DealBook: Wells Fargo's Mortgage Gains May Be Unsustainable

8:40 p.m. | Updated

Wells Fargo has turned its mortgage business into an enormous profit machine. The San Francisco-based bank posted earnings of $5.1 billion in the fourth quarter, a 24 percent increase from the previous year.

But its strong gains may not be sustainable, unless interest rates drop significantly or the housing market recovers substantially. Both are long shots.

“Rates really don’t have to go up very much to discourage a whole swath of people from returning to the housing market,” said Lance Roberts, chief economist at StreetTalk Advisors, an investment advisory firm.

In recent years, Wells Fargo has aggressively expanded its mortgage business, a strategy that has helped drive record profits. The company reported net income of $18.9 billion in 2012, up 19 percent from 2011. Revenue rose 6 percent in the same period.

“We saw robust growth across the entire bank, proving that there is a lot of value in a strong, diversified business,” said Timothy J. Sloan, chief financial officer of Wells Fargo.

But after 12 consecutive quarters of rising profits, Wells Fargo may find it difficult to keep up the pace.

The bank’s recent mortgage profits largely reflect the government’s efforts to stimulate the economy, rather than a robust recovery in the housing market.

As the Federal Reserve has cut interest rates, millions of borrowers have refinanced their home loans to reduce costs. Refinancing accounted for 72 percent of Wells Fargo’s mortgage origination in the fourth quarter.

That business has been especially lucrative of late.

Banks pass on most of their mortgages to government entities like Fannie Mae and Freddie Mac, which guarantee that the loans will be repaid. With the guarantee attached, banks sell the mortgages to bond investors and book a financial gain.

Profits have ballooned with the government intervention. The Fed has been a big buyer of mortgage bonds in an effort to drive down interest rates. But banks have not cut ordinary borrowers’ rates by the same amount.

That means the difference, or spread, between the rates increased last year. Wells Fargo’s gains from this activity totaled $10.3 billion in 2012, more than double the previous year.

Those gains may be hard to beat.

While the Fed has promised to purchase more mortgage bonds, interest rates may not fall much further. If mortgage rates stagnate or rise, fewer borrowers are likely to refinance or buy a house. And if the mortgage bond market weakens, banks will make less of a gain when selling the mortgages.

Already, refinancing activity appears to be slowing. In the fourth quarter, Wells Fargo handled $125 billion of mortgage originations, up 4 percent from the previous year. But loan production was higher earlier in the year, peaking at $139 billion in the third quarter.

At the same time, the Fed’s low rates are actually hurting other parts of the business. An important measure of a bank’s overall lending profitability, the net interest margin, has eroded. In the fourth quarter, Wells Fargo’s net interest margin dropped slightly to 3.56 percent, from 3.89 percent a year earlier.

Investors shrugged off the strong profits because of such concerns. Wells Fargo’s shares fell slightly on Friday, to $35.10, a 0.85 percent drop.

In an effort to assuage investors’ concerns about the refinancing business, Mr. Sloan, the chief financial officer, said in a conference call on Friday that he saw “billions of dollars in refinancing opportunities.”

Housing market numbers support his optimism. Over 70 percent of mortgages had interest rates above 4 percent in the fall, according to CoreLogic, a housing data firm. Some of those borrowers would benefit financially from refinancing, given that the interest rate on fixed, 30-year loans is 3.4 percent.

If the refinancing boom does sputter, a significant increase in new mortgages could help fill the void. That depends largely on the health of the housing market. While house prices posted annual gains last year, the recovery is far from robust.

Wells Fargo’s servicing business, in which the bank collects payments from homeowners, could also soften the blow. In the fourth quarter, the company reported $926 million in fees from that activity, up 6 percent from a year earlier.

Wells Fargo can also rely on other businesses to pick up some of the slack. In an interview on Friday, Mr. Sloan said that strong loan growth throughout the bank, including in autos and credit cards, reflected potential opportunity.

The bank reported gains in its wealth management business, where profit increased 13 percent, to $351 million. It has also been focusing on its brokerage business as regulations have curbed profits in other areas.

Cost-cutting could be another option. In the past, the bank has shown it can be aggressive on that front.

Recently, Wells Fargo has been developing its online and mobile banking operations so that it can trim staffing costs in its branches. It has also refocused on core businesses and sold units like H. D. Vest Financial Services, which it put on the auction block in 2011.

The company has also cleaned up much of the costly legal mess stemming from the mortgage crisis, striking several deals with federal regulators over the last year. This week, Wells Fargo was among the 10 banks that agreed to an $8.5 billion settlement with the Comptroller of the Currency and the Federal Reserve over claims of shoddy foreclosure practices, including sloppy paperwork used in home seizures and botched loan modifications. Separately, the bank has allotted $1.2 billion to prevent foreclosures.

With the settlement, Wells Fargo puts an end to an expensive foreclosure review that was mandated by regulators. The review cost the bank an estimated $125 million each quarter.

“By putting these issues behind us, we can focus more of our resources on serving our customers,” the bank’s chief executive, John G. Stumpf, told analysts on Friday.

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Villaraigosa backs Feuer in hotly contested city attorney's race

Making his first citywide endorsement of this municipal elections season, Los Angeles Mayor Antonio Villaraigosa on Thursday backed former Assemblyman Mike Feuer in the hotly contested race for city attorney.

Villaraigosa, appearing with Feuer outside the Variety Boys and Girls Club in Boyle Heights, praised the former lawmaker "as a tireless advocate, as a ferocious fighter for public safety and for kids."

The endorsement came the same day that campaign finance reports filed with the city showed Feuer to be in the best financial shape of the four candidates on the ballot as the March 5 primary nears.

Counting the $300,000 in matching public funds he qualified for, Feuer had raised nearly $1.2 million by the end of the year and had some $940,000 left to spend. City Atty. Carmen Trutanich, whom Feuer and two others are trying to unseat, reported raising $381,000, which included nearly $159,000 in matching funds, and had $313,000 in cash on hand.

Of the others on the ballot, private attorneys Greg Smith and Noel Weiss, Smith lent his campaign $616,000 — much of it during the last three months of 2012 — and reported raising $8,900 in contributions from others, bringing his total contributions to date to $97,000. Smith had $473,000 remaining and has rejected public funds. Weiss has agreed to accept the spending-limit terms attached to receiving campaign cash from taxpayers but has not qualified for any because he has not raised anything.

In another citywide race, for controller, Councilman Dennis Zine raised the most of any of the six candidates for the open seat: nearly $1 million, counting a $25,000 loan and $267,000 in matching funds.

Trutanich downplayed both Feuer's financial advantage and the mayor's endorsement. The city attorney said he had only recently begun raising money — he announced he would seek reelection shortly after failing to make the runoff in last year's district attorney election. And Trutanich also held a news conference Thursday to discount the mayor's endorsement of Feuer.

"The mayor has an appreciation for what those folks do across the street," Trutanich said, pointing to police headquarters. "But I don't think he has an appreciation for what we do in this office."

The mayor and Trutanich have had a cool relationship since 2009, when Trutanich, then an attorney in private practice, beat Villaraigosa's close political ally, then-Councilman Jack Weiss, to win the city's top legal post.

Others said the mayor's endorsement is valuable, though not likely to be the game-changer that the Feuer campaign predicted it would be.

Democratic campaign consultant Eric Hacopian, who is not working for any of the city attorney candidates, said the endorsement, though important, will probably have the most impact with those already inclined to go with Feuer, because the two men appeal to many of the same voters.

Raphael Sonenshein, a longtime observer of Los Angeles politics who heads the Pat Brown Institute at Cal State L.A., said the mayor's endorsement also could help Feuer with Latinos and African Americans, groups that sided with Rocky Delgadillo when he defeated Feuer for city attorney in 2001.

"The only silver lining for Trutanich," Sonenshein said, is that it would give him an opportunity to remind voters that he defeated an establishment candidate in the 2009 race. "He could say it's the City Hall machine" at work, but "on balance it's a good endorsement for Feuer."

jean.merl@latimes.com

wesley.lowery@latimes.com

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A Google-a-Day Puzzle for Jan. 11

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.

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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:

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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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ABC Chief Says Network Needs Hits, Will Abandon “All-Star” Format for “Dancing”

NEW YORK (TheWrap.com) – ABC entertainment president Paul Lee summed up his fall season by saying his network has “a lot to shout about, and we also have a lot to do.”

Lee’s network finished the fall in fourth place in the key 18-49 demographic and third place in total viewers. He lamented the fall’s lack of any “big breakout hits on broadcast on any of the networks and on ABC in particular.”

NBC, which passed ABC and its other rivals to become fall’s top-rated network in 18-49, might dispute that: It has touted the new drama “Revolution” as a hit.

Lee assessed his network’s fall at a Television Critics Association panel on Thursday. He said he was particularly disappointed not to see better numbers for reality standby “Dancing With the Stars,” which adapted an “all-star” format in the fall and brought back former contestants. He said that for its spring cycle, the show would go back to recruiting fresh talent, in hopes of drawing a younger audience.

Looking for a positive spin on the disappointing ratings for the show – which still averages 16 million total viewers per episode – he said the dancing this fall may have been too good.

“It turns out people like to have bad dancing as much as they do good dancing,” he said.

TV News Headlines – Yahoo! News

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F.D.A. Warns Two Producers on Egg Safety

Two large egg producers have received warning letters from the Food and Drug Administration, which said they violated a two-year-old rule aimed at preventing salmonella contamination.

During inspections conducted last summer, the F.D.A. found failures to prevent pests and wildlife from entering barns housing laying hens, poor record-keeping and other infractions that amounted to what it called “serious violations” of the rule.

The failures meant that eggs the companies produced “may have become contaminated with filth,” agency inspectors wrote in the letters, which were sent late last month and posted on the agency’s Web site on Thursday.

The letters offer a window into the way new regulations the agency proposed last week to enhance food safety might work. The proposed regulations, like the rule cited in the letters, aim to prevent food from being tainted rather than addressing contamination after it has occurred.

Both producers, Midwest Poultry Services of Mentone, Ind., and SKS Enterprises Inc., in Lodi, Calif., failed to comply with plans they had submitted to the agency aimed at preventing salmonella enteritidis, one of the most common types of salmonella bacteria, the F.D.A. said. Such plans were required by a rule set out two years ago.

Officials noted the presence of more than 30 wild birds and their nests in three of the five SKS facilities they inspected between May and August, despite the company’s plans for preventing wildlife from coming into contact with its chickens and eggs.

After the inspection, SKS told the agency it would use chicken wire to prevent wild birds from entering its barns, but the agency said it had not received any follow-up report on that correction.

The F.D.A. also said the company was missing pest control records and failed to conduct tests of its birds within time frames specified by the rule.

A woman who answered the phone at SKS’s offices at about 1 p.m. Pacific time said everyone had gone home for the day.

In Midwest Poultry’s facility in Fort Recovery, Ohio, the agency inspector found records of high levels of rodent activity — in one barn, 113 rodents were caught over a five-day period.

Midwest, which produces some 150 million dozen eggs a year, could not give inspectors any record of actions it had taken to correct the problem, and a subsequent response sent to the F.D.A. in August lacked any new strategy for dealing with rodents, the agency said.

The F.D.A. said Midwest failed to maintain records showing that it had refrigerated eggs within the required 36 hours of laying.

“They cited two violations, both of which were about documentation, and all of that documentation has been sent to them,” said Robert L. Krouse, chief executive of Midwest Poultry. “Now we’re waiting to see if they want any more.”

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Japan Approves $116 Billion in Emergency Economic Stimulus

TOKYO — The Japanese government approved emergency stimulus spending of more than $100 billion on Friday, part of an aggressive push by Prime Minister Shinzo Abe to kick-start growth in Japan’s long-moribund economy.

Mr. Abe also reiterated pressure on Japan’s central bank to make a firmer commitment to stopping deflation by pumping more money into the economy — a measure the prime minister says is crucial to getting businesses to invest and consumers to spend.

“We will put an end to this shrinking, and aim to build a stronger economy where earnings and incomes can grow,” Mr. Abe told a televised news conference. “For that, the government must first take the initiative to create demand, and boost the entire economy.”

Under the plan, the Japanese government will spend about 10.3 trillion yen (about $116 billion) on public works and disaster mitigation projects, subsidies for companies that invest in new technology and financial aid to small businesses.

The government will seek to raise real economic growth by 2 percentage points and add 600,000 jobs to the economy, Mr. Abe said. The measures announced Friday amount to one of the largest spending plans in Japan’s history, he stressed.

By simply talking about stimulus measures, Mr. Abe, who took office late last month, has already driven down the value of the yen, much to the relief of Japanese exporters whose competitiveness benefits from a weaker currency.

But the government’s promises to spend its way out of economic stagnation also raise concerns over Japan’s public debt, which has already mushroomed to twice the size of its economy and is the largest in the industrialized world.

At the root of Japan’s debt woes was a similar attempt in the 1990s by Mr. Abe’s own Liberal Democratic Party to stimulate economic growth through government spending on extensive public works projects across the country.

Mr. Abe said, however, that the spending this time around would be better focused to bring about growth through investment in innovation. He said the government would also invest in measures that would help mitigate the fall in Japan’s population, by encouraging families to have more children.

“To grow in a sustainable way, we must help create a virtuous cycle where companies actively borrow and invest, and in so doing raise employment and incomes,” Mr. Abe said.

“For that, it is extremely important that we adopt a growth strategy that gives everyone solid hope that the future of the Japanese economy lies in growth.”

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Irvine City Council overhauls oversight, spending on Great Park

Capping a raucous eight-hour-plus meeting, the Irvine City Council early Wednesday voted to overhaul the oversight and spending on the beleaguered Orange County Great Park while authorizing an audit of the more than $220 million that so far has been spent on the ambitious project.

A newly elected City Council majority voted 3 to 2 to terminate contracts with two firms that had been paid a combined $1.1 million a year for consulting, lobbying, marketing and public relations. One of those firms — Forde & Mollrich public relations — has been paid $12.4 million since county voters approved the Great Park plan in 2002.

"We need to stop talking about building a Great Park and actually start building a Great Park," council member Jeff Lalloway said.

The council, by the same split vote, also changed the composition of the Great Park's board of directors, shedding four non-elected members and handing control to Irvine's five council members.

The actions mark a significant turning point in the decade-long effort to turn the former El Toro Marine base into a 1,447-acre municipal park with man-made canyons, rivers, forests and gardens that planners hoped would rival New York's Central Park.

The city hoped to finish and maintain the park for years to come with $1.4 billion in state redevelopment funds. But that money vanished last year as part of the cutbacks to deal with California's massive budget deficit.

"We've gone through $220 million, but where has it gone?" council member Christina Shea said of the project's initial funding from developers in exchange for the right to build around the site. "The fact of the matter is the money is almost gone. It can't be business as usual."

The council majority said the changes will bring accountability and efficiencies to a project that critics say has been larded with wasteful spending and no-bid contracts. For all that has been spent, only about 200 acres of the park has been developed and half of that is leased to farmers.

But council members Larry Agran and Beth Krom, who have steered the course of the project since its inception, voted against reconfiguring the Great Park's board of directors and canceling the contracts with the two firms.

Krom has called the move a "witch hunt" against her and Agran. Feuding between liberal and conservative factions on the council has long shaped Irvine politics.

"This is a power play," she said. "There's a new sheriff in town."

The council meeting stretched long into the night, with the final vote coming Wednesday at 1:34 a.m. Tensions were high in the packed chambers with cheering, clapping and heckling coming from the crowd.

At one point council member Lalloway lamented that he "couldn't hear himself think."

During public comments, newly elected Orange County Supervisor Todd Spitzer chastised the council for "fighting like schoolchildren." Earlier this week he said that if the Irvine's new council majority can't make progress on the Great Park, he would seek a ballot initiative to have the county take over.

And Spitzer angrily told Agran that his stewardship of the project had been a failure.

"You know what?" he said. "It's their vision now. You're in the minority."

mike.anton@latimes.com

rhea.mahbubani@latimes.com

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A Google-a-Day Puzzle for Jan. 10

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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“Les Miserables” soundtrack tops Billboard album chart

LOS ANGELES (Reuters) – The soundtrack to the big screen adaption of Broadway musical “Les Miserables” topped the Billboard 200 album chart on Wednesday, edging out British folk rockers Mumford & Sons.

“Les Miserables” sold 92,000 albums in the week, according to data from Nielsen SoundScan, a 32 percent decline from last week for the star-studded production featuring the singing of Russell Crowe, Anne Hathaway and Hugh Jackman. It was the No. 2 album last week.

The soundtrack had the poorest showing for a No. 1 album since Christian hip-hop and pop artist tobyMac’s “Eye on It” topped the chart in September with 69,000 in sales.

Mumford & Sons’ “Babel” rose to the second spot from No. 8, finishing behind “Les Mis” by only a thousand albums sold. The British band’s second album was boosted by a sale price and heavy promotion on the Apple iTunes Store.

Country-pop star Taylor Swift, whose album “Red” spent the past four weeks atop the chart, dropped to third.

“American Idol” winner Phillip Phillips’ “The World from the Side of the Moon” took fourth and British boy band One Direction’s “Take Me Home” was fifth on the chart.

U.S. album sales for last week, which totaled 6.26 million, rose 8 percent compared to the same week last year.

A total of 34.53 million songs were downloaded last week, a 5 percent increase from last year.

(Reporting by Eric Kelsey, editing by Jill Serjeant and Jackie Frank)

Music News Headlines – Yahoo! News

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Flu Widespread, Leading a Range of Winter’s Ills

It is not your imagination — more people you know are sick this winter, even people who have had flu shots.

The country is in the grip of three emerging flu or flulike epidemics: an early start to the annual flu season with an unusually aggressive virus, a surge in a new type of norovirus, and the worst whooping cough outbreak in 60 years. And these are all developing amid the normal winter highs for the many viruses that cause symptoms on the “colds and flu” spectrum.

Influenza is widespread, and causing local crises. On Wednesday, Boston’s mayor declared a public health emergency as cases flooded hospital emergency rooms.

Google’s national flu trend maps, which track flu-related searches, are almost solid red (for “intense activity”) and the Centers for Disease Control and Prevention’s weekly FluView maps, which track confirmed cases, are nearly solid brown (for “widespread activity”).

“Yesterday, I saw a construction worker, a big strong guy in his Carhartts who looked like he could fall off a roof without noticing it,” said Dr. Beth Zeeman, an emergency room doctor for MetroWest Medical Center in Framingham, Mass., just outside Boston. “He was in a fetal position with fever and chills, like a wet rag. When I see one of those cases, I just tighten up my mask a little.”

Massachusetts General Hospital in Boston started asking visitors with even mild cold symptoms to wear masks and to avoid maternity wards. The hospital has treated 532 confirmed influenza patients this season and admitted 167, even more than it did by this date during the 2009-10 swine flu pandemic.

At Brigham and Women’s Hospital, 100 patients were crowded into spaces licensed for 53. Beds lined halls and pressed against vending machines. Overflow patients sat on benches in the lobby wearing surgical masks.

“Today was the first time I think I was experiencing my first pandemic,” said Heidi Crim, the nursing director, who saw both the swine flu and SARS outbreaks here. Adding to the problem, she said, many staff members were at home sick and supplies like flu test swabs were running out.

Nationally, deaths and hospitalizations are still below epidemic thresholds. But experts do not expect that to remain true. Pneumonia usually shows up in national statistics only a week or two after emergency rooms report surges in cases, and deaths start rising a week or two after that, said Dr. Gregory A. Poland, a vaccine specialist at the Mayo Clinic in Minnesota. The predominant flu strain circulating is an H3N2, which typically kills more people than the H1N1 strains that usually predominate; the relatively lethal 2003-4 “Fujian flu” season was overwhelmingly H3N2.

No cases have been resistant to Tamiflu, which can ease symptoms if taken within 48 hours, and this year’s flu shot is well-matched to the H3N2 strain, the C.D.C. said. Flu shots are imperfect, especially in the elderly, whose immune systems may not be strong enough to produce enough antibodies.

Simultaneously, the country is seeing a large and early outbreak of norovirus, the “cruise ship flu” or “stomach flu,” said Dr. Aron J. Hall of the C.D.C.’s viral gastroenterology branch. It includes a new strain, which first appeared in Australia and is known as the Sydney 2012 variant.

This week, Maine’s health department said that state was seeing a large spike in cases. Cities across Canada reported norovirus outbreaks so serious that hospitals were shutting down whole wards for disinfection because patients were getting infected after moving into the rooms of those who had just recovered. The classic symptoms of norovirus are “explosive” diarrhea and “projectile” vomiting, which can send infectious particles flying yards away.

“I also saw a woman I’m sure had norovirus,” Dr. Zeeman said. “She said she’d gone to the bathroom 14 times at home and 4 times since she came into the E.R. You can get dehydrated really quickly that way.”

This month, the C.D.C. said the United States was having its biggest outbreak of pertussis in 60 years; there were about 42,000 confirmed cases, the highest total since 1955. The disease is unrelated to flu but causes a hacking, constant cough and breathlessness. While it is unpleasant, adults almost always survive; the greatest danger is to infants, especially premature ones with undeveloped lungs. Of the 18 recorded deaths in 2012, all but three were of infants under age 1.

That outbreak is worst in cold-weather states, including Colorado, Washington, Wisconsin, Minnesota and Vermont.

Although most children are vaccinated several times against pertussis, those shots wear off with age. It is possible, the authorities said, that a new, safer vaccine introduced in the 1990s gives protection that does not last as long, so more teenagers and adults are vulnerable.

And, Dr. Poland said, if many New Yorkers are catching laryngitis, as has been reported, it is probably a rhinovirus. “It’s typically a sore, really scratchy throat, and you sometimes lose your voice,” he said.

Though flu cases in New York City are rising rapidly, the city health department has no plans to declare an emergency, largely because of concern that doing so would drive mildly sick people to emergency rooms, said Dr. Jay K. Varma, deputy director for disease control. The city would prefer people went to private doctors or, if still healthy, to pharmacies for flu shots. Nursing homes have had worrisome outbreaks, he said, and nine elderly patients have died. Homes need to be more alert, vaccinate patients, separate those who fall ill and treat them faster with antivirals, he said.

Dr. Susan I. Gerber of the C.D.C.’s respiratory diseases branch, said her agency has not seen any unusual spike of rhinovirus, parainfluenza, adenovirus, coronavirus or the dozens of other causes of the “common cold,” but the country is having its typical winter surge of some, like respiratory syncytial virus “that can mimic flulike symptoms, especially in young children.”

The C.D.C. and the local health authorities continue to advocate getting flu shots. Although it takes up to two weeks to build immunity, “we don’t know if the season has peaked yet,” said Dr. Joseph Bresee, chief of prevention in the agency’s flu division.

Flu shots and nasal mists contain vaccines against three strains, the H3N2, the H1N1 and a B. Thus far this season, Dr. Bresee said, H1N1 cases have been rare, and the H3N2 component has been a good match against almost all the confirmed H3N2 samples the agency has tested.

About a fifth of all flus this year thus far are from B strains. That part of the vaccine is a good match only 70 percent of the time, because two B’s are circulating.

For that reason, he said, flu shots are being reformulated. Within two years, they said, most will contain vaccines against both B strains.

Joanna Constantine, 28, a stylist at the Guy Thomas Hair Salon on West 56th Street in Manhattan, said she recently was so sick that she was off work and in bed for five days — and silenced by laryngitis for four of them.

She did not have the classic flu symptoms — a high fever, aches and chills — so she knew it was probably something else.

Still, she said, it scared her enough that she will get a flu shot next year. She had not bothered to get one since her last pregnancy, she said. But she has a 7-year-old son and a 5-year-old daughter, “and my little guys get theirs every year.”

Jess Bidgood contributed reporting.

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