News Kenyatta’s Lead Poses Tough Choices for U.S.

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Kenyatta's Lead Poses Tough Choices for U.S.
Mar 7th 2013, 23:32

Pete Muller for The New York Times

Supporters of presidential candidate Uhuru Kenyatta cheered as he arrived at a rally on Saturday.

NAIROBI, Kenya — He has been charged with heinous crimes, accused of using a vast fortune to bankroll death squads that slaughtered women and children. His running mate also faces crimes against humanity charges, and as Kenya's election drew closer, the Obama administration's top official for Africa issued a thinly veiled warning during a conference call about the vote, saying that Kenyans are, of course, free to pick their own leaders but that "choices have consequences."

Presidential candidate Uhuru Kenyatta has been charged with heinous crimes and accused of using a vast fortune to bankroll death squads that slaughtered women and children.

The presidential election is Kenya's first in six years.

But when the ballot counting began this week, Uhuru Kenyatta, the son of Kenya's first president, surged ahead in the race for president and stayed out front as the margin narrowed early on Friday. Soon, the Obama administration and its allies could face a tough choice, made even more complicated by the appearance of taking sides against a candidate who may very well win.

Does the United States put a premium on its commitment to justice and ending impunity — as it has emphasized across the continent — and distance itself from Mr. Kenyatta should he clinch this election?

Or would that put at risk all the other strategic American interests vested in Kenya, a vital ally in a volatile region and a crucial hub for everything from billion-dollar health programs and American corporations to spying on agents of Al Qaeda?

Even the little things could be tricky. Are the American diplomats who interact with the Kenyan government on a daily basis not supposed to shake Mr. Kenyatta's hand? What about sharing a dais with him? The British have already publicly stated that they would avoid any contact unless it was essential.

"This is going to pose a very awkward situation," said Jendayi Frazer, a former assistant secretary of state for African affairs. "Kenyatta knows he needs the United States, and the United States knows it needs Kenya."

American officials have declined to discuss publicly what a Kenyatta victory would mean, and several reiterated the rather anodyne video message from President Obama in February, in which he said, "The choice of who will lead Kenya is up to the Kenyan people."

But Johnnie Carson, the top administration official for Africa, was not quite so diplomatic when he repeatedly warned soon after that "choices have consequences," which critics say backfired by energizing supporters of Mr. Kenyatta and his running mate, William Ruto, driving many to the polls to rally behind them.

"When you inject yourself into an election," Ms. Frazer said, "you never know how it will play."

Mr. Carson responded, "One comment does not swing a contest."

If he wins the presidency, Mr. Kenyatta, who was leading with about 48 percent of the vote early Friday morning, would become the second African head of state after Sudan's Omar Hassan al-Bashir to face grave charges at the International Criminal Court at The Hague. But that does not mean he will meet the same diplomatic isolation as Mr. Bashir, who is wanted on an arrest warrant and cannot travel to much of the world.

For starters, Mr. Bashir has refused to appear at the court, while Mr. Kenyatta has traveled there to defend himself, so no warrant has been issued. Beyond that, the United States and Sudan were hardly allies when Mr. Bashir was accused of fomenting genocide in Darfur. The relationship was already sour, with Sudan squeezed by sanctions for playing host to Osama bin Laden, among other things.

By contrast, the American-Kenyan partnership has been a particularly symbiotic one, especially recently. American intelligence agents work closely with their Kenyan counterparts, hunting down Qaeda cells in Kenya and Somalia. Kenya receives nearly $1 billion in American aid each year and has agreed to accept captured Somali pirates and hundreds of thousands of refugees, at the request of donors like the United States.

Nairobi, Kenya's capital, is home to the largest American Embassy in sub-Saharan Africa and a sprawling United Nations campus that runs programs across the world, making it especially difficult for the United States to take its resources somewhere else.

"There is really very little leverage that the U.S. and other countries can exercise," said J. Peter Pham, director of the Michael S. Ansari Africa Center in Washington.

One former American official with extensive experience in Africa was more blunt. "We need Kenya more than Kenya needs us," he said.

The United States has to be careful how it handles the Kenyatta issue, analysts say, because Mr. Kenyatta could easily turn to China, which has made important inroads here, building highways and even covertly financing some Kenyan military operations.

Already, the Western concerns about Mr. Kenyatta's candidacy seem to be provoking a backlash.

On Wednesday, the Kenyatta campaign accused the British high commissioner here of "shadowy, suspicious and rather animated involvement" in Kenya's election, a claim the British dismissed as "entirely false."

Some diplomats have also spoken of what they call a "Mugabe factor," warning that Kenya's leaders, if put under too much pressure, could become isolated and testy like President Robert Mugabe of Zimbabwe.

Court documents paint a disturbing picture of Mr. Kenyatta. According to prosecutors, as hundreds of his fellow Kikuyus were being slaughtered by rival ethnic groups in the explosion of violence after the last major election in 2007, Mr. Kenyatta organized meetings with a nefarious Nairobi street gang to take revenge.

Mr. Kenyatta, the documents say, "contributed money towards the retaliatory attack" and was "aware of the widespread and systematic nature of the attack." The outlawed gang, the Mungiki, killed scores of people, including small children burned to death while huddling in their homes.

Mr. Kenyatta has denied the charges and says he will clear his name. Many analysts say the case is rather weak. The trial was supposed to start next month but has been postponed until July.

The case against Mr. Ruto, a charismatic politician with an intensely loyal following, is believed to be stronger. Prosecutors say Mr. Ruto and his inner circle "created a network of perpetrators" and paid them to kill.

There are few figures in the Kenyan political landscape as polarizing as Mr. Kenyatta, 51, a deputy prime minister. Many members of other ethnic groups accuse him and his family of stealing their ancestral land, which became the basis for the Kenyatta family fortune.

But among many Kikuyus, Mr. Kenyatta is seen as a savior. He is a confident speaker, educated at Amherst College and respected in Nairobi's business circles. During the last election crisis, several supporters said, he paid for buses to ferry Kikuyus out of danger zones and bought sacks of food for families who had been burned out of their homes.

"When we needed it, Uhuru was there," said David Wanjohi Chege, a trader.

Many Western governments would clearly prefer the second-place candidate, Prime Minister Raila Odinga, who was trailing with 46 percent of the vote early Friday amid complaints from his camp that some results had been "doctored." The race seemed headed for a runoff.

Diplomats in Nairobi said they do not know what their governments will do if Mr. Kenyatta ultimately wins — though most expected little or no change in policy unless he is convicted or stops cooperating with the court. If that happens, some diplomats spoke of targeted sanctions without wanting to be more specific.

"To be honest, there are so many different scenarios, nobody really knows what we're going to do," one American official said.

The United States has opted not to participate in the International Criminal Court, though the administration has expressed support for "the I.C.C.'s prosecution of those cases that advance U.S. interests and values." Many Kenyans see this as hypocritical.

Mr. Kenyatta's lawyers could probably drag out the trial for years. The only conviction the court has secured, against a Congolese warlord, came six years after he arrived at the court.

Some Kenyans have worried that Mr. Kenyatta, if he wins, may try to pull Kenya out of the court to evade trial. But according to legal scholars, that would not change Kenya's obligations.

"The I.C.C. was definitely a factor in this election, but not necessarily the factor you would expect," said Maina Kiai, a prominent Kenyan human rights defender. "It got people out. People were saying, 'They're our boys, they're our sons, we need to protect them.' "

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News Revolution in the Resale of Digital Books and Music

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Revolution in the Resale of Digital Books and Music
Mar 7th 2013, 22:11

The paperback of "Fifty Shades of Grey" is exactly like the digital version except for this: If you hate the paperback, you can give it away or resell it. If you hate the e-book, you're stuck with it.

The retailer's button might say "buy now," but you are in effect only renting an e-book — or an iTunes song — and your rights are severely limited. That has been the bedrock distinction between physical and electronic works since digital goods became widely available a decade ago.

That distinction is now under attack, both in the courts and the marketplace, and it could shake up the already beleaguered book and music industries. Amazon and Apple, the two biggest forces in electronic goods, are once again at the center of the turmoil.

In late January, Amazon received a patent to set up an exchange for all sorts of digital material. The retailer would presumably earn a commission on each transaction, and consumers would surely see lower prices.

But a shudder went through publishers and media companies. Those who produce content might see their work devalued, just as they did when Amazon began selling secondhand books 13 years ago. The price on the Internet for many used books these days is a penny.

On Thursday, the United States Patent and Trademark Office published Apple's application for its own patent for a digital marketplace. Apple's application outlines a system for allowing users to sell or give e-books, music, movies and software to each other by transferring files rather than reproducing them. Such a system would permit only one user to have a copy at any one time.

Meanwhile, a New York court is poised to rule on whether a start-up that created a way for people to buy and sell iTunes songs is breaking copyright law. A victory for the company would mean that consumers would not need either Apple's or Amazon's exchange to resell their digital items. Electronic bazaars would spring up instantly.

"The technology to allow the resale of digital goods is now in place, and it will cause a dramatic upheaval," said Bill Rosenblatt, president of GiantSteps, a technology consulting firm. "In the short term, it's great for consumers. Over the long term, however, it could seriously reduce creators' incentive to create."

Scott Turow, the best-selling novelist and president of the Authors Guild, sees immediate peril in the prospect of a secondhand digital thrift shop. "The resale of e-books would send the price of new books crashing," he said. "Who would want to be the sucker who buys the book at full price when a week later everyone else can buy it for a penny?"

He acknowledged it would be good for consumers — "until there were no more authors anymore."

Libraries, though, welcome the possibility of loosened restrictions on digital material.

"The vast majority of e-books are not available in your public library," said Brandon Butler, director of public policy initiatives for the Association of Research Libraries. "That's pathetic."

He said that 60 percent of what the association's 125 members buy was electronic, which meant sharp restrictions on use. Libraries cannot buy from Apple's iTunes, he said. And so, for example, Pixar's Oscar-winning soundtrack for the movie "Up" is not available in any public collection. An Apple spokesman confirmed this.

"If these things can't be owned, who is going to make sure they exist going forward?" Mr. Butler asked. "Without substantial changes, we can't do what libraries have always done, which is lend and preserve."

For over a century, the ability of consumers, secondhand bookstores and libraries to do whatever they wanted with a physical book has been enshrined in law. The key 1908 case involved a publisher that issued a novel with a warning that no one was allowed to sell it for less than $1. When Macy's offered the book for 89 cents, the publisher sued.

That led to a landmark Supreme Court ruling limiting the copyright owner's control to the first sale. After that, it was a free market.

Sales of digital material are considered licenses, which give consumers little or no ability to lend the item. The worry is that without such constraints digital goods could be infinitely reproduced while still in the possession of the original owner.

Both the Amazon and Apple systems aim to solve this problem. Amazon's patent envisions a book or movie or song being kept in a customer's personalized "data store." When an item is no longer wanted, the user could sell or trade it to another user, an action that would automatically delete the item from the first user's store.

The patent describes what is essentially a gigantic swap meet. Amazon's 152 million active customers would maintain a list of desired secondhand digital objects ("Django Unchained"; Cheryl Strayed's "Wild") as well as a list of used digital objects that are "available for movement" ("Ghost Rider: Spirit of Vengeance"; Lance Armstrong's autobiography).

An Amazon spokesman declined to comment on the patent, including how soon or even whether the digital marketplace would be set up. The patent does not make clear if such a bazaar would need the publishers' permission.

The degree to which media companies are against secondhand digital marketplaces can be seen in the music industry's hard line toward ReDigi, a Massachusetts start-up that allows for the reselling of iTunes songs.

ReDigi took some pains to make its approach as friendly to the music companies as possible. For instance, any money gained from selling songs must be spent on new songs. And ReDigi says its system, like both Amazon's and Apple's, allows for only one copy of an electronic product to exist at any one moment.

Capitol Records nonetheless sued ReDigi for copyright infringement in a New York federal court, and asked the judge to shut the service down through a preliminary injunction. The judge declined. He is expected to rule on the merits of the case shortly.

An Apple spokesman did not immediately return a message seeking comment on the company's patent application, which was first reported on Apple Insider. Apple, which has not sued ReDigi, declined to comment on the court case.

John Ossenmacher, ReDigi's chief executive, said he was heartened by Amazon's resale patent.

"Amazon is pretty fearless, which bodes well for the consumers of digital goods." And, he added, for Amazon itself. "What better value to give an Amazon customer than to say, 'Buy your book here and then later you can resell it'? You can't do that with Barnes & Noble's Nook."

Robert Levine, author of "Free Ride," an account of how Silicon Valley rose to power by plundering the traditional media companies, said he believed there was a cultural imperative to loosen the restrictions on digital entertainment — but not too much.

Before the Internet, he pointed out, there was little controversy over secondhand stores for books and music. "It never threatened the broader market because it simply wasn't that efficient," he said. "You couldn't always find the book or CD you were looking for."

Amazon, which caused an uproar with writers and publishers when it started selling used books in 2000, made it as easy as clicking a button. "Digital resale would change it even more," Mr. Levine said.

Markets usually move toward a solution both sides can live with, he noted. "But that happens slowly, and in the meantime we're in for one hell of a fight."

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News Art Review: ‘Bill Brandt: Shadow and Light’ at MoMA

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Art Review: 'Bill Brandt: Shadow and Light' at MoMA
Mar 7th 2013, 22:36

A Camera Ravenous for Emotional Depth

'Bill Brandt: Shadow and Light' at MoMA

The pre-eminent British photographer of the 20th century, Bill Brandt, took pictures whose balance of art and humanity is frequently called strange, mysterious and irresistible. The best induce us to pore over them, exploring their psychology as much as their form, their implied narratives as much as their brooding blacks or parsimonious whites, their connections to the history of art as much as their documentary realism. Brandt himself wrote in 1948 that he admired photography's power to make people see the world anew, to experience it with "a sense of wonder."

Bill Brandt: Shadow and Light Nearly 160 prints and related material are at MoMA.

An installation view of "Bill Brandt: Shadow and Light," a new exhibition featuring the work of the British photographer, at the Museum of Modern Art.

"Bill Brandt: Shadow and Light" at the Museum of Modern Art is the latest chance to experience the several varieties of Brandtian wonder and defamiliarizing strangeness. Organized with sharp acumen by Sarah Hermanson Meister, a MoMA photography curator, it presents nearly 160 vintage prints and related material, including examples of the illustrated magazines that published Brandt's work starting in the mid-1930s. All told the show provides a sweeping view of Brandt's sensibility, his wide-ranging subject matter, his obsession with the printing process as an essential part of the photographer's art and his ability to function creatively even when on assignment.

Following the trajectory suggested by its title, the show begins with the often penumbral images — not unlike Seurat's charcoal drawings — of British life that he took in the 1930s and during World War II. It ends with his Surrealist, relatively light-bathed images of female nudes from the 1950s and '60s, in which exaggerated viewpoints render bodies, and parts of bodies, nearly unrecognizable if not abstract, like smooth biomorphic sculptures worthy of Brancusi or Arp.

The achievements of Brandt (1904-83) are not as firmly fixed in the mind as those of his contemporaries and artistic equals: Walker Evans (1903-75) is known for the consummate lucidity of his images of sharecroppers and weathered Southern architecture. Henri Cartier-Bresson (1908-2004), master of the hand-held Leica, captured people on the fly in elegantly composed "decisive moments."

Brandt was interested in neither. His pictures can be so dark that it takes a while to know what's what, and they tend toward stillness. (He worked for the most part with a Rolleiflex box camera on a tripod.) More than a visual style, his photographs have a kind of atmosphere, an emotional depth, a sense of human vulnerability that extends even to the city views and landscapes, and that expands in several directions as you study the pictures.

Some, like those of London parlormaids on duty in starchy white aprons over black dresses, seem quintessentially of the moment, made for black-and-white film and rife with social tension. Others, though hardly without such commentary, oscillate stylistically in time. A shadowy image of a girl scrubbing a doorsill variously brings to mind 19th-century photography, Chardin and Rembrandt.

Brandt was not beyond ambiguity himself. His desire to be seen as an English photographer recording his homeland led him to obscure the fact that it was an adopted one. When he died in 1983 more than one obituary said he was born in England, though he was actually born in Hamburg to a family of wealthy German bankers and shippers. He suffered from tuberculosis as a teenager, prompting his parents to send him to Swiss sanitariums where enforced rest enabled him to dabble in photography.

In 1927 he went to Vienna, seeking a psychoanalytic cure for his disease and ended up working as a photographer's assistant. He had found his art, although it wasn't yet clear where he would pursue it.

In 1929 he settled in Paris for five crucial years, making periodic trips through Europe with a camera and friends. (His early efforts can be viewed in photo albums kept by his companions, Lyena Barjansky and Eva Boros; Boros later became his wife.) He worked briefly as an assistant to the American photographer, painter and Surrealist Man Ray, taking to heart both his sensibility and his freewheeling darkroom techniques. Brandt familiarized himself with Eugène Atget's monumental ode to Paris and was deeply influenced by Brassaï, the Hungarian-born photographer whose 1933 book, "Paris by Night," as one critic put it, portrayed the "late-night human comedy with a technical and documentary precision unknown before his time."

By 1934 Brandt was in England to stay, driven there perhaps, Ms. Meister suggests, because Paris was nearly overrun with talented photographers. He soon established himself with two books, "The English at Home" (1936) and, with a nod to Brassai "A Night in London" (1938).

Divided into six sections, the MoMA show gives an excellent account of the sheer variety of Brandt's subject matter. He portrayed distinctly different levels of the British class system: from grave, besooted Northumbrian miners to those uniformed parlormaids to wealthy Londoners playing backgammon in a Mayfair drawing room. He roamed London's streets and parks and, during the Blitz, the crowded underground stations where people sought shelter, sleeping cheek to jowl, and where he made some of his best-known images. The London blackout played to his love of darkness. He also explored the gritty industrial towns in the north of England, like Halifax and Jarrow, shrouded in Dickensian gloom, and he took to the open countryside to capture images of Hadrian's Wall, Stonehenge and a ruined farmhouse on the edge of a windswept moor that is thought to have figured in Emily Brontë's "Wuthering Heights."

He made portraits of sculptors, actors and literary notables, and in 1960 zeroed in on the eyes — sometimes the left, sometimes the right — of distinguished, rather ancient artists (among them Jean Dubuffet, Louise Nevelson, Jean Arp and Alberto Giacometti), resulting in extreme close-ups of organs of sight surrounded by leathery, sagging skin that are beyond gender, race and even species. And finally there are the so-called nudes, the surprise ending of an already illustrious career and potent latecomers to the history of Surrealism.

Considered his greatest achievement, these are perhaps the most mysterious of all Brandt's work. In some, like "Belgravia, London" — in which a woman's legs loom up from the bottom of the image, and a foot hooked over the other knee presents a drastically elongated calf — the picture might almost have been taken by the woman herself. (We certainly wonder: Where's Bill?) Others, especially those taken on pebbly beaches in England and France, can seem disturbingly strange. Ears and forearms become colossal. A shockingly odd chunk of flesh resembles an amputated limb but is actually the sole of a bare foot whose bent toes are out of sight.

Both the show and catalog demonstrate the single-mindedness of Brandt's artistry. Many of his seemingly documentary images were posed. His wealthier subjects were often family members or friends; Pratt, the dark-haired parlormaid he frequently photographed, worked for his uncle. When shooting on assignment he tended to retain the best images for himself: the portrait of Robert Graves that appeared in a 1941 issue of Picture Post shows a young man focused on his work; the one from the same session that Brandt held back shows the poet looking more mature, a quill pen clasped between his teeth and a slightly mad, oracular gleam in his eye.

A short, fascinating, well-illustrated catalog essay by Lee Ann Daffner, the Modern's conservator of photography, delves into Brandt's extensive fine-tuning of his negatives to achieve the effects he wanted: highlighting lines and textures with razor blades or pencils; removing imperfections and intensifying lights and darks with ink, wash or white gouache (as on the white of Dubuffet's eye).

In the darkroom Brandt manipulated his negatives to such an extent that each print was more or less unique. And to the dismay of his admirers in the 1960s he began to reprint his early images, replacing their soft seeping grays and blacks with stark blacks and whites, perhaps as a result of the sharper, lighter effects of the nudes. Ms. Meister might have included a few examples of these, along with a few examples of his nudes from the late 1970s, which she characterizes as disturbing and implicitly violent.

At the end of her excellent catalog essay she notes that she has also omitted the color landscapes and the three-dimensional assemblages Brandt made from found objects near the end of his life that she describes as "a private curiosity." She concludes with the slightly prim observation that "like most great artists, Brandt, upon occasion, needed an editor."

Learning of these omissions slightly undermines her beautiful show, revealing it as something of a Brandtian fiction in itself. It gives us Brandt's artistry at full- strength — which may have been needed — without quite revealing all the strange places to which it drove him.

"Bill Brandt: Shadow and Light" continues through Aug. 12 at the Museum of Modern Art; (212) 708-9400, moma.org.

A version of this review appeared in print on March 8, 2013, on page C21 of the New York edition with the headline: A Camera Ravenous For Emotional Depth .

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News Bats: Rivera Expected to Announce This Is His Last Season

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Bats: Rivera Expected to Announce This Is His Last Season
Mar 7th 2013, 22:08

Mariano Rivera during a workout in February in  Tampa.Scott Audette/Reuters Mariano Rivera during a workout in February in Tampa.

JUPITER, Fla. — The Yankees have scheduled a news conference for Saturday morning in Tampa where Mariano Rivera is expected to make it official that he is retiring after this season.

With a major league record 608 saves, Rivera has carved out what may have been the greatest career ever by a closer. His entire professional career was spent with the Yankees, and he was an integral part of five championships.

"He's the greatest closer of all time, no question in my mind," said Joe Girardi, his manager and former catcher. "He's one of the best pitchers of all time, not just closers, and one of the best teammates, and a lot of fun to catch."

Rivera, 43, was hinting last spring that 2012 would be his last year, but after a season-ending knee injury on May 3, he declared he would come back in 2013.

When he arrived at spring training this year, he again said he would reveal his plans for the future.

The Yankees are prepared for a big send-off, but knowing Rivera they have left open the possibility that he could change his mind at the last minute. Still, every expectation is that he will announce this will be his final season.

What made Rivera even more special was the fact that he primarily used one pitch, the cut fastball, to achieve his unprecedented success, which includes 42 postseason saves and an uncanny 0.70 earned run average in 96 appearances.

Ichiro Suzuki played against Rivera for virtually all of his 11-year career when he was with the Seattle Mariners and said that when people in Japan asked who was the toughest pitcher he faced in the majors, he would say Rivera.

"Everybody knows that he used one pitch and one pitch alone," Suzuki said through his interpreter. "Nobody has ever had this much success with one pitch in the past, and no one will ever have this much success with one pitch in the future."

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News DealBook: Fed’s Stress Tests Point to Banks’ Improving Health

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DealBook: Fed's Stress Tests Point to Banks' Improving Health
Mar 7th 2013, 22:23

As regulators took a hard look at the financial industry, they found some of the nation's largest institutions better prepared than others to sustain future market shocks, paving the way for some banks to increase their dividends and buy back shares.

The results of so-called stress tests on Thursday, mandated by the Dodd-Frank financial overhaul law and conducted by the Federal Reserve, indicate that most banks would survive a severe recession and a crash in the markets. The tests, which measured a bank's capital during extreme hypothetical conditions, also produced some unlikely winners.

Citigroup, for example, outperformed its rivals just one year after a poor performance embarrassed the bank. Bank of America also showed improved capital levels under stressed conditions.

Morgan Stanley and JPMorgan Chase, however, produced some of the lowest results among large Wall Street firms. The banks have significant trading operations that can rack up big losses in turbulent times. Goldman Sachs, another trading firm, also struggled under one measure of future health.

The test results offer an important window into the financial system four years after the banking industry teetered on the brink of collapse. Regulators liked what they saw, in general, and cheered what the improvements portend for consumers and the economy.

"The stress tests are a tool to gauge the resiliency of the financial sector," a Federal Reserve governor, Daniel K. Tarullo, said in a statement. "Significant increases in both the quality and quantity of bank capital during the past four years help ensure that banks can continue to lend to consumers and businesses, even in times of economic difficulty."

But the tests may not fully capture some forces and events that occur during a financial crisis. For instance, Wall Street firms may lose access to short-term loans that are critical to their survival. It's almost impossible to project the impact of the rapid collapse of one or two large financial firms, as happened in 2008 when Lehman Brothers and American International Group were melting down.

Investors will pore over the results to gauge how much money banks is likely to be returned to their shareholders. In the aftermath of the financial crisis, regulators prevented lenders like Citigroup and Bank of America from increasing their dividends or repurchasing shares, forcing them instead to hoard capital to absorb losses.

Behind the scenes in the coming days, the Fed will signal to each bank whether it can proceed with its most recent payout plan, submitted in January. If the Fed objects, a bank will have an opportunity to temper its proposals for dividend payments and share buybacks before releasing the plans publicly, potentially creating a tense face-off with regulators. For 17 of the 18 banks, their ratios are well above the 5 percent benchmark that the banks have to exceed for tier 1 common capital to get their capital plans approved.

After the stress test results were announced, Citigroup said that it had asked the Federal Reserve for permission to carry out a $1.2 billion in stock buybacks through the end of the first quarter of next year. The bank intend to keep its quarterly dividend at a penny a share.

The stress tests have already created tension between regulators and banks. The results, which reveal in striking detail the losses that banks will suffer in times of stress, has prompted wrangled with the Fed over how to conduct the tests and how much data to release.

But regulators argue that past blowups prompted the need for the stress tests. The annual effort, the regulators say, provides a regular health check for the same banks that brought the economy to its knees just over four years ago.

Underpinning the Fed's stress tests are some basic assumptions. The tests estimated that 18 banks sustain combined losses of $462 billion, in a period of considerable financial and economic stress in which unemployment soars, stock prices halve and house prices drop by more than 20 percent.

The tests analyze capital as a measure of health, assessing how much capital would remain at the end of 2014 once banks are subjected to hefty losses.

In a surprise, Citigroup had capital equivalent to 8.9 percent of its assets at the end of 2014, well above last year's showing. Bank of America's so-called Tier 1 common capital ratio registered at 6.9 percent, also an improvement.

But Morgan Stanley's ratio came in at 6.4 percent. JPMorgan was 6.8. Those numbers are lower than rivals', but they are still strong capital numbers after a crisis.

On one important alternative measure of capital, Goldman Sachs had a poor showing compared with its peers. Under the stress situation, the bank's Tier 1 leverage ratio — which weighs assets differently — would fall to a low of 3.9 percent. This could become an issue in any discussions between Goldman Sachs and the Fed about the bank's capital plan. When regulators assess whether a bank can proceed with its capital plan, the Tier 1 leverage ratio cannot fall below 3 percent.

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News It’s the Hardware’s Turn in the Spotlight

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It's the Hardware's Turn in the Spotlight
Mar 7th 2013, 19:06

Jim Wilson/The New York Times

Michael Buckwald, the chief executive of Leap Motion, will introduce a 3-D motion controller, a gadget that lets people control their computers and devices by waving their hands, at South by Southwest.

AUSTIN, Tex. — Each year, thousands of tech enthusiasts flock to South by Southwest, the technology, music and film conference here, hoping to be among the first to find the next big thing in social networking and mobile apps.

But this year, it might be a piece of hardware that steals the show. The most talked-about start-ups this year include the maker of a camera that automatically takes a photo every 30 seconds, a new game console and a gadget that lets people control their computers and devices by waving their hands. Hugh Forrest, the director of the technology portion of South by Southwest, estimated that at least two dozen panels, talks and presentations involve some sort of new device or gadget at this year's event — a much higher portion than he could recall from previous years.

"We always hope to be a showcase for new products and ideas in technology and that is reflected this year," he said.

The new emphasis on devices over software reflects a much larger shift in the start-up and tech world, driven by tools like crowdfunding and 3-D printing that make it cheaper, faster and easier to create prototypes. The trend is accelerating partly because of the popularity of and excitement around small companies making items like wearable fitness devices as well as smartwatches developed by Pebble and smart thermostats created by Nest.

And now the devices are taking over the halls and convention center of South by Southwest, which has historically been known as a launchpad for new software services; Twitter, Foursquare, GroupMe and Highlight all got their inaugural push on those convention center grounds.

"This is where software development is going," said Oskar Kalmaru, one of the founders of Memoto, a company that makes a Kickstarter-financed wearable automatic camera that takes pictures at 30-second intervals, creating a kind of personal photographic memory. "The innovating new technology is hardware that has a software component."

The dropping costs of designing and building inventive new hardware products has prompted a wave of creativity and innovation that echoes the software boom a decade or two ago in Silicon Valley.

Mr. Kalmaru and his team, who are traveling from Stockholm to attend the weeklong conference, are among the hardware companies eager to dazzle and impress the throngs of early adopters, entrepreneurs and venture capitalists who arrive thirsty for the latest in start-ups and innovative ideas.

"It's the same thing that happened with software development over the past 10 to 15 years is now happening to hardware," said Mr. Kalmaru. "It's much easier now."

In some ways, the arrival of artisanal hardware at South by Southwest, said Susan Etlinger, an industry analyst at Altimeter Group, can be seen as an indication that the world of mobile applications and "me-too" social networks has become oversaturated and crowded.

"For mobile start-ups it can be very frustrating and difficult to fight your way through the noise," she said.

Not to mention that the crush of 27,000 conference-goers expected to descend on Austin will most likely strain cellular and data networks and make it difficult to get a signal on smartphones, let alone successfully use and try out a new app there.

"It's just too hard for a small start-up to get noticed there," said Jen Grenz, a vice president of a mobile company called Lango that is releasing a messaging application this week. But it is not attending the event to do so. Snapchat, one of the most talked-about apps in the tech world, is also skipping the event.

But chief executives of the hardware companies Nest and Jawbone will be there for the first time, although other executives from their companies have attended in years past.

Julie Uhrman, the founder and chief executive behind Ouya, a Kickstarter-financed Android gaming machine, is a keynote speaker. The company recently announced that its consoles would begin shipping in late March.

Bre Pettis, the founder of the Makerbot 3-D printers, is delivering the opening remarks of the festival and speaks again at a presentation by Supermechanical, a hardware company based in Austin that makes Wi-Fi-enabled sensors that can be used to detect things like moisture. Such a device could alert its owner by text message that the basement is flooding.

Like the software companies, hardware makers want to capture the attention of influential people who are inclined to tell their friends about a hot new device. It is also likely that the type of people attending South by Southwest will be interested in purchasing a "lifelogging" camera or a gesture-based controller.

"The right kind of social experience can take off there," said Kira Wampler, a vice president at Lytro, which makes a sleek, rectangular camera that lets users refocus photographs after they are taken. "It is a group of people who are really interested in exploring what is new."

Ms. Wampler said SXSW was the company's first major event. Lytro has set up an area where curious attendees can sign up for photo walks or try out and buy Lytro cameras, which start at $400.

The company will also have 100 devices available for people to borrow for a day.

The makers of the Leap Motion Controller, a gadget that lets people control their computers and devices by waving their hands — not unlike those seen in the movie "Minority Report" — are setting up a dozen demonstration tents in the parking lot of a barbecue restaurant and inviting attendees to try out the device.

Michael Buckwald, a founder and the chief executive of Leap Motion, said the company's goal was to create a way for people to "walk up and walk into what we see as the future."

Joining the little start-ups are some behemoth device makers. Samsung, which had a large presence at both the International Consumer Electronics Show in Las Vegas in January and the Mobile World Congress cellphone trade show in Barcelona last week, is setting up shop at South by Southwest too. One of the biggest companies in the world, Samsung is giving away free rides in Uber cabs and snacks like ice cream and pizza, and is hosting a panel with "Arrested Development" cast members to try to drum up some attention for its line of Galaxy smartphones.

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News Brennan Confirmed to Lead the C.I.A.

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Brennan Confirmed to Lead the C.I.A.
Mar 7th 2013, 21:08

The Senate on Thursday afternoon approved John O. Brennan's nomination to lead the Central Intelligence Agency by a vote of 63 to 34.

The vote followed a filibuster by Senator Rand Paul, who spent nearly 13 hours on the Senate floor in pursuit of more information about the administration's domestic drone policy. After receiving a brief letter from Attorney General Eric H. Holder Jr. assuring him that the president does not have the "authority to use a drone to kill an American not engaged in combat on American soil," Mr. Paul declared his effort a success, and ultimately voted to end debate (though against the nomination), bringing the total votes in favor of cloture to 81 over 16 against.

The final confirmation vote, however, revealed some unusual coalitions.

Two Democrats, Senators Patrick J. Leahy of Vermont and Jeff Merkley of Oregon, as well as Senator Bernard Sanders of Vermont, an independent and one of the Senate's most outspoken liberals, joined Republicans in voting against the nomination. Several of the early participants in Mr. Paul's filibuster, including Senator Marco Rubio, Republican of Florida, and Senator Ron Wyden, Democrat of Oregon, voted to confirm Mr. Brennan's nomination.

Mr. Brennan has served in top intelligence posts under both former President George W. Bush and President Obama. The latter had considered nominating Mr. Brennan as C.I.A. director four years ago, but objections to his perceived role in the agency's enhanced interrogation program from the left made it politically difficult. Mr. Brennan has since emerged as a critic of those techniques, and a report criticizing the C.I.A. for the program is likely to emerge as an early challenge of Mr. Brennan's tenure.

President Obama praised the "bipartisan confirmation" of Mr. Brennan in a statement.

"The Senate has recognized in John the qualities I value so much -- his determination to keep America safe, his commitment to working with Congress, his ability to build relationships with foreign partners, and his fidelity to the values that define us as a nation," Mr. Obama said.

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