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Monthly Archives: December 2012

The initiative is arguably counterintuitive because domestic airlines have been piling up money in recent years from all sorts of fees — baggage fees and the change-penalty fees among them — on top of the base fares.

American’s new coach fare options are “another example of how we’re building toward a new, innovative and more modern airline,” said Rob Friedman, the vice president for marketing at the airline, which is about to emerge from bankruptcy court protection and is in talks with US Airways.

Oddly, while American moves to incorporate some stand-alone fees into some base fares, a process known as bundling a fare, Southwest Airlines seems to be going in the other direction. Southwest, which has long bragged about having simple fare structures that don’t include fees for things like changing tickets or checking bags, recently announced plans to increase its dependence on fees, a process known as unbundling.

It all adds up to more complexities on the chalkboard of airline fee and fare formulas.

The changes by American and Southwest suggest that domestic airlines in general are looking more closely at ways to experiment with revenue, especially from business travelers, as a new year begins with indications that demand is dropping.

In November, most airlines in the United States reported small declines in passenger demand and in load factors, the number of available seats filled by paying customers. Southwest, for example, reported that its revenue passenger-miles, a standard measure of demand, were off 3.3 percent compared with November 2011.

On Monday, the airline forecaster Michael Boyd, of the Boyd Group International, summed up his predictions for 2013 this way: “No traffic growth. Fewer flights. Less capacity.” Airlines, he added, will focus more “on revenue growth, not traffic volume.”

American’s new fare strategy encompasses two basic changes, both of which include some fees in coach fares. One is Choice Essential, which costs $68 extra for a round-trip domestic fare but eliminates the $150 penalty fee for ticket changes after purchase. It also drops the $25 fee for the first checked bag and gives the buyer “priority boarding.” (We’ll address the laughable scrum that airlines’ “priority boarding” has become in a future column.)

Another option, Choice Plus, costs $88 extra and adds penalty-free same-day standby change options, while also eliminating the change penalty. And it includes what American calls a free “premium beverage” (beer, wine, cocktail), and a 50 percent bonus on frequent-flier mileage awards, as well as priority boarding.

American’s lowest nonrefundable coach fare structure, which it now calls Choice, remains unchanged. That is, checked-bag fees and $150 penalty fees for making a reservations change remain in effect, while customers continue to have “the flexibility to purchase additional products à la carte,” as American put it.

The American penalty fee changes are aimed mostly at business travelers, the customers most likely to occasionally change plans after a ticket is purchased. Southwest’s recently announced fare and policy changes include a penalty fee on tickets that are not used and not canceled before flight time.

Southwest has long been valued by many business travelers for not charging a penalty fee to rebook a ticket, and that has not changed. Southwest said it was merely adding a “no-show fee” for customers using the cheapest fares who rebook “tickets that are not flown and not canceled by our passengers prior to a flight,” Robert E. Jordan, Southwest’s chief commercial officer, said at a recent meeting with airline stock market analysts.

But in describing initiatives that are certain to interest Southwest’s intensely loyal customer base once the details are announced early in 2013, Mr. Jordan also said, “We are increasing our ancillary fees” in general, without providing specifics. He said that Southwest hoped to raise an additional $100 million this year from new fees.

There is no indication that Southwest is considering revising its policies on basic rebooking or allowing the first two bags to be checked free. Still, an increasing reliance on fees will probably start to redefine the Southwest flying culture. For example, Mr. Jordan said, “we are testing a new revenue stream enabled by selling open and premium boarding positions, so that’s the A1 to A15 position, and selling those open positions at the gate.” Southwest also plans to increase its “EarlyBird” priority boarding fee to $12.50 from $10.

Airlines have come to depend mightily on revenue from fees. In 2011, domestic airlines raised $2.4 billion in change-penalty fees, up from $915.2 million in 2007, according to the Bureau of Transportation Statistics, an agency of the Transportation Department.

And there is even more money in fees for checked bags. In 2007, a year before most airlines other than Southwest began charging for most checked bags on coach fares, domestic carriers raised a mere $464.3 million from such charges. Last year, the total was $3.4 billion.

E-mail: jsharkey@nytimes.com

The drug, to be called Sirturo, was discovered by scientists at Janssen, the pharmaceuticals unit of Johnson & Johnson, and is the first in a new class of drugs that aims to treat the drug-resistant strain of the disease.

Tuberculosis is a highly infectious disease that is transmitted through the air and usually affects the lungs but can also affect other parts of the body, including the brain and kidneys. It is considered one of the world’s most serious public health threats. Although rare in the United States, multidrug-resistant tuberculosis is a growing problem elsewhere in the world, especially in poorer countries. About 12 million people worldwide had tuberculosis in 2011, according to Johnson & Johnson, and about 630,000 had multidrug-resistant TB.

A study in September in The Lancet found that almost 44 percent of patients with tuberculosis in countries like Russia, Peru and Thailand showed resistance to at least one second-line drug, or a medicine used after another drug had already failed.

Treating drug-resistant tuberculosis can take years and can cost 200 times as much as treating the ordinary form of the disease

“This is quite a milestone in the story of therapy for TB,” Dr. Paul Stoffels, the chief scientific officer at Johnson & Johnson, said in an interview. He said the approval was the first time in 40 years that the agency had approved a drug that attacked tuberculosis in a different way from the current treatments on the market. Sirturo works by inhibiting an enzyme needed by the tuberculosis bacteria to replicate and spread throughout the body.

Sirturo, also known as bedaquiline, would be used on top of the standard treatment, which is a combination of several drugs. Patients with drug-resistant tuberculosis often must be treated for 18 to 24 months.

Even as it announced the approval, however, the F.D.A. also issued some words of caution.

“Multidrug-resistant tuberculosis poses a serious health threat throughout the world, and Sirturo provides much-needed treatment for patients who have don’t have other therapeutic options available,” Edward Cox, director of the office of antimicrobial products in the F.D.A.’s center for drug evaluation and research, said in a statement. “However, because the drug also carries some significant risks, doctors should make sure they use it appropriately and only in patients who don’t have other treatment options.”

The consumer advocacy group Public Citizen opposed approval in a letter to the F.D.A. in mid-December, saying that the results of a limited clinical trial showed that patients using bedaquiline were five times as likely to die than those on the standard drug regimen to treat the disease.

“Given that bedaquiline belongs to an entirely new class of drugs, it is entirely feasible that death in some cases was due to some unmeasured toxicity of the drug,” the letter said.

Sirturo carries a so-called black box warning for patients and health care professionals that the drug can affect the heart’s electrical activity, which could lead to an abnormal and potentially fatal heart rhythm. The warning also notes deaths in patients treated with Sirturo. Nine patients who received Sirturo died compared with two patients who received a placebo. Five of the deaths in the Sirturo group and all of the deaths in the placebo arm seemed to be related to tuberculosis, but no consistent reason for the deaths in the remaining Sirturo-treated patients could be identified.

Doctors Without Borders and the Bill and Melinda Gates Foundation, both active in the fight against tuberculosis and other global diseases, applauded the F.D.A.’s decision.

Jan Gheuens, interim director of the TB Program for the Gates Foundation, called it a “long-awaited event” and said the fight against TB had not benefited from new drugs in the way H.I.V. had. Beyond the benefits of the drug itself, he said the quick approval process could be a model for other drugs sorely needed in the developing world.

He also suggested, however, that more trials should be conducted to get a better understanding of the side effects that led to the black box warning.

The F.D.A. approved bedaquiline under an accelerated program that allows the agency to conditionally approve drugs that are viewed as filling unmet medical needs with less than the usual evidence that they work. The drug’s approval was based on studies that showed it killed bacteria more quickly than a control group taking the standard regimen, but it did not measure whether in the end patients actually fared better on bedaquiline. Johnson & Johnson will conduct larger clinical trials to investigate whether the drug performs as predicted.

In a statement responding to Public Citizen’s letter, a spokeswoman for Johnson & Johnson said the company was committed to supporting appropriate use of Sirturo and would “work to ensure Sirturo is used only where treatment alternatives are not available.”

Dr. Stoffels said the hope was that other new tuberculosis drugs would also be approved that, when used in combination with bedaquiline, could shorten and simplify the current standard of treatment. “That is still a long time away,” he acknowledged, but “this is a first step in a new regimen for TB.”

 6:12 p.m. | Updated

Analysts and prospective buyers are preparing for horse trading to begin over the Tribune Company’s newspapers now that the company, whose holdings include The Los Angeles Times and The Chicago Tribune, has emerged from bankruptcy protection.

Tribune, which completed its bankruptcy paperwork on Monday, has not announced the sale of any assets, but it is likely to do so in the next several months so it can streamline its business, said Reed Phillips, managing partner of DeSilva & Phillips, a media banking firm.

The troubled state of the newspaper industry makes those assets most likely to be sold, he added. Less clear, however, is whether the company will sell them all at once or by region, for example selling The Chicago Tribune with Chicago magazine.

“The company is too large and complex right now, coming out of bankruptcy,” Mr. Phillips said. “What’s needed is a more focused strategy.”

Aaron Kushner, chief executive of Freedom Communications and publisher of The Orange County Register in California, confirmed on Monday that he was eager to buy Tribune’s newspapers. He would not say whether he had had any specific conversations with Tribune Company executives.

He said that from what he had gleaned from bankruptcy court filings and public pension documents, it seemed likely that Tribune would sell its newspapers as a group. That is because the company has such enormous and complex pension obligations and corporate overhead that it would be difficult to untangle them and sell properties individually.

“We’re interested in all of the papers, though obviously, from an outside perspective, we have not seen the numbers,” Mr. Kushner. “If papers are sold, someone has to be responsible for the pensions.”

The company’s reorganization plan was approved in July by the United States Bankruptcy Court in Delaware. It received final approval from the Federal Communications Commission in November.

The announcement on Monday ended a four-year process for the company. Its assets were tied up in court while the media industry continued its digital transformation. In a letter to employees, Eddy Hartenstein, the company’s chief executive, acknowledged that the last four years “have been a challenging period.”

“You have been resilient, dedicated to serving the company, our customers and your fellow employees,” he said. ”You are what sets Tribune apart from our competitors.”

The company also announced a seven-member board. The directors include Mr. Hartenstein and Peter Liguori, a former chief operating officer of Discovery Communications, who is expected to be named chief executive. Bruce Karsh, a founder of Oaktree Capital Management, which is a major shareholder in the company, also sits on the board, as does Ross Levinsohn, a former interim chief at Yahoo.

Tribune said it expected to resolve details about board members’ responsibilities at its first meeting in the next few weeks. The company is emerging from bankruptcy protection with a $300 million loan to finance its continuing operations, as well as a $1.1 billion loan to finance its reorganization. According to a company statement, Tribune plans to give former creditors 100 million shares of new class A common stock and new class B common stock.

The end of the bankruptcy has led to plenty of speculation about who might buy Tribune’s newspapers, with names like Rupert Murdoch and David Geffen floated as contenders. Mr. Phillips said he was skeptical that Mr. Murdoch would be a serious bidder because his company had so much else on its plate.

“I would think they would take a look,” said Mr. Phillips. “But when it comes to stepping up and making a substantial offer, I would be surprised. They’re already splitting off the publishing business from the entertainment business.”

He said that Mr. Geffen, too, would probably not acquire Tribune properties “unless the price is really attractive, because he’s not someone who has run a newspaper company previously. So I think it will be more of a challenge. The price he’s probably willing to pay based on advice from his advisers is going to be lower than what someone else is willing to pay.”

Mr. Kushner praised Tribune’s board and said he expected that “one of the first things that they’ll be trying to figure out is how the different parts of the Tribune company really work well together or separately.”

Mr. Kushner, who bought The Orange County Register last summer, said he was focused on buying large metropolitan newspapers. He said that while Tribune newspapers appeared to be profitable, how they would remain profitable was unclear, as with many newspapers.
At The Register, Mr. Kushner said, he tried to increase revenue by strengthening relationships with subscribers.

For example, he said, the newspaper gave its readers more value by increasing its pages 40 percent in the last year. It also spent $12.4 million sending $100 checks to its subscribers that they could in turn make payable to favorite local nonprofit groups. He said enhancing a paper’s relationship with subscribers would help drive subscriptions and, ultimately, advertising.

“Our basic view is that we add more value,” said Mr. Kushner. “This is the only path that we can have revenue grow.”

SAN FRANCISCO — The antivirus industry has a dirty little secret: its products are often not very good at stopping viruses.

Consumers and businesses spend billions of dollars every year on antivirus software. But these programs rarely, if ever, block freshly minted computer viruses, experts say, because the virus creators move too quickly. That is prompting start-ups and other companies to get creative about new approaches to computer security.

“The bad guys are always trying to be a step ahead,” said Matthew D. Howard, a venture capitalist at Norwest Venture Partners who previously set up the security strategy at Cisco Systems. “And it doesn’t take a lot to be a step ahead.”

Computer viruses used to be the domain of digital mischief makers. But in the mid-2000s, when criminals discovered that malicious software could be profitable, the number of new viruses began to grow exponentially.

In 2000, there were fewer than a million new strains of malware, most of them the work of amateurs. By 2010, there were 49 million new strains, according to AV-Test, a German research institute that tests antivirus products.

The antivirus industry has grown as well, but experts say it is falling behind. By the time its products are able to block new viruses, it is often too late. The bad guys have already had their fun, siphoning out a company’s trade secrets, erasing data or emptying a consumer’s bank account.

A new study by Imperva, a data security firm in Redwood City, Calif., and students from the Technion-Israel Institute of Technology is the latest confirmation of this. Researchers collected and analyzed 82 new computer viruses and put them up against more than 40 antivirus products, made by top companies like Microsoft, Symantec, McAfee and Kaspersky Lab. They found that the initial detection rate was less than 5 percent.

On average, it took almost a month for antivirus products to update their detection mechanisms and spot the new viruses. And two of the products with the best detection rates — Avast and Emsisoft — are available free; users are encouraged to pay for additional features. This despite the fact that consumers and businesses spent a combined $7.4 billion on antivirus software last year — nearly half of the $17.7 billion spent on security software in 2011, according to Gartner.

“Existing methodologies we’ve been protecting ourselves with have lost their efficacy,” said Ted Schlein, a security-focused investment partner at Kleiner Perkins Caufield & Byers. “This study is just another indicator of that. But the whole concept of detecting what is bad is a broken concept.”

Part of the problem is that antivirus products are inherently reactive. Just as medical researchers have to study a virus before they can create a vaccine, antivirus makers must capture a computer virus, take it apart and identify its “signature” — unique signs in its code — before they can write a program that removes it.

That process can take as little as a few hours or as long as several years. In May, researchers at Kaspersky Lab discovered Flame, a complex piece of malware that had been stealing data from computers for an estimated five years.

Mikko H. Hypponen, chief researcher at F-Secure, called Flame “a spectacular failure” for the antivirus industry. “We really should have been able to do better,” he wrote in an essay for Wired.com after Flame’s discovery. “But we didn’t. We were out of our league in our own game.”

Symantec and McAfee, which built their businesses on antivirus products, have begun to acknowledge their limitations and to try new approaches. The word “antivirus” does not appear once on their home pages. Symantec rebranded its popular antivirus packages: its consumer product is now called Norton Internet Security, and its corporate offering is now Symantec Endpoint Protection.

“Nobody is saying antivirus is enough,” said Kevin Haley, Symantec’s director of security response. Mr. Haley said Symantec’s antivirus products included a handful of new technologies, like behavior-based blocking, which looks at some 30 characteristics of a file, including when it was created and where else it has been installed, before allowing it to run. “In over two-thirds of cases, malware is detected by one of these other technologies,” he said.

Speaking at the Eisenhower Executive Office Building, adjacent to the White House, President Obama took note of the progress.

“Today it appears that an agreement to prevent this New Year’s tax hike is within sight, but it is not done,” he said. “There are still issues left to resolve, but we are hopeful that Congress can get it done. But it is not done.”

Mr. Obama used the occasion to warn Republicans that he would continue to press for more tax increases even beyond whatever may be included in a deal now. “If Republicans think I will finish the job of deficit reduction through spending cuts alone,” he said, then “they’ve got another thing coming. That’s not how it’s going to work.”

Republicans responded to the president’s speech angrily, accusing him of “moving the goal posts” just when a deal was in reach. They said that they knew that the two sides still had to agree on how to suspend the automatic spending cuts, but that they generally agreed that such a suspension would be offset, at least partially, by spending cuts elsewhere. Instead, the president said any deal to turn off the so-called sequester had to be financed by tax increases and spending cuts in concert.

“My heart is still pounding,” said Senator Bob Corker, Republican of Tennessee, expressing anger broadly felt by Republicans who said they were blindsided.

Mr. McConnell, of Kentucky, went to the Senate floor Monday afternoon, calling on Congress to act on the tax agreement and leave a deal on automatic spending cuts for the coming days. “Let’s pass the tax relief portion now,” he said. “Let’s take what’s been agreed to and get moving. The president wants this, members of Congress want to protect taxpayers, and we can get it done now.”

Under the emerging deal, income taxes would rise to 39.6 percent from 35 percent on income over $400,000 for single people and $450,000 for couples. Above those income levels, dividends and capital gains tax rates would also rise, to 20 percent from 15 percent.

The official familiar with the deal stressed that taxes would rise in some sense on the top 2 percent of earners, as Mr. Obama had wanted. That is because the deal would reinstate provisions to tax law, ended by the Bush tax cuts of 2001, that phase out personal exemptions and deductions for the affluent. Those phaseouts, under the agreement, would begin at $250,000 for single people and $300,000 for couples.

The estate tax would also rise, but considerably less than Democrats had wanted. The value of estates over $5 million would be taxed at 40 percent, up from the current 35 percent. Democrats had wanted a 45 percent rate on inheritances larger than $3.5 million.

Under the deal, the new rates on income, investment and inheritances would be permanent.

Mr. Obama and the Democrats would be granted a five-year extension of tax cuts they won in the 2009 stimulus law for middle-class and working-poor taxpayers. Those include a child credit that goes out as a check to workers who do not earn enough money to pay income taxes, an expanded earned income credit and a refundable credit for tuition.

Democrats also secured a full year’s extension of unemployment insurance without strings attached, a $30 billion cost.

All combined, the official said, the new package would raise about $600 billion over 10 years, compared to the revenue generated if current tax levels were simply extended. That, he said, is 85 percent of the revenue Democrats had wanted to raise under Mr. Obama’s initial proposal, which would have raised around $700 billion.

In addition, the deal would stave off sharp cuts for one year to health care providers who treat Medicare patients. That cost, about $30 billion, would be paid for with cuts to other health care programs.

But a final deal is being held up by one last question: What to do about $110 billion in automatic spending cuts set to begin Jan. 2.

While Republicans want them to go into force unless they are replaced by spending cuts elsewhere, Senate Democrats want to put them on “pause” for at least a year. All sides are angry over the impasse.

Mr. McConnell’s solution is likely to be resisted by Democrats, who will see it as a clear Republican victory with the spending cuts remaining in place. But many Republicans are just as opposed to those cuts as Democrats because they hit defense programs especially hard. Pressure would continue to mitigate or reverse the damage.

“Let me be clear,” Mr. McConnell said, “we will continue to work on finding smarter ways to cut spending, but let’s not let that hold up protecting Americans from the tax hike that will take place in about 10 hours. We can do this. We must do this.”

Robert Pear, John M. Broder and Jennifer Steinhauer contributed reporting.

He is expanding the Jay Peak ski resort, which he co-owns, but he is also building a biomedical research firm and a window manufacturing plant, extending the runway at the local airport and rehabilitating much of the nearby town of Newport, where he lives. There, he is developing the waterfront, adding the town’s first hotel and a conference center and rebuilding an entire downtown block. He is also creating what he says is the largest indoor mountain bike park in the world and a state-of-the art tennis center.

The price tag for the entire project, which Mr. Stenger says will create 10,000 direct and indirect jobs over several years, is $865 million.

But even more unusual than the size of the undertaking is the method by which Mr. Stenger and his business partner, Ariel Quiros, are financing it. They have tapped into a federal program that gives green cards, or permanent residency, to foreigners who invest at least $500,000 in an American business — the reward for the investment is a chance at United States citizenship.

Mr. Stenger has already attracted 550 foreign investors from 60 countries to put up $275 million for the first phase: a hotel here at the Jay Peak ski complex, an indoor water park the size of a football field, an ice hockey arena, condominiums, restaurants and stores.

The second and third phases, now under way, require 1,000 additional foreign investors to put up $500 million to overhaul Newport and to develop the nearby Burke Mountain ski area.

Mr. Stenger and Mr. Quiros are putting up $90 million themselves. But even at $785 million, this is one of the single biggest projects in the country financed under the investor program.

Congress created the visa program in 1990 to help stimulate the economy. Because of a cumbersome process and complaints of fraud and corruption, it was long underused.

But a confluence of events in recent years has led to its rather sudden revival: the program was improved; the financial crisis of 2008 made it hard for developers to get loans from commercial banks; and foreign nationals, especially in China, were accumulating vast wealth and were eager for their children to study and live in the United States.

In 2006, the government issued just 802 of these EB-5 visas to investors and their families; this year, it granted 7,818.

The program is now growing so rapidly that in the next year or two the number issued will probably reach the annual limit of 10,000. For the first time in the program’s history, applicants may be turned away.

Mr. Stenger, 64, who began his career as a ski instructor, and Mr. Quiros, 56, who spent years in the import-export business and already owned thousands of acres here, began leveraging the visa program five years ago, in the early stages of its revival. Along with state officials, who monitor and audit their projects, and Senator Patrick J. Leahy, a Democrat who has championed the program in Washington, the two men have sought to make Jay Peak a national showcase for the investor program.

Mr. Quiros said these projects would have been impossible without it.

“It’s too hard to get money of this magnitude,” he said, “especially with the economic situation that exists today.”

The immigrant investors do not have to get involved in the business, though it must create or save at least 10 jobs, and they can live anywhere they want.

One potential investor in Jay Peak is Steve Green, 49, an Englishman who has had a successful career in banking and reinsurance and has lived in Bermuda for 25 years.

“The reason to explore this and potentially to do it — and I’m more than 50-50 inclined to do it — is that it would give me an opportunity to relocate in the United States, keep a small home in Bermuda, spend the majority of my retirement in the United States and confer those rights on my children,” he said in a telephone interview from Bermuda.

Mr. Green said his hesitation about investing here stemmed from uncertainty over what kind of financial return he would get. “There is a substantial risk that you don’t get anything back,” he said.

Investors must put up $1 million for a visa, but if they invest in a rural area or one with high unemployment, that is reduced to $500,000.

A year ago, many people seriously doubted whether the euro would still exist by now. On the threshold of 2013, the debate is more about how long it will take for the euro zone economy to recover and what must be changed to avoid future crises.

Europe still has plenty to worry about. Economic output is shrinking in nine of the 17 nations that use the euro. European banks remain weak, and many have yet to confront their problems decisively.

Many businesses in Spain, Italy and other distressed countries cannot obtain credit, hampering a recovery.

On top of that, with national elections coming in Italy in February and Germany in September, leaders there may be more focused on the narrow concerns of their voters than the cause of European unity.

“At the moment the crisis seems to have calmed down somewhat,” Jens Weidmann, president of the Bundesbank, the German central bank, said in an interview with the Frankfurter Allgemeine newspaper published on Sunday. “But the underlying causes have by no means been eliminated.”

But consider some of the doomsday situations that did not occur in 2012. Greece did not leave the euro zone or set off a financial disaster like the one sparked by the collapse of Lehman Brothers. Spanish and Italian bond yields, rather than succumbing to contagion from Greece, retreated from levels that had threatened their governments with bankruptcy. And nowhere did populist, anti-euro political parties gain the upper hand.

All of these things could still happen, but the probability of catastrophe has fallen substantially because of a fundamental change in the way that European leaders are dealing with the crisis.

Under its president, Mario Draghi, the European Central Bank has promised to buy the bonds of countries like Spain, if needed, to control their borrowing costs.

That vow, which cooled the crisis fever of late summer, bought time for elected officials to begin creating the superstructure needed to make the euro more credible, including a permanent fund for rescuing stricken member countries and a unified system for overseeing banks.

“In 2012, the euro area leaders finally got the diagnosis right,” said Jacob Funk Kirkegaard, a research fellow at the Peterson Institute for International Economics in Washington. “It wasn’t about Greek debt or Irish banks. It was about some very fundamental design flaws that needed to be fixed. That’s what markets were looking for.”

Even though European political leaders seem to argue endlessly, they have made enough progress to keep speculators at bay. Investors surveyed by UBS recently ranked the chances of a breakup of the euro zone well behind the potential danger from a combination of spending cuts and tax increases scheduled to take effect in the United States next month or a hard landing by the Chinese economy.

“There is more of a perception that nobody is better off if this thing breaks up,” said Richard Barwell, senior European economist at Royal Bank of Scotland.

The question in 2013 will be whether a fragile calm in Europe holds long enough for economic growth to resume, for banks to rebuild their balance sheets and for leaders to make progress creating a more durable currency union.

Here are some of the main things to watch:

ECONOMIC PERFORMANCE The euro crisis, arguably, will be over the day that all of the stricken countries are generating economic growth. Ireland, one of the first countries to get into debt trouble back in 2008, might already have turned the corner. Its gross domestic product grew 0.2 percent in the third quarter from the period a year earlier.

Spain, Italy and Portugal are still deep in recession, and Greece is in a de facto depression. But there are some signs of progress in one crucial measure: trade balances. All of the distressed countries have increased exports this year and reduced trade deficits. That is a sign their products have become more competitive on world markets.

The regulator, Dai Xianglong, was the head of China’s central bank and also had oversight of the insurance industry in 2002, when a company his relatives helped control bought a big stake in Ping An Insurance that years later came to be worth billions of dollars. The insurer was drawing new investors ahead of a public stock offering after averting insolvency a few years earlier.

With growing attention on the wealth amassed by families of the politically powerful in China, the investments of Mr. Dai’s relatives illustrate that the riches extend beyond the families of the political elites to the families of regulators with control of the country’s most important business and financial levers. Mr. Dai, an economist, has since left his post with the central bank and now manages the country’s $150 billion social security fund, one of the world’s biggest investment funds.

How much the relatives made in the deal is not known, but analysts say the activity raises further doubts about whether the capital markets are sufficiently regulated in China.

Nicholas C. Howson, an expert in Chinese securities law at the University of Michigan Law School, said: “While not per se illegal or even evidence of corruption, these transactions feed into a problematic perception that is widespread in the P.R.C.: the relatives of China’s highest officials are given privileged access to pre-I.P.O. properties.” He was using the abbreviation for China’s official name, the People’s Republic of China.

The company that bought the Ping An stake was controlled by a group of investment firms, including two set up by Mr. Dai’s son-in-law, Che Feng, as well as other firms associated with Mr. Che’s relatives and business associates, the regulatory filings show.

The company, Dinghe Venture Capital, got the shares for an extremely good price, the records show, paying a small fraction of what a large British bank had paid per share just two months earlier. The company paid $55 million for its Ping An shares on Dec. 26, 2002. By 2007, the last time the value of the investment was made public, the shares were worth $3.1 billion.

In its investigation, The New York Times found no indication that Mr. Dai had been aware of his relatives’ activities, or that any law had been broken. But the relatives appeared to have made a fortune by investing in financial services companies over which Mr. Dai had regulatory authority.

In another instance, in November 2002, Dinghe acquired a big stake in Haitong Securities, a brokerage firm that also fell under Mr. Dai’s jurisdiction, according to the brokerage firm’s Shanghai prospectus.

By 2007, just after Haitong’s public listing in Shanghai, those shares were worth about $1 billion, according to public filings. Later, between 2007 and 2010, Mr. Dai’s wife, Ke Yongzhen, was chairwoman on Haitong’s board of supervisors.

A spokesman for Mr. Dai and the National Social Security Fund did not return phone calls seeking comment. A spokeswoman for Mr. Che, the son-in-law, denied by e-mail that he had ever held a stake in Ping An. The spokeswoman said another businessman had bought the Ping An shares and then, facing financial difficulties, sold them to a group that included Mr. Che’s friends and relatives, but not Mr. Che.

The businessman “could not afford what he has created, so he had to sell his shares all at once,” the spokeswoman, Jenny Lau, wrote in an e-mail.

The corporate records reviewed by The Times, however, show that Mr. Che, his relatives and longtime business associates set up a complex web of companies that effectively gave him and the others control of Dinghe Venture Capital, which made the investments in Ping An and Haitong Securities. The records show that one of the companies later nominated Mr. Che to serve on the Ping An board of supervisors. His term ran from 2006 to 2009.

The Times reported last month that another investment company had also bought shares in Ping An Insurance at an unusually low price on the same day in 2002 as Dinghe Venture Capital. That company, Tianjin Taihong, was later partly controlled by relatives of Prime Minister Wen Jiabao, then serving as vice premier with oversight of China’s financial institutions. In late 2007, the shares Taihong bought in Ping An were valued at $3.7 billion.

The investments by Dinghe and Taihong are significant in part because by late 2002, Beijing regulators had granted Ping An an unusual waiver to rules that would have forced the insurer to sell off some divisions. Throughout the late 1990s, the company was fighting rules that would have required a breakup, a move that Ping An executives worried could lead to bankruptcy.

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But officials cautioned that optimism had risen in past days only to burst hours later. An objection by just one senator could derail a deal until the next Congress convenes on Thursday.

That concern was not unmerited. After the Senate convened Monday morning, Senator Tom Harkin of Iowa, one of the Democratic Party’s most senior liberals, took to the chamber floor to suggest that he would oppose the deal that was coming together.

“As I see this thing developing, as I have said, no deal is better than a bad deal,” Mr. Harkin said, “and this is a very bad deal, the way things are shaping up.”

The last of a round of calls between Mr. Biden and Mr. McConnell ended around midnight, with both men promising to resume talks Monday morning. President Obama was expected to speak publicly about the talks at 1:30.

“The leader and the V.P. continued their discussion late into the evening and will continue to work toward a solution,” Don Stewart, a spokesman for Mr. McConnell, said.

Both sides were already close Sunday on the central issue surrounding whether Congress would intervene before the nation careened off the so-called fiscal cliff: What would be the income threshold for the families that would absorb tax increases beginning Tuesday? Barely a week after House Republicans refused to vote to allow taxes to rise on income over $1 million, Senate Republicans proposed allowing tax rates to rise on income over $450,000 for individuals and $550,000 for couples. Democrats countered with a proposal to extend expiring Bush-era tax cuts for up to $360,000 for individuals and $450,000 for couples. For both sides, that meant major movement. Mr. Obama has been holding firm at a $250,000 threshold.

But Democrats were inching upward, possibly to $450,000 for all households. That had liberal Democrats nervous but centrists optimistic that a deal was in reach that could pass both the Senate and the House. The House Rules Committee on Sunday night was considering an emergency rules change that would suspend requirements that legislation be posted for at least 48 hours, so that a deal could be rushed to the floor.

The two sides are also getting closer on a new rate of taxation on inherited estates, one source said. The biggest stumbling block remains Democrats’ demand for a one-year “pause” on across-the-board spending cuts, which Republicans say can happen only with other up-front spending cuts.

Mr. Harkin and other Senate Democrats object vociferously to any compromise that suspends the cuts for any time frame short of a year, with one senior Senate Democratic aide saying the one-year “pause” — known as sequestration — is nonnegotiable. Mr. McConnell has suggested a three-month suspension, according to officials knowledgeable about the negotiations.

In the balance of these discussions are more than a half-trillion dollars in tax increases on virtually every working American and spending cuts that are scheduled to begin Tuesday. Taken together, they threaten to push the economy back into recession.

House members were told to return to Washington by Sunday. Representative Kevin McCarthy, a California Republican and the House majority whip, advised House members at 9 a.m. Monday “to remain close to the Capitol as additional legislation and votes are possible pending action from the Senate.”

The weekend saw a round of volatile negotiations as senators tried to reach a deal, only to be stalled for hours over a Republican demand that any accord must include a new way of calculating inflation that would mean smaller increases in payments to beneficiaries of programs like Social Security. Democrats halted the negotiations, which did not resume until Mr. McConnell made an emergency call to Mr. Biden and the White House sent the president’s chief legislative negotiator to meet with Senate Democrats. Soon after, Republicans withdrew their demand and discussions resumed, but little progress was made.

“It looks awful,” said Senator Richard J. Durbin of Illinois, the second-ranking Democrat. “I’m sure the American people are saying, with so much at stake why are they waiting so late to get this done?”

Senator Lindsey Graham, Republican of South Carolina, who had said early Sunday that he thought a deal was within reach, said later on his Twitter feed, “I think we’re going over the cliff.”

Weeks of negotiations between Mr. Obama and Speaker John A. Boehner inched toward a deal to avert the fiscal cliff, while locking in trillions of dollars in deficit reduction over 10 years and starting an effort to overhaul the tax code and entitlement programs like Medicare. But earlier this month, Mr. Boehner walked away from those talks.

Instead he tried to reach a much more modest deal to avoid a fiscal crisis by extending the expiring tax cuts for incomes under $1 million. When Mr. Boehner’s own Republican members revolted, he ceded negotiations to the Senate. But compromise has proved equally elusive in that chamber.

Absent a last-minute deal, Mr. Reid is expected to move on Monday to bring to a vote a stopgap measure pushed by Mr. Obama, which would retain lower tax rates for incomes below $250,000 and extend unemployment benefits. But it was not clear that would even get a vote. The objection of a single senator on Monday would run out the clock on the 112th Congress before a final tally could be taken.

Mr. Obama appeared on the NBC program “Meet the Press” on Sunday and implored Congress to act. “We have been talking to the Republicans ever since the election was over,” Mr. Obama said in the interview. “They have had trouble saying yes to a number of repeated offers.”

He added, “Now the pressure’s on Congress to produce.”

Robert Pear and John M. Broder contributed reporting.