Fiat CEO: plan to buy Chrysler shares

NEW YORK (Reuters) – Italian carmaker Fiat SpA fully intends to acquire the 41.5 percent of Chrysler Group shares that it does not now own, but wrangling over the price could continue for a while, Fiat-Chrysler chief Sergio Marchionne said on Friday.

Fiat is in arbitration proceedings with the owner of the shares, a United Auto Workers trust fund that pays medical benefits to retired workers. The trust fund acquired the shares during the U.S. government-sponsored bankruptcy and bailout of Chrysler in 2009, when Fiat gained an ownership stake and management control of the U.S. automaker.

“We’ve always taken the position that we would have to pay them, but the question is price,” said Marchionne, speaking on the sidelines of a meeting of the Council for the United States and Italy, an international-relations group. The current arbitration proceedings, he added, are “part of the dance”.

If, as industry experts predict, the two sides cannot agree on a price by year-end, the trust fund can begin the process that would lead to an initial public offering of its shares, potentially depriving Fiat of its goal of gaining full ownership of Chrysler.

However, the IPO process would take months to meet regulatory and other requirements, and a settlement could be reached during that time.

UBS estimates the fair value of Chrysler at between $ 9 billion and $ 13.4 billion, meaning the trust fund’s 41.5 percent stake is worth between $ 4.1 billion and $ 5.5 billion.

Fiat and the health care trust are battling in a Delaware court over a 3.32 percent piece of Chrysler. Fiat is able to purchase up to 16.4 percent of Chrysler in this piecemeal fashion over the next three-and-a-half years. Chrysler has offered about half of what the health care trust believes the 3.32 percent stake is worth.

When Chrysler exited its 2009 bankruptcy, Fiat took a 20-percent ownership and has increased that since to the current 58.5 percent of the No. 3 U.S. automaker.

The system for Fiat to buy tranches of Chrysler for a total of 16.4 percent of the U.S. automaker was also part of that bankruptcy agreement. Fiat says it has used a formula for setting its price for the first tranche of those shares, and the trust wants more than double that figure. The full 16.4 percent of Chrysler to be purchased in this manner would total, Fiat says, $ 754 million, while the trust wants $ 1.7 billion.

Fiat earlier rebutted a report that it was set to raise money to finance its purchase of a further stake in Chrysler, saying it had no need for extra funds.

Its comment came after an unsourced report in Il Messaggero said Fiat was sounding out UniCredit , Morgan Stanley , Bank of America and Goldman Sachs about the possibility of raising between 1 and 2 billion euros ($ 1.3-$ 2.6 billion).

(Reporting by Paul Ingrassia; Editing by Dale Hudson)

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Cuban lawmakers meet to consider economy, budget

HAVANA (AP) — Cuban lawmakers are holding the second of their twice-annual sessions with a year-end report expected on the state of the country’s economy.

Legislators are also to approve next year’s budget.

Cuban leaders have sometimes used the parliamentary gatherings to make important announcements or policy statements.

Observers will be watching for word on the progress of President Raul Castro‘s economic reform plan and efforts to promote younger leaders.

The unicameral parliament will reconvene in February with a new membership following elections. It is then expected to name Castro to another five-year term.

State-run media said Castro presided over Thursday’s session.

It was not open to international journalists.

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“Lincoln” leads Golden Globe movie nominations

LOS ANGELES (Reuters) – “Lincoln,” the tale of U.S. President Abraham Lincoln‘s battle to end slavery, ruled at the Golden Globe nominations on Thursday, while a very different movie take on slavery – “Django Unchained” – got a big boost in Hollywood’s crowded awards season.

Steven Spielberg’s portrayal of one of America’s most revered presidents won a leading seven nominations, including best drama, best director, best screenplay and best actor for Daniel Day-Lewis in the title role.

But “Lincoln” faces stiff competition at the Golden Globes from Ben Affleck’s Iran hostage drama “Argo” and Quentin Tarantino‘s dark and quirky slavery-era Western, “Django Unchained.”

The best drama nominees were rounded out by thriller “Zero Dark Thirty” about the hunt for Osama bin Laden, with four mentions, and the shipwreck tale, “Life of Pi,” with three.

The Golden Globe Awards, which will be given out by about 80 members of the Hollywood Foreign Press Association (HFPA) on January 13, are among the most widely watched honors programs leading up to the Oscars in February, although their ultimate choices for best movie rarely coincide.

‘LINCOLN’ SEEN AS OSCAR FRONTRUNNER

“Lincoln” is already regarded as an Oscar frontrunner after picking up multiple accolades from U.S. critics’ groups and the Screen Actors Guild (SAG).

Producer Kathleen Kennedy said the film’s portrayal of Lincoln’s battles in Congress to get slavery abolished had struck a chord with Americans at a time of political gridlock in Washington.

“People have become frustrated with the political process, and the movie takes you on a journey that shows the democratic process is difficult but the end result is a very satisfying process…I think that’s what people are excited about after watching ‘Lincoln,’” Kennedy told Reuters on Thursday.

Tarantino’s violent and sometimes comic “Django Unchained,” starring Jamie Foxx, has fared less well – until now.

“This was a huge boost. ‘Django Unchained‘ was very much SAG snubbed. But now they are really back in the game,” Thelma Adams, contributing editor at Yahoo! Movies, told Reuters.

“It’s very gratifying to get this many nominations from the HFPA for a film I worked so hard on and am so passionate about,” Tarantino said in a statement.

Unlike the Academy Awards, the HFPA has separate categories for film dramas and comedies.

“Les Miserables,” the movie version of the worldwide hit stage musical, earned four Golden Globe nominations in the comedy/musical category, as did “Silver Linings Playbook,” about an unlikely romance between a man suffering from bipolar disorder and a young widow.

The stars of both films – Hugh Jackman and Anne Hathaway for “Les Miserables,” and Jennifer Lawrence and Bradley Cooper for “Silver Linings Playbook,” – will be among those competing for acting awards.

FROM STAGE TO SCREEN

“Les Mis” director, Tom Hooper, who failed to get a nomination for his work on the movie, acknowledged the challenge of translating the beloved musical to the big screen.

“Millions of people hold this musical so close to their heart. I had to make a film that honors that experience…and I needed to find a way to work, which is why I chose to do all live singing,” Hooper told Reuters.

The HFPA also opened the door to smaller, sometimes overlooked movies and performances, while largely snubbing high profile contenders such as the James Bond film “Skyfall,” which got just one mention, for Adele’s best original song.

Wes Anderson’s “Moonrise Kingdom” and admired British senior ensemble film, “The Best Exotic Marigold Hotel,” were both nominated in the best musical or comedy category.

“They are precious little films that now have to be taken seriously,” said Tom O’Neil of awards website Goldderby.com.

In the acting race, Jessica Chastain’s CIA agent in “Zero Dark Thirty” will square off against Helen Mirren in “Hitchcock,” British actress Rachel Weisz in period drama, “The Deep Blue Sea,” France’s Marion Cotillard for “Rust and Bone,” and Naomi Watts in tsunami survival tale “The Impossible.”

Chastain said that aside from being a true-life thriller, “Zero Dark Thirty” also aimed at asking questions about society.

“To be involved in a movie that does that – the 9/11 hunt for Osama bin Laden pretty much defined this decade for us – and to be playing the woman who sacrificed so much to find him is such an honor,” the actress told Reuters.

Day-Lewis’s performance as Lincoln will compete against Denzel Washington’s alcoholic airline pilot in “Flight,” Richard Gere’s role as a corrupt financial executive in “Arbitrage,” John Hawkes as a severely disabled man in “The Sessions,” and Joaquin Phoenix’s drifter in the cult tale, “The Master.”

The Golden Globes also honor the year’s best TV shows. “Game Change,” the HBO film about Sarah Palin’s 2008 bid to become U.S. vice-president, led the nominations with five, followed by post-9/11 psychological thriller, “Homeland,” with four.

(Additional reporting by Piya Sinha-Roy and Eric Kelsey; Editing by Paul Simao and David Brunnstrom)

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Therapy without drugs may suffice to ward off psychosis

NEW YORK (Reuters Health) – Young adults at very high risk of psychotic illness should receive talk therapy rather than antipsychotic drugs as an initial treatment, a new study suggests.

The results might ease fears about overtreating people who have warning signs of psychosis but not a full-blown disease, but the study findings were not conclusive because the number of participants was too small.

“This shows it’s quite safe and reasonably effective … to offer supportive psychosocial care to these patients,” Dr. Patrick McGorry, an author of the study, told Reuters Health. There is “no evidence to suggest that antipsychotic medications are needed in first-line” treatment, he said.

The clinical trial included 115 clients of a Melbourne, Australia, clinic for young people deemed to be at “ultra-high risk” for a psychotic disorder such as schizophrenia.

The study was open to individuals between the ages of 14 and 30 who met at least one of three criteria: having low-level psychotic symptoms, having had previous brief episodes of psychotic symptoms that went away on their own or having a close relative with a psychotic disorder along with low mental functioning during the past year.

The study compared three regimens: talk therapy focused on reducing depression symptoms and stress while building coping skills plus a low dose of the antipsychotic risperidone, or talk therapy plus a placebo pill or therapy emphasizing social and emotional support plus a placebo.

The goal was to see how many participants in each group progressed to full-blown psychosis.

After a year, there was no notable difference between the groups, however about 37 percent of the participants dropped out during the study. McGorry said if the trial had included more people, significant differences between the groups might have emerged.

The study appears online in the Journal of Clinical Psychiatry.

Researchers have been working to identify people at risk of developing psychotic disorders. “The importance of detecting early signs and symptoms of a serious mental illness is not controversial,” said Dr. Matcheri Keshavan, a professor of psychiatry at Harvard Medical School. “But the best way of treating or preventing it remains controversial.”

McGorry, a professor at the Centre for Youth Mental Health at The University of Melbourne, said that only about 36 percent of high-risk individuals will likely progress to psychosis within three years. So many health professionals worry about the prospect of treating everyone at risk with drugs, which come with side effects.

Another concern is that individuals will carry the label of mental illness unnecessarily.

McGorry said that the “vast majority” of the at-risk young adults in the study, most of them university-age, met the requirement for some kind of mental illness. That’s why all the participants received some level of care, even if it was just basic emotional and social support and coping skills.

The rates of progression to full-blown psychosis – which ranged from about 10 percent to about 22 percent – were lower in all three groups than in previous studies.

It’s not clear why, but McGorry said it’s possible that more participants will develop psychosis after the end of the 12-month study period. Many of the study participants were also taking antidepressants, which may have eased psychotic symptoms.

As with many trials, most participants showed poor adherence to the medications used, which may have influenced the results, the authors note.

McGorry was also an author of a 2010 study that found fish oil supplements might prevent psychosis in the same type of at-risk individuals. That research continues, he said.

Going forward, “what is needed is some way of finding predictive biomarkers that can tell who might be at the highest risk,” said Keshavan. “We need to understand their brains.”

McGorry and some of his co-authors have served as consultants or received research funding from pharmaceutical companies. One of them, Janssen-Cilag, which developed risperidone, partially funded the study.

SOURCE: Journal of Clinical Psychiatry, online November 27, 2012.

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Labor market brightens, consumers step up spending

WASHINGTON (Reuters) – The number of Americans filing new claims for jobless benefits fell sharply last week to a near four-year low and retail sales rebounded in November, hopeful signs for the struggling economic recovery.

Initial claims for state unemployment aid fell for a fourth straight week, dropping 29,000 to a seasonally adjusted 343,000, the Labor Department said on Thursday. They are now at their lowest level since early October, and within a hair of territory last seen in early 2008.

Another report suggested consumer spending picked up last month despite fears Washington will fail to avoid harsh austerity measures that could trigger a recession. Worries over this “fiscal cliff” hit sentiment hard in early December.

“It is hard to detect material evidence that fiscal cliff uncertainties are weighing on consumer behavior,” said Michael Feroli, an economist at JPMorgan in New York.

A slow but steady improvement in the labor market has helped support consumer spending, which propped up economic growth in the third quarter when business investment sagged.

Economic growth is expected to slow in the fourth quarter, hurt by slower inventory building and a pull back in investment by companies worried about the fiscal cliff.

However, the economy does appear to be moving quickly past the headwinds presented by superstorm Sandy, which hit the East Coast in late October and led to a spike in jobless claims.

The four-week moving average for new claims, which irons out weekly volatility, dropped 27,000 to 381,500.

“The labor market might be improving a bit quicker than expected,” said David Sloan, an economist at 4Cast in New York.

U.S. stocks dipped despite the data. Investors appeared cautious about making aggressive bets in the midst of negotiations in Washington to slow or avoid the $ 600 billion in spending cuts and tax hike set to take hold early next year.

CORE SALES MEASURE MARCHES HIGHER

The Commerce Department said retail sales rose 0.3 percent last month, rebounding from October’s 0.3 percent decline.

The increase fell short of the consensus forecast in a Reuters poll of economists, but a measure of core sales exceeded expectations.

Core retail sales, which strip out automobiles, gasoline and building materials rose 0.5 percent in November. The government uses this measure, which was flat in October, to calculate consumer spending.

Despite the improvement, growth in spending is still seen slowing in the fourth quarter.

“Consumers have recovered somewhat … but the trend has been declining since last June,” said Joseph Trevisani, a market strategist at Worldwide Markets in Woodcliff Lake, New Jersey.

GDP growth is expected to slow to a 1.2 percent annual rate in the last three months of the year, a Reuters poll showed on Wednesday, down from a 2.7 percent rate in the third quarter.

The rise in overall retail sales was tempered by a 4 percent decline in receipts at gasoline stations, the biggest drop since December 2008. That likely reflects a fall in gasoline prices during the month, which left consumers with more money to spend on other things.

The Labor Department said separately that prices received by the nation’s farms, factories and refineries dropped 0.8 percent in November as gasoline prices fell by the most since March 2009.

So-called core producer prices, which strip out volatile energy and food costs, rose a modest 0.1 percent.

The report underscored a general lack of inflation pressure in the economy, giving the Federal Reserve room to continue with efforts to bring down the nation’s 7.7 percent unemployment rate.

The Fed announced a new round of monetary stimulus on Wednesday, taking the unprecedented step of indicating interest rates would remain near zero until unemployment falls to at least 6.5 percent.

In a packed day for government data on the economy, the Commerce Department also said business inventories, which are a key component of economic growth, rose 0.4 percent in October, in line with expectations.

(Reporting by Jason Lange; Additional reporting by Chris Reese and Nick Olivari in New York; Editing by Neil Stempleman and Tim Ahmann)

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The Hobbit: Richard Armitage Talks Preparations For Playing Thorin Oakenshield

British actor Richard Armitage admitted it wasn’t a walk in the park to play a J.R.R. Tolkien character in Peter Jackson’s reimagining of “The Hobbit,” the first installment of which is on its way into theaters.

Upon touching down in New Zealand, where the trilogy was shot, the cast had a lot of character preparation to do.

PLAY IT NOW: Martin Freeman Discusses The Hobbit’s ‘Good Chemistry’ & Playing Bilbo Baggins

“We arrived in February 2011 and we went straight into a training program, which was called ‘Dwarf Bootcamp,’ which was literally boots — these huge boots. We learned how to walk, we wrestled with each other, we did archery together, we did sword fighting, hammer fighting, horse riding — everything you could possibly think of,” Richard, who plays Thorin Oakenshield in the film told Access Hollywood at the film’s junket.

In addition, the cast, which includes his former “Cold Feet” co-star James Nesbitt as Bofur, found ways to get to know each other better off set.

VIEW THE PHOTOS: The Hobbit: An Unexpected Journey — New York City Premiere

“We went round to each other’s houses and we cooked food together, we went to the pub and got drunk together, so there was an incredibly great bonding time between the dwarves,” he said.

Richard had plenty of experience sword fighting and horse riding in the BBC America series “Robin Hood,” but it was something else that came in handy during the long days on set.

“I’d done a number of shows where I’d had to use sword fighting and I’d also done horse riding. I’d also pulled guns out of my pocket. That was less useful,” he laughed, likely referring to his recent role in the PBS-import series “MI-5,” where he played a British spy. “But, yeah, you draw on everything. I’d worked at the Royal Shakespeare Company, so the vocal work was really useful to kind of pull that from there. I’d worked in a circus, there were… all sorts of things that were really useful, but the one thing that I do have — for lack of talent — is stamina and that’s the one thing I think everybody needed on this job.”

VIEW THE PHOTOS: Meet ‘The Hobbit’ Cast!

An imagination was useful also, but Richard said what turned out on the big screen was still wilder – and more beautiful – than he dreamed of.

“So many moments… Actually, apart from the eagles — which every single time I’ve seen this film absolutely blows my mind and I can barely keep the tears back and [it has] nothing to do with the pathos of the scene, just that feeling of flight moves me — is the throne of Aragorn, in the beginning of the prologue,” he told Access of the moment that moved him most. “When it got to [filming] that scene, I walked on and… it was just a green cross on the floor with a tiny green chair… [But in the film], they just made this incredible, almost space aged, sort of suspended seat in the middle of this stalagmite. It just blows my mind when I see that.”

VIEW THE PHOTOS: The Brit Pack: Hot Shots Of Stars From The UK!

“The Hobbit: An Unexpected Journey” hits theaters on December 14, 2012, followed by “The Hobbit: The Desolation of Smaug,” on December 13, 2013 and “The Hobbit: There and Back Again,” on July 18, 2014.

– Jolie Lash

Copyright 2012 by NBC Universal, Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Why Netflix’s future is in “House of Cards,” “Arrested Development” – not Disney

LOS ANGELES/NEW YORK (TheWrap.com) – Netflix hailed as a “game-changer” its landmark deal last week to bring Disney movies to the streaming service. But while that deal may be significant, it pales in importance next to another looming development – the February debut of its original series “House of Cards.”

The economic benefits of the Disney deal, which gives the company streaming rights to much of Disney‘s catalog and straight-to-DVD movies as well as the exclusive rights to the studio’s new movies from 2016 to 2018, won’t be felt for years.

But the rollout of new, made-for-Netflix shows, which moves the company into a game owned by broadcast and cable – and follows a model set by everyone from HBO to AMC – will be a near-term bellwether of the company’s future success, analysts and observers say.

“You don’t identify a movie you watch on TV with a channel, but you definitely identify an original series with a channel,” Michael Pachter, an analyst with Wedbush Securities, told TheWrap. “What Netflix is doing with its original series is getting something exclusive that makes you have to go to Netflix if you want to see it. It’s branding.”

They include the long-awaited rebirth of cult favorite “Arrested Development” and original pieces like Eli Roth’s “Hemlock Grove,” Jenji Kohan’s “Orange Is the New Black” and “House of Cards,” from director David Fincher and starring Kevin Spacey.

Like “Lilyhammer,” all episodes of the shows’ first seasons will be released at once, allowing for binge viewing by Netflix subscribers.

The Disney deal is momentous in that it marks the first time a digital pay-TV distributor has earned exclusive rights to a major studio’s new releases. Both analysts and studio executives say Netflix will pay more than $ 300 million a year for those rights, a startling sum for a company that has minimized the importance of films. Netflix has declined to discuss any figures.

Some analysts argue the Disney deal is a positive development, but one that will not move the needle when it comes to attracting new members.

“Netflix customers will like it when Disney movies show up, but not many people will want to sign up for Netflix because they have 15 new movies a year I want to see,” Pachter said.

That’s why Netflix bankrolled “Arrested Development,” a show canceled by Fox in 2006 that still has a small but loyal audience, one that will assuredly watch the new season on Netflix. That’s also why it has invested in so many new shows from established artists like Kohan, who created “Weeds,” and Roth, a successful horror filmmaker.

While the company’s first foray into original programming – Steven Van Zandt’s “Lilyhammer” – didn’t make much of a splash, the new shows debuting next year look far more promising.

It also has committed a reported $ 100 million for two seasons of “House of Cards,” as well as offering complete creative freedom to Fincher and his team.

The money the streaming service spends on its own shows is a pittance compared to what it shells out in licensing deals, but that original content will distinguish Netflix from competitors in broadcast, like HBO, and in digital, like Amazon.

“Everybody is trying to get their brand to the top of people’s minds, and sometimes that requires a substantial expenditure and doing something different, like original production,” Bill Carroll, vice president and director of programming at Katz Television Group, told TheWrap.

More than any of its competitors in the streaming-video market, Netflix is attempting to transform itself into a digitized form of HBO, which began by airing studio movies.

HBO later added lower-cost programming, such as stand-up comedy shows, and eventually original series and films. Showtime, Starz and others soon followed.

Because it is not locked into a schedule, Netflix can host an unlimited amount of programming and owns a wealth of information about its subscribers to tailor its offerings to specific viewers and track their success.

Figuring out just what constitutes a “hit,” however, will be difficult. As it has with previous original shows like “Lilyhammer,” Netflix will not release viewing numbers for its upcoming shows. The company stresses that immediate viewing is less important than developing a loyal following over time.

As for the Disney deal, Netflix already had rights to films from that studio and Sony under an agreement with Starz, which in September 2011 opted not to renew its deal.

“They got something they used to have and had to pay a lot more money for it,” Seth Willenson, a library-valuation expert, producer and former studio executive told TheWrap.

So what changed? Exclusivity.

Disney’s new releases will appear on Netflix during the same window when they would have been showing on an HBO or another pay channel. It also means that new rivals, such as Amazon and Hulu Plus, won’t be getting the latest “Avengers” sequel at the same time – or the upcoming series of new “Star Wars” films.

“The argument is that what they are getting now from Disney will only be on Netflix,” Vasily Karasyov, an analyst with Susquehanna told TheWrap. “What they were getting before was only on Starz. It’s more exclusive. They are trying to do what Starz did in the ’90s and buy up rights and put it on the map.”

At the UBS conference last week in New York, Chief Creative Officer Ted Sarandos teased the possibility of pursuing exclusive deals with more studios as well.

This new attraction to movies represents a change of tune for the Los Altos, Calif.-based company. After all, Netflix has been publicly dismissive in recent months of film’s importance to its service, stressing its viewers’ penchant for binge-watching television shows, like AMC’s “Breaking Bad” and “Mad Men.”

About 60 percent of Netflix viewing time is spent on TV, a number that has only grown in recent years. Exclusivity increasingly motivates its decision-making on the TV side as well, which is one reason it allowed its deal with A&E Networks to expire in September, taking shows like “Storage Wars” and “Hoarders” off Netflix.

And nothing is more exclusive than content you fund yourself.

“It wants content unique to its platform,” Karasyov said. “No one says, ‘Come to my website because we have the same stuff everyone else does.’”

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Germany passes law to protect circumcision after outcry

BERLIN (Reuters) – German politicians passed a law on Wednesday to protect the right to circumcise infant boys in a show of support for Muslims and Jews angered by a local court ban on the practice in May.

The ban – imposed on the grounds that circumcision amounted to “bodily harm” – triggered an emotional debate over the treatment of Jews and other religious minorities, a sensitive subject in a country still haunted by its Nazi past.

The outcry prompted Germany‘s centre-right government and opposition parties to draw up legislation confirming the practice was legal – overruling the decision by a court in the western city of Cologne.

The new law passed by an overwhelming majority in Bundestag lower house said the operation could be carried out, as long as parents were informed about the risks.

Jewish groups welcomed the move.

“This vote and the strong commitment shown … to protect this most integral practice of the Jewish religion is a strong message to our community for the continuation and flourishing of Jewish life in Germany,” said Moshe Kantor, President of the European Jewish Congress.

Germany’s Catholic Bishops Conference said it hoped the bill would help safeguard religious freedoms. No comment was immediately available from the country’s Central Council of Muslims.

PAIN MINIMISED

The May ruling centered on the case of a Muslim boy who bled after the procedure and the ban only applied to the area around Cologne.

But some doctors in other parts of Germany started refusing to carry out circumcisions, saying it was unclear whether they would face prosecution.

Under the new law, a doctor or trained expert must conduct the operation and children must endure as little pain as possible, which means an anesthetic should be used. The procedure cannot take place if there is any doubt about the child’s health.

Justice Minister Sabine Leutheusser-Schnarrenberger said no other country in the world country had made the religious circumcision of boys an offence.

“In our modern and secular state, it is not the job of the state to interfere in children’s’ upbringing,” she said.

Child welfare group Deutsche Kinderhilfe disagreed, saying the government had “(pushed) through the legalization of the ritual of genital circumcision … against the advice of child right campaigners and the medical profession.”

(Reporting by Madeline Chambers; Edited by Stephen Brown and Andrew Heavens)

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Fed sends clearer signal on keeping rates low

WASHINGTON (AP) — The Federal Reserve sent its clearest signal to date Wednesday that it will keep interest rates super-low to boost the U.S. economy even after the job market has improved significantly.

The Fed says it plans to keep its key short-term rate near zero at least until the unemployment rate drops below 6.5 percent — as long as expected inflation remains no more than 2.5 percent. Unemployment is now 7.7 percent. Annual inflation is about 2 percent.

That plan adds detail to what the Fed had said before: that it expects to keep the rate low until at least mid-2015.

In a statement Wednesday after its final policy meeting of the year, the Fed also said it will keep spending $ 85 billion a month on bond purchases to drive down long-term borrowing costs and stimulate economic growth.

The Fed will spend $ 45 billion a month on long-term Treasury purchases to replace a previous bond-purchase program of an equal size. And it will keep buying $ 40 billion a month in mortgage bonds.

“The Fed has become more explicit and more transparent,” said Steven Wood, chief economist at Insight Economics. “This should provide the markets with much more clarity around monetary policy action in the upcoming year.”

With its new purchases of long-term Treasurys, the Fed’s investment portfolio, which is nearly $ 3 trillion, would swell to nearly $ 4 trillion by the end of 2013 if its bond purchase programs remain in place.

The policies are intended to help an economy that the Fed says is growing only modestly.

Stocks and bond yields rose after the Fed’s statement was released. The Dow Jones industrial average was little changed just before the Fed news crossed at 12:30 p.m. Eastern time and jumped 69 points shortly after.

The yield on the benchmark 10-year Treasury note rose to 1.69 percent from 1.65 percent as investors sold ultra-safe investments and moved money into stocks.

The Fed’s plan to keep stimulating the economy at least until unemployment has reached 6.5 percent is intended to reassure consumers, companies and investors, said Joseph Gagnon, a former Fed official who is a senior fellow at the Peterson Institute for International Economics.

Having only a target date of mid-2015 for any increase in interest rates “sounded gloomy,” as if the economy would remain weak until then, Gagnon said. Specifying an unemployment rate — close to a normal rate of 6 percent or less — makes clear that the Fed will keep stimulating the economy even after the job market has strengthened.

“This is trying to get away from that sense of ‘Oh, my God, this is all about gloom and doom,’ ” Gagnon said.

The Fed’s new plan to link any rate increase to specific levels of unemployment and inflation mirrors a proposal pushed by Charles Evans, president of the Federal Reserve Bank of Chicago.

Updated forecasts that the Fed released Wednesday illustrate why it thinks it should continue stimulating the economy. It expects unemployment to remain at least 7.4 percent next year and 6.8 percent by the end of 2014. The earliest it sees unemployment dropping below 6.5 percent is the end of 2015.

It expects the economy to grow no more than 3 percent next year before picking up to 3.5 percent in 2014 and 3.7 percent in 2015.

The Fed said it can pursue the aggressive stimulus programs because inflation remains below its target. Its statement was approved on an 11-1 vote. Jeffrey Lacker, president of Federal Reserve Bank of Richmond, objected for the eighth time this year.

The meeting was held against the backdrop of the looming “fiscal cliff,” the sharp tax increases and spending cuts that will hit the economy in January if Congress and President Barack Obama are unable to reach an agreement this month to avert them.

Bernanke has said that the Fed’s efforts will not be able to rescue the economy if the budget negotiations fail and the country does go over the fiscal cliff.

Fears of the cliff have led some U.S. companies to delay expanding, investing and hiring. Manufacturing has slumped. Consumers have cut back on spending. Unemployment remains elevated. If higher taxes and government spending cuts were to last for much of 2013, most experts say the economy would sink into another recession.

The latest bond-buying program would replace an expiring program called Operation Twist. With Twist, the Fed sold $ 45 billion a month in short-term Treasurys and used the proceeds to buy the same amount in longer-term Treasurys.

Twist didn’t expand the Fed’s investment portfolio, it just reshuffled the holdings. But the Fed has run out of short-term securities to sell. So to maintain its pace of long-term Treasury purchases and to keep long-term rates low, it must spend more and increase its portfolio.

The Fed’s portfolio totals nearly $ 2.9 trillion — more than three times its size before the 2008 financial crisis.

The Fed has launched three rounds of bond purchases since the financial crisis hit. In announcing a third program in September, the Fed said it would keep buying mortgage bonds until the job market improved substantially.

Skeptics note that rates on mortgages and many other loans are already at or near all-time lows. So any further declines in rates engineered by the Fed might offer little economic benefit.

Inside and outside the Fed, a debate has raged over whether the Fed’s actions have helped support the economy over the past four years, whether they will ignite inflation later and whether they should be extended.

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FX orders “Tyrant” from “Homeland” producers

NEW YORK (TheWrap.com) – FX has ordered the Middle Eastern drama pilot “Tyrant” from “Homeland” producers Howard Gordon and Gideon Raff, as well as “Six Feet Under” and “Lost” producer Craig Wright.

The pilot follows an American family drawn into the troubles of a turbulent Middle Eastern nation. The series, written and created by Raff, was developed by Gordon and Wright. The pilot comes from Gordon’s shingle at 20th Century Fox Television, Teakwood Lane.

Gordon, Raff and Wright are executive producers in association with Keshet Broadcasting. If “Tyrant” becomes a series, Wright will serve as showrunner.

“We are thrilled to bring ‘Tyrant’ to FX,” said Nick Grad, FX’s executive vice president of original programming. “The brilliant and wholly original concept just blew us all away. It’s pretty amazing when you read a script and can instantly imagine it becoming one of the best shows on television. We’re grateful to the producers for choosing to bring it to FX and look forward to continuing our partnership with our friends at Fox 21.”

“‘Tyrant’ is exactly the type of project we aim to do at Fox 21 – working with extremely talented writer/creators to create provocative material with big, breakout characters and themes,” said Bert Salke, president of Fox 21. “This script has excited everyone who’s read it and it’s particularly gratifying to be back working with FX, with whom we have had such a successful partnership on the fantastic ‘Sons of Anarchy.’”

Production is tentatively slated to begin in the spring.

TV News Headlines – Yahoo! News

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