DealBook: Hewlett-Packard Takes $8.8 Billion Charge

Hewlett-Packard said on Tuesday that it had taken an $8.8 billion accounting charge, after discovering “serious accounting improprieties” and “outright misrepresentations” at Autonomy, a British software maker that it bought for $10 billion last year.

It is a major setback for H.P., which has been struggling to turn around its operations and remake its business.

The charge essentially wiped out its profit. In the latest quarter, H.P. reported a net loss of $6.9 billion, compared with a $200 million profit in the period a year earlier. The company said the improprieties and misrepresentations took place just before the acquisition, and accounted for the majority of the charges in the quarter, more than $5 billion.

Shares in H.P. plummeted nearly 11 percent in early afternoon trading on Tuesday, to less than $12.

Hewlett-Packard bought Autonomy in the summer of 2011 in an attempt to bolster its presence in the enterprise software market and catch up with rivals like I.B.M. The takeover was the brainchild of Léo Apotheker, H.P.’s chief executive at the time, and was criticized within Silicon Valley as a hugely expensive blunder.

Mr. Apotheker resigned a month later. The management shake-up came about one year after Mark Hurd was forced to step down as the head of H.P. after questions were raised about his relationship with a female contract employee.

“I’m both stunned and disappointed to learn of Autonomy’s alleged accounting improprieties,” Mr. Apotheker said in a statement. “The developments are a shock to the many who believed in the company, myself included. ”

Since then, H.P. has tried to revive the company and to move past the controversies. Last year, Meg Whitman, a former head of eBay, took over as chief executive and began rethinking the product lineup and global marketing strategy.

But the efforts have been slow to take hold.

In the previous fiscal quarter, the company announced that it would take an $8 billion charge related to its 2008 acquisition of Electronic Data Systems, as well as added costs related to layoffs. Then Ms. Whitman told Wall Street analysts in October that revenue and profit would be significantly lower, adding that it would take several years to complete a turnaround.

“We have much more work to do,” Ms. Whitman said at the time.

Hewlett-Packard continues to face weakness in its core businesses. Revenue for the full fiscal year dropped 5 percent, to $120.4 billion, with the personal computer, printing, enterprise and service businesses all losing ground. Earnings dropped 23 percent, to $8 billion, over the same period.

“As we discussed during our securities analyst meeting last month, fiscal 2012 was the first year in a multiyear journey to turn H.P. around,” Ms. Whitman said in a statement. “We’re starting to see progress in key areas, such as new product releases and customer wins.”

The strategic troubles have weighed on the stock. Shares of H.P. have dropped to less than $12 from nearly $30 at their high this year.

The latest developments could present another setback for Ms. Whitman’s efforts.

When the company assessed Autonomy before the acquisitions, the financial results appeared to pass muster. Ms. Whitman said H.P.’s board at the time – which remains the same now, except for the addition of the activist investor Ralph V. Whitworth – relied on Deloitte’s auditing of Autonomy’s financial statements. As part of the due diligence process for the deal, H.P. also hired KPMG to audit Deloitte’s work.

Neither Deloitte nor KPMG caught the accounting discrepancies. Deloitte said in a statement that it could not comment on the matter, citing client confidentiality. “We will cooperate with the relevant authorities with any investigations into these allegations,” the accounting firm said.

Hewlett-Packard said it first began looking into potential accounting problems in the spring, after a senior Autonomy executive came forward. H.P. then hired a third-party forensic accounting firm, PricewaterhouseCoopers, to conduct an investigation covering Autonomy sales between the third quarter 2009 and the second quarter 2011, just before the acquisition.

The company said it discovered several accounting irregularities, which disguised Autonomy’s actual costs and the nature of the its products. Autonomy makes software that finds patterns, data that is used by companies and governments.

H.P. said that Autonomy, in some instances, sold hardware like servers, which has higher associated costs. But the company booked these as software sales. It had the effect of underplaying the company’s expenses and inflating the margins.

“They used low-end hardware sales, but put out that it was a pure software company,” said John Schultz, the general counsel of H.P. Computer hardware typically has a much smaller profit margin than software. “They put this into their growth calculation.”

An H.P. official, who spoke on background because of ongoing inquiries by regulators, said the hardware was sold at a 10 percent loss. The loss was disguised as a marketing expense, and the amount registered as a marketing expense appeared to increase over time, the official said.

H.P. also contends that Autonomy relied on value-added resellers, middlemen who sold software on behalf of the company. Those middlemen reported sales to customers that didn’t actually exist, according to H.P.

H.P. also claims that that Autonomy was taking licensing revenue upfront, before receiving the money. That improper assignment of sales inflated the company’s gross profit margins.pfront, before receiving the money. It had the effect, the company said, of significantly bolstering Autonomy’s gross margin.

Hewlett Packard turned over its findings to Securities and Exchange Commission in the United States and the Serious Fraud Office in Britain with the last week. In a conference call with analysts, Ms. Whitman said the company might consider legal actions against several parties.

The former management team of Autonomy, which includes the company’s founder Mike Lynch, rejected H.P. claims about the accounting issues.

“H.P. has made a series of allegations against some unspecified former members of Autonomy Corporation PLC’s senior management team. The former management team of Autonomy was shocked to see this statement today, and flatly rejects these allegations, which are false,” the group said in a statement. “It took 10 years to build Autonomy’s industry-leading technology and it is sad to see how it has been mismanaged since its acquisition by H.P.”

While Mr. Schultz would not detail H.P.’s future legal strategy, he said “we intend to be aggressive in recovering value for our shareholders.” In addition to Mr. Lynch, the company indicated this could include other individuals, including perhaps former senior executives of H.P. who missed the bad accounting. “We’re not limiting it to Autonomy,” Mr. Shulz said.

H.P. also underscored the importance of Autonomy to the broader strategy, emphasized the quality of the products. “This is a very healthy company with good products that exist,” said Mr. Shultz. “At its core, these are very good products.”

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Clinton Visits in Effort to Defuse Gaza Conflict; Egypt Hints at Truce

JERUSALEM — Diplomatic efforts accelerated Tuesday to end the deadly confrontation between Israel and Palestinian militants in Gaza, as the United States sent Secretary of State Hillary Rodham Clinton to the Middle East and Egypt’s president and his senior aides expressed confidence that a cease-fire was close.

The diplomatic moves to end the nearly week-old crisis came on a day of some of the most intense violence yet. Israeli aerial forces assaulted several targets including a suspected rocket launching site near Gaza’s Al Shifa hospital, which killed at least nine people. A delegation visiting from the Arab League canceled a news conference at the hospital because of the Israeli assault, as wailing ambulances brought victims in, some of them decapitated.

Militants in Gaza fired a barrage of rockets that hit the southern Israeli cities of Beersheba and Ashdod, and longer-range rockets toward Tel Aviv and Jerusalem, but neither main city was struck and no casualties were reported. One Gaza rocket hit a building in the Israeli city of Rishon Lezion, just south of Tel Aviv, injuring one person.

Senior Egyptian officials in Cairo said Israel and Hamas were “very close” to a cease-fire agreement that could be announced within hours. “We have not received final approval but I hope to receive it any moment,” said Essam el Haddad, President Mohamed Morsi’s top foreign affairs adviser.

Foreign diplomats who had been briefed on the outlines of a tentative agreement said it had been structured in stages — first, an announcement at 10 p.m. local time (3 p.m. EST) of a cease-fire, followed by its implementation at midnight, for 48 hours, creating a window for negotiators to agree on conditions for a longer-term cessation of hostilities.

The announcement of Mrs. Clinton’s active role in efforts to defuse the crisis added a strong new dimension to the multinational push to avert a new Middle East war. Israel has amassed thousands of soldiers on the border with Gaza and has threatened to invade the crowded Palestinian enclave for the second time in four years to stop the persistent rockets that have been lobbed at Israel.

Mrs. Clinton, who accompanied President Obama on his three-country Asia trip, left Cambodia on her own plane immediately for the Middle East. She was en route to Jerusalem to meet with Prime Minister Benjamin Netanyahu of Israel, then head to the West Bank to meet with Palestinian leaders and finally to Cairo to consult with Egyptian officials.

The decision to dispatch Mrs. Clinton dramatically deepens the American involvement in the crisis. Mr. Obama made a number of late-night phone calls from his Asian tour to the Middle East on Monday night that contributed to his conclusion that he had to become more engaged and that Mrs. Clinton might be able to accomplish something.

With Ban Ki-moon, the United Nations secretary general, also in Israel on Tuesday, a senior official in Prime Minister Benjamin Netanyahu’s office said Israel had decided to give more time to diplomacy before launching a ground invasion into Gaza. But Israel has not withdrawn other options.

“I prefer a diplomatic solution,” Mr. Netanyahu said in a statement at the start of a meeting in Jerusalem with the German foreign minister, Guido Westerwelle. “I hope that we can get one, but if not, we have every right to defend ourselves with other means and we shall use them.

“As you know, we seek a diplomatic unwinding to this, through the discussions of cease-fire,” Mr. Netanyahu added. “But if the firing continues, we will have to take broader action and we won’t hesitate to do so.”

Intensifying the pressure on Hamas after a day of heavy rocket fire out of Gaza against southern Israel, the Israeli military said on Tuesday afternoon that it had distributed leaflets over Gaza instructing the Palestinian residents in several areas to evacuate their homes immediately, “for your safety,” and to move toward defined zones in central Gaza City. That seemed intended to signal that plans for a ground operation were imminent should the cease-fire talks fail.About three hours before Mr. Ban was scheduled to meet Mr. Netanyahu in Jerusalem, sirens sounded across the city in the early afternoon announcing an incoming rocket from Gaza. The military wing of Hamas said it had fired at the city. The rocket fell short, landing harmlessly in the West Bank just south of Jerusalem, and the military said it landed on open ground near a Palestinian village.

The rocket attack on the city, which is holy to Jews, Muslims and Christians, was the second in less than a week. On Friday, a rocket landed in a similar location, the police said.

The Israeli military said its air force had struck Tuesday morning at 11 Palestinian squads involved in planting explosives and firing rockets, as well as underground rocket launchers and a store of weapons and ammunition. The military said it had also used tank shells and artillery fire against unspecified targets in Gaza.

Isabel Kershner reported from Jerusalem and Peter Baker from Phnom Penh, Cambodia. Reporting was contributed by Jodi Rudoren from Gaza City, David D. Kirkpatrick from Cairo, David E. Sanger in Washington and Rick Gladstone from New York.

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Investors Rush to Beat Threat of Higher Taxes

Business owners and investors are rapidly maneuvering to shield themselves from the prospect of higher taxes next year, a strategy that is sending ripples across Wall Street and broad areas of the economy.

Take Steve Wynn, the casino magnate, who has been a vocal critic of higher tax rates. He and his fellow shareholders in Wynn Resorts, the company announced, will collect a special dividend of $750 million on Tuesday, a payout timed to take advantage of current rates. Experts estimated that taking the payout this year instead of next could save Mr. Wynn, who owns a sizable stake in the company, more than $20 million.

For the wealthy like Mr. Wynn, the overriding goal is to record as much of their future income this year as they can. This includes moves as diverse as sales of businesses, one-time dividends and the sale of stocks that have been big winners.

“In my 30 years in practice, I’ve never seen such a flood of desire and action to transfer a business and cash out,” said Kenneth K. Bezozo, a partner in New York with the law firm Haynes and Boone. “We’re seeing a watershed event.”

Whether small business owners or individuals saving for retirement, investors are being urged by their advisers to reconsider their holdings. Along the way, many are shedding the very investments that have been the most popular over the last year, contributing to recent sell-offs in formerly high-flying shares like Apple and Amazon.

Investors typically take profits in their own portfolio at year-end, but the selling appears to be more targeted this year. Stocks with large dividends, for instance, are seen as less attractive because of the perceived likelihood of a sharp increase in the tax rate on dividends.

All this is weighing on the broader financial markets, as worries mount about the economic drag from the combination of higher tax rates and reduced government spending set for January if President Obama and Senate Republicans cannot reach a budget compromise before then.

Fears about the fiscal impasse in Washington, along with anxiety about fading corporate profits and weakening economies abroad, have pushed the benchmark Standard & Poor’s 500-stock index down about 5 percent since the election. On Friday, major stock indexes had their best showing of the week after President Obama and Republican leaders signaled that a compromise was possible.

Even if many of the tax breaks scheduled to expire survive a new budget deal, some business owners and investors are bracing for substantial increases in specific areas of the tax code.

The top rate on dividends, for example, could climb to 39.6 percent from 15 percent if no action is taken. Capital gains taxes, which now top out at 15 percent, could rise above 20 percent, many financial advisers say. Most investment income will also be subject to a 3.8 percent charge to help pay for President Obama’s health care law.

Stocks that pay big dividends have been popular in recent years among investors eager for an alternative to the meager returns on bank savings accounts and Treasury securities. Since October, though, the two sectors that provide the most generous dividend payments — utilities and telecommunication stocks — have been among the worst performers, hurt also in part by the devastation of Hurricane Sandy on the East Coast. Utility companies in the S.& P. 500 have fallen 9.4 percent from their highs in October. Telecommunication stocks in the index have dropped 11.3 percent from theirs, compared with the broader index’s 6.8 percent decline from its recent high.

John Moorin, the founder of a medical equipment company near Indianapolis, said he sold about $650,000 in dividend-paying stocks like McDonald’s and Coca-Cola a few days after the election, worried about the potential increase in taxes.

“I love these companies, but I’m so scared that now all of the sudden I’m going to get taxed at such a rate with them that they won’t be worth anything,” Mr. Moorin said.

Although Mr. Wynn has declared special dividends at the end of the year before — most recently in 2011 — in a call with analysts last month, he hinted that higher taxes would cause him and other chief executives to rethink big payouts in future years.

In the meantime, he added, it was “very difficult to do long-range planning with a government that moves as much as this does on so many issues.”

Leggett & Platt, a diversified manufacturer based in Carthage, Mo., decided to move up payment of its fourth-quarter dividend to December from January so shareholders could take advantage of the lower rate.

“If we can help our shareholders avoid taxes and keep more of their dividends, we’ll do it,” said David M. DeSonier, senior vice president for corporate strategy and investor relations.

David Kocieniewski contributed reporting.

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Teenage Boys, Worried About Body Image, Take Health Risks

Béatrice de Géa for The New York Times

David Abusheikh at a gym in Brooklyn. He goes six days a week and says he uses protein supplements to help build muscle.

It is not just girls these days who are consumed by an unattainable body image.

Take David Abusheikh. At age 15, he started lifting weights for two hours a day, six days a week. Now that he is a senior at Fort Hamilton High School in Brooklyn, he has been adding protein bars and shakes to his diet to put on muscle without gaining fat.

“I didn’t used to be into supplements,” said Mr. Abusheikh, 18, who plans on a career in engineering, “but I wanted something that would help me get bigger a little faster.”

Pediatricians are starting to sound alarm bells about boys who take unhealthy measures to try to achieve Charles Atlas bodies that only genetics can truly confer. Whether it is long hours in the gym, allowances blown on expensive supplements or even risky experiments with illegal steroids, the price American boys are willing to pay for the perfect body appears to be on the rise.

In a study to be published on Monday in the journal Pediatrics, more than 40 percent of boys in middle school and high school said they regularly exercised with the goal of increasing muscle mass. Thirty-eight percent said they used protein supplements, and nearly 6 percent said they had experimented with steroids.

Over all, 90 percent of the 1,307 boys in the survey — who lived in the Minneapolis-St. Paul area, but typify what doctors say is a national phenomenon — said they exercised at least occasionally to add muscle.

“There has been a striking change in attitudes toward male body image in the last 30 years,” said Dr. Harrison Pope, a psychiatry professor at Harvard who studies bodybuilding culture and was not involved in the study. The portrayal of men as fat-free and chiseled “is dramatically more prevalent in society than it was a generation ago,” he said.

While college-age men have long been interested in bodybuilding, pediatricians say they have been surprised to find that now even middle school boys are so absorbed with building muscles. And their youth adds an element of risk.

Just as girls who count every calorie in an effort to be thin may do themselves more harm than good, boys who chase an illusory image of manhood may end up stunting their development, doctors say, particularly when they turn to supplements — or, worse, steroids — to supercharge their results.

“The problem with supplements is they’re not regulated like drugs, so it’s very hard to know what’s in them,” said Dr. Shalender Bhasin, a professor of medicine at Boston University School of Medicine. Some contain anabolic steroids, and even high-quality protein supplements might be dangerous in large amounts, or if taken to replace meals, he said. “These things just haven’t been studied very well,” he said.

Anabolic steroids pose a special danger to developing bodies, Dr. Bhasin said. Steroids “stop testosterone production in men,” he said, leading to terrible withdrawal problems when still-growing boys try to stop taking them. Still, the constant association of steroids with elite athletes like Lance Armstrong and Barry Bonds perpetuates the notion that they can be managed successfully.

Online, in bodybuilding forums for teenagers, boys barely out of puberty share weight-lifting regimens and body fat percentages, and judge one another’s progress. On Tumblr and Facebook, teenagers post images of ripped athletes under the heading “fitspo” or “fitspiraton,” which are short for “fitness inspiration.” The tags are spinoffs of “thinspo” and “thinspiration” pictures and videos, which have been banned from many sites for promoting anorexia.

“Lifted b4 school today felt good but was weak as hell,” wrote one boy who said he was 15 and from Tallahassee, Fla., on a message board on Bodybuilding.com in September, saying he bench-pressed 245 pounds. “Barely got it.”

Many of these boys probably see themselves in Mike Sorrentino, “The Situation” from the “Jersey Shore” series on MTV, or the Adam Sackler character, on the HBO series “Girls,” who rarely wears a shirt or takes a break from his crunches.

Mr. Abusheikh, for instance, has a Facebook page full of photos of himself shirtless or showing off his six-pack abs. At his high school, participation in the annual bodybuilding competition hit an all-time high of 30 students this year.

“They ask us about everything,” said Peter Rivera, a physical education teacher at Fort Hamilton High School who helps oversee the competition. “How do I lose weight? How do I gain muscle? How many times a week should I work out?” Some boys want to be stronger for sports, Mr. Rivera said, but others “want to change their body type.”

Compared with a sedentary lifestyle of video games and TV, an obsession with working out may not quite qualify as a health hazard. And instructors like Mr. Rivera say most boys are eager for advice on the healthiest, drug-free ways to get in shape.

With so little known about supplements, it can be difficult, particularly for teenagers, to make wise decisions.

This article has been revised to reflect the following correction:

Correction: November 19, 2012

An earlier version of this article gave an incorrect nationality for the soccer player Cristiano Ronaldo. He is Portuguese, not Brazilian. Because of an editing error, it misstated the number of boys included in the survey. The researchers interviewed 2,793 boys and girls, not 2,800 boys. It also described incorrectly the title of Dr. Shalender Bhasin. He is a professor of medicine at Boston University School of Medicine, not at the Boston Medical Center.

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Teenage Boys, Worried About Body Image, Take Health Risks

Béatrice de Géa for The New York Times

David Abusheikh at a gym in Brooklyn. He goes six days a week and says he uses protein supplements to help build muscle.

It is not just girls these days who are consumed by an unattainable body image.

Take David Abusheikh. At age 15, he started lifting weights for two hours a day, six days a week. Now that he is a senior at Fort Hamilton High School in Brooklyn, he has been adding protein bars and shakes to his diet to put on muscle without gaining fat.

“I didn’t used to be into supplements,” said Mr. Abusheikh, 18, who plans on a career in engineering, “but I wanted something that would help me get bigger a little faster.”

Pediatricians are starting to sound alarm bells about boys who take unhealthy measures to try to achieve Charles Atlas bodies that only genetics can truly confer. Whether it is long hours in the gym, allowances blown on expensive supplements or even risky experiments with illegal steroids, the price American boys are willing to pay for the perfect body appears to be on the rise.

In a study to be published on Monday in the journal Pediatrics, more than 40 percent of boys in middle school and high school said they regularly exercised with the goal of increasing muscle mass. Thirty-eight percent said they used protein supplements, and nearly 6 percent said they had experimented with steroids.

Over all, 90 percent of the 1,307 boys in the survey — who lived in the Minneapolis-St. Paul area, but typify what doctors say is a national phenomenon — said they exercised at least occasionally to add muscle.

“There has been a striking change in attitudes toward male body image in the last 30 years,” said Dr. Harrison Pope, a psychiatry professor at Harvard who studies bodybuilding culture and was not involved in the study. The portrayal of men as fat-free and chiseled “is dramatically more prevalent in society than it was a generation ago,” he said.

While college-age men have long been interested in bodybuilding, pediatricians say they have been surprised to find that now even middle school boys are so absorbed with building muscles. And their youth adds an element of risk.

Just as girls who count every calorie in an effort to be thin may do themselves more harm than good, boys who chase an illusory image of manhood may end up stunting their development, doctors say, particularly when they turn to supplements — or, worse, steroids — to supercharge their results.

“The problem with supplements is they’re not regulated like drugs, so it’s very hard to know what’s in them,” said Dr. Shalender Bhasin, a professor of medicine at Boston University School of Medicine. Some contain anabolic steroids, and even high-quality protein supplements might be dangerous in large amounts, or if taken to replace meals, he said. “These things just haven’t been studied very well,” he said.

Anabolic steroids pose a special danger to developing bodies, Dr. Bhasin said. Steroids “stop testosterone production in men,” he said, leading to terrible withdrawal problems when still-growing boys try to stop taking them. Still, the constant association of steroids with elite athletes like Lance Armstrong and Barry Bonds perpetuates the notion that they can be managed successfully.

Online, in bodybuilding forums for teenagers, boys barely out of puberty share weight-lifting regimens and body fat percentages, and judge one another’s progress. On Tumblr and Facebook, teenagers post images of ripped athletes under the heading “fitspo” or “fitspiraton,” which are short for “fitness inspiration.” The tags are spinoffs of “thinspo” and “thinspiration” pictures and videos, which have been banned from many sites for promoting anorexia.

“Lifted b4 school today felt good but was weak as hell,” wrote one boy who said he was 15 and from Tallahassee, Fla., on a message board on Bodybuilding.com in September, saying he bench-pressed 245 pounds. “Barely got it.”

Many of these boys probably see themselves in Mike Sorrentino, “The Situation” from the “Jersey Shore” series on MTV, or the Adam Sackler character, on the HBO series “Girls,” who rarely wears a shirt or takes a break from his crunches.

Mr. Abusheikh, for instance, has a Facebook page full of photos of himself shirtless or showing off his six-pack abs. At his high school, participation in the annual bodybuilding competition hit an all-time high of 30 students this year.

“They ask us about everything,” said Peter Rivera, a physical education teacher at Fort Hamilton High School who helps oversee the competition. “How do I lose weight? How do I gain muscle? How many times a week should I work out?” Some boys want to be stronger for sports, Mr. Rivera said, but others “want to change their body type.”

Compared with a sedentary lifestyle of video games and TV, an obsession with working out may not quite qualify as a health hazard. And instructors like Mr. Rivera say most boys are eager for advice on the healthiest, drug-free ways to get in shape.

With so little known about supplements, it can be difficult, particularly for teenagers, to make wise decisions.

This article has been revised to reflect the following correction:

Correction: November 19, 2012

An earlier version of this article gave an incorrect nationality for the soccer player Cristiano Ronaldo. He is Portuguese, not Brazilian. Because of an editing error, it misstated the number of boys included in the survey. The researchers interviewed 2,793 boys and girls, not 2,800 boys. It also described incorrectly the title of Dr. Shalender Bhasin. He is a professor of medicine at Boston University School of Medicine, not at the Boston Medical Center.

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Economic View: How Pollsters and Analysts Won Big on Election Day

THE biggest winners on Election Day weren’t politicians; they were numbers folks.

Computer scientists, behavioral scientists, statisticians and everyone who works with data should be proud. They told us who was going to win, but they also helped to make many of those victories happen.

Three groups of geeks deserve the love they rarely receive: people who run political polls, those who analyze the polls and those who figure out how to help campaigns connect with voters.

Many people doubted the accuracy of political polling this year. Part of the skepticism was based on the wide range of predictions, with some showing President Obama in the lead, and others Mitt Romney. But there were additional, structural reasons to worry whether pollsters would be able to find representative samples of voters.

One problem is that people are harder to reach on the telephone these days. About a third of voters no longer have a land line, and many of those who have them don’t pick up calls from strangers. So modern polling companies have to work harder to find voters willing to answer questions, then have to guess which of these respondents will actually show up and vote.

So it may come as a surprise that, collectively, polling companies did quite well during this election season. Although there was a small tendency for the pollsters to overestimate Mr. Romney’s share of the vote, a simple average of the polls in swing states produced a very accurate prediction of the Electoral College outcome. Notably, the most accurate polls tended to be done via the Internet, many by companies new to this field. That’s geek victory No. 1.

This relatively accurate polling data provided the raw material for the second group of election pioneers: poll analysts like Nate Silver, who writes the FiveThirtyEight blog for The New York Times, as well as Simon Jackman at Stanford, Sam Wang at Princeton and Drew Linzer at Emory University.

What do poll analysts do? They are like the meteorologists who forecast hurricanes. Data for meteorologists comes from satellites and other tracking stations; data for the poll analysts comes from polling companies. The analysts’ job is to take the often conflicting data from the polls and explain what it all means.

Worry about the reliability of the polling data led to widespread skepticism, or even outright hostility, toward poll analysts. The phrase “garbage in, garbage out” was one of the more polite criticisms bouncing around the Internet in the days before the election.

Because the polls were not, in fact, garbage, the first job of a poll analyst was quite easy: to average the results of the various polls, weighing more reliable and recent polls more heavily and correcting for known biases. (Some polls consistently project higher voter shares for one party or the other.)

A harder but more valuable task is to help readers translate the polling data into forecasts of the probability of victory. In Florida, where the final polls showed essentially a tie, according to Mr. Silver’s weighting method, it’s easy to see why he said the chance of either candidate winning the state was 50 percent. Ultimately, President Obama would very narrowly carry the state.

But what about North Carolina, where Mr. Silver projected that Mitt Romney would get 50.6 percent of the vote and President Obama, 48.9 percent? Looking at that very small difference, what probability would you have assigned to a Romney victory in that state?

Most people would guess something very close to 50-50. But not a good numbers guy. By looking back at previous elections with polling data this close, Mr. Silver estimated that Mr. Romney’s chances of winning North Carolina were 74 percent, a number that may seem surprisingly high. (Mr. Romney won the state.)

The slightly larger but still seemingly tiny lead that the president held in Ohio, another swing state, led poll analysts to predict that the chance of an Obama victory in Ohio was around 90 percent. And because Mr. Romney would have to win several such states with small Obama leads in order to prevail in the Electoral College, the analysts ended up with similarly high degrees of confidence in an overall Obama victory. They ended up predicting the Electoral College outcome almost exactly right, especially if you consider the final outcome in Florida to be a virtual tie, as they had projected.

Pundits making forecasts, some of whom had mocked the poll analysts, didn’t fare as well, and many failed miserably. George F. Will predicted that Mr. Romney would win 321 electoral votes, which turned out to be very close to President Obama’s actual total of 332. Jim Cramer from CNBC was nearly as wrong in the opposite direction, projecting that the president would win 440 electoral votes.

Richard H. Thaler is a professor of economics and behavioral science at the Booth School of Business at the University of Chicago. He was an informal adviser to the Obama campaign.

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Palestinian Death Toll Rises as Israel Presses Onslaught

GAZA CITY — After a night of sustained Israeli strikes by air and sea and a morning of rocket attacks on Israel, the Health Ministry here said on Monday that the Palestinian death toll in six days of conflict had risen to 91 with 700 wounded, including 200 children, as the assault ground on unrelentingly despite efforts toward a cease-fire.

The casualties — 19 people reported killed since midnight local time — included Palestinians killed in strikes by warplanes and a drone attack on two men on a motorcycle. Another drone attack killed the driver of a taxi hired by journalists and displaying “Press” signs, although it was not clear which journalists hired it, Palestinian officials said.

On Sunday, Israeli forces attacked two buildings housing local broadcasters and production companies used by foreign outlets. Israeli officials denied targeting journalists, but on Monday Israeli forces again blasted the Al Sharouk block used by many local broadcasters as well as Britain’s Sky News and the Al Arabiya channel.

The attack, apparently aimed at a computer shop on the third floor of the building, sparked a blaze that sent plumes of dark smoke creeping up the sides of the building. Video footage showed clouds of gray smoke billowing from the high-rise building as the missiles struck home.

An Israeli bomb pummeled a home deep into the ground here on Sunday, killing 11 people, including nine in three generations of a single family, in the deadliest single strike in six days of cross-border conflict. Members of the family were buried Monday in a rite that turned into a gesture of defiance and became a rally supporting Gaza’s militant Hamas rulers.

A militant leader said Tel Aviv, in the Israeli heartland, would be hit “over and over” and warned Israelis that their leaders were misleading them and would “take them to hell.”

The airstrikes further indicated that Israel was striking a wide range of targets. Three Israelis have been killed and at least 79 wounded by continued rocket fire into southern Israel and as far north as Tel Aviv.

Israel says its onslaught is designed to stop Hamas from launching the rockets, but, after an apparent lull overnight, more missiles hurtled toward targets in Israel, some of them intercepted by Israel’s Iron Dome defense system. Of five rockets fired on Monday at the southern Israeli city of Ashkelon, four were intercepted but one smashed through the concrete roof at the entrance to an empty school. There were no reports of casualties. Other rockets rained on areas along the border with Gaza. 

Later a second volley struck Ashkelon. Several rockets were intercepted, but one crashed down onto a house, causing damage but no casualties. News reports said 75 rockets had been fired by midafternoon.

On Sunday, a new blitz of Palestinian rockets totaled nearly 100 by nightfall, including two that soared toward the population center of Tel Aviv but were knocked out of the sky by Israeli defenses.

In a statement on Monday, the Israel Defense Forces said overnight targets included “underground rocket launchers, terror tunnels, training bases, Hamas command posts and weapon storage facilities.” But news reports said the strikes flattened two houses belonging to a single family, killing two children and two adults and injuring 42 people, while a shrapnel burst from another attack killed one child and wounded others living near the rubble of the former national security compound.

The latest exchanges offered a grim backdrop to Egyptian-led cease-fire efforts that have so far proved inconclusive. The United Nations secretary general, Ban Ki-moon, was set to join the effort in Cairo on Monday.

Brig. Gen. Yoav Mordechai, the spokesman for the Israel Defense Forces, said there had been a reduction of up to 40 percent in rocket fire from Gaza, while Israeli forces had launched 40 attacks on tunnels between Egypt and Gaza, both at the entrances and along the road leading to them, causing considerable damage.

He said six rocket launching teams and two men on motorcycles were hit, while the Israeli forces continued to intercept Palestinian radio signals to urge Gaza residents to steer clear of activists.

In the Israeli strike on Sunday morning, it took emergency workers and a Caterpillar digger more than an hour to reveal the extent of the devastation under the two-story home of Jamal Dalu, a shop owner. Mr. Dalu was at a neighbor’s when the blast wiped out nearly his entire family: His sister, wife, two daughters, daughter-in-law and four grandchildren ages 2 to 6 all perished under the rubble, along with two neighbors, an 18-year-old and his grandmother.

Fares Akram and Jodi Rudoren reported from Gaza City, and Alan Cowell from London. Reporting was contributed by Isabel Kershner from Ashkelon, Israel; Ethan Bronner, Myra Noveck and Irit Pazner Garshowitz from Jerusalem; Rina Castelnuovo from Ashdod, Israel; Peter Baker from Bangkok; and David D. Kirkpatrick from Cairo.

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How to Survive Societal Collapse in Suburbia

On a clear morning in May, Ron Douglas left his home in exurban Denver, eased into his Toyota pickup truck and drove to a business meeting at a Starbucks. Douglas, a bearded bear of a man, ordered a venti double-chocolate-chip Frappuccino — “the girliest drink ever,” he called it — and then sat down to discuss the future of the growing survivalist industry.

Many so-called survivalists would take pride in keeping far away from places that sell espresso drinks. But Douglas, a 38-year-old entrepreneur and founder of one of the largest preparedness expos in the country, isn’t your typical prepper.

At that morning’s meeting, a strategy session with two new colleagues, Douglas made it clear that he doesn’t even like the word “survivalist.” He believes the word is ruined, evoking “the nut job who lives out in the mountains by himself on the retreat.” Instead, he prefers “self-reliance.”

When prompted by his colleagues to define the term, Douglas leaned forward in his chair. “I’m glad you asked,” he replied. “Take notes. This is good.”

For the next several minutes, Douglas talked about emergency preparedness, sustainable living and financial security — what he called the three pillars of self-reliance. He detailed the importance of solar panels, gardens, water storage and food stockpiles. People shouldn’t just have 72-hour emergency kits for when the power grid goes down; they should learn how to live on their own. It’s a message that Douglas is trying to move from the fringe to the mainstream.

“Our main goal is to reach as many people and get the word out to as many people as we can, to get them thinking and moving in this direction,” he said. “Sound good?”

The preparedness industry, always prosperous during hard times, is thriving again now. In Douglas’s circles, people talk about “the end of the world as we know it” with such regularity that the acronym Teotwawki (tee-ought-wah-kee) has come into widespread use. The Vivos Group, which sells luxury bunkers, until recently had a clock on its Web site that was ticking down to Dec. 21, 2012 — a date that, thanks to the Mayan calendar, some believe will usher in the end times. But amid the alarmism, there is real concern that the world is indeed increasingly fragile — a concern highlighted most recently by Hurricane Sandy. The storm’s aftermath has shown just how unprepared most of us are to do without the staples of modern life: food, fuel, transportation and electric power.

The survivalist business surged in the wake of 9/11, when authorities instructed New Yorkers to prepare disaster kits, learn how to seal doors and vents with duct tape and be ready to evacuate at any time. Threat-level warnings about possible terrorist attacks kept Americans rattled for years, and were followed by various disasters of other types: the financial meltdown, Hurricanes Katrina and Ike, drought, blackouts and concerns over everything from rising sea levels to Iran’s nuclear program.

Late last year, Douglas and his partners formed the Red Shed Media Group, a single corporate home for several endeavors: the Self Reliance Expo, conventions that Douglas founded in 2010, dedicated to showcasing survival gear and skills; Self Reliance Broadcasting, an Internet-based channel devoted to the cause; and an entity that controls the rights to publishing “Making the Best of Basics,” a popular survivalist handbook. The name Red Shed was symbolic for Douglas. “When your grandfather went and did a project,” he told me, “he went out to the red shed and pulled out all the tools he needed for the job.” Douglas wants his virtual red shed to be a single place where people can get all the preparedness information they need. Five expos this year have drawn 40,000 people who pay $10 each. The radio network has logged more than two million podcast downloads; in one day alone in July, it reported nearly 90,000 downloads. The book, which was first published in 1974, includes recipes for everything from wild pig (“they are easy to prepare”) to dove pie (“simmer for one hour or until doves are tender”). Douglas said it had sold about 20,000 copies this year.

But the goal isn’t just to sell to the same old preparedness crowd. Red Shed wants to attract liberals and political moderates to a marketplace historically populated by conservatives and right-wing extremists. “It’s not the end of the world,” Douglas told me last spring, making a bold statement for someone in his industry. “It’s not doomsday.” It’s about showing the gun-toting mountain man in his camouflage and the suburban soccer mom in her minivan that they want the same thing: peace of mind. “We don’t say, ‘Hurry up and buy your stuff because Obama is going to ruin the country,’ ” Douglas said. “We don’t get into the political crap. We just want to teach people the lifestyle.”

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The Neediest Cases: Emerging From a Bleak Life to Become Fabulous Phil

For years, Phillip Johnson was caught in what seemed like an endless trench of bad luck. He was fired from a job, experienced intensifying psychological problems, lost his apartment and spent time in homeless shelters. At one point, he was hospitalized after overdosing on an antipsychotic drug.

“I had a rough road,” he said.

Since his hospital stay two years ago, and despite setbacks, Mr. Johnson, 27, has been getting his life on track. At Brooklyn Community Services, where he goes for daily counseling and therapy, everybody knows him as Fabulous Phil.

“Phillip is a light, the way he evokes happiness in other people,” his former caseworker, Teresa O’Brien, said. “Phillip’s character led directly to his nickname.”

About six months ago, with Ms. O’Brien’s help, Mr. Johnson started an event: Fabulous Phil Friday Dance Party Fridays.

One recent afternoon at the agency, 30 clients and a few counselors were eating cake, drinking soft drinks and juice, and grooving for 45 minutes to Jay-Z and Drake pulsating from a boom box.

Mr. Johnson’s voice rose with excitement when he talked about the party. Clients and counselors, he said, “enjoy themselves.”

“They connect more; they communicate more,” he continued. “Everybody is celebrating and laughing.”

The leadership Mr. Johnson now displays seems to be a far cry from the excruciatingly introverted person he was.

As an only child living with his single mother in public housing in Bedford-Stuyvesant, Brooklyn, he said, he tended to isolate himself. “A lot of kids my age would say, ‘Come outside,’ but I would always stay in my room,” he said. He occupied himself by writing comic books or reading them, his favorites being Batman and Spiderman because, he said, “they were heroes who saved the day.”

After graduating from high school in 2003, he worked odd jobs until 2006, when he took a full-time position at a food court at La Guardia Airport, where he helped to clean up. The steady paycheck allowed him to leave his mother’s apartment and rent a room in Queens.

But the depression and bleak moods that had shadowed him throughout middle and high school asserted themselves.

“My thinking got confused,” he said. “Racing thoughts through my mind. Disorganized thoughts. I had a hard time focusing on one thing.”

In 2008, after two years on the job, Mr. Johnson was fired for loud and inappropriate behavior, and for being “unpredictable,” he said. The boss said he needed counseling. He moved back in with his mother, and in 2009 entered a program at an outpatient addiction treatment service, Bridge Back to Life. It was there, he said, that he received a diagnosis of schizophrenia and help with his depression and marijuana use.

But one evening in May 2010, he had a bout with insomnia.

He realized the antipsychotic medication he had been prescribed, Risperdal, made him feel tired, he said, so he took 12 of the pills, rather than his usual dosage of two pills twice a day. When 12 did not work, he took 6 more.

“The next morning when I woke up, it was hard for me to breathe,” he said.

He called an ambulance, which took to Woodhull Hospital. He was released after about a month.

Not long after, he returned to his mother’s apartment, but by February 2011, they both decided he should leave, and he relocated to a homeless shelter in East New York, where, he said, eight other people were crammed into his cubicle and there were “bedbugs, people lying in your bed, breaking into your locker to steal your stuff.”

In late spring 2011, he found a room for rent in Manhattan, but by Thanksgiving he was hospitalized again. Another stint in a shelter followed in April, when his building was sold.

Finally, in July, Mr. Johnson moved to supported housing on Staten Island, where he lives with a roommate. His monthly $900 Social Security disability check is sent to the residence, which deducts $600 for rent and gives him $175 in spending money; he has breakfast and lunch at the Brooklyn agency. To assist Mr. Johnson with unexpected expenses, a grant of $550 through The New York Times Neediest Cases Fund went to buy him a bed and pay a Medicare prescription plan fee for three months.

“I was so happy I have a bed to sleep on,” he said about the replacement for an air mattress. “When I have a long day, I have a bed to lay in, and I feel good about that.”

Mr. Johnson’s goals include getting his driver’s license — “I already have a learner’s permit,” he said, proudly — finishing his program at the agency, and then entering an apprenticeship program to become a plumber, carpenter or mechanic.

But seeing how his peers have benefited from Fabulous Phil Fridays has made him vow to remain involved with people dealing with mental illnesses or substance abuse.

He was asked at the party: Might he be like the comic-book heroes he loves? A smile spread across his face. He seemed to think so.

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The iEconomy: As Boom Lures App Creators, Tough Part Is Making a Living

Daniel Rosenbaum for The New York Times

Shawn and Stephanie Grimes’s efforts have cost $200,000 in lost income and savings, but their apps have earned less than $5,000 this year.

ROSEDALE, Md. — Shawn and Stephanie Grimes spent much of the last two years pursuing their dream of doing research and development for Apple, the world’s most successful corporation.

But they did not actually have jobs at Apple. It was freelance work that came with nothing in the way of a regular income, health insurance or retirement plan. Instead, the Grimeses tried to prepare by willingly, even eagerly, throwing overboard just about everything they could.

They sold one of their cars, gave some possessions to relatives and sold others in a yard sale, rented out their six-bedroom house and stayed with family for a while. They even cashed in Mr. Grimes’s 401(k).

“We didn’t lose any sleep over it,” said Mr. Grimes, 32. “I’ll retire when I die.”

The couple’s chosen field is so new it did not even exist a few years ago: writing software applications for mobile devices like the iPhone or iPad. Even as unemployment remained stubbornly high and the economy struggled to emerge from the recession’s shadow, the ranks of computer software engineers, including app writers, increased nearly 8 percent in 2010 to more than a million, according to the latest available government data for that category. These software engineers now outnumber farmers and have almost caught up with lawyers.

Much as the Web set off the dot-com boom 15 years ago, apps have inspired a new class of entrepreneurs. These innovators have turned cellphones and tablets into tools for discovering, organizing and controlling the world, spawning a multibillion-dollar industry virtually overnight. The iPhone and iPad have about 700,000 apps, from Instagram to Angry Birds.

Yet with the American economy yielding few good opportunities in recent years, there is debate about how real, and lasting, the rise in app employment might be.

Despite the rumors of hordes of hip programmers starting million-dollar businesses from their kitchen tables, only a small minority of developers actually make a living by creating their own apps, according to surveys and experts. The Grimeses began their venture with high hopes, but their apps, most of them for toddlers, did not come quickly enough or sell fast enough.

And programming is not a skill that just anyone can learn. While people already employed in tech jobs have added app writing to their résumés, the profession offers few options to most unemployed, underemployed and discouraged workers.

One success story is Ethan Nicholas, who earned more than $1 million in 2009 after writing a game for the iPhone. But he says the app writing world has experienced tectonic shifts since then.

“Can someone drop everything and start writing apps? Sure,” said Mr. Nicholas, 34, who quit his job to write apps after iShoot, an artillery game, became a sensation. “Can they start writing good apps? Not often, no. I got lucky with iShoot, because back then a decent app could still be successful. But competition is fierce nowadays, and decent isn’t good enough.”

The boom in apps comes as economists are debating the changing nature of work, which technology is reshaping at an accelerating speed. The upheaval, in some ways echoing the mechanization of agriculture a century ago, began its latest turbulent phase with the migration of tech manufacturing to places like China. Now service and even white-collar jobs, like file clerks and data entry specialists or office support staff and mechanical drafters, are disappearing.

“Technology is always destroying jobs and always creating jobs, but in recent years the destruction has been happening faster than the creation,” said Erik Brynjolfsson, an economist and director of the M.I.T. Center for Digital Business.

Still, the digital transition is creating enormous wealth and opportunity. Four of the most valuable American companies — Apple, Google, Microsoft and I.B.M. — are rooted in technology. And it was Apple, more than any other company, that set off the app revolution with the iPhone and iPad. Since Apple unleashed the world’s freelance coders to build applications four years ago, it has paid them more than $6.5 billion in royalties.

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