Puerto Rico Races to Rescue Its Pension Fund

Puerto Rico is fighting to stay afloat in a rising sea of debt.

Its economy is sputtering. Its population is shrinking. Its recent election is disputed. Its public pension fund is perilously low on cash. The American territory has just been through a brutal five-year recession, something not experienced in the United States as a whole since the 1930s.

Desperate to raise cash, Puerto Rican officials have been selling off anything they can: two toll roads and the main airport so far.

To bring in tax revenue, they are trying to lure people out of the underground economy. Coffee shops, hairdressers, even outdoor market stalls are being required to issue printed receipts with every sale. The receipts carry a lottery number, with a chance to win cars or cash, as an incentive to get shoppers to pay the island’s 7 percent sales tax.

Though many of Puerto Rico’s problems are reminiscent of Greece’s — tax noncompliance, a stagnant economy, years of issuing long-term debt to cover short-term payments — investors have had a nearly insatiable appetite for its bonds.

But now their support is dwindling. Some big investors are pruning their holdings. That is beginning to widen the cost of borrowing for Puerto Rico relative to other states and municipalities, which are benefiting from a big decline in borrowing costs. The interest rate its 30-year bonds now pay is about 2.5 percentage points higher than other municipal borrowers’, up from a difference of just 1.5 percentage points at the beginning of 2012, according to Municipal Market Data.

The possibility of a credit downgrade also hangs in the air, something that could lead to more selling.

“There is no specific event looming on the horizon,” said Alan Schankel, a managing director at Janney Capital Markets in Philadelphia. “But it’s a problem of immense magnitude, and it’s very challenging to sit here and see how they work their way out of it.”

Puerto Rico needs to be able to issue bonds at attractive rates to cover its short-term financing needs. Perhaps more important, it has to figure out how to salvage its retirement funds. After shortchanging them for years, it now has the weakest major public pension system in America.

The main fund, which serves about 250,000 government workers, past and present, is only 6 percent funded — a small percentage of what is considered the minimum needed for a marginally healthy pension plan — and could run out of money as soon as 2014. Another fund, for about 80,000 teachers, which is 20 percent funded, will last just a few years longer if nothing is done. Police officers and teachers in Puerto Rico have opted out of Social Security and rely entirely on their pensions.

“For now, I’m not totally shaken about the possibility of the fund going broke,” said Jorge Ramón Román, a 78-year-old retired instructor for the island’s Civil Air Patrol. “But I do fear for the future, when I’ll be an even older person, more infirm and with less of a pension.”

Héctor M. Mayol Kauffman, the executive director of the pension system, said it would be impossible to cut the benefits of people who are already retired, citing court precedent.

Puerto Rican officials were racing this fall to put together a rescue plan for the pension fund. Voters, though, pushed out Gov. Luis Fortuño, who had tried austerity measures that included cutting tens of thousands of government workers along with a revamping of the fund.

They elected Alejandro García Padilla, who promised to create 50,000 new jobs in the next 18 months. But the margin was razor-thin and Mr. Fortuño has requested a recount. Mr. García Padilla’s party had dropped out of the retirement overhaul effort, but the governor-elect says he will deal with the looming pension crisis with “diligence and promptness” and has put together a task force of economists and financial advisers.

“We will not leave retired government workers stranded at a bus stop in their older years,” he said.

Since the election, yields on the island’s 30-year bonds have continued to widen.

“I don’t think that there’s a default that’s about to happen, but a default isn’t the only bad thing that can happen when you’ve got bonds,” Mr. Schankel said. Puerto Rico’s bonds are just a notch or two above junk status. If they fall to that level, at least some institutions would be forced to sell, potentially setting off a chain reaction. And individual investors could get a jolt if they saw the value of their holdings fall. Many people own Puerto Rican debt without knowing it, through their mutual funds.

“The concern is that Puerto Rico is a systemic risk to the municipal bond market because it’s so widely held,” said Robert Donahue, a managing director with Municipal Market Advisors.

Rafael Matos contributed reporting from San Juan, P.R.

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U.S. Shaping Scope of Force in Afghanistan After 2014

WASHINGTON — American and allied military planners are drawing up the broad outlines of a force that would remain in Afghanistan following the handover to Afghan security after 2014, including a small counterterrorism force with an eye toward Al Qaeda, senior officials say.

Under the emerging plan, the American counterterrorism force might number less than 1,000, one military official said. In a parallel effort, NATO forces would advise Afghan forces at major regional military and police headquarters but most likely have a minimal battlefield role, with the exception of some special operations advisers.

Final decisions on the size of the American and NATO presence after 2014 and its precise configuration have not been made by the United States or its allies. But one option calls for about 10,000 American and several thousand non-American NATO troops.

The planning for a post-2014 mission has emerged as an early test for President Obama in his new term as he tries to flesh out the strategy for transferring the responsibility for security to the Afghans. But it is not the only challenge: After the White House decides what sort of military presence to propose to the Afghan government for after 2014, it must turn to the question of how quickly to reduce its troop force before then.

As one of his last acts as senior American commander in Afghanistan, Gen. John R. Allen is expected to submit a formal recommendation for how quickly to begin withdrawing the United States’ 66,000 troops. Two American officials who are involved in Afghan issues said that General Allen wants to keep a significant military capability through the fighting season ending in fall 2013, which could translate to a force of more than 60,000 troops until the end of that period.

Afghan forces are to assume the lead role for the war next year, and a military officer said that such a troop level would enable the United States to better support them, maintain the initiative and control critical terrain.

But such an approach may entail a heavier military involvement than the White House, which appears weary of the war, might like.

The White House is expected to ask General Allen to submit a range of options for drawing down forces next year, including some involving substantial reductions in troop levels.

“The White House has not yet asked General Allen for his assessment, nor have we begun considering any specific recommendations for troop numbers in 2013 and 2014,” said George Little, the Pentagon spokesman. “What is true is that in June 2011 the president made clear that our forces would continue to come home at a steady pace as we transition to an Afghan lead for security. That it still the case.”

The issue is already a politically contentious one. Some leading Democratic lawmakers have signaled that they would like to see steady troop reductions next year while Republicans have argued that speedy withdrawals would jeopardize hard-won gains.

There are also questions about General Allen’s future: his e-mails to a woman linked to the F.B.I. inquiry that disclosed David H. Petraeus’s affair are being investigated by the Pentagon inspector general.

But General Allen has resumed his duties in Kabul, and Mr. Obama has said that he thinks highly of his military performance. The Marine general who has been nominated to replace him, Joseph F. Dunford Jr., is not scheduled to take up the post until early February and recently told Congress that he had not been part of the planning process.

The planning for a post-2014 force is the Obama administration’s first order of business on Afghanistan for several reasons. The United States has opened talks with the Afghans on a security agreement that would authorize an American troop presence in Afghanistan after 2014. So American officials need to define what role American and NATO forces might play then.

In addition, NATO’s political arm has authorized the alliance’s military planners to develop a concept for how to carry out the post-2014 mission, which is to be approved by the alliance’s defense ministers early next year.

Reporting was contributed by Matthew Rosenberg and Alissa J. Rubin from Kabul, Afghanistan, and Eric Schmitt and Wesley S. Morgan from Washington.

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After His Vulgar Assault on Jenny Johnson, Chris Brown Quits Twitter

Chris Brown is really bad at public relations. The 23-year-old rapper went on a memorably vulgar tirade against comedian Jenny Johnson on Sunday and apparently realized soon thereafter that it was a bad idea, because he scrambled to cover his tracks. But deleting tweets does not erase their previous existence and deactivating your Twitter account does not take away all of the bad things you did with it.

RELATED: The New York Times’s Bill Keller Riles Up Twitter

We’re getting ahead of ourselves, though. Did you hear about Chris Brown’s memorably vulgar tirade against comedian Jenny Johnson on Sunday? It was truly despicable. Johnson, if you haven’t heard of her, is pretty big on Twitter and pretty funny, too. She’s also deeply disapproving of Brown’s existence, more specifically his history of beating women. And she didn’t miss a chance to take a swipe at Brown on Sunday, when he complained about his appearance. “I look old as fuck! I’m only 23…” Brown tweeted. “ ”I know! Being a worthless piece of shit can really age a person.” Johnson replied.

RELATED: The Twitter Skirmish While You Were Sleeping Over #RomneyStrength

Then things got ugly. In a series of tweets, Brown told Johnson to suck his dick, threatened to fart on her, threatened to shit and called her a “ho” about seven times. After tweeting — and this is a direct quote — “mom says hello… She told me not to shart in ur mouth, wanted me to shit right on the retina, ….#pinkeye” Brown tweeted, “Just ask Rihanna if she mad??????” You can read the entire exchange here.

RELATED: Morning Twitter Meme: Journalists Tiring of Royal Wedding

Brown’s rant was not well received by the Twitter community or the media. Then again, at this point, it’s not like anybody expected more from Brown. This is the same guy that dressed up like a terrorist for Halloween. It’s unclear how or why, but within a couple hours of the blowback, Brown’s Twitter account was gone. We’ll let you know if we find out any more details. For now, we’re going with Eli Braden’s theory: “Chris Brown’s publicist finally figured out his Twitter password.”

Social Media News Headlines – Yahoo! News

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Rolling Stones mark 50th year with London show

LONDON (AP) — The Rolling Stones made a triumphant return to the London stage on Sunday night in the first of five concerts to mark the 50th anniversary of their debut as an American-oriented blues band.

They showed no signs of wear and tear — except on their aging, heavily lined faces — as frontman Mick Jagger swaggered and strutted through a stellar two-and-a-half hour show. He looked remarkably trim and fit and was in top vocal form.

The Stones passed the half-century mark in style at the sometimes emotional gig that saw former bassist Bill Wyman and guitar master Mick Taylor join their old mates in front of a packed crowd at London's 02 Arena.

It was the first of five mega-shows to mark the passage of 50 years since the band first appeared in a small London pub determined to pay homage to the masters of American blues.

Jagger, in skin-tight black pants, a black shirt and a sparkly tie, took time out from singing to thank the crowd for its loyalty.

"It's amazing that we're still doing this, and it's amazing that you're still buying our records and coming to our shows," he said. "Thank you, thank you, thank you."

Lead guitarist Keith Richards, whose survival has surprised many who thought he would succumb to drugs and drink, was blunter: "We made it," he said. "I'm happy to see you. I'm happy to see anybody."

But the band's fiery music was no joke, fuelled by an incandescent guest appearance by Taylor, who played lead guitar on a stunning extended version of the ominous "Midnight Rambler," and Mary J. Blige, who shook the house in a duet with Jagger on "Gimme Shelter."

The 50th anniversary show, which will be followed by one more in London, then three in the greater New York area, lacked some of the band's customary bravado — the "world's greatest rock 'n' roll band" intro was shelved — and there were some rare nostalgic touches.

Even the famously taciturn Wyman briefly cracked a smile when trading quips with Richards and Ronnie Wood.

The concert started with a brief video tribute from luminaries like Elton John, Iggy Pop and Johnny Depp, who praised the Stones for their audacity and staying power. The Stones' show contained an extended video homage to the American trailblazers who shaped their music: Muddy Waters, John Lee Hooker, Otis Redding, Bob Dylan, Johnny Cash and others. The montage included rare footage of the young Elvis Presley.

The Stones began their professional career imitating the Americans whose music they cherished, but they quickly developed their own style, spawning hundreds — make that thousands — of imitators who have tried in vain to match their swagger and style.

The concert began with some early Stones' numbers that are rarely heard in concert, including the band's cover of the Lennon-McCartney rocker "I Wanna Be Your Man" and the Stones original "It's All Over Now."

They didn't shy away from their darker numbers, including "Paint It Black" and "Sympathy for the Devil" — Jagger started that one wearing a black, purple-lined faux fur cape that conjured up his late '60s satanic image.

He even cracked a joke about one of the band's low points, telling the audience it was in for a treat: "We're going to play the entire "Satanic Majesty's Request" album now," he said, referring to one of the band's least-loved efforts, a psychedelic travesty that has been largely, mercifully, forgotten.

He didn't make good on his threat.

He also made fun of the sky-high ticket prices, which had exposed the band to some criticism in the London press.

"How are you doing up in the cheap seats," he said, motioning to fans in the upper rows of the cavernous 02 Arena. "Except they're not cheap seats, that's the problem."

But Jagger seemed more mellow than usual, chatting a bit about the good old days and asking if there was anyone in the crowd who had seen them in 1962, when they first took to the stage.

He said 2012 had been a terrific year for Britain and that the Stones nearly missed the boat, playing no role in the celebration of the Queen's Diamond Jubilee, the London Olympics, or the new James Bond film.

"We just got in under the wire," he said. "We feel pretty good."

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Oprah Winfrey Seeks a Younger Audience to Bolster a Flagging Empire

Stephanie Diani for The New York Times

Oprah Winfrey spoke last month at a convention held by O, The Oprah Magazine, in Los Angeles.

LOS ANGELES — It’s not easy to find a fresh way to photograph Oprah Winfrey.

That’s why the editors of O, The Oprah Magazine, recently tried to create a shot that recalled the glory days of Ms. Winfrey’s syndicated talk show. They arranged to photograph her for its April 2013 issue as she stepped onstage to speak to 5,000 attendees at the magazine’s annual conference, a New Age slumber party of sorts for women held at the convention center here last month. When Ms. Winfrey confidently strode out dressed in a sea foam green V-neck dress and a pair of perilously tall ruby red stilettos, the audience collectively leapt to its feet and shrieked at the sight of her.

“I love you, Oprah,” some women shouted, while other fans brushed away tears. “I love you back,” she responded in her signature commanding voice. “It’s no small thing to get the dough to come here.”

Ms. Winfrey, who used to receive this kind of applause from fans five days a week, has had fewer such receptions since the talk show she hosted for 25 years ended 18 months ago. The cable network OWN, which she started with Discovery Communications, is emerging from low ratings and management shake-ups. And without a regular presence on daytime network television, she cannot steer traffic to her other products as easily as in the past. Her magazine, in particular, has experienced a decline in advertising revenue and newsstand sales since the talk show finished.

“She’s still Oprah. But she’s still struggling,” said Janice Peck, an associate professor of journalism and mass communication at the University of Colorado who wrote the 2008 book “The Age of Oprah.” “I think she’s scared, even though she’s very, very rich and she’s always going to be very, very rich. The possibility of failure, it’s quite scary.”

Ms. Winfrey, 58, has shown some signs of strain. She arrived at the conference with faint shadows under her eyes and announced to her best friend, Gayle King, and the audience simultaneously that she had a breast cancer scare the week before. (It was ultimately a false alarm.) When Ms. King grew visibly upset, one woman chided Ms. Winfrey for not telling her friend ahead of time and ordered her to apologize to Ms. King — all before an audience. Ms. Winfrey also did not hide her dissatisfaction with the criticism she had faced. She told the audience, “the press tried to cut me off at the knees” in its coverage of OWN, and bristled at questions about the challenges her magazine confronted.

“I don’t care what the form is,” Ms. Winfrey said with the conviction of a preacher. “I care about what the message is.”

With signs of progress at OWN, Ms. Winfrey now has more time to devote to other media platforms — her magazine, her radio channel on XM Satellite Radio, her Facebook page, which has 7.8 million subscribers, her Twitter account, which has nearly 15 million followers, and her latest content channel on The Huffington Post.

“It’s all an opportunity to speak to people,” Ms. Winfrey said as she sat for an interview during the conference, a pair of glittery gold stilettos slung in her hand and a couple of handlers in the corner quietly tapping away at smartphones. She pushed aside a bottle of sparkling water, a glass with a silver straw and a delicate orchid placed before her and spoke frankly about her plans.

“Ultimately, you have to make money because you are a business. I let other people worry about that. I worry about the message. I am always, always, always about holding true to the vision and the message, and when you are true to that, then people respond.”

When it comes to the magazine, Ms. Winfrey said her staff prepared her to expect a 25 percent decline in newsstand sales after the talk show ended. (It has been closer to 22 percent.) And while she acknowledged that she enjoyed “holding the magazine in my hand,” she was pragmatic about print’s future and said she would stop publishing a print magazine if it were not profitable.

“Obviously, the show was helping in ways that you know I hadn’t accounted for,” Ms. Winfrey said. “I’m not interested, you know, in bleeding money.”

Ms. Winfrey, who spoke in a conference room over the roars of an expectant crowd in the convention space below, said she knew that her brand’s strength stemmed from how she resonated with a breadth of viewers.

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White House Presses for Drone Rule Book

WASHINGTON — Facing the possibility that President Obama might not win a second term, his administration accelerated work in the weeks before the election to develop explicit rules for the targeted killing of terrorists by unmanned drones, so that a new president would inherit clear standards and procedures, according to two administration officials.

The matter may have lost some urgency after Nov. 6. But with more than 300 drone strikes and some 2,500 people killed by the Central Intelligence Agency and the military since Mr. Obama first took office, the administration is still pushing to make the rules formal and resolve internal uncertainty and disagreement about exactly when lethal action is justified.

Mr. Obama and his advisers are still debating whether remote-control killing should be a measure of last resort against imminent threats to the United States, or a more flexible tool, available to help allied governments attack their enemies or to prevent militants from controlling territory.

Though publicly the administration presents a united front on the use of drones, behind the scenes there is longstanding tension. The Defense Department and the C.I.A. continue to press for greater latitude to carry out strikes; Justice Department and State Department officials, and the president’s counterterrorism adviser, John O. Brennan, have argued for restraint, officials involved in the discussions say.

More broadly, the administration’s legal reasoning has not persuaded many other countries that the strikes are acceptable under international law. For years before the Sept. 11, 2001, attacks, the United States routinely condemned targeted killings of suspected terrorists by Israel, and most countries still object to such measures.

But since the first targeted killing by the United States in 2002, two administrations have taken the position that the United States is at war with Al Qaeda and its allies and can legally defend itself by striking its enemies wherever they are found.

Partly because United Nations officials know that the United States is setting a legal and ethical precedent for other countries developing armed drones, the U.N. plans to open a unit in Geneva early next year to investigate American drone strikes.

The attempt to write a formal rule book for targeted killing began last summer after news reports on the drone program, started under President George W. Bush and expanded by Mr. Obama, revealed some details of the president’s role in the shifting procedures for compiling “kill lists” and approving strikes. Though national security officials insist that the process is meticulous and lawful, the president and top aides believe it should be institutionalized, a course of action that seemed particularly urgent when it appeared that Mitt Romney might win the presidency.

“There was concern that the levers might no longer be in our hands,” said one official, speaking on condition of anonymity. With a continuing debate about the proper limits of drone strikes, Mr. Obama did not want to leave an “amorphous” program to his successor, the official said. The effort, which would have been rushed to completion by January had Mr. Romney won, will now be finished at a more leisurely pace, the official said.

Mr. Obama himself, in little-noticed remarks, has acknowledged that the legal governance of drone strikes is still a work in progress.

“One of the things we’ve got to do is put a legal architecture in place, and we need Congressional help in order to do that, to make sure that not only am I reined in but any president’s reined in terms of some of the decisions that we’re making,” Mr. Obama told Jon Stewart in an appearance on “The Daily Show” on Oct. 18.

In an interview with Mark Bowden for a new book on the killing of Osama bin Laden, “The Finish,” Mr. Obama said that “creating a legal structure, processes, with oversight checks on how we use unmanned weapons, is going to be a challenge for me and my successors for some time to come.”

The president expressed wariness of the powerful temptation drones pose to policy makers. “There’s a remoteness to it that makes it tempting to think that somehow we can, without any mess on our hands, solve vexing security problems,” he said.

Despite public remarks by Mr. Obama and his aides on the legal basis for targeted killing, the program remains officially classified. In court, fighting lawsuits filed by the American Civil Liberties Union and The New York Times seeking secret legal opinions on targeted killings, the government has refused even to acknowledge the existence of the drone program in Pakistan.

But by many accounts, there has been a significant shift in the nature of the targets. In the early years, most strikes were aimed at ranking leaders of Al Qaeda thought to be plotting to attack the United States. That is the purpose Mr. Obama has emphasized, saying in a CNN interview in September that drones were used to prevent “an operational plot against the United States” and counter “terrorist networks that target the United States.”

But for at least two years in Pakistan, partly because of the C.I.A.’s success in decimating Al Qaeda’s top ranks, most strikes have been directed at militants whose main battle is with the Pakistani authorities or who fight with the Taliban against American troops in Afghanistan.

In Yemen, some strikes apparently launched by the United States killed militants who were preparing to attack Yemeni military forces. Some of those killed were wearing suicide vests, according to Yemeni news reports.

“Unless they were about to get on a flight to New York to conduct an attack, they were not an imminent threat to the United States,” said Micah Zenko, a fellow at the Council on Foreign Relations who is a critic of the strikes. “We don’t say that we’re the counterinsurgency air force of Pakistan, Yemen and Somalia, but we are.”

Then there is the matter of strikes against people whose identities are unknown. In an online video chat in January, Mr. Obama spoke of the strikes in Pakistan as “a targeted, focused effort at people who are on a list of active terrorists.” But for several years, first in Pakistan and later in Yemen, in addition to “personality strikes” against named terrorists, the C.I.A. and the military have carried out “signature strikes” against groups of suspected, unknown militants.

Originally that term was used to suggest the specific “signature” of a known high-level terrorist, such as his vehicle parked at a meeting place. But the word evolved to mean the “signature” of militants in general — for instance, young men toting arms in an area controlled by extremist groups. Such strikes have prompted the greatest conflict inside the Obama administration, with some officials questioning whether killing unidentified fighters is legally justified or worth the local backlash.

Many people inside and outside the government have argued for far greater candor about all of the strikes, saying excessive secrecy has prevented public debate in Congress or a full explanation of their rationale. Experts say the strikes are deeply unpopular both in Pakistan and Yemen, in part because of allegations of large numbers of civilian casualties, which American officials say are exaggerated.

Gregory D. Johnsen, author of “The Last Refuge: Yemen, Al Qaeda and America’s War in Arabia,” argues that the strike strategy is backfiring in Yemen. “In Yemen, Al Qaeda is actually expanding,” Mr. Johnsen said in a recent talk at the Brookings Institution, in part because of the backlash against the strikes.

Shuja Nawaz, a Pakistan-born analyst now at the Atlantic Council in Washington, said the United States should start making public a detailed account of the results of each strike, including any collateral deaths, in part to counter propaganda from jihadist groups. “This is a grand opportunity for the Obama administration to take the drones out of the shadows and to be open about their objectives,” he said.

But the administration appears to be a long way from embracing such openness. The draft rule book for drone strikes that has been passed among agencies over the last several months is so highly classified, officials said, that it is hand-carried from office to office rather than sent by e-mail.

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Hobbits, superheroes put magic in NZ film industry

WELLINGTON, New Zealand (AP) — A crate full of sushi arrives. Workers wearing wetsuit shirts or in bare feet bustle past with slim laptops. With days to go, a buzzing intensity fills the once-dilapidated warehouses where Peter Jackson's visual-effects studio is rushing to finish the opening film in "The Hobbit" trilogy.

The fevered pace at the Weta Digital studio near Wellington will last nearly until the actors walk the red carpet Nov. 28 for the world premiere. But after "The Hobbit: An Unexpected Journey" hits theaters, there's more work to be done.

Weta Digital is the centerpiece of a filmmaking empire that Jackson and close collaborators have built in his New Zealand hometown, realizing his dream of bringing a slice of Hollywood to Wellington. It's a one-stop shop for making major movies — not only his own, but other blockbusters like "Avatar" and "The Avengers" and hoped-for blockbusters like next year's "Man of Steel."

Along the way, Jackson has become revered here, even receiving a knighthood. His humble demeanor and crumpled appearance appeal to distinctly New Zealand values, yet his modesty belies his influence. He's also attracted criticism along the way.

The special-effects workforce of 150 on "The Lord of the Rings" trilogy a decade ago now numbers 1,100. Only five of Weta Digital's workers are actual employees, however, while the rest are contractors. Many accept the situation because movie work often comes irregularly but pays well. Union leaders, though, say the workers lack labor protections existing in almost any other industry.

Like many colleagues, Weta Digital's director, Joe Letteri, came to New Zealand in 2001 to work on the "Rings" trilogy for two years. The work kept coming, so he bought a house in Wellington and stayed.

"People come here because they know it's their chance to do something really great and to get it up on the screen," he said in a recent interview. "And you want to do it in these next two weeks, because the two weeks after the movie's finished are useless."

Jackson, who declined to be interviewed for this story, launched Weta in 1993 with fellow filmmakers Jamie Selkirk and Richard Taylor. Named after an oversized New Zealand insect, the company later was split into its digital arm and Weta Workshop, which makes props and costumes.

Loving homages to the craft are present in Weta Digital's seven buildings around the green-hilled suburb of Miramar. There are old-time movie posters, prop skulls of dinosaurs and apes, and a wall of latex face impressions of actors from Chris O'Donnell to Tom Cruise.

Its huge data center, with the computing power of 30,000 laptops, resembles a milk-processing plant because only the dairy industry in New Zealand knew how to build cooling systems on such a grand scale.

Little of Weta's current work was visible. Visitors must sign confidentiality agreements, and the working areas of the facilities are off-limits. The company is secretive about any unannounced projects, beyond saying Weta will be working solidly for the next two years, when the two later "Hobbit" films are scheduled to be released.

The workforce has changed from majority American to about 60 percent New Zealanders. The only skill that's needed, Letteri says, is the ability to use a computer as a tool.

Beyond having creativity as a filmmaker, Jackson has proved a savvy businessman, Letteri says.

"The film business in general is volatile, and visual effects has to be sitting right on the crest of that wave," Letteri says. "We don't get asked to do something that somebody has seen before."

The government calculates that feature films contribute $560 million each year to New Zealand's economy. Like many countries, New Zealand offers incentives and rebates to film companies and will contribute about $100 million toward the $500 million production costs of "The Hobbit" trilogy. Almost every big budget film goes through Jackson's companies.

"New Zealand has a good reputation for delivering films on time and under budget, and Jackson has been superb at that," says John Yeabsley, a senior fellow at New Zealand's Institute of Economic Research. "Nobody has the same record or the magic ability to bring home the bacon as Sir Peter."

"You cannot overestimate the fact that Peter is a brand," says Graeme Mason, chief executive of the New Zealand Film Commission. "He's built this incredible reputational position, which has a snowball effect."

Back in 2010, however, a labor dispute erupted before filming began on "The Hobbit." Unions said they would boycott the movie if the actors didn't get to collectively negotiate. Jackson and others warned that New Zealand could lose the films to Europe. Warner Bros. executives flew to New Zealand and held a high-stakes meeting with Prime Minister John Key, whose government changed labor laws overnight to clarify that movie workers were exempt from being treated as regular employees.

Helen Kelly, president of the New Zealand Council of Trade Unions, says a compromise could easily have been reached. She says the law changes amounted to unnecessary union-busting and a "gross breach" of employment laws.

"I was very disappointed at Peter Jackson for lobbying for that," she says, "and I was furious at the government for doing it."

Weta Digital's general manager Tom Greally compared it to the construction industry, where multiple contractors and mobile workers do specific projects and then move on.

Animal rights activists said last week they plan to picket the premiere of "The Hobbit" after wranglers alleged that three horses and up to two dozen other animals died in unsafe conditions at a farm where animals were boarded for the movies. Jackson's spokesman Matt Dravitzki acknowledged two horses died preventable deaths at the farm but said the production company worked quickly to improve animal housing and safety. He rejected claims any animals were mistreated or abused.

Jackson's team pointed out that 55 percent of animal images in "The Hobbit" were computer generated at Weta. The People for the Ethical Treatment of Animals (PETA) have asked Jackson in the future to create all his animals in the studio.

Controversies aside, the rise of Weta and the expat American community in and around Miramar is visible in everything from a Mexican restaurant to yoga classes. On Halloween, which in the past was not much celebrated in New Zealand, hundreds of costumed children roamed about collecting candy. Americans gave the tradition a boost here, but the locals have embraced it.

The National Business Review newspaper estimates Jackson's personal fortune to be about $400 million, which could rise considerably if "The Hobbit" franchise succeeds. Public records show Jackson has partial ownership stakes in 21 private companies, most connected with his film empire. He's spent some of his money on philanthropy, helping save a historic church and a performance theater.

For all his influence, Jackson maintains a hobbit-like existence himself, preferring a quiet home life outside of work. In the end, many say, he seems to be driven by what has interested him from the start: telling great stories on the big screen.

___

Follow Nick Perry on Twitter at http://twitter.com/nickgbperry

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Rising Consumer Optimism Fuels an Annual Spree

Worries about the economy and fiscal austerity be damned. On Black Friday, consumers were ready to shop till they dropped. And some even did, dozing off on the furniture displays in department stores offering predawn deals.

Consumers have voiced increasing optimism in recent months as employment rises and their home values (finally) go up, or at least stabilize, even as government talks about taxes and spending remain at an impasse. Bargain hunters put that upbeat mood into action on Thursday night and the wee hours of Friday morning at department and discount stores around the country.

Shoppers stood in line Friday for the 7 a.m. opening of Sam’s Club in Eagan, Minn., enduring freezing temperatures and biting winds, and clinging to free Starbuck’s Holiday Blend coffee as they collected vouchers for laptops and big-screen TVs.

“I didn’t even want it,” Meshia Flood, 36, a student from nearby Eagan, told a worker standing near the exit, referring to the 40-inch Sanyo LED TV on her cart. She and her 13-year-old daughter had come for a 96-cent Samsung Galaxy S III smartphone, but did not snag one before they disappeared minutes after opening.

Hundreds to thousands of consumers lined up outside Sears, Target, Macy’s, Old Navy and other retailers offering time-sensitive deals. Some turned up Thursday night for newly extended hours that some merchants have been experimenting with.

Bryan Everett, Target’s senior vice president for stores, said that Target’s decision to open at 9 p.m. on Thursday rather than midnight meant that there were more families in the store, and that customers stayed longer.

“Usually, it’s just a parent with a child, or mom and dad, or just a single guest in the store,” he said. “This year, we were seeing four- to five-person families.”

As a result, he said, customers stayed longer, and there was more “cross shopping.” Usually the Black Friday shoppers make a beeline for the electronics and toys, he said, but this year in addition to the surge in big-screen LCD TVs, iPads, iPods and Xboxes “we saw a nice pattern of shopping in the apparel and home departments.” Children’s pajamas, blankets, sheet sets, pillows and scarves all did particularly well.

The official sales numbers will not be reported for a few days, but analysts are expecting a strong sales day, with results comparable with last year’s gain of about 3 percent, according to MasterCard Advisors SpendingPulse, which is a metric for total American retail sales across all payment forms, including cash and check. The earlier hours from a few select chains seem unlikely to increase the size of the spending pie, but they may reapportion it.

“Black Friday has always been and always will be about being first: first to open, first to price, first to offer that special item,” said Michael Brown, a partner in the retail practice of A. T. Kearney, a global management consulting firm.

He said the race to open earlier and earlier would probably continue in coming years, although there was some question about how early was too early. Some Midtown Manhattan stores that were open at midday on Thursday did not seem to get blockbuster traffic, at least compared with the postdinner doorbusters.

In addition to longer hours, stores also experimented with ways to slow the creep of online competitors onto their turf and prevent consumers from using brick-and-mortar locations as showrooms for the goods they planned to purchase online.

Best Buy, Target, Fry’s Electronics and Staples all agreed to match prices with at least some online competitors. Physical stores may also benefit from decisions by some states to force online retailers to pay sales taxes. That is chipping away at the pricing edge of some major companies like Amazon.com, according to Nelson Granados, an assistant professor at the Graziadio School of Business and Management at Pepperdine University.

Reporting was contributed by Christina Capecchi from Eagan, Minn.; Christopher Maag from Columbus, Ohio; Cindy Wolff from Memphis; and Rebecca Fairley Raney from Upland, Calif.

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Secret message found with carrier pigeon may never be deciphered

British man finds carrier pigeon skeleton in his fireplace with unbreakable secret code (Reuters)

Before military forces had secure cell phones and satellite communications, they used carrier pigeons. The highly trained birds delivered sensitive information from one location to another during  World War II. Often, the birds found the intended recipient. But not always.

A dead pigeon was recently discovered inside a chimney in Surrey, England. There for roughly 70 years, the bird had a curious canister attached to its leg. Inside was a coded message that has stumped the experts.

The code features a series of 27 groups of five letters. According to Reuters, nobody from Britain’s Government Communications Headquarters has been able to decipher it. The message was sent by a Sgt. W. Scott to someone or something identified as “Xo2.”

A spokesperson remarked, “Although it is disappointing that we cannot yet read the message brought back by a brave carrier pigeon, it is a tribute to the skills of the wartime code-makers that, despite working under severe pressure, they devised a code that was indecipherable both then and now.”

The bird was discovered by a homeowner doing renovations earlier this month. In an interview with Reuters, David Martin remarked that bits of birds kept falling from the chimney. Eventually, Margin saw the red canister and speculated that it might contain a secret message. And it seems as if the message will always be secret.

Carrier pigeons played a vital role in wars due to their incredible homing skills. All told, U.K. forces used about 250,000 of the birds during World War II.

Wireless News Headlines – Yahoo! News

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'Dallas' star Larry Hagman dies in Texas

LOS ANGELES (AP) — Larry Hagman, whose predatory oil baron J.R. Ewing on television's long-running nighttime soap opera "Dallas" became a symbol for 1980s greed and coaxed forth a Texas-sized gusher of TV ratings, has died. He was 81.

Hagman, who returned as J.R. in a new edition of "Dallas" this year, passed away Friday afternoon due to complications from his battle with cancer, according to a statement from the family provided to The Associated Press by Warner Bros., producer of "Dallas."

"Larry was back in his beloved hometown of Dallas, re-enacting the iconic role he loved the most," the family said. "Larry's family and closest friends had joined him in Dallas for the Thanksgiving holiday."

Linda Gray, his on-screen wife in the original series and the sequel, was with Hagman when he died in a Dallas hospital, said her publicist, Jeffrey Lane.

"He brought joy to everyone he knew. He was creative, generous, funny, loving and talented, and I will miss him enormously. He was an original and lived life to the fullest," Gray said in a statement.

Hagman was diagnosed in 1992 with cirrhosis of the liver and acknowledged that he had drank heavily for years. In 1995, a malignant tumor was discovered on his liver and he underwent a transplant.

Years before "Dallas," Hagman had gained TV fame as a nice guy with the fluffy 1965-70 NBC comedy "I Dream of Jeannie," in which he played Capt. Tony Nelson, an astronaut whose life is disrupted when he finds a comely genie, portrayed by Barbara Eden, and takes her home to live with him.

He also starred in two short-lived sitcoms, "The Good Life" (NBC, 1971-72) and "Here We Go Again" (ABC, 1973). His film work included well-regarded performances in "The Group," ''Harry and Tonto" and "Primary Colors."

But it was Hagman's masterful portrayal of the charmingly loathsome J.R. that brought him his greatest stardom. The CBS serial drama about the Ewing clan and those in their orbit aired from April 1978 to May 1991.

The "Who shot J.R.?" story twist, in which Hagman's character was nearly murdered in a cliffhanger episode, fueled international speculation and millions of dollars in betting-parlour wagers. It also helped give the series a ratings record for the time.

When the answer was revealed in a November 1980 episode, an average 41 million viewers tuned in to make "Dallas" the second most-watched entertainment show of all time, trailing only the "MASH" finale in 1983 with 50 million viewers.

It was J.R.'s sister-in-law, Kristin (Mary Crosby) who plugged him — he had made her pregnant, then threatened to frame her as a prostitute unless she left town — but others had equal motivation.

Hagman played Ewing as a bottomless well of corruption with a charming grin: a business cheat and a faithless husband who tried to get his alcoholic wife, Sue Ellen (Linda Gray), institutionalized.

"I know what I want on J.R.'s tombstone," Hagman said in 1988. "It should say: 'Here lies upright citizen J.R. Ewing. This is the only deal he ever lost.'"

On Friday night, Victoria Principal, who co-starred in the original series, recalled Hagman as "bigger than life, on-screen and off. He is unforgettable, and irreplaceable, to millions of fans around the world, and in the hearts of each of us, who was lucky enough to know and love him."

Ten episodes of the new edition of "Dallas" aired this past summer and proved a hit for TNT. Filming had been completed for five of the episodes for the second season and work on the sixth episode was in progress, the network said.

There was no immediate comment from Warner or TNT on how the series would deal with Hagman's loss.

In 2006, Hagman did a guest shot on FX's drama series "Nip/Tuck," playing a macho business mogul. He also got new exposure in recent years with the DVD releases of "I Dream of Jeannie" and "Dallas."

The Fort Worth, Texas, native was the son of singer-actress Mary Martin, who starred in such classics as "South Pacific" and "Peter Pan." Martin was still in her teens when he was born in 1931 during her marriage to attorney Ben Hagman.

As a youngster, Hagman gained a reputation for mischief-making as he was bumped from one private school to another. He made a stab at New York theater in the early 1950s, then served in the Air Force from 1952-56 in England.

While there, he met and married young Swedish designer Maj Axelsson. The couple had two children, Preston and Heidi, and were longtime residents of the Malibu beach colony that is home to many celebrities.

Hagman returned to acting and found work in the theater and in such TV series as "The U.S. Steel Hour," ''The Defenders" and "Sea Hunt." His first continuing role was as lawyer Ed Gibson on the daytime serial "The Edge of Night" (1961-63).

He called his 2001 memoir "Hello Darlin': Tall (and Absolutely True) Tales about My Life."

"I didn't put anything in that I thought was going to hurt someone or compromise them in any way," he told The Associated Press at the time.

After his transplant, he became an advocate for organ donation and volunteered at a hospital to help frightened patients.

"I counsel, encourage, meet them when they come in for their operations, and after," he said in 1996. "I try to offer some solace, like 'Don't be afraid, it will be a little uncomfortable for a brief time, but you'll be OK.' "

He also was an anti-smoking activist who took part in "Great American Smoke-Out" campaigns.

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AP Television Writer Frazier Moore in New York contributed to this report.

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