DealBook: Wells Fargo Profit Jumps 24% in Quarter, Driven by Mortgage Gains

8:46 a.m. | Updated

Wells Fargo reported $5.1 billion in profit for the fourth quarter on Friday, a 24 percent increase, driven by the bank’s lucrative mortgage business.

Seizing on low-interest rates that have spurred a flurry of refinancing activity, the bank again notched record profits. For the last 12 quarters, profits at the bank have increased.

In this latest quarter, Wells Fargo, based in San Francisco, reported earnings of 91 cents a share, which exceeded analysts’ expectations. Ahead of the report, analysts polled by Thomson Reuters estimated that the bank would report earnings of 89 a share.

Wells Fargo, unlike many of its rivals, has been able to steadily increase its revenue. The first bank to release fourth-quarter earnings, Wells Fargo reported $21.95 billion in revenue in the fourth quarter, up 7 percent from a year earlier.

Much of the revenue gains stemmed from the bank’s consumer lending business, as borrowers jumped on record low interest rates to refinance their mortgages. Wells Fargo, which dominates the market as the nation’s largest mortgage lender, notched $125 billion in mortgage originations, up from $120 billion in the fourth quarter of 2011. Refinancing applications accounted for nearly 75 percent of that total.

The big profit in the group came from the extra money that Wells Fargo makes bundling the mortgages into bonds and selling them to the government. In the fourth quarter, the bank reported $2.8 billion of so-called net gains on its mortgages activities, up 51 percent from the previous year.

Under the tenure of its chief executive, John G. Stumpf, Wells Fargo has aggressively expanded into the mortgage market, a strategy that might help the bank surpass its rivals in profits, notably JPMorgan Chase.

Wells Fargo’s net interest margin, a closely watched profit metric that measures the difference between the interest the bank collects and the interest it pays on its own borrowings, was down slightly to 3.56 percent, from 3.89 percent a year earlier.

Profit in the community banking division, which spans Wells Fargo’s retail branches and mortgage business, increased 14 percent to $2.9 billion.

The bank successfully courted more cash from depositors, adding $72 billion in total core checking and savings deposits than a year earlier.

“The company’s underlying results were driven by solid loan growth, improved credit quality, and continued success in improving efficiency,” Wells Fargo’s chief financial officer, Tim Sloan, said in a statement.

The bank has benefited from sweeping federal stimulus initiatives that have buoyed the mortgage business. The Treasury Department has helped spur Americans to refinance their mortgages.

Wells Fargo is the reigning titan in the mortgage industry, generating roughly a third of all the mortgages across the United States. Mortgage originations continued to climb, up 4 percent to $125 billion.

Adding to its mortgage-related profit, Wells Fargo reported a $926 million profit from its servicing business, in which the bank collects payments from homeowners. That’s up roughly 6 percent from a year earlier.

Alongside the consumer loan business, Wells Fargo had gains in its wealth management business, a particular focus for the bank to defray the impact of federal regulations that dragged down profits elsewhere.

Still, Wells Fargo’s profit from residential mortgages could wane this year if the Federal Reserve halts its extensive bond buying spree.

Working to move beyond the mortgage crisis woes that have dogged the bank, Wells Fargo has been brokering deals with federal regulators. Wells Fargo was one of 10 banks that signed onto an $8.5 billion settlement this week with the Comptroller of the Currency and the Federal Reserve over claims that shoddy foreclosure practices may have led to the wrongful eviction of homeowners.

The sweeping federal pact ends a deeply flawed review of millions of loans in foreclosure that was mandated by federal regulators in 2011. The review, which was ended this week, began in November 2011 amid mounting public fury that bank employees were churning through hundreds of foreclosure filings without reviewing them for accuracy.

In addition to the settlement, the bank set aside $1.2 billion to prevent foreclosures.

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The Carpetbagger: 'Lincoln' Leads Oscar Field With 12 Nominations

Start your Oscar Ballot here.

LOS ANGELES — Torture. Terror. Depression. Revolt. Where’s Uggie the dog when you need him?

The 85th Academy Awards season jolted into place early Thursday morning, as the heaviest number of Oscar nominations — including nods for best picture — went to “Lincoln,” about a president’s struggle with civil war; “Life of Pi,” about a shipwreck survivor and a tiger; “Silver Linings Playbook,” a comedy, of sorts, about mental illness; and “Les Misérables,” filled with songs of the oppressed.

Close behind were “Argo,” about political captivity; “Amour,” a French-language film about death; and “Django Unchained,” about slavery and retribution.

“Beasts of the Southern Wild,” about a child’s encounters with rising floodwaters in the South, and “Zero Dark Thirty,” about the murky pursuit of a national enemy, also scored heavily and were nominated for best picture.

But the morning’s real surprise was a triple snub in the best director category: Neither Kathryn Bigelow, who directed “Zero Dark Thirty,” nor Ben Affleck, who directed “Argo,” nor Quentin Tarantino, who directed “Django Unchained,” were included among the five directing nominees.

Those were Steven Spielberg, for “Lincoln,” Ang Lee, for “Life of Pi,” Michael Haneke, for “Amour,” David O. Russell, for “Silver Linings Playbook” and Benh Zeitlin for “Beasts of the Southern Wild.”

In all, nine films received best picture nominations, in a field that can include as many as ten or as few as five, depending on how voters from the Academy of Motion Picture Arts and Sciences spread their hand.

The nominations were announced at the Academy’s Beverly Hills headquarters in an early morning ceremony that paired the actress Emma Stone with the host of this year’s Oscar telecast, Seth MacFarlane. The unusual inclusion of Mr. MacFarlane, the creator of the animated “Family Guy” TV show, was an effort by the Academy to increase his public profile; only once before (in 1972) has a host announced nominees.

Mr. MacFarlane worked hard to squelch skepticism about his selection as host and give a hint of what will come on Oscar night, cracking a series of one-liners that mocked the self-seriousness of the Oscars and the job of moviemaking. The directing nominees, he quipped, are “the very best at sitting in a chair and watching other people make a movie.” Of the foreign film “Amour,” he said, “The last time Austria and Germany co-produced something was Hitler.” (Cue nervous laughter from the 400 or so reporters in the room.)

Hollywood now faces a somewhat longer-than-usual campaign period. A new digital voting system — despite its reported hitches — allowed the Academy to announce nominees two weeks earlier than last year, and more than six weeks before the awards ceremony, which ABC will broadcast on Feb. 24.

“Lincoln,” directed by Steven Spielberg, had gone into the morning as the picture to beat, and it remained a leader, with 12 nominations. But it barely outpaced “Life of Pi,” which beat the expectations by coming up second, with 11 nominations in all, even as “Zero Dark Thirty,” an early favorite, fell into the pack, with just five.

Mr. Spielberg’s directing nomination was his seventh, while Daniel Day-Lewis received his fifth best actor nomination, this time for his portrayal of Abraham Lincoln. (He has won twice.) Sally Field was among the “Lincoln” nominees, as a supporting actress for playing Mary Todd Lincoln, as was Tony Kushner, for writing the film’s adapted script.

All of that, plus an aggressive promotional campaign that found the film playing as a civics lesson in the United States Senate, have helped create a sense that “Lincoln” is the most important picture in a self-consciously important field.

In Oscar terms, however, it remains to be seen if “Lincoln” is more like “The Artist,” which last year established dominance (with help from its cheery Jack Russell terrier co-star, Uggie) and went on to win, or Mr. Spielberg’s own “Saving Private Ryan,” which seemed to lead, but watched “Shakespeare in Love” take the best picture Oscar in 1999.

Though no slouch when it comes to importance, “Zero Dark Thirty,” about the pursuit of Osama Bin Laden, may have been hurt by controversy, as several senators and a number of political critics tore into the film for its portrayal of the use of torture.

Senators Dianne Feinstein, Carl Levin and John McCain last month insisted that Michael Morell, the acting director of the Central Intelligence Agency, explain whether Ms. Bigelow and the film’s writer, Mark Boal, had perhaps been “misled” about the efficacy of torture by the C.I.A. But Oscar voters gave the film nominations for writing and nominated its star, Jessica Chastain, as best actress.

“Zero Dark Thirty” may yet connect with a larger audience – it opens in wide release on Friday – but the remaining best actress nominees all hailed from movies most Americans have not seen: Jennifer Lawrence was nominated, for “Silver Linings Playbook”; “Emmanuelle Riva,” for “Amour”; Quvenzhané Wallis (a 9-year-old), for “Beasts of the Southern Wild”; and Naomi Watts, for “The Impossible.”

For best actor, Bradley Cooper was nominated for “Silver Linings Playbook”; Joaquin Phoenix for “The Master,” about the relationships among characters in a cult; Hugh Jackman, for “Les Misérables”; and Denzel Washington, for “Flight.”

One of only two African American nominees, Mr. Washington, who played a drunken but skilled airline pilot in “Flight,” had received five nominations in the past, winning twice. (Among perennials, Meryl Streep was missing this year, though she had a Golden Globe nomination for her work in “Hope Springs.”)

Among the huge winners on Thursday was the Walt Disney Company, which had three of the five nominees in the best animated feature category — “Brave,” “Frankenweenie,” and “Wreck-It Ralph.” DreamWorks Animation, another powerhouse in the field, had none. “The Pirates! Band of Misfits,” released by Sony Pictures, and “ParaNorman,” from Focus Features, were also among the animation nominees.

“Silver Linings Playbook,” from the Weinstein Company, also came up a winner, as it took seven nominations in the top 11 categories, which were announced in a live television broadcast. Robert De Niro was nominated as best supporting actor for “Silver Linings Playbook,” and Jacki Weaver was nominated as best supporting actress. In all, it was the first film to get nominations in all four acting categories since “Reds,” which was released in 1981, according to Libby Wertin, a researcher with the Academy.

It slightly outstripped “Lincoln” in the major categories, and handily outweighed “Life of Pi,” which had no acting nominees.

Some contenders were emphatically factored out on Thursday. “Moonrise Kingdom,” which had been on some lists as a best picture contender, received a nomination only for its original screenplay, by Wes Anderson and Roman Coppola.

In keeping with recent tradition, the Academy also brushed off the best box-office performers. There were no nominations in the major categories for “The Hobbit: An Unexpected Journey,” “The Dark Knight Rises” or “Skyfall.”

The Oscar process has been especially rough this year, as the Academy began phasing out paper ballots in favor of online voting. The idea was to get quicker results, which allowed the group to break precedent by announcing its nominations in advance of the rival Golden Globes ceremony, set for Sunday.

But some of the Academy’s roughly 6,000 potential voters remained unaware of the shift until balloting was near. Others had difficulty accessing a heavily secured voting system. And the Oscar nominating vote was ultimately extended by a day — after the documentary branch members got an extension for voting on their shortlist, which was selected under new rules.

On the documentary front, the new process, which was meant to broaden the pool of voters making a first-cut of the candidates, yielded what appeared to be a fairly conventional list of either culturally hip or politically progressive nominees. Those were “5 Broken Cameras,” about Palestinian resistance to the Israeli army; “The Gatekeepers,” about the Israeli security apparatus; “How to Survive a Plague,” about AIDS; “The Invisible War,” about rape in the United States military; and “Searching for Sugar Man,” about the lost career of the singer Sixto Rodriguez.

If “Lincoln” were to win the top Oscar, it would be Disney’s first best picture other than those served up by the Miramax unit, which it acquired from Bob and Harvey Weinstein, and then sold. “Lincoln” was distributed by Disney and produced by DreamWorks Studios with the involvement of companies like Participant Media and 20th Century Fox.

Tom Hooper was bypassed as the director of “Les Misérables,” from Universal. But the film’s presumed strength among actors — Anne Hathaway was nominated as best supporting actress, along with Mr. Jackman’s best actor nomination — still make it a force to be reckoned with.

“Skyfall” will presumably make an appearance on ABC’s Oscar telecast, as part of a special retrospective on the 50-year-old James Bond franchise. Any other year, a Bond montage might be a routine bid for the pop audience. But in the wake of mass killings in Newtown, Conn., and Aurora, Colo., the tribute may pose a challenge for the show’s producers, Neil Meron and Craig Zadan, who will have to decide whether to serve up their killer-spy with or without guns.

For Mr. MacFarlane, who was nominated as writer of the lyrics for “Everybody Needs a Best Friend,” from “Ted,” the bigger challenge may be the need to wring laughs out of so many serious pictures. “Amour” finds an aging husband caring for his dying mate. In “Argo,” Iran’s revolutionary crowds crash the American embassy and begin the hostage crisis that ended the Jimmy Carter presidency.

But he is trying.

“If you don’t know who I am, just pretend I’m Donny Osmond,” he said, getting mileage from a crack about his own baby face. “We’ll get along fine.”

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Amazon steps up digital music competition with Apple






SAN FRANCISCO (Reuters) – Amazon.com Inc unveiled a service that increases competition with Apple Inc’s dominant iTunes store.


Amazon launched Amazon AutoRip, which gives customers free digital versions of music CDs they purchase from the world’s largest Internet retailer.






The digital music files are automatically stored in customer libraries in remote datacenters run by Amazon, where they are available to play or download immediately through the company’s Cloud Player service, the company said.


Amazon customers who have bought AutoRip-eligible CDs at any time since the company started selling discs in 1998 will also get digital versions of that music stored in their Cloud Player libraries for free, the company added.


More than 50,000 albums are available for AutoRip and Steve Boom, head of digital music at Amazon, said the company focused on music that has been the most popular among its customers during the past 15 years.


Albums include “21″ by Adele; “Overexposed” by Maroon 5; “Dark Side of the Moon” by Pink Floyd and “Thriller” by Michael Jackson.


Boom declined to estimate how many CDs Amazon expects to digitize through the new service. However, he noted that the company has sold hundreds of millions of CDs to millions of customers.


“When we picked those 50,000 titles we focused on having a substantial majority of our physical CD sales covered,” he added.


Amazon is hoping the new service boosts digital music sales and encourages more people to use its cloud music service.


“People will be exposed to Cloud Player and our digital music offering, which is a good thing,” Boom said. “We want to take this global.”


Amazon’s MP3 digital music business has been around since 2007, but its market share is less than 15 percent, according to The NPD Group. Apple’s iTunes store is the clear leader, with over 50 percent of the market.


Amazon is making a bigger push against iTunes now that the company’s Kindle Fire tablets are in more consumers’ hands and its Cloud Player music application is available on a range of other mobile devices, including Apple’s iPhone, iPad and iPod Touch.


(Reporting By Alistair Barr; editing by Andrew Hay)


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'Lincoln' leads Oscars with 12 nominations


BEVERLY HILLS, Calif. (AP) — The Civil War saga "Lincoln" leads the Academy Awards with 12 nominations, including best picture, director for Steven Spielberg and acting honors for Daniel Day-Lewis, Sally Field and Tommy Lee Jones.


Also among the nine nominees for best picture Thursday: the old-age love story "Amour"; the Iran hostage thriller "Argo"; the independent hit "Beasts of the Southern Wild"; the slave-revenge narrative "Django Unchained"; the musical "Les Miserables"; the shipwreck story "Life of Pi"; the lost-souls romance "Silver Linings Playbook"; and the Osama bin Laden manhunt chronicle "Zero Dark Thirty."


Harvey Weinstein produced two of the nine best picture nominees — "Django Unchained" and "Silver Linings Playbook" — and was naturally pleased.


"I am blown away! I can't say thank you enough to the Academy for their support of our films," he said in a statement. "We have a tremendous group of actors and filmmakers who we had the pleasure of working with this year and I am so happy that their achievements are being recognized."


"Life of Pi" surprisingly ran second with 11 nominations, ahead of "Zero Dark Thirty" and "Les Miserables," which had been considered potential front-runners.


More surprising were snubs in the directing category, where three favorites missed out: Ben Affleck for "Argo" and past Oscar winners Kathryn Bigelow for "Zero Dark Thirty" and Tom Hooper for "Les Miserables." Bigelow was the first woman ever the win the directing Oscar for 2009's "The Hurt Locker," while Hooper won a year later for "The King's Speech."


The best-picture category also had surprising omissions. The acclaimed first-love tale "Moonrise Kingdom" was left out and only got one nomination, for original screenplay. Also snubbed for best-picture was "The Master," a critical favorite that did manage three acting nominations for Joaquin Phoenix, Amy Adams and Philip Seymour Hoffman.


Two-time winner Spielberg earned his seventh directing nomination, and also in the mix are past winner Ang Lee for "Life of Pi" and past nominee David O. Russell for "Silver Linings Playbook." The other slots went to surprise picks who are first-time nominees: Michael Haneke for his French-language "Amour" and Benh Zeitlin for "Beasts of the Southern Wild."


"Amour" also was a best-picture surprise. The film, which won the top prize at last May's Cannes Film Festival, mainly had been considered a favorite in the foreign-language category, where it also was nominated. "Amour" had five nominations, including original screenplay and best-actress for Emmanuelle Riva.


The year's second-biggest box-office hit, "The Dark Knight Rises," was shut out entirely, even for visual effects. The omission of its predecessor, "The Dark Knight," from best-picture consideration for 2008, was largely responsible for the expansion of the Oscar category from five nominees to 10 the following year. "The Dark Knight" had earned eight nominations and won two Oscars.


Chronicling Abraham Lincoln's final months as he engineers passage of the 13th Amendment abolishing slavery, "Lincoln" stars best-actor contender Day-Lewis in a monumental performance as the 16th president, supporting-actress nominee Field as the notoriously headstrong Mary Todd Lincoln and supporting-actor prospect Jones as abolitionist firebrand Thaddeus Stevens.


Joining Day-Lewis in the best-actor field are Bradley Cooper as a psychiatric patient trying to get his life back together in "Silver Linings Playbook"; Hugh Jackman as Victor Hugo's tragic hero Jean Valjean in "Les Miserables"; Phoenix as a Navy vet who falls in with a cult in "The Master"; and Denzel Washington as a boozy airline pilot in "Flight."


Cooper had been a bit of a longshot. John Hawkes, a potential best-actor favorite, missed out for his role as a man in an iron lung aiming to lose his virginity in "The Sessions."


Nominated for best actress are Jessica Chastain as a CIA operative hunting bin Laden in "Zero Dark Thirty"; Jennifer Lawrence as a troubled young widow struggling to heal in "Silver Linings Playbook"; Riva as an ailing woman tended by her husband in "Amour"; Quvenzhane Wallis as a spirited girl on the Louisiana delta in "Beasts of the Southern Wild"; and Naomi Watts as a mother caught up in a devastating tsunami in "The Impossible."


Best actress had a wild age range: Riva is the oldest nominee ever in the category at 85, while Wallis is the youngest ever at 9.


Along with Field, supporting-actress nominees are Adams as a cult leader's devoted wife in "The Master"; Anne Hathaway as an outcast mother reduced to prostitution in "Les Miserables"; Helen Hunt as a sex surrogate in "The Sessions"; and Jacki Weaver as an unstable man's doting mom in "Silver Linings Playbook."


Besides Jones, the supporting-actor contenders are Alan Arkin as a wily Hollywood producer in "Argo"; Robert De Niro as a football-obsessed patriarch in "Silver Linings Playbook"; Hoffman as a dynamic cult leader in "The Master"; and Christoph Waltz as a genteel bounty hunter in "Django Unchained."


"Family Guy" creator Seth MacFarlane, who will host the Feb. 24 Oscars, joined Emma Stone to announce the Oscar lineup, and he scored a nomination himself, original song for "Everybody Needs a Best Friend," the tune he co-wrote for his big-screen directing debut "Ted."


"That's kind of cool I got nominated," MacFarlane deadpanned at the announcement. "I get to go to the Oscars."


Walt Disney predictably dominated the animated-feature category with three of the five nominees: "Brave," ''Frankenweenie" and "Wreck-It Ralph." Also nominated were "ParaNorman" and "The Pirates! Band of Misfits."


"I'm absolutely blown away," Rich Moore, director of "Wreck-It Ralph" said by phone. "It is weird at 5:30 in the morning to hear Emma Stone say your name. It's surreal."


"Lincoln" is Spielberg's best awards prospect since his critical peak in the 1990s, when he won best-picture and directing Oscars for "Schindler's List" and a second directing Oscar for "Saving Private Ryan." The 12 nominations for "Lincoln" matched Spielberg's personal best on "Schindler's List," which won seven Oscars.


Spielberg's latest film could vault him, Day-Lewis and Field to new heights among Hollywood's super-elite of multiple Oscar winners.


A best-picture win for "Lincoln" would be Spielberg's second, while another directing win would be his third, a feat achieved only by Frank Capra and William Wyler, who each earned three directing Oscars, and John Ford, who received four.


"Lincoln" also was the ninth best-picture nominee Spielberg has directed, moving him into a tie for second-place with Ford. Only Wyler directed more best-picture nominees, with 13.


Day-Lewis and Field both have two lead-acting Oscars already, he for "My Left Foot" and "There Will Be Blood" and she for "Norma Rae" and "Places in the Heart." A third Oscar for either would put them in rare company with previous triple winners Ingrid Bergman, Walter Brennan, Jack Nicholson and Meryl Streep. Katharine Hepburn is the record-holder with four acting Oscars.


An Oscar for Jones would be his second supporting-actor prize; he previously won for "The Fugitive."


"Lincoln" composer John Williams — whose five Oscars include three for the music of three earlier Spielberg films, "Jaws," ''E.T. the Extra-terrestrial" and "Schindler's List" — earned his 43rd nomination for best score, extending his all-time record in the category.


The Oscars feature a best-picture field that ranges from five to 10 films depending on a complex formula of ballots from the 5,856 voting members of the Academy of Motion Picture Arts and Sciences.


Winners for the 85th Oscars will be announced Feb. 24 at a ceremony aired live on ABC from Hollywood's Dolby Theatre.


___


AP Movie Critic Christy Lemire contributed to this report.


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Institute of Medicine Studying Concussions in Young Athletes





The Institute of Medicine, a federally financed research group, has started a 15-month investigation into sports-related concussions sustained by young athletes.


An ad hoc committee of scientists, which held its first meeting Monday, “will conduct a study on sports-related concussions in youth, from elementary school through young adulthood, including military personnel and their dependents,” according to the Web site of the institute, part of the National Academies of Science.


The committee will look at the causes of concussions and the “relationships to hits to the head or body during sports, and the effectiveness of protective devices and equipment.”


The committee will also review screening, diagnosis, treatment and long-term consequences of concussions and head hits.  


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Wall Street Flattens Out





Stocks rose ever so slightly on Wall Street on Thursday as stronger-than-expected exports in China, the world’s second-biggest economy, raised hopes for a more robust recovery in the global economy this year.


The Standard & Poor’s 500-stock index added 0.2 percent, the Dow Jones industrial average rose 0.1 percent and the Nasdaq composite index was flat in morning trading.


Data showed China’s export growth rebounded sharply to a seven-month high in December, a strong finish to the year after seven straight quarters of slowdown, even as demand from Europe and the United States remained subdued.


Ford shares gained 3.2 percent after it doubled its first-quarter dividend to 10 cents a share, despite a recent drop in market share.


Adding to the bullish sentiment, Spanish benchmark government bond yields fell below 5 percent to a 10-month low on the back of a strong bond auction that raised more than the targeted amount. European stock markets were mostly higher after the European Central Bank kept benchmark interest rates steady.


“The market’s more positive and it owes a lot of that to the Chinese economic data,” said Art Hogan, managing director of Lazard Capital Markets in New York, adding that the success of the Spanish auction was also of note.


Shares of the upscale jeweler Tiffany dropped 6 percent after it said earnings for the year through Jan. 31 will be at the lower end of its forecast.


Molycorp shares dropped 20 percent after the company said revenue and cash flow would be lower than expected this year due to lower rare-earth prices.


Nokia shares jumped 14 percent on Wall Street after the Finnish handset maker said its fourth-quarter results were better than expected and that the mobile phone business achieved underlying profitability.


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News Analysis: Obama Nominees in Step on Light Footprint


Carolyn Kaster/Associated Press


President Obama named John O. Brennan, right, as his choice for C.I.A. director and chose Chuck Hagel, left, to be his next defense secretary.







WASHINGTON — With the selection of a new national security team deeply suspicious of the wisdom of American military interventions around the world, President Obama appears to have ended, at least for the moment, many of the internal administration debates that played out in the Situation Room over the past four years.




He has sided, without quite saying so, with Vice President Joseph R. Biden Jr.’s view — argued, for the most part, in the confines of the White House — that caution, covert action and a modest American military footprint around the world fit the geopolitical moment. The question is whether that approach will fit the coming challenges of stopping Iran’s nuclear program and the potential collapse of Syria.


Gone for the second term are the powerful personalities, and more hawkish voices, that pressed Mr. Obama to pursue the surge in Afghanistan in 2009, a gamble championed by Secretary of State Hillary Rodham Clinton and Robert M. Gates, the former secretary of defense. Gone from the C.I.A. is the man who urged Mr. Obama to keep troops there longer, David H. Petraeus.


The new team will include two Vietnam veterans, Senator John Kerry and Chuck Hagel, who bear the scars of a war that ended when the president was a teenager, and a counterterrorism chief, John O. Brennan, who helped devise the “light footprint” strategy of limiting American interventions, whenever possible, to drones, cyberattacks and Special Operations forces. All are advocates of those low-cost, low-American-casualty tools, and all have sounded dismissive of attempts to send thousands of troops to rewire foreign nations as wasteful and ill-conceived.


Most important to Mr. Obama and his national security adviser, Tom Donilon, all three are likely to accommodate themselves, in ways their predecessors often did not, to a White House that has insisted on running national security policy from the West Wing.


“One of the characteristics of this administration has been that decision-making has been centered in the White House,” said Dennis B. Ross, a Mideast expert who left the Obama administration a year ago but never wandered far from some of its key debates. “And most second-term administrations don’t change their sociology.”


But if they grab hold of the national security levers after what many predict will be, for Mr. Hagel and Mr. Brennan, bruising confirmation hearings, they will confront problems that may test whether the light footprint carries enough weight.


“Issues 1 and 2 will be cutting the defense budget and confronting Iran,” said Michael Mandelbaum, a political scientist whose 2010 book, “The Frugal Superpower,” dealt with the challenge of trying to manage the world on the cheap. “And then you will have issues like Syria, which test the question of whether you can manage to control a dangerous situation with no boots on the ground — and unless something dramatic changes, there will be no boots.”


Mr. Hagel, who was both a senator and a cellphone entrepreneur, has long been a critic of Pentagon bloat. But others with business experience, like Donald Rumsfeld, have believed they could bring market discipline to one of the country’s most sprawling enterprises, only to discover that killing off unneeded weapons systems has almost nothing to do with business decisions and everything to do with the politics of Congressional districts and campaign funds.


Mr. Obama’s bet was that by appointing a Republican, he will better his chances of overcoming those obstacles. What he discovered even before announcing Mr. Hagel’s appointment is that the former senator burned many bridges with his Republican colleagues, in part with his outspoken opposition to the Iraq war, despite voting in 2002 to authorize military action, and to the 2008 surge when President George W. Bush was still in office.


“If the president thinks Chuck Hagel can get him the Republican votes to downsize the Pentagon,” said one former senior aide to Mr. Bush, who declined to speak on the record, “I think he is in for a very rude surprise.”


Then there is Iran, which will be a test for all three men, for different reasons. Mr. Hagel has been particularly vocal about the dangers of a military confrontation with Tehran. While both Mr. Gates and his successor, Leon E. Panetta, expressed similar concerns at various points in the first term, Mr. Hagel’s view is considerably to the left of Mr. Obama’s. The president has, gradually, endorsed “coercive diplomacy,” telling the American Israel Public Affairs Committee in March, “As I’ve made clear time and again during the course of my presidency, I will not hesitate to use force when it is necessary to defend the United States and its interests.”


But Mr. Hagel has opposed unilateral sanctions and suggested that threatening Iran just closes down opportunities for dialogue.


“The key to coercive diplomacy is that the side you are trying to influence is convinced you are willing to follow through on the threat,” said Mr. Ross, who drafted some of those threats. “The president has been clear, but from others there have been mixed messages.”


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Lawyers in Ohio football rape case want trial moved






(Reuters) – Attorneys for two Ohio teenage football players accused of raping a 16-year-old student have asked that the trial be moved because potential witnesses are afraid to come forward in defense of the boys, one of the lawyers said on Monday.


Walter Madison, the attorney for one of the accused rapists, Ma’lik Richmon, said social media efforts to bring the alleged rape into the national spotlight have led to an atmosphere of intimidation and coercion.






“This has a chilling effect on witnesses who could come forward to be part of this process so my client can get a fair and full proceeding,” he told Reuters. “So, we’re left without the opportunity to make our case. That’s pretty serious.”


Richmond and Trenton Mays, both 16 and members of the Steubenville High School football team, are charged with raping a 16-year-old fellow student at a party last August.


The two students are set to be tried as juveniles in February in Steubenville, a city of 19,000 about 40 miles west of Pittsburgh.


Madison said his client’s mother has had to change her cell phone number multiple times due to threats and harassment.


Last week, the online activist group Anonymous made public a picture allegedly of the rape victim, being carried by her wrists and ankles by two young men, and of a video that showed several other young men joking about an alleged assault.


Madison said that Richmond is not seen in the video.


A county sheriff under fire for how he has handled the high school rape investigation faced down a crowd of protestors on Saturday and said no new charges will be brought against anyone involved in the case.


Activists say there had been a cover-up by local officials to protect the integrity of the high school’s football program.


Meanwhile, a petition to the White House calling for the two rape suspects to be tried as adults reached 25,000 signatures Monday, the threshold required to receive a response from the Obama Administration.


Moving the case to the adult court system would allow for a jury trial and a more severe penalty, the petition says.


“This is a serious offense and this needs to be an example for everyone that this type of behavior should not, and will not be tolerated in our society,” it says.


The petition, created December 25, more than doubled its number of supporters overnight. It had 11,000 signatures on Sunday.


It was submitted to the White House through its online petition website, We The People. Now that it has the required 25,000 signatures, the Obama Administration will give an official statement at some point in the future. The petition has no legal impact.


(Editing by Paul Thomasch and Andrew Hay)


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Oprah to interview Armstrong for Jan. 17 show


LOS ANGELES (AP) — Lance Armstrong has agreed to an interview with Oprah Winfrey in which he is to address allegations he used performance-enhancing drugs during a career in which he won seven Tour de France titles.


According to Winfrey's website on Tuesday, this will be a "no holds-barred interview." It will be the first with Armstrong since his cycling career crumbled under the weight of a massive report by the U.S. Anti-Doping Agency. The report detailed accusations of drug use by Armstrong and teammates on his U.S. Postal Service teams.


It's unclear if the interview at Armstrong's home in Austin, Texas, has already been taped. Nicole Nichols, a spokeswoman for Oprah Winfrey Network & Harpo Studios, declined comment.


The show will be broadcast Jan. 17 at 9 p.m. EST on OWN and Oprah.com.


Armstrong has strongly denied the doping charges that led to him being stripped of his Tour de France titles, but The New York Times reported Friday he has told associates he is considering acknowledging the use of performance enhancers.


The newspaper report cited anonymous sources, and Armstrong lawyer Tim Herman told The Associated Press that night he had no knowledge of Armstrong considering a confession.


Earlier Tuesday, "60 Minutes Sports" reported the head of USADA told the show a representative for Armstrong offered the agency a "donation" in excess of $150,000 several years before an investigation by the organization led to the loss of Armstrong's Tour de France titles.


In an interview for the premiere on Showtime on Wednesday night, USADA chief executive Travis Tygart said he was "stunned" when he received the offer in 2004.


"It was a clear conflict of interest for USADA," Tygart said. "We had no hesitation in rejecting that offer."


Herman denied such an offer was made.


"No truth to that story," Herman wrote Tuesday in an email to the AP. "First Lance heard of it was today. He never made any such contribution or suggestion."


Tygart was traveling and did not respond to requests from the AP for comment. USADA spokeswoman Annie Skinner said Tygart's comments from the interview were accurate. In it, he reiterates what he told the AP last fall: He was surprised when federal investigators abruptly closed their two-year investigation into Armstrong and his business dealings, then refused to share any evidence they gathered.


"You'll have to ask the feds why they shut down," Tygart told the AP. "They enforce federal criminal laws. We enforce sports anti-doping violations. They're totally separate. We've done our job."


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Gaps Seen in Therapy for Suicidal Teenagers





Most adolescents who plan or attempt suicide have already received at least some mental health treatment, raising questions about the effectiveness of current approaches to helping troubled youths, according to the largest in-depth analysis to date of suicidal behaviors in American teenagers.




The study, in the journal JAMA Psychiatry, found that 55 percent of suicidal teenagers had received some therapy before they thought about suicide, planned it or tried to kill themselves, contradicting the widely held belief that suicide is due in part to a lack of access to treatment.


The findings, based on interviews with a nationwide sample of more than 6,000 teenagers and at least one parent of each, linked suicidal behavior to complex combinations of mood disorders like depression and behavior problems like attention-deficit and eating disorders, as well as alcohol and drug abuse.


The study found that about one in eight teenagers had persistent suicidal thoughts at some point, and that about a third of those who had suicidal thoughts had made an attempt, usually within a year of having the idea.


Previous studies have had similar findings, based on smaller, regional samples. But the new study is the first to suggest, in a large nationwide sample, that access to treatment does not make a big difference.


The study suggests that effective treatment for severely suicidal teenagers must address not just mood disorders, but also behavior problems that can lead to impulsive acts, experts said. According to the Centers for Disease Control and Prevention, 1,386 people between the ages of 13 and 18 committed suicide in 2010, the latest year for which numbers are available.


“I think one of the take-aways here is that treatment for depression may be necessary but not sufficient to prevent kids from attempting suicide,” said Dr. David Brent, a professor of psychiatry at the University of Pittsburgh, who was not involved in the study. “We simply do not have empirically validated treatments for recurrent suicidal behavior.”


The report said nothing about whether the therapies given were state of the art or carefully done, said Matt Nock, a professor of psychology at Harvard and the lead author, and it is possible that some of the treatments prevented suicide attempts. “But it’s telling us we’ve got a long way to go to do this right,” Dr. Nock said. His co-authors included Ronald C. Kessler of Harvard and researchers from Boston University and Children’s Hospital Boston.


Margaret McConnell, a consultant in Alexandria, Va., said her daughter Alice, who killed herself in 2006 at the age of 17, was getting treatment at the time. “I think there might have been some carelessness in the way the treatment was done,” Ms. McConnell said, “and I was trusting a 17-year-old to manage her own medication. We found out after we lost her that she wasn’t taking it regularly.”


In the study, researchers surveyed 6,483 adolescents from the ages of 13 to 18 and found that 9 percent of male teenagers and 15 percent of female teenagers experienced some stretch of having persistent suicidal thoughts. Among girls, 5 percent made suicide plans and 6 percent made at least one attempt (some were unplanned).


Among boys, 3 percent made plans and 2 percent carried out attempts, which tended to be more lethal than girls’ attempts.


(Suicidal thinking or behavior was virtually unheard-of before age 10.)


Over all, about one-third of teenagers with persistent suicidal thoughts went on to make an attempt to take their own lives.


Almost all of the suicidal adolescents in the study qualified for some psychiatric diagnosis, whether depression, phobias or generalized anxiety disorder. Those with an added behavior problem — attention-deficit disorder, substance abuse, explosive anger — were more likely to act on thoughts of self-harm, the study found.


Doctors have tested a range of therapies to prevent or reduce recurrent suicidal behaviors, with mixed success. Medications can ease depression, but in some cases they can increase suicidal thinking. Talk therapy can contain some behavior problems, but not all.


One approach, called dialectical behavior therapy, has proved effective in reducing hospitalizations and suicide attempts in, among others, people with borderline personality disorder, who are highly prone to self-harm.


But suicidal teenagers who have a mixture of mood and behavior issues are difficult to reach. In one 2011 study, researchers at George Mason University reduced suicide attempts, hospitalizations, drinking and drug use among suicidal adolescent substance abusers. The study found that a combination of intensive treatments — talk therapy for mood problems, family-based therapy for behavior issues and patient-led reduction in drug use — was more effective than regular therapies.


“But that’s just one study, and it’s small,” said Dr. Brent of the University of Pittsburgh. “We can treat components of the overall problem, but that’s about all.”


Ms. McConnell said that her daughter’s depression had seemed mild and that there was no warning that she would take her life. “I think therapy does help a lot of people, if it’s handled right,” she said.


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