Treasury Will Not Mint $1 Trillion Coin to Raise Debt Ceiling





WASHINGTON — The Treasury Department said Saturday that it will not mint a trillion-dollar platinum coin to head off an imminent battle with Congress over raising the government’s borrowing limit.


“Neither the Treasury Department nor the Federal Reserve believes that the law can or should be used to facilitate the production of platinum coins for the purpose of avoiding an increase in the debt limit,” Anthony Coley, a Treasury spokesman, said in a written statement.


The Obama administration has indicated that the only way for the country to avoid a cash-management crisis as soon as next month is for Congress to raise the “debt ceiling,” which is the statutory limit on government borrowing. The cap is $16.4 trillion.


“There are only two options to deal with the debt limit: Congress can pay its bills, or it can fail to act and put the nation into default,” Jay Carney, the White House press secretary, said in a statement. “Congress needs to do its job.”


In recent weeks, some Republicans have indicated that they would not agree to raise the debt limit unless Democrats agreed to make cuts to entitlement programs like Social Security.


The White House has said it would not negotiate spending cuts in exchange for Congressional authority to borrow more, and it has insisted that Congress raise the ceiling as a matter of course, to cover expenses already authorized by Congress. In broader fiscal negotiations, it has said it would not agree to spending cuts without commensurate tax increases.


The idea of minting a trillion-dollar coin drew wide if puzzling attention recently after some bloggers and economic commentators had suggested it as an alternative to involving Congress.


By virtue of an obscure law meant to apply to commemorative coins, the Treasury secretary could order the production of a high-denomination platinum coin and deposit it at the Federal Reserve, where it would count as a government asset and give the country more breathing room under its debt ceiling. Once Congress raised the debt ceiling, the Treasury secretary could then order the coin destroyed.


Mr. Carney, the press secretary, fielded questions about the theoretical tactic at a news conference last week. But the idea is now formally off the table.


The White House has also rejected the idea that it could mount a challenge to the debt ceiling itself, on the strength of the Fourteenth Amendment to the Constitution, which holds that the “validity of the public debt” of the United States “shall not be questioned.”


The Washington Post earlier published a report that the Obama administration had rejected the platinum-coin idea.


Read More..

IHT Rendezvous: Hostages Caught Up in France's African Intervention

LONDON — The widespread satisfaction expressed in France at the government’s decision to intervene militarily against Islamic militants in Mali was tempered on Saturday by news of a failed overnight French hostage rescue mission on the other side of Africa.

After reports emerged from Somalia of a helicopter-borne commando raid in the south of the country, Jean-Yves Le Drian, the French defense minister announced that a hostage was believed to have been killed by his captors in an operation in which a French soldier died and another was missing.

The hostage, identified as Denis Allex, was a French secret service agent who had been held by Somalia’s Islamist Al Shabab militia since 2009. His captors, who may have seized the missing French soldier during the raid, claimed Mr. Allex was still alive and they planned to put him on trial.

Mr. Le Drian said there was no connection between the military operations in Mali and Somalia. The hostage rescue mission would have happened earlier, he told a news conference, if the conditions had been right.

However, news of the Somali raid prompted speculation that the action might have been prompted by France’s concern that its Mali intervention would spur retaliation against its citizens held captive in Africa.

These include eight hostages seized in Mali and neighboring states by Al Qaeda in the Islamic Maghreb, one of the groups involved in last year’s Islamist takeover of northern Mali.

The decision of President François Hollande to send French forces into action in Mali to counter an offensive by Islamist militias that control the north of the country has been greeted with broad cross-party support at home.

Libération newspaper said it could represent a positive turning point in the presidency of Mr. Hollande, “who did not hesitate in the face of the very real risk of seeing the establishment of a terrorist state in the heart of the dark continent.”

Families of the hostages, however, expressed fears for the fate of their loved ones, with some demanding why military action to free them had not been taken earlier.

Jean-Pierre Verdon, the father of one captive, Philippe Verdon, told France’s RTL broadcaster: “Making war on terrorists is a matter for the state, but our obsession is the hostages.”

A leader of the regional Al Qaeda group last month accused France of blocking negotiations on a deal that would have led to freeing the captives.

Mathieu Guidère, a French academic expert on the region, speculated at the time that the government wanted to send a message to the militants that the capture of French citizens would not affect its foreign policy.

The government was trapped in an “infernal logic,”, according to Mr. Guidère, a professor at the University of Toulouse.

“The more the government declares it will intervene in Mali to support African forces, the more French citizens will be kidnapped,” he told Le Figaro in December. “If you want to fight terrorism, you don’t go about announcing it in advance.”

Before news came through of the abortive overnight raid in Somalia, the intervention in Mali had attracted support across the political spectrum in France.

Jean-François Copé, head of the center-right opposition U.M.P., said: “It was high time to act to prevent the establishment of a narco-terrorist state.”

François Fillon, a former U.M.P. prime minister said: “The fight against terrorism demands national unity beyond partisan differences.”

With Mr. Hollande now facing a second crisis in Africa, it is a political honeymoon that may not last.

Read More..

Adrian Peterson, J.J. Watt unanimous All-Pros


NEW YORK (AP) — It's unanimous, on both sides of the ball.


Vikings 2,000-yard man Adrian Peterson and Texans pass-swatting end J.J. Watt were unanimous choices for The Associated Press All-Pro team announced Saturday.


Peterson, who came within 9 yards of breaking Eric Dickerson's single-season rushing record, and Watt, who led the NFL with 20 1-2 sacks, were selected by all 50 members of a nationwide panel of media members who cover the league.


Peterson is a three-time All-Pro, while Watt represents lots of new blood. He's among 17 players making their All-Pro debuts.


"Obviously it's a huge honor, especially for being such a young guy," said Watt, a second-year pro. "It's crazy to even think about. It's very humbling and very motivating. It makes me want to do it again and again."


Peyton Manning made his sixth team, the previous five while quarterbacking Indianapolis. He led Denver to the AFC's best record, 13-3.


Also chosen for the sixth time was Atlanta tight end Tony Gonzalez, who this season moved into second place on the career receptions list. San Francisco linebacker Patrick Willis made it for the fifth time in his six pro seasons.


The 49ers had the most All-Pros, six: Willis, fellow LBs NaVorro Bowman and Aldon Smith, guard Mike Iupati, safety Dashon Goldson and punter Andy Lee.


"As an organization, we take great pride in the success and recognition of our players," 49ers general manager Trent Baalke said. "This type of acknowledgement only comes from hard work and a team-first mentality, which all six of these men exhibit on a daily basis. They play the game the way it was meant to be played, and are very deserving of this honor."


Seattle was next with RB Marshawn Lynch, center Max Unger, cornerback Richard Sherman and safety Earl Thomas. All were selected for the first time.


Sherman was incensed when he didn't make the Pro Bowl. He was thrilled with the news he made the All-Pro team "because that's comparing the whole league."


" That is taking individuals and saying they are the best in the NFL at that position and that's what I wanted to be," Sherman said. " The Pro Bowl is taking three from each side, it's more of a popularity contest. The All-Pro, you're the best at your position. It doesn't matter if you're a fifth-rounder or fourth-rounder or undrafted. If you play the best, you're All-Pro."


Denver had three All-Pros: LB Von Miller, tackle Ryan Clady and Manning. No other team had more than two.


The NFC had 17 players and only 10 made it from the AFC.


One rookie, Minnesota kicker Blair Walsh, was chosen.


Also on offense were Baltimore fullback Vonta Leach, making it for the third straight year; Detroit WR Calvin Johnson and Chicago WR Brandon Marshall; Houston tackle Duane Brown; New Orleans guard Jahri Evans, making his fourth consecutive appearance; Baltimore kick returner Jacoby Jones; Miami DE Cameron Wake; Cincinnati DT Geno Atkins and New England DT Vince Wilfork; and Chicago CB Charles Tillman.


___


AP Sports Writers Tim Booth in Seattle, Janie McCauley in San Francisco and Kristie Rieken in Houston contributed to this story.


___


Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL


Read More..

Former Lab Technician Denies Faulty DNA Work in Rape Cases





A former New York City laboratory technician whose work on rape cases is now being scrutinized for serious mistakes said on Friday that she had been unaware there were problems in her work and, disputing an earlier report, denied she had resigned under pressure.




The former lab technician, Serrita Mitchell, said any problems must have been someone else’s.


“My work?” Ms. Mitchell said. “No, no, no, not my work.”


Earlier, the city medical examiner’s office, where Ms. Mitchell said she was employed from 2000 to 2011, said it was reviewing 843 rape cases handled by a lab technician who might have missed critical evidence.


So far, it has finished looking over about half the cases, and found 26 in which the technician had missed biological evidence and 19 in which evidence was commingled with evidence from other cases. In seven cases where evidence was missed, the medical examiner’s office was able to extract a DNA profile, raising the possibility that detectives could have caught some suspects sooner.


The office declined to identify the technician. Documents said she quit in November 2011 after the office moved to fire her, once supervisors had begun to discover deficiencies in her work. A city official who declined to be identified said Ms. Mitchell was the technician.


However, Ms. Mitchell, reached at her home in the Bronx on Friday, said she had never been told there were problems. “It couldn’t be me because your work gets checked,” she said. “You have supervisors.”


She also said that she had resigned because of a rotator cuff injury that impeded her movement. “I loved the job so much that I stayed a little longer,” she said, explaining that she had not expected to stay with the medical examiner’s office so long. “Then it was time to leave.”


Also on Friday, the Legal Aid Society, which provides criminal defense lawyers for most of the city’s poor defendants, said it was demanding that the city turn over information about the cases under review.


If needed, Legal Aid will sue the city to gain access to identifying information about the cases, its chief lawyer, Steven Banks, said, noting that New York was one of only 14 states that did not require routine disclosure of criminal evidence before trial.


Disclosure of the faulty examination of the evidence is prompting questions about outside review of the medical examiner’s office. The City Council on Friday announced plans for an emergency oversight committee, and its members spoke with outrage about the likelihood that missed semen stains and “false negatives” might have enabled rapists to go unpunished.


“The mishandling of rape cases is making double victims of women who have already suffered an indescribably horrific event,” said Christine C. Quinn, the Council speaker.


A few more details emerged Friday about a 2001 case involving the rape of a minor in Brooklyn, in which the technician missed biological evidence, the review found. The victim accused an 18-year-old acquaintance of forcing himself on her, and he was questioned by the police but not charged, according to a law enforcement official.


Unrelated to the rape, he pleaded guilty in 2005 to third-degree robbery and served two years in prison. The DNA sample he gave in the robbery case was matched with the one belatedly developed from evidence the technician had overlooked in the 2001 rape, law enforcement officials said. He was recently indicted in the 2001 rape.


Especially alarming to defense lawyers was the possibility that DNA samples were cross-contaminated and led to false convictions, or could do so in the future.


“Up to this point,” Mr. Banks said, “they have not made information available to us, as the primary defender in New York City, to determine whether there’s an injustice that’s been done in past cases, pending cases, or allowing us to be on the lookout in future cases.” He added, “If it could happen with one analyst, how does anyone know that it stops there?”


The medical examiner’s office has said that the risk of cross-contamination was extremely low and that it does not appear that anyone was wrongly convicted in the cases that have been reviewed so far. And officials in at least two of the city’s district attorneys’ offices — for Brooklyn and Manhattan — said they had not found any erroneous convictions.


But Mr. Banks said the authorities needed to do more, and that their statements thus far were the equivalent of “trust us.”


“Given what’s happened,” he said, “that’s cold comfort.”


Read More..

Business Briefing | Retailing: Best Buy Shares Rally on Improved Holiday Sales



The Best Buy Company had better-than-expected holiday sales, setting off a gain of $2, or 16.4 percent, in its stock price, to $14.21 a share on Friday. The holiday quarter accounted for about a third of Best Buy’s revenue last year. The chain said that revenue at stores open at least a year fell 1.4 percent for the nine weeks ended Jan. 5. The company’s performance in the United States was flat. The chief executive, Hubert Joly, said in a statement that the result was better than the last several quarters. A Morningstar analyst, R. J. Hottovy, said the results showed that some of Best Buy’s initiatives, like more employee training and online price matching helped increase sales.


Read More..

India Ink: Insurgents in Jharkhand Plant Bombs Inside Dead Bodies

Maoist insurgents in Jharkhand state have started to hide explosive devices in the bodies of their enemies, police officials said, a new tactic in the long battle between Indian security forces and the insurgents.

On Monday, rebels killed nine Central Reserve Police Force paramilitary soldiers and three villagers in an ambush in the Karmatiya forest area of Latehar district, about 150 kilometers (90 miles) southwest from the state capital of Ranchi, said state police chief Gauri Shankar Rath. After the insurgents retreated into the woods, the Central Reserve Police Force on Wednesday found the body of Babulal Patel, 29, a constable, with stitches in his abdomen, he said.

His body was flown to Ranchi by helicopter and taken to the Rajendra Institute of Medical Sciences for an autopsy. When the doctors saw the stitches, they grew alarmed and called the top security officials, Binay Kumar, a doctor there, said.

Using X-rays, members of a bomb disposal squad detected an improvised explosive device, or I.E.D., in the soldier’s stomach. With the help of doctors, it took over two hours for the bomb disposal unit to remove the explosive and defuse it outside.

“The I.E.D. connected with detonator batteries and a small solar panel weighing about 2.45 kilograms was extracted with utmost care from the body of the security personnel,” said Dr. Kumar. “Even a small mistake or a little pressure could have exploded the bomb device, triggering a major casualty inside the hospital,” he said. “The abdomen was stitched with surgical precision.”

A similar I.E.D. had detonated when the security personnel, along with some villagers, had removed the body of another colleague in the forest area. Three villagers were killed in that explosion on Wednesday.

Jharkhand’s police chief, Mr. Rath, said this was the first time the Maoist had used bodies as booby traps.

“With this inhuman act, the Maoists have now made it clear that they do not have any regard for human dignity, values and human lives,” said Mr. Rath. “This incident has crossed all limits of cruelty. We’ll definitely retaliate when the time comes.”

Mr. Rath called the Maoists’ most recent attack on security personnel “well planned.”

The state police official said the Maoists had ambushed the security forces under the leadership of Deo Kumar Singh, also known as Arvindji, considered among the top 10 Maoists commanders in Jharkhand and Bihar. “He has executed several deadly operations in the past,” Mr. Rath said.

Latehar’s superintendent of police, Kranti K. Garhdeshi, said that Mr. Singh also was an expert in I.E.D.’s and landmines.

In the past decade, hundreds of security personnel and civilians have been killed in battles with the Maoist insurgents in Jharkhand. The Indian prime minister, Manmohan Singh, has declared the insurgents the biggest internal security threat in India.

Read More..

BlackBerry Z10 shown off in leaked marketing materials









Title Post: BlackBerry Z10 shown off in leaked marketing materials
Url Post: http://www.news.fluser.com/blackberry-z10-shown-off-in-leaked-marketing-materials/
Link To Post : BlackBerry Z10 shown off in leaked marketing materials
Rating:
100%

based on 99998 ratings.
5 user reviews.
Author: Fluser SeoLink
Thanks for visiting the blog, If any criticism and suggestions please leave a comment




Read More..

Browns name Rob Chudzinski new coach


CLEVELAND (AP) — The Browns hauled their coaching search to Arizona and back. They talked to high-profile college coaches, NFL assistants and a fired pro coach who took a team to a Super Bowl.


None of them was hired.


Instead, Rob Chudzinski became their pick.


With no experience as a head coach at any level, Chudzinski was hired Thursday night by the Cleveland Browns, the team he cheered for as a kid. This is Chudzinski's third stint with the team, but this time around he's the guy in charge.


Chudzinski, who spent the past two seasons calling plays as Carolina's offensive coordinator, is the Browns' sixth full-time coach since 1999 and 14th in team history.


Just as it appeared the Browns might be going in another direction, the team selected the 44-year-old Chudzinski to revive a team that has made the playoffs just once in the past 14 years.


Chudzinski will be introduced Friday at an 11 a.m. news conference, where owner Jimmy Haslam and CEO Joe Banner likely will be asked how they selected Banner after speaking to at least seven other candidates and flirting with Chip Kelly before he returned to Oregon.


"Chud," as he's known to players and friends, Chudzinski worked as the Browns' tight ends coach in 2004 and was their offensive coordinator in 2007, when the team won 10 games — their most since an expansion rebirth in 1999.


A lifelong Browns fan who grew up in Toledo, Ohio, Chudzinski replaces Pat Shurmur, another first-time coach when he was hired, who was fired on Dec. 31 after a 5-11 season. For the past two years, Chudzinski has worked with talented Panthers quarterback Cam Newton and resuscitated Carolina's offense, which was one of the league's worst before he arrived.


When Haslam and Banner embarked on their coaching search as 2013 began, the pair vowed they would wait as long as necessary to find "the right coach" for Cleveland. They promised to give their new coach final say over the roster and planned to pair him with an executive to help pick players.


Chudzinski wasn't seen by many as an option.


And then he became the choice.


Chudzinski interviewed with the team on Wednesday, when the club also visited with Cincinnati defensive coordinator Mike Zimmer. Chudzinski appeared to be a long shot for the job, not because he wasn't qualified, but because it was thought Haslam wanted to make a big splash with his first coaching hire.


However, Chudzinski wowed Haslam and Banner during his meeting and the team decided it was time to end its search in its second week.


It's not yet known whom Chudzinski will bring in as coordinators. There are reports he may hire former San Diego coach Norv Turner to run his offense. Chudzinski worked for Turner with the Chargers.


In his first season in Carolina, Chudzinski turned Newton, the No. 1 overall draft pick, loose and the Panthers set club records for total yards (6,237) and first downs (345). Carolina also scored 48 touchdowns after getting just 17 in the season before Chudzinski arrived. The Panthers jumped from last in the league in total yardage to seventh, the biggest improvement since 1999.


Following the season, Chudzinski interviewed for head coaching jobs with St. Louis, Jacksonville and Tampa Bay before returning to Carolina.


In getting the Browns' job, Chudzinski was picked over Zimmer, Montreal Alouettes coach Marc Trestman, fired Arizona coach Ken Whisenhunt and Cardinals defensive coordinator Ray Horton. Whisenhunt was in Cleveland for a second interview on Thursday, and appeared to be the front-runner. The Browns also were expected to interview Indianapolis offensive coordinator Bruce Arians.


Newton continued to develop in his second season with Chudzinski, and the QB's development may have helped his case since the Browns are hoping Brandon Weeden will improve this year after his uneven rookie season.


After his first stint on Cleveland's staff, Chudzinski spent two seasons as San Diego's tight ends coach, working with perennial Pro Bowl standout Antonio Gates.


Taking over the Browns' offense in 2007, Chudzinski helped the Browns go 10-6. They barely missed the playoffs, but four players, including quarterback Derek Anderson, made the Pro Bowl. However, in 2008, the Browns struggled on offense and a six-game losing streak led to a 4-12 finish and Romeo Crennel's firing.


Chudzinski's hiring may not be popular with Cleveland fans, many of whom at fantasies about Nick Saban or Jon Gruden or Kelly brining his supersonic offense to the NFL.


But his selection is in keeping with at least one of Banner's past moves. When he was in Philadelphia's front office, Banner went outside the box and hired Green Bay assistant Andy Reid, a relative unknown who spent 14 seasons with the Eagles.


Now that they've got their coach, the Browns can focus on finding a GM to replace Tom Heckert, fired after three seasons.


___


Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL


Read More..

The New Old Age Blog: Taking a Zen Approach to Caregiving

You try to help your elderly father. Irritated and defensive, he snaps at you instead of going along with your suggestion. And you think “this is so unfair” and feel a rising tide of anger.

How to handle situations like this, which arise often and create so much angst for caregivers?

Jennifer Block finds the answer in what she calls “contemplative caregiving” — the application of Buddhist principles to caregiving and the subject of a year-long course that starts at the San Francisco Zen Center in a few weeks.

This approach aims to cultivate compassion, both for older people and the people they depend on, said Ms. Block, 49, a Buddhist chaplain and the course’s lead instructor. She’s also the former director of education at the Zen Hospice project in San Francisco and founder of the Beyond Measure School for Contemplative Care, which is helping develop a new, Zen-inspired senior living community in the area.

I caught up with Ms. Block recently, and what follows is an edited transcript of our conversation.

Let’s start with your experience. Have you been a caregiver?

My experience in caregiving is as a professional providing spiritual care to individuals and families when they are facing and coping with aging and sickness and loss and dying, particularly in hospital and hospice settings.

What kinds of challenges have you witnessed?

People are for the most part unprepared for caregiving. They’re either untrained or unable to trust their own instincts. They lack confidence as well as knowledge. By confidence, I mean understanding and accepting that we don’t know all the answers – what to do, how to fix things.

This past weekend, I was on the phone with a woman who’d brought her mom to live near her in assisted living. The mom had been to the hospital the day before. My conversation with the daughter was about helping her see the truth that her mother needed more care and that was going to change the daughter’s responsibilities and her life. And also, her mother was frail, elderly, and coming nearer to death.

That’s hard, isn’t it?

Yes, because we live in a death-denying society. Also, we live in a fast-paced, demanding world that says don’t sit still — do something. But people receiving care often need most of all for us to spend time with them. When we do that, their mortality and our grief and our helplessness becomes closer to us and more apparent.

How can contemplative caregiving help?

We teach people to cultivate a relationship with aging, sickness and dying. To turn toward it rather than turning away, and to pay close attention. Most people don’t want to do this.

A person needs training to face what is difficult in oneself and in others. There are spiritual muscles we need to develop, just like we develop physical muscles in a gym. Also, the mind needs to be trained to be responsive instead of reactive.

What does that mean?

Here’s an example. Let’s say you’re trying to help your mother, and she says something off-putting to you like “you’ve always been terrible at keeping house. It’s no wonder you lost my pajamas.”

The first thing is to notice your experience. To become aware of that feeling, almost like being slapped emotionally. To notice your chest tightening.

Then I tell people to take a deep breath. And say something to themselves like “soften” to address that tightness. That’s how you can stay facing something uncomfortable rather than turning away.

If I were in this position, I might say something to myself like “hello unhappiness” or “hello suffering” or “hello aging” to tether myself.

The second step would be curiosity about that experience. Like, wow, where do I feel that anger that rose up in me, or that fear? Oh, it’s in my chest. I’m going to feel that, stay with it, investigate it.

Why is that important?

Because as we investigate something we come to understand it. And, paradoxically, when we pay attention to pain it changes. It softens. It moves. It lessens. It deepens. And we get to know it and learn not to be afraid of it or change it or fix it but just come alongside of it.

Over hours, days, months, years, the mind and heart come to know pain. And the response to pain is compassion — the wish for the alleviation of pain.

Let’s go back to what mother said about your housekeeping and the pajamas. Maybe you leave the room for five minutes so you can pay attention to your reaction and remember your training. Then, you can go back in and have a response rather than a reaction. Maybe something like “Mom, I think you’re right. I may not be the world’s best housekeeper. I’m sorry I lost your pajamas. It seems like you’re having a pretty strong response to that, and I’d like to know why it matters so much to you. What’s happening with you today?”

Are other skills important?

Another skill is to become aware of how much we receive as well as give in caregiving. Caregiving can be really gratifying. It’s an expression of our values and identity: the way we want the world to be. So, I try to teach people how this role benefits them. Such as learning what it’s like to be old. Or having a close, intimate relationship with an older parent for the first time in decades. It isn’t necessarily pleasant or easy. But the alternative is missing someone’s final chapter, and that can be a real loss.

What will you do in your course?

We’ll teach the principles of contemplative care and discuss them. We’ll have homework, such as ‘Bring me three examples of someone you were caring for who was caring toward you in return.’ That’s one way of practicing attention. And people will train in meditation.

We’ll also explore our own relationship to aging, sickness, dying and loss. We’ll tell our stories: this is the situation I was in, this is where I felt myself shut down, this was the edge of my comfort or knowledge. And we’ll teach principles from Buddhism. Equanimity. Compassion. Deep inner connectedness.

What can people do on their own?

Mindfulness training is offered in almost every city. That’s one of the core components of this approach.

I think every caregiver needs to have their own caregiver — a therapist or a colleague or a friend, someone who is there for them and with whom they can unburden themselves. I think of caregiving as drawing water from a well. We need to make sure that we have whatever nurtures us, whatever supplies that well. And often, that’s connecting with others.

Are other groups doing this kind of work?

In New York City, the New York Zen Center for Contemplative Care educates the public and professionals about contemplative care. And in New Mexico, the Upaya Zen Center does similar work, much of it centered around death and dying.

People who want to read about this might want to look at a new book of essays, “The Arts of Contemplative Care: Pioneering Voices in Buddhist Chaplaincy and Pastoral Work” (Wisdom Publications, 2012).

Read More..

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.

Read More..