The Lede: Inside the Fed's 2007 Deliberations

On Friday the Federal Reserve released the transcripts of its discussions in 2007, the year the housing market, the financial markets, and the broader economy began to unravel. Focusing on the crucial period from August to December, reporters from The Times shared their findings on what the transcripts reveal in the blog entries and tweets below.


This post has been revised to reflect the following correction:

Correction: January 18, 2013

An earlier version of the 12:51 p.m. entry in this post misidentified the speaker at a December 2007 meeting who said, "I’m actually very, very worried," describing his concerns about derivative products. It was Frederic Mishkin, not Eric S. Rosengren.

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Mali moves to keep militants out of another town; EU mission OKd









JOHANNESBURG, South Africa — Malian government forces Thursday reportedly pressed to keep Al Qaeda-linked militants out of the village of Banamba as rebels struck fear into nearby Diabaly.


The European Union, meanwhile, authorized sending a noncombat training mission to the West African nation.


Malian officials sent about 100 soldiers to Banamba, 90 miles north of the capital, Bamako, after sightings of suspected Islamist militants in the area, according to news reports.





Al Qaeda militias have already infiltrated Diabaly, in effect using the population as a human shield, moving around in small groups to avoid being targeted in airstrikes by France, taking over homes and preventing residents from leaving, the reports said.


"They stationed themselves outside my house with a heavy weapon. I don't know what sort it was," resident Thiemogo Coulibaly told the Associated Press. "After that came the bombing, which went on from 7:30 a.m. to 2 p.m., and after that, one of them [militants] jumped over my garden wall to grab the keys to my car."


African forces from outside Mali are expected to arrive within days. Assistance from Western powers other than France, the former colonial power in Mali and other parts of West Africa, has been limited to logistical and intelligence support.


The EU said its mission would provide instruction to the Malian army on matters of command and control, logistics, civilian protection and humanitarian law.


EU foreign ministers said they hoped to launch the training mission to Mali by mid-February. They condemned the "acts being carried out by terrorist groups against the Malian armed forces," but also warned both sides of the conflict to respect civilian safety and human rights. "All the parties and individuals involved in Mali will be held responsible for their actions," the ministers said.


Although dispatching the training team will require another decision by European leaders, the move Thursday was aimed at bolstering support for the Malian government and came days after major EU power France launched its own military operation.


"The threat of jihadi terrorists is something that should be a matter of great concern to all of us," Dutch Foreign Minister Frans Timmermans said outside a meeting with his EU counterparts in Brussels. "And there is not one European country that can hide if this threat would present itself to the European continent."


Malian forces are trying to turn back militants who have established control over much of northern Mali and who have tried pushing south toward Bamako. French airstrikes and troops have backed up the Malian military, which has appealed for outside help.


The EU training mission would last 15 months, cost about $16 million and be based in Bamako. Officials named a French general to head the team, which would comprise about 450 people.


The main weakness in France's bid to oust what it sees as a terrorist threat on its backdoor step, analysts say, is the lack of a large combat and capable ground force strong enough to drive out the well-armed, battle-hardened militias.


Militant forces gained control of Diabaly on Monday, several days after French airstrikes began. The insurgents took Malian forces by surprise, exposing the weakness of the local army.


About 1,400 French forces are in Mali, French Defense Minister Jean-Yves Le Drian said, with an additional 1,100 due to arrive as the battle unfolds.


About 200 Nigerian troops are also expected in Mali within days, the first of 3,300 African forces promised by neighboring countries, many of whom have little experience in the harsh desert terrain they will face in Mali.


France has outlined an ambitious operation to oust Ansar Dine and other Al Qaeda-linked groups and to restore territorial integrity and political stability.


robyn.dixon@latimes.com


henry.chu@latimes.com


Dixon reported from Johannesburg and Chu from London.





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Facebook Could Bury Video-Calling Partner Skype With a Tiny App Update



Facebook assembled the press Tuesday to announce the launch of its Graph Search. It was big news, but what the company should have announced is the initial launch of a VoIP service to one of the largest customer bases in the world.


On Wednesday, Facebook added a free voice calling feature to its iOS Messenger app in the United States. The feature is iOS-only, and Facebook offered no additional details to The Verge’s inquiries as to when the feature would land on additional operating systems or when it would launch internationally.


Coy question-dodging aside, what Facebook did with Wednesday’s news is take the first step toward leapfrogging its video-calling partner, Skype. Skype is owned by Microsoft, and Microsoft’s Bing search engine powers Facebook’s out-of-network searches.


When asked if Facebook and Skype were partnering to bring VoIP to Facebook apps, a Skype spokesperson told Wired via e-mail a simple “No,” and would not comment beyond that. Does this mean Facebook developed its own VoIP offering? More importantly, is Facebook charging full steam into the VoIP world?


The new feature isn’t exactly easy to find within the iOS app. To access the free voice calls, you need to tap on a friend, then tap on the “i” in the top right corner. The “Free Call” option should appear under your friend’s photo.


In addition to the convoluted process to make a call, there are other hoops in the U.S. and Canada-only initial rollout. If you have a mobile device, chances are you have plenty of minutes on your voice plan to call your friends. A U.S.-only Facebook VoIP service is nice, but it’s not something that will impact many users. On the other hand, once this feature goes international and covers all the major platforms, that’s when Facebook starts cutting into Skype’s bread and butter.


Skype charges for international calls. It’s less expensive than a call from a land or mobile line. If Facebook were to roll its free voice feature out internationally, suddenly all those payphone calls are free. It’s not just the free calls that’ll hurt Skype; it’s the fact that the company can’t compete with Facebook’s 1 billion users on a monthly basis.


“Facebook does have a very big installed base that already uses the instant messaging function within Facebook,” IHS analyst Francis Sideco told Wired. “It definitely has a good base in which to attack this market. It really depends on the business model and how they go to market with it.”


Skype touted 45 million concurrent users in October. That’s a great milestone for the VoIP service, but it pales in comparison to Facebook’s billion users. If all those Facebookers suddenly gained access to free phone calls, it would not only cut into Skype and other VoIP services like Vonage; it’d also cut into the profits of the telecoms that still charge an arm and a leg to call friends and family in other countries.


IHS analyst Ian Fogg told Wired that delivering VoIP over messenger gives the social network another way to get its users to launch an app.


“It helps boost the engagement level of Facebook user base and indirectly supports all of Facebook advertising businesses,” Fogg says.


But, he also notes, “Just because it’s there doesn’t mean they’ll use it. They may just keep sharing events and posting photos.”


Even if you build a something great, it doesn’t mean that subscribers will flock to it. When’s the last time you got an invite to a Facebook Video Call?


Still, Wednesday’s update could be the first step toward changing the way we communicate internationally, and that could be bigger than searching for your friend’s favorite pizza places in Houston.


Facebook representatives were not available for comment by press time.


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“Dear Abby” advice columnist Pauline Phillips dead at 94






(Reuters) – Pauline Phillips, the “Dear Abbynewspaper columnist who dished out advice to millions of confused, troubled and lovesick readers in America and around the world, has died at the age of 94, her daughter said on Thursday.


Phillips, whose twin sister Esther wrote the rival “Ask Ann Landers” column, died in Minneapolis on Wednesday after a long battle with Alzheimer’s disease.






“I have lost my mother, my mentor and my best friend,” daughter Jeanne Phillips said in a statement released by the syndicator of the “Dear Abby” column, Universal Uclick.


“My mother leaves very big high heels to fill with a legacy of compassion, commitment and positive social change. I will honor her memory every day by continuing this legacy,” Jeanne Phillips added


Phillips’ family announced in August 2002 that she had been diagnosed with Alzheimer’s disease.


Phillips had brought daughter Jeanne in to collaborate on the syndicated newspaper column in 1987 and in December 2002 turned over all responsibility for it to her.


(Reporting By Eric Kelsey; Editing by Sandra Maler)


(This story corrects name of her sister’s column in 2nd paragraph)


Celebrity News Headlines – Yahoo! News





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Life, Interrupted: Brotherly Love

Life, Interrupted

Suleika Jaouad writes about her experiences as a young adult with cancer.

There are a lot of things about having cancer in your 20s that feel absurd. One of those instances was when I found myself calling my brother Adam on Skype while he was studying abroad in Argentina to tell him that I had just been diagnosed with leukemia and that — no pressure — he was my only hope for a cure.

Today, my brother and I share almost identical DNA, the result of a successful bone marrow transplant I had last April using his healthy stem cells. But Adam and I couldn’t be more different. Like a lot of siblings, we got along swimmingly at one moment and were in each other’s hair the next. My younger brother by two years, he said I was a bossy older sister. I, of course, thought I knew best for my little brother and wanted him to see the world how I did. My brother is quieter, more reflective. I’m a chronic social butterfly who is probably a bit too impulsive and self-serious. I dreamed of dancing in the New York City Ballet, and he imagined himself playing in the N.B.A. While the sounds of the rapper Mos Def blared from Adam’s room growing up, I practiced for concerto competitions. Friends joked that one of us had to be adopted. We even look different, some people say. But really, we’re just siblings like any others.

When I was diagnosed with cancer at age 22, I learned just how much cancer affects families when it affects individuals. My doctors informed me that I had a high-risk form of leukemia and that a bone marrow transplant was my only shot at a cure. ‘Did I have any siblings?’ the doctors asked immediately. That would be my best chance to find a bone marrow match. Suddenly, everyone in our family was leaning on the little brother. He was in his last semester of college, and while his friends were applying to jobs and partying the final weeks of the school year away, he was soon shuttling from upstate New York to New York City for appointments with the transplant doctors.

I’d heard of organ transplants before, but what was a bone marrow transplant? The extent of my knowledge about bone marrow came from French cuisine: the fancy dish occasionally served with a side of toasted baguette.

Jokes aside, I learned that cancer patients become quick studies in the human body and how cancer treatment works. The thought of going through a bone marrow transplant, which in my case called for a life-threatening dose of chemotherapy followed by a total replacement of my body’s bone marrow, was scary enough. But then I learned that finding a donor can be the scariest part of all.

It turns out that not all transplants are created equal. Without a match, the path to a cure becomes much less certain, in many cases even impossible. This is particularly true for minorities and people from mixed ethnic backgrounds, groups that are severely underrepresented in bone marrow registries. As a first generation American, the child of a Swiss mother and Tunisian father, I suddenly found myself in a scary place. My doctors worried that a global, harried search for a bone marrow match would delay critical treatment for my fast-moving leukemia.

That meant that my younger brother was my best hope — but my doctors were careful to measure hope with reality. Siblings are the best chance for a match, but a match only happens about 25 percent of the time.

To our relief, results showed that my brother was a perfect match: a 10-out-of-10 on the donor scale. It was only then that it struck me how lucky I had been. Doctors never said it this way, but without a match, my chances of living through the next year were low. I have met many people since who, after dozens of efforts to encourage potential bone marrow donors to sign up, still have not found a match. Adding your name to the bone marrow registry is quick, easy and painless — you can sign up at marrow.org — and it just takes a swab of a Q-tip to get your DNA. For cancer patients around the world, it could mean a cure.

The bone marrow transplant procedure itself can be dangerous, but it is swift, which makes it feel strangely anti-climactic. On “Day Zero,” my brother’s stem cells dripped into my veins from a hanging I.V. bag, and it was all over in minutes. Doctors tell me that the hardest part of the transplant is recovering from it. I’ve found that to be true, and I’ve also recognized that the same is true for Adam. As I slowly grow stronger, my little brother has assumed a caretaker role in my life. I carry his blood cells — the ones keeping me alive — and he is carrying the responsibility, and often fear and anxiety, of the loving onlooker. He tells me I’m still a bossy older sister. But our relationship is now changed forever. I have to look to him for support and guidance more than I ever have. He’ll always be my little brother, but he’s growing up fast.


Suleika Jaouad (pronounced su-LAKE-uh ja-WAD) is a 24-year-old writer who lives in New York City. Her column, “Life, Interrupted,” chronicling her experiences as a young adult with cancer, appears regularly on Well. Follow @suleikajaouad on Twitter.

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An Insurer, UnitedHealth, Reports a Slight Drop in Income





The UnitedHealth Group, the nation’s largest health insurer, reported a slight drop in its fourth-quarter net income on Thursday as medical costs rose, but its revenue increased more than 11 percent, helped by growth in its Medicare, care management, technology and international businesses.




The company also outlined its plans to participate in the new health exchanges that will be established under the 2010 Affordable Care Act, which are expected to add millions to the ranks of the insured. It said it expected to start by participating in 10 to 25 exchanges, perhaps more, though it has no firm commitment to that range.


“We will only participate in exchanges that we assess to be fair, commercially sustainable, and provide a reasonable return on the capital they will require,” the company’s chief executive, Stephen J. Hemsley, told analysts on a conference call.


The government-subsidized exchanges will offer insurance plans sold by private insurers like UnitedHealth. So far 17 states and the District of Columbia have received conditional approval to establish their own exchanges.


The company said its fourth-quarter profit rose to $1.20 a share from $1.17 a year earlier, as the number of outstanding shares fell. But its net income slipped 1 percent, to $1.24 billion from $1.25 billion a year earlier. Revenue rose to $28.8 billion from $25.9 billion.


Analysts had expected earnings of $1.19 a share and sales of $28.2 billion, according to a survey by Thomson Reuters.


The company said the unusual number of flu cases this year added $50 million in incremental costs, a figure analysts found reassuring.


“Over all, these results were strong, which should ease market concerns about the impact of the elevated flu season on the group,” said Michael Wiederhorn, an analyst at Oppenheimer, in a research note.


For 2013, UnitedHealth reiterated its forecast for revenue of $123 billion to $124 billion, up from $110.6 billion in 2012. It expects earnings of $5.25 to $5.50 a share, compared with $5.28 in 2012.


Analysts had been expecting earnings of $5.55 a share on revenue of $121.11 billion.


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Kaspersky Lab reports major malware discovery









MOSCOW — In what is being called a new hunt for Red October, a Russian cyber-security company says it has discovered a major international malware system that has attacked and compromised the computers of government agencies, diplomatic consulates, research centers and defense installations, among other sensitive institutions.


The malware has siphoned off terabytes' worth of information, much of it classified, researchers with Moscow-based Kaspersky Lab said in a report this week. The origin of the program and the motives of the attackers remain elusive, but there are hints that the programmers are Russian, the report says.


"Last October we first received from our clients samples of something we soon gathered was not just a malware program but a multi-component attack platform, initially targeting embassies around the world," Vitaly Kamlyuk, a senior anti-virus expert at Kaspersky, said in an interview Wednesday. "We called the virus 'Red October' because we detected it in October and because it required a level of red-alert attention to tackle."





Similar to the Flame virus, a now-defunct spyware program Kaspersky thwarted last year, the new virus usually infiltrates computers through an email attachment camouflaged to mimic ordinary business correspondence, the expert said.


"One embassy was looking to buy a car and received the virus in a car sale proposal they soon found in their inbox," Kamlyuk said.


Kaspersky, a leading developer of commercial anti-virus software, said it found victims of the malware with IP addresses in 39 countries, led by Switzerland, Kazakhstan and Greece. The most common targets included embassies, government agencies and research institutes, as well as aerospace and energy companies.


Kaspersky said the malware was probably being operated by a government or criminal organization large enough to employ at least two dozen highly trained programmers.


Independent experts in the United States offered differing views on who might be responsible.


"The two primary suspects for this operation would have been either Russia or China, just based on some of the data," said John Bumgarner, research director for the U.S. Cyber Consequences Unit, a nongovernmental think tank.


But researcher Jeffrey Carr, author of "Inside Cyber Warfare," theorized that the malware was the work of the foreign intelligence service of a NATO or European Union country, and that the intent was to spy on Russian embassies.


"It's a pretty good guess" that Russia's spy service, the FSB, approached Kaspersky and asked the firm to investigate, Carr said. "One of the indications was that they were specifically looking for Russian documents."


Kaspersky researchers said the spyware, when first installed, might be only several hundred kilobytes in size, minuscule by modern computer standards. But as it gets established and communicates with its controllers, it may grow to several megabytes.


The virus records the names of the users, their IP addresses, information stored on their processors and local disks, the history of browsers, logins and passwords, and the records of devices plugged into USB ports, including smartphones, according to the report.


Like the Flame program, the new virus can record screen shots, as well as keystrokes.


Evidence of the Red October virus dates to May 2007, Kamlyuk said. The program was embedded in Microsoft Excel and Word documents that had been used by Chinese hackers against Asian companies and Tibetan political activists, Kamlyuk said.


"But soon enough," he said, "we realized that, despite its obvious Chinese roots and the fact that no agencies in China were in fact targets of the new malicious program, the Chinese hackers had nothing to do with Red October."


The language used in the malware was primarily English, but not that of a native English speaker. It included Cyrillic symbols and transliterations of terms from Russian computer jargon, the researchers said.


For instance, Kamlyuk said, the malware sometimes uses the Russian word "zakladka" for "bookmark" or "marker" and "proga" for "programs."


"Many domain names of the malware were registered under fake Russian names and addresses too," he said.


"Now we have come to the realization that we are dealing with something programmed by Russian-speaking experts, based on Chinese hackers' exploit documents and mostly aimed at embassies of and other targets in Russia and its former Soviet satellites," Kamlyuk said.


Sergei Karaganov, honorary chairman of the Council on Foreign and Defense Policy, a Moscow-based think tank, said in an interview that such cyber-espionage is increasingly common and that Russia and other countries have attempted to create international protocols to combat it.


"But every time, their attempts have been thwarted by the stiff resistance on the part of the United States, which probably counts too much on its supremacy in this sphere," he said. "On the other hand, I wouldn't rule out the possibility of this being an ingenious trick on the part of Kaspersky Lab to boost their trade."


sergei.loiko@latimes.com


Times staff writer Ken Dilanian in Washington contributed to this report.





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When Time Is Short, Go Aerobic to Slim Down



It’s the time of year when we promise ourselves that we’re going to eat better (and less), exercise more and drop some weight. Turns out you might want to skip the weight bench and hit the treadmill if you want to keep that last resolution but don’t have a lot of time to work out.


Researchers at Duke University have examined the impact of aerobic and resistance training on body and fat mass in overweight and obese adults and concluded that when it comes to losing weight, aerobic exercise has an edge.


“If you’re overweight, it’s good to lose fat and body weight,” Dr. Leslie Willis, an exercise physiologist at Duke and lead author of the study, said of aerobic exercise. “Spend time doing cardio training if that’s your main goal.”


She noted, however that she isn’t saying that resistance training is by any means a bad thing, and in fact remains vital because it promotes lean body mass — which becomes more important as we age.


The study, published last month in the Journal of Applied Physiology, surveyed 234 adults aged 18 to 70 who were overweight or obese. They participated in one of three eight-month programs consisting of aerobic training, resistance training and a combination of the two. The aerobic training group exercised at 70 to 85 percent maximum heart rate for 45 minutes three times a week. The resistance training group did eight to 12 repetitions on resistance machines, increasing weight as time progressed so they’d remain challenged. The remaining group combined the regimens of both groups. When they were done, each participant was weighed, measured and tested for cardio fitness, body composition and strength.


The study found the aerobic training group and combination groups lost the most weight, around 4 pounds. Those who did resistance training alone actually gained a similar amount of weight in lean body mass. While the cardio group lost weight, they also lost lean body mass. The cardio and combination groups also saw a reduction in waistline, the cardio group losing 1 and combination group losing 1.66 square centimeters. These groups also lost 1 and 2 percent body fat, respectively, whereas the resistance group saw little to no change. However, in the aerobic group, there was no alteration of lean body mass like there was in the groups that had some sort of resistance regimen.


Read this way, the study suggests that if you only have a few hours a week to work out and your goal is losing weight, concentrate your energy on aerobic workouts. It also shows that if you have the time, resistance training plus cardio is best to build lean body mass.


A problem, however, is that sometimes studies like this are taken too literally, said Dr. Abbie Smith-Ryan, an exercise and sports scientist at UNC. Although the science behind the study is “flawless” and adds great data to the body of knowledge on the subject, she said, it’s also important to consider additional practical factors before changing your workout routine.


“When I look at the changes in body fat alone,” she said, “it was just 4 pounds. While statistically significant, we would hope to see a larger change in body fat and weight with such a comprehensive training program.”


Much of Smith-Ryan’s research is in high-intensity interval training, where she noted that over less time performed a week, they are seeing some large changes. She agrees, though, that you shouldn’t tell people to stop resistance training, which can directly and indirectly influence metabolism by breaking down our muscles. The repair process is where the caloric demand arises, and the more intense the workout, the more calories we burn rebuilding those muscles.


“This to me doesn’t say, ‘Don’t do resistance training training, or just do aerobic training,’” she said. “They are both important. This study also highlights the importance of nutrition. Exercise is not only the important part of weight loss; nutrition is a big factor. The subjects were on a 2,000-calorie diet, which is practical, but there was such a small change in body fat and weight over a six-month period.


The main takeaway, then, is to find something that fits your goals (losing pounds, changing your shape, improving your cardio fitness) that you will stick with. Chances are if you only lose a few pounds and a percent or two in body fat in eight weeks, you won’t stick with it. Those looking to change their overall look need to up the ante with intensity and frequency. Oh, and eat less.


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Fox hires Dennis Kucinich as analyst






NEW YORK (AP) — Days before President Barack Obama‘s inauguration for a second term in office, Fox News Channel has signed Dennis Kucinich, one of his former opponents, to be a regular contributor.


Kucinich, a presidential candidate in 2004 and 2008 who ended 16 years in Congress two weeks ago, will make his debut as a Fox contributor on Thursday’s edition of “The O’Reilly Factor,” the network said Wednesday.






“I’ve always been impressed with Rep. Kucinich’s fearlessness and thoughtfulness about important issues,” Fox News Chairman Roger Ailes said. “His willingness to take a stand from his point of view makes him a valuable voice in our country’s debate.”


Fox is the nation’s top-ranked cable news network, particularly popular with Republicans. Its big-name Republican contributors include Karl Rove, Sarah Palin and John Bolton. Democrats in the Fox stable include Evan Bayh, Joe Trippi and Bob Beckel.


Kucinich was elected to the Cleveland city council at age 23 and, at 31, became one of the nation’s youngest mayors. He’s also been an Ohio state senator and run his own communications and marketing firm.


“Fox News has always provided me with an opportunity to share my perspective with its enormous viewership,” he said.


Entertainment News Headlines – Yahoo! News





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Study Confirms Benefits of Flu Vaccine for Pregnant Women


While everyone is being urged to get the flu vaccine as soon as possible, some pregnant women avoid it in the belief that it may harm their babies. A large new study confirms that they should be much more afraid of the flu than the vaccine.


Norwegian researchers studied fetal death among 113,331 women pregnant during the H1N1 flu pandemic of 2009-2010. Some 54,065 women were unvaccinated, 31,912 were vaccinated during pregnancy, and 27,354 were vaccinated after delivery. The scientists then reviewed hospitalizations and doctor visits for the flu among the women.


The results were published on Thursday in The New England Journal of Medicine.


The flu vaccine was not associated with an increased risk for fetal death, the researchers found, and getting the shot during pregnancy reduced the risk of the mother getting the flu by about 70 percent. That was important, because fetuses whose mothers got the flu were much more likely to die.


Unvaccinated women had a 25 percent higher risk of fetal death during the pandemic than those who had had the shot. Among pregnant women with a clinical diagnosis of influenza, the risk of fetal death was nearly doubled. In all, there were 16 fetal deaths among the 2,278 women who were diagnosed with influenza during pregnancy.


Dr. Marian Knight, a professor at the perinatal epidemiology unit of the University of Oxford, who was not involved in the research, called it “a high-quality national study” that shows “there is no evidence of an increased risk of fetal death in women who have been immunized. Clinicians and women can be reassured about the safety of the vaccine in the second and third trimesters of pregnancy.”


The Norwegian health system records vaccinations of individuals and maintains linked registries to track effects and side effects. The lead author, Dr. Camilla Stoltenberg, director of the Norwegian Institute of Public Health, said that there are few countries with such complete records.


“This is a great study,” said Dr. Denise J. Jamieson, an obstetrician and a medical officer at the Centers for Disease Control and Prevention, who was not involved in the work. “It’s nicely done, with good data, and it’s additional information about the importance of the flu vaccine for pregnant women. It shows that it’s effective and might reduce the risk for fetal death.”


In Norway, the vaccine is recommended only in the second and third trimesters, so the study includes little data on vaccination in the first trimester. The C.D.C. recommends the vaccine for all pregnant women, regardless of trimester.


“We knew from other studies that the vaccine protects the woman and the newborn,” Dr. Stoltenberg said. “This study clearly indicates that it protects fetuses as well. I seriously suggest that pregnant women get vaccinated during every flu season.”


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