Bank of America profit boosted by one-time gains (Reuters)

(Reuters) ? Signs of improvement in the economy and gains from asset sales helped Bank of America Corp post a quarterly profit, sending its shares higher on Thursday, but the second-largest U.S. bank still needs more capital and with little left to sell, it is becoming creative.

Bank of America said it was considering issuing $1 billion in common stock to certain employees in lieu of a portion of their year-end cash bonuses next month.

The move, a large stock issue to effectively captive investors -- its employees -- could further pad the bank's capital levels, but at the same time dilute shareholders' interest and may stir discontent among some bankers.

Investors, however, seemed to shrug aside such fears and focus instead on Chief Executive Brian Moynihan's success so far in building up capital levels and fixing the bank's problems.

The fourth-quarter profit after a year-ago loss, improving loan demand and better credit quality, all helped buoy Bank of America's shares, which rose 5.7 percent to $7.19 in morning trading on the New York Stock Exchange.

"Bank of America looks like it's making good progress on the capital build-up," said Derek Pilecki of Gator Capital Management in Tampa, Florida. "It's a work in progress with expense cuts continuing. They have to issue stock to make capital targets, but the dilution isn't overwhelming."

Bank of America was still trying to recover fully from the aftermath of the 2008 financial crisis and a disastrous acquisition of mortgage lender Countrywide Financial that has saddled the company with losses.

Moynihan is working to show Bank of America has enough capital to absorb these mortgage-related losses and to meet new international capital standards. Over the past two years, he has been shedding noncore businesses to boost capital levels and streamline the company.

Last spring, Bank of America launched a wide-ranging efficiency program called Project New BAC, which is expected to eliminate 30,000 jobs in its first phase over the next few years.

On a conference call with analysts on Wednesday, Chief Financial Officer Bruce Thompson said the bank should start to see the benefits of job cuts in first quarter expenses.

"We enter 2012 stronger and more efficient after two years of simplifying and streamlining our company," Moynihan said in a statement. "We built our capital ratios to record levels during 2011 on the strength of our core businesses and by shedding those that are not core to serving customers and clients."

Bank of America said its Tier 1 common equity ratio, a key measure of capital against risk-weighted assets, reached 9.86 percent at the end of December.

That was up from 8.65 percent at the end of September and higher than the 9.25 percent minimum the bank had projected.

ONE-TIME GAINS

Bank of America said net income applicable to common shareholders was $1.58 billion, or 15 cents per share, in the fourth quarter, compared with a loss of $1.6 billion, or 16 cents per share, a year earlier.

The Charlotte, North Carolina-based bank benefited from pretax gains of $5.3 billion from the sale of China Construction Bank Corp shares, and gains from the exchange of trust preferred securities and the sale of debt securities.

Various accounting charges and litigation expenses reduced earnings by $3.7 billion.

The bank set aside $2.9 billion in the quarter for loan losses, down from $5.1 billion a year ago. Bank of America, which is working to shed risky assets, also said total loans decreased to $926 billion from $932 billion in the third quarter.

Like rivals Wells Fargo & Co, JPMorgan Chase & Co and some regional banks, Bank of America reported loan growth in the fourth quarter, potentially boding well for the U.S. economy.

In its corporate bank, average loans and leases increased 29 percent to $107.5 billion, with growth in both U.S. and international commercial loans.

But also like other banks with large investment banking operations, such as Citigroup Inc, JPMorgan, Goldman Sachs Group Inc and Morgan Stanley, Bank of America was hurt by lackluster trading and investment banking revenue in the fourth quarter as clients roiled by the European debt crisis shunned capital markets and put off deals.

Sales and trading revenue in Bank of America's banking and markets unit increased to $1.9 billion, excluding an accounting charge, from $1.1 billion in the third quarter but was down from $2.4 billion a year ago.

Investment banking fees were flat from the third quarter at $1 billion but down from $1.6 billion a year ago.

Bank of America bulked up its investment banking business with the 2009 purchase of Merrill Lynch.

In December, Moynihan said the bank had seen better results in this business in the fourth quarter after a weak third quarter.

The bank also continued to struggle to show revenue growth at a time of low interest rates and regulatory restrictions on fees earned from debit card transactions.

Total revenue declined to $24.9 billion from $28.5 billion in the third quarter but was up from $22.4 billion a year ago.

The bank said the Durbin amendment, the provision in the Dodd-Frank financial reform bill that curbed debit-card swipe fees, decreased card services revenue by $430 million.

"Bank of America had a solid quarter, but not quite enough to make you pop the champagne" said Allerton Smith, senior director at Moody's Analytics.

"Capital ratios are up, liquidity is stronger and there is a noticeable decline in problem loans," Smith said.

(Reporting By Rick Rothacker; Additional reporting by Ben Berkowitz in Boston and Jed Horowitz in New York; editing by Paritosh Bansal, Maureen Bavdek and John Wallace)

Source: http://us.rd.yahoo.com/dailynews/rss/business/*http%3A//news.yahoo.com/s/nm/20120119/bs_nm/us_bankofamerica

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Video: Gingrich slams media at GOP debate

David Goldman?/?AP

At Thursday?s Republican presidential debate in South Carolina, Newt Gingrich slammed the news media for focusing on accusations by his ex-wife that he requested an ?open marriage.? NBC?s Peter Alexander reports.

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Billionaire donates for Washington Monument repairs

WASHINGTON?? A billionaire history buff has stepped forward to donate the $7.5 million matching gift that's needed to start repairing cracks near the top of the Washington Monument from last summer's East Coast earthquake.

Businessman David Rubenstein told The Associated Press he was inspired to help fund the repairs to the 555-foot obelisk when it became clear how severely damaged it was by a 5.8-magnitude quake on Aug. 23. The monument received about 1 million visitors a year before the famous landmark was closed to the public after the quake.

The Park Service hopes to have a contractor begin work by the end of August. The repair work is expected to take a year to complete, likely keeping the monument closed for two years.

Largest gift
Congress allocated $7.5 million in December on the condition that private donations would match that amount. The National Park Service and nonprofit Trust for the National Mall are expected to announce Rubenstein's gift Thursday morning. It will be the largest gift to the nonprofit group, which aims to raise $350 million to restore the mall's grounds and facilities.

The combined $15 million in public and private funds is expected to cover the cost of repairing damage directly caused by the quake, said National Park Service spokeswoman Carol Johnson. Repairing water damage will cost more, as would a seismic study or reinforcements to strengthen the obelisk against future earthquakes, she said.

Rubenstein, a co-founder of The Carlyle Group, began building the private equity firm's business in Washington and said he wanted to restore a symbol of the nation and hasten repairs to reopen the landmark.

"This Washington Monument is probably one of the most recognizable buildings in the United States next to the Capitol and the Empire State Building," he said. "It could use a little repair work, and I wanted people to get to see it as soon as possible."

Experts have noted the monument needs more than just a little repair work, though it has been deemed structurally sound.

Extensive repairs needed
The August quake was centered some 40 miles west of Richmond, Va., and felt from Canada to Georgia. It damaged the Washington National Cathedral, where pieces of mortar rained down from its vaulted ceiling. At the Washington Monument, panicked visitors fled down flights of stairs on the day of the big shake, but there were no known deaths or serious injuries in the region.

The earthquake caused numerous cracks to form in the obelisk, which was the tallest man-made structure in the world when it was completed in 1884.

Surveillance video taken the day of the quake and later released by the park service showed the spire shaking violently. Daylight could be seen through some of the cracks, the largest of which was reported to be at least 4 feet long and about an inch wide.

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A report in December recommended extensive repairs and reinforcements to preserve the spire. It said some marble panels were cracked all the way through near the top portion of the monument. Cracks near its peak also have left the monument vulnerable to water damage from rain, engineers noted.

Last fall, daredevil engineers on a "difficult access team" rappelled from the top to conduct a visual inspection of the exterior of the obelisk.

Officials said it's unclear whether the work will require scaffolding to be built around the monument, similar to what was erected during a restoration project from 1999 to 2001.

'A true patriot'
Caroline Cunningham, president of the Trust for the National Mall, called Rubenstein "a true patriot" and said his gift "demonstrates how much people care about this space." She said it should serve as an example for other philanthropists.

There has long been talk of sprucing up the mall at the heart of the nation's capital.

A design competition is under way to develop ways to improve the mall, including the Washington Monument grounds. Finalists will be chosen in May, and the group will seek funding for each project. The nonprofit group has targeted parts of the mall that are run down from over use and neglect as a focus for its restoration efforts.

Rubenstein has made large gifts in recent years to Washington's cultural institutions including the Smithsonian Institution, the National Archives, the Library of Congress and the Kennedy Center.

The monument, which he visited recently, was built with private $1 donations eventually totaling over $1 million, Rubenstein said. Construction began in 1848, but funds ran out during the Civil War when the monument was left as an embarrassing stump for years. It was finally completed in 1884 and was the world's tallest man-made structure until it was eclipsed by the Eiffel Tower. It remains the tallest structure in Washington.

Rubenstein owns a copy of the Magna Carta, among other historical documents, and reveres George Washington.

"I like to remind people about American history," Rubenstein said. "George Washington is an incredible figure. When he was the head of the Revolutionary War Army, he could have stayed on as really the head of the government when we won the Revolutionary War, but he put down his arms."

___

Trust for the National Mall: http://www.nationalmall.org

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Source: http://www.msnbc.msn.com/id/46050494/ns/us_news-giving/

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480 homeless after heavy rains in Mozambique (AP)

MAPUTO, Mozambique ? Nearly 500 people were flooded out of their homes in Mozambique's capital after a tropical depression brought torrential rain and high winds, city officials said Wednesday.

In neighboring South Africa, the flagship Kruger National Park was affected during the busy summer season.

The homeless in Mozambique were being sheltered in schools, churches and even on sports fields, city officials said. In the southern Inhambane province, officials said roofs were blown off 71 classrooms, seven teachers' homes and two offices at a school. In neighboring Gaza province, 40 small homes were swept away and 1,000 goats were killed.

Mozambique's National Operational Emergency Center said tropical depression Dando had now dissipated after two days of destroying homes, downing power lines and causing other damage in Maputo and other southern areas. No deaths were reported.

In South Africa, helicopters were used to evacuate guests from one private lodge and a trail in Kruger, which borders Mozambique, park officials said in a statement Wednesday. Flooding has made some roads and low-lying bridges inaccessible and several camping sites and a picnic area were closed, they added.

Source: http://us.rd.yahoo.com/dailynews/rss/africa/*http%3A//news.yahoo.com/s/ap/20120118/ap_on_re_af/af_mozambique_flooding

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If You Suck at Darts, Here's Some Math to Help You Out [Math]

If you're anything like me, you play darts rarely. And when you do, you're drunk. Ignoring the fact that that's a dangerous combination, here's how to try and maximize your chance of winning, ineptitude aside. More »

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Powerful drug's surprising, simple method could lead to better treatments

Tuesday, January 17, 2012

With one simple experiment, University of Illinois chemists have debunked a widely held misconception about an often-prescribed drug.

Led by chemistry professor and Howard Hughes Medical Institute early career scientist Martin Burke, the researchers demonstrated that the top drug for treating systemic fungal infections works by simply binding to a lipid molecule essential to yeast's physiology, a finding that could change the direction of drug development endeavors and could lead to better treatment not only for microbial infections but also for diseases caused by ion channel deficiencies.

"Dr. Burke's elegant approach to synthesizing amphotericin B, which has been used extensively as an antifungal for more than 50 years, has now allowed him to expose its elusive mode of action," said Miles Fabian, who oversees medicinal chemistry research grants at the National Institute of General Medical Sciences. The institute is part of the National Institutes of Health, which supported the work. "This work opens up avenues for improving upon current antifungals and developing novel approaches for the discovery of new agents."

Systemic fungal infections are a problem worldwide and affect patients whose immune systems have been compromised, such as the elderly, patients treated with chemotherapy or dialysis, and those with HIV or other immune disorders. A drug called amphotericin (pronounced AM-foe-TARE-uh-sin) has been medicine's best defense against fungal infections since its discovery in the 1950s. It effectively kills a broad spectrum of pathogenic fungi and yeast, and has eluded the resistance that has dogged other antibiotics despite its long history of use.

The downside? Amphotericin is highly toxic.

"When I was in my medical rotations, we called it 'ampho-terrible,' because it's an awful medicine for patients," said Burke, who has an M.D. in addition to a Ph.D. "But its capacity to form ion channels is fascinating. So my group asked, could we make it a better drug by making a derivative that's less toxic but still powerful? And what could it teach us about avoiding resistance in clinical medicine and possibly even replacing missing ion channels with small molecules? All of this depends upon understanding how it works, but up until now, it's been very enigmatic."

While amphotericin's efficacy is clear, the reasons for its remarkable infection-fighting ability remained uncertain. Doctors and researchers do know that amphotericin creates ion channels that permeate the cell membrane. Physicians have long assumed that this was the mechanism that killed the infection, and possibly the patient's cells as well. This widely accepted dogma appears in many scientific publications and textbooks.

However, several studies have shown that channel formation alone may not be the killing stroke. In fact, as Burke's group discovered, the mechanism is much simpler.

Amphotericin binds to a lipid molecule called ergosterol, prevalent in fungus and yeast cells, as the first step in forming the complexes that make ion channels. But Burke's group found that, to kill a cell, the drug doesn't need to create ion channels at all ? it simply needs to bind up the cell's ergosterol.

Burke's group produced a derivative of amphotericin using a molecule synthesis method Burke pioneered called iterative cross-coupling (ICC), a way of building designer molecules using simple chemical "building blocks" called MIDA boronates joined together by one simple reaction. They created a derivative that could bind ergosterol but could not form ion channels, and tested it against the original amphotericin.

If the widely accepted model was true, and ion channel formation was the drug's primary antifungal action, then the derivative would not be able to wipe out a yeast colony. But the ergosterol-binding, non-channel-forming derivative was almost equally potent to natural amphotericin against both of the yeast cell lines the researchers tested, once of which is highly pathogenic in humans. The researchers detailed their findings in the journal Proceedings of the National Academy of Sciences.

"The results are all consistent with the same conclusion: In contrast to half a century of prior study and the textbook-classic model, amphotericin kills yeast by simply binding ergosterol," Burke said.

"The beauty is, because we now know this is the key mechanism, we can focus squarely on that goal. Now we can start to think about drug discovery programs targeting lipid binding."

The researchers currently are working to synthesize a derivative that will bind to ergosterol in yeast cells, but will not bind to cholesterol in human cells, to see if that could kill an infection without harming the patient. They also hope to explore other derivatives that would target lipids in fungi, bacteria and other microbes that are not present in human cells. Attacking these lipids could be a therapeutic strategy that may defy resistance.

In addition to exploiting amphotericin's lipid-binding properties for antimicrobial drugs, Burke and his group hope to harness its channel-creating ability to develop treatments for conditions caused by ion-channel deficiencies; for example, cystic fibrosis. These new findings suggest that the ion-channel mechanism could be decoupled from the cell-killing mechanism, thus enabling development of derivatives that could serve as "molecular prosthetics," replacing missing proteins in cell membranes with small-molecule surrogates.

"Now we have a road map to take ampho-terrible and turn it into ampho-terrific," Burke said.

###

University of Illinois at Urbana-Champaign: http://www.uiuc.edu

Thanks to University of Illinois at Urbana-Champaign for this article.

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Video: Matthews: King?s words carry universal power

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