Decent jobs report despite slowdown in hiring pace

WASHINGTON (Reuters) - The pace of U.S. job growth slowed a bit in December, keeping the unemployment rate steady at 7.8 percent, but details of the Labor Department's U.S. employment report were fairly encouraging.
* Nonfarm payrolls increased 155,000, but job gains for the previous month were revised up to show 15,0000 more positions created than previously reported.
* Construction employment rebounded strongly, gaining 30,000 jobs after sagging 10,000 in November, reflecting increased residential construction activity as the housing market recovery gains traction.
* Manufacturing payrolls gained 25,000 after rising 5,000 in November. Manufacturing working hours increased, a positive sign for a sector that has been cooling in recent months. That helped to lift the overall average workweek to 34.5 hours from 34.4 hours in November.
* With workers putting in more time, the average hourly earnings increased 0.3 percent after rising by the same margin in November.
* More people entered the labor force, a sign of confidence in the jobs market, keeping the unemployment rate elevated. The household survey also showed a modest increase in employment, but more people reported they did not have jobs.
* The bad news is that government shed 13,000 jobs in December after a loss of 10,000 the prior month.
* Temporary help jobs, often seen as a harbinger for permanent hiring, fell in December and retail employment declined by 11,300 jobs after a hiring spree the previous months.

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Bank of America, other banks move closer to ending mortgage mess

CHARLOTTE/WASHINGTON (Reuters) - Bank of America Corp announced more than $14 billion of legal settlements over bad mortgages it sold to investors and flaws in its foreclosure process, taking the bank a step closer to ending the home loan problems that have dogged it for years.
About $3 billion of Bank of America's Monday's settlements were part of a larger $8.5 billion deal between 10 big mortgage lenders and regulators to end a loan-by-loan review of foreclosures mandated by the government.
Bank of America shares touched their highest level in nearly two years as investors called it a good step toward ending the company's multiple legal woes. The shares later retreated to close down 0.2 percent at $12.09.
Analysts have estimated that Bank of America has paid out some $40 billion for mortgage settlements since the crisis began. Most of those losses stem from its 2008 purchase of Countrywide Financial, once the largest subprime lender in the United States.
But the bank is moving closer to the day when it can stop worrying about mortgages and start focusing on growth, analysts and investors said.
"It's a step in the right direction in terms of trying to put these issues behind the company," said Jonathan Finger of Finger Interests Ltd, a Houston, Texas-based investment firm that owns 1.1 million of the bank's shares.
Besides the multibank foreclosure settlement, the second largest U.S. bank also announced about $11.6 billion of settlements with government mortgage finance company Fannie Mae to end allegations the bank improperly sold mortgages that later soured, and to resolve questions about foreclosure delays.
Bank of America had already set aside money to cover most of those settlements. The deal with Fannie wipes out 44 percent of the buy-back requests the bank faced as of the end of the third quarter. It also eliminates possible future repurchase requests on about $300 billion in loans.
Bank of America's home loan problems are far from over, though. It still needs court approval for an $8.5 billion settlement with private investors and it is locked in litigation with insurer MBIA Inc over mortgage-related claims.
The agreement also does not end a lawsuit the U.S. Justice Department brought against the bank last year over Countrywide and Bank of America loans sold to Fannie Mae and Freddie Mac, the agency said. The suit accuses Countrywide and Bank of America of causing losses to taxpayers of more than $1 billion.
"I think there is still quite a lot of litigation to go, and I don't think we'll see the end of this for some time," said Thomas Perrelli, a former top Justice Department official, speaking of industry wide legal issues stemming from the financial crisis.
BANKS SETTLE
The settlement Bank of America, Citigroup Inc, JPMorgan Chase & Co, Wells Fargo & Co and five other banks entered with regulators pays out up to $125,000 in cash to homeowners whose homes were being foreclosed when the paperwork problems emerged.
About $3.3 billion of the $8.5 billion settlement with the Office of the Comptroller of the Currency will be in cash, with the rest in changes to the terms of loans or mortgage forgiveness.
In April 2011, the government required banks that collect payments on mortgages, known as servicers, to review whether errors in the foreclosure process had harmed borrowers.
The review focused on foreclosures from 2009 and 2010 and looked at processes, including "robo-signing," where servicer employees or contractors signed documents without first reviewing them.
That loan-by-loan review proved slow and expensive, the OCC said.
The reviews had already cost more than $1.5 billion. They turned up evidence that around 6.5 percent of the loan files contained some error requiring compensation, but most of those errors involved potential payouts much less than $125,000, OCC officials said.
Other banks involved in the settlement include MetLife Bank, Aurora Bank FSB, PNC Financial Services Group Inc, Sovereign Bank NA, SunTrust Banks Inc and U.S. Bancorp.
Wells Fargo said its portion of the cash settlement will be $766 million, which will result in a $644 million charge when it reports fourth-quarter earnings on Friday. The bank said it will spend another $1.2 billion on foreclosure prevention actions, which will not result in additional charges.
Citigroup, which reports earnings next week, said it will take a $305 million charge for its cash payment portion of the settlement, while existing reserves would cover $500 million in loan forgiveness and other actions.
Housing advocates said they viewed the settlement as a positive move as it ends a flawed review process and provides some money, if limited, to consumers. But some advocates and lawmakers expressed dissatisfaction with the pact and suggested hearings could follow.
"I remain concerned that banks continue to avoid full accountability, and I believe that borrowers deserve more answers and transparency than the Federal Reserve and the OCC are currently willing to provide," said Elijah Cummings, the top Democrat on the House Oversight committee.
BOFA SELLS SERVICING RIGHTS
For Bank of America, the Fannie Mae deal was the much larger of Monday's agreements.
Fannie Mae and sibling Freddie Mac essentially buy mortgages from banks and package them into bonds for investors. But during the mortgage boom, banks sold loans to the two companies that Fannie Mae and Freddie Mac say should never have been sold because, for example, borrowers had misstated their income. The two mortgage finance companies are pushing banks to buy back the loans.
On Monday, Bank of America also said it was selling the rights to collect payments on about $306 billion of loans to Nationstar Mortgage Holdings and Walter Investment Management Corp. Reuters first reported on Friday that Bank of America was talking to Nationstar and Walter Investment.
Investors appear to have decided the bank is on the right track as its shares hit their highest level since May 2011 on Monday. When Warren Buffett came to the bank's rescue in August 2011 with a $5 billion investment, he received warrants for 700 million shares of stock at $7.14 per share.

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Nasdaq CEO says would definitely consider Euronext

NEW YORK (Reuters) - Nasdaq OMX Group would definitely consider bidding for Euronext, the operator of the Paris, Amsterdam, Brussels and Lisbon stock exchanges, if it were put up for sale, Nasdaq's Chief Executive Robert Greifeld said in an interview.
"We would have to take a look at it," he said. "I'm not saying we would bid on it, but we would have to take a look."
Chatter that Euronext could be spun off from NYSE Euronext quickly surfaced after IntercontinentalExchange (ICE) made an $8.2 billion bid for the New York Stock Exchange operator in December.
Greifeld said if Euronext were to become available, it would not likely be until sometime in 2014, as it would take several months for the ICE-NYSE deal to close and then the two companies would have to begin an integration process. That scenario would be positive as at that point there may be more clarity on where the macro-economic environment in Europe is headed, he added.
"It would be a harder decision now to decide whether to bid on it than it would be 15 months from now," he said.
Germany's Deutsche Boerse has lost its appetite for buying Euronext, because regulatory and technological changes have made it harder to earn big profits from stock trading, three people familiar with the Frankfurt-based company's thinking told Reuters.
Deutsche Boerse has made three attempts at combining with Euronext since 2003. The final attempt, made in 2011, was shot down by antitrust concerns over creating a dominant player in European derivatives.
When the ICE-NYSE deal was announced, the two companies said they had told regulators in Europe that they would spin Euronext off through an IPO process if that would help the deal pass regulatory muster. But a source familiar with the situation said European regulators still had not indicated if they would prefer Euronext to be separated from a combined ICE-NYSE.
NOT AN AFTERTHOUGHT
ICE's interests are in combining its derivatives business with NYSE's Liffe, Europe's second-largest futures exchange. Doing so would make it the top challenger to Deutsche Boerse's European dominance in derivatives.
While the spotlight has been on Liffe, Euronext, with its four markets, does more trading than the London Stock Exchange, Greifeld pointed out. "It's not an afterthought," he added.
ICE CEO Jeff Sprecher and Nasdaq's Greifeld have a strong relationship going back to their hostile $11.3 billion joint bid for NYSE Euronext in 2011. That bid, which came during Deutsche Boerse and NYSE's merger talks, was dropped due to opposition from U.S. anti-trust regulators.
Combining Nasdaq and NYSE would have brought together the top two U.S. stock exchanges, creating a virtual monopoly on listings and dominance in trading U.S. cash equities and options.
Greifeld said that he is not concerned about going toe-to-toe against a combined ICE-NYSE, because while his trans-Atlantic exchange has fierce rivalries with NYSE across a range of businesses, it does not really compete against ICE.
Still, he said Sprecher would bring a new element to NYSE.
"Jeff is probably the right person to bring the organization forward into modern times," he said, taking a jab at the Big Board operator.
Greifeld said he does not feel the need to go out and do an acquisition just because ICE and NYSE are combining, and that Nasdaq would be opportunistic in its acquisition strategy.
Nasdaq has diversified its revenue stream away from equity trading through a number of small- to mid-sized acquisitions, the latest being a binding offer for Thomson Reuters Corp's investor relations, public relations and multimedia services units for $390 million in December.

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Gadget Watch: Electronic fork nags you on eating

LAS VEGAS (AP) — If you've always wanted a fork that spies on your eating habits, you're in luck: A company has developed a utensil that records when you lift it to the mouth.
The electronic fork is one of the gadgets getting attention this week at the International CES in Las Vegas, an annual showcase of the latest TVs, computers and other consumer-electronic devices.
WHAT IT IS: The HAPIfork is a fork with a fat handle containing electronics and a battery. It's made by HapiIabs, which is based in the land of slow, languorous meals — France.
HOW IT WORKS: The fork contains a motion sensor, so it can figure out when it's being lifted to the mouth. If it senses that you're eating too fast, it warns with you with a vibration and a blinking light. The company believes that using the fork 60 to 75 times during meals lasting from 20 to 30 minutes is ideal.
Between meals, you can connect the fork to a computer or phone and upload data on how fast you're eating, for long-term tracking.
The electronics are waterproof, so you can wash the fork in the sink. If you want to put it in the dishwasher, you have to remove the electronics first.
WHY YOU'D WANT IT: Nutritional experts recommend eating slowly because it takes about 20 minutes to start feeling full. If you eat fast, you may eat too much. The fork is also designed to space your forkfuls so that you have time to chew each one properly. It's like having your mom in a utensil!
WHAT IT DOESN'T DO: The fork has no clue about the nutritional content of your food or how big your forkfuls are. It can't tell if you're shoveling lard or stabbing peas individually.
AVAILABILITY: The company is launching a fundraising campaign for the fork in March on the group-fundraising site Kickstarter.com. Participants need to put down $99 for a fork, which is expected to ship around April or May. Those forks will connect to computers through USB cables.
Later this year, the company plans to start selling Bluetooth-enabled forks to the general public. No price was disclosed for that version.

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Google executive chairman arrives in North Korea

PYONGYANG, North Korea (AP) — Google's chairman wants a firsthand look at North Korea's economy and social media landscape during his private visit Monday to the communist nation, his delegation said, despite misgivings in Washington over the timing of the trip.
Eric Schmidt, executive chairman of one of the world's biggest Internet companies, is the highest-profile U.S. executive to visit North Korea — a country with notoriously restrictive online policies — since young leader Kim Jong Un took power a year ago. His visit has drawn criticism from the U.S. State Department because it comes only weeks after a controversial North Korean rocket launch; it has also prompted speculation about what the businessman hopes to accomplish.
Schmidt arrived on a commercial Air China flight with former New Mexico Gov. Bill Richardson, who has traveled more than a half-dozen times to North Korea over the past 20 years.
Richardson, speaking ahead of the flight from Beijing, called the trip a private, humanitarian mission.
"This is not a Google trip, but I'm sure he's interested in some of the economic issues there, the social media aspect. So this is why we are teamed up on this," Richardson said without elaborating on what he meant by the "social media aspect."
"We'll meet with North Korean political leaders. We'll meet with North Korean economic leaders, military. We'll visit some universities. We don't control the visit. They will let us know what the schedule is when we get there," he said.
U.S. officials have criticized the four-day trip. North Korea on Dec. 12 fired a satellite into space using a long-range rocket. Washington condemned the launch, which it considers a test of ballistic missile technology, as a violation of U.N. Security Council resolutions barring Pyongyang from developing its nuclear and missile programs. The Security Council is deliberating whether to take further action.
"We continue to think the trip is ill-advised," State Department spokeswoman Victoria Nuland told reporters Monday, reiterating the U.S. position that the visit is badly timed. However she added that the government would be open to hearing from the delegation after they return from North Korea.
The trip was planned well before North Korea announced its plans to send a satellite into space, two people with knowledge of the delegation's plans told The Associated Press. AP first reported the group's plans last Thursday.
Schmidt, a staunch proponent of Internet connectivity and openness, is expected to make a donation during the visit, while Richardson will try to discuss the detainment of a U.S. citizen jailed in Pyongyang, members of the delegation told AP. They asked not to be named, saying the trip was a private visit.
"We're going to try to inquire the status, see if we can see him, possibly lay the groundwork for him coming home," Richardson said of the U.S. citizen. "I heard from his son who lives in Washington state, who asked me to bring him back. I doubt we can do it on this trip."
The visit comes just days after Kim, who took power following the Dec. 17, 2011, death of his father, Kim Jong Il, laid out a series of policy goals for North Korea in a lengthy New Year's speech. He cited expanding science and technology as a means to improving the country's economy as a key goal for 2013.
North Korea's economy has languished for decades, particularly after the collapse of the Soviet Union, which since the mid-1940s had provided the country with an economic safety net. North Korea, which has very little arable land, has relied on outside help to feed its people since a famine in the 1990s.
In recent years, North Korea has aimed to modernize its farms and digitize its factories. Farmers told the AP that management policies were revamped to encourage production by providing workers with incentives.
Computer and cellphone use is gaining ground in North Korea's larger cities.
However, most North Koreans only have access to a domestic Intranet system, not the World Wide Web. For North Koreans, Internet use is still strictly regulated and allowed only with approval.
Schmidt, who oversaw Google's expansion into a global Internet giant, speaks frequently about the importance of providing people around the world with Internet access and technology.
Google now has offices in more than 40 countries, including all three of North Korea's neighbors: Russia, South Korea and China, another country criticized for systematic Internet censorship.
Accompanying Schmidt is Jared Cohen, a former U.S. State Department policy and planning adviser who heads Google's New York-based think tank. The two collaborated on a book about the Internet's role in shaping society called "The New Digital Age" that comes out in April.
Also leading the delegation is Kun "Tony" Namkung, a Korea expert who has made frequent trips to North Korea over the past 25 years and has worked as a consultant for The Associated Press.

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U.S. banks to pay $8.5 billion to end foreclosure reviews

WASHINGTON (Reuters) - A group of 10 mortgage servicers agreed on Monday to pay a total of $8.5 billion to end a U.S. government-mandated case-by-case review of housing crisis foreclosures in an acknowledgement the program had proven too cumbersome and expensive.
Roughly 3.8 million borrowers whose homes were in foreclosure within the time frame of the review will receive cash compensation ranging from hundreds of dollars up to $125,000, depending on the type of errors they experienced, the U.S. Office of the Comptroller of the Currency (OCC) said.
The reviews followed the "robo-signing" scandal that emerged in 2010 involving allegations banks pursued faulty foreclosures by using defective or fraudulent documents.
Bank of America Corp , Citigroup Inc , JPMorgan Case & Co , Wells Fargo & Co , MetLife Bank , and five others will pay $3.3 billion directly to eligible borrowers, and $5.2 billion in loan modifications and forgiveness, regulators said.
The OCC and the Federal Reserve Board said they accepted the agreement to get relief to consumers more quickly than through the reviews.
In April 2011, the government required the servicers to review foreclosure actions from 2009 and 2010 to determine whether borrowers had been unlawfully foreclosed on or suffered some other financial harm due to errors in the foreclosure process.
Comptroller of the Currency Thomas Curry said in a statement: "It has become clear that carrying the process through to its conclusion would divert money away from the impacted homeowners and also needlessly delay the dispensation of compensation to affected borrowers."
The agreement announced Monday resolves matters left unsettled by a $25 billion deal that the top five servicers reached last February with the Justice Department, housing authorities and state attorneys general to end an investigation into foreclosure practices including robo-signing.
Those authorities had taken a broad approach to dealing with allegations of robo-signed documents and faulty foreclosures, while the bank regulators had initially opted for the more targeted, individual reviews.
Bank of America said it supports the new approach "because it expands the number of borrowers who will receive payment, speeds the delivery of those payments, and will provide support for homeowners still struggling to make payments."
MetLife said it was fully cooperating with the OCC review process and said its portion of the settlement was $37 million.
The other servicers said they were pleased to reach the settlement.
Regulators said the agreement replaces the case-by-case reviews with a broader framework, which allows borrowers to receive compensation regardless of whether they faced actual harm.
Instead the payouts will be based on whether a borrower falls into one of 11 categories, ranging from whether the person was eligible for protections under the Servicemembers Civil Relief Act, whether the borrower was not in default, or whether he or she was denied a loan modification, for example.
The other banks involved in the settlement are: Aurora , PNC , Sovereign , SunTrust , and U.S. Bank .
Regulators are continuing negotiations whether four other servicers, and are also expected to enter into similar settlements with them.
At least one lawmaker expressed disappointment in the settlement. Elijah Cummings, the top Democrat on the House Committee on Oversight said he had serious concerns that the deal "may allow banks to skirt what they owe and sweep past abuses under the rug without determining the full harm borrowers have suffered."
On Friday Cummings and Oversight Committee Chairman Darrell Issa sent a letter to the agencies requesting a briefing on the settlement.

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Bank of America in mortgage claims settlement

NEW YORK (AP) — Bank of America reached an $11.6 billion settlement with government mortgage agency Fannie Mae to settle claims resulting from mortgage-backed investments that soured during the housing crash, bringing it a step closer to clearing up its legacy of bad home loans.
Under the deal announced Monday, Bank of America will pay $3.6 billion in cash to Fannie Mae and buy back $6.75 billion in loans that the bank and its Countrywide Financial unit sold to the agency from Jan. 1, 2000 through Dec. 31, 2008. That includes about 30,000 loans. The bank is also paying $1.3 billion to the agency for failing to deal with foreclosures fast enough.
Also Monday, a separate settlement was announced between federal regulators and ten major banks and mortgage companies, including Bank of America, over wrongful foreclosure practices. That $8.5 billion settlement covers up to 3.8 million people who were in foreclosure in 2009 and 2010. Of those, about 400,000 may be entitled to payments, advocates estimate.
For Bank of America, its own settlement with Fannie Mae over the mortgage investments represents a "a significant step" in resolving the bank's remaining mortgage problems, Bank of America CEO Brian Moynihan said in a statement. Moynihan's predecessor, Ken Lewis, bought Countrywide, a troubled mortgage-lending giant, in July 2008 just as the financial crisis was taking hold.
The settlement represents "another step closer to normal," for Bank of America, Wells Fargo analyst Matt Burnell wrote in a note to clients. Burnell said the deal was good for the bank because it resolved a dispute with a government agency and will likely reduce the provisions it has to set aside to cover claims from investors over faulty mortgages that were sold with incorrect data on home values or income.
Bank of America's acquisition of Countrywide was initially praised by lawmakers because the lender was seen as stepping in to support the mortgage industry. However, instead of boosting Bank of America's mortgage business, the purchase has drawn a drumbeat of regulatory fines, lawsuits and losses.
Fannie Mae and Freddie Mac buy mortgages from banks and package them together as bonds that they sell to investors. During the housing boom, banks sold loans to the two agencies that should never have been issued, because the banks failed to carry out the necessary diligence before making them. For example, banks sometimes failed to adequately check whether customers had stated their income correctly.
The government agencies, which were effectively nationalized in 2008 when they nearly collapsed under the weight of their mortgage losses, have been demanding that banks buy back some of the mortgage-backed investments.
In September, Bank of America also agreed to pay $2.43 billion to settle a class-action lawsuit related to its takeover of Merrill Lynch, another of Lewis's acquisitions during the financial crisis. That lawsuit was filed on behalf of investors who bought or held Bank of America stock when the company announced its plans to buy Merrill Lynch in a $20 billion deal as the banking industry and federal regulators struggled to contain fallout from the financial crisis in the fall of 2008.
The Charlotte, North Carolina-based bank said it would pay for the Fannie Mae settlement in part from existing reserves, though it would record a $2.7 billion hit to its fourth quarter earnings for 2012 from the settlement and the loan servicing fees, as well as taking a charge of $2.5 billion for the settlement over wrongful foreclosure practices.
Despite the charges, Bank of America still expects its earnings for the period to be "modestly positive." Bank of America is scheduled to report earnings Jan. 17.
Bank of America fell 8 cents to $12.01 Monday, after opening slightly higher. The stock more than doubled in 2012, making it the best performer in the 30-member Dow Jones industrial average. It's up 3.6 percent this year.
"Fannie Mae has diligently pursued repurchases on loans that did not meet our standards at the time of origination, and we are pleased to have reached an appropriate agreement to collect on these repurchase requests," Bradley Lerman, Fannie Mae executive vice president and general counsel, said in a statement.

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U.S. to Pass Saudi Arabia in Energy Production, IEA Says: Huge Foreign Policy, Economic Implications

A new report by the International Energy Association says the U.S. will become the world's largest oil producer by 2017, overtaking current leaders Saudi Arabia and Russia. U.S. energy policies initiated by the George W. Bush administration and implemented by President Barack Obama have moved the U.S. toward energy independence and away from Middle East energy sources. U.S. oil production has risen rapidly since 2008 and oil imports are at their lowest level in two decades.
"North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency," says IEA Executive Director Marian von der Hoeven in a statement.
The IEA also says the U.S. could become self-sufficient in energy by 2035 and a net exporter of natural gas by 2020. The Obama administration's push to develop and grow domestic natural gas capabilities has led to a natural gas drilling boom. Production has jumped 15% in four years but the glut in natural gas supplies have also caused the price of natural gas to plummet. According to the White House, the U.S. holds a 100-year supply of natural gas and domestic production is at an all-time high. The Daily Ticker's Aaron Task and Henry Blodget both agree that the explosion in domestic energy production could alter the geopolitical landscape and U.S. labor market.
"The foreign policy implications are maybe even bigger than the economic ones," says Task.
"For 50 years or more we have been just addicted and coupled to a region of the world where so many people hate us," Blodget adds.
Oil and petroleum imports have fallen an average of more than 1.5 million barrels per day and domestic crude oil production has increased by an average of more than 720,000 barrels per day since 2008. As domestic drilling has expanded so has the number of oil and gas production jobs. According to the Federal Reserve Bank of St. Louis, job growth in these industries has risen 25% since January 2010.
Related: The Fracking Revolution: More Jobs and Cheaper Energy Are Worth the "Manageable" Risks, Yergin Says
President Obama says natural gas production could support 600,000 jobs by the end of the decade. Most of these positions are highly desirable from a financial standpoint. Drilling and support jobs pay about $34.50 an hour, 50% more than the national average according to The New York Times.
Cheap natural gas and the administration's eagerness to expand U.S. energy production has shifted resources away from green energy technologies like solar and wind.
Related: Robert F. Kennedy Jr.: Renewable Energy Is Key to U.S. Growth
The method of extracting natural gas from shale rock formations has come under intense scrutiny. Many local cities and communities have already banned the practice. Hydraulic fracturing, more commonly referred to as hydrofracking or fracking, involves injecting large amounts of sand, water and chemicals into the ground at high pressures. Critics of fracking say this process produces millions of gallons of wastewater that contain highly corrosive salts and carcinogens. These radioactive elements could pollute water sources such as rivers and underground aquifers and pose serious dangers to the environment and individuals.

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Eurozone back in recession in Q3

LONDON (AP) -- The 17-country eurozone has bowed to the inevitable and fallen back into recession for the first time in three years as a sprawling debt crisis took its toll on the region's stronger economies.
And with surveys pointing to increasingly depressed conditions across the eurozone at a time of high unemployment in many countries, there are fears that the recession will deepen, and make the debt crisis even more difficult to handle.
Official figures Thursday showed that the eurozone contracted by 0.1 percent in the July to September period from the quarter before as economies including Germany and the Netherlands suffer from falling demand.
The decline reported by Eurostat, the EU's statistics office, was in line with market expectations and follows on from the 0.2 percent fall recorded in the second quarter. As a result, the eurozone is officially in recession, commonly defined as two straight quarters of falling output.
"We can dispense with the euphemisms and equivocation, and openly proclaim that the euro area economy is indeed in technical recession," said James Ashley, senior European economist at RBC Capital Markets.
Because of the eurozone's grueling three-year debt crisis, the region has the focus of concern for the world economy. The eurozone's economy is worth around €9.5 trillion, or $12.1 trillion, which puts it on a par with the U.S. economy. The region, with its 332 million population, is the U.S.'s largest export customer, and any fall-off in demand will hit order books.
While the U.S has managed to bounce back from its own savage recession in 2008-09, albeit inconsistently, and China continues to post still-strong growth, Europe's economies have been on a downward spiral — and there is little sign of any improvement in the near-term.
The eurozone has managed to avoid returning to recession for the first time since the financial crisis following the collapse of U.S. investment bank Lehman Brothers, mainly thanks to the strength of its largest single economy, Germany.
But even that country is struggling now as confidence wanes and exports drain in light of the debt problems afflicting large chunks of the eurozone.
Germany's economy grew a muted 0.2 percent in the third quarter, down from a 0.3 percent increase in the previous quarter. Over the past year, Germany's annual growth rate has more than halved to 0.9 percent from 1.9 percent.
Perhaps the most dramatic decline among the eurozone's members was seen in the Netherlands, whose economy shrank 1.1 percent on the previous quarter.
Five eurozone countries are in recession — Greece, Spain, Italy, Portugal and Cyprus. Those five are also at the center of Europe's debt crisis and are imposing austerity measures, such as cuts to pensions and increases to taxes, in an attempt to stay afloat.
As well as hitting workers' incomes and living standards, these measures have also led to a decline in economic output and a sharp increase in unemployment.
Spain and Greece have unemployment rates of over 25 percent. Their young people are faring even worse with every other person out of work. As well as being a cost to governments who have to pay out more for benefits, it carries a huge social and human cost.
Protests across Europe on Wednesday highlighted the scale of discontent and with economic surveys pointing to the downturn getting worse, the voices of anger may well get louder still.
"The likelihood is that this anger will continue to grow unless European leaders and policymakers start to act as if they have a clue as to how to resolve the crisis starting to unravel before their eyes," said Michael Hewson, markets analyst at CMC Markets.
The wider 27-nation EU, which includes non-euro countries, avoided the same fate. It saw output rise 0.1 percent during the quarter, largely on the back of an Olympics-related boost in Britain.
The EU's output as a whole is greater than the U.S. It is also a major source of sales for the world's leading companies. Forty percent of McDonald's global revenue comes from Europe - more than it generates in the U.S. General Motors, meanwhile, sold 1.7 million vehicles in Europe last year, a fifth of its worldwide sales.

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Are We Regulating Ourselves Back Into Recession?

"Let us put an end to self-inflicted wounds," President Gerald Ford told Congress in 1975. "And let us remember that our national unity is a most priceless asset." While Ford was talking about the scars from the Vietnam War, his words seem relevant today. Our nation grapples with not one divisive issue, but a basket of them, each pulling and undermining our already battered confidence, while testing our resolve and straining the limits of logic.
What are we doing to ourselves, America?
In just two short weeks, instead of closing the books after a bruising election, we've not only kept the rancor alive but have doubled down on it. In this morning's papers alone, I easily counted a dozen different areas of discourse before growing tired of it all. As my colleague Mike Santoli and I discuss in the attached video, with so much going on — and with so much wrong — is it any wonder stocks are moving in reverse at a fast clip since the second quarter correction.
"It feels like a particularly heavy round of one of these anti-business — or at least calling business to task — moments," Santoli says in the face of my long and growing list of negatives, which include higher taxes, the fiscal cliff, the Benghazi aftermath, turnover at the CIA, federal probes of FedEx and UPS over mail-order medicine, BP's record fine, further investigation into banks for money laundering, as well as another round of mandatory stress testing.
Before you go off and call me some kind of zero-regulation advocate or pessimist, all I am saying is that it strikes me as slightly counterproductive to be building up and and tearing down the banks at the same time. And Santoli seems to agree, saying that it is alarming to see how much banks have to spend on compliance, legal and regulatory issues, calling it a "massive weight."
As much as we had recently been gaining some degree of comfort over the economy, housing and jobs, it suddenly seems as if we're doing everything wrong.
''Is it ever going to be a good time to cinch up tax rates?" Santoli questions. Obviously the answer is no, and yet the markets cling to the belief that our elected officials will break ranks and reach some sort of last-minute grand bargain solution.
Maybe I am just being cynical, but I am of the mind that no major changes will emerge without first going through a period of calamity. Santoli is a smidge more optimistic, however, clinging to a ''residual hope'' that the President has a ''Nixon-to-China moment" and that his second term is not about fighting individual, ideological fight. "That is the distant hope you have to hold," he says.
How about you? Have you given up hope in the face of so much negativity?

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Bigger fights loom after "fiscal cliff" deal

WASHINGTON (Reuters) - President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought "fiscal cliff" deal narrowly averted devastating tax increases and spending cuts.
The agreement, approved late on Tuesday by the Republican-led House of Representatives and signed by Obama on Wednesday, was a victory for the president, who had won re-election in November on a promise to address budget woes, partly by raising taxes on the wealthiest Americans.
But it set up potentially bruising showdowns over the next two months on spending cuts and an increase in the nation's limit on borrowing. Republicans, angry the fiscal cliff deal did little to curb the federal deficit, promised to use the debt-ceiling debate to win deep spending cuts next time.
Republicans believe they will have greater leverage over Democrat Obama when they must consider raising the borrowing limit in February because failure to close a deal could mean a default on U.S. debt or another downgrade in the U.S. credit rating. A similar showdown in 2011 led to a credit downgrade.
"Our opportunity here is on the debt ceiling," Republican Senator Pat Toomey of Pennsylvania said on MSNBC. "We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean."
But Obama and congressional Democrats may be emboldened by winning the first round of fiscal fights when dozens of House Republicans buckled and voted for major tax hikes for the first time in two decades.
"We believe that passing this legislation greatly strengthens the president's hand in negotiations that come next," House Minority Leader Nancy Pelosi told NBC in an interview to air on Thursday.
Obama, who is vacationing in Hawaii, signed the legislation late on Wednesday, the White House said.
"We received the bill late this afternoon, and it was immediately processed. A copy was delivered to the president for review. He then directed the bill be signed by autopen," a senior administration official said. An autopen is an automatic pen with the president's signature.
Deteriorating relations between leaders in the two parties do not bode well for the more difficult fights ahead. Vice President Joe Biden and Republican Senate leader Mitch McConnell had to step in to work out the final deal as the relationship between House Speaker John Boehner and Obama unraveled.
Senate Majority Leader Harry Reid also drew the ire of Boehner, who told Reid in the White House to "Go fuck yourself" after a tense meeting last week, aides said. His remark came after the Democrat accused Boehner of running a "dictatorship" in the House.
Bemoaning the intensity of the fiscal cliff fight, Obama urged "a little less drama" when the Congress and White House next address budget issues like the government's rapidly mounting $16 trillion debt load. He vowed to avoid another divisive debt-ceiling fight before the late-February deadline for raising the limit.
"While I will negotiate over many things, I will not have another debate with this Congress about whether or not they should pay the bills they have already racked up," Obama said before he headed to Hawaii to resume an interrupted vacation.
NOT TIME TO CELEBRATE
Analysts warned that might not be so easy. "While the markets and most taxpayers may breathe a sigh of relief for a few days, excuse us for not celebrating," said Greg Valliere, chief political strategist at Potomac Research Group.
"We have consistently warned that the next brawl represents a far greater threat to the markets - talk of default will grow by February, accompanied by concerns over a credit rating downgrade," he said.
Rating agencies Moody's Investors Service and Standard & Poor's said the "fiscal cliff" measure did not put the budget on a more sustainable path. The International Monetary Fund said raising the debt ceiling would be a critical move.
"More remains to be done to put U.S. public finances back on a sustainable path without harming the still fragile recovery," said Gerry Rice, a spokesman for the IMF.
Financial markets that had been worried about the fiscal cliff showdown welcomed the deal, with U.S. stocks recording their best day in more than a year. The S&P 500 achieved its biggest one-day gain since December 20, 2011, pushing the benchmark index to its highest close since September 14.
The debate over "entitlement" programs is also bound to be difficult. Republicans will be pushing for significant cuts in government healthcare programs like Medicare and Medicaid for retirees and the poor, which are the biggest drivers of federal debt. Democrats have opposed cuts in those popular programs.
"This is going to be much uglier to me than the tax issue ... this is going to be about entitlement reform," Republican Senator Bob Corker of Tennessee said on CNBC.
"Now that we have this other piece behind us - hopefully - we'll deal in a real way with the kinds of things our nation needs to face," he said.
The fiscal cliff crisis ended when dozens of Republicans in the House relented and backed a bill passed by the Democratic-controlled Senate that hiked taxes on household income above $450,000 a year. Spending cuts of $109 billion in military and domestic programs were delayed for two months.
Economists had warned that the fiscal cliff of across-the-board tax hikes and spending cuts would have punched a $600 billion hole in the economy this year and threatened to send the country back into recession.
Dozens of House Republicans reluctantly approved the Senate bill, which passed by a bipartisan vote of 257-167 and sent it to Obama to sign into law.
Peter Huntsman, chief executive of chemical producer Huntsman Corp, said the vote did little to reduce the U.S. budget deficit and would hinder growth.
"We haven't even begun to address the basic issues behind this," Huntsman told Reuters. "We haven't fixed anything. All we've done is addressed the short-term pain.
The vote underlined the precarious position of Boehner, who will ask his Republicans to re-elect him as speaker on Thursday when a new Congress is sworn in. Boehner backed the bill, but most House Republicans, including his top lieutenants, voted against it.
The Ohio congressman also drew criticism on Wednesday from his fellow Republicans for failing to schedule a House vote on a bill passed by the Senate that would provide federal aid to Northeastern states hit by the storm Sandy.

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Oil prices tumble over ample supplies, flat demand

BANGKOK (AP) — Oil prices fell Thursday as fiscal-cliff euphoria fizzled and the traders evaluated ample energy supplies against lackluster demand.
Benchmark crude for February delivery fell 21 cents at midday Bangkok time to $92.91 in electronic trading on the New York Mercantile Exchange. Prices had jumped Wednesday after a deal in Washington averted the dreaded "fiscal cliff." The contract rose $1.30 to finish at $93.12 a barrel on the Nymex.
Despite the stopgap budget deal, more hurdles are ahead for the U.S. economy, including a new deadline for more spending cuts in two months.
Moreover, Moody's Investors Services said the U.S. government's "AAA" credit rating could be at risk if lawmakers fail to take additional steps to lower the deficit, which has topped $1 trillion annually in each of the past four years.
Platts, the energy information arm of McGraw-Hill Cos., said it expects data from the U.S. Energy Information Agency and the American Petroleum Institute to show a 1 million barrel draw for the week ending Dec. 28. Still, the U.S. market is "well-supplied," Platts said, citing analysts.
U.S. supplies, at 371 million barrels for the week ending Dec. 21, are 15.6 percent higher than the five-year average, Platts said, citing EIA data. For the same week, data showed U.S. production at nearly 7 million barrels per day, the highest since December 1993.
Carl Larry of Oil Outlooks and Opinions said production levels were "at new high" and noted that "the room for demand to expand is not even close to what we had just a few short years ago before the global recession."
Brent crude, used to price various kinds of international oil, fell 30 cents to $112.17 a barrel on the ICE Futures exchange in London.

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Asia stocks eke out gains on China hopes, oil eases

HONG KONG (Reuters) - Most Asian stock markets edged higher on Thursday on hopes of a steady economic revival in China, although oil gave back part of the previous session's strong gains as investors took some money off the table and braced for more U.S. budget battles.
The MSCI Asia Pacific ex-Japan index of stocks <.miapj0000pus> rose 0.2 percent following Wednesday's 2 percent jump on relief that U.S. politicians had averted the "fiscal cliff".
Data from China showing the services sector expanded in December continued to underpin expectations of an economic recovery that has helped spur a strong rally in Hong Kong-listed Chinese shares <.hsce> over the past month.
The China Enterprises index <.hsce> which rallied more than 4 percent in the previous session eased 0.2 percent. Onshore Chinese markets will resume trading on Friday.
"China looks like it's improving at the margin and the market has momentum that could last for at least a few months," said Christian Keilland, head of trading at BTIG in Hong Kong.
"Investors seem to have accepted that reforms are underway but they're going to happen at a slower pace."
Australian stocks <.axjo> rose 0.7 percent to their highest in more than 19 months, with mining giants Rio Tinto up 2.4 percent and BHP Billiton up 0.8 percent, among the top gainers on the benchmark S&P ASX/200 index. <.axjo>
South Korea's Kospi <.ks11> underperformed the region, falling 0.4 percent as automakers and other exporters slumped on a stronger Korean won, which hit a 16-month high against the dollar overnight.
In other currency markets, the Japanese yen bounced after hitting a 29-month low versus the dollar earlier in the day but analysts warned that any strength is likely to be short-lived.
"Technically dollar/yen looks somewhat overbought here. It's gone a long way in a very short time," said Callum Henderson, global head of FX research for Standard Chartered Bank in Singapore, adding that the dollar could see some consolidation in the near term before heading higher.
The euro which in overnight trading was close to a 8-1/2 month high against the dollar, slipped 0.1 percent.
The U.S. dollar rose 0.2 percent <.dxy> against a basket of major currencies.
President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought deal averted the fiscal cliff of automatic tightening that threatened to push the U.S. into recession.
Strength in the dollar and profit-taking pushed oil prices lower with Brent crude slipping 0.3 percent and U.S. crude futures down 19 cents to $92.93.
"After the initial excitement, reality sets in," said Victor Shum, oil consultant at IHS Purvin & Gertz. "There will be other negotiations and the deal is a compromise."

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'Fiscal cliff' deal leaves lots of issues dangling

The "fiscal cliff" compromise on taxes leaves a big part of the nation's budget crisis still dangling.
Lawmakers bought a little time with a New Year's agreement to hold income tax rates steady for 99 percent of Americans while allowing payroll taxes to go up. But they left themselves only two months to settle seemingly irreconcilable differences over how much the United States should borrow and spend and where painful budget cuts should land.
Here's a look at what's been resolved and what's left hanging:
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AUTOMATIC SPENDING CUTS
The bipartisan deal approved by the Senate and House put off dealing with the nearly $110 billion in automatic spending cuts set for this year.
Unless Congress stops them by March 1, automatic cuts of about 8 or 9 percent are set to sweep through nearly all federal agencies, with half the money coming out of the military.
Both parties talk about the need to control spending, but lawmakers don't want the kinds of chaotic cuts now barreling toward them. Republicans worry that the Pentagon would be hamstrung; Democrats say vital federal programs would be crippled.
Federal workers would face furloughs or even layoffs, Americans would see all sorts of government services curtailed, and businesses would feel the pinch of reduced government spending.
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DEBT LIMIT SHOWDOWN
Around the same time, the United States would lose its ability to borrow money to pay its debts, unless Congress acts. That's a big deal, especially since the government borrows about 31 cents of every dollar it spends.
The U.S. bumped against its $16.4 trillion borrowing limit Monday, but the Treasury Department is using special accounting measures to avoid default for now. Private economists say those methods could probably stretch through late February or early March.
After that, the United States would risk its first-ever default.
Hopes of wrapping the issue into the year-end negotiations were dashed, setting up the potential for another standoff. House Speaker John Boehner says any debt increase must be paired with equal spending cuts. Obama says the debt ceiling is too important to negotiate.
The last time such a showdown brought the nation close to default, in the summer of 2011, it roiled the financial markets and contributed to Standard & Poor's decision to strip the U.S. government of its AAA bond rating.
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A GOVERNMENT SHUTDOWN?
Yet another deadline looms on March 27. The stopgap measure that funds government activities expires; congressional approval will be needed to keep the government running. It's another chance to fight over spending.
In 2011, the nation came within hours of a partial government shutdown that would have furloughed an estimated 800,000 government workers, closed national parks and halted the work of the IRS.
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THE NATIONAL DEBT
The "fiscal cliff" deadline was originally designed to force lawmakers to confront trillion-dollar annual budget deficits that pile the nation's debts higher each year. As larger and larger numbers of baby boomers receive retirement benefits in coming years, the strain on the budget will be unsustainable.
Obama says Medicare's climbing costs must be addressed to fix this. Republicans want to rein in Medicare, Social Security and other entitlement programs more sharply. Many Democratic lawmakers object. And tampering with programs so popular with voters is never easy.
The "fiscal cliff" was supposed to be a way to force Washington to confront the long-term debt problem. The next two months will be another opportunity to come up with a plan or dodge the issues again.
The tough, unpopular decisions are further complicated by concerns that cutting spending too quickly could damage the nation's sluggish economic recovery.
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WHAT'S DONE
The year-end "fiscal cliff" deadline did inspire compromise between Republicans and Democrats on some hotly debated tax questions. Some of the issues settled:
— Payroll taxes are going back up, after being trimmed for two years to help stimulate spending and boost the economy. For most workers, that means paychecks will shrink by 2 percent — another $1,000 for someone earning $50,000 a year. The wealthiest pay a lower share of their income, however, because the Social Security payroll tax applies only to the first $113,700 of earnings.
— The top 1 percent are getting socked with higher income tax rates. Income over $400,000 for individuals or $450,000 for couples will be taxed at a top rate of 39.6 percent, up from 35 percent. Everyone else gets to keep their current income tax rates, which date back to the George W. Bush-era tax cuts.
— The wealthiest Americans will pay higher taxes on their investments. Rates for their capital gains and dividends are rising from 15 to 20 percent. And the tax on estates worth more than $5 million will go up to 40 percent, from 35 percent.
— The alternative minimum tax — designed to keep the wealthy from using loopholes to avoid taxes — will be permanently indexed for inflation so it doesn't catch millions of middle- and upper-middle-income people in its net.
— Tax breaks for families with children, college tuition and low-income workers will continue for five years. A diverse group of temporary business tax breaks were extended for one year.
— Emergency federal unemployment benefits to help 2 million people out of work for at least six months will be extended a year.
— A scheduled 27 percent cut in Medicare payments to doctors will be held off for a year in what's become a congressional ritual.

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2016 politics on display as Congress ends term

WASHINGTON (AP) — Rep. Paul Ryan, the GOP's 2012 vice presidential candidate, voted for the "fiscal cliff" compromise that raised taxes on the wealthiest Americans. Republican Sens. Marco Rubio and Rand Paul voted against it. And Vice President Joe Biden helped broker the deal with GOP leaders in the Senate.
As Congress closed out its term this week, New Jersey Gov. Chris Christie accused fellow Republicans of showing "callous indifference to the suffering of the people of my state" by not holding a vote on Superstorm Sandy aid. New York Gov. Andrew Cuomo joined him in the rebuke.
And Secretary of State Hillary Rodham Clinton drew headlines for a different reason after being hospitalized for a blood clot in her head, an illness that raised questions about the Democrat's political future.
While the next presidential primary voting is still three years away, the political implications of the actions and whereabouts of the potential field of 2016 candidates hung over extraordinary year-end Washington drama.
The fiscal cliff vote forced those in Congress who are eyeing presidential runs to stake out early positions which signal how they may be aligning themselves — and which could come back to haunt them should they move forward.
The intense legislative debate also gave would-be candidates involved in them an opportunity to command the spotlight while rivals were on the sidelines. And the weeks of gridlock over the looming fiscal cliff of big tax increases and spending cuts provided governors weighing bids a chance to cast themselves as outsiders and, perhaps, start building a case for taming Washington paralysis.
For Republican White House hopefuls in Congress, the votes on the compromise that raised taxes on the wealthiest Americans could help frame future presidential primary debates over the debt ceiling, tax code reforms and how to fund government and entitlement programs. The party has rejected tax increases for more than two decades but now finds itself trying to regroup after President Barack Obama's re-election and dealing with a struggle between Republicans who want to take a more pragmatic tax approach and tea party loyalists advocating a firm anti-tax position.
"The American people chose divided government. As elected officials, we have a duty to apply our principles to the realities of governing," Ryan said after joining with House Speaker John Boehner, R-Ohio, in support of the bill, putting him in the minority of the GOP caucus and against the tea party.
Ryan may be spared some political fallout from the right, given that Republican activist Grover Norquist, who for years has pushed GOP lawmakers to pledge not to raise taxes, and several other conservative heavyweights supported the bill, including Oklahoma Sen. Tom Coburn and Pennsylvania Sen. Pat Toomey, the former head of the anti-tax Club for Growth.
Two other potential 2016 presidential candidates drew praise from conservative opponents of the measure for voting to refuse tax increases.
Rubio, a prominent Hispanic lawmaker in a party trying to connect with Latino voters, called the legislation an impediment to "rapid economic growth and job creation." The Florida senator also said it failed to control runaway debt. Paul, the son of GOP presidential candidate Ron Paul, opposed the bill because of the combination of spending and tax increases. The Kentucky senator said: "We're going to raise taxes and we're going to raise spending. Tell me what's good about that?"
On the Democratic side, Biden played a major role in the deal-making, with his late-night talks with Senate Republican leader Mitch McConnell leading to the compromise plan. It was a reminder of the former Delaware senator's legislative skills, which could either impress Democratic primary voters or anger liberals who may view the deal as too much of a compromise with Republicans.
As the vice president helped broker a deal, it was hard for Democrats to overlook where Clinton, the party's formidable potential contender, was: She revealed she was being treated in a New York hospital for a blood clot in her head that formed after she suffered a concussion during a fainting spell in early December. She was released from the hospital Wednesday and doctors said they were confident she would make a full recovery. But the extended illness made it more likely that Clinton, 65, would face scrutiny over her health should she run.
Beyond Washington, two prominent Northeast governors weighed in on Congress' year-end wrangling, and wasted little time assailing the House GOP leadership over hurricane relief.
Christie said his state had been betrayed by his fellow Republicans in the House, who refused to bring a Superstorm Sandy aid package to a vote, adding, "America deserves better than just another example of a government that has forgotten who they are there to serve and why."
Cuomo, a Democrat long considered by party insiders to be a possible White House candidate, issued a joint statement with Christie condemning the "inaction and indifference" by the House. "The people of our states can no longer afford to wait while politicians in Washington play games," they said. House Republicans said after Christie's blistering news conference that they would hold a vote Friday for $9 billion for the national flood insurance program and another on Jan. 15 for a remaining $51 billion in the relief package.
It's impossible to say whether this week's votes and comments will become 2016 campaign fodder. But they certainly give hints about how possible candidates are testing the waters — and how their positions are faring with certain parts of the electorate.
"It strikes me that Ryan is thinking he wants to be the establishment candidate," said Doug Gross, an Iowa Republican who chaired Mitt Romney's 2008 campaign in the state. Conservatives may agree — and not look kindly on that. As Erick Erickson, a conservative commentator and the editor of RedState.com, put it on Twitter, "Thus ends the Paul Ryan 2016 Presidential Exploratory Committee."
Still, some Republicans dismissed any fallout from their candidates' votes.
"I don't ultimately think this one vote will hurt any of them," said Sara Taylor Fagen, a Republican strategist. "But to some degree it probably forecasts their voting patterns for the future.

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Facebook CEO Mark Zuckerberg donating $500 million in stock to Silicon Valley charity

 Facebook CEO Mark Zuckerberg said Tuesday he is donating nearly $500 million in stock to a Silicon Valley charity with the aim of funding health and education issues.
Zuckerberg donated 18 million Facebook shares, valued at $498.8 million based on their Tuesday closing price. The beneficiary is the Silicon Valley Community Foundation, a non-profit that works with donors to allocate their gifts.
This is Zuckerberg's largest donation to date. He pledged $100 million in Facebook stock to Newark, New Jersey, public schools in 2010, before his company went public earlier this year. Later in 2010, he joined Giving Pledge, an effort led by Microsoft Corp. founder Bill Gates and Berkshire Hathaway Inc. CEO Warren Buffett to get the country's richest people to donate most of their wealth. His wife, Priscilla Chan, joined with him.
In a Facebook post Tuesday, Zuckerberg, 28, said he's "proud of the work" done by the foundation that his Newark donation launched, called Startup: Education, which has helped open charter schools, high schools and others.
With the latest contribution, he added, "we will look for areas in education and health to focus on next." He did not give further details on what plans there may be for funds.
"Mark's generous gift will change lives and inspire others in Silicon Valley and around the globe to give back and make the world a better place," said Emmett D. Carson, CEO of the foundation.

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Facebook CEO Zuckerberg donating $500M in stock

 Facebook CEO Mark Zuckerberg said he is donating nearly $500 million in stock to a Silicon Valley charity with the aim of funding health and education issues.
Zuckerberg donated 18 million Facebook shares, valued at $498.8 million based on their Tuesday closing price. The beneficiary is the Silicon Valley Community Foundation, a nonprofit that works with donors to allocate their gifts.
This is Zuckerberg's largest donation to date. He pledged $100 million in Facebook stock to Newark, N.J., public schools in 2010, before his company went public earlier this year. Later in 2010, he joined Giving Pledge, an effort led by Microsoft Corp. founder Bill Gates and Berkshire Hathaway Inc. CEO Warren Buffett to get the country's richest people to donate most of their wealth. His wife, Priscilla Chan, joined with him.
In a Facebook post Tuesday, Zuckerberg, 28, said he's "proud of the work" done by the foundation that his Newark donation launched, called Startup: Education, which has helped open charter schools, high schools and others.
With the latest contribution, he added, "we will look for areas in education and health to focus on next." He did not give further details on what plans there may be for funds.
"Mark's generous gift will change lives and inspire others in Silicon Valley and around the globe to give back and make the world a better place," said Emmett D. Carson, CEO of the foundation.

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You Can Download Your Entire Twitter History Now

this last weekend, but Twitter has made it official in a blog post today: you can download all your tweets, from forever. The archiving feature still isn't available to all users, but it's on its way, says Twitter, which will roll out the option "over the coming weeks and months." So maybe not that soon for some of you. Only those who currently see that option under the "settings" section of the site can download their past today. (If that option does exist, the Verge has a write-up complete with screen shots explaining the rest of the process.) For those who don't yet have the ability, however, take this time to consider if you're ready to face your former self (or selves). Some of you might not like the 2008 version of your social media persona. The rest of you, enjoy years of 140-character missives. We look forward to some more creative uses of the text.

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Facebook rejects German demand to allow fake names

 Facebook will fight a German privacy watchdog's demand to allow users to register with fake names, insisting Tuesday that its current practice fully complies with the law.
The California-based social networking site has long required users to register with their real names — a policy that the data protection commissioner of Schleswig-Holstein state says is in breach of German law and European rules designed to protect free speech online.
The commissioner, Thilo Weichert, ordered Facebook on Monday to rescind its real name policy immediately.
"We believe the orders are without merit, a waste of German taxpayers' money and we will fight it vigorously," Facebook said in a statement. The company claims that its real name policy is intended to protect users.
Weichert told The Associated Press that Facebook has two weeks to respond. If it fails to comply with the order, his office can impose a penalty against the company, said Weichert.
The maximum fine would be only €50,000 ($66,000) — peanuts for a multinational company, but nevertheless a symbolic blow that could also lead to a tougher stance from other German and European privacy regulators.
"We have the right to prevent this data protection breach," he said. "Theoretically we can order the website blocked, but that would be disproportionate."
German privacy rules have posed a legal headache for Facebook, Google and other web giants in recent years. The country has strict laws on data protection that give consumers significant rights to limit the way companies use their information.
Weichert has previously warned investors against buying Facebook shares, warning that the company's "business model will implode" because Facebook users' private information is used in breach of European law.

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Is Facebook the New Walmart?

It’s hard to keep up with the ways we are being duped daily, living in a fast-paced society of convenience, unlimited social sharing and a desire to get more for less. Numbed from the sheer quantity of what we take in, we forget that for every action, is a reaction.
Danish philosopher, theologian, poet and social critic Søren Aabye Kierkegaard summed it up when he said “As a result of knowing and being everything possible, one is in contradiction with oneself.”
If the philosopher/social critic were here today, what would he say of our use of social media. Could he have ever predicted such a worldwide platform could exist? And while we’re hitting him up with questions, what would he say about Sam Walton’s exercise in creating products at rock bottom prices for people who find worth in consuming?
MORE: The Twitter Counterrevolution
The price we pay for free and discount has implications and direct blood ties to a dark psychology that has increasingly become embedded in our DNA.
Take for instance when Facebook bought Instagram last April. Despite already being disillusioned by Facebook on a number of cloudy privacy issues, fresh cries went up decrying the injustice of a massive company growing massively bigger.
Mashable’s 20 Witty Reactions to the buy showcased a mix of reactions from being taken by “the man,” to snarky posts on preparing to lose identity…again.
Just this past mid-December, Kevin Systrom co-founder of Instagram, issued a statement clarifying the Instagram Terms of Service, which are already easy enough for the Everyman to understand: “From the start, Instagram was created to become a business,” Systrom said.
As if we didn’t know.
“Their drive to be the total digital representation of every person on the planet is having huge impacts on personal privacy, ownership of our personal digital creations, and expansion of government’s ability to intrude in their citizens’ lives.”
Yet the idea that our private lives have been packaged into products, are social collateral for sale, is troubling to many, but maybe not troubling enough to abandon Instagram and other mass social media platforms.
A friend recently posted on Facebook regarding the Instagram invasion of privacy “This whole thing is ridiculous and people just need to embrace social media for what it is... ugh.” 
We might ask just what “it” is and why it smells ripe of social injustice.
Alex Steed, Partner at Knack Factory, a creative content firm based in Portland, Maine, says that, if we need comparisons, Facebook just might be the post-modern, digital Walmart.
“Walmart came around in the age of the uninformed consumer, and they built an empire. The consumer is now more informed, ironically, because of Facebook and other platforms like it,” Steed tells TakePart. “In that way, its greatest strength, the fact that everyone uses it to pass along information, is its greatest weakness, which is that the platform could be used to spread information about the terrible things it is doing.”
He adds that companies and organizations can clearly still cross lines and anger the public. But when people become dependent on services, and accustomed to the role providers play in their lives, it becomes more and more difficult to divest oneself.
From cheap packs of underwear at Walmart to a morning status post on Facebook, have we become addicted to these bargain services that come at the cost of environment, personal property and even death?
It’s okay. Everyone else is doing it. You’re just a drop in a huge bucket.
A Stanford study titled “Social Networking and Ethics” dives deep into the psychology of social media and a “digital totalitarianism” that uses the power of information rather than physical force as a means of control, “a trend which itself would beg for ethical contextualization.”
The study says that through these social networking technologies, “the urgent need for attention to this phenomenon is underscored by the fact that it is reshaping how human beings initiate and/or maintain virtually every type of ethically significant social bond or role: friend-to-friend, parent-to-child, co-worker-to co-worker, employer-to-employee, teacher-to-student, neighbor-to-neighbor, seller-to-buyer, and doctor-to-patient, to offer just a partial list.”
Erik Ritchie, Vice president of Strategy at Salt Branding, wouldn’t go so far as to say that either Facebook or Walmart are totalitarian in nature, but he does believe they share a similar characteristic: Their societal costs are essentially hiding from their customers/users.
“In the case of Walmart, their efforts to drive down costs at all costs have had ripple effects that negatively impact the global environment and the livelihood and work conditions experienced by their direct employees and those employed by their suppliers. In the case of Facebook, their drive to be the total digital representation of every person on the planet is having huge impacts on personal privacy, ownership of our personal digital creations, and expansion of government’s ability to intrude in their citizens’ lives,” Ritchie tells TakePart.
He adds that only when the true costs incurred by these companies are placed front and center in a meaningful way to all consumers can we expect change.
Computer scientist, composer, visual artist, and author, Jaron Lanier frames the point cynically when he says: “The only hope for social networking sites from a business point of view is for a magic formula to appear in which some method of violating privacy and dignity becomes acceptable.”
It doesn’t take a fresh pair of reality goggles to see we may already be there.

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