Justices to Take Up Generic Drug Case

WASHINGTON — The Supreme Court said on Friday that it would decide whether a pharmaceutical company should be allowed to pay a competitor millions of dollars to keep a generic copy of a best-selling drug off the market.

Stephen Crowley/The New York Times

Ralph Neas, head of the Generic Pharmaceutical Association, said the case would alter the marketing of new generics.

The case could settle a decade-long battle between federal regulators, who say the deals violate antitrust law, and the pharmaceutical industry, which contends that they are really just settlements of disputes over patents that protect the billions of dollars they pour into research and development.

Three separate federal circuit courts of appeal have ruled over the last decade that the deals were allowable. But in July a federal appeals court in Philadelphia — which covers the territory where many big drug makers are based — said the arrangements were anticompetitive.

Both sides in the case supported the petition for the Supreme Court to decide the case, each arguing that the conflicting appeals court decisions would inject uncertainty into their operations.

By keeping lower-priced generic drugs off the market, drug companies are able to charge higher prices than they otherwise could. Last year, the Congressional Budget Office estimated that a Senate bill to outlaw those payments would lower drug costs in the United States by $11 billion and would save the federal government $4.8 billion over 10 years.

Senator Charles E. Grassley, an Iowa Republican who co-sponsored the Senate bill, which never came to the floor for a vote, praised the decision.

The Federal Trade Commission first filed the suit in question in 2009. Jon Leibowitz, chairman of the F.T.C., said, “These pay-for-delay deals are win-win for the drug companies, but big losers for U.S. consumers and taxpayers.”

Generic drug makers say that the payments preserve a system that has saved American consumers hundreds of billions of dollars.

“This case could determine how an entire industry does business because it would dramatically affect the economics of each decision to introduce a new generic drug,” Ralph G. Neas, president of the Generic Pharmaceutical Association, said in a statement. “The current industry paradigm of challenging patents on branded drugs in order to bring new generics to market as soon as possible has produced $1.06 trillion in savings over the past 10 years.”

The case will review a decision by the United States Court of Appeals for the 11th Circuit, based in Atlanta, which in the spring ruled in favor of the drug makers, Watson Pharmaceuticals and Solvay Pharmaceuticals. Watson had applied for federal approval to sell a generic version of AndroGel, a testosterone replacement drug made by Solvay.

While courts have long held that paying a competitor to stay off the market creates unfair competition, the pharmaceuticals case is different because it involves patents, whose essential purpose is to prevent competition.

When a generic manufacturer seeks approval to market a copy of a brand-name drug, it also often files a lawsuit challenging a patent that the drug’s originator says prevents competition.

Last year, for the third time since 2003, the 11th Circuit upheld the agreements as long as the allegedly anticompetitive behavior that results — in this case, keeping the generic drug off the market — is the same thing that would take place if the brand-name company’s patent were upheld.

Two other federal circuit courts, the Second Circuit and the Federal Circuit, have ruled similarly. But in July, the Third Circuit Court of Appeals said that those arrangements were anticompetitive on their face and violated antitrust law.

The agreements are also affected by a peculiar condition in the law that legalized generic competition for prescription drugs. That law, known as the Hatch-Waxman Act, gives a 180-day period of exclusivity to the first generic drug maker to file for approval of a generic copy and to file a lawsuit challenging the brand-name drug’s patent.

Brand-name drug companies have taken advantage of that law, finding that they can settle the patent suit by getting the generic company to agree to stay out of the market for a period of time. Because that generic company also has exclusivity rights, no other generic companies can enter the market.

Michael A. Carrier, a professor at Rutgers School of Law-Camden, said that while there were provisions in the law under which a generic company could forfeit that exclusivity, “they really are toothless in practice.”

One wild card could still prevent the Supreme Court from definitively settling the question. In granting the petition to hear the case, the Supreme Court said that Justice Samuel A. Alito Jr. recused himself, taking no part in the consideration or decision.

That opens the possibility that a 4-4 decision could result, upholding the lower court case that went against the F.T.C. and in favor of the drug makers. But it would leave the broader question for another day.

The case is Federal Trade Commission v. Watson Pharmaceuticals et al, No. 12-416.

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Wealth Matters: Protect Yourself from Investment Fraud This Madoff Day

Left to right: Louis Lanzano/Associated Press; Stephen Chernin/Getty Images; Richard Carson/Reuters

Three men accused of defrauding clients arriving at federal court. From left, Marc Dreier in Manhattan on May 11, 2009; Bernard Madoff in Manhattan on March 12, 2009; and R. Allen Stanford in Houston last Feb. 29.

THIS is the time of year when most people think of gifts and holiday gatherings. I couldn’t help thinking of frauds past.

Four years ago this week, Marc S. Dreier, a high-flying lawyer, was arrested and later charged with defrauding his clients of $700 million. A few days later, Bernard L. Madoff’s fraud was uncovered. Totaling an estimated $65 billion, Mr. Madoff’s fraud was in a class by itself. And then, a short time afterward, some of the brokers who had been selling fraudulent certificates of deposit for R. Allen Stanford began to turn on him; he was arrested in February 2009 and later convicted of a $7 billion fraud.

These schemes collapsed with the economy in 2008. But on their anniversaries, it may be a good time to ask whether you have done all you can to lower your risk of being caught up in a similar fraud. Call it Madoff Day (celebrated on Dec. 11, the day of his arrest).

Protecting yourself against fraud, or simply bad advice, is easier said than done. The most common advice is to make sure your money is held by an independent custodian or firm whose job is to keep your money safe. That wasn’t the case with either the Madoff or Stanford fraud. But that is only one small step.

So what else can investors do to protect themselves, not only from unscrupulous advisers but also from rushing into an investment that is clearly too good to be true?

Marc H. Simon, a lawyer who lost two years of bonuses, his job and months of unreimbursed expenses when Mr. Dreier’s law firm collapsed, said he has thought a lot about what he could have done differently.

Mr. Simon said that six or seven years before the fraud was uncovered, he knew of inconsistencies in the firm’s 401(k) plans. But the big red flag should have been that Mr. Dreier had sole control over every major decision at the law firm. Still, that had been Mr. Dreier’s pitch: work for him and don’t worry about the irksome details partners typically face.

“People like Drier and Madoff were highly intelligent individuals, they were very charismatic and they were giving people what they wanted,” Mr. Simon said. “It is harder to bring into question those who are providing you something you want.”

Randall A. Pulman, a lawyer in San Antonio who represents many victims of Mr. Stanford’s fraud, agreed that the will to believe was what ensnared people.

“For you and me, it’s too good to be true,” he said. “For the guy who has been working in the oil fields, how is he supposed to know?”

Of course, fraud and just plain bad advice are not limited to the poor or unsophisticated. Robert P. Rittereiser, the former chief financial officer of Merrill Lynch and former chief executive of E. F. Hutton, is working as the receiver for two funds suing J. Ezra Merkin, a former money manager who steered money to Mr. Madoff. Mr. Rittereiser did not think investors in Mr. Merkin’s funds knew that their money was simply being passed on to Mr. Madoff. But even if they did, they may not have seen anything to be concerned about.

“They were investing money and getting appropriate returns for the kind of fund it was,” Mr. Rittereiser said. “Most of them had a relationship of some kind and confidence with Merkin and the people he was dealing with.”

So how do you protect yourself? The first step would seem to be picking an honest adviser. The good news is that only about 7 percent of advisers have disciplinary records, said Nicholas W. Stuller, president and chief executive of AdviceIQ, a company that evaluates advisers. The bad news is that those violations appear only after someone has filed a complaint.

Mr. Stuller’s company, which has now approved some 2,400 advisers, rejects anyone with any type of infraction — from a securities fine to a misdemeanor for getting into a fight. He said this policy might keep some good advisers off the site, but his goal is to search the records of federal and state regulators to find advisers he knows are clean.

“There are advisers who have significant negative disciplinary history with one regulator but appear to be pristine with another regulator,” Mr. Stuller said. “There was a guy in Minnesota who was stealing insurance premiums. In his enforcement record, it says, ‘We’re going to alert Finra,’ but his Finra record is clean,” he said, referring to the Financial Industry Regulatory Authority. “That’s where the regulators don’t talk to each other.”

AdviceIQ’s main competitor, BrightScope, takes a different approach. It notes disciplinary actions taken against advisers but leaves it up to the consumer to go to regulators to determine what the violations were.

“We want the consumer to go to the source data, because there is a lot of liability in publishing that,” said Mike Alfred, co-founder and chief executive of BrightScope. “Many of these folks are good advisers, and they’ll take care of you. But what if they had one crazy client who put all his money in Internet stocks in 2000 and then sued?”

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Judge may lower Apple's award in Samsung patent case

By Jessica Guynn, Los Angeles Times

December 6, 2012, 8:42 p.m.

SAN JOSE — A federal judge signaled Thursday that she might reduce Apple Inc.'s $1-billion jury award in its patent infringement case with Samsung Electronics Co.

U.S. District Judge Lucy Koh did not specify by how much she might shave the award, but during a marathon afternoon hearing in federal court in San Jose she said it did appear that the jury had miscalculated damages.

In August, after three days of deliberations in the complex patent case, a jury awarded Apple more than $1 billion.

In the months since the verdict, Samsung has mounted an aggressive campaign to overturn the verdict, raising a host of legal issues including juror misconduct. Apple hotly contested those issues during the hearing Thursday and sought to increase the damage award.

Lawyers for the world's two largest smartphone makers sparred for more than three hours over a bevy of legal issues in the dispute that produced one of the largest damage awards in an intellectual property case. Koh said she would issue rulings in the coming weeks.

Samsung argued that the damage award should be reduced because the jury incorrectly calculated the amount. Apple asked the court to award $535 million more in damages because the jury found that Samsung had willfully infringed Apple's patents.

Both sides seemed to be gearing up for years of legal appeals despite the judge's plea for "global peace." The case is likely to go before the U.S. Federal Circuit Court of Appeals, the Washington court that decides patent disputes, and perhaps the U.S. Supreme Court.

Apple also asked the judge to ban some Samsung products. The judge did not rule on whether the infringing Samsung products should be taken off store shelves.

The products are older models and would not dent Samsung sales, but the ban would give Apple a win in its high-stakes patent war against the South Korean company that is playing out around the globe.

ALSO:

NASA releases breathtaking images of the Earth at night

Samsung lawyers file copy of Apple patent settlement with HTC

Facebook voters: Everything you need to know to cast your ballot

jessica.guynn@latimes.com

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A Google-a-Day Puzzle for Dec. 7

Our good friends at Google run a daily puzzle challenge and asked us to help get them out to the geeky masses. Each day’s puzzle will task your googling skills a little more, leading you to Google mastery. Each morning at 12:01 a.m. Eastern time you’ll see a new puzzle posted here.

SPOILER WARNING:
We leave the comments on so people can work together to find the answer. As such, if you want to figure it out all by yourself, DON’T READ THE COMMENTS!

Also, with the knowledge that because others may publish their answers before you do, if you want to be able to search for information without accidentally seeing the answer somewhere, you can use the Google-a-Day site’s search tool, which will automatically filter out published answers, to give you a spoiler-free experience.

And now, without further ado, we give you…

TODAY’S PUZZLE:

Note: Ad-blocking software may prevent display of the puzzle widget.

Ken is a husband and father from the San Francisco Bay Area, where he works as a civil engineer. He also wrote the NYT bestselling book "Geek Dad: Awesomely Geeky Projects for Dads and Kids to Share."

Read more by Ken Denmead

Follow @fitzwillie and @wiredgeekdad on Twitter.

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Spotify gains more listeners and Metallica

(Reuters) – Digital music service Spotify rolled out new features and said it increased the number of active users at a press event that featured a special musical performance by Frank Ocean.

Spotify now has 20 million active users worldwide, up 33 percent in less than six months. The company counts five million people among paying subscribers, a 25 percent increase during the same time period.

Spotify also revealed it has one million paid subscribers in the United States, that it added a Twitter like functionality that allows users to follow one another, and that the rock band Metallica‘s music was now available on the service.

The company made the announcements at a splashy New York event on Thursday that included a conversation between Spotify backer Sean Parker and Metallica drummer Lars Ulrich.

Ulrich’s appearance is notable since his band was one of the leading crusaders against Napster, the digital music sharing company co-founded by Parker more than a decade ago that was a flashpoint for digital rights and artist compensation.

“We have more in common than the whole thing that happened 12 years ago,” said Ulrich about Parker.

Ulrich said the decision to join Spotify coincided with the fact the band now owns its entire catalogs of music.

Spotify, which strikes royalty deals with record labels, has paid more than $ 500 million to the music industry since its launch four years ago – an amount that has more than doubled in the past nine months. It pays roughly 70 percent of its revenue back to rights holders.

“The more music that gets shared the more money goes back to artists,” said Daniel Ek, CEO and co-founder of Spotify.

Spotify is a free on-demand streaming music service that is rising in popularity. People can pay to hear music without interruptions from advertising and the ability to play lists and preferences from any device any time.

The company has struck up a partnership with Facebook – Parker is Facebook’s founding president – that allows listener’s to display their music choices on their personal pages.

Streaming music services such as Spotify and Pandora are being carefully watched by the music industry concerned over the royalty payments.

For example, Pandora is pushing the Internet Radio Fairness Act, which would change how royalties are paid to artists. As of now, online streaming music companies like Pandora pay a different rate to license music than say traditional radio companies.

Many of music’s most notable names like Billy Joel and Rihanna are opposing the proposed change.

(Reporting By Jennifer Saba in New York)

Music News Headlines – Yahoo! News

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Oscar Niemeyer dies at 104; modernist Brazilian architect

Oscar Niemeyer, the architect whose soaring buildings form the heart of Brasilia, the instant modernist capital built in the wilds of Brazil in the late 1950s, has died. He was 104.

Niemeyer, who had outlived his contemporaries to become the world's oldest practicing architect of international stature, died Wednesday at a Rio de Janeiro hospital. The cause was a respiratory infection, a hospital spokeswoman told the Associated Press.

During his long and productive life, Niemeyer was revered as well as ridiculed for his daring designs, but the creativity and sheer volume of his works ultimately spoke for him. In 1988, at 80, he shared architecture's biggest prize, the Pritzker.

Niemeyer, a diminutive, soft-spoken man, worked well into his 90s in a Rio de Janeiro penthouse office with a stunning view of Sugar Loaf Mountain and overlooking Copacabana Beach. Hundreds of projects came into being kindled by this view.

Many of his designs began with a quick sketch that embodied his love of the curve — from Einstein's universe, to the sinewy white beach that he gazed at nearly every day, to the voluptuous women he so loved to watch walking along that beach.

These women, he often said, were his inspiration.

"Curves are the essence of my work because they are the essence of Brazil, pure and simple," Niemeyer told the Washington Post in 2002. "I am a Brazilian before I am an architect. I cannot separate the two."

A passionate man, he lived in protest of the right angle "and buildings designed with the ruler and the square." His politics were also those of protest — he became a communist in the 1940s because of his anger over the inequality he saw around him, and he was a longtime friend of Cuba's revolutionary, Fidel Castro. His designs — especially of Brasilia — were partly an attempt to push his country toward egalitarianism, bringing rich and poor together through housing projects and public spaces.

A few years after Brasilia was completed, when a rightist military coup in 1964 not only destroyed Niemeyer's dreams of a just society in Brazil but also took away his sponsors, he fled to Algiers and then Paris. In the city, he had an office on the Champs Elysees and met Pablo Picasso, Jean-Paul Sartre and many other notables and, he later recounted, lived a hedonistic life far away from his wife, Annita. He returned to Rio in the late 1970s.

Oscar Ribeiro de Almeida de Niemeyer Soares was a Carioca — a native of Rio — whose heritage was Portuguese, Arab and German. Born Dec. 15, 1907, he was the son of a businessman and his wife who lived in Laranjeiras, a quaint, hilly neighborhood within the city.

While at the National School of Fine Arts, from which he graduated in 1934, Niemeyer worked with architect and urban planner Lucio Costa, who would lead Niemeyer to projects that would make his name in international architecture.

Costa, the master planner of Brasilia and an early proponent of Brazilian modernism, at first was unimpressed when the young draftsman joined his firm. Before long, they were working with Swiss-born architect Le Corbusier — who was in Brazil as a design consultant to the government — on the defiantly modern design for the Ministry of Education and Health Building in Rio. The building, which incorporated Le Corbusier's signature "brise-soleil" louvers to shield it from Brazil's intense sunlight, became a symbol of the new architecture in Brazil.

Le Corbusier would greatly influence Niemeyer, instilling in him a sense of fluidity, spontaneity and what David Underwood, writing in "Oscar Niemeyer and Brazilian Free-form Modernism" (1994), called jeito — "the lightness of touch, the graceful elegance of form and the movement inherent in the sauntering 'Girl from Ipanema' celebrated in the best of Brazilian modernism."

While Le Corbusier opened doors to creativity, however, Niemeyer saw his work as very distinct from his mentor's. As he told The Times: "He posited the right angle. I posit the curve."

In bringing to life his sensuous designs, he relied on what was then a new and versatile material — reinforced concrete — which he pushed to its limits, especially at load-bearing points, he wrote in a 2003 essay for Deutsches Architektur Museum, "which I wanted to be as delicate as possible so that it would seem as if [they] barely touched the ground."

The first Niemeyer structure built was a maternity clinic in Rio in 1937. His first major project, commissioned in 1940, were buildings for Pampulha, a then-new suburb of the southeastern city of Belo Horizonte, including a yacht club, casino and a church so avant-garde in design that church officials refused to consecrate it for 16 years.

With Costa, Niemeyer also designed the Brazilian Pavilion at the New York World's Fair in 1939, and Niemeyer influenced the ultimate design of the United Nations headquarters while serving as Brazil's design consultant in 1947.

In time, his portfolio would include a postwar housing project in Berlin; the universities of Constantine and Algiers in Algeria; the French Communist Party headquarters in Paris; the Cultural Center of Le Havre, France; and the Mondadori headquarters in Milan.

He also designed the Strick House in Santa Monica— thought to be his only residential commission in the United States.

He will perhaps be best remembered for Brasilia, the bold project launched by Brazilian President Juscelino Kubitschek in 1956 in an effort to unify his vast country and move it forward half a century in a mere five years.

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John McAfee Detained by Guatemala Police

John McAfee was taken into police custody in Guatemala on Wednesday for being in the country illegally, police there have confirmed.

The McAfee Security founder had fled to Guatemala to avoid authorities in neighboring Belize, where he is wanted for questioning in the gunshot murder of his neighbor Greg Faull. McAfee has repeatedly claimed to be innocent. He was first reported detained by Robert King, a Vice photographer he was traveling with, who, oddly, likely contributed to McAfee’s capture.

On Monday, Vice published a story titled “We Are With John McAfee Right Now, Suckers” and inadvertently revealed McAfee’s whereabouts in Guatemala via location data embedded in the photo. McAfee and Vice photographer King both claimed the photo had been manipulated to conceal his true location.

McAfee later admitted that was a lie, and King’s Facebook status update claiming the photo was doctored disappeared. Wired emailed Vice’s Alex Detrick to ask if the publication stood by King’s statement, but Vice did not respond. However, on Tuesday, Vice published a new video of McAfee in Guatemala and claimed that he had “just hired the best lawyer in the country.” McAfee announced a press conference, and promised his new attorney the entire world media would show up. He was subsequently taken into custody by the Guatemala National Civil Police and Interpol.

On Wednesday, King reported Mcafee had been detained, which authorities in Guatemala subsequently confirmed. McAfee previously told Wired’s Joshua Davis he had dyed his hair, eyebrows, beard, and mustache black to avoid detection. This seemed like obvious subterfuge, but appears to be the case based on his appearances on Vice, and in a photo published by the Guatemala National Civil Police following McAfee’s detention.

If you’re worried that McAfee might drop out of public sight now that he’s been captured, don’t be. He’s already jailblogging and plans to go ahead with the press conference.

Mat Honan is a senior writer for Wired's Gadget Lab and the co-founder of the Knight-Batten award-winning Longshot magazine.

Read more by Mat Honan

Follow @mat on Twitter.

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Sean Bean replaces Brendan Fraser in TNT pilot “Legends”

LOS ANGELES (TheWrap.com) – TNT‘s upcoming pilot “Legends” is getting a Stark makeover.

Sean Bean, who played ill-fated Lord of Winterfell Eddard Stark in HBO’s “Game of Thrones,” has signed on to replace Brendan Fraser in TNT’s upcoming pilot “Legends.”

Fraser dropped out of the pilot last month; the show would have marked his first starring turn on a TV series.

Bean will play Martin Odum, a deep-cover operative who has a chameleon-like ability to transform himself into a different person for each mission. The project is based on a book by spy novelist Robert Littell.

“Homeland” duo Howard Gordon and Alexander Cary are executive-producing the pilot, which comes from Fox 21, as are Jeffrey Nachmanoff (“The Day After Tomorrow”) and Jonathan Levin (“Charmed”).

Deadline first reported news of Bean’s “Legends” casting.

TV News Headlines – Yahoo! News

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Recipes for Health: Winter Squash and Walnut Spread — Recipes for Health

Andrew Scrivani for The New York Times

2 pounds pumpkin or winter squash, such as kabocha or butternut, seeds and membranes scraped away, cut into large pieces (if using butternut, cut in half crosswise, just above the bulbous bottom part, then cut these halves into lengthwise quarters and scrape away the seeds and membranes)

3 tablespoons extra virgin olive oil

1/2 medium onion, finely chopped

2 tablespoons finely chopped fresh mint

1/8 teaspoon freshly grated nutmeg

1/4 cup (1 1/4 ounces/35 g) lightly toasted walnuts, finely chopped

1 ounce Parmesan, grated (about 1/3 cup)

Salt and freshly ground pepper

1. Heat the oven to 425 degrees. Line a baking sheet with foil and oil the foil. Place the squash on the baking sheet and rub or toss with 1 tablespoon of the olive oil. Place in the oven and bake until tender, 40 to 60 minutes depending on the type of squash and the size of the pieces. Every 15 minutes use tongs to turn the pieces over so different surfaces become browned on the foil. Remove from the oven and allow to cool, then peel and place in the bowl of a food processor fitted with the steel blade. Pulse several times, scrape down the sides of the bowl, then purée until smooth.

2. Heat another tablespoon of the olive oil over medium heat in a large, heavy skillet and add the onion. Add a generous pinch of salt, turn the heat to medium low and cook, stirring often, until very tender, sweet and lightly caramelized, about 20 minutes. Remove from the heat and add to the squash. Add the mint, nutmeg, walnuts, Parmesan, and 1 tablespoon olive oil and pulse together. Season to taste with salt and pepper. Serve on croutons.

Yield: 2 cups

Advance preparation: This will keep for three to four days in the refrigerator and freezes well. It benefits from being made a day ahead.

Variation: Omit the Parmesan for a vegan version. If desired, blend in 1 to 2 teaspoons of light miso.

Nutritional information per tablespoon: 35 calories; 2 grams fat; 0 grams saturated fat; 1 gram polyunsaturated fat; 1 gram monounsaturated fat; 1 milligram cholesterol; 4 grams carbohydrates; 1 gram dietary fiber; 15 milligrams sodium (does not include salt to taste); 1 gram protein

Martha Rose Shulman is the author of “The Very Best of Recipes for Health.”

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Euro Watch: Spending Data Points to Continuing Woes in Euro Zone

PARIS — European consumers continue to cut back on spending, official data showed Wednesday, indicating that the region’s financial crisis and ailing job market were weighing on hopes of an economic recovery.

Retail sales in the 17-nation euro zone fell 1.2 percent in October from September, and were down 3.6 percent from a year earlier, Eurostat, the statistical agency of the European Union, reported Wednesday.

For the entire 27-nation European Union, sales declined 1.1 percent from September and 2.4 percent from October 2011, Eurostat said.

The big dip in retail sales was partly a result of front-loading of purchases before value-added taxes rose in some countries, said James Nixon, an economist in London for Société Générale.

The fiscal crisis in the euro zone and the austerity measures employed to combat it have made companies reticent about hiring, helping to drive the euro zone into recession in the third quarter. That has created a vicious circle, in which falling consumer spending is expected to weigh further on the economy.

A reading Wednesday on euro zone activity from a private data and analysis firm also suggested the economy continued to contract. Markit Economics’ composite purchasing managers’ index for November came in at 46.5. That was a bump upward from the 40-month low of 45.7 in October, but the 10th straight month below 50, a level that suggests shrinking output.

On Friday, Eurostat reported that unemployment in the euro zone rose to a record 11.7 percent in October from 11.6 percent a month earlier, and that the jobless rate among those under 25 years of age was 23.9 percent.

The European Commission on Wednesday expressed grave concern about the problem of youth unemployment, noting that just the immediate cost to governments — in terms of lost revenue and social outlays — worked out to an estimated €150 billion, or $196 billion, a year, or 1.2 percent of E.U. gross domestic product.

It recommended a new program to address the problem, with measures including job guarantees for young people, labor market changes to reduce obstacles to hiring across European borders, and further efforts to provide high-quality training and apprenticeship programs.

The European commissioner for employment and social affairs, Laszlo Andor, said in a statement that the cost of failing to help put young people to work would be “catastrophic.”

The European Central Bank and its British counterpart, the Bank of England, will hold policy meetings Thursday, and though signs of weakness would appear to give the central banks scope for action, neither is believed to be planning any major changes to current monetary policy.

Economists expect the E.C.B. to leave its main refinancing rate at 0.75 percent, while the Bank of England is expected to stand pat at 0.5 percent.

Action by the central banks has helped to calm markets and relieve the pressure on the euro, but conditions remain unsettled. As an indication of the stresses that have sent investors scurrying for the perceived safety of major sovereign bonds, yields on France’s 10-year sovereign debt fell on Wednesday to around 2 percent, the lowest level on record.

The dismal retail sales data came as the European Stability Mechanism, the euro zone’s permanent new bailout fund, said it had issued about €39.5 billion in bonds to cover the recapitalization of Spain’s banking sector.

Euro zone leaders agreed in June to provide up to €100 billion to help Spanish banks, which have been battered in the aftermath of a property bubble collapse and economic dislocation caused by austerity measures. The funds were originally raised by the bloc’s temporary bailout fund, the European Financial Stability Facility, and the transaction Wednesday represented an effective transfer of that money from the old facility to the permanent one.

The fund said that €37 billion would be handed over some time in December to the Spanish government’s own banking rescue fund, the FROB, to cover the needs of BFA-Bankia, Catalunya Banc, NCG Banco and Banco de Valencia. The FROB will use the remaining €2.5 billion to capitalize Spain’s “bad bank,” a company called Sareb that is being used to sift through soured assets.

The action Wednesday “is an important event as the E.S.M. has now started to actively fulfill its role as the permanent rescue mechanism for the euro zone,” Klaus Regling, the head of the European Stability Mechanism, said in a statement.

Mr. Nixon, of Société Générale, predicted that the euro zone economy would shrink in the fourth quarter at an annualized 1.2 percent rate, but said he expected some of the northern European economies, including Germany, to start pulling away from the laggards in 2013.

“We may have reached a bottom,” Mr. Nixon said, citing an easing of tension in the market for sovereign debt and smoother financing conditions. “At least things aren’t getting worse any faster.”

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