Citigroup to cut 11,000 jobs and take $1-billion charge

A Citibank branch office in San Rafael, Calif., in July. The company said Wednesday it would close dozens of branches in the U.S. and several foreign countries. (Justin Sullivan / Getty Images / December 5, 2012)

By Jim Puzzanghera

December 5, 2012, 7:25 a.m.

WASHINGTON -- Citigroup Inc. will cut 11,000 jobs and take a $1-billion pre-tax charge to its fourth-quarter earnings as it tries to reduce costs and reposition itself under new corporate leadership.

The job cuts -- including closing 44 U.S. consumer banking branches -- will save $900 million in 2013 and produce $1.1 billion in annual savings in 2014 and beyond, the company said in announcing the steps Wednesday.

"These actions are logical next steps in Citi's transformation," said Chief Executive Michael Corbat, who took over in October after the surprising departure of Vikram Pandit.

"While we are committed to — and our strategy continues to leverage — our unparalleled global network and footprint, we have identified areas and products where our scale does not provide for meaningful returns," Corbat said.

Citigroup stock was up about 4% in early trading Wednesday.

About 6,200 of the layoffs will come from Citi's consumer banking operations in the U.S. and around the world as the company focuses on the 150 cities with the "highest growth potential," it said. 

In addition to cutting 44 U.S. branches, Citigroup will close 14 in Brazil, seven in Hong Kong, 15 in South Korea and four in Hungary. The company also said it expected to "sell or significantly scale back" its consumer banking operations in Pakistan, Paraguay, Romania, Turkey and Uruguay.

Other cuts include 1,900 jobs in its group serving institutional clients.

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Know What You'll Look Like in 30 Years — Maybe Then You'll Max Out Your 401(k)

Don’t think you’ll ever get old? Keith Richards probably didn’t either. But at least he had a retirement plan.

Chances are good, however, that you’re not saving enough for your retirement. To convince you to sock away enough gold for your golden years, Merrill Edge has launched an online magic mirror to remind you that you won’t be forever young.

Face Retirement lives up to the catty double meaning in its name. Using a facial aging algorithm, the web app snaps a photo of you with your laptop’s camera and then shows you what you’ll look like at 47, 57, 67 and so on, all the way to 107.

The wrinkly, saggy results aren’t pretty. And that’s the point.

In a 2011 study cited by Merrill Edge (Merrill Lynch’s online discount brokerage), Stanford behavioral economics researchers say that we’re often reluctant to save for retirement because deep down we don’t identify with that older person we’ll one day be: “To people estranged from their future selves, saving is like a choice between spending money today or giving it to a stranger years from now.”

To find out if they could alter that perception, the researchers immersed test subjects into a virtual reality simulation that showed them a computer-generated vision of themselves at retirement age and then asked them questions about money. The study found that “those who interacted with their virtual future selves exhibited an increased tendency to accept later monetary rewards over immediate ones.” In other words, they were willing to save more.

Merrill Edge’s app isn’t as sophisticated as the Stanford version, but the results are still unnerving. The site’s other scare tactic involves charting increased cost-of-living projections alongside your gravity-ravaged face. In 2042, a loaf of bread is expected to cost more than $6. In 2082, a gallon of gas could cost nearly $40.

If those figures are anywhere close to right, the majority of us could be in trouble. According to new figures from the Boston College Center for Retirement Studies, more than half of U.S. households aren’t on track to maintain their current standard of living by retirement. Low savings rates could play a role in that, but the study puts much of the blame on falling interest rates and the bursting of the housing bubble, which itself was driven by excessive optimism that home prices would climb forever. When it comes to magical thinking, turns out retirement isn’t the only thing we get wrong.

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And the most overpaid actor award goes to: Eddie Murphy

NEW YORK (Reuters) – Eddie Murphy was once among Hollywood’s top box office draws, but he now has the dubious honor of being crowned its most overpaid actor, according to Forbes magazine.

In its annual list, determined by the misalignment between star salaries and their films’ box office take, Murphy, once a one-man gold mine with 1980s hits such as “Trading Places” and “Beverly Hills Cop”, displaced Drew Barrymore for the top spot.

“Murphy‘s career has just collapsed,” Forbes said, citing such recent box office bombs as “Imagine That”, “A Thousand Words” and “Meet Dave”.

Weighing box office receipts against paychecks, Forbes calculated that for every dollar Murphy was paid for his last three films, they returned an average of just $ 2.30 at the box office. Murphy placed second on the list a year ago.

Popular actresses such as Katherine Heigl, and Oscar winners Reese Witherspoon and Sandra Bullock, made the top five, with “returns” ranging from $ 3.40 to $ 5.

Forbes took issue with Witherspoon’s “questionable” choices such as the star-laden, James L. Brooks romantic comedy “How Do You Know”, which was one of 2010′s worst-performing films. It cost $ 120 million, much of which went toward star salaries, but grossed a paltry $ 49 million.

The cast included two-time Oscar winner Denzel Washington, as well as actors generally considered solid at the box office such as Adam Sandler and Ben Stiller.

“Washington‘s films do fine at the box office but he can demand an outsized paycheck on those movies,” Forbes noted. His current hit “Flight” was not included for this year’s list.

Washington‘s return was the same $ 6.30 calculated for Sandler, whose comedies Forbes said were consistent performers — except when they’re not, such as the disappointing “Jack and Jill”.

It was the same with Stiller, whom Forbes said “earns so much money per film that one miss can make him seem overpaid. That’s what happened with “Tower Heist”, in which the actor co-starred with — Eddie Murphy.

Will Ferrell, who topped the list for two of the last four years and came in third a year ago, didn’t place.

The full list can be found at www.forbes.com/overpaidactors.

(Reporting by Chris Michaud; editing by Patricia Reaney and Andrew Hay)

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Extended Use of Breast Cancer Drug Suggested

The widely prescribed drug tamoxifen already plays a major role in reducing the risk of death from breast cancer. But a new study suggests that women should be taking the drug for twice as long as is now customary, a finding that could upend the standard that has been in place for about 15 years.

In the study, patients who continued taking tamoxifen for 10 years were less likely to have the cancer come back or to die from the disease than women who took the drug for only five years, the current standard of care.

“Certainly, the advice to stop in five years should not stand,” said Prof. Richard Peto, a medical statistician at Oxford University and senior author of the study, which was published in The Lancet on Wednesday and presented at the San Antonio Breast Cancer Symposium.

Breast cancer specialists not involved in the study said the results could have the biggest impact on premenopausal women, who account for a fifth to a quarter of new breast cancer cases. Postmenopausal women tend to take different drugs, but some experts said the results suggest that those drugs as well might be taken for a longer duration.

“We’ve been waiting for this result,” said Dr. Robert W. Carlson, a professor of medicine at Stanford University. “I think it is especially practice-changing in premenopausal women because the results do favor a 10-year regimen.”

Dr. Eric P. Winer, chief of women’s cancers at the Dana-Farber Cancer Institute in Boston, said that even women who completed their five years of tamoxifen months or years ago might consider starting on the drug again.

Tamoxifen blocks the effect of the hormone estrogen, which fuels tumor growth in estrogen receptor-positive cancers that account for about 65 percent of cases in premenopausal women. Some small studies in the 1990s suggested that there was no benefit to using tamoxifen longer than five years, so that has been the standard.

About 227,000 cases of breast cancer are diagnosed each year in the United States, and an estimated 30,000 of them would be in premenopausal women with ER-positive cancer and prime candidates for tamoxifen. But postmenopausal women also take tamoxifen if they cannot tolerate the alternative drugs, known as aromatase inhibitors.

The new study, known as Atlas, included nearly 7,000 women with ER-positive disease who had completed five years of tamoxifen. They came from about three dozen countries. Half were chosen at random to take the drug another five years, while the others were told to stop.

In the group assigned to take tamoxifen for 10 years, 21.4 percent had a recurrence of breast cancer in the ensuing ten years, meaning the period 5 to 14 years after their diagnoses. The recurrence rate for those who took only five years of tamoxifen was 25.1 percent.

About 12.2 percent of those in the 10-year treatment group died from breast cancer, compared with 15 percent for those in the control group.

There was virtually no difference in death and recurrence between the two groups during the five years of extra tamoxifen. The difference came in later years, suggesting that tamoxifen has a carry-over effect that lasts long after women stop taking it.

Whether these differences are big enough to cause women to take the drug for twice as long remains to be seen.

“The treatment effect is real, but it’s modest,” said Dr. Paul E. Goss, director of breast cancer research at the Massachusetts General Hospital.

Tamoxifen has side effects, including endometrial cancer, blood clots and hot flashes, which cause many women to stop taking the drug. In the Atlas trial, it appears that roughly 40 percent of the patients assigned to take tamoxifen for the additional five years stopped prematurely.

Some 3.1 percent of those taking the extra five years of tamoxifen got endometrial cancer versus 1.6 percent in the control group. However, only 0.6 percent of those in the longer treatment group died from endometrial cancer or pulmonary blood clots, compared with 0.4 percent in the control group.

“Over all, the benefits of extended tamoxifen seemed to outweigh the risks substantially,” Trevor J. Powles of the Cancer Center London, said in a commentary published by The Lancet.

Dr. Judy E. Garber, director of the Center for Cancer Genetics and Prevention at Dana-Farber, said many women have a love-hate relationship with hormone therapies.

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DealBook: Freeport to Buy Plains Exploration and McMoRan

Freeport-McMoRan Copper and Gold said on Wednesday that it would buy two oil and natural gas companies, Plains Exploration and Production and the McMoRan Exploration Company, in a return to the energy business.

The two transactions will create a natural resources titan worth about $60 billion, including debt, and will formally reunite Freeport with McMoRan, the oil exploration company it spun off in 1994.

Under the terms of the deals, Freeport will pay about $6.9 billion in cash and stock for Plains. That offer consists of $25 a share in cash and 0.6531 of a Freeport share, worth about $50 a share based on Tuesday’s closing prices.

And Freeport will pay $14.75 a share in cash and 1.15 units of a trust that will hold a 5 percent interest in future production of McMoRan’s deepwater exploration operations. Freeport and Plains together already own about 36 percent of the smaller exploration company.

“This transaction will enable us to add assets with exceptional exploration and development potential to a world-class mining company to create a premier minerals and oil and gas business focused on value creation for shareholders,” James R. Moffett, Freeport’s chairman, said in a statement.

JPMorgan Chase is providing $9.5 billion to help pay for the cash portion of the deal and to repay some of Plains’s existing debt.

Freeport was advised by Credit Suisse and the law firm Wachtell, Lipton, Rosen & Katz. Plains was advised by Barclays and the law firm Latham & Watkins. McMoRan was advised by Evercore Partners and the law firm Weil, Gotshal & Manges.

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A Utah craftsman races illness to finish a vintage carousel

PETERSBORO, Utah — By any measure, Vean Woodbrey looms large.

Dressed in denim bib overalls, he stands 6 feet 4, weighs 275 pounds and wears size 16 shoes. His children — all 16 of them — jokingly call him Sasquatch because of the cartoonish spread of his footprint. So do many of his 70 grandchildren and great-grandkids.

And then there is the 7-foot-tall wooden giraffe he's carving inside his home workshop in this farming town near the Idaho border. He runs a gnarled hand along the figure's neck, wiping off the sawdust that covers everything like an early season snow.

"It's simple, but there's a certain beauty to it," Woodbrey, 69, said. "The best part is that it came straight out of my imagination."

Woodbrey is an aging craftsman on a mission to finish an amusement-park-sized carousel for his grandchildren and other other youth in this Mormon community before his declining health finally fails him.

As he painstakingly crafts a menagerie of 22 animals — horses, a panda, a zebra, a lion, a tiger, a camel, an elephant and the giraffe — Woodbrey knows time is running out. He has already battled prostate and bone cancer, both of which have slowed his once-loping gait. He also suffers from a neuropathy that numbs the toes in both feet, making him teeter like a child's top in its final throes of movement. To keep his balance in his shop, he holds onto his animals and various saws and sanders.

Every morning, he slowly scales the ramp onto his second-floor workshop to create his imaginary world out of scavenged lumber. Each day is one more sunrise wrung out of a life as a father, community leader, coach and scoutmaster.

"I've got to get this carousel done," he said. "There's this sense of urgency, but I'm inching my way there."

There have been delays: Once he stapled three fingers together with a nail gun. Then he took a fall and broke five toes on one foot. He's already burned through two drills.

He shakes his head. The illness has made him see things so clearly. The doctors say the bone cancer is 85% licked, but that either could return at any time. "When you have cancer, you take an inventory of what you've done, but there's so many things you still want to do," Woodbrey said. "Every day, my wife knows exactly where I am — up in the wood shop with my animals. I'm a man on a time clock."

****

Woodbrey's fondness for carousels dates to his boyhood in San Diego, where his father took the family's four children to a local amusement park. "My dad would buy one ticket he said would go to the eldest — and that was him," he said. "But he'd grab so many brass rings he'd win free tickets so we could all ride."

When the family moved to Salt Lake City, Woodbrey collected soda bottles to redeem for the money to ride the carousel at a local park. If he was lucky, he'd make enough to buy a drink or an ice cream cone.

Years later, after Woodbrey married his wife, Tonya, and they started raising their 16 kids, he took a job at nearby Hill Air Force Base where, for 40 years, he repaired F-4 fighter jets and, later, Minuteman missile systems. At home, he began making wooden dollhouses for his eight daughters and toys for his eight sons.

At age 58, he was struck with prostate cancer. As he lay in the hospital, one of his kids bought him a copy of a magazine dedicated to carousels. Once again, he was hooked — checking each new issue for trends, seeing which old carousels were up for sale.

Eight years later, Woodbrey was treated for a golf-ball-sized tumor in his skull. After weeks of radiation treatments, weary and depressed, he asked his wife, "What am I going to do?"

"She responded: 'Go do whatever you want. Just don't give up.'"

Woodbrey retired from his job at the base and began scouting a carousel to refurbish. He finally found the 7-ton shell of a 1930s Allan Herschell ride — its animals long ago sold off as antiques by the previous owner — for sale in Montana for $5,000

Woodbrey got the contraption home and set to work. One day, he called his eight sons and eight sons-in-law over to the house for a meal. But first the men were instructed to hoist the carousel's 16-foot center pole aloft into the sky and set it into place. They worked together, grunting and sweating, like Amish barn builders. "I told them nobody could eat until we were done," Woodbrey recalled.

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NASA's Giant New Rocket Goes Supersonic (In a Wind Tunnel)

NASA has a big new rocket in the works, one designed to carry astronauts beyond earth orbit for the first time since the Saturn V took us to the moon. The Space Launch System will, among other things, make a trip to an asteroid, but before it can do that it must make a few trips to the wind tunnel.

The rocket’s first mission beyond earth orbit isn’t expected until 2017, assuming the program doesn’t fall off a fiscal cliff. Right now, NASA engineers are busy finalizing the design of the launch vehicle, testing a 10-foot model in the agency’s transonic tunnel in Langley, Virginia.

“The test includes the largest integrated vehicle model to be tested in a wind tunnel for SLS,” says John Blevins, SLS Lead Engineer for Aerodynamics and Acoustics. “It will simulate the environment of transonic flight that the SLS rocket will navigate during its flight.”

The model will be exposed to speeds up to Mach 1.2. There are 360 pressure transducers spread across the surface of the model, and data is acquired at a rate of thirteen thousand scans per second, according to NASA. The information gleaned from the wind tunnel tests will provide insight into the structural forces the SLS will endure during launch and acceleration from subsonic to supersonic flight.

The first mission will see the SLS launch the Orion spacecraft into lunar orbit as an initial check of the system. It will be an unmanned flight, but NASA hopes to fly astronauts around the moon by 2021 and expand the flight envelope of its new generation of space vehicles.

The Orion capsule has endured numerous kinds of testing in recent years, but it hit a bit of a speed bump recently when small cracks were found in the capsule slated for flight in 2017. The three hairline cracks, each less then two inches long, are located on the bottom of the vehicle. This capsule is expected to be used for a test flight to earth orbit atop a Delta IV rocket in 2014, three years before the SLS will launch an Orion into lunar orbit.

The cracks did not penetrate the aluminum skin of the Orion spacecraft. NASA says a simple fix will distribute the stress across the location where the cracks occurred according to the Denver Post.

“For this flight, since its unmanned, we can fix it and fly it” Orion program manager Mark Geyer told the newspaper. “When we build the one we’re actually going to put people on, we’ll make sure to fix this design.”

With NASA handing off the job of delivering astronauts and cargo to low earth orbit over to commercial companies like SpaceX and Orbital Sciences, the manned space program at the agency is focusing on exploration a bit deeper into space. Orion will be able to carry a four person crew on mission lasting up to 210 days. In addition to possible missions to an asteroid, Orion is also being designed for trips to the moon and Mars. For all trips the capsule would just be part of the space vehicle needed as was the case with the Apollo capsules which used a command module and lunar module for the missions.

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Howard Stern signs on for more “America’s Got Talent”

LOS ANGELES (Reuters) – Shock jock Howard Stern will return as a judge for his second season on NBC‘s summer talent show “America’s Got Talent,” the broadcaster said on Monday, although the high-priced radio host appears to have done little to improve the show’s ratings.

NBC hoped Stern, 58, known for this sexually explicit radio interviews, would attract bigger audiences, but the finale in September was watched by a record low of under 11 million viewers, according to ratings data.

“Howard Stern’s towering presence and opinions on last season’s show as a new judge made a dramatic impact and added a sharper edge to the fascinating developments on stage,” Paul Telegdy, president of alternative programming at NBC, said in a statement.

The show, which also features celebrity judges Sharon Osbourne and Howie Mandel, remained the top-rated summer series among adults aged 18-49, the demographic most coveted by advertisers.

NBC attributed the overall 2012 audience decline partly to an earlier start that pitted “Got Talent” against end-of-season original programming in May.

The network is still searching for a replacement for Osbourne, who has quit in a dispute with NBC over their decision to drop her son Jack from another reality show.

Unlike popular singing competitions “The Voice,” “The X Factor” and “American Idol,” “America’s Got Talent” is open to dancers, comics, dancers and other performers. It is produced by “The X Factor” creator and judge Simon Cowell.

Stern is noted for his say-anything and do-anything radio program but he toned down his act when he started appearing as a judge on the show.

(Reporting by Eric Kelsey; Editing by Jill Serjeant)

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National Briefing | New England: New Hampshire: Not Guilty Plea in Hepatitis Case

A traveling hospital technologist accused of stealing drugs and infecting patients with hepatitis C through contaminated syringes pleaded not guilty in federal court on Monday. The technologist, David Kwiatkowski, whom prosecutors described as a “serial infector,” was indicted last week on charges of tampering with a consumer product and illegally obtaining drugs. Until May, Mr. Kwiatkowski worked as a cardiac technologist at Exeter Hospital, where 32 patients were given diagnoses of the same strain of hepatitis C he carries. Before that, he worked in 18 hospitals in seven states, moving from job to job despite having been fired twice over accusations of drug use and theft. In addition to the New Hampshire patients, a handful of patients in Kansas and one in Maryland have been found to carry the strain Mr. Kwiatkowski carries.

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More Dads Buy the Toys, So Barbie, and Stores, Get Makeovers

Barbies are for girls and construction sets are for boys. Or are they?

For the first time in Barbie’s more than 50-year history, Mattel is introducing a Barbie construction set that underscores a huge shift in the marketplace. Fathers are doing more of the family shopping just as girls are being encouraged more than ever by hypervigilant parents to play with toys (as boys already do) that develop math and science skills early on.

It’s a combination that not only has Barbie building luxury mansions — they are pink, of course — but Lego promoting a line of pastel construction toys called Friends that is an early Christmas season hit. The Mega Bloks Barbie Build ’n Style line, available next week, has both girls — and their fathers — in mind.

“Once it’s in the home, dads would very much be able to join in this play that otherwise they might feel is not their territory,” said Dr. Maureen O’Brien, a psychologist who consulted on the new Barbie set.

Consumer surveys show that men are increasingly making the buying decisions for families, reflecting the growth in two-income households and those in which the women work and the men stay home. One-fifth of fathers with preschool-age children and working wives said they were the primary caretaker in 2010, according to the latest Census Bureau data. And 37.6 percent of working wives earned more than their husbands in 2011, up from 30.7 percent 10 years earlier.

“Kids are going to grow up with dads that give them baths and drive them to soccer and are cutting up oranges for team snacks,” said Liz Ross, president for North America of BPN, part of the IPG Mediabrands holding company, which recently completed a study on male consumers. “What will go away, albeit slowly, is the image or the perception of the befuddled dad.”

The change is having consequences beyond toys. Consumer products have traditionally been marketed to appeal to women, and stores have been designed for women’s sensibilities. Now, some brands and stores are catering directly to male decision-makers. Sears is reorganizing stores to put tools next to work wear, for instance, based on men’s preferences. Procter & Gamble is working on men’s grooming aisles at top retailers, a nod to the fact that women are no longer choosing shampoos or shaving creams for their husbands. With the selling point that it helps girls develop spatial reasoning, the Barbie set, a joint effort of Mattel and the toy company Mega Bloks, is also meant to pique fathers’ interest.

“Dad is a bigger influencer in terms of toy purchases over all, and this sets up well for that, because the construction category is something Dad grew up with and definitely has strong feelings and emotions about,” said Vic Bertrand, chief innovation officer of Mega Brands, Mega Bloks’ parent company.

Construction sets for girls are a speedy growth category, thanks to Lego’s introduction of its Friends line in January. Despite criticism that those sets were sexist — themes include a beauty shop and a fashion studio — Lego’s chief executive said in August that the company sold twice as many of the sets in the first half of the year as it had expected, and retailers like Amazon and Target have named them hot holiday toys.

Anne Marie Kehoe, vice president of toys for Walmart U.S., said that, with the Barbie addition, construction toys aimed at girls will represent about 20 percent of the toy construction category by the end of this year, while last year there were just a handful of products.

Research shows that playing with blocks, puzzles and construction toys helps children with spatial development, said Dr. Susan C. Levine, chairwoman of the psychology department at the University of Chicago and co-principal investigator at the National Science Foundation’s Spatial Intelligence and Learning Center. Even controlling for other skills such as verbal and numerical skills, she said, children with better spatial thinking are more likely to eventually go into mathematics, engineering, science and technology.

She said that a set aimed at girls could be beneficial, if only because it might increase girls’ likelihood of participating in construction activities.

Dr. O’Brien, the consultant on the new Barbie set, said adults had traditionally been “the limiting factor” in why girls have not played with those toys as often.

Recently, she said, there has been a shift in attitudes, as parents study research on development and spatial play. “For this particular product, one of the advantages is you can appeal to both moms and dads,” she said of the construction set.

During her research, Dr. O’Brien said, she watched a grandfather jump in to explain building principles to his granddaughter, who was playing with the Barbie. Still, the construction set is not exactly dump trucks and dirt. It remains “unapologetically all girl,” said Stephanie Cota, senior vice president of global marketing for Barbie, girls’ brands and games at Mattel.

The Mega Bloks building pieces are pink (Pantone 219, the signature Barbie color), and the construction choices are scenes like a fashion boutique, a mansion and an ice cream cart. Each set comes with a small Barbie figure that can be snapped into the scene.

Mattel, the world’s largest toy maker, still leans heavily on Barbie, one of its most popular and longest-running franchises. However, pressure to update Barbie has been high — Mattel has introduced Barbies with video cameras and digital cameras in recent years.

Yet sales of Barbie in North America through September fell 1 percent, even as sales of Mattel’s other girl brands, like Disney Princess dolls, rose 44 percent. Mega Brands makes just a fraction of what its larger rival Lego does, and had revenues of about $376 million last year.

The Barbie brand, which tends to raise feminists’ ire for its overly sexualized dolls, not to mention the 1992 version saying “Math class is tough,” has already taken some high-arched steps toward gender equality. A computer-engineer Barbie was introduced two years ago, for instance, with the support of the Society of Women Engineers.

This time, though, the introduction appears to be a response more to market changes than to critics.

Girls “don’t necessarily care about, ‘That’s a boy toy; that’s not for me,’ ” said Ms. Cota of Mattel. “Now, more so than ever, girls are looking at what’s fun, what they like.”

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