a sloppy contest between two of the league's more precise teams.

AFC East champion New England (10-4), which had won seven in a row, trailed 31-3 in the third quarter and lost for the first time at home in December in 21 games. The Patriots also had won 21 in a row in the second half of the schedule before San Francisco somehow regrouped late in a game it seemingly had clinched long before.

"I used to live next to a train station in Chicago," Harbaugh said. "And it's like the more you hear the train, the less you hear it. I feel that way with our team in terms of pressure in big games. The more you feel it, the less you feel it."

San Francisco forced four turnovers, matching the number of giveaways New England had at home all season.

But then the Niners began collapsing, and back came Brady and the Patriots on a 6-yard TD run by Danny Woodhead and a 1-yard dive by Brady. A 5-yard pass to Aaron Hernandez and Woodhead's 1-yard run with 6:43 remaining tied it.

And just like that, San Francisco went in front again.

Rookie LaMichael James broke free for a 62-yard kickoff return. On the next snap — the third time the Niners would have a one-play TD drive — Crabtree took a pass on the left side, spun and headed into the end zone.

"We faced adversity," James said. "Nobody flinched."

New England turned over the ball on downs and Akers made his kick. Stephen Gostkowski added a 41-yarder for the Patriots with 38 seconds remaining, but they couldn't recover the onside kick.

San Francisco led 17-3 at the half. And they looked safe after Frank Gore picked up Kaepernick's third fumble and scored on a 9-yard run, followed by Crabtree's 27-yard score in a pinpoint pass from the second-year quarterback.

The defense set up both of San Francisco's TDs in the third.

Dashon Goldson returned Steven Ridley's fumble 66 yards to the New England 3 before Gore found the end zone. Defensive end Aldon Smith, known for his sacks, grabbed a pass out of Hernandez's hands for his first career interception. After he was tackled, Smith ran directly to the sideline and sat down on the 49ers' bench.

He was back up on his feet cheering the next play, when Crabtree broke free to make it 31-3.

"We just spotted them 28 points," Brady said. "We fought hard, but you can't play poorly against a good team and expect to win. We can't miss plays that we have opportunities with."

Still, no one can relax against the Patriots.

Unlike a week ago, when the Patriots routed Houston, they fell behind quickly in the rain and ran only 10 snaps on their opening three series. San Francisco's fearsome pass rush was sharp then, and Brady was hit on the arm twice while trying to pass.

Even worse, his long throw on their third possession for Wes Welker was picked off by Carlos Rogers, who then slalomed his way on the wet turf toward the New England end zone. Only Brady stood in his way at the 5, and Rogers fell trying to elude him.

It was a key stop because Delanie Walker fumbled two plays later.

Earlier, Kaepernick accounted for 60 yards through the air on the 49ers' first drive. Randy Moss showed the kind of elusiveness that made him a record-setter in New England from 2007 until he was traded early in the 2010 by getting behind the secondary for a 24-yard TD.

His short celebration as he faced the crowd drew loud hoots.

Brady preventing Rogers from scoring was about the only highlight for the Patriots in the opening quarter, but the 49ers weren't any more effective beyond their scoring drive and a 38-yard run by Goldson on a fake punt. The slopfest included Akers' being wide left on a 39-yard field goal.

All this from teams ranked 1-2 in fewest giveaways.

"We just didn't even give ourselves a chance," Brady said.

When the Patriots finally got their usually unstoppable offense going, they used 16 plays and converted a fourth down. But they stumbled inside the 10 when Brady was sacked by Ray McDonald. Gostkowski made a 32-yard field goal.

San Francisco answered quickly, helped by a 35-yard pass interference call on Aqib Talib. Walker slipped behind a zone defense for a 34-yard TD pass from Kaepernick, making it 14-3.

Akers made a 20-yard field goal as the half ended, finishing a 15-play, 76-yard drive. The three points were the Patriots' fewest in a half all season, and they were outgained 249-113.

Of course, that turned around in the second half.

Aside from the players' mistakes, the game also was slowed by officiating confusion that led to several lengthy conferences. One delay took about 10 minutes to decide whether 49ers punt returner Ted Ginn Jr., muffed a second-quarter kick.

NOTES: Welker now has 100 catches this season, the fifth time he has reached that number, an NFL record. ... New England has 506 points, the fourth time it has reached 500, also a league mark. ... San Francisco had allowed only 184 points going into the game, lowest in the league. ... Andy Lee averaged 54 yards net on five punts for the 49ers. ... Brady's 65 throws are a career high. ... Brandon Lloyd had 10 catches for 190 yards for New England.

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Experts Say Thimerosal Ban Would Imperil Global Health Efforts

A group of prominent doctors and public health experts warns in articles to be published Monday in the journal Pediatrics that banning thimerosal, a mercury compound used as a preservative in vaccines, would devastate public health efforts in developing countries.

Representatives from governments around the world will meet in Geneva next month in a session convened by the United Nations Environmental Program to prepare a global treaty to reduce health hazards by banning certain products and processes that release mercury into the environment.

But a proposal that the ban include thimerosal, which has been used since the 1930s to prevent bacterial and fungal contamination in multidose vials of vaccines, has drawn strong criticism from pediatricians.

They say that the ethyl-mercury compound is critical for vaccine use in the developing world, where multidose vials are a mainstay.

Banning it would require switching to single-dose vials for vaccines, which would cost far more and require new networks of cold storage facilities and additional capacity for waste disposal, the authors of the articles said.

“The result would be millions of people, predominantly in low- and middle-income countries, with significantly restricted access to lifesaving vaccines for many years,” they wrote.

In the United States, thimerosal has not been used in children’s vaccines since the early 2000s after the Food and Drug Administration and public health groups came under pressure from advocacy groups that believed there was an association between the compound and autism in children.

At the time, few, if any, studies had evaluated the compound’s safety, so the American Academy of Pediatrics called for its elimination in children’s vaccines, a recommendation that the authors argued was made under the principle of “do no harm.”

Since then, however, there has been a lot of research, and the evidence is overwhelming that thimerosal is not harmful, the authors said. Louis Z. Cooper, a former president of the academy and one of the authors, said that if the members had known then what they know now, they never would have recommended against using it. “Science clearly documented that we can’t find hazards from thimerosal in vaccines,” he said. “The preservative plays a critical role in distribution of vaccine to the global community. It was a no-brainer what our position needed to be.”

Advocacy groups have lobbied to include the substance in the ban, and some global health experts worry that because the government representatives due to vote next month are for the most part ministers of environment, not health, they may not appreciate the consequences of banning thimerosal in vaccines. The Pediatrics articles are timed to raise a warning before the meeting.

“If you don’t know about this, and you’re a minister of environment who doesn’t usually deal with health, it’s confusing,” said Heidi Larson, senior lecturer at the London School of Hygiene and Tropical Medicine, who runs the Vaccine Confidence Project.

In an open letter to the United Nations Environmental Program and the World Health Organization this year, the Coalition for Mercury-Free Drugs, a nonprofit group that supports the ban, disputed the assertion that scientific studies had offered proof that thimerosal is safe, and urged member states to include it in the ban.

That it is being used in developing countries, but not developed countries, is an “injustice,” the letter said.

The World Health Organization has also weighed in. In April, a group of experts on immunization wrote in a report that they were “gravely concerned that current global discussions may threaten access to thimerosal-containing vaccines without scientific justification.”

Dr. Larson said she believed that the efforts of pediatricians and global health experts, including the W.H.O., would influence the negotiations in Geneva and that the compound would most likely be left out of the final ban.

“You can’t just pull the plug on something without having a plan for an alternative,” she said.

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Newtown has Mixed Feelings About the Media Horde in Its Midst

NEWTOWN, Conn. — Wolf Blitzer understands that his presence here is not appreciated by some local people, who wish that the TV satellite trucks, and the reporters who have taken over the local Starbucks, would go away and leave them to ache, grieve and mourn in peace.

But he also knows that the massacre at Sandy Hook Elementary School ranks with the national tragedies he has covered: Oklahoma City, Sept. 11, Virginia Tech. So for now the most intimate and heartbreaking of catastrophes and the insatiable, unwieldy beast of global news media are locked in an awkward union in a bucolic New England town that never expected to encounter either.

Mr. Blitzer, the longtime CNN anchor, said the few exhortations to go home he had heard while working here had been far outnumbered by comments from people who thank him for telling Newtown’s story sensitively and who want the world to know what happened here. Still, he said, Newtown is providing a particularly vivid laboratory of how the media report this kind of tragedy.

“If you have people bringing dolls or flowers to makeshift memorials and they’re crying, that’s a powerful image, it’s part of this story, it’s part of our history right now, and we have to deal with it,” he said on Sunday.

This town, of course, has been transformed by unimaginable tragedy. But in a more mundane and presumably transitory way, Newtown and particularly the small community of Sandy Hook have also been transformed by those coming to report on it, a news media presence that has clogged quiet roads, established glowing encampments of lights and cameras, and showed up in force at church services and public memorials.

Nearly every newscast on CNN since Friday night has been broadcast from Newtown. The same has been true for nearly every network television morning and evening newscast. Coverage of other events has been minimized if not scrapped entirely, at least for a few days — sometimes with breathlessly inaccurate results about the massacre. On Friday, there was a succession of reports about the shooting and the gunman that turned out to be wrong: reports about the gunman’s name, about his mother’s occupation, about how he got into the building.

The confusion continued into Saturday when NBC broadcast an exclusive report that the gunman had an altercation with four staff members at the school the day before the shootings, according to state and federal officials. A revised account played down the possibility of an altercation.

Reporters like NBC News’s justice correspondent, Pete Williams, tried to be transparent about the fact that many initial details about the shooting came from anonymous and occasionally contradictory sources.

When Adam Lanza’s brother Ryan’s name circulated widely as the gunman’s name on Friday afternoon, he said “we are being told the name Ryan,” but cautioned that “at the end of the day that name might be wrong.”

Despite the errors, Al Tompkins, a senior faculty member at the Poynter Institute, the nonprofit journalism organization, said he was “touched and impressed by the nonstop coverage so far.” He said he had not seen any children interviewed without a parent nearby.

Some news organizations said they had specific rules about such interviews. A spokeswoman for CBS News said that its policy “is not to interview children under the age of 18 before getting permission from a parent.”

While police officials have asked — at times almost begged — the news media to respect the privacy of families that have lost a loved one, reporters and bookers do have to ask. Thus the sight of big-name anchors going door to door this weekend, seeking interviews. They said they know when no means no.

“We are always extremely sensitive to the feelings and the wishes of loved ones,” said Tom Cibrowski, the executive producer of ABC’s “Good Morning America.” But, he added, “There is a time when some do choose to honor their child or the victim, and we can provide a forum.”

Most moving, perhaps, was the eloquent tribute that Robbie Parker paid Saturday in front of TV cameras to his dead 6-year-old daughter, Emilie Alice. Nonetheless, in Newtown, a police officer has been assigned to keep unwelcome visitors away at the homes of the families of each of the dead children.

Some here have had gripes about individual reporters pushing cameras and microphones into the faces of unwilling residents, particularly those leaving the firehouse in grief on Friday after receiving news about what happened at the school.

Still, Michael Burton, the second assistant chief at the firehouse, who said he witnessed some intrusive reporters, also said the coverage has been a blessing beyond sharing the town’s grief.

A fire department in Texas, learning of the Christmas tree sale at his firehouse, bought the two trees that became the center of a memorial at the bridge leading up to the school. Someone in North Carolina bought another 26, one for each of the slain children and school personnel, all now adorned in a green tribute leading up to the school.

“If not for the media coverage, none of that would have happened,” he said.

On Sunday morning, Eric Mueller, an art teacher at a private school in New Haven, began hammering 27 wooden angels that he and eight friends had constructed into the ground in front of his house in Newtown. Within minutes, he was joined by more than a dozen reporters and photographers. “My wife said, ‘Whatever you do, don’t talk to the press,’ ” he said.

He said his gesture was for the residents of Newtown, not for the world. But he said he had no problem with the news media descending on the town.

“I’m fine with it right now. I’ll go back in the house and be done with it and let the angels speak for themselves.”

Peter Applebome reported from Newtown, Conn., and Brian Stelter from New York.

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