The North Korean Leader, Kim Jong-un, Makes Overture to South





SEOUL, South Korea — The North Korean leader, Kim Jong-un, called for an end to the “confrontation” with rival South Korea on Tuesday in what appeared to be an overture to the incoming South Korean president as she was cobbling together South Korea’s new policy on the North.




North Korea issued a major policy statement on Tuesday, New Year’s Day, following a tradition set by Mr. Kim’s late grandfather, the North Korean founder Kim Il-sung, and his late father, Kim Jong-il, who died in December last year, bequeathing the dynastic rule to Mr. Kim.


Mr. Kim was the first supreme North Korean leader to issue the statement as his personal speech since his grandfather last did so before his death in 1994. During the rule of his reclusive father, Kim Jong-il, the statement — which laid out policy guidelines for the new year and was studied by all branches of the party, state and military — was issued as a joint editorial of the country’s main official media.


Mr. Kim’s speech on Tuesday, which was broadcast through the North’s state-run television and radio stations, was another sign that the young leader was trying to imitate his grandfather Kim Il-sung, who in life was considered a more people-friendly leader and is still widely revered among North Koreans.


Although Mr. Kim inherited the key policies of his father, outside analysts see him as trying to distance himself from the ruling style of his father, Kim Jong-il, who was more feared than respected among his people and whose rule was marked by a famine.


In his speech, Mr. Kim, echoed themes of previous New Year’s messages, emphasizing that improving the living standards of North Koreans and rejuvenating the agricultural and light industries were among the improvised country’s main priorities.


But he revealed no details of any planned economic policy changes. He only mentioned a need to “improve economic leadership and management” and “spread useful experiences created in various work units.”


Since July, various news outlets in South Korea have reported that Mr. Kim’s regime has begun carrying out cautious economic incentives aimed at bolstering productivity at farms and factories. Some reports said the state was considering letting farmers keep at least 30 percent of their yield; currently, it is believed, they are allowed to sell only a surplus beyond a government-set quota that is rarely met.


Mr. Kim also vowed to strengthen his country’s military, calling for the development of more advanced weapons. But he made no mention of relations with the United States or the international efforts to halt North Korea’s nuclear weapons program. He simply reiterated that his government was willing to “expand and improve upon friendly and cooperative relationships with all countries friendly to us.”


Mr. Kim’s speech followed the successful launching of a satellite aboard a long-range rocket in December. North Korea’s propagandists have since been busy billing the launch as a symbol of what they called the North’s soaring technological might and Mr. Kim’s peerless leadership. Washington considered it a test of long-range ballistic missile technology and a violation of United Nations Security Council resolutions banning such tests, and is seeking more sanctions to impose on the isolated country.


But it was his allusion to relations with South Korea that signified a departure in tone.


“A key to ending the divide of the nation and achieving reunification is to end the situation of confrontation between the North and the South,” Mr. Kim said. “A basic precondition to improving North-South relations and advancing national reunification is to honor and implement North-South joint declarations.”


He was referring to two inter-Korean summit agreements, signed in 2000 and 2007, when two South Korean presidents, Kim Dae-jung and Roh Moo-hyun, were pursuing a “Sunshine Policy” of reconciliation and economic cooperation with North Korea and met Mr. Kim’s father in the North Korean capital, Pyongyang.


As a result of those agreements, billions of dollars of South Korean investment, aid and trade flowed into the North. Billions more were promised in investments in shipyards and factory parks, as the South Korean leaders believed that economic good will was the best way of encouraging North Korea to shed its isolation and hostility while reducing the economic gap between the two Koreas and the cost of reunification in the future.


But that warming of ties ended when conservatives came to power in South Korea with the inauguration of President Lee Myung-bak in 2008. When Mr. Lee was president-elect, North Korea offered a similar overture as Tuesday’s. But Mr. Lee suspended any large aid or investment barring a significant progress toward dismantling the North’s nuclear weapons programs, and inter-Korean relations spiraled down, further aggravated by the North’s shelling of a South Korean island in 2010.


The incoming leader of South Korea, Park Geun-hye, who is the presidential candidate of Mr. Lee’s governing party, kept the conservatives in power by winning the Dec. 19 election. She is the daughter of Park Chung-hee, the former military strongman under whose rule from 1961 till 1979 a staunchly anti-Communist, pro-American political establishment took root in South Korea.


North Korea had engineered a couple of assassination attempts on Ms. Park’s father, one of which resulted in her mother’s death in 1974. But Ms. Park also traveled to Pyongyang in 2002 and discussed inter-Korean reconciliation with Kim Jong-il.


During her campaign for president, she said that if elected, she would decouple humanitarian aid from politics and try to hold a summit meeting with Kim Jong-un. She was in part reacting to widespread criticism in South Korea that Mr. Lee’s hard-line policy did little to change the North’s behavior.


During the campaign, however, Ms. Park stuck to Mr. Lee’s stance on the most contentious issue of large-scale investment, which the North considers crucial.


Ms. Park, like the current president, insisted that any large-scale economic investments be preceded by the “building of trust” through progress in denuclearizing North Korea.


Peace bought with “shoveling” of unrestrained aid under the Sunshine Policy was “a fake,” she said, citing the North’s long history of using military threats to win economic concessions.


North Korea called her a “confrontational maniac” and “fascist.” But since her election, it has refrained from attacking her.


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Kim Kardashian Steps Out for New Year's Party after Pregnancy Announcement















01/01/2013 at 10:20 AM EST







Kanye West and Kim Kardashian


Denise Truscello/WireImage


The year 2012 was good for Kim Kardashian. But, oh baby, is she ready for 2013! 

"It's been so exciting," she told PEOPLE of the whirlwind of emotions she's felt since finding out she was pregnant. "We're very, very happy." 

With just a hint of a baby bump showing under her form fitting black Julien Macdonald dress, the reality star rang in the new year in Las Vegas with the man she's spent 2012 with: Beau and baby daddy Kanye West.

"I wish I could share a drink with you all, but I can't for a little while," she told the crowd at Mirage's 1 OAK just before leading a countdown to 2013. 

With the crowd cheering and confetti flying as the clock struck midnight, Kardashian stood on an elevated banquet adjacent to the deejay booth and passionately kissed West. And for the next 25 minutes, the deejay played nothing but West's songs – much to the delight of his pregnant girlfriend, who smiled and sang along.

As the night continued, the duo rarely left each other's side, with Kardashian dancing behind West while her party sipped Grey Goose cocktails. Kardashian stuck to water as the Grammy award-winning rapper occasionally rubbed her belly.

Her VIP table littered with party hats, streamers and black and gold balloons, Kardashian appeared happy throughout the night, kissing West and chatting with friends and family in attendance, including mom Kris Jenner, longtime friend Brittny Gastineau and Lance Bass.

Now that the new year has begun, Kardashian is working on being healthy for her unborn child. 

"I've felt good. I've felt no morning sickness but it isn't the easiest," she said. "People always say pregnancy is so easy and fun. It's definitely an adjustment; It's learning about your body, but I've felt really good."

While the announcement of Kardashian's pregnancy came as a surprise to a lot of people, she doesn't want to be surprised when it comes the sex of the baby.

She said, "Of course I do want to know!"

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Clinton receiving blood thinners to dissolve clot


WASHINGTON (AP) — Doctors treating Secretary of State Hillary Rodham Clinton for a blood clot in her head said blood thinners are being used to dissolve the clot and they are confident she will make a full recovery.


Clinton didn't suffer a stroke or neurological damage from the clot that formed after she suffered a concussion during a fainting spell at her home in early December, doctors said in a statement Monday.


Clinton, 65, was admitted to New York-Presbyterian Hospital on Sunday when the clot turned up on a follow-up exam on the concussion, Clinton spokesman Phillipe Reines said.


The clot is located in the vein in the space between the brain and the skull behind the right ear. She will be released once the medication dose for the blood thinners has been established, the doctors said.


In their statement, Dr. Lisa Bardack of the Mount Kisco Medical Group and Dr. Gigi El-Bayoumi of George Washington University said Clinton was making excellent progress and was in good spirits.


Clinton's complication "certainly isn't the most common thing to happen after a concussion" and is one of the few types of blood clots in the skull or head that are treated with blood thinners, said Dr. Larry Goldstein, a neurologist who is director of Duke University's stroke center. He is not involved in Clinton's care.


The area where Clinton's clot developed is "a drainage channel, the equivalent of a big vein inside the skull. It's how the blood gets back to the heart," Goldstein said.


Blood thinners usually are enough to treat the clot and it should have no long-term consequences if her doctors are saying she has suffered no neurological damage from it, Goldstein said.


Clinton returned to the U.S. from a trip to Europe, then fell ill with a stomach virus in early December that left her severely dehydrated and forced her to cancel a trip to North Africa and the Middle East. Until then, she had canceled only two scheduled overseas trips, one to Europe after breaking her elbow in June 2009 and one to Asia after the February 2010 earthquake in Haiti.


Her condition worsened when she fainted, fell and suffered a concussion while at home alone in mid-December as she recovered from the virus. It was announced Dec. 13.


This isn't the first time Clinton has suffered a blood clot. In 1998, midway through her husband's second term as president, Clinton was in New York fundraising for the midterm elections when a swollen right foot led her doctor to diagnose a clot in her knee requiring immediate treatment.


Clinton had planned to step down as secretary of state at the beginning of President Barack Obama's second term. Whether she will return to work before she resigns remained a question.


Democrats are privately if not publicly speculating: How might her illness affect a decision about running for president in 2016?


After decades in politics, Clinton says she plans to spend the next year resting. She has long insisted she had no intention of mounting a second campaign for the White House four years from now. But the door is not entirely closed, and she would almost certainly emerge as the Democrat to beat if she decided to give in to calls by Democratic fans and run again.


Her age — and thereby health — would probably be a factor under consideration, given that Clinton would be 69 when sworn in, if she were elected in 2016. That might become even more of an issue in the early jockeying for 2016 if what started as a bad stomach bug becomes a prolonged, public bout with more serious infirmity.


Not that Democrats are willing to talk openly about the political implications of a long illness, choosing to keep any discussions about her condition behind closed doors. Publicly, Democrats reject the notion that a blood clot could hinder her political prospects.


"Some of those concerns could be borderline sexist," said Basil Smikle, a Democratic strategist who worked for Clinton when she was a senator. "Dick Cheney had significant heart problems when he was vice president, and people joked about it. He took the time he needed to get better, and it wasn't a problem."


It isn't uncommon for presidential candidates' health — and age — to be an issue. Both in 2000 and 2008, Sen. John McCain, R-Ariz., had to rebut concerns he was too old to be commander in chief or that his skin cancer could resurface.


Two decades after Clinton became the first lady, signs of her popularity — and her political strength — are ubiquitous.


Obama had barely declared victory in November when Democrats started zealously plugging Clinton as their strongest White House contender four years from now, should she choose to take that leap.


"Wouldn't that be exciting?" House Democratic leader Nancy Pelosi declared in December. "I hope she goes. Why wouldn't she?"


Even Republicans concede that were she to run, Clinton would be a force to be reckoned with.


"Trying to win that will be truly the Super Bowl," Newt Gingrich, the former House Speaker and 2012 GOP presidential candidate, said in December. "The Republican Party today is incapable of competing at that level."


Americans admire Clinton more than any other woman in the world, according to a Gallup poll released Monday — the 17th time in 20 years that Clinton has claimed that title. And a recent ABC News/Washington Post poll found that 57 percent of Americans would support Clinton as a candidate for president in 2016, with just 37 percent opposed. Websites have already cropped up hawking "Clinton 2016" mugs and tote bags.


Beyond talk of future politics, Clinton's three-week absence from the State Department has raised eyebrows among some conservative commentators who questioned the seriousness of her ailment after she canceled planned Dec. 20 testimony before Congress on the deadly attack on the U.S. diplomatic mission in Benghazi, Libya.


Clinton had been due to discuss with lawmakers a scathing report she had commissioned on the attack. It found serious failures of leadership and management in two State Department bureaus were to blame for insufficient security at the facility. Clinton took responsibility for the incident before the report was released, but she was not blamed. Four officials cited in the report have either resigned or been reassigned.


___


Associated Press writer Ken Thomas in Washington and AP Chief Medical Writer Marilynn Marchione in Milwaukee contributed to this report.


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Senate approves "fiscal cliff" deal, crisis eased


WASHINGTON (Reuters) - Washington's last-minute scramble to step back from a recession-inducing "fiscal cliff" shifted to the Republican-controlled House of Representatives on Tuesday after the Senate approved a bipartisan deal to avoid steep tax hikes and spending cuts.


In a rare late-night show of unity, the Senate voted 89 to 8 to raise some taxes on the wealthy while keeping income taxes low on more moderate income voters.


The bill's prospects were less certain in the House, where a vote had not yet been scheduled. Many conservative Republicans have rejected tax increases on any Americans, no matter how wealthy. Some liberal Democrats were also upset with a complex deal that they thought gave away too much.


Lingering uncertainty over U.S. tax and spending policy has unnerved investors and depressed business activity for months, and lawmakers had hoped to reach a deal before Tuesday, when a broad range of automatic tax increases and spending cuts would begin to punch a $600 billion hole in the economy.


Financial markets have avoided a steep plunge on the assumption that Washington would ultimately avoid pushing the country off the fiscal cliff into a recession.


With financial markets closed for the New Year's Day holiday, lawmakers have one more day to close the deal.


"My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something," Representative Steve Cohen, a Democrat from Tennessee, said on the House floor.


The bill passed by the Senate at around 2 a.m. would raise income taxes on families earning more than $450,000 per year. Low temporary rates that have been in place for less affluent taxpayers for the past decade would be made permanent, along with a range of targeted tax breaks put in place by President Barack Obama in the depths of the 2009 recession.


However, workers would see up to $2,000 more taken out of their paychecks as a temporary payroll tax cut was set to expire.


The bill would also delay an across-the-board 8 percent spending cut to domestic and military programs for two months, and extend jobless benefits for 2 million people who otherwise would see them run out.


Obama in a statement on Monday urged the House to vote. "There's more work to do to reduce our deficits, and I'm willing to do it," he said.


Republicans had hoped to include significant spending cuts in the deal to narrow trillion-dollar budget deficits. Conservatives were already looking forward to the next battle over the debt ceiling, in late February, to extract deficit reduction measures from the Democratic president.


Vice President Joe Biden, who was instrumental in pushing through the Senate measure, was scheduled to address a closed-door meeting of House Democrats. Their support likely will be needed to pass the bill.


Republican members were to meet to discuss "a path forward," a senior aide said.


The meeting could help Republicans leaders decide when to begin consideration of the White House-backed measure. A vote could come later in the day, but was not yet scheduled.


The conservative Club for Growth urged a "no" vote on the Senate measure, saying it would be on its "congressional scorecard" used to challenge members of Congress.


Liberal groups also have urged Democrats to reject the deal.


Richard Trumka, head of the AFL-CIO labor union, wrote on Twitter that the deal does not raise taxes enough on the wealthy and "sets the stage for more hostage taking" by Republicans in future budget confrontations.


Republican Representative Tom Cole said his House colleagues should pass the Senate bill rather than try to change it.


"We ought to take this deal right now, and we'll live to fight another day," Cole said on MSNBC. "Putting to bed this thing before the markets (open on Wednesday) is really a pretty important thing to do."


(Writing by Andy Sullivan; Editing by Fred Barbash and Vicki Allen)



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Envoy to Syria Warns of Descent to Warlord ‘Hell’





BEIRUT, Lebanon — The international envoy to Syria, Lakhdar Brahimi, drew a grim portrait on Sunday of the country’s future in the absence of a political solution, warning of a state carved up by warlords and a death toll that would rapidly surge, while conceding that there was little sign that the antagonists intended to negotiate.







Muzaffar Salman/Reuters

A rebel soldier firing at pro-government forces on Sunday in Aleppo, Syria. In Homs, civilians fled a district torn by fighting.






At a news conference at Arab League headquarters in Cairo, Mr. Brahimi said the violence, which has already killed tens of thousands of people, could claim 100,000 lives over the next year.


“People are talking about a divided Syria being split into a number of small states like Yugoslavia,” he said.


“This is not what is going to happen. What will happen is Somalization — warlords,” Mr. Brahimi said, according to a transcript of his remarks. Without a peace deal, he added, Syria would be “transformed into hell.”


Mr. Brahimi’s comments reflected a deepening pessimism after his apparently unsuccessful attempt over the past week to mediate the crisis by shuttling between opposition figures and the Syrian president, Bashar al-Assad. The envoy indicated that Mr. Assad had made no response to peace proposals, which included a plan to create a transitional government. In another sign of the impasse, the leader of a large opposition coalition all but rebuffed an invitation by Russia, one of Syria’s closest allies, to discuss solutions to the crisis.


On Saturday, nearly a week after Mr. Brahimi traveled to Damascus, the Syrian capital, Russia’s foreign minister said there was “no possibility” of persuading Mr. Assad to leave the country, which Syrian opposition groups have insisted is a precondition for any peace talks.


The envoy’s warnings came as activists in Syria reported a new exodus of civilians from the central city of Homs, adding untold numbers of internal refugees to the millions Mr. Brahimi said had already been displaced by the war. Over the past three days, hundreds and perhaps thousands of residents have fled fighting in the Deir Ba’alba district of Homs after government troops stormed the restive neighborhood, according to activists in Talbiseh, north of Homs, where many of the refugees were being received.


Some residents have blamed rebel fighters for the incursion, saying the army moved in after the insurgents inexplicably quit the neighborhood. In Syria’s other cities, residents have frequently been angered by the tendency of rebel fighters to occupy a neighborhood and then attack government troops before abruptly withdrawing and leaving civilians to bear the brunt of the army’s brutal retaliation.


It was unclear how many people had been killed in the fighting in the district. One young witness said he believed a neighbor had been killed. Two videos purportedly from Deir Ba’alba showed the bodies of about a dozen men who had apparently been executed with gunshots to the head. But there was no confirmation of claims made on Saturday by an antigovernment group, the Local Coordination Committees, that hundreds had been killed.


One resident of Deir Ba’alba, a 14-year-old boy reached by Skype in Talbiseh, said he had fled with his parents at 1:30 a.m. Sunday. The family had grown accustomed to sporadic fighting and gunfire, and usually fled to a relative’s house elsewhere in Homs. “But this time, it was heavy shelling,” the teenager said. “I could hear the asphalt cracking under the tanks.”


As he and his family left, the boy saw the body of a neighbor, a woman, lying on the ground, he said. His mother tried to convince the boy that the neighbor was alive. “I’m sure I saw her dead,” he said. “Her neck was bleeding. She was unveiled. It was the first time I saw our neighbor unveiled.”


One fighter from Homs said the retreat had come after the rebel military council for Homs failed to provide ammunition for its fighters in Deir Ba’alba. “They asked for supplies 48 hours before the invasion,” the fighter said. “Their call was not answered. I don’t know why.”


Civilians had begged the fighters not to leave, or at least to leave their weapons behind, two fighters said. Another fighter from Homs, calling the withdrawal “suicidal,” said the rebels had left civilians “to face their destiny alone.”


“We don’t know what happened to them,” he said.


Read More..

Angry Birds, YouTube among top apps of 2012






TORONTO (Reuters) – Angry Birds, Instagram and Facebook continued to be among the most downloaded apps of the year but rising stars also earned coveted spots on smartphones and tablets.


This year consumers spent on average two hours each day using mobile applications, an increase of 35 percent over last year, according to analytics firm Flurry. The number is expected to continue growing in 2013.






“2012 was a transformative tipping point in the way consumers use apps,” said Craig Palli, a vice president at mobile marketing company Fiksu, adding that the biggest shift is in consumers’ eagerness to turn to apps for a broad range of day-to-day tasks.


Categories such as social networking, media and entertainment, photo editing, and games, continued to captivate consumer interest, with YouTube and Angry Birds being the top free and paid apps respectively at Apple’s App Store.


Meanwhile, several apps released this year quickly joined the ranks of the top downloaded and revenue grossing apps of the year.


The game Draw Something for iPhone and Android quickly gained widespread popularity when it was released in February, and despite dropping off, is still the second most downloaded paid app of the year Android and Apple devices.


“It had a big run and other multi-player puzzle-oriented games like newcomers LetterPress and ScrambleWithFriends proved popular, too,” Palli said. “But in many respects these titles were inspired by the more revolutionary Words With Friends.”


Songza, a music-discovery app for iPhone, Android and Kindle Fire, saw significant growth in both the United States and Canada, where it is now one of the top free apps on the App Store.


Paper, a sketchbook app for the iPad, is estimated to be one of the top grossing apps released this year according to Distimo, an app analytics company. It was named by Apple as the iPad app of the year.


But the real revolution, according to Palli, is among consumers who are eager to turn to apps for their day-to-day tasks, such as finding a taxi or hotel, following current events or increasingly, making payments.


“It is really consumers who are turning to apps first and traditional methods second,” said Palli.


Uber and Hailo, which allow users to book limos and taxis, and AirBnB and HotelTonight, for finding accommodations, began to move mainstream in 2012, Palli said.


Payment apps such as Square, and Apple’s introduction of the Passbook has further positioned the smartphone as a digital wallet.


This year, during major events such as the Olympics, Hurricane Sandy and the U.S. presidential election, the top apps on the App Store reflected those events, said Palli, showing the demand for keeping up with current events through apps.


(Editing by Patricia Reaney and Bill Trott)


Tech News Headlines – Yahoo! News





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Kim Kardashian: From Divorce Drama to Baby Mama in 5 Clicks





Follow her odyssey from her messy split with Kris Humphries to her great expectation with Kanye West








Credit: Prahl/Winslow/Splash News Online



Updated: Monday Dec 31, 2012 | 11:45 AM EST




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FDA approves 1st new tuberculosis drug in 40 years


WASHINGTON (AP) — The Food and Drug Administration on Monday approved a Johnson & Johnson tuberculosis drug that is the first new medicine to fight the deadly infection in more than four decades.


The agency approved J&J's pill, Sirturo, for use with older drugs to fight a hard-to-treat strain of tuberculosis that has not responded to other medications. However, the agency cautioned that the drug carries risks of potentially deadly heart problems and should be prescribed carefully by doctors.


Roughly one-third of the world's population is estimated to be infected with the bacteria causing tuberculosis. The disease is rare in the U.S., but kills about 1.4 million people a year worldwide. Of those, about 150,000 succumb to the increasingly common drug-resistant forms of the disease. About 60 percent of all cases are concentrated in China, India, Russia and Eastern Europe.


Sirturo, known chemically as bedaquiline, is the first medicine specifically designed for treating multidrug-resistant tuberculosis. That's a form of the disease that cannot be treated with at least two of the four primary antibiotics used for tuberculosis.


The standard drugs used to fight the disease were developed in the 1950s and 1960s.


"The antibiotics used to treat it have been around for at least 40 years and so the bacterium has become more and more resistant to what we have," said Chrispin Kambili, global medical affairs leader for J&J's Janssen division.


The drug carries a boxed warning indicating that it can interfere with the heart's electrical activity, potentially leading to fatal heart rhythms.


"Sirturo provides much-needed treatment for patients who have don't have other therapeutic options available," said Edward Cox, director of the FDA's antibacterial drugs office. "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."


Nine patients taking Sirturo died in company testing compared with two patients taking a placebo. Five of the deaths in the Sirturo group seemed to be related to tuberculosis, but no explanation was apparent for the remaining four.


Despite the deaths, the FDA approved the drug under its accelerated approval program, which allows the agency to clear innovative drugs based on promising preliminary results.


Last week, the consumer advocacy group Public Citizen criticized that approach, noting the drug's outstanding safety issues.


"The fact that bedaquiline is part of a new class of drug means that an increased level of scrutiny should be required for its approval," the group states. "But the FDA had not yet answered concerns related to unexplained increases in toxicity and death in patients getting the drug."


The FDA said it approved the drug based on two mid-stage studies enrolling 440 patients taking Sirturo. Both studies were designed to measure how long it takes patients to be free of tuberculosis.


Results from the first trial showed most patients taking Sirturo plus older drugs were cured after 83 days, compared with 125 days for those taking a placebo plus older drugs. The second study showed most Sirturo patients were cured after 57 days.


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S&P, Nasdaq rise on last day of 2012, Apple advances

NEW YORK (Reuters) - Wall Street mostly edged higher on Monday, with the S&P 500 on track for double-digit gains for the year, as politicians bargained for a deal to avert the "fiscal cliff."


Equities are coming off a five-day streak of losses, driven by the growing concern that there wouldn't be a deal before the midnight deadline to avoid the combination of tax hikes and spending cuts that could force the U.S. economy into recession.


Taxes were set to rise for many Americans this week unless U.S. lawmakers could cut a last-minute deal, an outcome that was possible but seemed unlikely even as the Senate reconvened to continue discussions on the fiscal cliff.


The last trading session of the year is expected to be volatile on low volume and as investors keep a close eye on headlines out of Washington.


"As long as markets think there could be a deal, we should stay higher. Any agreement will be received positively, even if the final agreement is watered down," said David Katz, chief investment officer of Matrix Asset Advisors, in New York.


Despite recent declines over the stalemated budget talks, the S&P 500 is up about 11.8 percent for the year, compared with a nearly flat performance in 2011. The Dow is about 6 percent higher and the Nasdaq is up about 14 percent.


The Dow Jones industrial average <.dji> was down 9.59 points, or 0.07 percent, at 12,928.52. The Standard & Poor's 500 Index <.spx> was up 3.39 points, or 0.24 percent, at 1,405.82. The Nasdaq Composite Index <.ixic> was up 19.47 points, or 0.66 percent, at 2,979.78.


The Dow was nearly flat as consumer discretionary stocks, including McDonald's Corp and Coca-Cola Co , fell, while industrial names like Caterpillar Inc and General Electric rallied more than 1 percent.


Gains in Apple Inc , the most valuable U.S. company, helped lift the Nasdaq. The stock rose 2.6 percent to $522.71, lifting an S&P index of tech shares <.gspt> up 0.6 percent. For the year so far, Apple is up 29.1 percent.


"People are starting to position themselves for 2013, and people are buying Apple now rather than risk a higher tax rate on it next year," Katz said.


Despite the concerns about the impact that going over the fiscal cliff could have on the economy in 2013, investors may be ready to take on more risk next year, in hopes of a greater reward.


Utility stocks were the weakest sector of 2012, with the S&P utility index <.gspu> dropping 4.2 percent for the year.


Bank stocks rose after a New York Times report that U.S. regulators are nearing a $10 billion settlement with several banks that would end the government's efforts to hold lenders responsible for faulty foreclosure practices.


Bank of America Corp was up 0.7 percent at $11.44.


Financial stocks were among the strongest of the year, with the S&P financial index surging 24.5 percent for 2012 so far. Bank of America is the top-performing Dow component, with its stock price more than doubling over the past 12 months.


While midnight is the deadline for a fiscal deal, the government can pass legislation in 2013 that retroactively cancels or moderates the impact of going over the fiscal cliff.


Investors have remained relatively sanguine about the process, believing it will eventually be solved. In the past two months, markets have not shown the kind of volatility that occurred during the fight to raise the debt ceiling in 2011.


Rather, equities have largely performed well in the last two months, buoyed by signs of economic recovery, an improving housing market and monetary policy designed to stimulate growth and lower unemployment.


However, U.S. stocks dropped on Friday, with significant losses in the last minutes of trading, as prospects for a deal worsened at the beginning of the weekend.


On Sunday, President Barack Obama said on NBC's "Meet the Press" that investors could begin to show greater concerns in the new year.


(Editing by Jan Paschal)



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Letter From Washington: Lessons From the 2012 U.S. Election







WASHINGTON — The 2012 U.S. elections, though not seminal, revealed much about the nature and direction of U.S. politics.




A divided government may be ingrained: At the presidential level, Democrats start with a decided advantage. Changing demographics — more Hispanics and other minorities solidly behind the party; women and young voters moving that way and forming hard-to-break voting habits — cut the Democrats’ way.


The electoral map that decides U.S. presidential contests tilts Democratic. President Barack Obama won the national popular vote by 3.7 percentage points, and carried the electoral map — the number of electors from each state is based indirectly on population — 332 to 206. If you took 1.9 percentage points from Mr. Obama and added them to Mitt Romney’s tally, the Republican would have won the popular vote by more than 125,000 votes. Yet if that formula were then applied to every state in the country, the only ones that would change would be Florida and Ohio. Mr. Obama would have lost the popular vote but would still have won the Electoral College vote, 285 to 253, and thus the presidency.


This is why some states that are reliably Democratic at the presidential level and where Republicans now control the statehouses are trying to change the Electoral College system. Each state controls its own rules. Only two, Maine and Nebraska, award electors by congressional district; everywhere else, it’s winner-takes-all.


Republicans are pondering a shift to the approach used in Maine and Nebraska. They see a possible test case in Pennsylvania, where Mr. Obama won the popular vote by more than five percentage points, rolling up huge margins in Philadelphia and its suburbs and in Pittsburgh. Mr. Romney, however, carried 13 of the 18 congressional districts. If this new system were in effect, the Republicans would have gotten 13 of the state’s 20 electoral votes while getting trounced in the popular vote. If this occurred in mainly Republican states, it would erase the Democrats’ Electoral College advantage.


In elections for the House of Representatives, Republicans already have a structural advantage. Democratic voters, especially minorities, tend to be bunched into a relatively small number of districts.


“The high-density Democratic population makes it more difficult for Democrats to create more competitive districts,” said Nathan Gonzales, congressional analyst for the Rothenberg Political Report, a nonpartisan newsletter on U.S. politics.


It’s this bunching, more than any redistricting edge, that enabled Republicans to retain a lead of 234 seats to 201 in the House of Representatives this year even though Democrats received a million more votes over all in House races. There is little to suggest this advantage will lessen in the years ahead.


Conventions matter more than debates: The news media treat the national political conventions as irrelevant dinosaurs; the presidential debates are depicted as the Super Bowl or World Cup of politics.


It didn’t work out that way this year. The conventions mattered more. Mr. Romney and the Republicans blew a chance at the convention in Tampa, Florida, to reset his candidacy. At their convention in Charlotte, North Carolina, the Democrats stepped up to the challenge, especially with a powerful speech by former President Bill Clinton that set the basis for more positive public attitudes about the U.S. economy.


Mr. Obama’s disastrous performance in his first debate with Mr. Romney certainly mattered, though the duration of the Republican nominee’s bounce was exaggerated. Before that debate, the president was about four points ahead nationally; that was close to his final margin.


Moving to the center is tough in the media age: Richard M. Nixon advised Republicans to run to the right in the primaries and to quickly move to the center in the general election. This formula worked as recently as 1980 for Ronald Reagan. For Democrats, the formula is to run to the left in the primaries and to move to the center in the general election.


This is much harder to do today with the omnipresent news media tracking and assembling every public pronouncement and policy change. Mr. Romney tried to pivot after the primaries; there is little evidence that it worked well. He couldn’t escape earlier assertions that had alienated Hispanics (calling for undocumented workers to choose self-deportation) or women (boasting that he would end U.S. government funding for Planned Parenthood).


There are polls — and polls: Polls done on the cheap, automatic phone calls, some online surveys and partisan polls all missed the mark. More professional polls, with telephone interviews, conducted for the news media and other sources, were accurate in most instances.


Campaigns matter: Improving attitudes about the economy and, to a small degree, the president’s response to Hurricane Sandy, moved the needle in the closing weeks. Mr. Obama was indisputably a better political candidate.


The contrasting campaigns widened the margin. Post-election forums at Harvard University and the University of Pennsylvania, and the campaign e-book “The End of the Line,” by Jonathan Martin and Glenn Thrush of the Web site Politico, illustrated the Obama campaign’s supremacy on tactics: polling, the use of digital and social media, advertising, identifying voters and getting them to the polls.


The biggest advantage was overarching, strategic. “We knew who our guy was and where the country was,” said Stephanie Cutter, Mr. Obama’s deputy campaign manager. “They didn’t seem to have a sense of either.”


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