Inflation remains tame, but so do gains in earnings

WASHINGTON -- Despite worry in some corners about the Federal Reserve's stimulus efforts stoking inflation, there continues to be little indication that consumer prices are heading higher.

The consumer price index was flat in January for the second month in a row, the Bureau of Labor Statistics reported Thursday. A drop in gas prices and a halt to recent gains in food prices held down the overall index. Compared with a year ago, the consumer price measure for January was up a mild 1.6%.

But that moderate inflation rate will provide little comfort to most consumers. Not only have gas prices jumped in recent weeks, the end of the payroll tax holiday at the start of this year has clipped about $40 from the biweekly paycheck for the average worker.

With that, inflation-adjusted average hourly earnings in January were up just 0.6% from a year ago, the Bureau of Labor Statistics said.

Excluding energy and food, the so-called core measure of consumer prices, which is more closely tracked by the Fed, rose 0.3% in January from December, the highest in 20 months. Higher prices for clothes and shelter accounted for much of that increase, although consumers also paid more for airline fares, medical services and school tuitions in January.

Still, the annual core inflation rate in January held at 1.9% for the third straight month. That is just a notch below the 2% inflation target set by the Fed, which has been pumping money into the financial system to stimulate economic growth and help bring down the high jobless rate.

The Fed's stimulus efforts include the purchase of $85 billion worth of government and mortgage bonds a month, aimed at holding down long-term interest rates to spur investment, spending and hiring. Many economists and policymakers, including some Fed members, are concerned that the central bank's easy-money policies will lead to spiraling inflation down the road.

So far, there’s little sign of that.

"Consumer inflation remains relatively tame, mostly because of persistently subdued economic growth," said Diane Swonk, chief economist at Mesirow Financial in Chicago. "Ongoing constraints on consumer budgets, however, will force a reallocation away from discretionary purchases toward necessities. This will hold overall inflation in check, but remain extremely uncomfortable."

ALSO:

Consumer sentiment bounces back in February

Retail sales growth slows as higher payroll tax resumes

More Fed officials worry about negative effects of stimulus

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Grapevine on Interstate 5 closed due to ice

By Hailey Branson-Potts

February 20, 2013, 7:19 a.m.

The California Highway Patrol shut down a stretch of Interstate 5 through the Grapevine early Wednesday because of ice.

The freeway was closed about 6:35 a.m. between Castaic and Grapevine Road, said CHP Officer Ed Jacobs. No motorists were stranded, he said.

“Until further notice, it’s Mother Nature’s call” on when to reopen the highway, Jacobs said.

Lingering rain, snow showers and gusty winds were expected to affect mountain regions until midday, according to the National Weather Service. Up to three inches of snow could fall Wednesday at elevations as low as 2,000 feet.

The additional precipitation could create hazardous icy roadways, the National Weather Service said. Snowfall, coupled with heavy winds, could reduce visibility to zero.

A stretch of California 58 in Kern County, which was shut down Tuesday night because of snow, remained closed, according to the California Highway Patrol.

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Robin Roberts returns to 'Good Morning America'

NEW YORK (AP) — Five months after undergoing a bone marrow transplant, Robin Roberts is back on television in the morning.

Roberts said Wednesday she'd been waiting 174 days "to say this, good morning America."

The morning-show host is recovering from MDS, a blood and bone marrow disease. She looked thin with close-cropped hair but was smiling broadly, back at work on "Good Morning America" at ABC's studio in New York.

Roberts was welcomed back in a taped message from President Barack Obama and his wife, Michelle, former ESPN colleagues and Magic Johnson.

ABC announced Roberts will interview the first lady later this week, to be shown next Tuesday.

ABC News President Ben Sherwood came into the studio to give fist bumps to the anchors at the 7:25 a.m. EST break. He said Roberts' health will be closely monitored to make sure she doesn't overdo it at the beginning.

"This was up to Robin, her doctors and God," Sherwood said. "It's a day that we all rejoice."

ABC didn't miss a beat with her absence, continuing in first place in the ratings after first overcoming NBC's "Today" show last spring. Sherwood said the success with Roberts' absence surprised him.

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Ask an Expert: Questions About Hearing Loss? A Help Desk

This week’s Ask the Expert features Neil J. DiSarno, who will answer questions about hearing loss. Dr. DiSarno is the chief staff officer for audiology at the American Speech-Language-Hearing Association. From 1998 to 2012 he was chairman of the department of communication sciences and disorders at Missouri State University. Following are the types of questions that Dr. DiSarno is prepared to answer.

Neil J. DiSarno of the American Speech-Language-Hearing Association.

¶My wife has told me she believes I’m not hearing as well as I used to. What sort of specialist should I see and what can I expect?

¶I’ve been told that I should consider using hearing aids. If I decide to, how much better am I likely to hear?

¶I’ve noticed that my 2-year-old granddaughter’s speech is not developing properly. Neither her mother or the pediatrician seem to be concerned, but I suspect there is a problem. What do you suggest?

¶I use hearing aids, but still have great difficulty hearing conversation in restaurants and in large group settings. Is this common and is there something more that I can do to improve my ability to function in those settings?

Please leave your questions in the comments section. Answers will be posted on Wednesday, Feb. 27. (Unfortunately, not all questions may be answered.)

Booming: Living Through the Middle Ages offers news and commentary about baby boomers, anchored by Michael Winerip. You can connect with Michael Winerip on Facebook here. You can follow Booming via RSS here or visit nytimes.com/booming and reach us by e-mail at booming@nytimes.com.

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2 fugitives accused of Medicare fraud may be in Glendale, U.S. says

Federal investigators say Anush Sahakyan, above, and Karo Gotti Blkhoyan fraudulently billed Medicare for $1.3 million. (U.S. Department of Health and Human Services)

By Chad Terhune

February 20, 2013, 7:52 a.m.

Federal authorities say two of Medicare's most-wanted fugitives may be hiding out in Glendale.

Healthcare investigators say Karo Gotti Blkhoyan, 32, and Anush Sahakyan, 29, set up a phony medical clinic in South Carolina from 2009 to 2010 and billed for $1.3 million in false claims. Medicare paid out more than $300,000.

The pair, indicted last year on charges including healthcare fraud and money laundering, used the stolen identities of Medicare patients in California and New York, officials said.

"We have information through witnesses that they are in the Glendale area," said Su Kim, a special agent in South Carolina with the U.S. Department of Health and Human Services' inspector general.

The inspector general's office launched its most-wanted list in 2011, and 41 fugitives have been captured thus far. There are more than 170 fugitives on the list, officials said.

The giant healthcare program has been a tempting target for criminals for years. Medicare processes about 2.9 million claims daily and 10,000 seniors join the rolls every day.

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Small surgeries, huge markups

Tax help comes with health insurance advice

Former L.A. clinic owner makes Medicare's most-wanted list

Follow Chad Terhune on Twitter

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At least one dead in shootings near Tustin; SigAlert on 55 Freeway

By Hailey Branson-Potts

February 19, 2013, 7:18 a.m.

At least one person was dead Tuesday morning after shootings in multiple locations in Tustin, KTLA-TV reported.

The shootings occurred near the 55 Freeway, according to officials with the Tustin Police Department.

A SigAlert was issued at 6 a.m. for the southbound 55 Freeway at McFadden Avenue and the McFadden exit ramp was closed.

Comments are filtered for language and registration is required. The Times makes no guarantee of comments' factual accuracy. Readers may report inappropriate comments by clicking the Report Abuse link next to a comment. Here are the full legal terms you agree to by using this comment form.

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Clive Davis reveals in memoir that he's bisexual

NEW YORK (AP) — Record executive Clive Davis says he's bisexual.

In his new memoir, out Tuesday, the 80-year-old, who is twice divorced, reveals that he had sex with a man in the 1970s. Davis writes in "The Soundtrack of My Life" that he hadn't been repressed or confused during his marriages and that sex with a man "provided welcome relief."

He also writes that he started dating a man from 1990 to 2004, which he says was a "tough adjustment" for his son Mitchell. He says after "one trying year," he and his son worked things out. Davis is the father of three children.

Davis is the chief creative officer of Sony Music Entertainment. He writes that he's been in a "strong monogamous relationship" with a man for the last seven years.

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Well: Susan Love's Illness Gives New Focus to Her Cause

During a talk last spring in San Francisco, Dr. Susan Love, the well-known breast cancer book author and patient advocate, chided the research establishment for ignoring the needs of people with cancer. “The only difference between a researcher and a patient is a diagnosis,” she told the crowd. “We’re all patients.”

It was an eerily prescient lecture. Less than two months later, Dr. Love was given a diagnosis of acute myelogenous leukemia. She had no obvious symptoms and learned of her disease only after a checkup and routine blood work.

“Little did I know I was talking about myself,” she said in an interview. “It was really out of the blue. I was feeling fine. I ran five miles the day before.”

Dr. Love, a surgeon, is best known as the author of the top-selling “Dr. Susan Love’s Breast Book” (Da Capo Press, 2010) now in its fifth edition. She is also president of the Dr. Susan Love Research Foundation, which focuses on breast cancer prevention and research into eradicating the disease. But after decades of tireless advocacy on behalf of women with breast cancer, Dr. Love found herself in an unfamiliar role with an unfamiliar disease.

“There is a sense of shock when it happens to you,” she said. “In some ways I would have been less shocked if I got breast cancer because it’s so common, but getting leukemia was a world I didn’t know. Even when you’re a physician, when you get shocking news like this you sort of forget everything you know and are scared the same as everybody else.”

Because Dr. Love’s disease was caught early, she had a little time to seek second opinions and choose her medical team. She chose City of Hope in Duarte, Calif., because of its extensive experience in bone marrow transplants. At 65, Dr. Love was startled to learn she was considered among the “elderly” patients for this type of leukemia.

She was admitted to the hospital and underwent chemotherapy. Because her blood counts did not rebound after the treatment, her stay lasted a grueling seven weeks.

She went home for just two weeks, and then returned to the hospital for a bone-marrow transplant, with marrow donated by her younger sister, Elizabeth Love De Garcia, 53, who lives in Mexico City.

Although the transplant itself was uneventful, the next four weeks were an ordeal. Dr. Love developed pain and neuropathy from the chemotherapy drugs. Dr. Love’s wife, Dr. Helen Cooksey; daughter, Katie Love-Cooksey, 24; and siblings offered round-the-clock support. Ms. Love-Cooksey slept in the hospital every night. “I wasn’t very articulate during that time, but I always had my family there,” Dr. Love said. “They were great advocates for me.”

The transplant “is quite an amazing thing,” Dr. Love said. Her blood type changed from O positive to B positive, the same type as her sister. She also has inherited her sister’s immune system, and a lifelong allergy to nickel has disappeared. “I can wear cheap jewelry now,” she said. She returned to work last month.

Dr. Love has been told her disease is in remission, though her immune system remains compromised and she is more susceptible to infection. So she avoids crowds, air travel and other potential sources of cold and flu viruses.

While Dr. Love has always been a strong advocate for women undergoing cancer treatment, she says her disease and treatment has strengthened her understanding of what women with breast cancer and other types of cancer go through during treatments.

“There are little things like having numb toes or having less stamina to building muscles back up after a month of bed rest,” she said. “There is significant collateral damage from the treatment that is underestimated by the medical profession. There’s a sense of ‘You’re lucky to be alive, so why are you complaining?’ ”

Dr. Love says her experience has emboldened her in her quest to focus on the causes of disease rather than new drugs to treat it.

“I think I’m more impatient now and in more of a hurry,” she said. “I’ve been reminded that you don’t know how long you have. There are women being diagnosed every day. We don’t have the luxury to sit around and come up with a new marketing scheme. We have to get rid of this disease, and there is no reason we can’t do it.”

People who remain skeptical about the ability to eradicate breast cancer should look to the history of cervical cancer, she said. Decades ago, a woman with an abnormal Pap smear would be advised to undergo hysterectomy. Now a vaccine exists that can protect women from the infection that causes most cervical cancers.

“We need to focus more on the cause of breast cancer,” she said. “I’m still very impressed with the fact that cancer of the cervix went from being a disease that robbed women of their fertility, if not their lives, to having a vaccine to prevent it.”

Dr. Love, who wrote a book called “Live a Little!,” said illness has also made her grateful that she didn’t put off her “bucket list” and that she has traveled the world and focused on work she finds challenging and satisfying.

“It just reminds you that none of us are going to get out of here alive, and we don’t know how much time we have,” she said. “I say this to my daughter, whether it’s changing the world or having a good time, that we should do what we want to do. I drink the expensive wine now.”

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Talk of more corporate deals sends stocks higher

Talk of more mergers and acquisitions is sending stock prices higher in early trading, setting the market up to continue a seven-week rally.

Reports that retailers Office Depot and OfficeMax are discussing a combination come after several big corporate deals were announced in recent weeks. Investors are becoming optimistic that more deals could be on the way as buyers pay premium prices for publicly traded companies.

The Dow Jones industrial average was up 44 points at 14,025 after the first hour of trading Tuesday. U.S. markets were closed Monday for the Presidents' Day holiday.

The gains were broad. All 10 of the industry groups tracked by the Standard & Poor's 500 index rose, led by consumer staples. Two stocks rose for every one that fell on the New York Stock Exchange.

The S&P 500 was up five points at 1,525. The technology-heavy Nasdaq composite index was up nine points at 3,201. Google traded above $800 a share for the first time.

Markets were also higher in Europe following news that the German economy is picking up steam. Indexes rose about 1 percent in Germany, France and Britain.

Stocks of office supplies stores jumped in early trading following a report in The Wall Street Journal that OfficeMax and Office Depot were considering a deal to combine, which would result in big cost savings. The paper said an announcement could come as early as this week.

OfficeMax soared $2.73 to $13.48, a gain of 25 percent, and Office Depot shot up 821 cents to $5.41, a gain of 18 percent. Staples also rose as investors anticipated that more mergers could be on the way for companies that sell office supplies.

Analysts cautioned that corporate deals in the highly competitive office supply business may not win the approval of antitrust regulators. Staples tried to buy Office Depot in 1997, but was blocked by the Federal Trade Commission.

The news follows shortly after a wave of big corporate deals that involved household names like Heinz and Dell.

Health insurers fell following the release of preliminary government data that suggests rate cuts to Medicare Advantage plans for next year that were steeper than many had anticipated.

Humana had the biggest loss in the S&P 500, dropping $6.27 to $71.72, a drop of 8 percent. UnitedHealth fell $1.35 to $56. Humana and UnitedHealth are the two largest Medicare Advantage providers.

The government says it expects costs per person for Medicare Advantage plans to fall more than 2 percent in 2014. The government uses this figure as a benchmark to determine payments for these privately run versions of the government's Medicare program, which covers the elderly and disabled. Medicare Advantage plans are offered by health insurers and subsidized by the government.

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Mary Jo White could face conflicts of interest as SEC chairwoman

NEW YORK — As a lawyer in private practice, Mary Jo White worked for Wall Street all-stars: banking giant JPMorgan Chase & Co., auditor Deloitte & Touche, former Bank of America Corp. chief Ken Lewis.

White, President Obama's pick to lead the U.S. Securities and Exchange Commission, even did legal work for former Goldman Sachs Group Inc. director Rajat Gupta, the highest-profile catch in the federal government's crackdown on insider trading, according to disclosures White filed ahead of her U.S. Senate confirmation hearing.

If she wins approval to lead the country's top financial watchdog, government ethics rules could force White to sit out of some SEC decisions. Potential conflicts of interest — or the appearances of conflicts — could arise from her work at the high-powered New York law firm Debevoise & Plimpton, and that of her husband John White, a partner at the prestigious firm Cravath, Swaine & Moore.

Obama's appointment of White, a former U.S. attorney in Manhattan known for high-profile prosecutions of mobsters and terrorists, was seen as a signal the administration was getting tougher on Wall Street. Her confirmation hearing in the Senate has not yet been scheduled but is expected in the next several weeks.

"She would have quite a minefield to navigate," said Robert Kelner, an attorney who is an expert in government ethics rules at the law firm Covington & Burling in Washington. "But this is not unusual for a senior-level appointee coming out of a law firm."

White could have to abstain from votes on matters involving former clients at a time when the SEC has been struggling to regain investor confidence among regulators and financial markets.

Government ethics rules generally prevent commissioners from participating in matters in which they or their spouses have any financial stake, or have any interest that could raise questions about their impartiality, Kelner said.

These rules generally restrict commissioners from taking part in cases they worked on while in the private sector — whether to bring a securities fraud lawsuit against a former client, for example, Kelner said.

White could still be involved in other matters dealing with former clients, just as long as she hasn't previously worked on the other side of particular cases before the SEC, Kelner said.

What could also complicate White's tenure at the SEC is an ethics pledge Obama has required executive-branch appointees to sign since he took office.

Aiming to limit the effects of the "revolving door" between government officials and the private sectors they regulate, the ethics pledge precludes appointees from participating in any matter involving "specific parties that is directly and substantially related" to their "former employer or former clients." Kelner said the pledge generally would not apply to broad regulations or policies.

The White House could grant White a waiver from the ethics pledge.

White did not respond to an email request for comment. Nominees typically do not speak publicly ahead of their confirmation hearings.

White would take over the SEC at a time when the agency faces major regulatory issues, aside from enforcement issues. The five-member commission, under former Chairwoman Mary Schapiro, failed to pass a sweeping overhaul of money-market funds, which federal officials say remain a weak link in the financial system.

Also before the SEC are rules governing high-speed stock trading and how the increasingly fragmented stock market is structured. The agency still must mete out myriad regulations called for by the Dodd-Frank financial overhaul of 2010.

John Coffee, a securities law expert at Columbia University in New York, said White has no apparent conflicts involving the marquee regulatory matters facing the SEC.

"There is just a forest of bayonets waiting out there if she looked like she was protecting a former client from an enforcement action," Coffee said. "I think she's also too smart to put herself in that kind of position."

andrew.tangel@latimes.com

Times staff writer Jim Puzzanghera in Washington contributed to this report.

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