Fed to tie interest rate to job gains

WASHINGTON — The Federal Reserve said it will continue aggressive measures to stimulate the economy and made a major policy shift to focus more directly on boosting the job market.

Fed policymakers said they would keep interest rates at historically low levels until unemployment drops below 6.5%.

It's likely to keep the Fed's short-term interest rates at historically low levels well into 2015.

The move marked the first time that Fed policymakers have tied themselves to an explicit unemployment goal. It appeared to end the long-running debate within the central bank over how aggressively to target the nation's lagging job market.

The jobless figure was 7.7% in November, and the Fed's new forecast doesn't see that dropping below 6.5% for about three years.

The decision was made easier by the slow pace of inflation, which remains below 2% on an annual basis. Critics of the Fed's policies have argued that efforts to stimulate the economy would lead to inflation, but so far, that has not happened, and Fed Chairman Ben S. Bernanke has argued that the risk is much smaller than the dangers posed by high unemployment.

"The conditions now prevailing in the job market represent an enormous waste of human and economic potential," Bernanke said Wednesday during a news conference after the central bank's last policy meeting of the year.

Under its new policy, the Fed would let its inflation outlook rise to 2.5% before taking action to curtail it — giving the nation's employers more time to create jobs.

The move to link interest rate policies directly to the jobless rate is meant to give the public and businesses greater confidence about how long interest rates will remain exceptionally low, and that by itself could act as a kind of stimulus to the economy.

The new push got a warm welcome from both economists and Wall Street.

Economist Bernard Baumohl at the Economic Outlook Group said the previous time frame for action was "self-defeating because it provided no incentive for employers to start spending any time soon to avoid higher interest rates. It just didn't create any sense of urgency to accelerate investments or increase the rate of hiring."

The Fed has kept its federal funds rate, which influences rates for credit cards, mortgages and business and other loans, near zero since December 2008. Unemployment has been near 8% or above since early 2009.

Bernanke and his colleagues also decided Wednesday to continue the controversial large-scale bond-buying programs in the new year. Specifically, the Fed will buy $40 billion of mortgage-backed securities and $45 billion of long-term Treasury bonds a month.

The purchases are intended to drive down long-term interest rates to spur spending, investment and lending, boosting economic activity as well as hiring.

The central bank launched the purchase of mortgage-backed securities in September to give a lift especially to the housing market, which Fed policymakers said Wednesday "has shown further signs of improvement." They said they would continue to buy bonds until the job market "improved substantially."

The Fed, which has a dual mandate to maximize employment and keep inflation in check, also forecast a somewhat stronger growth for next year.

Its policy statement Wednesday noted a slowing in U.S. business investment and "significant downside risks" in the global economy, but made no mention of the so-called fiscal cliff, the automatic federal budget cuts and tax hikes scheduled to take effect beginning Jan. 1.

In a 75-minute news conference, however, Bernanke said it was clearly evident that concerns about the fiscal impasse already had hurt the economy, weakening business investments and consumer confidence.

He said that whatever the Fed did, it was not enough to offset the full effects of a U.S. economy failing to resolve fiscal issues. But he was cautiously optimistic: "I actually believe that Congress will come up with a solution, and I certainly hope they will."

For years, the Fed didn't give any indication of its future interest-rate path and only in recent years signaled what it might do by using somewhat vague language. In June 2011, the Fed said that it would keep rates exceptionally low for an "extended period." In August 2011, policymakers said no change was likely until at least mid-2013. And that date has since been extended twice, to late 2014 and then mid-2015.

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Documents: Prisoner plotted to kill Justin Bieber

LAS CRUCES, N.M. (AP) — An imprisoned man whose infatuation with Justin Bieber included a tattoo of the pop star on his leg has told investigators in New Mexico he hatched a plot to kill him.

Court documents in a New Mexico district court say Dana Martin told investigators he persuaded a man he met in prison and the man's nephew to kill Bieber, Bieber's bodyguard and two others not connected to the pop star.

He told investigators that Mark Staake and Tanner Ruane headed east, planning to be near a Bieber concert scheduled in New York City. They missed a turn and crossed into Canada from Vermont. Staake was arrested on an outstanding warrant. Ruane was arrested later.

The two men face multiple charges stemming for the alleged plot.

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Eli Lilly to Conduct Additional Study of Alzheimer’s Drug

The drug maker Eli Lilly & Company said on Wednesday that it planned an additional study of an experimental Alzheimer’s drug that failed to improve the condition of people with the disease, saying that it remained hopeful about the drug’s prospects.

The newest study is expected to get under way in the third quarter of 2013 and will focus on patients with mild Alzheimer’s disease. Lilly released results of two clinical trials in August that showed the drug, called solanezumab, did not significantly improve either the cognition or the daily functioning of people with mild and moderate forms of the disease. But despite that failure, the results also gave some reason for hope: when patients with mild Alzheimer’s were separated out, the drug was shown to significantly slow their decline in cognition.

In a statement on Wednesday, the company said it decided not to pursue approval of the drug based on existing study results after it met with officials from the Food and Drug Administration. A Lilly executive said, however, that the company was still optimistic.

“We remain encouraged and excited by the solanezumab data,” David Ricks, a senior vice president at Lilly and president of Lilly Bio-Medicines, said in the statement. “We are committed to working with the F.D.A. and other regulatory authorities to bring solanezumab to the millions of patients and caregivers suffering from this devastating disease who urgently need this potential treatment.”

The Lilly drug is the second Alzheimer’s treatment to fail in clinical trials this year. Pfizer and Johnson & Johnson stopped development of a similar treatment, bapineuzumab, after it, too, was not shown to work. Both drugs target beta amyloid, a protein in the brain that is found in people with Alzheimer’s disease.

Lilly shares closed at $49, down 3.2 percent.

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Stocks lower as investors watch Washington

Stocks slipped Thursday on Wall Street after more signs of tension emerged from federal budget talks in Washington.

The Dow Jones industrial average was down 70 points at 13,174 just after 1 p.m. EST. The Standard & Poor's 500 index was down 10 points at 1,418. The Nasdaq composite index was down 24 points at 2,989.

In Washington, House Speaker John Boehner said that the White House was so resistant to cutting government spending that it risked pushing the country off the “fiscal cliff.”

The “cliff” is tax increases and government spending cuts that take effect Jan. 1 unless Congress and the White House reach a deal to avert them. Economists have warned that the “cliff” could eventually lead to a recession in the United States.

President Barack Obama said that a deal was “still a work in progress.” Asked about Boehner's assertion that he was waiting to hear more from the president, Obama said only, “Merry Christmas.”

Stocks fell despite the fourth straight weekly drop in applications for unemployment benefits. Applications fell 29,000 last week to 343,000, the second-lowest this year, the Labor Department reported.

On Wall Street, energy and health care stocks fell the most, and telecommunications stocks were down only slightly. All 10 categories of stock in the S&P 500 index were lower.

Best Buy shot up $1.86, or 15 percent, to $14.04 after a newspaper reported that the founder of the troubled electronics chain will make a bid of up to $6 billion for the company by the end of the week.

CVS Caremark climbed 97 cents, or 2 percent, to $48.51 after issuing a profit prediction for next year that was ahead of Wall Street expectations. The company also raised its dividend.

On Wednesday, the Dow Jones industrial average declined for the first day in five. Stocks rallied in the afternoon after the Federal Reserve tied its pledge of super-low interest rates to an improvement in the unemployment rate, but the rally faded.

The Fed said it would hold interest rates super-low until the unemployment rate drops below 6.5 percent, a threshold the Fed believes may not be breached until the end of 2015. The rate is 7.7 percent today.

The Dow's close Wednesday of 13,245 put it within a point of its close on Election Day. After the election, stocks slid 5 percent as investors began to fret about the “fiscal cliff,” but stocks have drifted back higher recently.

“I don't think anyone expected the markets to hold up this well as we get closer and closer to the deadline,” said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas.

“Two possibilities: Either the markets are convinced that they'll reach some sort of agreement, or the markets don't care,” Frederick said.

Among individual stocks:

— Google gained $5.26, or 0.8 percent, to $702.82 after releasing an updated map application for the iPhone. Google Maps came pre-loaded on previous iPhones but was dropped for the much-derided Apple Maps earlier this year.

— SolarCity, which installs rooftop solar panels, began trading on the Nasdaq under the symbol SCTY. Shares were priced at $8 and shot to $12. Elon Musk, founder of PayPal and Tesla Motors, is the company's chairman.

— Clearwire, a struggling provider of mobile Internet access services, jumped 40 cents to $3.15 in heavy trading after Sprint Nextel offered to buy out the minority shareholders of the company for $2.1 billion, giving Sprint total control.

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Ravi Shankar, sitar master, dies at 92

Ravi Shankar was already revered as a master of the sitar in 1966 when he met George Harrison, the Beatle who became his most famous disciple and gave the Indian musician-composer unexpected pop-culture cachet.

Suddenly the classically trained Shankar was a darling of the hippie movement, gaining widespread attention through memorable performances at the Monterey Pop Festival, Woodstock and the 1971 Concert for Bangladesh.

Harrison called him "the godfather of world music," and the great violinist Yehudi Menuhin once compared the sitarist's genius to Mozart's. Shankar continued to give virtuoso performances into his 90s, including one in 2011 at Walt Disney Concert Hall.

PHOTOS: Ravi Shankar | 1920 - 2010

Shankar, 92, who introduced Indian music to much of the Western world, died Tuesday at a hospital near his home in Encinitas. Stuart Wolferman, a publicist for his record label Unfinished Side Productions, said Shankar had undergone heart valve replacement surgery last week.

Well-established in the classical music of his native India since the 1940s, he remained a vital figure on the global music stage for six decades. Shankar is the father of pop music star Norah Jones and Anoushka Shankar, his protege and a sitar star in her own right.

Before the 1950s, Indian classical music — with its improvised melodic excursions and complex percussion rhythms — was virtually unknown in America. If Shankar had done nothing more than compose the movie scores for Indian filmmaker Satyajit Ray's "Apu" trilogy in the 1950s, he "would be remembered and revered," Times music critic Mark Swed wrote last fall.

PHOTOS: Notable deaths of 2012

Shankar was on a path to international stardom during the 1950s, playing the sitar in the Soviet Union and debuting as a soloist in Western Europe and the United States. Two early albums also had considerable impact, "Three Classical Ragas" and "India's Master Musician."

During his musical emergence in the West, his first important association was with violinist Menuhin, whose passion for Indian music was ignited by Shankar in 1952. Their creative partnership peaked with their "West Meets East" release, which earned a Grammy Award in 1967. The recording also showed Shankar's versatility — and the capacity of Indian music to inspire artists from different creative disciplines.

He presented a new form of classical music to Western audiences that was based on improvisation instead of written compositions. Shankar typically played in the Hindustani classical style, in which he was accompanied by a player of two tablas, or small hand drums. Concerts in India that often lasted through the night were generally shortened to a few hours for American venues as Shankar played the sitar, a long-necked lute-like stringed instrument.

At first, he especially appealed to fans of jazz music drawn to improvisation. He recorded "Improvisations" (1962) with saxophonist Bud Shank and "Portrait of a Genius" (1964) with flutist Paul Horn, gave lessons to saxophonist John Coltrane (who named his saxophone-playing son Ravi), and wrote a percussion piece for drummer Buddy Rich and Alla Rakha.

On the Beatles' 1965 recording "Norwegian Wood," Harrison had played the sitar and met Shankar the next year in London.

Shankar was "the first person to impress me," among the impressive people the Beatles met, "because he didn't try to impress me," Harrison later said. The pair became close and their friendship lasted until Harrison's death in 2001.

Harrison was instrumental in getting Shankar booked at the now legendary Monterey Pop Festival in 1967. They partnered in organizing the Concert for Bangladesh and were among the producers who won a Grammy in 1972 for the subsequent album. They toured together in 1974, and Harrison produced Shankar's career-spanning mid-1990s boxed set, "In Celebration."

But Shankar came away from his festival appearances with mixed feelings about his rock generation followers. He expressed hope that his performances might help young people better understand Indian music and philosophy but later said "they weren't ready for it."

"All the young people got interested … but it was so mixed up with superficiality and the fad and the drugs," Shankar told The Times in 1996. "I had to go through several years to make them understand that this is a disciplined music, needing a fresh mind."

When Shankar was criticized in India as a sellout for spreading his music in the West, he responded in the early 1970s by lowering his profile and reaffirming his classical roots. He followed his first concerto for sitar and orchestra in 1971 with another a decade later.

"Our music has gone through so much development," Shankar told The Times in 1997. "But its roots — which have something to do with its feelings, the depth from where you bring out the music when you perform — touch the listeners even without their knowing it."

In the 1980s and '90s, Shankar maintained a busy performing schedule despite heart problems. He recorded "Tana Mana," an unusual synthesis of Indian music, electronics and jazz; oversaw the American premiere of his ballet, "Ghyanshyam: The Broken Branch"; and collaborated with composer Philip Glass on the album "Passages."

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Facebook revises privacy controls in effort to make them more accessible, comprehensible

SAN FRANCISCO – Facebook is trying to make its privacy controls easier to find and understand in an effort to turn the world’s largest social network into a more discreet place.

The fine-tuning announced Wednesday will include several revisions that will start rolling out to Facebook Inc.‘s more than 1 billion users in the next few weeks.

The biggest change will be a new “privacy shortcuts” section that will appear as a tiny lock on the right-hand side at the top of people’s news feeds. This feature offers a drop-down box where users will be able to get answers to common questions such as “Who can see my stuff?”

Other updates will include a tool that will enable individuals to review all the publicly available pictures identifying them on Facebook.

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'Lincoln,' 'Les Mis,' 'Playbook' lead SAG awards

LOS ANGELES (AP) — The Civil War saga "Lincoln," the musical "Les Miserables" and the comic drama "Silver Linings Playbook" boosted their Academy Awards prospects Wednesday with four nominations apiece for the Screen Actors Guild Awards.

All three films were nominated for overall performance by their casts. Also nominated for best ensemble cast were the Iran hostage-crisis thriller "Argo" and the British retiree adventure "The Best Exotic Marigold Hotel."

Directed by Steven Spielberg, "Lincoln" also scored individual nominations for Daniel Day-Lewis in the title role as best actor, Sally Field for supporting actress as Mary Todd Lincoln and Tommy Lee Jones for supporting actor as abolitionist firebrand Thaddeus Stevens.

"Les Miserables," from "The King's Speech" director Tom Hooper, had nominations for Hugh Jackman for best actor as Victor Hugo's long-suffering hero Jean Valjean and Anne Hathaway for supporting actress as a woman fallen into prostitution, plus a nomination for its stunt ensemble.

"Silver Linings Playbook," made by "The Fighter" director David O. Russell, also had lead-acting nominations for Bradley Cooper and Jennifer Lawrence as lost souls who find a second chance at love and Robert De Niro for supporting actor as a football-obsessed dad.

Besides Lawrence, best-actress nominees are Jessica Chastain as a CIA analyst pursuing Osama bin Laden in "Zero Dark Thirty"; Marion Cotillard as a woman who finds romance after tragedy in "Rust and Bone"; Helen Mirren as Alfred Hitchcock's strong-willed wife in "Hitchcock"; and Naomi Watts as a woman caught in the devastation of a tsunami in "The Impossible."

Joining Cooper, Day-Lewis and Jackman in the best-actor field are John Hawkes as a polio victim aiming to lose his virginity in "The Sessions" and Denzel Washington as a boozy airline pilot in "Flight."

SAG nominees are almost all familiar names in Hollywood's awards season. Eighteen of the 20 film acting contenders are past Academy Awards nominees and 13 have won Oscars, among them five two-time winners. Only Cooper and Jackman have never before earned Oscar nominations.

One of the year's most-acclaimed films, Paul Thomas Anderson's "The Master," earned only one nomination, supporting actor for Philip Seymour Hoffman as a mesmerizing cult leader. The film was snubbed on nominations for ensemble, lead actor Joaquin Phoenix and supporting actress Amy Adams.

Other individual performances overlooked by SAG voters include Anthony Hopkins in the title role of "Hitchcock," Keira Knightley in the title role of "Anna Karenina," Bill Murray as Franklin Roosevelt in "Hyde Park on Hudson" and "Argo" director Ben Affleck, who also starred in the film.

The SAG Awards will be presented Jan. 27. The guild nominations are one of Hollywood's first major announcements on the long road to the Feb. 24 Oscars Awards, whose nominations will be released Jan. 10.

Nominations for the Golden Globes, the second-biggest film honors after the Oscars, come out Thursday.

Maggie Smith had four individual and ensemble nominations. Along with sharing the ensemble honor for "Best Exotic Marigold Hotel," Smith joined the cast of "Downton Abbey" among TV ensemble contenders and had nominations for supporting film actress as a cranky retiree in "Marigold Hotel" and TV drama actress for "Downton Abbey."

Nicole Kidman earned two individual nominations, as supporting film actress as a woman smitten with a prison inmate in "The Paperboy" and best actress in a TV movie or miniseries as war correspondent Martha Gellhorn in "Hemingway & Gellhorn."

Bryan Cranston had three overall nominations, as best actor in a TV drama for "Breaking Bad," an ensemble honor for that show and a film ensemble honor for "Argo."

Along with "Breaking Bad" and "Downton Abbey," best TV drama ensemble contenders are "Boardwalk Empire," ''Homeland" and "Mad Men." TV comedy ensemble nominees are "30 Rock," ''The Big Bang Theory," ''Glee," ''Modern Family," ''Nurse Jackie" and "The Office."

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Online:

http://www.sagawards.org

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Southern California posts most November home sales since 2006

Southern California's housing market surged again last month, with the number of homes sold climbing more than 14% from a year earlier to their the highest level for any November in six years.

It was the 11th straight month of year-over-year increases, according to real estate research firm DataQuick. The median home price for the region was $321,000, up from $315,000 the two prior months and a nearly 17% increase over $275,000 in November of 2011.

Helping to boost the median home price, the number of sales rose in the trade-up middle ranges of the market and at the high end, while sales volume fell in less expensive areas.

Investors paying cash for homes remain an unusually large part of the regional housing market, DataQuick said.

More buyers feel confident about their jobs, the economy and housing prices, said John Walsh, president of the San Diego data firm.

“We’re also seeing more non-distressed sales, where people sell at a profit and buy another house, triggering more move-up activity,” Walsh said.

Quiz: How much do you know about mortgages?

A total of 19,285 new and resale houses and condominiums sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month, DataQuick reported. That was down 8.5% from October -- a normal seasonal decline -- but up 14.2% from 16,884 sales in November 2011.

The percentage of resales involving foreclosed homes continued to decline, falling to 15% of all resales, compared with nearly a third a year earlier.

Short sales, in which banks allow borrowers to retire their mortgages by selling their homes for less than the amount owed, continued to make up about a quarter of all resales, according to DataQuick estimates -- an indication that the market, though recovering, is still far from normal.

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'Right-to-work' measure passes in Michigan Legislature

Controversial "right-to-work" legislation covering public-sector employees passed the Michigan House of Representatives on Tuesday, bringing it one step closer to being signed into law.

The House passed the bill, 58 to 51, as union opponents of the measure booed inside the Capitol and an estimated 12,000 people rallied outside. The state's Senate approved the bill last week.

The House is now scheduled to vote on a right-to-work bill for private-sector employees, which would cover Michigan's auto industry. If that measure passes, Michigan would become the 24th right-to-work state, meaning unions cannot require members to pay dues as a condition of employment.

Michigan is the fourth state in the Midwest to become embroiled in labor controversy since 2010, when a slate of Republican governors were swept into statehouses across the nation. The speed with which the right-to-work measure are being passed worries some labor experts, who say that it was once unimaginable that Michigan, where 17.5% of the workforce is unionized, would become a right-to-work state.

"Michigan could prove defining," said Harley Shaiken, a labor expert at UC Berkeley. "What happens here, given the role of unions historically in Michigan, and the larger political implications of right-to-work, will mean a lot."

But even as the Rev. Jesse Jackson rallied protesters on the steps of Lansing City Hall, labor leaders were hurriedly seeking ways to reverse the legislation down the road.

Michigan can't go the way of Ohio, where a referendum last year reversed legislation that would have restricted collective bargaining. Michigan's right-to-work legislation is attached to an appropriations bill, meaning it can't be reversed by referendum. Also, it may be too risky to wait and go the way of Wisconsin, where litigation continues after a judge struck down parts of a collective bargaining law.

However, in Michigan, there is an option of a "statutory initiative," which would be permitted if opponents of the bills can collect enough signatures to equal 8% of the votes cast in the last gubernatorial election, union leaders say. A so-called veto referendum could be triggered by collecting signatures equal to 5% of the votes cast.

A statutory initiative would allow voters to cast a ballot on right-to-work legisation in November 2014, when Gov. Rick Snyder, who has said he would support the legislation, will be up for reelection.

"There are multiple options for a referendum," a senior labor leader said Tuesday. "All options are on the table. This fight is far from over."

It’s unclear whether unions are promoting a referendum now to warn Snyder of the repercussions that signing the legislation would have.

Democrats including Sen. Carl Levin and Rep. John Dingell met with Snyder on Monday to urge him to veto the legislation. The governor promised to "seriously" consider their concerns, but Democrats remained worried that he would sign the bills.

“The governor has a choice: He can put this on the ballot, and let the voters make the determination, or he can jam it through a lame-duck session,” Dingell said Monday.

Snyder, a businessman before he became governor, was elected in 2010 by a landslide, beating his opponent by a nearly 2-to-1 margin. But only 35.5% of respondents said they thought he was doing an "excellent" or "good" job in a Michigan State University survey this fall, and that figure could fall as the controversy continues.

"I think this will pass, and be signed, and there will be a long struggle with the United Auto Workers and other unions,” said Kristin Dziczek, director of the labor and industry group at the Center for Automotive Research. "They’re going to focus their attentions on overturning this. I don’t think the war has even begun."

ALSO:

Obama blasts right-to-work in Michigan

Ohio votes to overturn new collective bargaining law

Protests re-ignite as Michigan right-to-work bill nears final OK

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Notorious patent troll hits RIM with new lawsuit, seeks BlackBerry sales ban

Well-known patent troll Wi-LAN has filed a new lawsuit against BlackBerry maker Research In Motion (RIMM) in the U.S. District Court for the Southern District of Florida. Wi-LAN, which describes itself as “a leading intellectual property licensing company,” claims RIM’s BlackBerry smartphones infringe U.S. Patent No. 6,260,168, owned by Wi-LAN, which relates to Bluetooth implementation. The lawsuit covers multiple BlackBerry handsets including Bold, Torch, Pearl and Storm models, Reuters reports. Wi-LAN is reportedly seeking unspecified damages and is looking to ban sales of RIM’s infringing BlackBerry phones in the United States.

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