The Lede Blog: How the Senate Hearing on Benghazi Unfolded

Visit NBCNews.com for breaking news, world news, and news about the economy

The Lede is following Secretary of State Hillary Rodham Clinton’s testimony Wednesday before the House Foreign Affairs Committee about the Sept. 11, 2012, attacks on the American Consulate in the eastern city of Benghazi, Libya, that killed Ambassador Chris Stevens and three other Americans. Earlier today, she testified before the Senate Foreign Relations Committee .

At a House Committee hearing last October investigating the attack, as reported on The Lede, State Department officials and security experts who served on the ground offered conflicting assessments about what resources were requested and made available to deal with growing security concerns in Tripoli and Benghazi.

Mrs. Clinton had been scheduled to testify before Congress last month, but an illness, a concussion and a blood clot near her brain forced her to postpone her appearance.

As our colleagues Michael R. Gordon and Eric Schmitt reported, four State Department officials were removed from their posts on last month after an independent panel criticized the “grossly inadequate” security at a diplomatic compound in Benghazi.

Read More..

DealBook: Egan-Jones Barred for 18 Months on Some Ratings

The Securities and Exchange Commission said on Tuesday that Egan-Jones, the upstart credit ratings firm run by Sean Egan, had agreed to an 18-month ban from rating asset-backed and government securities issuers as a nationally recognized statistical rating organization.

The agreement settles accusations that the firm made misstatements about its record when applying for a government designation, the S.E.C. said.

“Accuracy and transparency in the registration process are essential to the commission’s oversight of credit rating agencies,” Robert Khuzami, director of the S.E.C.’s division of enforcement, said in a statement.

Egan-Jones, which also agreed to correct any deficiencies and submit a report describing those steps, can still rate asset-backed and government securities issuers during the ban — just not with the government blessing that confers special authority on its opinions. The firm retains that designation for its other ratings categories.

Egan-Jones plans to reapply for the designation once the ban ends, said Bill Hassiepen, co-head of the ratings desk at Egan-Jones, who called the settlement terms “agreeable.”

“The firm is most satisfied that this matter is resolved and behind us,” Mr. Hassiepen said in a statement. “This settlement allows Egan-Jones to focus all of our efforts and resources on what we do best — producing the most timely, accurate and independent ratings in the business.”

The S.E.C. had accused Egan-Jones of exaggerating its record in its application to the government. The firm had said it had 150 ratings of asset-backed securities and 50 ratings of governments under its belt, when it actually had none at that time, according to the agency. The S.E.C. had also found that Egan-Jones had violated provisions governing conflicts of interest.

Egan-Jones, notable for its business model of charging investors rather than issuers for its ratings, neither admitted nor denied the accusations.

Read More..

Well Pets: Holly the Cat's Incredible Journey

Nobody knows how it happened: an indoor house cat who got lost on a family excursion managing, after two months and about 200 miles, to return to her hometown.

Even scientists are baffled by how Holly, a 4-year-old tortoiseshell who in early November became separated from Jacob and Bonnie Richter at an R.V. rally in Daytona Beach, Fla., appeared on New Year’s Eve — staggering, weak and emaciated — in a backyard about a mile from the Richters’ house in West Palm Beach.

“Are you sure it’s the same cat?” wondered John Bradshaw, director of the University of Bristol’s Anthrozoology Institute. In other cases, he has suspected, “the cats are just strays, and the people have got kind of a mental justification for expecting it to be the same cat.”

But Holly not only had distinctive black-and-brown harlequin patterns on her fur, but also an implanted microchip to identify her.

“I really believe these stories, but they’re just hard to explain,” said Marc Bekoff, a behavioral ecologist at the University of Colorado. “Maybe being street-smart, maybe reading animal cues, maybe being able to read cars, maybe being a good hunter. I have no data for this.”

There is, in fact, little scientific dogma on cat navigation. Migratory animals like birds, turtles and insects have been studied more closely, and use magnetic fields, olfactory cues, or orientation by the sun.

Scientists say it is more common, although still rare, to hear of dogs returning home, perhaps suggesting, Dr. Bradshaw said, that they have inherited wolves’ ability to navigate using magnetic clues. But it’s also possible that dogs get taken on more family trips, and that lost dogs are more easily noticed or helped by people along the way.

Cats navigate well around familiar landscapes, memorizing locations by sight and smell, and easily figuring out shortcuts, Dr. Bradshaw said.

Strange, faraway locations would seem problematic, although he and Patrick Bateson, a behavioral biologist at Cambridge University, say that cats can sense smells across long distances. “Let’s say they associate the smell of pine with wind coming from the north, so they move in a southerly direction,” Dr. Bateson said.

Peter Borchelt, a New York animal behaviorist, wondered if Holly followed the Florida coast by sight or sound, tracking Interstate 95 and deciding to “keep that to the right and keep the ocean to the left.”

But, he said, “nobody’s going to do an experiment and take a bunch of cats in different directions and see which ones get home.”

The closest, said Roger Tabor, a British cat biologist, may have been a 1954 study in Germany in which cats placed in a covered circular maze with exits every 15 degrees most often exited in the direction of their homes, but more reliably if their homes were less than five kilometers away.

New research by the National Geographic and University of Georgia’s Kitty Cams Project, using video footage from 55 pet cats wearing video cameras on their collars, suggests cat behavior is exceedingly complex.

For example, the Kitty Cams study found that four of the cats were two-timing their owners, visiting other homes for food and affection. Not every cat, it seems, shares Holly’s loyalty.

KittyCams also showed most of the cats engaging in risky behavior, including crossing roads and “eating and drinking substances away from home,” risks Holly undoubtedly experienced and seems lucky to have survived.

But there have been other cats who made unexpected comebacks.

“It’s actually happened to me,” said Jackson Galaxy, a cat behaviorist who hosts “My Cat From Hell” on Animal Planet. While living in Boulder, Colo., he moved across town, whereupon his indoor cat, Rabbi, fled and appeared 10 days later at the previous house, “walking five miles through an area he had never been before,” Mr. Galaxy said.

Professor Tabor cited longer-distance reports he considered credible: Murka, a tortoiseshell in Russia, traveling about 325 miles home to Moscow from her owner’s mother’s house in Voronezh in 1989; Ninja, who returned to Farmington, Utah, in 1997, a year after her family moved from there to Mill Creek, Wash.; and Howie, an indoor Persian cat in Australia who in 1978 ran away from relatives his vacationing family left him with and eventually traveled 1,000 miles to his family’s home.

Professor Tabor also said a Siamese in the English village of Black Notley repeatedly hopped a train, disembarked at White Notley, and walked several miles back to Black Notley.

Still, explaining such journeys is not black and white.

In the Florida case, one glimpse through the factual fog comes on the little cat’s feet. While Dr. Bradshaw speculated Holly might have gotten a lift, perhaps sneaking under the hood of a truck heading down I-95, her paws suggest she was not driven all the way, nor did Holly go lightly.

“Her pads on her feet were bleeding,” Ms. Richter said. “Her claws are worn weird. The front ones are really sharp, the back ones worn down to nothing.”

Scientists say that is consistent with a long walk, since back feet provide propulsion, while front claws engage in activities like tearing. The Richters also said Holly had gone from 13.5 to 7 pounds.

Holly hardly seemed an adventurous wanderer, though her background might have given her a genetic advantage. Her mother was a feral cat roaming the Richters’ mobile home park, and Holly was born inside somebody’s air-conditioner, Ms. Richter said. When, at about six weeks old, Holly padded into their carport and jumped into the lap of Mr. Richter’s mother, there were “scars on her belly from when the air conditioner was turned on,” Ms. Richter said.

Scientists say that such early experience was too brief to explain how Holly might have been comfortable in the wild — after all, she spent most of her life as an indoor cat, except for occasionally running outside to chase lizards. But it might imply innate personality traits like nimbleness or toughness.

“You’ve got these real variations in temperament,” Dr. Bekoff said. “Fish can be shy or bold; there seem to be shy and bold spiders. This cat, it could be she has the personality of a survivor.”

He said being an indoor cat would not extinguish survivalist behaviors, like hunting mice or being aware of the sun’s orientation.

The Richters — Bonnie, 63, a retired nurse, and Jacob, 70, a retired airline mechanics’ supervisor and accomplished bowler — began traveling with Holly only last year, and she easily tolerated a hotel, a cabin or the R.V.

But during the Good Sam R.V. Rally in Daytona, when they were camping near the speedway with 3,000 other motor homes, Holly bolted when Ms. Richter’s mother opened the door one night. Fireworks the next day may have further spooked her, and, after searching for days, alerting animal agencies and posting fliers, the Richters returned home catless.

Two weeks later, an animal rescue worker called the Richters to say a cat resembling Holly had been spotted eating behind the Daytona franchise of Hooters, where employees put out food for feral cats.

Then, on New Year’s Eve, Barb Mazzola, a 52-year-old university executive assistant, noticed a cat “barely standing” in her backyard in West Palm Beach, struggling even to meow. Over six days, Ms. Mazzola and her children cared for the cat, putting out food, including special milk for cats, and eventually the cat came inside.

They named her Cosette after the orphan in Les Misérables, and took her to a veterinarian, Dr. Sara Beg at Paws2Help. Dr. Beg said the cat was underweight and dehydrated, had “back claws and nail beds worn down, probably from all that walking on pavement,” but was “bright and alert” and had no parasites, heartworm or viruses. “She was hesitant and scared around people she didn’t know, so I don’t think she went up to people and got a lift,” Dr. Beg said. “I think she made the journey on her own.”

At Paws2Help, Ms. Mazzola said, “I almost didn’t want to ask, because I wanted to keep her, but I said, ‘Just check and make sure she doesn’t have a microchip.’” When told the cat did, “I just cried.”

The Richters cried, too upon seeing Holly, who instantly relaxed when placed on Mr. Richter’s shoulder. Re-entry is proceeding well, but the mystery persists.

“We haven’t the slightest idea how they do this,” Mr. Galaxy said. “Anybody who says they do is lying, and, if you find it, please God, tell me what it is.”

Read More..

Well Pets: Holly the Cat's Incredible Journey

Nobody knows how it happened: an indoor house cat who got lost on a family excursion managing, after two months and about 200 miles, to return to her hometown.

Even scientists are baffled by how Holly, a 4-year-old tortoiseshell who in early November became separated from Jacob and Bonnie Richter at an R.V. rally in Daytona Beach, Fla., appeared on New Year’s Eve — staggering, weak and emaciated — in a backyard about a mile from the Richters’ house in West Palm Beach.

“Are you sure it’s the same cat?” wondered John Bradshaw, director of the University of Bristol’s Anthrozoology Institute. In other cases, he has suspected, “the cats are just strays, and the people have got kind of a mental justification for expecting it to be the same cat.”

But Holly not only had distinctive black-and-brown harlequin patterns on her fur, but also an implanted microchip to identify her.

“I really believe these stories, but they’re just hard to explain,” said Marc Bekoff, a behavioral ecologist at the University of Colorado. “Maybe being street-smart, maybe reading animal cues, maybe being able to read cars, maybe being a good hunter. I have no data for this.”

There is, in fact, little scientific dogma on cat navigation. Migratory animals like birds, turtles and insects have been studied more closely, and use magnetic fields, olfactory cues, or orientation by the sun.

Scientists say it is more common, although still rare, to hear of dogs returning home, perhaps suggesting, Dr. Bradshaw said, that they have inherited wolves’ ability to navigate using magnetic clues. But it’s also possible that dogs get taken on more family trips, and that lost dogs are more easily noticed or helped by people along the way.

Cats navigate well around familiar landscapes, memorizing locations by sight and smell, and easily figuring out shortcuts, Dr. Bradshaw said.

Strange, faraway locations would seem problematic, although he and Patrick Bateson, a behavioral biologist at Cambridge University, say that cats can sense smells across long distances. “Let’s say they associate the smell of pine with wind coming from the north, so they move in a southerly direction,” Dr. Bateson said.

Peter Borchelt, a New York animal behaviorist, wondered if Holly followed the Florida coast by sight or sound, tracking Interstate 95 and deciding to “keep that to the right and keep the ocean to the left.”

But, he said, “nobody’s going to do an experiment and take a bunch of cats in different directions and see which ones get home.”

The closest, said Roger Tabor, a British cat biologist, may have been a 1954 study in Germany in which cats placed in a covered circular maze with exits every 15 degrees most often exited in the direction of their homes, but more reliably if their homes were less than five kilometers away.

New research by the National Geographic and University of Georgia’s Kitty Cams Project, using video footage from 55 pet cats wearing video cameras on their collars, suggests cat behavior is exceedingly complex.

For example, the Kitty Cams study found that four of the cats were two-timing their owners, visiting other homes for food and affection. Not every cat, it seems, shares Holly’s loyalty.

KittyCams also showed most of the cats engaging in risky behavior, including crossing roads and “eating and drinking substances away from home,” risks Holly undoubtedly experienced and seems lucky to have survived.

But there have been other cats who made unexpected comebacks.

“It’s actually happened to me,” said Jackson Galaxy, a cat behaviorist who hosts “My Cat From Hell” on Animal Planet. While living in Boulder, Colo., he moved across town, whereupon his indoor cat, Rabbi, fled and appeared 10 days later at the previous house, “walking five miles through an area he had never been before,” Mr. Galaxy said.

Professor Tabor cited longer-distance reports he considered credible: Murka, a tortoiseshell in Russia, traveling about 325 miles home to Moscow from her owner’s mother’s house in Voronezh in 1989; Ninja, who returned to Farmington, Utah, in 1997, a year after her family moved from there to Mill Creek, Wash.; and Howie, an indoor Persian cat in Australia who in 1978 ran away from relatives his vacationing family left him with and eventually traveled 1,000 miles to his family’s home.

Professor Tabor also said a Siamese in the English village of Black Notley repeatedly hopped a train, disembarked at White Notley, and walked several miles back to Black Notley.

Still, explaining such journeys is not black and white.

In the Florida case, one glimpse through the factual fog comes on the little cat’s feet. While Dr. Bradshaw speculated Holly might have gotten a lift, perhaps sneaking under the hood of a truck heading down I-95, her paws suggest she was not driven all the way, nor did Holly go lightly.

“Her pads on her feet were bleeding,” Ms. Richter said. “Her claws are worn weird. The front ones are really sharp, the back ones worn down to nothing.”

Scientists say that is consistent with a long walk, since back feet provide propulsion, while front claws engage in activities like tearing. The Richters also said Holly had gone from 13.5 to 7 pounds.

Holly hardly seemed an adventurous wanderer, though her background might have given her a genetic advantage. Her mother was a feral cat roaming the Richters’ mobile home park, and Holly was born inside somebody’s air-conditioner, Ms. Richter said. When, at about six weeks old, Holly padded into their carport and jumped into the lap of Mr. Richter’s mother, there were “scars on her belly from when the air conditioner was turned on,” Ms. Richter said.

Scientists say that such early experience was too brief to explain how Holly might have been comfortable in the wild — after all, she spent most of her life as an indoor cat, except for occasionally running outside to chase lizards. But it might imply innate personality traits like nimbleness or toughness.

“You’ve got these real variations in temperament,” Dr. Bekoff said. “Fish can be shy or bold; there seem to be shy and bold spiders. This cat, it could be she has the personality of a survivor.”

He said being an indoor cat would not extinguish survivalist behaviors, like hunting mice or being aware of the sun’s orientation.

The Richters — Bonnie, 63, a retired nurse, and Jacob, 70, a retired airline mechanics’ supervisor and accomplished bowler — began traveling with Holly only last year, and she easily tolerated a hotel, a cabin or the R.V.

But during the Good Sam R.V. Rally in Daytona, when they were camping near the speedway with 3,000 other motor homes, Holly bolted when Ms. Richter’s mother opened the door one night. Fireworks the next day may have further spooked her, and, after searching for days, alerting animal agencies and posting fliers, the Richters returned home catless.

Two weeks later, an animal rescue worker called the Richters to say a cat resembling Holly had been spotted eating behind the Daytona franchise of Hooters, where employees put out food for feral cats.

Then, on New Year’s Eve, Barb Mazzola, a 52-year-old university executive assistant, noticed a cat “barely standing” in her backyard in West Palm Beach, struggling even to meow. Over six days, Ms. Mazzola and her children cared for the cat, putting out food, including special milk for cats, and eventually the cat came inside.

They named her Cosette after the orphan in Les Misérables, and took her to a veterinarian, Dr. Sara Beg at Paws2Help. Dr. Beg said the cat was underweight and dehydrated, had “back claws and nail beds worn down, probably from all that walking on pavement,” but was “bright and alert” and had no parasites, heartworm or viruses. “She was hesitant and scared around people she didn’t know, so I don’t think she went up to people and got a lift,” Dr. Beg said. “I think she made the journey on her own.”

At Paws2Help, Ms. Mazzola said, “I almost didn’t want to ask, because I wanted to keep her, but I said, ‘Just check and make sure she doesn’t have a microchip.’” When told the cat did, “I just cried.”

The Richters cried, too upon seeing Holly, who instantly relaxed when placed on Mr. Richter’s shoulder. Re-entry is proceeding well, but the mystery persists.

“We haven’t the slightest idea how they do this,” Mr. Galaxy said. “Anybody who says they do is lying, and, if you find it, please God, tell me what it is.”

Read More..

Disruptions: Immediacy of Digital Media Helps Drive Spending

I was tallying my spending of the last year, and much to my surprise, I spent $2,403 in one category. No, that wasn’t on clothes. It wasn’t on my most recent vacation, either. And it wasn’t the total of all my parking tickets (though that did feel as if it came close).

The $2,403 is what I spent on digital media.

But wait, people are spending money online? On media? Didn’t music industry executives declare, “People won’t pay for things online!”? Yes, as did movie industry executives. TV, radio, book, newspaper and magazine bigwigs, too, have all made similar claims over the last decade.

Well, those apocalyptic predictions turn out to be wrong.

I am spending more on digital media than I used to spend on the physical stuff. (The federal government says the average American family spent $2,572 on all entertainment, not just digital, in 2011.) And I know why I am spending more on digital media.

Digital media, unlike its slow cousin, is immediate. In the past, if friends mentioned a good book they had just finished, people made a note (mental or on a scrap of paper) to pick it up during their next visit to the bookstore or library. The same went for other items like CDs, DVDs or magazines.

Now, when someone does that at dinner — “Oh, I just finished Cormac McCarthy’s latest book, you’d love it!” — we pull out our smartphones, hop into a wormhole to Amazon or iTunes and buy it on the spot. No notes; no forgetting the book’s name; no driving to a store. The book or song is just transported to our pockets.

With one-click shopping and smartphones, buying media online becomes an impulse purchase, like the candy or gum by the cash register.

And it all adds up, quickly. Last year, I bought 47 e-books. That’s $475 on digital books alone. In the past, I probably bought 20 physical books a year, at most, and given that half of those were from used bookstores, my annual literary budget rarely passed $200.

I’m paying less but buying more.

I also spent $359 on music subscription services last year, including Rdio and Spotify. Then I frittered away $318 on other music downloads. I paid $95 for a Netflix subscription ($8 a month adds up); $25 for Flickr; $396 on apps and games; $60 on an Xbox Live subscription; $316 on movies and TV shows; $239 for subscription or one-offs of several digital magazines, including The New Yorker, Wired, The Economist and Popular Photography. (As an employee of The New York Times, I have free access to its digital offerings, otherwise I’d gladly pay for that, too.)

I’ve had to pay $120 a year for online storage to back up all my media purchases. And these numbers don’t include the money I spent on the Internet — almost $100 a month for my iPhone, iPad and home connection — or the purchases of Kindles, iPads and headphones. Granted, $2,403 might seem high for a bunch of zeros and ones. That could be, in part, because I live in Silicon Valley, where people slurp up digital content with the same frequency that rock stars would inhale drugs in the ’80s. Out here, we all tend to live a few years in the future. If it’s happening here now, it will usually happen elsewhere several years later.

“This is the same thing we saw with e-commerce five years ago, where people said it was just going to be across a small segment of the Valley,” said D. J. Patil, a data scientist in residence at Greylock Partners, a prominent venture capital company based in Menlo Park, Calif. “Now we are seeing hundreds of millions of dollars a year in online transactions.”

So where am I spending less? On traditional media. I rarely go to the movies anymore, where I have to sign over the mortgage for my home for a bottle of water and bag of popcorn. I don’t pay for cable TV either.

Like the media moguls who once predicted that digital media would be the demise of their industries, I’m willing to make a forecast: that digital spending number will continue to grow, and it’s all thanks to the ease of digital media.


This post has been revised to reflect the following correction:

Correction: January 20, 2013

An earlier version of this blog post misstated the amount spent on the Internet. It is $100 a month, not $100 a year.

Read More..

Greek Prosecutors Seek Inquiry Over Deficit Claims





ATHENS — Greek prosecutors called on Tuesday for a criminal inquiry into the actions of the head of Elstat, the country’s statistical authority, and two of his subordinates, over claims that they manipulated budget figures to justify the country’s appeal for an international financial bailout.




The agency head, Andreas Georgiou, a veteran of nearly two decades at the International Monetary Fund, first came under scrutiny in the fall of 2011, when a former Elstat employee, Zoe Georganta, claimed that Mr. Georgiou had inflated the agency’s official figure for Greece’s 2009 budget deficit, saying it amounted to more than 15 percent of the country’s gross domestic product.


In an interview with The New York Times last spring, the statistics chief said that some members of Elstat’s board represented vested interests that did not want the full extent of Greece’s dire finances to come to light. “We were faced with significant pressures through the board not to revise the deficit upwards on account of fully applying European Union rules, but to minimize it,” he said.


Greece’s governing coalition, headed by the conservative New Democracy party, has lately undertaken a campaign to stamp out lawlessness and corruption, in part to impress its European creditors that it is serious about dealing with the country’s deep-seated problems. However, critics charge that it is doing so by attacking a series of straw men while ignoring criminality and tax evasion among the business, professional and political elites that have run the country for decades.


This month, for example, the police raided a squatter house in Athens that had been occupied by leftists and a few anarchists for more than 20 years, even though the violence that had plagued the city for years had subsided in recent months. The opposition said that, far from a crackdown on lawlessness, the raid incited a new wave of violence and was, at base, intended to distract attention from a scandal that threatens to disclose rampant tax evasion by the wealthy and well connected.


The Greek financial crisis erupted in 2009, when an incoming Socialist government announced that the budget deficit was 12.4 percent of gross domestic product, more than twice the previous estimate of the former government, also headed by New Democracy. To date, neither the Socialists nor New Democracy have prosecuted any officials responsible for the understatement of the deficit.


It was about a year ago that prosecutors first summoned Mr. Georgiou, following the claims by Ms. Georganta that Elstat inflated the deficit beyond the 12.4 percent figure. They further called upon Parliament to consider whether the former Socialist prime minister, George Papandreou, and the former finance minister, George Papaconstantinou, should be investigated for their roles in the 12.4 percent deficit estimate. A parliamentary committee last year found no wrongdoing by the politicians, vaguely highlighting instead “a lack of institutional knowledge of the euro zone.”


Since then Mr. Papaconstantinou, who appointed Mr. Georgiou as chief of the statistics service in June 2010, has been ensnarled in the tax evasion scandal, accused of removing names of family members from a list of more than 2,000 Greeks with Swiss bank accounts that may have been used to avoid taxes.


Read More..

DealBook: In Euro Zone, Signs of Progress and Fears of Complacency

PARIS – This may be the year that Europe stops being the ticking time bomb of the global economy.

Ireland is on track to leave international bailout limbo by summer. Talk of Greece leaving the euro is off the table. And financial speculators have generally stopped betting the euro zone will blow up.

But even as the sense of emergency fades, Europe is potentially facing a starker problem.

For three years, Chancellor Angela Merkel of Germany and a phalanx of policy makers have been working to shore up the euro’s foundations to prevent the currency union from unraveling. As they gather with academics, executives and various experts this week at the World Economic Forum, which opens Wednesday in Davos, Switzerland, the biggest concern is that leaders might become less vigilant now that the heat is off, ushering in a raft of new troubles that could dog the euro for years to come.

“The risk is that complacency takes hold because there is no more urgency in the crisis, and that everything that has been done up until now will be deemed sufficient,” said Jacob Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington. If that happens, he warned, “Europe will turn into the next Japan, and become a permanently depressed or stagnating economic area.”

Ms. Merkel might be forgiven for feeling a sense of vindication. Her deliberate approach to crisis management and refusal to get too far ahead of German public opinion has often frustrated her euro zone peers and foreign allies. And yet, the strategy seems to have worked — so far, at least. Ms. Merkel, who is to speak at Davos on Thursday, and other European leaders have generally done just enough to contain the crisis without alienating taxpayers.

Much of the credit for the current calm in Europe goes to Mario Draghi, the president of the European Central Bank. He appeased financial markets with his promise last summer to do whatever it took to preserve the euro, including buying the government bonds of Spain if necessary to keep a lid on the country’s borrowing costs.

The effect of Mr. Draghi’s promise has been evident: financial markets have stopped driving the borrowing costs of Spain and Italy toward the danger levels that led Ireland, Greece and Portugal to reach for international financial lifelines. Today, few people fear that Europe’s southern countries will break away from the euro union.

Other dire prospects, like Germany and other Northern European countries fleeing the euro union to avoid getting caught in a quagmire, have also dropped off the watch list. If anything, the focus of anxiety is the fiscal situation in the United States, where gridlock in Washington has become just as debilitating for the country’s finances as the euro policy paralysis was for European politicians.

“Some European policy makers who visited the United States recently were delighted to see that because of the fiscal cliff, Europe wasn’t on every channel,” said Kenneth S. Rogoff, a professor of economics at Harvard University. “There is an ecstasy over the fact that they won’t blow apart tomorrow.”

Still, Mr. Rogoff added, Europe must revive economic growth to fully address its problems. “And even if they do, that’s not a long-term solution,” he said. “They need to integrate more fully, or they will fall apart.”

Europe’s political leaders have taken important steps to improve spending discipline among euro members, to provide a financial backstop for troubled euro zone countries and to consolidate supervision of banks. Despite many imperfections, the measures seem to have been enough to convince investors that officials are slowly constructing a more resilient currency union.

“European countries have shown their resolve in making the euro a success and reaffirmed the deep political commitment to work together toward a stronger union,” Vítor Constâncio, the vice president of the European Central Bank, told an audience in Beijing on Jan. 12.

But leaders have yet to address some serious flaws in the structure of the euro zone. For example, they have not solved the problem of how to wind down terminally ill banks without sticking taxpayers with the bill. And they are far away from a deposit insurance fund for Europe, which means the risk of bank runs remains.

“In order to define a turning point, you need a lot of factors besides the stabilization of financial markets,” Mr. Draghi said this month.

But coming events could undermine confidence. Germany will hold national elections in September, which could make Ms. Merkel even more cautious than usual and stall euro zone decision making. Already, her main rivals pulled off an upset in regional elections this weekend in Lower Saxony.

Italian elections are also looming. Mario Monti, the prime minister who has restored Italy’s international credibility and is to speak at Davos on Wednesday, faces a public that is grumpy about a rollback of job protections and other policy overhauls. Silvio Berlusconi, a former Italian prime minister who presided over years of economic standstill, is attempting a populist comeback.

In France, President François Hollande’s pledge to bring the deficit down to 3 percent of gross domestic product this year to adhere to the rules governing euro membership may be challenged if France’s military engagement in Mali and the surrounding region turns into a drawn-out affair.

Across the channel, Prime Minister David Cameron of Britain, who is scheduled to speak at Davos on Thursday morning, has sounded warnings that the country might leave the European Union if changes in its administration are not made. “The danger is that Europe will fail and that the British people will drift toward the exit,” according to prepared text of a speech Mr. Cameron postponed delivering last week because of developments in the hostage crisis in Algeria.

In the meantime, the severe effects of prolonged austerity in several European countries are leaving deep social scars. Tax increases and steep spending cuts have ground many European citizens deeper than ever into hardship, prompting millions to demonstrate in Greece, Italy, Portugal and Spain. Recessionary economies in those countries are expected to get worse before they improve.

In Greece, where austerity has hit the hardest, people are burning trash and wood this winter for lack of money to pay electricity bills, and the government’s efforts to enact structural overhauls needed to turn the economy around and attract foreign investors continue to lag.

And then there is Germany, which itself is being tugged into a slowdown as its cash-poor southern neighbors continue to refrain from buying Audis and other high-priced German goods.

Unemployment in the euro zone continues to climb: the jobless rate in the 17 countries of the bloc hit a record 11.8 percent in November. Youth unemployment has surpassed 50 percent in Spain and Greece, a stratosphere of despair. Thousands of bright young people continue to flee Greece, Ireland, Spain and other countries every month for the booming economies of Australia and Canada.

Portuguese workers are even going to Africa in search of a better future, as the middle class there grows along with improving economic conditions on the southern part of the African continent.

Yet painful adjustments are starting to bear some fruit. Labor costs have come down in countries including Spain and Portugal, helping make their work forces more competitive within the region. In Spain, for instance, where unit labor costs have fallen 4 percent since the onset of the financial crisis in 2008, the labor market is now so alluring that Ford, Renault and Volkswagen have announced plans to expand production there.

In addition, the alarming flight of deposits from banks in Spain has come to a stop.

The euro zone’s problems have proven an opportunity for some countries to remove structural impediments to growth. In France, where Mr. Hollande has promised to make the economy more competitive, labor unions have agreed to a deal to overhaul swaths of the notoriously rigid labor market.

The deal would tame some of the French labor code’s most confounding restrictions, including lengthy hiring and firing procedures and outsize business taxes, as the country tries to lift its competitiveness, curb unemployment and improve the budget.

“Is the worst over? Probably yes,” analysts at Barclays Capital wrote in a recent note to clients.

That will be especially true if leaders and businesses persist in using the crisis as a chance to renew European competitiveness.

While some countries may have made enough economic overhauls to enjoy substantial growth, once the crisis is past, said Nicolas Véron, a senior fellow at Bruegel, a research institute in Brussels, “there are a lot of nuts still to crack.”

Liz Alderman reported from Paris and Jack Ewing from Frankfurt.

Read More..

Recipes for Health: Lentil, Celery and Tomato Minestrone


Andrew Scrivani for The New York Times







If you did a lot of cooking over the Christmas and New Year’s holidays you may have some celery hearts lingering in your refrigerator. You needed a few branches for a stew, a stock, or a soup, so you bought a whole bunch, and here it is weeks later and the rest of the celery is wilting in the produce drawer.




This doesn’t have to happen if you think of this vegetable as something more than an aromatic. I’m a big fan of celery, both raw and cooked, as the main ingredient or as one of several featured ingredients in a dish. You can do the traditional thing with raw celery and dice it up and add it to a potato, tuna or egg salad, or you can make a celery salad, slicing the branches as thin as you can get them and tossing them with herbs, radishes, oil and vinegar, and blue cheese. If you are cooking with celery, don’t stop at one branch when you make soup. The celery contributes a wonderful herbal flavor dimension. It retains its texture for a long time when you cook it, so I used it as the main vegetable in a risotto and loved the way it stood up to the creamy rice.


You always see celery listed as an ingredient in tonic juices and blender drinks. It has long been used in Chinese medicine to help control high blood pressure, which makes sense because it contains phytochemicals called phthalides that reduce stress hormones and work to relax the muscle walls in arteries, increasing blood flow. The vegetable is an excellent source of Vitamins K and C, and a very good source of potassium, folate, dietary fiber, molybdenum, manganese, and Vitamin B6. Another bonus attribute – it is very low in calories. However, it is on the high side as far as sodium goes.


Lentil, Celery and Tomato Minestrone


I make minestrones like this all the time, but I hadn’t made a version with this much celery in it until I made this one, and I loved the dimension of flavor it contributes to the mix.


1 cup lentils, rinsed


1 onion, halved


A bouquet garni made with 2 sprigs each thyme and parsley, a bay leaf, and a Parmesan rind


1 1/2 quarts water


1 tablespoon extra virgin olive oil


1 medium carrot, diced


3 celery stalks, diced


2 garlic cloves, minced


Salt, preferably kosher salt, to taste


1 28-ounce can chopped tomatoes, with liquid


Pinch of sugar


2 tablespoons tomato paste


1/4 cup chopped fresh parsley


Very thinly sliced celery, from the inner heart, for garnish


Freshly grated Parmesan cheese for serving


1. Combine the lentils, 1/2 onion and the bouquet garni with 1 quart water in a saucepan and bring to a boil. Reduce the heat, add salt to taste, cover and simmer 30 minutes.


2. Chop the remaining onion. Heat the olive oil in a large, heavy soup pot or Dutch oven over medium heat and add the onion, carrot, and celery. Cook, stirring often, until the onion is tender, about 5 minutes, and add the garlic and a pinch of salt. Stir together until fragrant, about 1 minute, and add the canned tomatoes with their liquid and the sugar. Bring to a simmer and cook, stirring often, for about 10 minutes, until the tomatoes have cooked down somewhat and smell fragrant.


3. Add the lentils with their broth, the tomato paste, salt to taste, an additional 2 cups water, and bring to a boil. Reduce the heat, cover, and simmer 30 minutes. Taste and adjust seasonings. Season to taste with freshly ground pepper, stir in the parsley and serve, garnishing each bowl with thinly sliced celery heart if you want some crunch, and passing the Parmesan at the table.


Yield: Serves 4 to 6 (4 if there are teen-agers in your house)


Advance preparation: This will keep for three or four days in the refrigerator. It may require thinning out. It’s even better the day after you make it. I have a teenage son and he just about polished off the leftovers – which should have served 3 – the day after I tested the recipe.


Variation: Shortly before serving add 2 cups baby spinach and simmer just until wilted.


Nutritional information per serving (4 servings): 276 calories; 4 grams fat; 0 grams saturated fat; 1 gram polyunsaturated fat; 2 grams monounsaturated fat; 0 milligrams cholesterol; 49 grams carbohydrates; 12 grams dietary fiber; 392 milligrams sodium (does not include salt to taste); 17 grams protein


Nutritional information per serving (6 servings): 184 calories; 2 grams fat; 0 grams saturated fat; 0 grams polyunsaturated fat; 2 grams monounsaturated fat; 0 milligrams cholesterol; 32 grams carbohydrates; 8 grams dietary fiber; 261 milligrams sodium (does not include salt to taste); 11 grams protein


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


Read More..

DealBook: Michael Dell’s Empire in a Buyout Spotlight

The computer empire of Michael S. Dell spreads across a campus of low-slung buildings in Round Rock, Tex.

But his financial empire — estimated at $16 billion — occupies the 21st floor of a dark glass skyscraper on Fifth Avenue in Manhattan.

It is there that MSD Capital, started by Mr. Dell 15 years ago to manage his fortune, has quietly built a reputation as one of the smartest investors on Wall Street. By amassing a prodigious portfolio of stocks, companies, real estate and timberland, Mr. Dell has reduced his exposure to the volatile technology sector and branched out into businesses as diverse as dentistry and landscaping.

Now, Mr. Dell is on the verge of making one of the biggest investments of his life. The 47-year-old billionaire and his private equity backers are locked in talks to acquire Dell, the company he started with $1,000 as a teenager three decades ago, in a leveraged buyout worth more than $20 billion. MSD could play a role in the Dell takeover, according to people briefed on the deal.

The private equity firm Silver Lake has been in negotiations to join with Mr. Dell on a transaction, along with other potential partners like wealthy Asian investors or foreign funds. Mr. Dell would be expected to roll his nearly 16 percent ownership of the company into the buyout, a stake valued at about $3.5 billion. He could also contribute additional personal money as part of the buyout.

That money is managed by MSD, among the more prominent so-called family offices that are set up to handle the personal investments of the wealthy. Others with large family offices include Bill Gates, whose Microsoft wealth financed the firm Cascade Investment, and New York’s mayor, Michael R. Bloomberg, who set up his firm, Willett Advisors, in 2010 to manage his personal and philanthropic assets.

“Some of these family offices are among the world’s most sophisticated investors and have the capital and talent to compete with the largest private equity firms and hedge funds,” said John P. Rompon, managing partner of McNally Capital, which helps structure private equity deals for family offices.

A spokesman for MSD declined to comment for this article. The buyout talks could still fall apart.

In 1998, Mr. Dell, then just 33 years old — and his company’s stock worth three times what it is today — decided to diversify his wealth and set up MSD. He staked the firm with $400 million of his own money, effectively starting his own personal money-management business.

To head the operation, Mr. Dell hired Glenn R. Fuhrman, a managing director at Goldman Sachs, and John C. Phelan, a principal at ESL Investments, the hedge fund run by Edward S. Lampert. He knew both men from his previous dealings with Wall Street. Mr. Fuhrman led a group at Goldman that marketed specialized investments like private equity and real estate to wealthy families like the Dells. And Mr. Dell was an early investor in Mr. Lampert’s fund.

Mr. Fuhrman and Mr. Phelan still run MSD and preside over a staff of more than 100 overseeing Mr. Dell’s billions and the assets in his family foundation. MSD investments include a stock portfolio, with positions in the apparel company PVH, owner of the Calvin Klein and Tommy Hilfiger brands, and DineEquity, the parent of IHOP and Applebee’s.

Among its real estate holdings are the Four Seasons Resort Maui in Hawaii and a stake in the New York-based developer Related Companies.

MSD also has investments in several private businesses, including ValleyCrest, which bills itself as the country’s largest landscape design company, and DentalOne Partners, a collection of dental practices.

Perhaps MSD’s most prominent deal came in 2008, in the middle of the financial crisis, when it joined a consortium that acquired the assets of the collapsed mortgage lender IndyMac Bank from the federal government for about $13.9 billion and renamed it OneWest Bank.

The OneWest purchase has been wildly successful. Steven Mnuchin, a former Goldman executive who led the OneWest deal, has said that the bank is expected to consider an initial public offering this year. An I.P.O. would generate big profits for Mr. Dell and his co-investors, according to people briefed on the deal.

Another arm of MSD makes select investments in outside hedge funds. Mr. Dell invested in the first fund raised by Silver Lake, the technology-focused private equity firm that might now become his partner in taking Dell private.
MSD’s principals have already made tidy fortunes. In 2009, Mr. Fuhrman, 47, paid $26 million for the Park Avenue apartment of the former Lehman Brothers chief executive Richard S. Fuld. Mr. Phelan, 48, and his wife, Amy, a former Dallas Cowboys cheerleader, also live in a Park Avenue co-op and built a home in Aspen, Colo.

Both are influential players on the contemporary art scene, with ARTNews magazine last year naming each of them among the world’s top 200 collectors. MSD, too, has dabbled in the visual arts. In 2010, MSD bought an archive of vintage photos from Magnum, including portraits of Marilyn Monroe and Mahatma Gandhi, and has put the collection on display at the University of Texas, Mr. Dell’s alma mater.

Just as the investment firms Rockefeller & Company (the Rockefellers, diversifying their oil fortune) and Bessemer Trust (the Phippses, using the name of the steelmaking process that formed the basis of their wealth) started out as investment vehicles for a single family, MSD has recently shown signs of morphing into a traditional money management business with clients beside Mr. Dell.

Last year, for the fourth time, an MSD affiliate raised money from outside investors when it collected about $1 billion for a stock-focused hedge fund, MSD Torchlight Partners. A 2010 fund investing in distressed European assets also manages about $1 billion. The Dell family is the anchor investor in each of the funds, according to people briefed on the investments.

MSD has largely remained below the radar, though its name emerged a decade ago in the criminal trial of the technology banker Frank Quattrone on obstruction of justice charges. Prosecutors introduced an e-mail that Mr. Fuhrman sent to Mr. Quattrone during the peak of the dot-com boom in which he pleaded for a large allotment of a popular Internet initial public offering.

“We know this is a tough one, but we wanted to ask for a little help with our Corvis allocation,” Mr. Fuhrman wrote. “We are looking forward to making you our ‘go to’ banker.”

The e-mail, which was not illegal, was meant to show the quid pro quo deals that were believed to have been struck between Mr. Quattrone and corporate chieftains like Mr. Dell — the bankers would give executives hot I.P.O.’s and the executives, in exchange, would hold out the possibility of giving business to the bankers. (Mr. Quattrone’s conviction was reversed on appeal.)

The MSD team has also shown itself to be loyal to its patron in other ways.

On the MSD Web site, in the frequently asked questions section, the firm asks and answers queries like “how many employees do you have” and “what kind of investments do you make.”

In the last question on the list, MSD asks itself, “Do you use Dell computer equipment?” The answer: “Exclusively!”

Michael J. de la Merced contributed reporting.


This post has been revised to reflect the following correction:

Correction: January 19, 2013

An article on Friday about MSD Capital, an investment firm started by Michael S. Dell to manage his fortune, misstated, in some editions, the year its energy hedge fund raised $1 billion from outside investors. It was in 2011, not earlier this year. (Another of the firm's hedge funds, the MSD Torchlight Partners fund, raised $1 billion in 2012).

A version of this article appeared in print on 01/18/2013, on page B1 of the NewYork edition with the headline: Michael Dell’s Empire In a Buyout Spotlight.
Read More..

Algerian Prime Minister Says at Least 37 Foreigners Dead in Siege


Ramzi Boudina/Reuters


Workers brought the body of one of the hostages killed in the attack to the hospital in In Amenas on Monday.







ALGIERS — In his first official tally of the deadly scope of the Algeria hostage crisis, the prime minister said Monday that the known death toll among the foreign captives had risen steeply to 37 from 23, and that five additional foreigners remained unaccounted for.




In a televised news conference, the prime minister, Abdelmalek Sellal, also said that 29 militants were killed including the leader of the group, and that three were captured alive during the four-day ordeal that terrorized a remote Algerian gas field refining site. Two of the attackers were Canadian, he said. Canada’s government said it was investigating that assertion.


Algerian officials had been forecasting that the tally of foreign dead would rise from a preliminary estimate of 23, a concern that was reinforced by reports that a significant number of hostages from Japan and the Philippines had been killed at the site. On Monday, the Algerian prime minister said the dead came from eight different nations, without specifying which ones. He said that one Algerian hostage had been killed as well.


Mr. Sellal was more specific about the attackers, saying at the news conference that they had come from Egypt, Canada, Mali, Niger, Mauritania and Tunisia, although it was unclear how he knew for sure. Algerian officials have been saying that few if any of the attackers are believed to have been Algerian.


But the prime minister said the leader of the militant band that had seized the gas field facility, an Algerian whom he identified as Bencheneb Mohamed Amine, was among the attackers killed during the crisis.


Mr. Sellal asserted that the attackers had started out in northern Mali — a claim made by the attackers themselves, which had initially been dismissed by the Algerian authorities as far-fetched because the Malian border is hundreds of miles away.


But the prime minister added that the attackers had ultimately crossed into Algeria through its eastern border with Libya, which is much closer to the refining site. If true, it would serve as a powerful reminder of Libya’s instability since the overthrow of Col. Muammar el-Qaddafi more than a year ago, and of the enormous distances that complicate the policing of national boundaries in the vast Sahara.


“We would need two NATOs to monitor our borders,” Mr. Sellal said.


He corroborated assertions made by other Algerian officials and accounts from freed hostages that the militants had intended to destroy the gas complex, had planted booby-traps throughout the site and had attached explosives to some of their captives.


The militants demanded an end to France’s armed intervention in Mali and the release of prisoners in Algeria. The Algerian government had said from the outset that it would not negotiate.


“They went wild with their demands,” the prime minister said. “It was impossible to meet, and it caused the military to intervene.”


In all, the prime minister said, 790 workers were on the site, including 134 foreigners of 26 nationalities, when it was first seized by a heavily armed militant band in one of the most brazen assaults in years.


The prime minister’s news conference represented the most detailed Algerian tally of casualties in the days of alternating standoff and confrontation that began early on Wednesday as the raiders swept in from the desert to take over the internationally managed gas plant, hundreds of miles from Algiers.


Earlier Monday, the Philippine Foreign Affairs Department announced casualties among its citizens for the first time, saying six Filipino hostages had been killed and four were still missing.


Additionally, citing an unidentified government source, Reuters said Algeria had informed Japan that nine of its citizens had died — if corroborated, the highest death toll by a nation reported so far — while previous Japanese accounts had spoken of 10 unaccounted for. Officials in Tokyo declined to confirm those figures, but news reports quoted Prime Minister Shinzo Abe as saying that seven Japanese captives died and that three were still unaccounted for.


Japan’s NHK television interviewed an unidentified Algerian worker who escaped the gas plant. He said that not long after sporadic firing started, militants appeared, armed with machine guns, antitank rockets and antiaircraft missiles. He said the attackers were kind to Algerian staff members, who were given food and blankets. Their targets were the foreign workers, who were rounded up.


Adam Nossiter reported from Algiers, and Alan Cowell from London. Reporting was contributed by Steven Erlanger and Scott Sayare from Paris, Alan Cowell and Stanley Reed from London, Floyd Whaley from Manila, Martin Fackler from Tokyo, Eric Schmitt and Michael R. Gordon from Washington, Ian Austen from Ottawa, and Michael Schwirtz and Rick Gladstone from New York.



Read More..