How Steve Jobs Tried to Save a Fellow Rebel CEO

When Hewlett Packard ousted CEO Mark Hurd in 2010, another once-ousted CEO named Steve Jobs tried to help him get his job back. As soon as Jobs heard the news of Hurd's resignation in August 2010, he sent an email to Hurd, report Bloomberg Businessweek's Ashley Vance and Aaron Ricadela in their cover story about the legacy that current HP CEO Meg Whitman inherited. Beyond sympathy over a fellow Silicon Valley being forced out, Jobs felt concern over how the fate of HP might affect companies like his own. "It's the founding company of the Valley," Apple Board Bill Campbell explained to Vance and Ricadela. "You don't want to see it go away." At the time, HP's meltdown had yet to unfold, and the company's sales in the quarter before Hurd's departure actually totaled $126 billion. "Mr. Hurd pulled off one of the great rescue missions in American corporate history," wrote The New York Times's James B. Stewart in a 2011 article. Jobs wanted HP to maintain that.
RELATED: Who's Really to Blame in HP's $8.8-Billion Meltdown?
Hurd left not because of his inability to run the company but because of his "detractors," Stewart reported, which might help explain why Jobs felt for him. Jobs had plenty of those on his first run at Apple, and Hurd's ruthless style — he wanted the lowest 10 percent of performers fired each year, for example — created a lot of infighting. (Hurd was also accused of sexual harassment.)
RELATED: HP Has the Perfect Funny Last Man Standing
Jobs's attempt at reconciliation at HP, which came in the form of a two-hour walk around his neighborhood and offers to write letters to the HP board, didn't work. But in November 2010, Léo Apotheker took over, much to Jobs's chagrin: "Hewlett and Packard built a great company, and they thought they left it in good hands," Jobs told Walter Isaacson for his biography. "But now it’s being dismembered and destroyed. It's tragic." That dismemberment continues. Last quarter HP reported a meagre $30 billion. And the infighting continues as well: Remember that $8.8 billion meltdown the company underwent because Whitman couldn't get along with a little company it had acquired? Looks like Jobs might have been right, as usual.

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Apple’s Schiller says cheap smartphones will ‘never be the future of Apple products’

Apple (AAPL) may sell a cheaper iPhone, but don’t expect it to sell for the bargin bin prices that we’ve heard about through rumors so far. In an interview with the Shanghai Evening News this week, Apple senior vice president of worldwide marketing Phil Schiller said that cheap smartphones will “never be the future of Apple products,” although he never explicitly ruled out selling a cheaper version of the iPhone. Apple’s reluctance to fight companies such as LG (066570) and Nokia (NOK) by flooding emerging markets with low-cost smartphones all boils down to one thing: Margins. As Schiller explains, Apple isn’t too concerned about its relatively low market share in emerging markets because “although Apple’s market share of smartphones is just about 20%, we own the 75% of the profit.

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The FDA Wants Women to Take Less Ambien

Women who take sleeping pills have been inadvertently double-dosing, according to a new announcement from the the Federal Drug Administration. Today FDA regulators told the makers of sleep-aid prescriptions such as Ambien, Zolpimist, and Edluar to cut recommended doses for women in half. The order comes after new findings about the different ways men and women respond to zolpidem, the active ingredient in most sleeping pills.
RELATED: FDA: Your Toothbrush May Be Out to Destroy You
Women eliminate zolpidem from their bodies more slowly than men. By studying people eight hours after they took sleeping pills, FDA researchers found that 10 to 15 percent of women still had   enough zolpidem coursing through their bloodstream to impair driving. Only three percent of men exhibited the same prolonged wooziness. That's why recommended doses of Ambien will go from 10 milligrams to 5 milligrams for women. FDA Center for Drug Evaluation and Research deputy director Robert Temple told The New York Times's Sabrina Tavernise:
Most people thought that by the morning it is gone. What we’re reminding people is that is sort of true, but that in some women who take a full 10 milligram dose, and in a lot of people who take the control release dose, it is not entirely true. Some people will be impaired in the morning.
The news that women may have been taking too much sleeping medication without even knowing it is kind of freaky, since too much Ambien can make people do things in their sleep they won't remember later—things like "driving, or preparing and eating food," according to Mayo Clinic sleep specialist Eric Olson.

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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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Wisconsin Assembly's all-nighters targeted

MADISON, Wis. (AP) — To young people, pulling an all-nighter usually involves lots of caffeine and staying up to study.
To the Wisconsin state Assembly, it's an all-too-familiar method of doing the state's business.
The new Republican speaker of the Assembly has some ideas for ending the all-night sessions, but he refused to announce what any of them were after a private meeting Tuesday with Democratic leaders. Talks were to resume Wednesday, but Democratic Minority Leader Peter Barca said "we're worlds apart."
If Democrats don't go along with what Republicans want, the Assembly's debate Thursday on approving the new rules could — wait for it — go all night.
"It's not hard to get people to agree it's not good to be working at 3 in the morning," said former Wisconsin state Rep. Bob Ziegelbauer. "It's another thing to create the conditions where that doesn't happen."
Going past midnight happens elsewhere, especially at the end of sessions or as other deadlines loom. But the Wisconsin Assembly routinely pushes debates and votes on contentious bills into the wee hours, when only lobbyists and the cleaning crew are left in the building.
"Those overnight sessions are just killers," said former Democratic state Rep. Mordecai Lee. "After a while you just zonk out. I remember being in overnight sessions and I couldn't think straight."
Some other states have taken steps to rein in the late-night sessions, such as the 11 p.m. in curfew in Pennsylvania or the midnight one in Oklahoma. In Minnesota, lawmakers require a vote to work past midnight, although they still routinely do it. The New York Senate has an unofficial but strict rule against marathon sessions. But there's no such rule in the New York Assembly, where the final session days have all gone into the early morning in recent years.
The Wisconsin Assembly's late-night sessions have produced some dramatic moments. Passage of Republican Gov. Scott Walker's plan effectively ending collective bargaining for public workers in 2011 came at 1 a.m. after a 61-hour filibuster. Republicans hustled off the floor to a barrage of insults from the gallery and yells of "Shame!" from Democrats.
Other times, lawmakers have burst into song, imitated one other or just become unusually candid.
Take Rep. Gary Sherman's tirade around 4 a.m. in 2008.
"This is unprofessional. This is stupid. We have no business to be here," Sherman yelled. "There's people in this room with cancer. There's people in this room with heart disease. A third of the room has high blood pressure. There's elderly people. There's pregnant people. What the hell are we doing?"
Ziegelbauer, who served 20 years in the Assembly before retiring last year, said the late nights can be frustrating.
"I drove home between 3 and 6 in the morning more times than I'd like to think," said Ziegelbauer, who lives about 2 1/2 hours from the Capitol. "It used to drive me crazy. The first couple sessions I would sit there and grind my teeth when the guy who lives 15 minutes away picks a fight that's going keep us there until 2 in the morning."
Lawmakers aren't alone in their dislike of the late nights.
"It's a huge impediment to citizen oversight of the Legislature," said Mike McCabe, director of the nonpartisan government watchdog group the Wisconsin Democracy Campaign. "It leads to fewer eyes watching the Legislature, and that's never healthy."
Any solution requires cooperation from both parties and a willingness to make the change, Ziegelbauer said. It could also mean being in session more than just a day or two a week, as is typical in Wisconsin, he said.
Previous attempts to make the Assembly act more like the Senate, which is normally done by 5 p.m., have failed.
Fresh off knocking Democrats out of control of the Assembly in 1995, Republicans instituted a rule ending debate at 8 p.m. But Democrats used that to their advantage, and Republicans repealed the rule two years later.
Democrats routinely stalled debate until 8 p.m., making it more difficult for bills they opposed to be taken up, said state Sen. Luther Olsen, a Republican who was in the Assembly the two years of the curfew. Olsen said Democrats would "just talk and talk and talk" until the deadline, then start the fight anew the next morning.
David Prosser, now a Wisconsin Supreme Court justice, was speaker of the Assembly at the time. He said such rules can work.
"It seems to me a rule that ends debate at a reasonable hour, except in extreme circumstances, is a very sensible rule," Prosser said. "On the other hand, there's practical difficulty in making that rule work if everybody in the body doesn't appreciate the value of the rule."
Walker has found himself on both sides of the issue.
As a member of the Assembly in 1997, he voted with Republicans to eliminate the 8 p.m. curfew. But in his run for governor in 2010, after the Assembly pulled two all-nighters, Walker promised to sign legislation that would bar voting after 10 p.m. or before 9 a.m.
"I have two teenagers and I tell them that nothing good happens after midnight. That's even more true in politics," Walker said then. "The people of Wisconsin deserve to know what their elected leaders are voting on."

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AIG says obliged to consider joining lawsuit against government

BOSTON (Reuters) - AIG has an obligation to consider a demand by its former chief executive that the company join a lawsuit challenging some of the terms of the insurer's 2008 government rescue, AIG said on Tuesday.
In a statement, American International Group said its board expected to make a decision "in the next several weeks."

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U.S. launches review of Shell Arctic drilling program

WASHINGTON (Reuters) - The Interior Department will review Royal Dutch Shell's 2012 Arctic oil drilling program to assess the challenges the oil company faced and to help guide future permitting in the region.
The announcement on Tuesday follows the grounding of one of Shell's rigs off the coast of Alaska last week, the latest mishap the company has encountered as it undertakes an ambitious Arctic exploration effort.
"Exploration allows us to better comprehend the true scope of our resources in the Arctic ... but we also recognize that the unique challenges posed by the Arctic environment demand an even higher level of scrutiny," Interior Secretary Ken Salazar said in a statement.
Any changes in permitting requirements or delays due to the review could threaten Shell's drilling plans for 2013. The company faces a limited window during the summer when weather conditions and regulators will allow drilling.
Interior said it hopes to complete its "high-level" assessment within 60 days.
Also on Tuesday, the U.S. Coast Guard in Alaska ordered a special investigation into the causes of last week's grounding of Shell's Kulluk drill ship, a probe that the Coast Guard said was expected to take several months.
Known as a formal marine casualty investigation, it is convened when a shipping accident has considerable regional significance or may indicate vessel class problems, or if such an investigation is the best way to assess technical issues that may have contributed to the problem, the Coast Guard said.
Shell has spent $4.5 billion since 2005 to develop the Arctic's vast oil reserves, but the company has faced intense opposition from environmentalists and native groups, as well as regulatory and technical hurdles.
The oil company made some strides last year, actually beginning preparatory drilling in the Chukchi and Beaufort seas. But the work was far short of completing up to three wells in the Chukchi and up to two in the Beaufort, as Shell planned.
Instead, its 2012 drilling season was beset by delays due to lingering ice in the water and problems with getting a mandatory oil spill containment vessel certified by the Coast Guard.
Shell welcomed the department's review, conceding that it had experienced some challenges.
"We have already been in dialogue with the DOI on lessons learned from this season, and a high level review will help strengthen our Alaska exploration program going forward," Shell spokeswoman Kelly op de Weegh said in a statement.
Interior said it would examine the issues with Shell's containment vessel, as well as issues with Shell's two Arctic drilling rigs, the Kulluk and Noble Corp's Discoverer, which Shell has under contract there.
It was the Kulluk that broke away from tow boats and ran aground on New Year's Eve in what were described as near hurricane conditions before being towed to safety on Monday.
U.S. Senator Mark Begich, an Alaska Democrat and strong supporter of offshore Arctic drilling, called on Tuesday for a hearing to examine the Kulluk situation.
"While this incident notably involves marine transportation and not oil exploration or drilling, we must quickly answer the many questions surrounding the Kulluk grounding and improve any regulatory or operational standards as needed to ensure this type of maritime accident does not occur again," Begich said in a letter to Coast Guard Commandant Admiral Robert Papp and to Shell.
Environmentalists see the Kulluk accident as new evidence that oil companies are not ready for Arctic drilling, calling on the government to put permitting there on hold.
One group calling for a pause in permitting, conservation group Oceana, said Interior's review was a step in the right direction, but it must be "more than a paper exercise."
"The Department of the Interior, after all, is complicit in Shell's failures because it granted the approvals that allowed Shell to operate," said Michael LeVine, Pacific senior counsel at the ocean conservation group.
As for the Kulluk itself, the unified command for the accident response said it remained anchored in its bay of refuge and still showed no signs of leaks or spills. Later on Tuesday, remote operated vehicles are expected to examine the hull and divers will be called in if necessary, the statement said.

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