DealBook: Justice Dept. Seeks to Block $20 Billion Merger of Brewers

8:57 p.m. | Updated

For more than a decade, the world’s biggest brewers have been swallowing competitor after competitor as they grapple with slowing growth in many markets. Now, the Obama administration wants to cut them off.

The Justice Department on Thursday sued to block Anheuser-Busch InBev’s $20.1 billion deal to buy Grupo Modelo, the Mexican maker of Corona beer, saying that the merger would cement Anheuser-Busch InBev’s control of the market and enable it to continue to raise beer prices. Grupo Modelo is the third-biggest beer company in the United States.

“This is the sort of product that matters to consumers,” William J. Baer, head of the Justice Department’s antitrust division, said in a conference call with reporters. “If you have a very slight price increase that happens because of this deal, it could mean that consumers will pay billions of dollars more.”

The lawsuit is the first major roadblock in a decade of consolidation by brewers around the world, which has reduced the industry to only a few major players, primarily multinationals that own a majority of big brands.

At the top worldwide is Anheuser-Busch InBev, itself the product of a 2008 merger between a St. Louis-based icon and a Belgian-Brazilian brewing juggernaut. To compensate for slow growth in developed economies like the United States, the company has been seeking significant footholds in emerging markets like Mexico.

Since the middle of 2008, the brewer has announced more than 15 takeovers, according to Capital IQ.

The government’s lawsuit details how in California, a price war among the biggest brewers had led Anheuser to complain in internal documents that Modelo’s strategy was “eating [Budweiser’s] lunch.” According to the suit, a sales executive said that “California is a burning platform” for Anheuser.

With the lawsuit, the Justice Department is again flexing its aggressive antitrust muscle. It is the biggest deal to be opposed since 2011, when the government sued to stop AT&T’s proposed $39 billion takeover of T-Mobile USA. (Those companies abandoned the deal.)

The antitrust action is in an industry that previous administrations had allowed waves of consolidation. Anheuser-Busch InBev; the acquisitive SABMiller, which is one of MillerCoors’s parents; and Grupo Modelo have 72 percent of the $80 billion American beer market, giving them enormous power over pricing.

Despite the explosion of smaller breweries in recent years, industry analysts say that the craft beer market makes up just 6 percent of beer sales.

The biggest in the market, Anheuser — brewer of Budweiser and Stella Artois — has raised its prices with regularity every year, with MillerCoors following suit, the Justice Department said.

“Even small price increases could lead to significant harm,” Mr. Baer said.

Like AT&T, which ferociously battled the government’s case for months, Anheuser-Busch InBev has promised a fight. In a statement, the company said, “We remain confident in our position, and we intend to vigorously contest the D.O.J.’s action in federal court.”

Yet behind the scenes, the two sides will continue to try to reach a settlement.

Analysts were divided over how significant a hurdle the lawsuit posed. In a research note on Thursday, analysts at UBS wrote that the case wasn’t a “deal breaker,” expecting Anheuser to give up what they called “reasonable” concessions.

Anheuser has long pursued the benefits of consolidation, including opportunities to cut costs. Last summer, the company agreed to buy the 50 percent that it did not already own in Modelo, a deal that would give it full control of Corona, the United States’ top imported beer brand.

“In this case, there are pretty significant synergies,” said Harry Schuhmacher, the editor of Beer Business Daily. “Anheuser can afford to overpay for Modelo and is eager to.”

He added that he believed the Modelo deal was the end of beer deals for a long time, especially among the beer giants. Some consolidation could still be in store among smaller companies.

The Justice Department’s lawsuit is the first prominent antitrust action on the watch of Mr. Baer, who took over as President Obama’s top antitrust lawyer at the beginning of the year. Mr. Baer, who previously worked at the Federal Trade Commission and in private practice at the law firm Arnold & Porter, is the first permanent antitrust chief since August 2011, when Christine A. Varney stepped down.

Ms. Varney left the government to join Cravath, Swaine & Moore, where she is now leading Modelo’s antitrust defense.

The Justice Department contends that taking over full control of Modelo would give Anheuser overwhelming control both nationally and in markets like California, Texas and New York.

Mindful of potential antitrust issues, Anheuser has proposed selling Modelo’s 50 percent stake in Crown Imports, the main importer of Corona in the United States, to Constellation Brands for nearly $1.9 billion. Anheuser has said that Crown is what dictates the prices of Modelo products, and that selling the stake removes any say that it would have in the matter.

But the Justice Department called that offer a “facade,” arguing that Crown’s dependence on Modelo products makes it effectively subject to Anheuser’s wishes. The government’s lawsuit highlighted an internal e-mail from Crown’s chief executive, Bill Hackett, to employees that read, “Our #1 competitor will now be our supplier.”

Since the Modelo deal’s announcement last June, consumer advocacy groups have called for government intervention.

“Obviously, beer is different from most other goods and services because there are significant public health issues relating to alcohol,” said Sandeep Vaheesan, special counsel at the American Antitrust Institute, a nonprofit group that supports stronger enforcement of the antitrust laws. “But an antitrust analysis looks strictly at promoting competitive prices, product innovation and consumer choice, and this deal thwarts those objectives.”

Thursday’s lawsuit is the most prominent setback in the deal-making career of Carlos Brito, Anheuser’s chief executive. Mr. Brito helped lead the growth of AmBev, a regional Brazilian brewer, into a global giant through a successive series of takeovers.

“I’m not sure if this is the end, but Brito’s a guy who’s used to getting what he wants,” said Lew Bryson, a writer who follows the beer industry. “InBev isn’t a company that’s growing much organically. It’s grown by acquisition.”

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Transcript of Guantánamo Hearing Points to Outside Censors

WASHINGTON — The Defense Department released a transcript on Wednesday of what it said was an exchange that had been censored from the public video feed of a military tribunal at Guantánamo Bay, Cuba, this week. A military judge had ordered the excerpt made public.

The blocked comments came during a pretrial motions hearing on Monday in the case against Khalid Shaikh Mohammed and four other detainees accused of aiding the attacks of Sept. 11, 2001. The episode was the first public indication that censors outside the courtroom were monitoring the live video from the tribunal and that they could cut the feed, which is delayed by 40 seconds before it can be viewed by the public and reporters.

During the censored portion, according to the transcript, David Nevin, a defense lawyer, was discussing whether arguments over a motion “will turn out to be closed or secret” regarding the preservation of evidence “at a detention facility,” an issue he said was “a critical matter to Mr. Mohammed” and “central to the case as far as he is concerned.”

The lawyers then became aware that a red light had gone on, indicating that the courtroom had been closed. But the button in the courtroom had not been hit by the only previously known censor, a security officer who sits near the judge, Col. James Pohl of the Army.

Mr. Nevin was apparently referring to the Central Intelligence Agency’s secret prisons in countries like Romania and Thailand where the agency once held the Sept. 11 defendants; the defense plans to argue that its clients should be spared execution because the C.I.A. tortured them. But Mr. Nevin did not mention such details, and his motion “to preserve evidence at any existing detention facility” was unclassified, Colonel Pohl said.

“If some external body is turning the commission off under their own view of what things ought to be, with no reasonable explanation,” the judge told government lawyers, “we are going to have a little meeting about who turns that light on or off.”

On Tuesday, Colonel Pohl read a government statement that said an “original classification authority” — apparently a reference to the C.I.A. — was also monitoring for disclosures of classified information. He insisted that the judge decided whether to close the courtroom.

It was not clear whether the offstage censors were at the base or watching remotely; the public feed is shown to reporters at Fort Meade in Maryland.

A military spokesman declined to comment.

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Rape trial of teenaged football players to be open to public: Ohio judge

(Reuters) – The controversial trial of two high school football players accused of raping a classmate will remain open to the public and will not be relocated to another town, an Ohio judge ruled on Wednesday.

Prosecutors and an attorney representing the accuser had sought a closed trial, arguing that public access to the juvenile trial would subject the accuser to unwanted publicity and make potential witnesses reluctant to testify.

Visiting Hamilton County Judge Tom Lipps said the presence of the media would prevent inaccurate reporting and enhance public confidence in the juvenile justice system, according to his written ruling, a copy of which was seen by Reuters.

“An open hearing is especially valuable where rumors, mischaracterizations and opinions unsupported by facts have reportedly been repeated in social media postings and other published outlets,” Lipps wrote. “An open hearing will diminish the influence of such postings and publications.”

Prosecutors have accused Ma’Lik Richmond and Trent Mays, both 16, of raping a classmate at a party attended by many teammates last August in Steubenville, a close-knit city of 19,000 near the Pennsylvania border.

The case attracted national attention after the hacker activist group Anonymous publicized a picture of two young men carrying a girl by her wrists and ankles and released a video showing other young men joking about the alleged assault.

Richmond’s lawyer, Walter Madison, said previously on CNN that his client was one of the young men in the photograph – which he said was taken out of context – but does not appear in the video. A lawyer for Mays has not publicly commented on the postings.

Community leaders have accused authorities of protecting the school’s popular football program by not charging more players who could have prevented the alleged attack.

Lipps also ruled on Wednesday that the trial will remain in Steubenville. He set a trial date for March 13.

Reuters generally does not identify people who say they have been victims of sex crimes.

(Editing by Paul Thomasch, Bernard Orr)

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Lewis says he's 'agitated,' not angry, about story

NEW ORLEANS (AP) — Ray Lewis is "agitated."

Not because the Baltimore Ravens linebacker thinks the magazine report linking him to a company that purports to make performance-enhancers will affect his play or that of his teammates against the San Francisco 49ers in the Super Bowl — the final game of a 17-year NFL career that most assume will earn him a spot in the Pro Football Hall of Fame.

Rather, Lewis did not want to spend time discussing the subject in private with his head coach or in public with the media, as he did Wednesday, when his forceful denials — and attacks on the owner of the supplement company — meant the matter intruded for a second consecutive day on his retirement send-off.

"It's so funny of a story, because I never, ever took what he says or whatever I was supposed to do. And it's just sad, once again, that someone can have this much attention on a stage this big, where the dreams are really real," Lewis said, wearing his white No. 52 Ravens jersey, gray sweat pants and a black hat with the team's purple logo. "I don't need it. My teammates don't need it. The 49ers don't need it. Nobody needs it."

He smiled widely when the first question at his media session was about the topic — surely, he figured it was coming — then chuckled later while addressing it. Known for his frequent references to God and faith, Lewis called the whole episode a "joke" and a "trick of the devil," adding that he told teammates: "Don't let people from the outside ever come and try to disturb what's inside."

Sports Illustrated reported Tuesday that Lewis sought help from a company called Sports With Alternatives To Steroids (SWATS), which says its deer-antler spray and pills contain a naturally occurring banned product connected to human growth hormone. The 37-year-old Lewis, the MVP of the 2001 Super Bowl, is the leading tackler in the NFL postseason after returning from a torn right triceps that sidelined him for 10 games.

SI reported that company owner Mitch Ross recorded a call with Lewis hours after the player hurt his arm in an October game against Dallas. According to the report, Lewis asked Ross to send him deer-antler spray and pills, along with other items made by the company.

On Wednesday, Lewis called Ross a coward and said he "has no credibility."

Ross declined an interview request from The Associated Press but emailed a statement reading: "It is the view of SWATS and Mitch Ross that the timing of information was unfortunate and misleading and was in no way intended to harm any athlete. We have always been about aiding athletes to heal faster and participate at an optimum level of play in a lawful and healthy manner. We never encourage the use of harmful supplements and/or dangerous drugs."

Told by a reporter that he seemed angry, Lewis replied: "Me? Never angry. I'm too blessed to be stressed. Nah. You're not angry. You can use a different word. You can use the word 'agitated,' because I'm here to win the Super Bowl. I'm not here to entertain somebody that does not affect that one way or another."

Christopher Key, a co-owner of SWATS, said in a telephone interview that the company removed NFL players' endorsements from its website because "all the players were given letters by the NFL two years ago saying they had to cease and desist and could not continue to do business with us anymore."

NFL spokesman Greg Aiello confirmed that but did not respond to other requests for comment about SWATS or Lewis' involvement.

Teammates uniformly pushed the same message as Lewis and Ravens head coach John Harbaugh — "Everybody heard about it, but we're not worried about it," is the way rookie running back Bernard Pierce put it — and several said NFL players often are offered products to aid in muscle-building or recovery.

"You've got to be real careful. You've got to think there's a reason they're giving you this product," Pierce said. "If someone has success, another person wants to be mentioned in that — like, 'Oh, I'm the reason for that.' If anybody tries to give me anything or tries to sell me on their stuff, I say, 'Go right to my agent.'"

Wary of using something that has no real benefit — or, worse, that would result in a positive drug test administered by the league — players seek approval first from the NFL, the union, or a team trainer or doctor.

"I've been approached," Baltimore nose tackle Ma'ake Kemoeatu said. "They'll come to me and they tell me, 'This will help you with recovery and all that.' I say, 'OK. I appreciate it.' And then I will call the NFL."

Another athlete mentioned in the SI story, three-time golf major champion Vijay Singh, released a statement Wednesday at the Phoenix Open, acknowledging he used deer-antler spray and saying he wasn't aware that it may contain a substance banned by the PGA Tour.

Sports Illustrated reported that when it spoke to Lewis for its story, he acknowledged asking Ross for "some more of the regular stuff" on the night of the injury and that he has been associated with the company "for a couple years."

Lewis' stance was different Wednesday.

"He told me there's nothing to it. ... He's told us in the past, he's told us now, that he's never taken any of that stuff, ever," Harbaugh said. "And I believe Ray. I trust Ray completely. We have a relationship. I know this man. And I know what he's all about. It's just too bad it has to be something that gets so much play."

While Lewis did face a handful of questions about SWATS, plus some on-field topics, he never had to deal Wednesday with a single reference to a dark chapter in his life: He pleaded guilty to obstruction of justice in connection with the stabbing deaths of two men after a Super Bowl party at an Atlanta nightclub in 2000.

"We all in here have a past. You know? But how many people actually dwell into it? You know? Nah, it ain't about your past. It's about your future," Lewis said in response to a question about keeping focused on Sunday's game.

"And for me and my teammates, I promise you, we have a strong group of men that we don't bend too much, and we keep pushing forward. So it's not a distraction at all for us," he said, raising a clenched fist.

"The trick of the devil is to kill, steal and destroy. That's what he comes to do. He comes to distract you from everything you're trying to do. There's no man ever trained as hard as our team has trained. There's no man that's went through what we went through," Lewis said. "So to give somebody credit that doesn't deserve credit, that would be a slap in the face for everything we went through."

Asked about deer-antler spray, 49ers tight end Vernon Davis' take was, "I don't think Ray would take any substance."

Carlos Rogers, a San Francisco cornerback, chuckled when asked about it and what effect the headlines could have on the Ravens.

"I don't think they'll get a distraction. I don't know what to make of that. I heard it was something that can't be detected. They can't test (for) it, anyway," Rogers said. "Him saying that he's never failed a test, he probably hasn't failed a test for what they test for."

Boasting that "you will never fail a drug test from taking our product," SWATS co-owner Key said the company has sold its products to more than 20 college football players each at Southeastern Conference schools Alabama, Auburn, Mississippi, LSU and Georgia.

Alabama has sent two cease-and-desist letters to SWATS, university spokeswoman Debbie Lane said, adding: "UA has been aware of this situation for some time, and we have monitored this company for several years." Auburn and LSU representatives also said they have asked the company to stay away from students.

___

AP Sports Writer John Zenor in Tuscaloosa, Ala., contributed to this report.

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Follow Howard Fendrich on Twitter at http://twitter.com/HowardFendrich

___

Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

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Well: Myths of Weight Loss Are Plentiful, Researcher Says

If schools reinstated physical education classes, a lot of fat children would lose weight. And they might never have gotten fat in the first place if their mothers had just breast fed them when they were babies. But be warned: obese people should definitely steer clear of crash diets. And they can lose more than 50 pounds in five years simply by walking a mile a day.

Those are among the myths and unproven assumptions about obesity and weight loss that have been repeated so often and with such conviction that even scientists like David B. Allison, who directs the Nutrition Obesity Research Center at the University of Alabama at Birmingham, have fallen for some of them.

Now, he is trying to set the record straight. In an article published online today in The New England Journal of Medicine, he and his colleagues lay out seven myths and six unsubstantiated presumptions about obesity. They also list nine facts that, unfortunately, promise little in the way of quick fixes for the weight-obsessed. Example: “Trying to go on a diet or recommending that someone go on a diet does not generally work well in the long term.”

Obesity experts applauded this plain-spoken effort to dispel widespread confusion about obesity. The field, they say, has become something of a quagmire.

“In my view,” said Dr. Jeffrey M. Friedman, a Rockefeller University obesity researcher, “there is more misinformation pretending to be fact in this field than in any other I can think of.”

Others agreed, saying it was about time someone tried to set the record straight.

“I feel like cheering,” said Madelyn Fernstrom, founding director of the University of Pittsburgh Weight Management Center. When it comes to obesity beliefs, she said, “We are spinning out of control.”

Steven N. Blair, an exercise and obesity researcher at the University of South Carolina, said his own students believe many of the myths. “I like to challenge my students. Can you show me the data? Too often that doesn’t come into it.”

Dr. Allison sought to establish what is known to be unequivocally true about obesity and weight loss.

His first thought was that, of course, weighing oneself daily helped control weight. He checked for the conclusive studies he knew must exist. They did not.

“My goodness, after 50-plus years of studying obesity in earnest and all the public wringing of hands, why don’t we know this answer?” Dr. Allison asked. “What’s striking is how easy it would be to check. Take a couple of thousand people and randomly assign them to weigh themselves every day or not.”

Yet it has not been done.

Instead, people often rely on weak studies that get repeated ad infinitum. It is commonly thought, for example, that people who eat breakfast are thinner. But that notion is based on studies of people who happened to eat breakfast. Researchers then asked if they were fatter or thinner than people who happened not to eat breakfast — and found an association between eating breakfast and being thinner. But such studies can be misleading because the two groups might be different in other ways that cause the breakfast eaters to be thinner. But no one has randomly assigned people to eat breakfast or not, which could cinch the argument.

So, Dr. Allison asks, why do yet another study of the association between thinness and breakfast? “Yet, I can tell you that in the last two weeks I saw an association study of breakfast eating in Islamabad and another in Inner Mongolia and another in a country I never heard of.”

“Why are we doing these?” Dr. Allison asked. “All that time and effort is essentially wasted. The question is: ‘Is it a causal association?’” To get the answer, he added, “Do the clinical trial.”

He decided to do it himself, with university research funds. A few hundred people will be recruited and will be randomly assigned to one of three groups. Some will be told to eat breakfast every day, others to skip breakfast, and the third group will be given vague advice about whether to eat it or not.

As he delved into the obesity literature, Dr. Allison began to ask himself why some myths and misconceptions are so commonplace. Often, he decided, the beliefs reflected a “reasonableness bias.” The advice sounds so reasonable it must be true. For example, the idea that people do the best on weight-loss programs if they set reasonable goals sounds so sensible.

“We all want to be reasonable,” Dr. Allison said. But, he said, when he examined weight-loss studies he found no consistent association between the ambitiousness of the goal and how much weight was lost and how long it had stayed off. This myth, though, illustrates the tricky ground weight-loss programs have to navigate when advising dieters. The problem is that on average people do not lose much – 10 percent of their weight is typical – but setting 10 percent as a goal is not necessarily the best strategy. A very few lose a lot more and some people may be inspired by the thought of a really life-changing weight loss.

“If a patient says, ‘Do you think it is reasonable for me to lose 25 percent of my body weight,’ the honest answer is, ‘No. Not without surgery,’” Dr. Allison said. But, he said, “If a patient says, ‘My goal is to lose 25 percent of my body weight,’ I would say, ‘Go for it.’”

Yet all this negativism bothers people, Dr. Allison conceded. When he talks about his findings to scientists, they often say: “O.K., you’ve convinced us. But what can we do? We’ve got to do something.” He replies that scientists have an ethical duty to make clear what is established and what is speculation. And while it is fine to recommend things like bike paths or weighing yourself daily, scientists must make sure they preface their advice with the caveat that these things seem sensible but have not been proven.

Among the best established methods is weight-loss surgery, which, of course, is not right for most people. But surgeons have done careful studies to show that on average people lose substanial amounts of weight and their health improves, Dr. Allison said. For dieters, the best results occur with structured programs, like ones that supply complete meals or meal replacements.

In the meantime, Dr. Allison said, it is incumbent upon scientists to change their ways. “We need to do rigorous studies,” he said. “We need to stop doing association studies after an association has clearly been demonstrated.”

“I never said we have to wait for perfect knowledge,” Dr. Allison said. But, as John Lennon said, “Just give me some truth.”

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Facebook Beats Forecasts on Earnings and Revenue

SAN FRANCISCO — Facebook made a lot of money in the last quarter. It also spent a lot. And that made investors once again cautious about the company.

After an eight-month roller coaster ride on the public markets, Facebook did well in the fourth quarter of 2012 by aggressively ramping up advertisements aimed at its users, including on mobile phones. In its financial report on Wednesday, it beat expectations, increasing revenue by a handsome 40 percent from the same period a year ago.

But its expenses also climbed rapidly as the company hired engineers and built data centers, causing profit to dip from the last quarter in 2011. With that, Wall Street lost some enthusiasm.

Facebook shares, which had closed at $31.24 on Wednesday, fell more than 3 percent in after-hours trading after the results were released.

In recent weeks, the stock had recovered much of the ground it lost in the eight months since its introduction last year.

“The quarter was a little like a cold shower after you’ve been out all night — it’s something that makes you sober up very quickly,” said Jordan Rohan, an analyst at Stifel Nicolaus, adding that the numbers made it clear that Facebook intended to spend more “to go after the opportunities before them.”

In the conference call with analysts after the earnings report, Mark Zuckerberg, chief executive of Facebook, cautioned Wall Street that profit might not grow as fast as investors would like. That, he said, was because Facebook would continue to spend money hiring people and building products for the future, like the new search tool it introduced earlier this month. “It’s important to start planting seeds,” he said.

The most closely watched part of the earnings report was how much money the company brought in from its mobile users; most people log in to the site using their cellphones. Facebook said advertising on the mobile newsfeed accounted for 23 percent of its advertising revenue, up from 14 percent in the third quarter but slightly lower than some analysts had forecast.

Mr. Zuckerberg predicted that the company would eventually make more money on every minute spent on the Facebook mobile app than on the desktop computer.

Facebook reported fourth-quarter revenue of $1.59 billion, compared with $1.52 billion predicted by analysts surveyed by Bloomberg. The company earned $64 million in net income, or 3 cents a share. Excluding certain items, Facebook said it had a net income of $426 million in the fourth quarter, or 17 cents a share, beating analysts’ expectations by 2 cents.

Facebook’s biggest, long-term challenge remains how to profit from the enormous piles of personal data of its one billion users without alienating them or inviting the wrath of government regulators in the United States and abroad. The company reported on Wednesday that it had 1.06 billion active users — those who log in at least once a month.

Secondarily, it must figure out a way to profit abroad. Most of its revenue still comes from North America and to a lesser extent Europe.

Despite the stock’s decline after the earnings report, it is still much recovered since last year’s slump. It opened at $38 a share last May, but shortly after that, the stock plummeted as Wall Street soured on its ability to increase profit as fast as investors wanted. Shares sank to half the public offering price last September.

But the company focused on its advertising business and released a series of new products aimed at taking on some of its biggest rivals, including Google and Apple. Mr. Zuckerberg took the initiative to reassure investors it had their interests at heart. The improvement in the share price in recent weeks suggests that the company’s charm offensive is paying off.

In the last few months, Facebook has floated several trial balloons aimed at pleasing Wall Street and, in particular, convincing investors that it can thrive in the mobile era.

It offered marketers more refined targeting options, including Facebook Exchange, which allows companies to track users as they are browsing and shopping for products around the Web and lets companies show advertisements for those products when the users log back on to Facebook.

Before Christmas last year, in a bid to step into territory dominated by Amazon, it introduced the Gifts application, which lets users buy goods and services for their Facebook friends, and in turn, share with the company an extremely valuable piece of data: their credit card numbers. The company made clear in the conference call on Wednesday that this would not be an immediate moneymaker.

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Egyptian Army Chief Warns of Collapse Amid Chaos

Tara Todras-Whitehill for The New York Times

An Egyptian protester throws a tear gas canister during clashes with riot police in Cairo on Tuesday.

CAIRO — As three Egyptian cities defied President Mohamed Morsi’s attempt to quell the anarchy spreading through their streets, the nation’s top general warned Tuesday that the state itself was in danger of collapse if the feuding civilian leaders could not agree on a solution to restore order.

Thousands of residents poured into the streets of the three cities, protesting a 9 p.m. curfew with another night of chants against Mr. Morsi and assaults on the police.

The president appeared powerless to stop them: he had already granted the police extralegal powers to enforce the curfew and then called out the army as well. His allies in the Muslim Brotherhood and their opposition also proved ineffectual in the face of the crisis, each retreating to their corners, pointing fingers of blame.

The general’s warning punctuated a rash of violent protests across the country that has dramatized the near-collapse of the government’s authority. With the city of Port Said proclaiming its nominal independence, protesters demanded the resignation of Mr. Morsi, Egypt’s first freely elected president, while people across the country appeared convinced that taking to the streets in protests was the only means to get redress for their grievances.

Just five months after Egypt’s president assumed power from the military, the cascading crisis revealed the depth of the distrust for the central government left by decades of autocracy, two years of convoluted transition and his own acknowledged missteps in facing the opposition. With cities in open rebellion and the police unable to tame crowds, the very fabric of society appears to be coming undone.

The chaos has also for the first time touched pillars of the long-term health of Egypt’s economy, already teetering after two years of turbulence since the ouster of Hosni Mubarak. While a heavy deployment of military troops along the Suez Canal — a vital source of revenue — appeared to insulate it from the strife in Port Said, Suez and Ismailia, the clashes near Tahrir Square in Cairo spilled over for the first time into an armed assault on the historic Semiramis InterContinental Hotel, sending tremors of fear through the vital tourism sector.

With the stakes rising and no solution in sight, Gen. Abdul Fattah el-Sisi, the defense minister, warned Egypt’s new Islamist leaders and their opponents that “their disagreement on running the affairs of the country may lead to the collapse of the state and threatens the future of the coming generations.”

“Political, economic, social and security challenges” require united action “by all parties” to avoid “dire consequences that affect the steadiness and stability of the homeland,” General Sisi said in an address to military cadets that was later relayed as public statement from his spokesman. And the acute polarization of the civilian politics, he suggested, had now becoming a concern of the military because “to affect the stability of the state institutions is a dangerous matter that harms Egyptian national security.”

Coming just months after the military relinquished the power it seized at the ouster of Mr. Mubarak, General Sisi’s rebuke to the civilian leaders inevitably raised the possibility that the generals might once again step into civilian politics. There was no indication of an imminent coup.

Analysts familiar with General Sisi’s thinking say that unlike his predecessors, he wants to avoid any political entanglements. But the Egyptian military has prided itself on its dual military and political role since Col. Gamal Abdel Nasser’s coup more six decades ago. And General Sisi insisted Tuesday it would remain “the solid mass and the backbone upon which rest the Egyptian state’s pillars.”

With the army now caught between the president’s instructions to restore order and the citizens’ refusal to comply, he said, the “armed forces are facing a serious dilemma” as they seek to end the violence without “confronting citizens and their right to protest.”

The attack on the Semiramis Hotel, between the American Embassy and the Nile in one of the most heavily guarded neighborhoods of the city, showed how much security had deteriorated. And it testified to the difficult task that the civilian government faces in trying to rebuild public security and trust.

Kareem Fahim and Mayy El Sheikh contributed reporting from Cairo.

Kareem Fahim and Mayy El Sheikh contributed reporting from Cairo.

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BlackBerry 10 said to be inadequate for helping RIM overcome its ‘demons’

After hitting a seven-year low of $ 6.22 this past summer, shares of Research in Motion (RIMM) have rebounded and climbed more than 100% in the past six months. The company that was previously written off by Wall Street investors has seen a significant boost in recent months as anticipation grows for its BlackBerry 10 operating system. But while a number of analysts have voiced their support for RIM, not everyone is convinced.

[More from BGR: Apple’s 128GB iPad shows the world exactly what Apple does best]

Jan Dawson of Ovum explained, per Benzinga, that RIM continues to “face the twin demons of consumer-driven buying power and a chronic inability to appeal to mature market consumers,” and he believes BlackBerry 10 won’t change this. The analyst said that due to a strong user base of 79 million subscribers and profitability still in the black, the company will remain for years to come. He was quick to note, however, that its glory days are in the past and “it is only a matter of time before it reaches a natural end.”

[More from BGR: Apple unveils new 128GB iPad]

Dawson previously wrote that RIM’s strategy seems to be focused on building the best devices for current BlackBerry users “rather than something that will necessarily win converts from other platforms.”

“The points of differentiation RIM has focused on in teasers for the new platform confirm this – better multitasking, productivity, email, contacts and calendar applications and so on, rather than a better gaming, content consumption or social networking experience,” he said.

Shares of RIM are down more than 6% on Monday, a day before the company is set to unveil its BlackBerry 10 operating system.

This article was originally published on BGR.com

Gadgets News Headlines – Yahoo! News

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Is flag football ahead for NFL?

NEW ORLEANS (AP) — Players on both Super Bowl teams say they are confused about when a hit is legal by NFL standards.

Rules designed to make the game safer are also making players uncertain about which hits are considered clean and which ones could lead to a fine.

San Francisco tight end Vernon Davis wondered if two-hand touch is in the future for the NFL.

"I think the rules will change a lot," he said Tuesday. "There's already no helmet to helmet. Might be flag football, maybe."

Baltimore Ravens safety Bernard Pollard, one of the league's hardest hitters, warned against trying to take collisions out of the game, as long as they are clean.

His 49ers counterpart, All-Pro Dashon Goldson, says defenders keep this in mind when they take the field:

"Do your best and then hope you don't get a letter (with a fine) in your locker on Wednesday," he said.

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To Open Eyes, W-2s List Cost of Health Plans

WASHINGTON — As workers open their W-2 forms this month, many will see a new box with information on the total cost of employer-sponsored health insurance coverage. To some, it will be a surprise, perhaps even a shock.

Workers often have little idea how much they and their employers are paying for coverage. In many cases, economists say, workers give up cash compensation to get and keep health benefits.

The disclosures, required by the 2010 health care law, are meant to make workers more cost-conscious. Health benefits are still tax-free. But labor unions and employer groups say it could be easier to tax them in the future, now that employers must report their value to the government.

The new information appears in Box 12 of the standard W-2 form, with a two-letter code, DD. The box shows the “cost of employer-sponsored health coverage.” And that amount is not taxable, the Internal Revenue Service says on the back of the form.

Jay J. Makled, a union steward for the United Automobile Workers at the Ford plant in Dearborn, Mich., described his reaction after seeing that his health coverage cost nearly $16,000 last year: “It’s quite expensive. I was surprised to see how much the company was paying for that benefit.”

Hourly employees represented by the union there said they generally did not pay any of the premium.

The number on the W-2 form is supposed to reflect the part of the cost paid by the employer and the part paid by the employee.

Prof. Nicole Huberfeld, an expert on health law at the University of Kentucky, who received her W-2 form on Monday, said, “Most people who get health insurance from their employers have no idea how much it costs.”

“People are often shocked when they see the cost, $12,000 to $16,000 a year,” Ms. Huberfeld said. “Many Americans believe this is something they get free. But employers pay lower wages because they provide insurance.”

In 2012, according to an annual survey by the Kaiser Family Foundation, premiums for employer-sponsored health insurance averaged $5,615 a year for single coverage and $15,745 for family coverage. Over five years, the costs have increased 25 percent for individual coverage and 30 percent for family coverage.

“Health coverage is a big piece of people’s income and a large part of the social welfare budget,” said C. Eugene Steuerle, a tax economist at the Urban Institute. “But the benefits are not taxable, and most of the spending is hidden, so we don’t consider the trade-offs. If we want to get control of health care costs, people have to be aware of them.”

That is the goal of the disclosure requirement, which was proposed by a bipartisan group of senators: two Republicans, Charles E. Grassley of Iowa and Michael B. Enzi of Wyoming, and two Democrats, Max Baucus of Montana and Ron Wyden of Oregon.

Congress acted after Peter R. Orszag, then the director of the Congressional Budget Office, told lawmakers: “The economic evidence is overwhelming, the theory is overwhelming, that when your firm pays for your health insurance, you actually pay through reduced take-home pay. The firm is not giving that to you for free.”

The tax-free treatment of employer-provided health benefits is the largest tax break in the tax code, costing the government roughly $180 billion a year in lost revenue, or 80 percent more than the home mortgage interest deduction, according to the administration.

Katie W. Mahoney, the executive director of health policy at the U.S. Chamber of Commerce, said, “It’s useful for employees to know the value of coverage their employers provide.” But she said some employers worried that reporting the benefit on the W-2 form could lead to taxing the benefit.

“That’s not the intent of the current requirement,” Ms. Mahoney said. “But once the information is collected by the government, it’s very easy for another administration to have a different intent.”

An employee of the A.F.L.-C.I.O. whose health coverage was listed as costing more than $20,000 said: “That knocks my socks off. When I saw the number, my eyes popped out. I appreciate my employer all the more.”

The employee said he had been told not to discuss the cost publicly because the union did not want to suggest that some employees had “Cadillac coverage.”

An employer that fails to comply with the reporting requirement could be subject to penalties of $200 per W-2 form, up to a maximum of $3 million, tax lawyers said.

Employers are exempt from the reporting obligation if they are required to file fewer than 250 W-2 forms, the I.R.S. said. That could change, but the agency said employers would be given at least six months’ notice.

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