NBC’s Engel, TV crew escape abduction in Syria






BEIRUT (AP) — NBC‘s chief foreign correspondent Richard Engel said Tuesday he and members of his network crew escaped unharmed after five days of captivity in Syria, where more than a dozen pro-regime gunmen dragged them from their car, killed one of their rebel escorts and subjected them to mock executions.


Appearing on NBC’s “Today” show, an unshaven Engel said he and his team escaped during a firefight Monday night between their captors and rebels at a checkpoint. They crossed into Turkey on Tuesday.






NBC did not say how many people were kidnapped with Engel, although two other men, producer Ghazi Balkiz and photographer John Kooistra, appeared with him on the “Today” show. It was not confirmed whether everyone was accounted for.


Engel said he believes the kidnappers were a Shiite militia group loyal to the Syrian government, which has lost control over swaths of the country’s north and is increasingly on the defensive in a civil war that has killed 40,000 people since March 2011.


“They kept us blindfolded, bound,” said the 39-year-old Engel, who speaks and reads Arabic. “We weren’t physically beaten or tortured. A lot of psychological torture, threats of being killed. They made us choose which one of us would be shot first and when we refused, there were mock shootings,” he added.


“They were talking openly about their loyalty to the government,” Engel said. He said the captors were trained by the Iranian Revolutionary Guard and allied with Hezbollah, the Lebanese Shiite militant group, but he did not elaborate.


There was no mention of the kidnapping by Syria’s state-run news agency.


Both Iran and Hezbollah are close allies of the embattled Syrian government of President Bashar Assad, who used military force to crush mostly peaceful protests against his regime. The crackdown on protests led many in Syria to take up arms against the government, and the conflict has become a civil war.


Engel said he was told the kidnappers wanted to exchange him and his crew for four Iranian and two Lebanese prisoners being held by the rebels.


“They captured us in order to carry out this exchange,” he said.


Engel and his crew entered Syria on Thursday and were driving through what they thought was rebel-controlled territory when “a group of gunmen just literally jumped out of the trees and bushes on the side of the road.”


“There were probably 15 gunmen. They were wearing ski masks. They were heavily armed. They dragged us out of the car,” he said.


He said the gunmen shot and killed at least one of their rebel escorts on the spot and took the hostages into a waiting truck nearby.


Around 11 p.m. Monday, Engel said he and the others were being moved to another location in northern Idlib province.


“And as we were moving along the road, the kidnappers came across a rebel checkpoint, something they hadn’t expected. We were in the back of what you would think of as a minivan,” he said. “The kidnappers saw this checkpoint and started a gunfight with it. Two of the kidnappers were killed. We climbed out of the vehicle and the rebels took us. We spent the night with them.”


Engel and his crew crossed back into neighboring Turkey on Tuesday.


The network said there was no claim of responsibility, no contact with the captors and no request for ransom during the time the crew was missing.


NBC sought to keep the disappearance of Engel and the crew secret for several days while it investigated what happened to them. Major media organizations, including The Associated Press, adhered to a request from the network to refrain from reporting on the issue out of concern it could make the dangers to the captives worse. News of the disappearance did begin to leak out in Turkish media and on some websites on Monday.


Syria has become a danger zone for reporters since the conflict began.


According to the Committee to Protect Journalists, Syria is by far the deadliest country for the press in 2012, with 28 journalists killed in combat or targeted for murder by government or opposition forces.


Among the journalists killed while covering Syria are award-winning French TV reporter Gilles Jacquier, photographer Remi Ochlik and Britain’s Sunday Times correspondent Marie Colvin. Also, Anthony Shadid, a correspondent for The New York Times, died after an apparent asthma attack while on assignment in Syria.


The Syrian government has barred most foreign media coverage of the civil war in Syria. Those journalists whom the regime has allowed in are tightly controlled in their movements by Information Ministry minders. Many foreign journalists sneak into Syria illegally with the help of smugglers and travel with rebel escorts or drivers.


Engel joined NBC in 2003 and was named chief foreign correspondent in 2008. He previously worked as a freelance journalist for ABC News, including during the U.S. invasion of Iraq. He has lived in the Middle East since graduating from Stanford University in 1996.


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New Android botnet discovered across all major networks






A new Android spam botnet has been discovered across all major networks that sends thousands of text messages without a user’s permission, TheNextWeb reported. The threat, which is known at SpamSoldier, was detected on December 3rd by Lookout Security in cooperation with an unnamed carrier partner. The malware is said to spread through a collection of infected phones that send text messages, which usually advertise free versions of popular paid games like Grand Theft Auto and Angry Birds Space, to hundreds of users each day.


[More from BGR: Facebook’s Instagram monetization plan: License users’ photos without paying for them]






Once a user clicks on the link to download the game, his or her phone instead downloads the malicious app. When the app is downloaded, SpamSoilder removes its icon from the app drawer, installs a free version of the game in question and immediately starts sending spam messages.


[More from BGR: How not to fix Apple Maps]


The security firm notes that the threat isn’t widespread, however it has been spotted on all major carriers in the U.S. and has potential to do serious damage if something isn’t done soon to stop it.


This article was originally published by BGR


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CBS dominates week in TV ratings






NEW YORK (AP) — CBS had little competition for dominance last week in the television ratings.


The network had 17 of the 25 most-watched programs on the air last week, according to the Nielsen company. It beat second-place NBC by an average of nearly four million viewers a night last week, and also took the 18-to-49-year-old demographic that advertisers seek.






“60 Minutes” and “NCIS” were the most popular shows on CBS last week. As is typical in the fall, NBC‘s Sunday night football matchup was the week’s most-watched show.


One end-of-year tradition, Barbara Walters‘ survey of the year’s most popular personalities, finished No. 27 in the week’s ratings with 7.6 million viewers.


On cable, Showtime’s “Dexter” and “Homeland” both hit series records for their season finale episodes on Sunday. “Dexter” had 2.8 million viewers and “Homeland” had 2.3 million. Showtime preceded each episode with a disclaimer, warning that audiences might find the shows too intense so soon after the Connecticut school killings.


CBS averaged 11.9 million viewers for the week in prime time (7.3 rating, 12 share). NBC had 7.3 million (4.5, 7), ABC had 5.1 million (3.3, 5), Fox had 4.4 million (2.7, 4), the CW had 1.7 million (1.1, 2) and ION Television had 1.3 million (0.9, 1).


Among the Spanish language networks, Univision led with an average of 3.2 million viewers (1.7, 3). Telemundo had 1.3 million (0.7, 1), TeleFutura had 850,000 (0.4, 1), Estrella had 340,000 (0.2, 0) and Azteca had 140,000 (0.1, 0).


NBC‘s “Nightly News” topped the evening newscasts with an average of 9.4 million viewers (6.3, 12). ABC’s “World News” was second with 8.3 million (5.5, 11) and the “CBS Evening News” had 7.2 million viewers (4.9, 9).


A ratings point represents 1,147,000 households, or 1 percent of the nation’s estimated 114.7 million TV homes. The share is the percentage of in-use televisions tuned to a given show.


For the week of Dec. 10-16, the top 10 shows, their networks and viewerships: NFL Football: San Francisco at New England, NBC, 23.23 million; “60 Minutes,” CBS, 19.63 million; “NCIS,” CBS, 17.65 million; “The Big Bang Theory,” CBS, 16.74 million; “NCIS: Los Angeles,” CBS, 15.12 million; “Sunday Night NFL Pre-Kick,” NBC, 14.62 million; “Person of Interest,” CBS, 14.08 million; “Two and a Half Men,” CBS, 13.34 million; “The Voice” (Monday), NBC, 12.33 million; “Criminal Minds,” CBS, 12.01 million.


___


ABC is owned by The Walt Disney Co. CBS is owned by CBS Corp. CW is a joint venture of Warner Bros. Entertainment and CBS Corp. Fox and My Network TV are units of News Corp. NBC and Telemundo are owned by Comcast Corp. ION Television is owned by ION Media Networks. TeleFutura is a division of Univision. Azteca America is a wholly owned subsidiary of TV Azteca S.A. de C.V.


___


Online:


http://www.nielsen.com


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Teva to enter Korean drugs market with Handok venture






JERUSALEM (Reuters) – Israel’s Teva Pharmaceutical Industries has entered into a joint venture with Handok Pharmaceuticals, aiming to gain a foothold in the $ 14 billion Korean market.


The agreement ends months of speculation that Teva was interested in making an acquisition in South Korea, where the Israeli company noted healthcare spending is expected to reach as much as 9 percent of gross domestic product by 2015.






The move comes after Jeremy Levin, new chief executive of the world’s largest generic drug company, last week set out a strategic plan, vowing to reshape Teva into “the most indispensable medicines company in the world” and provide significant value to its shareholders.


Levin said Teva’s growth centered on five areas: accelerating growth platforms, extending its global presence, engaging in strategic business development, protecting and expanding its core franchises and reduce its core cost base.


“Our business venture with Handok is a strategic fit for Teva in these growth areas and aligns with our commitment to address global medical, societal and consumer needs,” Levin told Reuters on Monday.


“Teva recognizes the importance of growing in east Asia, both for our shareholders and the patients who will benefit from having access to our medicines,” Levin said.


Teva shares, which have fallen sharply since the strategy was announced on December 11, were down 0.5 percent at 144.8 shekels by 0955 GMT, their lowest in 12 months.


Teva will hold 51 percent and Handok will own the rest, in a venture which will be Teva’s first in east Asia outside Japan and which is due to start operations in the next few months. Financial details were not disclosed.


Under terms of the deal, Teva will be responsible for manufacturing and supplying medicines, while Handok will handle sales and marketing, distribution and regulatory affairs.


Teva said the new company’s plans included selling its branded multiple sclerosis treatment Copaxone, which has started to face competition globally.


(Editing by David Holmes)


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Hopes rise for “fiscal cliff” deal as Obama, Boehner meet






WASHINGTON (Reuters) – President Barack Obama and top Republican John Boehner met at the White House on Monday as hopes rose that Washington will be able to head off steep tax hikes and spending cuts that could push the economy into recession next year.


Aides from both parties said they were optimistic that a deal could be reached in the coming days to avert the “fiscal cliff,” as lawmakers set the stage for action before a year-end deadline.






“There’s been too much progress at this point and neither guy wants to go over the cliff,” a senior Republican aide said.


Although both sides still had major differences, investors were cheered by signs of progress. The Standard & Poor’s 500 index was up 0.72 percent in late afternoon.


“I think there’s a lot of expectation that a fiscal cliff deal of some sort does get done,” said Joseph Benanti, managing director of Rosenblatt Securities in New York.


Senate Democratic leader Harry Reid said his chamber will wrap up work on the issue after Christmas.


“It appears that we’re going to be coming back the day after Christmas to complete work on the fiscal cliff,” he said on the Senate floor.


Boehner, the speaker of the Republican-controlled House of Representatives, has edged closer to Obama’s demand to raise taxes on the wealthiest Americans. In return, Obama is considering a measure that would slow the rate of growth of Social Security retirement benefits by changing the way they are measured against inflation, according to a Senate Democratic aide.


GETTING CLOSER ON TAXES


In a step toward an agreement, Boehner has put forward a tax increase for those earning over $ 1 million annually, while Obama wants that threshold set at $ 250,000. Republicans could probably stomach a tax hike on incomes above $ 500,000, a Republican aide said.


The two sides face a deadline of December 31, when $ 600 billion in across-the-board spending cuts and tax hikes are due to begin kicking in, a jolt to the economy that could throw it back into recession.


Boehner’s latest proposal calls for $ 1 trillion in new tax revenue, which would come from raising rates and limiting deductions that the wealthiest can take. That is $ 400 billion less than the White House wants, but the gap between the two sides has narrowed by half in recent weeks.


Boehner could float the broad outlines of a deal with rank-and-file members on Tuesday. If there are no strong objections, he could try to finalize the deal on Wednesday, the Republican aide said.


A Democratic aide said that if a deal is reached by Saturday night, votes could be held in Congress next week.


Both sides declined to say what Boehner and Obama discussed at the meeting, which was also attended by Treasury Secretary Timothy Geithner.


The White House said Boehner’s latest proposal doesn’t meet its standards.


“Thus far the president’s proposal is the only proposal that we have seen that achieves the balance that is so necessary,” White House spokesman Jay Carney said at a news briefing.


Republicans understand that the clock is ticking and they are confident that Boehner will get a deal they can support in the coming days, a senior House Republican aide said.


Boehner “won’t sign off on a deal that doesn’t have enough votes to get through,” the aide said.


Republicans want substantial spending cuts in return for increased tax revenue, but any proposal to trim popular benefit programs like the Medicare health insurance plan for seniors will face fierce resistance from liberal Democrats, whose votes will be needed to get a deal passed.


Obama could also face strong opposition from Democrats if he agrees to Boehner’s proposal to slow the growth of Social Security benefits by changing the way the cost-of-living increases are measured against inflation, an approach that could save $ 200 billion over 10 years.


Obama also wants to head off another confrontation over the government’s debt limit, which will need to be raised in the coming months. Republicans insist that any increase in the government’s $ 16.4 trillion borrowing authority must be paired with an equal reduction in spending.


(Additional reporting by Thomas Ferraro, Mark Felsenthal and Jeff Mason in Washington and Gabriel Debenedetti and Angela Moon in New York; Writing by Andy Sullivan; Editing by Alistair Bell and Eric Beech)


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N. Korea displays Kim Jong Il a year after death






PYONGYANG, North Korea (AP) — North Korea unveiled the embalmed body of Kim Jong Il, still in his trademark khaki jumpsuit, on the anniversary of his death Monday as mourning mixed with pride over a recent satellite launch that was a long-held goal of the late authoritarian leader.


Kim lies in state a few floors below his father, national founder Kim Il Sung, in the Kumsusan mausoleum, the cavernous former presidential palace. Kim Jong Il is presented lying beneath a red blanket, a spotlight shining on his face in a room suffused in red.






Wails echoed through the chilly hall as a group of North Korean women sobbed into the sashes of their traditional Korean dresses as they bowed before his body. The hall bearing the glass coffin was opened to select visitors — including The Associated Press — for the first time since his death.


North Korea also unveiled Kim’s yacht and his armored train carriage, where he is said to have died. Among the personal belongings featured in the mausoleum are the parka, sunglasses and pointy platform shoes he famously wore in the last decades of his life. A MacBook Pro lay open on his desk.


North Koreans paid homage to Kim and basked in the success of last week’s launch of a long-range rocket that sent a satellite named after him to space.


The launch, condemned in many other capitals as a violation of bans against developing its missile technology, was portrayed not only as a gift to Kim Jong Il but also as proof that his young son, Kim Jong Un, has the strength and vision to lead the country.


The elder Kim died last Dec. 17 from a heart attack while traveling on his train. His death was followed by scenes of North Koreans dramatically wailing in the streets of Pyongyang, and of the 20-something son leading ranks of uniformed and gray-haired officials through funeral and mourning rites.


The mood in the capital was decidedly more upbeat a year later, with some of the euphoria carrying over from last Wednesday’s launch. The satellite bears one of Kim Jong Il’s nicknames, Kwangmyongsong, or “Lode Star,” a moniker given to him at birth according to the official lore.


Cameras were not allowed inside the mausoleum, and state media did not release any images of Kim Jong Il’s body.


With the death anniversary came a hint that Kim Jong Un himself might soon be a father.


His wife, Ri Sol Ju, was seen on state TV with what appeared to be a baby bump as she walked slowly next to her husband at the mausoleum, where they bowed to statues of Kim’s father and grandfather.


There is no official word from Pyongyang about a pregnancy. In addition, Ri is shown wearing a billowing traditional Korean dress in black that makes it difficult to know for sure.


North Koreans are reluctant to discuss details of the Kim family that have not been released by the state. Still there are rumors even in Pyongyang about whether the country’s first couple is expecting.


To honor Kim’s father, North Koreans stopped in their tracks at midday and bowed their heads as the national flag fluttered at half-staff along streets and from buildings.


Pyongyang construction workers took off their yellow hard hats and bowed at the waist as sirens wailed across the city for three minutes.


Tens of thousands of North Koreans gathered in the frigid plaza outside, newly transformed into a public park with lawns and pergolas. Geese flew past snow-tinged firs and swans dallied in the partly frozen moat that rings the vast complex in Pyongyang’s outskirts.


“Just when we were thinking how best to uphold our general, he passed away,” Kim Jong Ran said at the plaza. “But we upheld leader Kim Jong Un. … We regained our strength and we are filled with determination to work harder for our country.”


Speaking outside the mausoleum, renamed the Kumsusan Palace of the Sun, the military’s top political officer, Choe Ryong Hae, said North Korea should be proud of the satellite, calling it “a political event with great significance in the history of Korea and humanity.”


Much of the rest of the world, however, was swift in condemning the launch, which was seen by the United States and other nations as a thinly disguised cover for testing missile technology that could someday be used for a nuclear warhead.


The test, which the U.N. Security Council said violated a ban on launches using ballistic missile technology, underlined Kim Jong Un’s determination to continue carrying out his father’s hardline policies even if they draw international condemnation.


Washington said Monday it has no option but to seek to isolate Pyongyang further.


“What’s left to us is to continue to increase pressure on the North Korean regime and we are looking at how to best to do that, both bilaterally and with our partners going forward until they (North Korea) get the message. We are going to further isolate this regime,” U.S. State Department spokeswoman Victoria Nuland said.


Some outside experts worry that Pyongyang’s next move will be to press ahead with a nuclear test in the coming weeks, a step toward building a warhead small enough to be carried by a long-range missile.


Despite inviting further isolation for his impoverished nation and the threat of stiffer sanctions, Kim Jong Un won national prestige and clout by going ahead with the rocket launch.


At a memorial service on Sunday, North Korea’s top leadership not only eulogized Kim Jong Il, but also praised his son. Kim Yong Nam, president of the Presidium of North Korea’s parliament, called the launch a “shining victory” and an emblem of the promise that lies ahead with Kim Jong Un in power.


The rocket’s success also fits neatly into the narrative of Kim Jong Il’s death. Even before he died, the father had laid the groundwork for his son to inherit a government focused on science, technology and improving the economy. And his pursuit of nuclear weapons and the policy of putting the military ahead of all other national concerns have also carried into Kim Jong Un’s reign.


In a sign of the rocket launch’s importance, Kim Jong Un invited the scientists in charge of it to attend the mourning rites in Pyongyang, according to state media.


The reopening of the mausoleum on the anniversary of the leader’s death follows tradition. Kumsusan, the palace where his father, Kim Il Sung, served as president, was reopened as a mausoleum on the anniversary of his death in 1994.


___


Associated Press writers Hyung-jin Kim in Seoul, South Korea, and Matthew Pennington in Washington contributed to this report. Follow Jean Lee, AP’s bureau chief for Pyongyang and Seoul, at www.twitter.com/newsjean.


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Cannibalization concerns ‘overblown’ as half of iPad mini sales go to new buyers






It has been widely reported that Apple’s (AAPL) iPad mini is cannibalizing sales of the company’s full-sized iPad. According to a new survey, however, nearly half of all recent iPad mini buyers are new to the platform, AppleInsider reported. The data comes from Katy Huberty of Morgan Stanley, who said that while the smaller tablet is clearly cannibalizing some sales of the larger iPad, concerns are “overblown.” The analyst’s opinion echoes previously statements shared by Apple CEO Tim Cook, revealing that the company does not “worry about cannibalization of our own product,” adding that “it’s much better for us to do that than for somebody else to do it.” Huberty also notes that the iPad mini is a “key demand driver” and has accounted for 34% of planned iPad purchases.


[More from BGR: New BlackBerry 10 images show off home screen UI, notifications and key apps]






[More from BGR: Apple loses its shine]


The survey did find that the iPad 4 is attracting slightly more new users than the iPad mini, however, 56% compared to 47%. The analyst notes that these numbers indicate that the company’s cannibalization risk factor with the iPad mini is “manageable.” Apple’s tablet install base continues to grow faster than any other company and its retention rate of 81% is the strongest in the industry. Better yet, 36% of consumers who do not own a tablet have said they plan to buy an iPad in the future.


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Channing Tatum, Jenna Dewan-Tatum expecting baby






NEW YORK (AP) — The Sexiest Man Alive will soon be a sexy dad.


Actor Channing Tatum and his wife Jenna Dewan-Tatum are expecting their first child in 2013, their reps confirm.






The news was first reported by People.com, which named Tatum the Sexiest Man Alive in November.


The couple, who recently co-starred in the film “10 Years,” met on the 2006 dance film “Step Up,” and wed in 2009.


Besides a baby, the new year will be a busy year for the parents-to-be. Tatum has at least four movies in the works while Dewan-Tatum appears on this season of “American Horror Story: Asylum” and has a TV movie called “She Made Them Do It” premiering Dec. 29 on Lifetime.


___


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Analysis: Boehner opens door to tax hikes, shifts U.S. fiscal cliff talks






WASHINGTON (Reuters) – U.S. House of Representatives Speaker John Boehner’s offer to accept a tax rate increase for the wealthiest Americans knocks down a key Republican road block to a deal resolving the year-end “fiscal cliff.”


The question now boils down to price – which income levels, what rates and what’s offered in return. Such major questions, still unanswered so close to the end of the year suggest, however, that no surge toward an agreement is immminent.






With just over two weeks before the fiscal cliff’s $ 600 billion in automatic tax hikes and spending cuts are triggered, threatening a new recession, there is little time to craft a comprehensive deal that will satisfy both Democrats and Republicans.


Until the latest offer, made on Friday, Boehner had insisted on extending all of the Bush era tax rates, resisting President Obama’s demand to let the marginal rates rise on income above $ 250,000. A rising chorus of business executives also had urged Republicans to agree to this.


Although the White House has not accepted Boehner’s gambit, which media reports have said includes a $ 1 million tax-hike threshold, it could push negotiations away from entrenched, ideological positions.


“Boehner has now accepted the premise of higher rates. So now we’re just arguing over details. I think it’s a significant step,” said Greg Valliere, chief political strategist at Potomac Research Group.


A framework deal spelling out tax revenue and spending cut targets to be finalized in the new year could be possible, Valliere said.


“Boehner’s offer to allow tax rates to go up for taxpayers earning over $ 1 million fundamentally transforms fiscal cliff negotiations,” added Sean West, U.S. policy analyst at Eurasia Group, a political risk consultancy.


In a note to clients, West wrote that it signals, significantly, that Boehner ultimately believes a deal to avoid the cliff is still possible.


“The political burden is now shifted back to the president, who must be willing to take on his party in order to get a deal Boehner can ultimately pass. We do not think the president will overreach: Obama will work with Boehner to get to a deal.”


There are still several critical elements to a deal besides a tax rate increase on the wealthy, including Republican demands to cut spending on entitlements.


Changes to the expensive Medicare and Medicaid health care programs for the elderly and the poor could be central to any deal, which must also include an increase in the federal debt limit needed by the end of February.


DEMANDS ENTITLEMENT CUTS


Boehner conditioned his tax rate increase offer on Obama agreeing to cuts in entitlement spending.


Many Republican lawmakers want to raise the eligibility age on Medicare from 65 to 67. They also want to add more means testing to Medicare, making wealthier retirees pay more for their care.


Currently, Medicare does have some means testing, charging higher premiums for coverage of doctors visits and prescription drugs to individuals earning more than $ 85,000 and married couples earning more than $ 170,000. Only about 5 percent of recipients pay these higher premiums.


Thus far, Obama has offered only about $ 400 billion in 10-year entitlement savings, mostly through small adjustments in reining in health care costs – not fundamental changes such as raising eligibility ages.


And just as Boehner faces opposition in his own party to raising any tax rates, Obama faces opposition to cuts to Medicare, Medicaid and Social Security from Democrats, who pledged in election campaigns they would protect these programs.


A major bloc of congressional Democrats has already signaled they will not accept major cutbacks in Medicare as part of any fiscal cliff deal.


House Minority Leader Nancy Pelosi of California and Maryland Representative Chris Van Hollen are among the high ranking Democrats in the House who in recent days have come out forcefully defending against raising the age for eligibility for Medicare from the current 65 to 67 years of age.


“Given the level of savings that is being talked about from Medicare, you can’t get it all from providers and drug makers,” said Paul Heldman, an analyst at Potomac Research, which tracks Washington policy for investors.


“So Opponents of raising the eligibility age have reason to believe beneficiaries will take some sort of hit if a mega-deal is cut,” he said.


If Republicans are not successful in securing entitlement program cuts in exchange for a tax-rate increase on the wealthy, they are adamant about using a debt-limit increase as leverage to overhaul Social Security and Medicare.


The U.S. Treasury expects to reach its $ 16.4 trillion statutory debt cap by year-end, and will exhaust its remaining borrowing capacity around mid-February, risking a potential default.


Louisiana Republican Representative John Fleming, a member of the conservative Tea Party caucus who has never voted to increase the debt ceiling, said he would support a debt limit hike if it were part of a deal to make Medicare and Social Security sustainable.


The pace of activity could pick up the coming week.


House Republicans were told to prepare for a possible weekend session next week, potentially interrupting travel plans for the long Christmas holiday weekend.


House Majority Leader Eric Cantor scheduled “possible legislation related to expiring provisions of law,” a reference to the expiring tax cuts, for the end of the week, portending a weekend session. Cantor has said the House would meet through the Christmas holidays and beyond.


(Additional reporting by Thomas Ferraro, Richard Cowan and Kim Dixon; editing by Fred Barbash and Todd Eastham)


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Abe’s challenge: Can he give Japan what money can’t buy






TOKYO (Reuters) – Even before Japanese voters returned Shinzo Abe‘s party to power, he had already won over financial markets with an economic revival plan as seductively simple as economists say it is risky: print money and spend it. Lots of it.


The Liberal Democratic Party’s landslide on Sunday is likely to sustain a market rally fuelled by economic stimulus hopes, but Abe’s economic legacy will probably be defined by how he tackles chronic ills that easy money alone cannot fix and that were largely ignored during the campaign.






The conservative leader set to return to the prime minister’s post he abruptly left in 2007 campaigned on a promise to double spending on public works and to push the Bank of Japan for radical action to end deflation and help exporters such as Toyota and Sony by taming the yen.


“The fact that Abe points to changes in the BOJ law or forex levels, or aggressive easing as solutions to Japan‘s problems is, if anything, worrying,” said Yuuki Sakurai, chief executive of Fukoku Capital Management which manages $ 19 billion in assets.


“They should be treated as tools to buy time to implement structural reforms, but we’re not hearing anything about deep reforms that the LDP wants to carry out.”


The so-called Abe trade – a 4 percent slide in the yen and more than a 10 percent rise in stock prices over the past month – shows that for now, most investors just want to see the new leader fulfill his pledges.


Analysts said they expected Sunday’s vote, which according to TV projections based on counted votes gave LDP and its ally a two-thirds lower house majority, to sustain that trend in the near-term.


“Abe’s economic policies will be implemented so the economy will improve next year. The problem is what happens after that,” said Koichi Haji, chief economist at NLI Research Institute in Tokyo. “The key is whether Abe can implement long-term structural reforms and growth strategies.”


The BOJ is poised to heed Abe’s calls for more aggressive easing and a more ambitious 2 percent inflation target, with markets expecting the central bank to ease policy for the fifth time this year on Thursday.


Investors also expect an extra budget of up to 10 trillion yen ($ 120 billion) as a down payment on Abe’s plan to spend such amounts per year over the next decade – double the current level – on public works long synonymous with the LDP.


Economists say pumping cash into the economy will only give it a temporary jolt if not followed by efforts to lift its growth potential and contain runaway debt.


In just three decades Japan has become the world’s oldest society, with those 65 or above making up nearly a quarter of a population that is greying and is estimated to have shrunk by over 260,000 in the last fiscal year alone.


Recipes to cope with it are well known: social security overhaul, including cuts in healthcare and pensions; boosting access to overseas markets and opening Japan to foreign goods, workers and investment; power sector revamp and bringing more women into the workforce.


All, however, carry political and social risks that Japan’s recent revolving-door leaders were unable or unwilling to take.


Left to sink or swim with swings in overseas demand for its exports and its currency, the world’s third-largest economy has been in and out of recession and dogged by low-grade deflation for the past two decades.


Now, in firm control of the lower house, Abe has a chance to prove his mettle and erase the memories of his first troubled year in office.


So far he has played it safe.


His “Abenomics” — a mix of potent monetary stimulus and big public spending — carries little political cost and he has been coy on touchy issues such the U.S.-led Trans-Pacific Partnership (TPP) free trade pact, or implementing sales tax increases.


With some luck, the new government may be even be able to call an end to a brief recession it entered last quarter.


Economists polled by Reuters last week predict the economy will start growing again in the first quarter of next year, largely due to expected recovery in China, Japan’s top export market.


TAX TEST


Abe’s first stern economic test will come after August, when the government, armed with second-quarter data, will decide whether the economy is strong enough to go ahead with a first round of planned sales tax increases.


With 10-year bond yields near a decade low below 0.7 percent, bond investors are now confident that he can steer the central bank to buy more bonds from the world’s most indebted government without setting off a market meltdown.


To keep that trust, Abe must convince investors that in his push for big scale-stimulus, he has not abandoned budget discipline. Economists say with Japan’s public debt at more than twice its economic output and climbing, the new government can ill-afford delaying a tax hike that has become a symbol of Tokyo’s fiscal rectitude. Their message is clear: “Just do it!”


“I hope they will go through with it,” said Takatoshi Ito, a Tokyo University professor, former adviser to the first Abe administration who is now mooted as a possible successor to BOJ Governor Masaaki Shirakawa when his term ends in April.


“Tax revenue is less than half of expenditures. Bond issuance is bigger than tax revenues. It’s like using a credit card for more than half of your monthly expenditure. It’s crazy, abnormal, you can’t go on like that.”


(Additional reporting by Kaori Kaneko, Antoni Slodkowski and Leika Kihara; Editing by Raju Gopalakrishnan)


Economy News Headlines – Yahoo! News





Title Post: Abe’s challenge: Can he give Japan what money can’t buy
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