If civil liberties advocates had hoped an expert panel’s call for an overhaul of America’s approach to surveillance might finally open the door to serious reforms, it appears they’re about to be disappointed yet again.

President Obama’s handpicked surveillance review group, a mix of legal scholars and former government officials, has called for major intelligence policy changes—and on Wednesday, testifying before the Senate Judiciary Committee, reiterated their unanimous opposition to the government’s bulk collection of American phone records. Yet early reports suggest that the president will reject their key recommendations in a speech he is slated to deliver this Friday, instead offering a bland array of cosmetic tweaks to the intelligence process.

The panel members themselves may have sensed which way the wind was blowing: At Wednesday’s hearing, they repeatedly stressed that they were not calling for an end to the National Security Agency’s controversial phone metadata program, but only a “change in approach.” Yet the distinction is largely semantic. Number one on the review group’s list of 46 recommendations (PDF) is a return to the traditional, particularized method of gathering phone records: When the government has evidence linking specific phone numbers to terrorism, it should seek individual court orders to obtain those records from the phone companies, rather than giving NSA analysts direct access to a database, with the authority to determine which numbers to search. In other words, exactly what the government has always had the ability to do without a bulk metadata program.

NSA defenders such as Dianne Feinstein (D-CA) and Jeff Sessions (R-AL) did their best to spin the panel’s conclusions in their favor, largely ignoring the group’s detailed 300-page report in favor of a Washington Post op-ed by panel member and former CIA official Michael Morell defending the value of collecting phone records. Yet even Morell rejected the familiar talking point that such records were “just metadata,” and therefore raised none of the privacy concerns associated with eavesdropping on the contents of calls. “There’s a lot of content in metadata,” Morell told the committee, “There’s not a sharp difference between metadata and content… It’s more of a continuum,” because sophisticated analysis of communication patterns can often reveal as much about peoples lives and activities as the substance of what is communicated.

Morell did lend some support to another favorite NSA talking point: That if the metadata program had been in place before the attacks of 9/11, the plot might have been prevented. But as former counterterrorism czar Richard Clarke pointed out, the 9/11 plot went undetected because of a failure to share information the NSA and CIA already had. University of Chicago Law professor called claims that it would be too cumbersome to acquire such information with specific court orders “wholly unconvincing,” saying there was “no reason” the government would need unfiltered access to a database of all phone records in order to effectively monitor terror networks. As the panelists all agreed, there was no evidence the metadata program had provided any unique intelligence that could not have been obtained by that more traditional method, nor that it had played a critical role in stopping any terror attacks.

The 9/11 plot went undetected because of a failure to share information the NSA and CIA already had.
Many of the panel’s most significant recommendations, however, were barely raised at the hearing at all. The proposal to end the FBI’s use of National Security Letters to acquire records without judicial approval received only a passing mention. The review groups’s analysis of NSA’s Internet surveillance powers, including its endorsement of a ban on warrantless querying of NSA databases for the communications of Americans, was glossed over entirely. Nor was there any discussion of the group’s strongly-worded condemnation of efforts to undermine widely-used encryption standards, which have horrified many security experts.

The administration has signaled its willingness to embrace some more minor procedural reforms: Greater transparency about the scope of government surveillance, and the creation of a civil liberties “advocate” to argue before the secret Foreign Intelligence Surveillance Court. But these are changes the president appeared willing to adopt even before the review group issued its report. Americans could be forgiven for wondering whether there was any point to appointing a group of experts to conduct such an extensive analysis if the president is going to ignore their advice, except when it matches what he’d already decided to do.

That may explain why the president’s speech is scheduled in advance of the separate report on surveillance being prepared by the Privacy and Civil Liberties Oversight Board. Ignoring one set of expert recommendations is awkward enough; ignoring two would make it even more obvious that the president is unwilling to seriously reign in his own intelligence agencies.
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Bank of America has spent the last five years digging out from its mortgage problems, shoring up its capital levels and laying off employees.

Now comes the hard part of trying to rebuild a banking business in a sluggish economy without reverting to the loose lending practices that nearly brought the company to its knees during the financial crisis.

That uphill battle came into focus on Wednesday as Bank of America reported fourth-quarter earnings that were stronger than expected.

The bank’s profits exceeded Wall Street estimates, helped in large part by its success at driving down expenses related to its troubled past, including the 2008 acquisition of the mortgage lender Countrywide Financial.

“Going forward, the biggest challenge will be finding revenue growth,” said Shannon Stemm, a banking analyst at Edward Jones. “The macroeconomic environment isn’t making that easy.”

With the economy growing tepidly, the bank has had success catering to wealthier customers and corporations — two segments that have come through the financial crisis better than others.

One telling statistic from the fourth quarter: As the bank’s traditional mortgage business shrank, about 20 percent of its mortgage production by dollar amount came from its wealth-management business.

Bank officials said on Wednesday that it was profitable to hold these mortgages, which are often too large to be guaranteed by Fannie Mae and Freddie Mac, on its balance sheet.

“They are not out there trying to be a broad-based mortgage banker,” said Moshe Orenbuch, a banking analyst at Credit Suisse. “They are trying to cater to their upscale customers.”

Such strategies leave a large portion of homeowners shut out of the housing market as credit standards remain tight for many Americans. Bank of America’s mortgage originations declined 46 percent in the fourth quarter compared with those in the period a year earlier. Earlier this week, Wells Fargo and JPMorgan Chase also reported big drops in their mortgage revenue.

Bank of America officials said they expected to bolster the company’s wealth-management staff as they seek to attract more customers who want advice about how to invest their money.

Another bright spot for Bank of America was investment banking. Revenue from merger advisory fees surged, driven by a pickup in deals late last year. Trading revenue also rose, underscoring the strength of the company’s Wall Street operations.

There were some broadly hopeful signs for Bank of America in the fourth quarter and the overall economy. The company’s chief executive, Brian T. Moynihan, said that customers had been spending more on their credit cards in recent months and that the bank had issued about 1,000 new cards in the fourth quarter.

“It is good news from an economy perspective,” Mr. Moynihan told analysts during a conference call on Wednesday.

Over all, the bank, based in Charlotte, N.C., said quarterly net income rose to $3.4 billion, or 29 cents a share, compared with $732 million, or 3 cents a share, in the period a year earlier, exceeding the 26 cents that Wall Street analysts had expected the bank to make. Revenue rose 15 percent, to $21.7 billion.

While analysts and investors largely cheered the progress the bank has made cleaning up its balance sheet since the financial crisis, the company is not yet out of the woods.

Looming over the entire banking industry is the $13 billion settlement that JPMorgan reached with the Justice Department and other authorities in November over the bank’s sale of questionable mortgage securities leading up to the financial crisis.

In light of those large settlements, analysts expect that Bank of America and other big mortgage players will have to set aside billions of dollars more in case of future regulatory settlements, which could weigh on earnings.

The bank’s litigation expenses in the fourth quarter more than doubled from the third quarter, to $2.3 billion, but bank officials declined to say whether that legal tab was likely to grow.

Bank of America took many of its biggest lumps early, setting aside huge reserves in 2011 to deal with mortgage-related costs. But with the number of troubled loans declining, the bank in the quarter was able to reduce its provision for credit losses to $336 million from $2.2 billion a year ago.

Having to reserve less capital for losses could free money for the company to buy back more of its shares — a move that could continue to endear the bank to investors. Bank of America’s shares rose 35 percent in 2013, surpassing the Standard & Poor’s 500-stock index. On Wednesday, they rose 38 cents, or 2.3 percent, to $17.15.

Bank officials cautioned that declining loan-loss reserves and the accompanying windfalls of freed capital would not go on forever. At that point, investors’ scrutiny of the company’s efforts to expand its core businesses could intensify.

“This is a big ship and they have turned that big ship,” said William Schwartz, head of the US Financial Institutions Group at DBRS, a credit rating firm. “Now they have to move it forward.”
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Blizzard is throwing a life preserver to World of Warcraft players that are drowning in a sea of high queue times. Subscribers in high-population servers will have the option to migrate their characters to a low population realm for free for a one-week period.


"We'll be offering Free Character Migrations next week for realms currently seeing high queue times at login," writes community manager Micah 'Bashiok' Whipple on the WoW forums (via Polygon). "Those looking to avoid waiting to log in can take advantage of the free transfers to a set destination realm. We're targeting the middle of next week for these Free Character Migrations to become available, and they'll remain open for approximately one week, or until a destination realm fills up. If you're looking to transfer with others we recommend setting up plans early to avoid any stragglers being left behind."

Battle.net explains the migration process, which is set to kick off next week. Among the notable items here is that guild leaders must transfer their leadership to another guild member prior to migrating. Also, a player's user interface, friends list, and ignore list will all be reset after the migration.
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