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

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

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Former Lab Technician Denies Faulty DNA Work in Rape Cases

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Gadgetwise Blog: Why Pixel Counts Don't Count in Cameras

With the coming of the Consumer Electronics Show, camera manufacturers will be trotting out scads of new products, but many are unfortunately falling back on an old marketing strategy.

I have been seeing manufacturers offer ever larger pixel counts for their newer models. For instance Nikon’s D5100 is still in the lineup alongside the newer and less expensive D3200. The D5100 has 16.2 megapixel sensor, the D3200 has a 24.2 megapixel sensor (there are even newer models, but I don’t have them on hand to test).

Shouldn’t that make the D3200 the better camera? Logically maybe. But in fact it doesn’t, which serves to point out why you can’t shop for a camera based on the number of pixels. It’s largely meaningless when it comes to image quality.

In recent years, many manufacturers had stepped stepped away from pushing pixel counts as the primary selling point of a camera, but it’s a measure the public seems to respond to. Now it’s back in a big way.

To demonstrate why pixels are irrelevant, I have taken an ugly but illustrative image of a corner in a darkened room. Low light brings out “noise” in photographs. It’s a kind of grainy unevenness that is generally undesirable although some artists use it for effect. Both photos are taken with the same settings and lens. You can see the grain is more pronounced in the photo from the D3200, which has the higher pixel count.

Why is that? Because at a certain point you’re better off having a larger pixel, which captures better quality information about the light it sees, rather than additional pixels capturing lower quality data.

To be clear, I am not singling out Nikon, or either of these cameras. They are terrific products, and I consider the D5100 one of the better bargains in its price range partly because of its ability to capture quality images in low light.

The point here is that when you are shopping for a camera, concentrate on the type and physical dimensions of the sensor. In that case, larger is better because more surface area means more ability to capture light. And though CCD sensors used to be state-of-the-art, CMOS sensors have largely surpassed them.

If you only remember one thing when shopping for a new camera it’s this: don’t be seduced by a high pixel count.

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Russia Says It Supports U.N. Envoy for Syria

George Ourfalian/Reuters

Syrian soldiers loyal to President Bashar al-Assad in Aleppo on Saturday.

MOSCOW (Reuters) — Russia voiced support on Saturday for Lakhdar Brahimi, the special Syria envoy from the United Nations and the Arab League, but insisted that the exit of the Syrian president, Bashar al-Assad, could not be a precondition for a deal to end the country’s conflict.

A Foreign Ministry statement after talks in Geneva on Friday with the United States and Mr. Brahimi, who the Syrian government has said is “flagrantly biased,” reiterated calls for an end to the violence in Syria, where more than 60,000 people have been killed since March 2011.

At the meeting with Mr. Brahimi and an American deputy secretary of state, William J. Burns, a Russian deputy foreign minister, Mikhail Bogdanov, “expressed unfailing support for Brahimi’s mission as the U.N.-Arab League special envoy on Syria,” the statement said.

The issue of Mr. Assad — who the United States, European powers and gulf-led Arab states say must step down to end what has escalated into a civil war — appeared to be a sticking point at the meeting.

“As before, we firmly uphold the thesis that questions about Syria’s future must be decided by the Syrians themselves,” Russia’s Foreign Ministry said, “without interference from outside or the imposition of prepared recipes for development.”

Russia has been Mr. Assad’s most powerful international supporter during the nearly 22-month conflict, joining with China to block three Western- and Arab-backed United Nations Security Council resolutions intended to pressure him or push him from power.

In Geneva, Russia called for “a political transition process” based on an agreement by foreign powers last June.

Mr. Brahimi, who is trying to build on the agreement reached in Geneva on June 30, has met three times since early December with senior Russian and American diplomats, and he met Mr. Assad in Damascus.

Russia and the United States disagreed over what the June agreement meant for Mr. Assad, with Washington saying it sent a clear signal that he must go and Russia contending it did not.

In Washington, a spokeswoman for the State Department, Victoria Nuland, said there had been some progress toward a common view at Friday’s meeting, but she did not provide details.

Moscow says it is not propping up Mr. Assad and, as rebels gain ground in the war, it has given indications it is preparing for his possible exit. But it continues to insist he must not be forced out by foreign powers.

Analysts say President Vladimir V. Putin of Russia wants to prevent the United States from using military force or support from the Security Council to bring down governments it opposes.

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DealBook: Client Redemptions Loom for SAC Capital

12:46 p.m. | Updated

The hedge fund giant SAC Capital Advisors is steeling itself for a possible wave of withdrawal requests from clients amid the government’s intensifying scrutiny of its trading practices.

Investors have about a month to decide whether to pull out money from SAC, the $14 billion fund owned by the billionaire investor Steven A. Cohen.

While posting one of the best investment track records on Wall Street across two decades, SAC has attracted billions of dollars from pension funds, wealthy families and other money management firms. But since late November, when federal prosecutors brought its latest criminal insider trading charge against a former SAC employee — a case that it calls the most lucrative insider trading scheme ever uncovered — those clients are weighing whether continuing their relationship with the fund is worth the reputational risk.

The fund has a standard quarterly redemption deadline, and the next one will fall on Feb. 15. Already, several of SAC’s clients, including Lyxor Asset Management and Titan Advisors, have notified the fund that they intend to withdraw their money. Others, like Skybridge Capital, have told SAC they will continue to invest with the fund.

Questions remain about the intentions of several of SAC’s well-known clients, including Blackstone Group, one of the world’s largest and most influential allocators to hedge funds. Blackstone has about $550 million invested in SAC, making it one of the fund’s largest outside investors. A Blackstone spokesman declined to comment.

The fund has told its employees that it could face at least $1 billion of withdrawals, according to a report in The Wall Street Journal on Friday. A spokesman for SAC said it was “far too early to speculate about redemptions, and we do not expect redemptions to have a significant impact on our funds.”

Any withdrawals from clients would come after a year of decent performance for SAC. In 2012 the firm returned about 13 percent net of fees, which while slightly underperforming the Standard & Poor’s 500 stock market index, is superior to the results of the average hedge fund.

While a spate of redemptions can have a crippling effect on a hedge fund by forcing it to sell its holdings at unfavorable prices, SAC is more insulated than most of its competitors from the ill effects of client withdrawals. That is because of the $14 billion that SAC manages, only about 40 percent of that comes from outside clients. The rest — a fortune of about $8 billion — belongs to Mr. Cohen and his employees.

Also, SAC has protected itself with a stringent redemption policy. The fund’s clients can redeem only 25 percent of their investment each quarter. So, for example, if a client has $200 million invested with SAC, and asks for its money back by the Feb. 15 deadline, SAC would return $50 million every three months beginning in March. That way, SAC is protected from having a forced liquidation of its investment portfolio.

Still, an investor exodus can have a crippling effect on a hedge fund, often causing it to shut down. Last month, Diamondback Capital Management, another hedge fund that became ensnared in the government’s insider trading investigation, closed after its investors sought to pull out roughly one-quarter of the fund’s assets.

Diamondback’s management decided that the most prudent course of action was to wind down rather than reorganize the firm to manage the reduced amount of money.

Like Diamondback, SAC has become embroiled in the government’s broad crackdown on insider trading at hedge funds. At least seven former SAC traders and analysts have been tied to illegal trading while at the fund. And the Securities and Exchange Commission has warned SAC that it might filed a civil action against the fund for failing to properly supervise its employees.

Mr. Cohen has told his employees that he believes he and his fund have at all times acted appropriately, and that the fund has fully cooperated with the government’s investigation.

In recent weeks, SAC has gone on a charm offensive in an attempt to hold on to clients. The fund has told its investors that they would not be responsible for any penalties incurred as a result of any of the government’s legal inquiry. Instead, SAC has told them, Mr. Cohen and his management company would pick up the costs.

There have also been changes at the fund. SAC last week told its staff that it was closing its office in Chicago, which is home to about a dozen employees. Such a move is not unusual, as the fund has closed offices before, such as San Francisco, where it saw limited opportunities.

A spokesman said it didn’t make sense to have an office in Chicago. SAC has more than 1,000 employees – portfolio managers, analysts, traders, and support staff – in five offices across the globe, with its headquarters in Stamford, Conn.

Though Mr. Cohen has told his friends and employees that he remains committed to managing money for outside clients, he could decide to follow in the footsteps of several fellow billionaire hedge fund managers.

A number of star investors, having already amassed billions in personal wealth, have decided to get out of the business of managing other people’s money. In recent years, for example, both George Soros and his onetime protégé, Stanley Druckenmiller, returned money to clients and set up so-called family offices to manage their own fortunes.

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

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

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

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

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

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

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

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

What kinds of challenges have you witnessed?

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

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

That’s hard, isn’t it?

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

How can contemplative caregiving help?

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

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

What does that mean?

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

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

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

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

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

Why is that important?

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

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

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

Are other skills important?

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

What will you do in your course?

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

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

What can people do on their own?

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

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

Are other groups doing this kind of work?

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

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

Read More..

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

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

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

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

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

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

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

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

What kinds of challenges have you witnessed?

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

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

That’s hard, isn’t it?

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

How can contemplative caregiving help?

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

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

What does that mean?

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

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

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

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

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

Why is that important?

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

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

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

Are other skills important?

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

What will you do in your course?

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

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

What can people do on their own?

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

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

Are other groups doing this kind of work?

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

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

Read More..

Gadgetwise Blog: Q&A: Dealing With Duplicate Work on Dropbox

What happens if two people work on the same file at the same time in a shared Dropbox folder? Does one copy of the file overwrite the other?

If two people are editing the same file at the same time, Dropbox saves both versions of the file in the shared folder. The service does not merge the two different files, but adds the words “conflicted copy” to the file name of the second version so it is obvious that two different copies of the same file now exist.

The file name of the second copy also lists the date that the conflict occurred between the two versions of the file. The computer name or name of the person who was working on the file is appended to the name as well, making it somewhat easier to identify the collaborator and ensure that everyone’s changes are incorporated into one final version of the document.

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At War Blog: Watch Karzai and Obama News Conference Live

The last time President Obama and President Hamid Karzai of Afghanistan spoke face to face, it was on a video conference call on Sept. 21. Mr. Obama, distracted by an election in which the war in Afghanistan was barely discussed, deflected Mr. Karzai’s most probing questions, The Times explains in this article.

This afternoon, the two leaders will finally confront the future of the American commitment in Afghanistan. You can watch the news conference live at 1:15 p.m. New York time from this blog post.

Here is some background on what is likely to be discussed:

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Nokia Sees Results From New Smartphone Line

BERLIN — Nokia said Thursday that its struggling mobile phone business was showing signs of a rebound, turning a profit in the fourth quarter fueled by sales of its Lumia smartphones that use Microsoft software.

Stephen Elop, the Nokia chief executive, said sales of smartphones and more basic cellphones, as well as profitability at the Nokia Siemens network-equipment venture, all came in better than expected during the three months through December.

“While we definitely experienced some tough challenges in the first half of 2012, we are managing through these issues,” Mr. Elop said in a conference call with journalists.

Nokia has amassed nearly €5 billion, or $6.5 billion, in losses since Mr. Elop, a former Microsoft executive, announced plans to phase out Nokia phones that used its own Symbian operating system for the Lumia line, which uses the Windows Phone 8 software, in February 2011.

Sales of Lumia phones increased only modestly during the early part of 2012, raising concern that the company’s turnaround strategy, marked by cost cutting and the sale of subsidiary businesses, would not be enough to save the former market leader.

But in the fourth quarter, amid heavy television and print ad spending in Europe and North America, Nokia said it sold 4.4 million Lumia phones, up from 2.9 million in the third quarter.

The company said revenue from the sale of 86.3 million mobile phones of all kinds amounted to €3.9 billion in the quarter, without providing comparative figures.

The company’s shares surged as much as 16 percent in Helsinki on the news.

In a statement, Nokia said that it expected operating profit at its devices and services business, which makes up about half of its total sales, to break even or generate a profit of as much as 2 percent of sales in the fourth quarter. In October, Nokia had told investors that it expected the business to make an operating loss of as much as 10 percent of sales.

But sales of its Lumia smartphone and Asha feature phones rose more than expected. Also, Nokia Siemens, its network gear venture, will report an operating profit of 13 percent to 15 percent of sales in the fourth quarter, compared with an expected range of 4 percent to 12 percent.

Looking ahead, Nokia said it expected to return to an operating loss of 2 percent of sales in the first quarter amid the post-holiday buying lull and harsh competition. But the results for the coming three months could vary widely, Nokia warned, from an even bigger 6 percent operating loss to a 2 percent operating profit.

Pete Cunningham, an analyst at Canalys, a research firm in Reading, England, said Nokia’s improving financial position was a positive step. But the company, which ceded its market leadership to Samsung and Apple, is not out of the woods yet.

“On face value, this is a positive for Nokia,” Mr. Cunningham said. “But 2013 could still turn out to be another very difficult year for Nokia. It is way too premature to say that the company has made a turnaround.”

Mr. Cunningham said he used the Lumia 920, Nokia’s newest smartphone, during the Christmas holidays and liked the experience.

“But the more I used the phone, the more apparent it became to me that there are big gaps between Lumia and its competitors in terms of the functionality and usability of its apps,” Mr. Cunningham said. “I still think there is a lot of work to be done on Lumia.”

Mr. Elop said Nokia would continue to innovate to close the gap with competitors. The big issues that Nokia faces, he said, are “managing efficiently, building great products and changing the way we operate. We’re beginning to see that happen.”

Nokia’s shares closed up nearly 13 percent at €3.39 in Helsinki trading.

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Flu Widespread, Leading a Range of Winter’s Ills

It is not your imagination — more people you know are sick this winter, even people who have had flu shots.

The country is in the grip of three emerging flu or flulike epidemics: an early start to the annual flu season with an unusually aggressive virus, a surge in a new type of norovirus, and the worst whooping cough outbreak in 60 years. And these are all developing amid the normal winter highs for the many viruses that cause symptoms on the “colds and flu” spectrum.

Influenza is widespread, and causing local crises. On Wednesday, Boston’s mayor declared a public health emergency as cases flooded hospital emergency rooms.

Google’s national flu trend maps, which track flu-related searches, are almost solid red (for “intense activity”) and the Centers for Disease Control and Prevention’s weekly FluView maps, which track confirmed cases, are nearly solid brown (for “widespread activity”).

“Yesterday, I saw a construction worker, a big strong guy in his Carhartts who looked like he could fall off a roof without noticing it,” said Dr. Beth Zeeman, an emergency room doctor for MetroWest Medical Center in Framingham, Mass., just outside Boston. “He was in a fetal position with fever and chills, like a wet rag. When I see one of those cases, I just tighten up my mask a little.”

Massachusetts General Hospital in Boston started asking visitors with even mild cold symptoms to wear masks and to avoid maternity wards. The hospital has treated 532 confirmed influenza patients this season and admitted 167, even more than it did by this date during the 2009-10 swine flu pandemic.

At Brigham and Women’s Hospital, 100 patients were crowded into spaces licensed for 53. Beds lined halls and pressed against vending machines. Overflow patients sat on benches in the lobby wearing surgical masks.

“Today was the first time I think I was experiencing my first pandemic,” said Heidi Crim, the nursing director, who saw both the swine flu and SARS outbreaks here. Adding to the problem, she said, many staff members were at home sick and supplies like flu test swabs were running out.

Nationally, deaths and hospitalizations are still below epidemic thresholds. But experts do not expect that to remain true. Pneumonia usually shows up in national statistics only a week or two after emergency rooms report surges in cases, and deaths start rising a week or two after that, said Dr. Gregory A. Poland, a vaccine specialist at the Mayo Clinic in Minnesota. The predominant flu strain circulating is an H3N2, which typically kills more people than the H1N1 strains that usually predominate; the relatively lethal 2003-4 “Fujian flu” season was overwhelmingly H3N2.

No cases have been resistant to Tamiflu, which can ease symptoms if taken within 48 hours, and this year’s flu shot is well-matched to the H3N2 strain, the C.D.C. said. Flu shots are imperfect, especially in the elderly, whose immune systems may not be strong enough to produce enough antibodies.

Simultaneously, the country is seeing a large and early outbreak of norovirus, the “cruise ship flu” or “stomach flu,” said Dr. Aron J. Hall of the C.D.C.’s viral gastroenterology branch. It includes a new strain, which first appeared in Australia and is known as the Sydney 2012 variant.

This week, Maine’s health department said that state was seeing a large spike in cases. Cities across Canada reported norovirus outbreaks so serious that hospitals were shutting down whole wards for disinfection because patients were getting infected after moving into the rooms of those who had just recovered. The classic symptoms of norovirus are “explosive” diarrhea and “projectile” vomiting, which can send infectious particles flying yards away.

“I also saw a woman I’m sure had norovirus,” Dr. Zeeman said. “She said she’d gone to the bathroom 14 times at home and 4 times since she came into the E.R. You can get dehydrated really quickly that way.”

This month, the C.D.C. said the United States was having its biggest outbreak of pertussis in 60 years; there were about 42,000 confirmed cases, the highest total since 1955. The disease is unrelated to flu but causes a hacking, constant cough and breathlessness. While it is unpleasant, adults almost always survive; the greatest danger is to infants, especially premature ones with undeveloped lungs. Of the 18 recorded deaths in 2012, all but three were of infants under age 1.

That outbreak is worst in cold-weather states, including Colorado, Washington, Wisconsin, Minnesota and Vermont.

Although most children are vaccinated several times against pertussis, those shots wear off with age. It is possible, the authorities said, that a new, safer vaccine introduced in the 1990s gives protection that does not last as long, so more teenagers and adults are vulnerable.

And, Dr. Poland said, if many New Yorkers are catching laryngitis, as has been reported, it is probably a rhinovirus. “It’s typically a sore, really scratchy throat, and you sometimes lose your voice,” he said.

Though flu cases in New York City are rising rapidly, the city health department has no plans to declare an emergency, largely because of concern that doing so would drive mildly sick people to emergency rooms, said Dr. Jay K. Varma, deputy director for disease control. The city would prefer people went to private doctors or, if still healthy, to pharmacies for flu shots. Nursing homes have had worrisome outbreaks, he said, and nine elderly patients have died. Homes need to be more alert, vaccinate patients, separate those who fall ill and treat them faster with antivirals, he said.

Dr. Susan I. Gerber of the C.D.C.’s respiratory diseases branch, said her agency has not seen any unusual spike of rhinovirus, parainfluenza, adenovirus, coronavirus or the dozens of other causes of the “common cold,” but the country is having its typical winter surge of some, like respiratory syncytial virus “that can mimic flulike symptoms, especially in young children.”

The C.D.C. and the local health authorities continue to advocate getting flu shots. Although it takes up to two weeks to build immunity, “we don’t know if the season has peaked yet,” said Dr. Joseph Bresee, chief of prevention in the agency’s flu division.

Flu shots and nasal mists contain vaccines against three strains, the H3N2, the H1N1 and a B. Thus far this season, Dr. Bresee said, H1N1 cases have been rare, and the H3N2 component has been a good match against almost all the confirmed H3N2 samples the agency has tested.

About a fifth of all flus this year thus far are from B strains. That part of the vaccine is a good match only 70 percent of the time, because two B’s are circulating.

For that reason, he said, flu shots are being reformulated. Within two years, they said, most will contain vaccines against both B strains.

Joanna Constantine, 28, a stylist at the Guy Thomas Hair Salon on West 56th Street in Manhattan, said she recently was so sick that she was off work and in bed for five days — and silenced by laryngitis for four of them.

She did not have the classic flu symptoms — a high fever, aches and chills — so she knew it was probably something else.

Still, she said, it scared her enough that she will get a flu shot next year. She had not bothered to get one since her last pregnancy, she said. But she has a 7-year-old son and a 5-year-old daughter, “and my little guys get theirs every year.”

Jess Bidgood contributed reporting.

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Flu Widespread, Leading a Range of Winter’s Ills

It is not your imagination — more people you know are sick this winter, even people who have had flu shots.

The country is in the grip of three emerging flu or flulike epidemics: an early start to the annual flu season with an unusually aggressive virus, a surge in a new type of norovirus, and the worst whooping cough outbreak in 60 years. And these are all developing amid the normal winter highs for the many viruses that cause symptoms on the “colds and flu” spectrum.

Influenza is widespread, and causing local crises. On Wednesday, Boston’s mayor declared a public health emergency as cases flooded hospital emergency rooms.

Google’s national flu trend maps, which track flu-related searches, are almost solid red (for “intense activity”) and the Centers for Disease Control and Prevention’s weekly FluView maps, which track confirmed cases, are nearly solid brown (for “widespread activity”).

“Yesterday, I saw a construction worker, a big strong guy in his Carhartts who looked like he could fall off a roof without noticing it,” said Dr. Beth Zeeman, an emergency room doctor for MetroWest Medical Center in Framingham, Mass., just outside Boston. “He was in a fetal position with fever and chills, like a wet rag. When I see one of those cases, I just tighten up my mask a little.”

Massachusetts General Hospital in Boston started asking visitors with even mild cold symptoms to wear masks and to avoid maternity wards. The hospital has treated 532 confirmed influenza patients this season and admitted 167, even more than it did by this date during the 2009-10 swine flu pandemic.

At Brigham and Women’s Hospital, 100 patients were crowded into spaces licensed for 53. Beds lined halls and pressed against vending machines. Overflow patients sat on benches in the lobby wearing surgical masks.

“Today was the first time I think I was experiencing my first pandemic,” said Heidi Crim, the nursing director, who saw both the swine flu and SARS outbreaks here. Adding to the problem, she said, many staff members were at home sick and supplies like flu test swabs were running out.

Nationally, deaths and hospitalizations are still below epidemic thresholds. But experts do not expect that to remain true. Pneumonia usually shows up in national statistics only a week or two after emergency rooms report surges in cases, and deaths start rising a week or two after that, said Dr. Gregory A. Poland, a vaccine specialist at the Mayo Clinic in Minnesota. The predominant flu strain circulating is an H3N2, which typically kills more people than the H1N1 strains that usually predominate; the relatively lethal 2003-4 “Fujian flu” season was overwhelmingly H3N2.

No cases have been resistant to Tamiflu, which can ease symptoms if taken within 48 hours, and this year’s flu shot is well-matched to the H3N2 strain, the C.D.C. said. Flu shots are imperfect, especially in the elderly, whose immune systems may not be strong enough to produce enough antibodies.

Simultaneously, the country is seeing a large and early outbreak of norovirus, the “cruise ship flu” or “stomach flu,” said Dr. Aron J. Hall of the C.D.C.’s viral gastroenterology branch. It includes a new strain, which first appeared in Australia and is known as the Sydney 2012 variant.

This week, Maine’s health department said that state was seeing a large spike in cases. Cities across Canada reported norovirus outbreaks so serious that hospitals were shutting down whole wards for disinfection because patients were getting infected after moving into the rooms of those who had just recovered. The classic symptoms of norovirus are “explosive” diarrhea and “projectile” vomiting, which can send infectious particles flying yards away.

“I also saw a woman I’m sure had norovirus,” Dr. Zeeman said. “She said she’d gone to the bathroom 14 times at home and 4 times since she came into the E.R. You can get dehydrated really quickly that way.”

This month, the C.D.C. said the United States was having its biggest outbreak of pertussis in 60 years; there were about 42,000 confirmed cases, the highest total since 1955. The disease is unrelated to flu but causes a hacking, constant cough and breathlessness. While it is unpleasant, adults almost always survive; the greatest danger is to infants, especially premature ones with undeveloped lungs. Of the 18 recorded deaths in 2012, all but three were of infants under age 1.

That outbreak is worst in cold-weather states, including Colorado, Washington, Wisconsin, Minnesota and Vermont.

Although most children are vaccinated several times against pertussis, those shots wear off with age. It is possible, the authorities said, that a new, safer vaccine introduced in the 1990s gives protection that does not last as long, so more teenagers and adults are vulnerable.

And, Dr. Poland said, if many New Yorkers are catching laryngitis, as has been reported, it is probably a rhinovirus. “It’s typically a sore, really scratchy throat, and you sometimes lose your voice,” he said.

Though flu cases in New York City are rising rapidly, the city health department has no plans to declare an emergency, largely because of concern that doing so would drive mildly sick people to emergency rooms, said Dr. Jay K. Varma, deputy director for disease control. The city would prefer people went to private doctors or, if still healthy, to pharmacies for flu shots. Nursing homes have had worrisome outbreaks, he said, and nine elderly patients have died. Homes need to be more alert, vaccinate patients, separate those who fall ill and treat them faster with antivirals, he said.

Dr. Susan I. Gerber of the C.D.C.’s respiratory diseases branch, said her agency has not seen any unusual spike of rhinovirus, parainfluenza, adenovirus, coronavirus or the dozens of other causes of the “common cold,” but the country is having its typical winter surge of some, like respiratory syncytial virus “that can mimic flulike symptoms, especially in young children.”

The C.D.C. and the local health authorities continue to advocate getting flu shots. Although it takes up to two weeks to build immunity, “we don’t know if the season has peaked yet,” said Dr. Joseph Bresee, chief of prevention in the agency’s flu division.

Flu shots and nasal mists contain vaccines against three strains, the H3N2, the H1N1 and a B. Thus far this season, Dr. Bresee said, H1N1 cases have been rare, and the H3N2 component has been a good match against almost all the confirmed H3N2 samples the agency has tested.

About a fifth of all flus this year thus far are from B strains. That part of the vaccine is a good match only 70 percent of the time, because two B’s are circulating.

For that reason, he said, flu shots are being reformulated. Within two years, they said, most will contain vaccines against both B strains.

Joanna Constantine, 28, a stylist at the Guy Thomas Hair Salon on West 56th Street in Manhattan, said she recently was so sick that she was off work and in bed for five days — and silenced by laryngitis for four of them.

She did not have the classic flu symptoms — a high fever, aches and chills — so she knew it was probably something else.

Still, she said, it scared her enough that she will get a flu shot next year. She had not bothered to get one since her last pregnancy, she said. But she has a 7-year-old son and a 5-year-old daughter, “and my little guys get theirs every year.”

Jess Bidgood contributed reporting.

Read More..

Bits Blog: Do People Actually Shop on Phones? The Answer Is Decidedly Yes

In e-commerce, the mobile revolution is here.

In 2012, people spent $25 billion on purchases made from phones and tablets, an increase of 81 percent from the year before, according to eMarketer, which compiles data from 120 sources that track commerce.

That is still a minority of total e-commerce sales. Mobile accounted for just 11 percent of e-commerce and is expected to reach 15 percent this year. But eMarketer predicts that by 2016, mobile will be $87 billion, or a quarter of all e-commerce.

The shift is significant for a type of shopping riddled with challenges — like small screens that make it hard to view items and type. It reflects the consumers’ shift to doing everything from work to play on mobile devices.

“Particularly in the second half of the year and in the holiday season, there were signs that smartphones and tablets in particular had made much more progress than people had previously thought we would,” said Clark Fredricksen, vice president of communications at eMarketer.

And mobile shoppers spend a surprising amount when using these devices — an average of $329 per order when on tablets and $250 when on phones, eMarketer said.

Tablets in particular have significantly changed the way people shop. While in 2011, people spent more money making purchases from smartphones than from tablets, shopping on tablets surpassed phones last year: $13.9 billion was spent from tablets and $9.9 billion from phones.

People are more likely to use tablets while they are in a shopping mood, like lounging on the couch. And their bigger screens make shopping easier than it is on smartphones and in some cases easier than on computers, because shoppers can zoom in or drag items to their carts with their fingers.

For example, at Tea Collection, a children’s clothing retailer, just over a third of transactions now come from mobile devices. People are just as likely to buy from tablets as from computers, and some days more likely, but the conversion rate is lower on smartphones.

Leigh Rawdon, chief executive and co-founder of Tea Collection, said she was surprised at how quickly people have taken to shopping on mobile devices, and that she expects behavior to change yet again with the proliferation of smaller tablets like the iPad Mini that blur the line between phone and tablet.

Still, some retailers report that mobile commerce has not been as big as they expected.

“Many mobile storefronts have problems that make buying difficult,” Mr. Fredricksen said. “Even though sessions often start on smartphones, in the end consumers end up turning to computers or retail stores or even a tablet to seal the deal.”

Big e-commerce players that have poured resources into mobile shopping, like Amazon.com and eBay, are seeing significantly more mobile commerce than smaller shopping sites, Mr. Fredricksen said.

During the holidays, overall e-commerce sales on computers and mobile devices combined grew 14 percent to $42.3 billion, according to comScore. That was lower than expected. After a strong start around Thanksgiving, consumer spending shrank because of concerns about the fiscal crisis in Washington, comScore said.

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Would-Be Inauguration in Venezuela for Chávez

Ariana Cubillos/Associated Press

A woman walked past a wall plastered with election campaign posters of President Hugo Chávez of Venezuela in Caracas on Wednesday.

CARACAS, Venezuela — President Hugo Chávez’s supporters have not ruled out swearing him in from his hospital in Havana. His detractors are calling for government investigators to go check his pulse themselves. The justices whom Mr. Chávez’s allies have named to the Supreme Court have decided that he can continue to govern in absentia.

In a country that Mr. Chávez has dominated for so long, his health crisis and the decision to proceed on Thursday with a quasi-presidential inauguration that he is unable to attend are producing a stream of bizarre developments and national angst about who is in charge.

“Who’s governing Venezuela?” Julio Borges, an opposition member of the National Assembly, said during a noisy legislative debate this week on the biggest issue facing the country, overshadowing other urgent matters like pressures for a painful currency devaluation, stagnant oil production and chronic shortages of food and other staples on store shelves.

Mr. Chávez has long said, “I am the people,” a mantra that his supporters are invoking as they plan to don the sash the president would have worn had he been able to attend his inauguration, symbolically becoming presidents themselves.

“Anyone who has a sash, bring it along, because tomorrow the people will be invested as president of the republic, because the people are Chávez,” Diosdado Cabello, the president of the National Assembly, said Wednesday. “All of us here are Chávez, the people in the street are Chávez, the lady who cooks is Chávez, the comrade who works as a watchman is Chávez, the soldier is Chávez, the woman is Chávez, the farmer is Chávez, the worker is Chávez; we’re all Chávez.”

To no one’s surprise, the Supreme Court, full of Chávez loyalists, ruled on the eve of the ceremony that Mr. Chávez’s inauguration could be postponed and that his team of advisers could smoothly move, in his absence, from one term to the next.

The court declined to set a time limit for the swearing in, raising the possibility that the country’s deepening uncertainty could go on for weeks or months. And it did nothing to clear up the stubborn mystery of the president’s condition.

Luisa Estella Morales, the president of the Supreme Court, said Wednesday at a news conference that there was no need at this time for a delegation to go to Cuba and report back on the condition of Mr. Chávez, 58. Asked if the swearing in could occur in Havana, she said the time and place of the ceremony had not been determined.

 Ms. Morales said the Supreme Court’s ruling was meant to uphold the results of October’s presidential election.

“It’s one of the most important values that we should preserve as a constitutional court,” Ms. Morales said. “The sovereign Venezuelan people have expressed through their vote their desire to continue being governed by President Hugo Rafael Chávez Frías.”

The government has been opaque for months, acknowledging that he suffered from a relapse of cancer in the pelvic area, but not specifying the type of cancer or detailing his prognosis.

The lack of information has left Venezuela tied in knots. Mr. Chávez has loomed so large for so long — with speeches that have lasted for hours, frequent Twitter posts and his outsized singing, ranting, poetry-reciting and foe-bashing personality — that his sudden silence has created a sizable vacuum.

“We don’t have a president,” lamented Estela Martínez, 63, a nurse who has supported Mr. Chávez throughout his 14 years in office. She said she was afraid that the public was not getting the full truth about the president’s condition and that there was far more shouting than clarity from political leaders. “Someone has to take the reins of the country.”

Henrique Capriles Radonski, the opposition candidate who lost to Mr. Chávez in October, criticized the Supreme Court’s decision endorsing a delay in the inauguration. “Institutions should not respond to the interests of a government,” he said.

The State Department in Washington, which has been cautious about getting involved in the contentious political back-and-forth, said Wednesday that it would be eager to improve relations with Venezuela, which have long been strained.

María Iguarán and María Eugenia Díaz contributed reporting.

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DealBook: S.E.C. Enforcement Chief, Robert Khuzami, Steps Down

Robert Khuzami, a former terrorism prosecutor who revamped the Securities and Exchange Commission’s enforcement unit after the financial crisis, is stepping down from the agency, ending a four-year tenure that included significant action against some of Wall Street’s largest firms.

After inheriting a mess in 2009, Mr. Khuzami reinvigorated the team, which was maligned for missing the warning signs of the financial crisis and Bernard L. Madoff’s Ponzi scheme. Mr. Khuzami, an imposing presence with a piercing stare, blew up the management ranks, fashioning specialized units to track complex corners of Wall Street and applied aggressive prosecutorial tactics to civil cases. In recent years, the enforcement division notched a record number of actions, many against banks at the center of the crisis.

“They know we’re out there, and we’re smarter and can cover more ground,” said Mr. Khuzami, who announced his departure to staff in an e-mail on Wednesday, said in an interview. He is set to depart in about two weeks.

Mr. Khuzami’s successor faces challenges. The enforcement unit must contend with the increasingly influential rapid-fire trading firms that, by some accounts, have introduced instability to the stock market.

The unit also faces lingering questions about its negotiating tactics. Some consumer advocates complain that the agency’s headline-grabbing settlements let Wall Street off the hook. Mr. Khuzami’s unit notably butted heads with a prominent federal judge in New York, Jed S. Rakoff, who in 2010 called the agency’s $150 million settlement with Bank of America over lax public disclosures “half-baked justice at best.”

Mr. Khuzami’s departure, part of a broader exodus from the S.E.C. following the resignation of chairwoman Mary L. Schapiro, raises further questions about the future of the unit. The move, at the very least, add to the gap in the S.E.C.’s roster.

The agency has witnessed a wave of turnover in recent weeks, with the head of trading and markets and the director of corporation finance both leaving. Elisse B. Walter, Ms. Schapiro’s replacement, named interim replacements for those spots.

But the enforcement division, officials say, could struggle under a provisional leader. The enforcement chief, they note, sets the tone for Wall Street oversight.

Ms. Walter is weighing a short list of candidates to replace Mr. Khuzami, according to people briefed on the matter. The list includes Mr. Khuzami’s current deputy, George Canellos, and the enforcement division’s chief litigation counsel, Matthew Martens.

With Mr. Khuzami gone, the field of contenders to replace Ms. Schapiro is also shifting. While President Obama awarded the job to Ms. Walter, a Democrat who became an S.E.C. commissioner in 2008, her term expires at the end of 2013.

Mr. Khuzami, a political independent described as alternately harsh and playful with his employees, built a loyal following among some enforcement division officials who hoped he would win the chairman post. He opted instead to position himself for a lucrative spot at a white shoe law firm.

“I don’t know what I’m doing next, but I loved the last four years and I’m sad it’s ending,” he said in the interview.

Mr. Khuzami, a Rochester native with a bohemian upbringing, followed an unlikely path to the S.E.C. His parents were ballroom dancers; his sister a
muralist. They jokingly refer to Mr. Khuzami as “the white sheep” of the family.

He put himself through school with odd jobs, as a dishwasher, bartender, overnight dockworker. After graduating from Boston University law school, he was hired as a junior lawyer at Cadwalader, Wickersham & Taft in New York.

Mr. Khuzami tried out for the United States Attorney’s office under Rudy Giuliani, but missed the cut. When the office eventually hired him in the early 1990s, he was assigned to terrorism prosecutions. The move led to a career defining case — the conviction of the so-called “Blind Sheik,” a Muslim leader tied the 1993 bombing of the World Trade Center. He later ran a securities task force.

But after more than a decade as a prosecutor, he departed for Deutsche Bank, where he eventually became general counsel of the firm’s American arm.

In 2009, he landed on Ms. Schapiro’s radar screen. She was searching for an aggressive personality to shake up the enforcement team, a demoralized group criticized for missing the warning signs of the crisis.

“It had to be someone who was a great prosecutor,” Ms. Schapiro said in an interview.

Their relationship began with an awkward meeting. Mr. Khuzami, having dressed in the dark to catch a pre-dawn plane to Washington, wore mismatched shoes with different colors. And at the end of the interview, without an explicit offer, he was unsure whether he won the position. Finally, after days of silence, Ms. Schapiro phoned him to ask: “Are you taking the job or not?”

Mr. Khuzami soon hatched a game plan for overhauling — some officials called it “dismantling” — the division.

He arrived in Washington with strategies imported from the U.S. attorney’s office. Mr. Khuzami pushed the S.E.C. to offer leniency for cooperating witnesses and to strike deferred-prosecution agreements to companies that promised to behave. The tools, he said, are “game changers” for unearthing fraud.

He also poached former prosecutors for his staff, including Lorin L. Reisner, Mr. Khuzami’s friend from the U.S. attorney’s office, who joined as the top deputy. Mr. Khuzami plucked other new hires from Wall Street, including traders and compliance officers. Adam Storch, then a 29-year-old Goldman Sachs vice president, became the unit’s first chief operating officer.

Under the new regime, the enforcement team eliminated a layer of management, moving senior lawyers onto the front lines of investigations. Mr. Khuzami mandated, for the first time, that all enforcement employees carry a Blackberry, holding them accountable beyond the 9-5 workday.

Mr. Khuzami also built specialties among his staff, a strategy he picked up at Deutsche Bank. He created an Office of Market Intelligence to analyze and triage tips and complaints from investors. He then opened five units that tracked some of the darkest corners of finance, focusing on structured products like derivatives, market abuse like insider trading and the secretive world of hedge fund returns.

“The changes were necessary and dramatic,” Ms. Schapiro said.

Mr. Khuzami introduced the broad outlines of reform in May 2009 at a retreat in Solomons Island, Maryland, an annual gathering of senior enforcement officials. “It’s time to get serious about change,” he said, according to attendees.

But the message provoked concerns among enforcement lawyers, who lined up at microphones to question the nuances of new procedures and complain about potential violations of their contracts. A few top officials, some who were widely respected, were about to be left sidelined under his regime.

“Everyone in the office was scared, but we also started working harder,” said Thomas Sporkin, who ran the Office of Market Intelligence until last year, when he departed the agency.

The group faced some growing pains, as it adjusted to Mr. Khuzami’s management style. He had a harsh streak and a knack for aggressively grilling lawyers about the nuances of enforcement cases, according to staff members. But they also recall a softer side. He invited employees to his family Christmas party, they say, and went to motorcycle safety school with Mr. Canellos.

As a motivational tool, he would often publicly perform for his staff. At a swearing in ceremony for new members, he quoted poetry from Gwendolyn Brooks. Mr. Khuzami also once donned a red wig to sing a version of the “Annie” theme song, “Tomorrow,” with lyrics twisted to fit the S.E.C., at an annual awards ceremony.

“Even though he scares the hell out of people,” one employee said, “you like him because he’s genuine.”

Mr. Khuzami’s tactics appeared to bear fruit. Under his tenure, the unit leveled more charges than in any comparable four-year period, including a record number of enforcement actions in 2011. They also mounted 150 actions against people and firms tied to the crisis.

Mr. Khuzami emphasized that the unit is now tracking bigger game. The agency has taken aim at billionaire hedge fund managers, including Philip Falcone, and filed complex cases involving collateralized debt obligations, a crackdown that ensnared some of the biggest names on Wall Street. At the urging of Mr. Khuzami and Mr. Reisner, the S.E.C. brought a landmark fraud case against Goldman Sachs, netting a record settlement in excess of $500 million.

“He’s really broadened the net,” said Mary Jo White, a white collar criminal defense lawyer at Debevoise who was Mr. Khuzami’s boss when she was the United States Attorney in Manhattan.

Some consumer advocates say the enforcement unit remains too timid. They complain that it opted not to charge Lehman Brothers executives and went soft on firms like Bank of America and Citigroup. Judge Rakoff refused to bless the $285 million Citigroup deal, calling the penalty “pocket change”
Critics also question why the S.E.C. sued only a handful of top executives who ran firms at the center of the credit crisis.

“If you’re rich and connected on Wall Street, then don’t worry about the S.E.C,” said Dennis Kelleher, the head of Better Markets, a nonprofit advocacy group critical of the financial industry.

Mr. Khuzami dismissed the grumbling, saying “the critics ought to take comfort in that we’re not reluctant to charge high-ranking individuals.” The agency, he noted, sued 65 senior executives involved in the crisis, including the leaders of Fannie Mae, Freddie Mac and most major mortgage companies that caused the housing bubble. The cases involving big banks, he said, lacked sufficient evidence implicating C.E.Os.

And despite their differences, even Mr. Rakoff credits Mr. Khuzami with a rapid turnaround of the enforcement division.

“Although, from our different perspectives, Rob Khuzami and I sharply disagree about some matters, overall I think he has done a terrific job,” Mr. Rakoff said. “Most important, he has restored a sense of pride and purpose to the S.E.C. enforcement division, and we are all the better for it.”

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Economic Scene: Health Care and Pursuit of Profit Make a Poor Mix

Thirty years ago, Bonnie Svarstad and Chester Bond of the School of Pharmacy at the University of Wisconsin-Madison discovered an interesting pattern in the use of sedatives at nursing homes in the south of the state.

Patients entering church-affiliated nonprofit homes were prescribed drugs roughly as often as those entering profit-making “proprietary” institutions. But patients in proprietary homes received, on average, more than four times the dose of patients at nonprofits.

Writing about his colleagues’ research in his 1988 book “The Nonprofit Economy,” the economist Burton Weisbrod provided a straightforward explanation: “differences in the pursuit of profit.” Sedatives are cheap, Mr. Weisbrod noted. “Less expensive than, say, giving special attention to more active patients who need to be kept busy.”

This behavior was hardly surprising. Hospitals run for profit are also less likely than nonprofit and government-run institutions to offer services like home health care and psychiatric emergency care, which are not as profitable as open-heart surgery.

A shareholder might even applaud the creativity with which profit-seeking institutions go about seeking profit. But the consequences of this pursuit might not be so great for other stakeholders in the system — patients, for instance. One study found that patients’ mortality rates spiked when nonprofit hospitals switched to become profit-making, and their staff levels declined.

These profit-maximizing tactics point to a troubling conflict of interest that goes beyond the private delivery of health care. They raise a broader, more important question: How much should we rely on the private sector to satisfy broad social needs?

From health to pensions to education, the United States relies on private enterprise more than pretty much every other advanced, industrial nation to provide essential social services. The government pays Medicare Advantage plans to deliver health care to aging Americans. It provides a tax break to encourage employers to cover workers under 65.

Businesses devote almost 6 percent of the nation’s economic output to pay for health insurance for their employees. This amounts to nine times similar private spending on health benefits across the Organization for Economic Cooperation and Development, on average. Private plans cover more than a third of pension benefits. The average for 30 countries in the O.E.C.D. is just over one-fifth.

We let the private sector handle tasks other countries would never dream of moving outside the government’s purview. Consider bail bondsmen and their rugged sidekicks, the bounty hunters.

American TV audiences may reminisce fondly about Lee Majors in “The Fall Guy” chasing bad guys in a souped-up GMC truck — a cheap way to get felons to court. People in most other nations see them as an undue commercial intrusion into the criminal justice system that discriminates against the poor.

Our reliance on private enterprise to provide the most essential services stems, in part, from a more narrow understanding of our collective responsibility to provide social goods. Private American health care has stood out for decades among industrial nations, where public universal coverage has long been considered a right of citizenship. But our faith in private solutions also draws on an ingrained belief that big government serves too many disparate objectives and must cater to too many conflicting interests to deliver services fairly and effectively.

Our trust appears undeserved, however. Our track record suggests that handing over responsibility for social goals to private enterprise is providing us with social goods of lower quality, distributed more inequitably and at a higher cost than if government delivered or paid for them directly.

The government’s most expensive housing support program — it will cost about $140 billion this year — is a tax break for individuals to buy homes on the private market.

According to the Tax Policy Center, this break will benefit only 20 percent of mostly well-to-do taxpayers, and most economists agree that it does nothing to further its purported goal of increasing homeownership. Tax breaks for private pensions also mostly benefit the wealthy. And 401(k) plans are riskier and costlier to administer than Social Security.

From the high administrative costs incurred by health insurers to screen out sick patients to the array of expensive treatments prescribed by doctors who earn more money for every treatment they provide, our private health care industry provides perhaps the clearest illustration of how the profit motive can send incentives astray.

By many objective measures, the mostly private American system delivers worse value for money than every other in the developed world. We spend nearly 18 percent of the nation’s economic output on health care and still manage to leave tens of millions of Americans without adequate access to care.

Britain gets universal coverage for 10 percent of gross domestic product. Germany and France for 12 percent. What’s more, our free market for health services produces no better health than the public health care systems in other advanced nations. On some measures — infant mortality, for instance — it does much worse.

In a way, private delivery of health care misleads Americans about the financial burdens they must bear to lead an adequate existence. If they were to consider the additional private spending on health care as a form of tax — an indispensable cost to live a healthy life — the nation’s tax bill would rise to about 31 percent from 25 percent of the nation’s G.D.P. — much closer to the 34 percent average across the O.E.C.D.

A quarter of a century ago, a belief swept across America that we could reduce the ballooning costs of the government’s health care entitlements just by handing over their management to the private sector. Private companies would have a strong incentive to identify and wipe out wasteful treatment. They could encourage healthy lifestyles among beneficiaries, lowering use of costly care. Competition for government contracts would keep the overall price down.

We now know this didn’t work as advertised. Competition wasn’t as robust as hoped. Health maintenance organizations didn’t keep costs in check, and they spent heavily on administration and screening to enroll only the healthiest, most profitable beneficiaries.

One study of Medicare spending found that the program saved no money by relying on H.M.O.’s. Another found that moving Medicaid recipients into H.M.O.’s increased the average cost per beneficiary by 12 percent with no improvement in the quality of care for the poor. Two years ago, President Obama’s health care law cut almost $150 billion from Medicare simply by reducing payments to private plans that provide similar care to plain vanilla Medicare at a higher cost.

Today, again, entitlements are at the center of the national debate. Our elected officials are consumed by slashing a budget deficit that is expected to balloon over coming decades. With both Democrats and Republicans unwilling to raise taxes on the middle class, the discussion is quickly boiling down to how deeply entitlements must be cut.

We may want to broaden the debate. The relevant question is how best we can serve our social needs at the lowest possible cost. One answer is that we have a lot of room to do better. Improving the delivery of social services like health care and pensions may be possible without increasing the burden on American families, simply by removing the profit motive from the equation.

E-mail: eporter@nytimes.com;

Twitter: @portereduardo

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Economic Scene: Health Care and Pursuit of Profit Make a Poor Mix

Thirty years ago, Bonnie Svarstad and Chester Bond of the School of Pharmacy at the University of Wisconsin-Madison discovered an interesting pattern in the use of sedatives at nursing homes in the south of the state.

Patients entering church-affiliated nonprofit homes were prescribed drugs roughly as often as those entering profit-making “proprietary” institutions. But patients in proprietary homes received, on average, more than four times the dose of patients at nonprofits.

Writing about his colleagues’ research in his 1988 book “The Nonprofit Economy,” the economist Burton Weisbrod provided a straightforward explanation: “differences in the pursuit of profit.” Sedatives are cheap, Mr. Weisbrod noted. “Less expensive than, say, giving special attention to more active patients who need to be kept busy.”

This behavior was hardly surprising. Hospitals run for profit are also less likely than nonprofit and government-run institutions to offer services like home health care and psychiatric emergency care, which are not as profitable as open-heart surgery.

A shareholder might even applaud the creativity with which profit-seeking institutions go about seeking profit. But the consequences of this pursuit might not be so great for other stakeholders in the system — patients, for instance. One study found that patients’ mortality rates spiked when nonprofit hospitals switched to become profit-making, and their staff levels declined.

These profit-maximizing tactics point to a troubling conflict of interest that goes beyond the private delivery of health care. They raise a broader, more important question: How much should we rely on the private sector to satisfy broad social needs?

From health to pensions to education, the United States relies on private enterprise more than pretty much every other advanced, industrial nation to provide essential social services. The government pays Medicare Advantage plans to deliver health care to aging Americans. It provides a tax break to encourage employers to cover workers under 65.

Businesses devote almost 6 percent of the nation’s economic output to pay for health insurance for their employees. This amounts to nine times similar private spending on health benefits across the Organization for Economic Cooperation and Development, on average. Private plans cover more than a third of pension benefits. The average for 30 countries in the O.E.C.D. is just over one-fifth.

We let the private sector handle tasks other countries would never dream of moving outside the government’s purview. Consider bail bondsmen and their rugged sidekicks, the bounty hunters.

American TV audiences may reminisce fondly about Lee Majors in “The Fall Guy” chasing bad guys in a souped-up GMC truck — a cheap way to get felons to court. People in most other nations see them as an undue commercial intrusion into the criminal justice system that discriminates against the poor.

Our reliance on private enterprise to provide the most essential services stems, in part, from a more narrow understanding of our collective responsibility to provide social goods. Private American health care has stood out for decades among industrial nations, where public universal coverage has long been considered a right of citizenship. But our faith in private solutions also draws on an ingrained belief that big government serves too many disparate objectives and must cater to too many conflicting interests to deliver services fairly and effectively.

Our trust appears undeserved, however. Our track record suggests that handing over responsibility for social goals to private enterprise is providing us with social goods of lower quality, distributed more inequitably and at a higher cost than if government delivered or paid for them directly.

The government’s most expensive housing support program — it will cost about $140 billion this year — is a tax break for individuals to buy homes on the private market.

According to the Tax Policy Center, this break will benefit only 20 percent of mostly well-to-do taxpayers, and most economists agree that it does nothing to further its purported goal of increasing homeownership. Tax breaks for private pensions also mostly benefit the wealthy. And 401(k) plans are riskier and costlier to administer than Social Security.

From the high administrative costs incurred by health insurers to screen out sick patients to the array of expensive treatments prescribed by doctors who earn more money for every treatment they provide, our private health care industry provides perhaps the clearest illustration of how the profit motive can send incentives astray.

By many objective measures, the mostly private American system delivers worse value for money than every other in the developed world. We spend nearly 18 percent of the nation’s economic output on health care and still manage to leave tens of millions of Americans without adequate access to care.

Britain gets universal coverage for 10 percent of gross domestic product. Germany and France for 12 percent. What’s more, our free market for health services produces no better health than the public health care systems in other advanced nations. On some measures — infant mortality, for instance — it does much worse.

In a way, private delivery of health care misleads Americans about the financial burdens they must bear to lead an adequate existence. If they were to consider the additional private spending on health care as a form of tax — an indispensable cost to live a healthy life — the nation’s tax bill would rise to about 31 percent from 25 percent of the nation’s G.D.P. — much closer to the 34 percent average across the O.E.C.D.

A quarter of a century ago, a belief swept across America that we could reduce the ballooning costs of the government’s health care entitlements just by handing over their management to the private sector. Private companies would have a strong incentive to identify and wipe out wasteful treatment. They could encourage healthy lifestyles among beneficiaries, lowering use of costly care. Competition for government contracts would keep the overall price down.

We now know this didn’t work as advertised. Competition wasn’t as robust as hoped. Health maintenance organizations didn’t keep costs in check, and they spent heavily on administration and screening to enroll only the healthiest, most profitable beneficiaries.

One study of Medicare spending found that the program saved no money by relying on H.M.O.’s. Another found that moving Medicaid recipients into H.M.O.’s increased the average cost per beneficiary by 12 percent with no improvement in the quality of care for the poor. Two years ago, President Obama’s health care law cut almost $150 billion from Medicare simply by reducing payments to private plans that provide similar care to plain vanilla Medicare at a higher cost.

Today, again, entitlements are at the center of the national debate. Our elected officials are consumed by slashing a budget deficit that is expected to balloon over coming decades. With both Democrats and Republicans unwilling to raise taxes on the middle class, the discussion is quickly boiling down to how deeply entitlements must be cut.

We may want to broaden the debate. The relevant question is how best we can serve our social needs at the lowest possible cost. One answer is that we have a lot of room to do better. Improving the delivery of social services like health care and pensions may be possible without increasing the burden on American families, simply by removing the profit motive from the equation.

E-mail: eporter@nytimes.com;

Twitter: @portereduardo

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Private Manning of WikiLeaks Case Must Face Charges

Mark Wilson/Getty Images

Pfc. Bradley Manning, a former Army intelligence analyst, on Tuesday. His court-martial is scheduled to begin on March 6.

FORT MEADE, Md. — A military judge on Tuesday declined to dismiss charges against Pfc. Bradley E. Manning, a former Army intelligence analyst accused of providing archives of military and diplomatic documents to the antisecrecy group WikiLeaks, despite complaints by his defense team that he had been mistreated while being held at the Marines’ brig at Quantico, Va.

But the judge, Col. Denise Lind, ruled that brig officials had improperly kept Private Manning on stricter conditions, including procedures designed to prevent potentially suicidal detainees from injuring themselves, for excessive periods. As a remedy, she granted Private Manning 112 days of credit against any eventual prison sentence.

That amounted to little more than a symbolic victory for Private Manning, whose supporters had rallied around claims that he had been tortured at Quantico. Prosecutors are pursuing charges, including aiding the enemy and violating the Espionage Act, that could result in a life sentence if he is convicted. His court-martial is scheduled to begin on March 6.

The ruling by Colonel Lind came after a long pretrial hearing last month that amounted to a miniature trial over whether military officials had subjected Private Manning to unlawfully harsh conditions over the roughly eight months he spent at Quantico in 2010 and 2011. His defense team had asked for the charges to be dismissed or for 10-for-1 credit for time served for the bulk of his time in Quantico, which could have shaved around seven years from any eventual prison term.

But Colonel Lind, who spent nearly two hours reading her opinion in a small courtroom on Tuesday afternoon, found for the government on most of the disputed facts. She recounted in great detail Private Manning’s sometimes erratic behavior and mental problems both before and after his arrest in Iraq in 2010, including suicidal gestures and comments that she said made his captors legitimately fear that he was dwelling on suicide and biding his time until an opportunity arose.

“There was no intent to punish the accused by anyone in the Marine Corps brig staff or chain of command,” she said. “The intent was to make sure the accused was safe, did not hurt himself and was available for the trial.”

Still, Colonel Lind found that some steps brig officials had taken were excessive. The government had already conceded that Private Manning should not have been kept on the strictest status, “suicide risk,” on two occasions totaling seven days, after a brig medical official said that status was no longer necessary. She agreed, awarding one day of credit for each of those days.

She also said that it eventually became excessive and effectively punitive for brig officials to keep him on “prevention of injury” status — a category that did not require a doctor’s assent — for a 75-day period starting in November 2010, when his behavior had been stable for a lengthy period, and ending when he had an anxiety attack.

And she also awarded 20 days’ credit for a period beginning in April 2011 until he was transferred from Quantico later that month, when brig officials kept him on an extra-strict version of “prevention of injury” status. That included removing his underwear nightly after a comment he had laughingly made to a guard in early March that he could kill himself with its elastic band if he wanted.

Finally, she awarded him 10 days’ credit for a period in which brig officials allowed him just 20 minutes of exercise a day instead of the full hour other prisoners were granted.

Colonel Lind’s opinion also at one point discussed events reported in two articles in The New York Times in March 2011, recounting the removal of Private Manning’s clothing at night: a reaction, it is now clear, to his comment about killing himself with his underwear.

The first article said Private Manning had stood naked during inspection one morning in early March and cited his lawyer, David E. Coombs, as saying his client had been “forced” to do so. But Judge Lind portrayed the event as more ambiguous than an order: Private Manning, lacking clothes, had covered himself with a blanket, and a guard asked if that was how he stood at attention. He reacted by dropping the blanket.

The second article, published the next day, cited a Marine brig spokesman as saying that Private Manning would be required to stand outside his cell under similar conditions each morning. But starting the next day, she found, guards began giving Private Manning his clothing back each morning before inspection, and she said there was no evidence he had stood outside his cell rather than inside it.

Also on Tuesday, the judge began hearing arguments on a pair of motions by prosecutors seeking to restrict the ability of Private Manning’s defense team to call witnesses and introduce other testimony related to his motivation and whether the documents were overclassified.

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