Israel hits Hamas buildings, shoots down Tel Aviv-bound rocket

GAZA/JERUSALEM (Reuters) – Israeli aircraft bombed Hamas government buildings in Gaza, and the “Iron Dome” defense system shot down a Tel Aviv-bound rocket on Saturday as Israel geared up for a possible ground invasion.

Hamas, the Palestinian Islamist group that runs the Gaza Strip, said Israeli missiles wrecked the office building of Prime Minister Ismail Haniyeh – where he had met on Friday with the Egyptian prime minister – and struck a police headquarters.

Along the Tel Aviv beachfront, volleyball games came to an abrupt halt and people crouched as sirens sounded. Two interceptor rockets streaked into the sky. A flash and an explosion followed as Iron Dome, deployed only hours earlier near the city, destroyed the incoming projectile in mid-air.

With Israeli tanks and artillery positioned along the Gaza border and no end in sight to hostilities now in their fourth day, Tunisia’s foreign minister travelled to the enclave in a show of Arab solidarity.

In Cairo, a presidential source said Egyptian President Mohamed Mursi would hold four-way talks with the Qatari emir, the prime minister of Turkey and Hamas chief Khaled Meshaal in the Egyptian capital on Saturday to discuss the Gaza crisis.

Egypt has been working to reinstate calm between Israel and Hamas after an informal ceasefire brokered by Cairo unraveled over the past few weeks. Meshaal, who lives in exile, has already held a round of talks with Egyptian security officials.

Officials in Gaza said 43 Palestinians, nearly half of them civilians including eight children, had been killed since Israel began its air strikes. Three Israeli civilians were killed by a rocket on Thursday.

Israel unleashed its massive air campaign on Wednesday with the declared goal of deterring Hamas from launching rockets that have plagued its southern communities for years.

The Israeli army said it had zeroed in on a number of government buildings during the night, including Haniyeh’s office, the Hamas Interior Ministry and a police compound.

Taher al-Nono, a spokesman for the Hamas government, held a news conference near the rubble of the prime minister’s office and pledged: “We will declare victory from here.”

Hamas‘s armed wing claimed responsibility for Saturday’s rocket attack on Tel Aviv, the third against the city since Wednesday. It said it fired an Iranian-designed Fajr-5 at the coastal metropolis, some 70 km (43 miles) north of Gaza.

“Well that wasn’t such a big deal,” said one woman, who had watched the interception while clinging for protection to the trunk of a baby palm tree on a traffic island.

In the Israeli Mediterranean port of Ashdod, a rocket ripped into several balconies. Police said five people were hurt.

Among those killed in airstrikes on Gaza on Saturday were at least four suspected militants riding on motorcycles.

Israel’s operation has drawn Western support for what U.S. and European leaders have called Israel’s right to self-defense, along with appeals to avoid civilian casualties.

Hamas, shunned by the West over its refusal to recognize Israel, says its cross-border attacks have come in response to Israeli strikes against Palestinian fighters in Gaza.

RESERVIST CALL-UP

At a late night session on Friday, Israeli cabinet ministers decided to more than double the current reserve troop quota set for the Gaza offensive to 75,000, political sources said, in a signal Israel was edging closer to an invasion.

Around 16,000 reservists have already been called up.

Asked by reporters whether a ground operation was possible, Major-General Tal Russo, commander of the Israeli forces on the Gaza frontier, said: “Definitely.”

“We have a plan … it will take time. We need to have patience. It won’t be a day or two,” he added.

A possible move into the densely populated Gaza Strip and the risk of major casualties it brings would be a significant gamble for Prime Minister Benjamin Netanyahu, favorite to win a January national election.

Hamas fighters are no match for the Israeli military. The last Gaza war, involving a three-week long Israeli air blitz and ground invasion over the New Year period of 2008-09, killed over 1,400 Palestinians, mostly civilians. Thirteen Israelis died.

But the Gaza conflagration has stirred the pot of a Middle East already boiling from two years of Arab revolution and a civil war in Syria that threatens to spread beyond its borders.

“Israel should understand that many things have changed and that lots of water has run in the Arab river,” Tunisian Foreign Minister Rafik Abdesslem said as he surveyed the wreckage from a bomb-blast site in central Gaza.

One major change has been the election of an Islamist government in Cairo that is allied with Hamas, potentially narrowing Israel’s manoeuvering room in confronting the Palestinian group. Israel and Egypt made peace in 1979.

“DE-ESCALATION”

Netanyahu spoke late on Friday with U.S. President Barack Obama for the second time since the offensive began, the prime minister’s office said in a statement.

“(Netanyahu) expressed his deep appreciation for the U.S. position that Israel has a right to defend itself and thanked him for American aid in purchasing Iron Dome batteries,” the statement added.

The two leaders have had a testy relationship and have been at odds over how to curb Iran’s nuclear program.

A White House official said on Saturday Obama called Turkish Prime Minister Tayyip Erdogan to discuss how the two countries could help bring an end to the Gaza conflict.

Ben Rhodes, White House deputy national security adviser, told reporters that Washington “wants the same thing as the Israelis want”, an end to rocket attacks from Gaza. He said the United States is emphasizing diplomacy and “de-escalation”.

In Berlin, a spokesman for German Chancellor Angela Merkel said she had spoken to Netanyahu and Egypt’s Mursi, stressing to the Israeli leader that Israel had a right to self-defense and that a ceasefire must be agreed as soon as possible to avoid more bloodshed.

U.N. Secretary-General Ban Ki-moon is expected to visit Israel and Egypt next week to push for an end to the fighting in Gaza, U.N. diplomats said on Friday.

The Israeli military said 492 rockets fired from Gaza have hit Israel since the operation began. Iron Dome intercepted another 245.

In Jerusalem, targeted by a Palestinian rocket on Friday for the first time in 42 years, there was little outward sign on the Jewish Sabbath that the attack had any impact on the usually placid pace of life in the holy city.

Some families in Gaza have abandoned their homes – some of them damaged and others situated near potential Israeli targets – and packed into the houses of friends and relatives.

(Additional reporting by Dan Williams and Douglas Hamilton in Tel Aviv, Allyn Fisher-Ilan in Jerusalem, Jeff Mason aboard Air Force One, Writing by Jeffrey Heller; editing by Crispian Balmer)

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Stephen Colbert joins US presidents at wax museum

WASHINGTON (AP) — Stephen Colbert is taking his place among the presidents at the Madame Tussauds wax museum in Washington and will be featured in a new media gallery.

Colbert visited the museum Friday to unveil a wax figure created to represent him. The museum says Colbert donated his own clothes to dress the figure in a suit, tie, cuff links and lapel pin. Colbert wore an identical outfit.

The new figure will be the centerpiece of a new media gallery with a replica of “The Colbert Report” set where guests can sit next to Colbert’s figure behind his fake news desk.

Designers from Madame Tussauds went to Colbert’s New York studio in June to take more than 250 measurements and photographs of the Comedy Central star to create the wax figure.

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Irish rally for government action on abortion

DUBLIN (Reuters) – At least 5,000 people marched to the offices of Ireland‘s socially conservative prime minister on Saturday to call for clearer guidelines on abortion following the death of a woman denied a termination.

It was the largest of a wave of protests across Ireland in recent days in response to the death of 31-year old Indian woman Savita Halappanavar who died of septicaemia following a miscarriage 17 weeks into her pregnancy.

The Irish health authority (HSE) has launched an inquiry into the death, which has reopened a decades-long debate over whether the government should legislate to explicitly allow abortion when the health of a mother is at risk.

Activists in the overwhelmingly Catholic country, which has some of the world’s most restrictive laws on abortion, say the refusal by doctors to terminate the pregnancy earlier may have contributed to Halappanavar‘s death.

“A vibrant, healthy woman starting her family life has died needlessly … because of the failure of successive governments to deal with this issue,” independent member of parliament Clare Daly told the crowd, which responded with chants of “shame.”

Irish law does not specify exactly when the threat to the life or health of the mother is high enough to justify a termination, leaving doctors to decide. Critics say this means doctors’ personal beliefs can play a role.

Despite a dramatic waning of the influence of the Catholic Church, which dominated politics in Ireland until the 1980s, successive governments have been loath to legislate on an issue they fear could alienate conservative voters.

Prime Minister Enda Kenny, whose ruling Fine Gael party made an election pledge not to introduce new laws allowing abortion, on Friday said he would not be rushed into a decision on the issue.

Halappanavar was admitted to hospital in severe pain on October 21 and asked for a termination after doctors told her the baby would not survive, according to her husband Praveen.

The foetus was surgically removed when its heartbeat stopped days later, but her family believes the delay contributed to the blood poisoning that killed Halappanavar on October 28.

“I just feel outrage,” said Mary Sheehan, a midwife in her 50s, who took part in the march with a sign that read “Vatican Republic killed Savita. “I want the message to out her parents that the Irish people are demanding change.”

The crowd also targeted the government’s junior coalition partner, the Labour Party, which is more socially liberal, for not doing more to force change on the issue, chanting “shame on Labour.”

(Reporting by Conor Humphries; editing by Jason Webb)

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To Get Rich in China Is Not So Glorious

In the course of a U.S. presidential campaign, the American public is bombarded with surveys asking voters to rank the relative importance of various issues, and whether they think the country is overall on the right track. Not so in China, where another leadership transition has just concluded, with the 18th Party Congress choosing Xi Jinping to succeed Hu Jintao as party secretary now and, in March, as president of China.

But a handful of recent studies do give some insight into public sentiment in the world’s second-largest economy on the eve of its once-in-a-decade leadership transition. The upshot: More wealth buys more cars and handbags, but not necessarily happiness—and white-collar workers in China’s fast-changing economy are the most likely in the world to say they’re more stressed out this year than last. Overall life satisfaction has declined since 1990.

“Sometimes I feel like I am driving down an expressway, speeding from one place to another, but I forgot the reason and I do not know the final destination,” says Rebecca Jiang, a 29-year-old civil servant. The petite woman, sipping a fruit smoothie at a teahouse, in many ways seems to be living the modern Chinese dream: Jiang moved from her hometown in Anhui province to Beijing for college in 2002; she earned bachelor’s and master’s degrees from respected universities, scored well on the highly competitive civil-servant exam, and in June got married. Yet these achievements have not erased the gnawing feeling that she is racing just to stay in place: “I do not have the time or energy to enjoy the scenery. Maybe it is about my personal goals: I am so busy I do not know what I really like, who I want to be. I am just traveling around. I am speeding even.”

Money is one source of stress. Home prices have quadrupled in a decade in Beijing, but salaries haven’t risen so fast. “My parents and my husband’s parents had to spend all their savings to buy us an apartment,” says Jiang. It’s out near the Sixth Ring Road—the capital’s outermost perimeter—and is a 90-minute to three-hour drive into central Beijing, depending on traffic. They bought it secondhand and paid 2 million RMB, or about $ 317,000.

She and her husband, who works for a multinational company, are keeping up with the rising costs and complexities of life in the crowded megacity—but just barely, she says. “We are too tired to talk in the evenings. We just go to bed, so we can get up early and do it again.” As for her job: “It is not so good as I thought it would be. Sometimes I have to work like a robot. You have to do what you are told to do, not what you think you should do.”

Recently the Beijing Academy of Social Sciences conducted a survey asking residents of China’s capital whether their quality of life had greatly improved, slightly improved, remained the same, or declined over the period 2005 to 2011. One-fifth of respondents said it had improved slightly, but two-fifths said it had declined. (Only 1 percent said life had improved greatly.)

“The fast changes in China as well as the uncertainties about the future create great psychological pressures,” says Peking University sociologist Xia Xueluan. “Happiness does not merely depend on wealth.” He adds: “For migrant workers, their major pressure is to keep up with costs of living, while for the urban white-collar workers, their major pressure is competition: extreme competition for promotion and recognition.”

Regus, a U.K.-based office-space company, this year polled white-collar workers around the globe and asked whether respondents agreed with the statement “My stress levels have risen in the past year.” The country with the highest proportion of “yes” respondents was China, by a significant margin: 75 percent. (No. 2 was Germany, at 58 percent.) Seventy-three percent of respondents in China said their job was a major source of stress.

In October, the Pew Global Attitudes Project released its survey results for China. Half of respondents said that corrupt officials were now a “very big problem” and 48 percent said the gap between rich and poor was. (In 2008, the responses to the same questions were, respectively, 39 percent and 41 percent.) Among Pew’s most arresting findings was identifying a widespread belief that China’s system creates not only inequality of wealth, but also inequality of opportunity. Nearly 8 in 10 respondents agreed with this statement: The “rich just get richer while the poor get poorer.”

“This country has a very unbalanced income structure, and for young working people it’s getting tougher and tougher to make a living” in the leading cities, says Han Cheng, a researcher with an international NGO in Beijing. As he sees it, the country’s meritocratic promise is waning: “Before, everyone was equally poor and unprivileged. But now there is a privileged class, and for people in that class, there are so many ways for them to receive benefits from their family.”

Richard A. Easterlin, an economist at the University of Southern California, in April published a study in the Proceedings of the National Academy of Sciences on “life satisfaction” in China over the past two decades. Even as incomes have risen for all socioeconomic groups, he found that the percentage of people reporting their life satisfaction was “good or very good” had declined markedly from 1990 to 2007 for those of low and moderate incomes, while ticking slightly upward for China’s richest.

“One may reasonably ask, how it is possible for life satisfaction not to improve in the face of such a marked advance in per capita GDP from a very low initial level?” Easterlin wrote. “In answer it is pertinent to note the growing evidence of the importance of relative income comparisons and material aspirations in China, which tend to negate the effect of rising income.” In other words, money alone doesn’t bring happiness—having more money than your neighbor might.

Comparing her life to her cousin in her small hometown, Jiang expresses mixed feelings. Her cousin lives just a five-minute walk from her office, works fewer hours, and has a larger apartment for less money. “Sometimes I wonder why I stay in Beijing,” she reflects. But then, after a moment, she points out that if she has a child, living in China’s capital will “give him the chance to start life on a much bigger stage.” Of course, she quickly adds that she isn’t sure she wants a child—“it’s very expensive and takes a lot of energy; public kindergarten slots are hard to get and private ones are very costly. I’m expected to have a child, but I’m just not sure.”

Larson is a Bloomberg Businessweek contributor.

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Israel moves on reservists after rockets target cities

GAZA/JERUSALEM (Reuters) – Israeli ministers were on Friday asked to endorse the call-up of up to 75,000 reservists after Palestinian militants nearly hit Jerusalem with a rocket for the first time in decades and fired at Tel Aviv for a second day.

The rocket attacks were a challenge to Israel‘s Gaza offensive and came just hours after Egypt‘s prime minister, denouncing what he described as Israeli aggression, visited the enclave and said Cairo was prepared to mediate.

Israel’s armed forces announced that a highway leading to the Gaza Strip and two roads bordering the enclave would be off-limits to civilian traffic until further notice.

Tanks and self-propelled guns were seen near the border area on Friday, and the military said it had already called 16,000 reservists to active duty.

Prime Minister Benjamin Netanyahu convened senior cabinet ministers in Tel Aviv after the rockets struck to decide on widening the Gaza campaign.

Political sources said ministers were asked to approve the mobilization of up to 75,000 reservists, in what could be preparation for a possible ground operation.

No decision was immediately announced and some commentators speculated in the Israeli media the move could be psychological warfare against Gaza’s Hamas rulers. A quota of 30,000 reservists had been set earlier.

Israel began bombing Gaza on Wednesday with an attack that killed the Hamas military chief. It says its campaign is in response to Hamas missiles fired on its territory. Hamas stepped up rocket attacks in response.

Israeli police said a rocket fired from Gaza landed in the Jerusalem area, outside the city, on Friday.

It was the first Palestinian rocket since 1970 to reach the vicinity of the holy city, which Israel claims as its capital, and was likely to spur an escalation in its three-day old air war against militants in Gaza.

Rockets nearly hit Tel Aviv on Thursday for the first time since Saddam Hussein’s Iraq fired them during the 1991 Gulf War. An air raid siren rang out on Friday when the commercial centre was targeted again. Motorists crouched next to cars, many with their hands protecting their heads, while pedestrians scurried for cover in building stairwells.

The Jerusalem and Tel Aviv strikes have so far caused no casualties or damage, but could be political poison for Netanyahu, a conservative favored to win re-election in January on the strength of his ability to guarantee security.

“The Israel Defence Forces will continue to hit Hamas hard and are prepared to broaden the action inside Gaza,” Netanyahu said before the rocket attacks on the two cities.

Asked about Israel massing forces for a possible Gaza invasion, Hamas spokesman Sami Abu Zuhri said: “The Israelis should be aware of the grave results of such a raid and they should bring their body bags.”

Officials in Gaza said 28 Palestinians had been killed in the enclave since Israel began the air offensive with the declared aim of stemming surges of rocket strikes that have disrupted life in southern Israeli towns.

The Palestinian dead include 12 militants and 16 civilians, among them eight children and a pregnant woman. Three Israelis were killed by a rocket on Thursday. A Hamas source said the Israeli air force launched an attack on the house of Hamas’s commander for southern Gaza which resulted in the death of two civilians, one a child.

SOLIDARITY VISIT

A solidarity visit to Gaza by Egyptian Prime Minister Hisham Kandil, whose Islamist government is allied with Hamas but also party to a 1979 peace treaty with Israel, had appeared to open a tiny window to emergency peace diplomacy.

Kandil said: “Egypt will spare no effort … to stop the aggression and to achieve a truce.”

But a three-hour truce that Israel declared for the duration of Kandil’s visit never took hold. Israel said 66 rockets launched from the Gaza Strip hit its territory on Friday and a further 99 were intercepted by the Iron Dome anti-missile system.

Israel denied Palestinian assertions that its aircraft struck while Kandil was in the enclave.

Israel Radio’s military affairs correspondent said the army’s Homefront Command had told municipal officials to make civil defence preparations for the possibility that fighting could drag on for seven weeks. An Israeli military spokeswoman declined to comment on the report.

The Gaza conflagration has stoked the flames of a Middle East already ablaze with two years of Arab revolution and a civil war in Syria that threatens to leap across borders.

It is the biggest test yet for Egypt’s new President Mohamed Mursi, a veteran Islamist politician from the Muslim Brotherhood who was elected this year after last year’s protests ousted military autocrat Hosni Mubarak.

Egypt’s Muslim Brotherhood are spiritual mentors of Hamas, yet Mursi has also pledged to respect Cairo’s 1979 peace treaty with Israel, seen in the West as the cornerstone of regional security. Egypt and Israel both receive billions of dollars in U.S. military aid to underwrite their treaty.

Mursi has vocally denounced the Israeli military action while promoting Egypt as a mediator, a mission that his prime minister’s visit was intended to further.

A Palestinian official close to Egypt’s mediators told Reuters Kandil’s visit “was the beginning of a process to explore the possibility of reaching a truce. It is early to speak of any details or of how things will evolve”.

Hamas fighters are no match for the Israeli military. The last Gaza war, involving a three-week long Israeli air blitz and ground invasion over the New Year period of 2008-2009, killed more than 1,400 Palestinians, mostly civilians. Thirteen Israelis died.

Tunisia’s foreign minister was due to visit Gaza on Saturday “to provide all political support for Gaza” the spokesman for the Tunisian president, Moncef Marzouki, said in a statement.

The United States asked countries that have contact with Hamas to urge the Islamist movement to stop its rocket attacks.

Hamas refuses to recognize Israel’s right to exist. By contrast, Palestinian President Mahmoud Abbas, who rules in the nearby West Bank, does recognize Israel, but peace talks between the two sides have been frozen since 2010.

Abbas’s supporters say they will push ahead with a plan to have Palestine declared an “observer state” rather than a mere “entity” at the United Nations later this month.

(Additional reporting by Maayan Lubell, Jeffrey Heller and Crispian Balmer in Jerusalem; Writing by Jeffrey Heller; Editing by Giles Elgood)

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The tailor behind Elvis Presley’s signature ’50s style dies in Memphis

LOS ANGELES (TheWrap.com) – Bernard Lansky, the man who helped created Elvis Presley‘s signature fashion style in the ’50s – pegged pants and two-toned shoes – died Thursday in his Memphis home. He was at 85.

Presley frequented Lansky’s men’s fashion store on Beale Street – a popular spot for blues, rhythm and blues and jazz music – after years of admiring the clothing styles as a teenager working at a nearby theater.

“When I get rich, I’m going to buy you out,” Lanksy recalled Presley telling him before becoming a rock ‘n’ roll star. “Don’t buy me out,” the salesman responded. “Just buy from me.”

And that’s exactly what the musician did, just after Presley signed with Sun Records in 1954.

“I put his first suit on him and his last suit on him,” Lansky bragged.

“It’s a statement to say that he dressed one of the most influential entertainers of all time,” Julie Lansky, his granddaughter, told AP. “He knew that for any entertainer, they had to look different.”

Lansky’s success continued long after his most famous client died on August 16, 1977. After moving his shop to the Peabody Hotel in Memphis’ downtown district in 1981, he went on to dress musicians like B.B. King, Carl Perkins, Johnny Cash, ZZ Top, Kiss and Hootie and the Blowfish.

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Placebos Work Better On Stoics

Click here to listen to this podcast

Aches and pains getting you down? Or maybe they really tick you off. If that’s the case, maybe don’t look to a placebo to give you any relief. Because a new study shows that sugar pills are less effective for people who are quick to anger. The work appears in the journal Neuropsychopharmacology. [Marta Peciña et al, Personality Trait Predictors of Placebo Analgesia and Neurobiological Correlates]

For centuries, physicians have known that some patients improve when given fake medicine, like pills that contain no real drugs. But how can docs predict which of their cases are most likely to benefit from the ‘placebo effect’?

To find out, researchers ran 50 volunteers through a battery of personality tests. They then injected a bit of saltwater into the subjects’ muscles and told them they’d be getting a little something to relieve the resulting pain. Although that little something was actually a sham.

The researchers found that pretend meds don’t do much for people who tend toward hostility. They work best for folks who are naturally resilient, and altruistic.

The subjects who responded to the faux treatment actually produced more of the body’s own natural painkillers. That’s good news for the stoic, and one more thing for the angry to be mad about.

—Karen Hopkin

[The above text is a transcript of this podcast]
 

Follow Scientific American on Twitter @SciAm and @SciamBlogs. Visit ScientificAmerican.com for the latest in science, health and technology news.
© 2012 ScientificAmerican.com. All rights reserved.

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Wall Street Week Ahead: Going off “cliff” with a bungee cord

NEW YORK (Reuters) – The 1987 crash. The Y2K bug. The debt ceiling debacle of 2011.

All these events, in the end, turned out to be buying opportunities for stocks. So will the “fiscal cliff,” some investors say as they watch favorite stocks tumble during the political give-and-take happening in Washington.

The first round of talks aimed at avoiding the “fiscal cliff” caused a temporary rise in equities on Friday, signaling Wall Street’s recent declines could be a buying opportunity. The gains were small and sentiment remains weak, but it suggests hope for market bulls.

Though shares ended moderately higher on Friday, it was not enough to offset losses for the week. The S&P was down 1.5 percent, while both the Dow and the Nasdaq fell 1.8 percent.

The S&P 500 is down more than 5 percent in the seven sessions that followed President Barack Obama‘s re-election. Uncertainty arose as attention turned to Washington’s task of dealing with mandated tax hikes and spending cuts that could take the U.S. economy back into recession.

Some see the market’s move as an overreaction to hyperbolic headlines about policy gridlock in Washington, believing stocks may start to rebound in what should be a quiet few days ahead of the Thanksgiving holiday next Thursday.

“It just doesn’t seem to make any sense that you suddenly wake up the day after the election and realize we’ve got a fiscal cliff,” said Krishna Kumar, partner at New York hedge fund Goose Hollow Alpha Advisors.

Not long ago the S&P was on target for its second-best year in the last 10, riding a 17 percent advance in 2012. That’s been halved to about 8 percent, which isn’t bad but disappointing compared with just a month ago.

Investors have been selling the year’s winners. Apple is down 25 percent from its peak above $ 700. General Electric is down 14 percent; Google has lost 16 percent. Overall, the stocks that make up the top 10 percent of performers in the month prior to Election Day have been the worst performers since, according to Bespoke Investment Group of Harrison, New York.

“I think it’s a good opportunity to be long stocks at these levels,” said Kumar.

Hikes on capital gains and dividend taxes are on the line, and Obama has dug in his heels on what he sees as a mandate to make the tax code more progressive.

He seems to have the upper hand in dealings with Congress because Republican lawmakers don’t want to see tax rates increase, which is what will happen if no solution is found by the beginning of 2013. Republicans don’t want to take the blame for driving the economy over the cliff.

The current crisis is similar to last year’s fight to raise the U.S. debt ceiling, which led to the downgrade of the United States’ top credit rating in early August 2011.

During the dealings, the S&P 500 lost 18.8 percent between its peak in July 2011 and its bottom in August. As the market slid, the political standoff badly hurt investors’ confidence in Washington, setting off a spike in volatility.

In the end a deal was announced that raised the ceiling and put off longer-term fiscal decisions until January 1, 2013, setting the stage for today’s “fiscal cliff” crisis.

After staying flat through September 2011, the S&P 500 jumped 31 percent between its October low and the end of March.

BUY THE DIP?

Gridlock in Washington and all that could possibly go wrong with the economy if a deal is not reached have grabbed the headlines, but the negotiations leave room for stock market gains. Congressional leaders said Friday they will work through the Thanksgiving holiday recess to find a solution.

“The debate over how to solve (the fiscal cliff) may be more productive than is commonly recognized,” said Brad Lipsig, senior portfolio manager at UBS Financial Services in New York.

“The U.S. is facing a major debt overhang, and serious steps toward addressing it might ultimately be viewed as a positive for future growth,” he said. “The market may recognize this and, after a time of hand wringing, recover from the concerns with a renewed sense of optimism.”

The recent selling took the S&P 500′s relative strength index – a technical measure of internal strength – below 30 this week, indicating the benchmark is oversold and due for a rebound.

The RSI in four of the 10 S&P sectors – utilities, telecoms, consumer staples and technology – is below 30 and the highest RSI reading, for the consumer discretionary sector, is below 40, suggesting a bounce is in store.

“What I want to do is what we did during the decline following the budget negotiations in the summer of 2011: The lower the stock market goes, the more I want to own stock,” said Brian Reynolds, chief market strategist at New York-based Rosenblatt Securities.

“If we go off the cliff it will be with a bungee cord attached,” he said.

KEEP CALM AND HEDGE

Volatility is expected to rise through the end of November and to spike in late December if no agreement on the fiscal cliff is reached in Congress. Alongside comes opportunity for those with high risk tolerance.

“Recently, volatility has increased in the market overall. You can’t really pick it up in the VIX yet, but I think as we get through November, I think you’re likely to see the VIX be at a relatively higher level,” said Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston.

In 2011, the VIX averaged 19.2 in July and 35 in August. So far this month the average is 17.8 and it is expected to spike if negotiations on the cliff drag into late next month.

“Looking at the range of possibilities, I would say any of them would be better than sitting here waiting. I would even put going off the fiscal cliff in that category,” said Jill Cuniff, president of Seattle-based Edge Asset Management Inc, which manages about $ 20 billion.

“But we don’t believe Congress will let that happen; there’s going to be some middle ground here.”

(Reporting by Rodrigo Campos and Jonathan Spincer, additional reporting by Caroline Valetkevitch; Editing by Kenneth Barry)

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France urges Mali to step up talks with rebels

PARIS (AP) — France‘s president called Thursday for stepped-up talks between Mali’s government and any leaders from its breakaway north “who reject terrorism,” even as African nations geared up for a possible military operation against Islamic extremists there.

President Francois Hollande‘s comments suggested a growing openness to dialogue with the extremists, but he remained committed to supporting the military planning effort.

Northern Mali fell to Islamic extremists in April, after coup leaders toppled the government in Bamako, Mali‘s capital. Fearing that northern Mali could become the latest hotbed of terrorism, France has been a driving force in international efforts to bolster Mali’s army to drive the Islamists from power.

Hollande spoke with interim Mali President Dioncounda Traore by phone on Thursday, partly to detail European efforts to help strengthen Mali’s army.

In recent days, representatives from the most moderate of three al-Qaida-linked groups that control northern Mali have been meeting with Burkina Faso‘s president, appointed as a mediator.

“France reiterates its wish that political dialogue will intensify between Malian authorities and representatives of northern populations who reject terrorism,” Hollande’s office said in a statement. “The acceleration of this dialogue must accompany the progress in African military-planning efforts.”

Earlier this week, the African Union approved a plan that calls for 3,300 African troops to be deployed in order to win back Mali’s north. European countries including France and Germany have expressed a willingness to provide military trainers and logistics support, but have stopped short of committing combat troops.

France, like many European countries, fears that the arid, northern Sahel region of Mali could become a breeding ground for terrorism, where al-Qaida and its allies could plot hostage-takings and attacks in Europe or beyond.

France has millions of people whose families hail from former French colonies in north and west Africa. Authorities have long been concerned that French-born militants could travel abroad for terrorism training and return home later to possibly carry out attacks.

French authorities are already investigating two French citizens who were arrested in Mali and neighboring Niger and are suspected of seeking to join up with the al-Qaida-linked extremists, a judicial official told The Associated Press.

Ibrahim Ouattara, a 24-year-old native of the northern Paris suburb of Aubervilliers who has dual French and Malian nationality, was arrested inside Mali this month and remains in custody there, the official said.

Separately, a 27-year-old Frenchman was arrested in August in Niger and has since been handed over to authorities in France, the official said, speaking on condition of anonymity because she was not authorized to discuss terrorism cases publicly.

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Why David Geffen is getting the “American Masters” treatment

LOS ANGELES (TheWrap.com) – David Geffen is not a singer. Nor is he a movie star. Nor is he a writer.

Thus he would seem an odd subject for “American Masters,” a series devoted to artists ranging from Willa Cather to Woody Allen.

Yet series creator Susan Lacy claims that the mogul has had a profound impact on American popular culture that equals any of those figures. She pleads her case in “Inventing David Geffen,” which will be broadcast November 20 on PBS. The documentary had its premiere in Los Angeles on Tuesday night.

“He seems like a bit of an odd choice,” Lacy admitted to TheWrap. “But I have a degree in American Studies and I learned that the people with the most influence are often the ones behind the scenes.”

In Geffen, Lacy saw a figure like Alfred Stieglitz, a photographer whose lasting legacy was a series of modernist shows he held at his New York galleries that influenced visual arts in this country and brought cubism to the masses.

Some arm twisting must have been required to get the press-averse Geffen to emerge from semi-retirement to reflect on his career in movies, music and Broadway. Lacy said that part of the reason she was able to convince him to participate is that he was a fan of the series and had participated in her documentaries on figures such as Joni Mitchell.

“It wasn’t hard,” she said. “I knew from other people that he thinks my Leonard Bernstein documentary is one of the best documentaries anyone ever made. Mike Nichols told me that he makes everybody who stays with him watch it.”

In addition to Geffen, the documentary features interviews with his friends and colleagues — an A-list rolodex that includes Tom Hanks, Steven Spielberg, Elton John, Neil Young, Clive Davis, Barry Diller, and Irving Azoff. His sphere was huge, Lacy claims because his influence was tectonic.

By championing musicians such as Jackson Browne and Laura Nyro, Geffen put his own imprint on the emerging singer-songwriter movement in the 1970s. Later, Geffen managed to adapt to shifting tastes, by aligning himself with groups like Aerosmith and Guns ‘N Roses and helping to usher in the heavy metal craze. For more than 30 years, his labels – Asylum Records, Geffen Records, and DGC Records – represented the high-water mark for musicians, who clamored to get in the door.

“He had an incredible eye for talent,” Lacy said. “These people would have eventually found their way. But he helped them get there. He fixed their teeth and allowed them to write music that’s history.”

Though he made his name in music, Geffen also became a force in the theater and film businesses.

He enriched himself by producing hit musicals like “Cats” and “Dreamgirls,” and branched out into movies with memorable pictures like “Risky Business.” In 1994, he co-founded DreamWorks SKG, the studio behind Oscar-winners like “American Beauty” and “Saving Private Ryan.”

“In each decade, he has done something that has affected the culture,” Lacy said. “If I had to boil it down to one thing it would be his genius at business.”

It’s a mastery of deal-making and talent-scouting that has made him a very wealthy man, worth an estimated $ 5.5 billion. It is also a trajectory that Lacy maintains cannot be replicated in a more fractured media landscape, where mega-corporations wield disproportionate influence and are more interested in quarterly earnings than fostering rising stars.

“Even he would say that nobody could do what he did today,” Lacy said. “The times have changed so much. I asked him if he could raise $ 2 billion to start a new studio, and he said ‘absolutely not.’ And record companies, well, we know what happened to them. Behind all the conglomerates and corporations, to find someone with a genuine sensibility like David Geffen‘s would be impossible. He was unique.”

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Wormy Monkeys Had Healthier Intestines

Click here to listen to this podcast

In developed countries, we’ve mostly eliminated freeloaders like parasitic worms from our guts. But we also have the highest rates of inflammatory bowel disease, or IBD—when the immune system mistakenly attacks intestinal cells and friendly gut bacteria.

For years, docs suspected there might be a connection between IBD and our worm-free lifestyle. And a handful of studies have actually shown that infecting human patients with worms can reduce symptoms of the disease. But how?

To find out, researchers fed parasitic worm eggs to monkeys with chronic diarrhea and gut inflammation—similar to IBD. After infection, the monkeys’ immune systems kicked into high gear, pumping out more mucus than usual to fight the worms. But that response also helped heal the monkeys’ intestines—restoring healthy, diverse populations of gut bacteria and decreasing the diarrhea. Those results appear in the journal PLoS Pathogens. [Mara Jana Broadhurst et al, Therapeutic Helminth Infection of Macaques with Idiopathic Chronic Diarrhea Alters the Inflammatory Signature and Mucosal Microbiota of the Colon]

The researchers already have FDA approval to study the worms in human subjects. Interested patients can go to clinicaltrials.gov to sign up—and hopefully worm their way out of intestinal distress.

—Christopher Intagliata

[The above text is a transcript of this podcast]
 

Follow Scientific American on Twitter @SciAm and @SciamBlogs. Visit ScientificAmerican.com for the latest in science, health and technology news.
© 2012 ScientificAmerican.com. All rights reserved.

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Asian stocks mixed on Europe, US woes; Japan gains

BANGKOK (AP) — Asian stock markets were mixed Friday after data showed Europe slipped back into recession and several big U.S. retailers disappointed investors with weak forecasts.

The European Union‘s statistics agency said Thursday that the combined economy of the 17 countries that use the euro contracted 0.1 percent in the third quarter from the previous quarter. Surveys pointing to difficult conditions ahead suggest the recession could deepen.

“Although unsurprising, data in Europe confirmed that the region fell back into recession, an outcome that will do little to ease tensions,” analysts at Credit Agricole CIB in Hong Kong said in an email commentary.

Hong Kong’s Hang Seng rose 0.3 percent to 21,171.28. South Korea‘s Kospi fell 0.5 percent to 1,860.92. Australia‘s S&P/ASX 200 lost 0.2 percent to 4,339.40. Benchmarks in Taiwan, New Zealand and mainland China fell. Singapore, Thailand and the Philippines rose.

Japan‘s Nikkei 225 stock index jumped 1.8 percent to 8,990.80, rallying for a second straight day on expectations that the opposition Liberal Democratic Party may win elections next month and pursue more aggressive stimulus policies than the current leadership.

LDP leader Shinzo Abe has said he is determined to push for such policies and to find ways to weaken the yen, whose strength against other currencies has hammered exporters.

Stan Shamu, strategist at IG Markets in Melbourne, said Abe wants an inflation target of between 2 and 3 percent as a way to cheapen the Japanese currency, perhaps by printing yen or bulking up on purchases of assets like Japanese government bonds. Still, the target might be difficult to achieve, given the economy’s weakness, he said.

“With such a big export economy, the yen has massive significance on how the local economy performs,” Shamu said.

Japan’s exporters, whose fortunes are linked to the yen’s valuation, were buoyed by the prospect of a changing of the guard. Mazda Motor Corp. soared 8.9 percent. Nissan Motor Co. jumped 5.8 percent. Nikon Corp. surged 6.9 percent and Canon Inc. gained 5 percent.

In Australia, Whitehaven Coal fell 1.4 percent after announcing it would scale back some operations due to the decline in global coal prices.

In the U.S., investors were dealt dual blows: worse-than-expected revenue from global retailing giant Wal-Mart and data showing that manufacturing weakened in the Philadelphia and New York regions, reflecting damage from Superstorm Sandy.

Wal-Mart, Ross Stores and Limited Brands, the owner of Victoria’s Secret, also disappointed investors by issuing profit forecasts that fell short of expectations.

The Dow Jones industrial average closed down 0.2 percent to 12,542.38. The Standard & Poor’s 500 index fell 0.2 percent to 1,353.33. The Nasdaq composite index lost 0.4 percent to 2,836.94.

Benchmark oil for December delivery was up 10 cents to $ 85.55 in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to close at $ 85.45 a barrel in New York on Thursday.

In currencies, the dollar weakened to 81.09 yen from 81.21 yen late Thursday in New York. The euro fell to $ 1.2769 from $ 1.2773.

___

Follow Pamela Sampson on Twitter at http://twitter.com/pamelasampson

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Egypt recalls envoy to Israel after Gaza strike

CAIRO (AP) — Egypt has recalled its ambassador to Israel after an Israeli airstrike killed the military commander of Gaza‘s ruling Hamas.

In a statement read on state TV late Wednesday, spokesman Yasser Ali said that President Mohammed Morsi recalled the ambassador and asked the Arab League‘s Secretary General to convene an emergency ministerial meeting in the wake of the Gaza violence.

Morsi also called for an immediate cease fire between Israel and Hamas, an offshoot of Morsi’s Muslim Brotherhood. Israel says it struck in response to rocket attacks from Gaza.

Hours earlier, Morsi’s Muslim Brotherhood group denounced the Israeli airstrike as a “crime that requires a quick Arab and international response to stem these massacres.”

Relations between Israel and Egypt have deteriorated since longtime President Hosni Mubarak was ousted last year.

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RIM CEO sees new BlackBerry powering growth

WATERLOO, Ontario (Reuters) – A new line of BlackBerry 10 devices will provide Research In Motion with a framework for growth over the next decade, offering long-term value for unhappy shareholders, Chief Executive Thorsten Heins said on Wednesday.

In an interview with Reuters, Heins said RIM had identified $ 800 million of the $ 1 billion of savings it promised for the financial year ending in early March, and was confident of finding the rest as it gets ready to launch the new phones.

RIM is betting that the new smartphones will help it claw back the market share it has lost to the likes of Apple Inc’s iPhone and devices powered by Google’s Android operating system.

Both consumers and corporate customers have abandoned the BlackBerry in droves, even though the devices offer security features that rivals have been unable to match.

“There’s this high-level security that you cannot walk away from, and then there’s ‘good enough’ security,” Heins said in an interview at RIM’s Waterloo, Ontario, campus, a sprawl of low-rise buildings.

But analysts remain skeptical, especially after the botched 2011 launch of RIM’s PlayBook tablet computer, which the company had hoped would compete with Apple’s wildly popular iPad. The PlayBook had top-of-the-line hardware, but its software was far from complete at the launch and needed multiple updates.

RIM delayed the roll-out of the BlackBerry 10 phones to the first quarter of 2013 so as not to repeat the errors that surrounded the PlayBook launch.

Heins said the delay was the correct decision – the way to ensure the BB10 phones are a high-quality product rather than a rushed one that would not meet customer expectations.

“I think it’s all lining up. Sometimes you get the feeling that the universe is in disarray, and with BlackBerry 10 coming, I see the stars lining up,” Heins said.

SLEEK DEMO MODELS

Sleek demo models of the new phones look much like the high-end smartphones in the market today, and company executives proudly showed off a touch-screen version and a version with the miniature QWERTY keyboard popular with many BlackBerry users.

Users flick a thumb or finger to maneuver from one program to another and can sneak a look at an incoming email while browsing the Internet or using other applications, a multi-tasking ability that RIM says rival devices lack.

Personal and business profiles can be kept separately, something RIM calls BlackBerry Balance. Corporations can erase only their share of the data on a device if they need to do so for security reasons, leaving personal photos, contacts and emails untouched.

The app library available at launch will not match the vast number available on other devices. Heins said RIM had chosen to focus on providing those apps needed in different regional markets. It expects some 100,000 apps to be ready at launch.

The developer community has been broadly enthusiastic about the devices. But financial analysts have mixed views on their likely reception in an ultra-competitive market.

Pacific Crest analyst James Faucette warned last week that BlackBerry 10 is likely to be dead on arrival – with an operating system that gets “a lukewarm response at best,” due to the unfamiliar user interface and a shortage of apps.

SHAREHOLDER VALUE

Heins insisted morale was high at the company, despite 5,000 job cuts and a rapidly sliding market share ahead of the launch of the new phones.

RIM’s share price is down more than 90 percent from a 2008 peak of about $ 148. It has fallen even after Heins, a former Siemens AG executive, took over in January. The shares on Wednesday closed at $ 8.49 on Nasdaq.

“The message to our shareholders is that we understand this is and has been a difficult time for them and for us,” the tall, bespectacled CEO said. “But with the development of the BlackBerry 10 platform we are truly convinced that we will create long-term value for RIM’s shareholders and investors.”

RIM has already given the demo phones to developers and to carriers, and its new BlackBerry Enterprise Server 10, which runs the devices on corporate networks, is in beta testing with 20 key customers — both government agencies and corporates.

Next month, the company will give more than 50 top enterprise customers technical previews of both BES 10 and the devices.

Heins said the feedback he is getting from the customer base “is very encouraging.”

With the erosion of RIM’s base particularly strong in North America, there has been speculation the company could choose to launch the new phones in a region where the phones remain popular. Heins said that would not be the case.

“We cannot launch every carrier and every country on the same day, but what we have defined is a set of waves in the various regions,” he said. “It is going to be a global launch. There isn’t one preferred region. We are managing and planning it as we speak.”

(Reporting by Euan Rocha and Janet Guttsman; Editing by Frank McGurty and Leslie Adler)

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Judge throws out Justin Bieber paparazzo chase case

LOS ANGELES (Reuters) – Criminal charges filed against a photographer who pursued teen pop star Justin Bieber at high speeds on a Los Angeles freeway in July were thrown out on Wednesday, striking a blow to California’s crackdown on overly aggressive paparazzi.

Celebrity photographer Paul Raef was the first person to be prosecuted under the state’s 2010 law that criminalizes dangerous driving when taking photos commercially.

Raef was charged in July with two counts of violating the law stemming from a July 6 incident on a freeway in Los Angeles‘ San Fernando Valley.

Dismissing the charges, Los Angeles Superior Court Judge Thomas Robinson called the state’s anti-paparazzi law “problematic” and “overly inclusive.”

The law “sweeps very widely and would increase the penalties for reckless driving” in unintended cases, Robinson said.

Robinson faulted the law’s vague definition of commercial photography, saying that it could also apply to a photographer who was speeding to reach an arranged photo shoot with Bieber.

Raef could have faced up to a year in prison and $ 3,500 in fines, if convicted. His attorney, Brad Kaiserman, said the law is “about protecting celebrities.”

A message left with Bieber’s publicist requesting comment was not immediately returned.

Raef still faces lesser charges of misdemeanor reckless driving and failing to obey police orders after he allegedly pursued Bieber, 18, at high speeds. He will be tried on those charges at a later date.

Bieber, who was pulled over by police for driving 80 miles per hour in a 65 mph zone, told officers at the time that he was being hounded by paparazzi, and police said they noticed Raef’s car following the “Boyfriend” singer.

About 30 minutes after the traffic stop, Bieber called police to report that Raef continued to follow him. Police later found Raef and other paparazzi together in downtown Los Angeles.

The Canadian singer received a speeding ticket at the time.

(Reporting By Eric Kelsey, editing by Jill Serjeant and Sandra Maler)

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Accused Colorado gunman tried to harm himself: reports

CENTENNIAL, Colo. (Reuters) – Accused Colorado theater gunman James Holmes was taken to the hospital on Tuesday for a medical condition that left him unable to attend a court hearing set for two days later, his lawyers said, with local media reporting he had tried to harm himself.

The lawyers, explaining in vague terms in an emergency hearing on Wednesday the sudden developments that sent him to the hospital, requested a delay in a routine pre-trial hearing due on Thursday. There was no word on Holmes’ current condition.

“What occurred was midday yesterday. We were informed of a situation that involved a trip to a hospital,” Holmes’ attorney Tamara Brady said in court, giving scant further details but adding, “It’s not as simple as a migraine.”

Holmes, a 24-year-old former neuroscience graduate student, is accused of opening fire inside a suburban Denver movie theater during a midnight screening of the movie “The Dark Knight Rises” in July, killing 12 people and wounding 58 others.

The rampage was one of the bloodiest acts of gun violence in the United States in recent years.

Law enforcement sources told local television station CBS4 that Holmes made multiple “half-hearted” suicide attempts over the past few days, including one in which he ran into a wall in his jail cell and another in which he jumped off his bed.

Another local television station, ABC7, reported that Holmes was hospitalized after intentionally pounding his head on the walls and floor of his cell.

The station quoted sources familiar with the case as saying his actions were an indication of Holmes’ mental state, but did not constitute suicide attempts.

A judge approved the emergency defense request for a delay in the case, and set a new hearing for December 10. Holmes’ lawyers, in filing their request, did not provide details of Holmes condition, citing legal, medical and psychological privilege.

INSANITY DEFENSE?

“As a result of developments over the past 24 hours, Mr. Holmes is in a condition that renders him unable to be present in court for tomorrow’s hearing,” Holmes’ lawyers wrote in the delay motion.

Another of Holmes’ attorneys, public defender Daniel King, did not respond to reporters who asked if Holmes was still in the hospital.

Prosecutors had earlier objected to a delay, saying it should be denied unless more detailed information was provided on Holmes’ condition than was contained in the defense request.

“It is not clear whether it is claimed he is suffering from a physical medical condition, a mental condition, whether he is suffering from a negative emotional reaction to his circumstances, or anything other than he has some kind of ‘condition,’” prosecutors wrote in their response.

Prosecutors have depicted Holmes as a young man whose once promising academic career was in tatters at the time of the shooting. He failed oral board exams for graduate school in June and a professor suggested he may not have been a good fit for his competitive doctorate program.

Holmes then began a voluntary withdrawal from the school and amassed an arsenal of weapons as part of “a detailed and complex” plan to commit mass murder, prosecutors charge.

Holmes has yet to enter a plea in the case, and prosecutors have not indicated whether they will seek the death penalty.

Holmes’ lawyers, who analysts have suggested may be laying the groundwork for an insanity defense, have said Holmes suffers from mental illness and sought to get help before the shooting.

Arapahoe County Sheriff Grayson Robinson, asked about Holmes’ condition, told Reuters he could not release any information, citing privacy issues and jail security.

(Writing and additional reporting by Mary Slosson; Editing by Cynthia Johnston, Jim Loney and Peter Cooney)

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French CEOs: ‘Help!’

When some German politicians called on French President François Hollande recently to step up the pace of economic reform in France, Finance Minister Wolfgang Schäuble sprang to Hollande’s defense in Berlin, saying it was wrong to call Europe’s second-largest economy the “sick man” of the region.

The heads of France’s biggest companies do not agree. Over the past few weeks, an extraordinary cry of alarm has risen from chief executives who warn that the French economy has gone dangerously off track. In an interview to be published on Nov. 15 in the magazine l’Express, Chief Executive Officer Henri de Castries of financial-services group Axa (CS:FP) warns that France is rapidly losing ground, not only against Germany but against nearly all its European neighbors. “There’s a strong risk that in 2013 and 2014, we will fall behind economies such as Spain, Italy, and Britain,” de Castries says.

On Nov. 5, veteran corporate chieftain Louis Gallois released a government-commissioned report calling for “shock treatment” to restore French competitiveness. And on Oct. 28, a group of 98 CEOs published an open letter to Hollande that said public-sector spending, which at 56 percent of gross domestic product is the highest in Europe, “is no longer supportable.” The letter was signed by the CEOs of virtually every major French company. (The few exceptions included utility Electricité de France, which is government controlled.)

The outcry is unusual for France Inc., which has tended to lobby behind the scenes and avoid public criticism of the government. That’s perhaps not surprising, since many CEOs attended the same schools as the country’s top politicians and often worked in government before going into business. De Castries was a classmate of Hollande’s at the elite Ecole Nationale d’Administration; Serge Weinberg, chairman of pharmaceutical giant Sanofi (SAN:FP) and a signatory of the Oct. 28 letter, used to work for Socialist Foreign Minister Laurent Fabius.

The problems they’re complaining about aren’t new. Heavy taxes and social charges required to support high government spending have eroded corporate profitability. In the l’Express interview, de Castries says that on average, the government charges incurred by his company for each employee are more than double the employee’s take-home pay. French labor costs are the second-highest in Europe, after Belgium, as companies are burdened with rigid and devilishly complicated work rules. No surprise, then, that operating margins at French companies have shrunk almost 40 percent over the past decade, while those of companies in Germany—where painful labor-market reforms were carried out—have risen about 40 percent.

With Europe mired in economic crisis, the French citizenry is now reaping the bitter results. Companies are shedding workers, pushing unemployment to a 13-year high of more than 10 percent, almost twice Germany’s rate. After three quarters of flat growth, the economy looks to be tipping into recession.

At the same time, the crisis has pushed other European governments—Italy’s, for example—to carry out long-overdue reforms. As Gallois put it in his report, France has become “unhooked” from the broader economic realities. Gallois listed 22 recommendations, including a €30 billion ($ 38 billion) reduction in payroll taxes, loosening of labor laws, and the lifting of a ban on shale-gas exploration.

Hollande’s government didn’t respond to most of the recommendations but said it would enact temporary tax credits for business totaling €20 billion over three years. Corporate bosses are not impressed. A temporary credit will not “structurally diminish the cost of labor” or reduce administrative burdens on business, Michel Landel, CEO of food-service group Sodexo (SW:FP), said in a Nov. 10 radio interview.

Businesses also fret that the process of applying for tax credits will add to already burdensome paperwork. “The first thing they do is to complicate the mechanism for lowering the social charges,” de Castries laments in the l’Express interview.

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General investigated for emails to Petraeus friend

PERTH, Australia (AP) — In a new twist to the Gen. David Petraeus sex scandal, the Pentagon said Tuesday that the top American commander in Afghanistan, Gen. John Allen, is under investigation for alleged “inappropriate communications” with a woman who is said to have received threatening emails from Paula Broadwell, the woman with whom Petraeus had an extramarital affair.

Defense Secretary Leon Panetta said in a written statement issued to reporters aboard his aircraft, en route from Honolulu to Perth, Australia, that the FBI referred the matter to the Pentagon on Sunday.

Panetta said that he ordered a Pentagon investigation of Allen on Monday.

A senior defense official traveling with Panetta said Allen’s communications were with Jill Kelley, who has been described as an unpaid social liaison at MacDill Air Force Base, Fla., which is headquarters to the U.S. Central Command. She is not a U.S. government employee.

Kelley is said to have received threatening emails from Broadwell, who is Petraeus’ biographer and who had an extramarital affair with Petraeus that reportedly began after he became CIA director in September 2011.

Petraeus resigned as CIA director on Friday.

Allen, a four-star Marine general, succeeded Petraeus as the top American commander in Afghanistan in July 2011.

The senior official, who discussed the matter only on condition of anonymity because it is under investigation, said Panetta believed it was prudent to launch a Pentagon investigation, although the official would not explain the nature of Allen’s problematic communications.

The official said 20,000 to 30,000 pages of emails and other documents from Allen’s communications with Kelley between 2010 and 2012 are under review. He would not say whether they involved sexual matters or whether they are thought to include unauthorized disclosures of classified information. He said he did not know whether Petraeus is mentioned in the emails.

“Gen. Allen disputes that he has engaged in any wrongdoing in this matter,” the official said. He said Allen currently is in Washington.

Panetta said that while the matter is being investigated by the Defense Department Inspector General, Allen will remain in his post as commander of the International Security Assistance Force, based in Kabul. He praised Allen as having been instrumental in making progress in the war.

The FBI’s decision to refer the Allen matter to the Pentagon rather than keep it itself, combined with Panetta’s decision to allow Allen to continue as Afghanistan commander without a suspension, suggested strongly that officials viewed whatever happened as a possible infraction of military rules rather than a violation of federal criminal law.

Allen was Deputy Commander of Central Command, based in Tampa, prior to taking over in Afghanistan. He also is a veteran of the Iraq war.

In the meantime, Panetta said, Allen’s nomination to be the next commander of U.S. European Command and the commander of NATO forces in Europe has been put on hold “until the relevant facts are determined.” He had been expected to take that new post in early 2013, if confirmed by the Senate, as had been widely expected.

Panetta said President Barack Obama was consulted and agreed that Allen’s nomination should be put on hold. Allen was to testify at his confirmation hearing before the Senate Armed Services Committee on Thursday. Panetta said he asked committee leaders to delay that hearing.

NATO officials had no comment about the delay in Allen’s appointment.

“We have seen Secretary Panetta‘s statement,” NATO spokeswoman Carmen Romero said in Brussels. “It is a U.S. investigation.”

Panetta also said he wants the Senate Armed Services Committee to act promptly on Obama’s nomination of Gen. Joseph Dunford to succeed Allen as commander in Afghanistan. That nomination was made several weeks ago. Dunford’s hearing is also scheduled for Thursday.

___

Associated Press writer Slobodan Lekic in Kabul, Afghanistan, contributed to this report.

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Zynga CFO David Wehner deflects to Facebook

NEW YORK (AP) — Zynga‘s finance chief is leaving the troubled online game company to join Facebook.

San Francisco-based Zynga Inc. said Tuesday that David Wehner will take a “senior finance position” at the social networking company. His exact title will be vice president of corporate finance and business planning, Facebook said.

Chief accounting officer, Mark Vranesh, is replacing Wehner as chief financial officer, returning to the post he held from 2008 to 2010, while Zynga was still a private company.

Zynga also reshuffled its executive ranks, a move CEO Mark Pincus said puts the company in a position for “long-term growth.” Zynga, whose games include “FarmVille” and “Texas HoldEm Poker,” has seen its stock price fall sharply in recent months amid concerns about its ability to make money from mobile games, off of Facebook.

David Ko, who was previously chief mobile officer, is now chief operations officer. Barry Cottle, who came to Zynga from Electronic Arts Inc., is now chief revenue officer. He was previously executive vice president of business and corporate development.

The appointments seek to fill some of the holes left by executives who’ve left Zynga in recent months. John Schappert, Zynga’s chief operating officer, left in August after less than a year and a half on the job. Schappert’s exit was followed by that of Mike Verdu, the company’s chief creative officer. And in September Jeff Karp, the chief marketing and chief revenue officer, left the company.

Zynga is also reaffirming its guidance. The company still expects adjusted earnings of 2 or 3 cents per share. Analysts polled by FactSet expect 3 cents.

Zynga shares closed up 1 cent at $ 2.11 and added 2 cents in after-hours trading.

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She’s got the voice, now Christina Aguilera looks for hits

LOS ANGELES (Reuters) – Christina Aguilera has the vocal chops, the look, the strut and millions of new fans thanks to her stint as a judge on TV singing contest “The Voice.”

But can she still sell records?

The singer, who had global hits with “Genie in a Bottle” and the female empowerment ballad “Beautiful” more than 10 years ago, bids to reclaim her status as one of the world’s biggest pop stars with her new album, “Lotus,” released on Tuesday.

Aguilera, 31, says the title and the mixture of dance-pop, ballads and rock-tinged tracks reflect the hopes and disappointments of recent years that saw her 2010 tour for album “Bionic” canceled, a divorce and the box-office flop of her debut feature film, the musical “Burlesque.”

“Lotus represents the unbreakable flower that stands the test of time. No matter the roughest of weather conditions, it remains strong and continues to thrive. (The album) is a nod to my fans who have been here with me the whole journey, and a nod to myself,” she said.

“It is a record of freedom and embracing that…It is very artistic at times, it is very fun at times, it is very free. I think that’s how music and life should be, away from all the negativity,” the four-time Grammy winner said in an appearance at a Billboard Film and TV Music conference in Los Angeles last month.

Aguilera will perform one of the tracks – “Make the World Move” – with her fellow judge Cee Lo Green live on “The Voice” this week for the show’s more than 10 million viewers.

But music industry experts say Aguilera’s popularity on “The Voice” – where her powerhouse performances leave aspiring pop stars in the dust – may not guarantee huge album sales and won’t give the singer a No. 1 hit.

This week also sees new releases from British boy band One Direction and singer Susan Boyle as well as the new “Twilight” film soundtrack.

NOT A BLOCKBUSTER

“I think ‘Lotus’ will certainly debut in the top 10 on the Billboard 200 album chart. But we don’t see it as being a blockbuster out of the gate,” said Keith Caulfield, associate director of charts at Billboard.

“It is a long road to rebuilding Christina as a brand and as a musician, after the last album didn’t so very well,” said Caulfield. “But it’s not always about first week sales.”

Much like Jennifer Lopez on “American Idol,” Aguilera has seen her star rocket in her 18 months on “The Voice.” Just a few months before the TV show made its debut in spring 2011, Aguilera was arrested for being drunk in public in West Hollywood, and her 2010 album “Bionic” had sold a disappointing 312,000 copies.

“‘The Voice’ has reinvigorated her entire career. A lot of people think she is the star of ‘The Voice’ – the judge you tune in for,” said Lyndsey Parker, managing editor at Yahoo! Music.

Yet the first single – “Your Body” – from the new album failed to make a big impact when it was released in September. It peaked at No. 34 on the Billboard Hot 100 chart and never really caught fire on radio.

“It came and went, which surprised me because I think it is a very strong song. And pretty much everything I have heard on this album is strong. I think it’s a real return to form,” said Parker.

“There are very few people in pop who can sing like her. I do think there is a renewed appreciation for great singing that can be done live and that isn’t just about flash. And Christina is coming back to prove that. I think some people are looking at her to take back her crown,” Parker added.

“Lotus” includes duets with both Green and Aguilera’s fellow “Voice” judge, country singer Blake Shelton. It also features the piano-driven ballad “Blank Page,” which is reminiscent of her 2002 hit “Beautiful” and rock-tinged tracks like “Army of Me.”

Aguilera says she hopes to inspire a new generation of singers who were not around in 1999 for her first big hit “Genie in a Bottle.”

“It’s so exciting for me to show them what I do as an artist,” she said. “I’ve been through a lot over the past few years, going through ‘Burlesque,’ a divorce…having a few setbacks….Stuff happens! This is the business. It’s not going to be all cute and pretty and tied up in a bow.

“All of that combined is in ‘Lotus.’ It embraces the woman that I’ve become, and embracing myself coming full circle as a pop star,” she said.

(Additional reporting by Piya Sinha-Roy; Editing by Cynthia Osterman)

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Congress, Obama playing with dynamite, CEOs say of “fiscal cliff”

BOSTON (Reuters) – Corporate America is raising the volume of its plea that the U.S. government avert a year-end “fiscal cliff” that could send the nation back into recession, but chief executives aren’t pushing the panic button just yet.

With a heated election season in the rear-view mirror, executives are calling on the White House and congressional leaders to head off a self-imposed deadline that could bring $ 600 billion in spending cuts and higher taxes early in 2013 if they are unable to reach a deal on cutting the federal budget deficit.

The Business Roundtable on Tuesday kicked off a print, radio and online ad campaign on which it plans to spend hundreds of thousands of dollars featuring the chiefs of Honeywell International Inc , Xerox Corp and United Parcel Service Inc calling on lawmakers to resolve the issue.

In an opinion piece published on Tuesday evening on the Wall Street Journal’s website, Goldman Sachs Chief Executive Officer Lloyd Blankfein urged the business community and the Obama administration to compromise and reconcile so as not to derail the fragile recovery.

One of the more dramatic warnings of the consequences of allowing the U.S. economy to go over the fiscal cliff came from Honeywell CEO David Cote.

“If the last debt ceiling discussion was playing with fire, this time they’re playing with nitroglycerin,” Cote said in an interview. “If they go off the cliff, I think it would spark a recession that’s a lot bigger than economists think. Some think it would just be a small fire. I think it could turn into a conflagration.”

The nonpartisan Congressional Budget Office (CBO) estimates that the U.S. economy would contract 0.5 percent in 2013 if the government fails to stop the budget cuts and tax increases – far below the 2 percent growth economists currently forecast.

A failure in Washington to solve the crisis by the year’s end could prompt major companies to curtail investment plans, said Duncan Niederauer, CEO of NYSE Euronext , operator of the New York Stock Exchange.

“We simply won’t be investing in the United States. We will be investing elsewhere where we have more certainty of the outcome,” Niederauer said in an interview.

About a dozen top U.S. CEOs, including General Electric Co’s Jeff Immelt, Aetna Inc’s Mark Bertolini, American Express Co’s Ken Chenault and Dow Chemical Co’s Andrew Liveris are scheduled to meet with President Barack Obama on Wednesday to discuss the issue.

The four are members of “Fix the Debt,” an ad-hoc lobbying organization that this week launched an advertising campaign that advocates long-term debt reduction.

UNCERTAINTY FACTOR

Bank of America Corp CEO Brian Moynihan said on Tuesday that worries about the cliff have companies holding off on spending.

“That uncertainty continues to hold back the recovery,” Moynihan said, speaking at an investor conference in New York.

Sandy Cutler, CEO of manufacturer Eaton Corp , shared his concern.

“Until we solve the fiscal issues (in the United States and Europe), you’re not going to get back to normal GDP growth,” Cutler told investors on Tuesday.

CEOs are not alone in this worry. The CBO report warned that failure to reach a deal could push the U.S. unemployment rate up to 9.1 percent, the highest since July 1991. It is currently 7.9 percent.

Obama and the Republican leadership of the House of Representatives have signaled a more conciliatory tone since last week’s election, when Obama soundly defeated Republican challenger Mitt Romney, whose party retained a majority in the House.

Wilbur Ross, an investor known for taking stakes in distressed companies, is bracing for higher tax rates in 2013.

“We, like many people, have been trying to utilize gains this year. It does seem that the probability is that rates will go up,” Ross said in an interview with Reuters Insider. “We don’t have a “for sale” sign on anything. But we are mindful that there is a benefit to concluding things this year rather than next.

NO SIGNS OF PANIC

Concerns about the cliff have not prompted customers to cancel orders, though they have added to an overall level of uneasiness that has companies wary of making large capital purchases or hiring significant numbers of new workers.

“We haven’t seen the panicking, like, ‘I’m not going to order something because of the fiscal cliff,’” said Steve Shawley, chief financial officer of heating and cooling systems maker Ingersoll Rand Plc . “Customers are being very judicious with their orders.”

Likewise, JPMorgan Chase & Co CEO Jamie Dimon last month told investors he did not expect the negotiations to hurt lending in the fourth quarter.

“The fiscal cliff isn’t going to change us,” Dimon said, referring to JPMorgan’s commercial bank, which loans money to businesses. The bank’s investment banking side could be more vulnerable if the debate makes investors jittery, he allowed.

WEAPONS, MEDICINES IN THE CROSS-HAIRS

The defense and healthcare sectors are the most vulnerable to the fiscal cliff, as they face the threat of sequestration — automatic, across-the-board cuts to their funding.

Makers of weapons systems note that they have long been preparing for declining sales as the United States winds down two long wars in Iraq and Afghanistan. The industry has already shed tens of thousands of jobs and closed facilities.

Lockheed Martin Corp’s new president and chief operating officer, Marillyn Hewson, told analysts on Monday her company had been preparing for tighter defense budgets for years, even before the sequestration deal.

“We aren’t going to see a major change,” said Hewson. “We’ve been very proactive as a leadership team in taking actions in recent years to address our cost structure, to look at how we can make our product more affordable.”

Automatic cuts to the federal budget could reduce federal health spending by $ 21.5 billion in 2013, potentially affecting everything from Medicare to the Food and Drug Administration, according to an analysis by PwC’s Health Research Institute.

Vincent Forlenza, the CEO of Beckton Dickinson & Co , said the labs he supplies have held off on buying new instruments because of the threat of spending cuts.

“If we don’t get to a deal we will have another year of paralysis and putting off research,” Forlenza said. “The impact of uncertainty on the (National Institutes of Health) budget is causing our research customers to put off research.”

(Additional reporting by John McCrank, Nick Zieminski, Caroline Humer, Jed Horowitz, Sharon Begley and Daniel Wilchins in New York, Rick Rothacker in Charlotte, North Carolina, Nichola Groom in Los Angeles, Andrea Shalal-Esa in Washington, Debra Sherman in Chicago and Anna Driver in Houston; Editing by Patricia Kranz and Steve Orlofsky and Carol Bishopric)

Health News Headlines – Yahoo! News

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