Asia stocks eke out gains on China hopes, oil eases

HONG KONG (Reuters) - Most Asian stock markets edged higher on Thursday on hopes of a steady economic revival in China, although oil gave back part of the previous session's strong gains as investors took some money off the table and braced for more U.S. budget battles.


The MSCI Asia Pacific ex-Japan index of stocks <.miapj0000pus> rose 0.2 percent following Wednesday's 2 percent jump on relief that U.S. politicians had averted the "fiscal cliff".


Data from China showing the services sector expanded in December continued to underpin expectations of an economic recovery that has helped spur a strong rally in Hong Kong-listed Chinese shares <.hsce> over the past month.


The China Enterprises index <.hsce> which rallied more than 4 percent in the previous session eased 0.2 percent. Onshore Chinese markets will resume trading on Friday.


"China looks like it's improving at the margin and the market has momentum that could last for at least a few months," said Christian Keilland, head of trading at BTIG in Hong Kong.


"Investors seem to have accepted that reforms are underway but they're going to happen at a slower pace."


Australian stocks <.axjo> rose 0.7 percent to their highest in more than 19 months, with mining giants Rio Tinto up 2.4 percent and BHP Billiton up 0.8 percent, among the top gainers on the benchmark S&P ASX/200 index. <.axjo/>


South Korea's Kospi <.ks11> underperformed the region, falling 0.4 percent as automakers and other exporters slumped on a stronger Korean won, which hit a 16-month high against the dollar overnight.


In other currency markets, the Japanese yen bounced after hitting a 29-month low versus the dollar earlier in the day but analysts warned that any strength is likely to be short-lived.


"Technically dollar/yen looks somewhat overbought here. It's gone a long way in a very short time," said Callum Henderson, global head of FX research for Standard Chartered Bank in Singapore, adding that the dollar could see some consolidation in the near term before heading higher.


The euro which in overnight trading was close to a 8-1/2 month high against the dollar, slipped 0.1 percent.


The U.S. dollar rose 0.2 percent <.dxy> against a basket of major currencies.


President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought deal averted the fiscal cliff of automatic tightening that threatened to push the U.S. into recession.


Strength in the dollar and profit-taking pushed oil prices lower with Brent crude slipping 0.3 percent and U.S. crude futures down 19 cents to $92.93.


"After the initial excitement, reality sets in," said Victor Shum, oil consultant at IHS Purvin & Gertz. "There will be other negotiations and the deal is a compromise."


(Reporting by Vikram Subhedar; Editing by Kim Coghill and Eric Meijer)



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World Briefing | Middle East: Comedian Accused of Insulting Egyptian President to Be Investigated





Prosecutors in Cairo opened a criminal investigation on Tuesday into allegations that a popular television comedian, Bassem Youssef, who has taken special aim at ultraconservative Islamists on his program, had insulted Egypt’s president, Mohamed Morsi, during his satirical monologues.  




The accusations against Mr. Youssef come amid growing fears among Egypt’s media professionals that the country’s newly ratified Constitution offers scant protections for freedom of expression.


Since Mr. Morsi was elected in June, the authorities have opened investigations into several media figures accused of insulting him or the Muslim Brotherhood, the Islamist group he once led.


An Islamist lawyer who filed the complaint against Mr. Youssef, Ramadan al-Aqsuri, said a skit in which the comedian printed a picture of Mr. Morsi’s face on a red pillow amounted to a “sharp attack on the person of the president.” Separately, a Muslim Brotherhood lawyer filed a lawsuit asking the state to pull Mr. Youssef’s show off the air and to close down the channel that carries it, citing “sarcasm against the president.”  


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7 Apps for Creepers






1. Sneakypix


Ever been waiting on the train platform, minding your business, only to glance to your left and find yourself face-to-face with a grown-up nose picker? In this day and age, our first inclination is to snap a discreet photo. Sneakypix makes it appear as if you’re on a phone call, but instead, aim your camera lens at the nasal aficionado and the app will fire off a series of stealth photos or video. Price: $ 0.99


Click here to view this gallery.






[More from Mashable: Mom Gives Son a Christmas iPhone — With Strings Attached]


Do you have a smartphone? Then chances are you’ve been a creeper.


Now don’t get all defensive, just yet. How many times have you snapped a photo of some hipster’s pink beard on the subway? How often do you send racy pictures to your husband during his business trips? How many times have you wondered whether your teenager was smoking pot on the Williamsburg Bridge or visiting his grandma in Queens?


[More from Mashable: 9 Apps to Fast-Track Your New Years’ Resolutions]


While we’re not advocating sinister, paranoid behavior (take a hike, stalkers), sometimes it’s helpful and downright fun to act like James Bond. And it turns out, you don’t need all the slick gadgets to do it.


These seven iPhone and Android apps will get you started, secret agent-style.


But seriously, for the love of Carl, don’t do anything illegal. Mmm-kay?


Image courtesy of iStockphoto, klosfoto


This story originally published on Mashable here.


Tech News Headlines – Yahoo! News





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Jessica Simpson and Kendall & Kylie Jenner Make Readers Smile - and Frown















01/01/2013 at 07:00 PM EST








Splash News Online; Michael Simon/Startraks


What's on the minds of PEOPLE readers this week? We love getting your feedback, and as always, you weighed in – even while celebrating during the holidays – with plenty of reactions to all of our stories.

From Kelly Osbourne's dramatic weight loss to Jessica Simpson's happy baby news to the tragic death of hero surfer Dylan Smith in Puerto Rico, readers responded to what made them happy, what made them laugh out loud and what made them sad this week.

Check out the articles with the top reactions on the site this week, and keep clicking on the emoticons at the bottom of every story to tell us what you think!

Love Kelly Osbourne says loving herself was the key to her 60-lb. weight loss. She had to get to a place where she respected herself enough to take care of her health – and she emerged a fierce style star who is not afraid to rock a bikini.

Wow Jessica Simpson became a new mom just 8 months ago – so the news that she's expecting baby No. 2 with fiancĂ© Eric Johnson made readers say, "Wow!"

Angry Reality stars Kendall and Kylie Jenner showed off expensive Christmas gifts on Instagram, and their pricey public display turned many readers off. From a pair of Louboutin spike heels to Balenciaga boots with a more than $1,000 price tag, the teens cleaned up with lavish presents that most could only dream about.

Sad Dylan Smith captured our hearts with his heroic efforts during Superstorm Sandy, saving six people on his surfboard. But the Queens, N.Y., lifeguard, 23, who was named one of PEOPLE's Heroes of the Year, drowned on Dec. 24 in a surfing accident off Puerto Rico.

LOL Does the idea of Tom Cruise dating a new woman make you laugh? Maybe. A story that falsely linked the actor romantically to a 26-year-old restaurant manager, had readers clicking LOL. Or maybe the funny part was this quote from a source, who told told PEOPLE: "He's single and will be talking to women – all of whom he won't be instantly dating."

Check back next week for another must-read roundup, and see what readers are reacting to every day here.

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Brain image study: Fructose may spur overeating


This is your brain on sugar — for real. Scientists have used imaging tests to show for the first time that fructose, a sugar that saturates the American diet, can trigger brain changes that may lead to overeating.


After drinking a fructose beverage, the brain doesn't register the feeling of being full as it does when simple glucose is consumed, researchers found.


It's a small study and does not prove that fructose or its relative, high-fructose corn syrup, can cause obesity, but experts say it adds evidence they may play a role. These sugars often are added to processed foods and beverages, and consumption has risen dramatically since the 1970s along with obesity. A third of U.S. children and teens and more than two-thirds of adults are obese or overweight.


All sugars are not equal — even though they contain the same amount of calories — because they are metabolized differently in the body. Table sugar is sucrose, which is half fructose, half glucose. High-fructose corn syrup is 55 percent fructose and 45 percent glucose. Some nutrition experts say this sweetener may pose special risks, but others and the industry reject that claim. And doctors say we eat too much sugar in all forms.


For the study, scientists used magnetic resonance imaging, or MRI, scans to track blood flow in the brain in 20 young, normal-weight people before and after they had drinks containing glucose or fructose in two sessions several weeks apart.


Scans showed that drinking glucose "turns off or suppresses the activity of areas of the brain that are critical for reward and desire for food," said one study leader, Yale University endocrinologist Dr. Robert Sherwin. With fructose, "we don't see those changes," he said. "As a result, the desire to eat continues — it isn't turned off."


What's convincing, said Dr. Jonathan Purnell, an endocrinologist at Oregon Health & Science University, is that the imaging results mirrored how hungry the people said they felt, as well as what earlier studies found in animals.


"It implies that fructose, at least with regards to promoting food intake and weight gain, is a bad actor compared to glucose," said Purnell. He wrote a commentary that appears with the federally funded study in Wednesday's Journal of the American Medical Association.


Researchers now are testing obese people to see if they react the same way to fructose and glucose as the normal-weight people in this study did.


What to do? Cook more at home and limit processed foods containing fructose and high-fructose corn syrup, Purnell suggested. "Try to avoid the sugar-sweetened beverages. It doesn't mean you can't ever have them," but control their size and how often they are consumed, he said.


A second study in the journal suggests that only severe obesity carries a high death risk — and that a few extra pounds might even provide a survival advantage. However, independent experts say the methods are too flawed to make those claims.


The study comes from a federal researcher who drew controversy in 2005 with a report that found thin and normal-weight people had a slightly higher risk of death than those who were overweight. Many experts criticized that work, saying the researcher — Katherine Flegal of the Centers for Disease Control and Prevention — painted a misleading picture by including smokers and people with health problems ranging from cancer to heart disease. Those people tend to weigh less and therefore make pudgy people look healthy by comparison.


Flegal's new analysis bolsters her original one, by assessing nearly 100 other studies covering almost 2.9 million people around the world. She again concludes that very obese people had the highest risk of death but that overweight people had a 6 percent lower mortality rate than thinner people. She also concludes that mildly obese people had a death risk similar to that of normal-weight people.


Critics again have focused on her methods. This time, she included people too thin to fit what some consider to be normal weight, which could have taken in people emaciated by cancer or other diseases, as well as smokers with elevated risks of heart disease and cancer.


"Some portion of those thin people are actually sick, and sick people tend to die sooner," said Donald Berry, a biostatistician at the University of Texas MD Anderson Cancer Center in Houston.


The problems created by the study's inclusion of smokers and people with pre-existing illness "cannot be ignored," said Susan Gapstur, vice president of epidemiology for the American Cancer Society.


A third critic, Dr. Walter Willett of the Harvard School of Public Health, was blunter: "This is an even greater pile of rubbish" than the 2005 study, he said. Willett and others have done research since the 2005 study that found higher death risks from being overweight or obese.


Flegal defended her work. She noted that she used standard categories for weight classes. She said statistical adjustments were made for smokers, who were included to give a more real-world sample. She also said study participants were not in hospitals or hospices, making it unlikely that large numbers of sick people skewed the results.


"We still have to learn about obesity, including how best to measure it," Flegal's boss, CDC Director Dr. Thomas Frieden, said in a written statement. "However, it's clear that being obese is not healthy - it increases the risk of diabetes, heart disease, cancer, and many other health problems. Small, sustainable increases in physical activity and improvements in nutrition can lead to significant health improvements."


___


Online:


Obesity info: http://www.cdc.gov/obesity/data/trends.html


___


Marilynn Marchione can be followed at http://twitter.com/MMarchioneAP


Mike Stobbe can be followed at http://twitter.com/MikeStobbe


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Asia stocks take off as U.S. fiscal cliff crisis ends

HONG KONG (Reuters) - Asian stocks rose nearly two percent to hit a five-month high and the dollar fell as both houses of Congress passed a bill to end the "fiscal cliff" crisis that threatened a U.S. recession and roiled world financial markets.


European markets were set to rally on the news, with spreadbetters expecting London's FTSE <.ftse> to rise about 1 percent and Frankfurt's DAX <.gdaxi> to open up 0.5 percent.


The Congress approved extending lower Bush-era tax rates to all but the nation's wealthiest households in a budget deal that stopped automatic implementation of $600 billion in spending cuts and tax increases.


The bill's passage in Congress allayed earlier concerns over complaints from a number of Republicans that spending cuts were still not adequately addressed.


The temporary reprieve that the deal offers the U.S. economy also sets up Wall Street for a strong start to trading which resumes later in the day.


Asian stock markets cheered the developments as a major risk for investors, namely a slump in the global economy, appeared to have receded for now.


"This is great news for global growth and explains why shares and other growth-related assets such as the Australian dollar are up strongly today," said Shane Oliver, strategist at AMP Capital.


Australian shares <.axjo> rose to a 19-month high while the Aussie dollar jumped to 1.4082.


The MSCI Asia Pacific ex-Japan index of stocks <.miapj0000pus> rose 1.9 percent. Chinese shares in Hong Kong <.hsce> jumped 3 percent as last month's rally spilled over into the new year with stocks closely linked to China's economy such as steel and cement posting the biggest gains.


In South Korea, where data showed manufacturing activity rose for the first time in seven months in December, the KOSPI index <.ks11> was up 1.6 percent led by a 3.6 percent jump in smartphone giant Samsung Electronics .


"The index is riding high on the U.S. fiscal deal. This upward momentum will last a couple of weeks, after which there will be a reality check due to the unresolved issue of the spending cuts and debt ceiling," said Cho Tae-hoon, an analyst at Samsung Securities.


Singapore <.ftsti> was the best-performing market in South East Asia rising 1.2 percent after data showed the city-state dodged an expected economic recession in the last three months of 2012.


RISK ON


Asian stocks outside Japan rose nearly 20 percent last year as a combination of improving economic data from China, easing worries about a euro zone blow-up, and global central bank easing that encouraged investors back into equity markets.


Sakthi Siva, Asia strategist for Credit Suisse, said in a note to clients that 2013 could see similar returns for Asian equities, given a solution to the fiscal crisis.


"As we move into 2013 we retain our bullish bias, and our theme is whether markets could catch up with earnings," said Siva, adding that markets in China and India could offer the most upside given the mismatch between index levels and earnings expectations.


Risky assets across the board got a lift with crude oil futures up 1.1 percent and copper futures in London jumping 1.7 percent.


The euro rose to $1.3261 against the U.S. dollar.


The safe-haven U.S. dollar edged lower, falling 0.4 percent against a basket of major currencies <.dxy>.


The Japanese yen continued its slide as investors wagered the Bank of Japan would have to take ever-more aggressive easing steps to support the economy and satisfy the new government.


The yen fell to 87.17 against the dollar to its weakest level since July 2010.


The Japanese currency also dropped to depths not seen in more than four years against the Australian and New Zealand dollars.


(Additional reporting by Wayne Cole in SYDNEY, Masayuki Kitano in SINGAPORE and Somang Yang in SEOUL; Editing by Eric Meijer)



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Central Africa’s Wildlife Rangers Face Deadly Risks





ZAKOUMA NATIONAL PARK, Chad — Just before dawn, the rangers were hunched over in prayer, facing east. They pressed their foreheads into the dry earth and softly whispered Koranic verses, their lips barely moving. A cool wind bit at their faces.




All of a sudden, Djimet Seid, the cook, said he heard “one war whoop — or maybe it was a scream.”


And then: “K-k-k-k-k-k-k,” the angry bark of a Kalashnikov assault rifle, opening up on fully automatic.


In an instant, an entire Chadian squad of rangers was cut down with alarming precision by elephant poachers who were skilled at killing more than just animals. Crouching in the bush, the poachers fired from a triangle of different spots, concealed and deadly accurate.


“If you go look at the infantry books, it’s exactly how you do a first light attack, exactly,” said Rian Labuschagne, a former paratrooper and now the manager of Zakouma National Park in southern Chad. “Our guys didn’t have a chance.”


Out here, among the spent bullet shells and the freshly dug graves, the cost of protecting wildlife is painfully clear. As ivory poaching becomes more militarized, with rebel groups and even government armies slaughtering thousands of elephants across Africa to cash in on record-high ivory prices, a horrible mismatch is shaping up. Wildlife rangers — who tend to be older, maybe a bit slower and incredibly knowledgeable about their environment and the ways of animals, but less so about infantry tactics — are wading into the bush to confront hardened soldiers.


The outcome, too often, is not only firefights and battles, but also coldblooded murder, with dozens of African wildlife rangers killed in recent years, many in revenge-driven ambushes. Ivory poachers, it seems, are becoming increasingly wily and ruthless.


This summer, in the Democratic Republic of Congo, a militia of infamous elephant poachers, sneaked up to the headquarters of a wildlife reserve and killed 5 people and 14 okapi, a rare animal with a giraffelike neck and zebralike legs. One guard who narrowly escaped said the attackers sliced open the chest of a downed colleague and ate his heart. In Zimbabwe, poachers are spreading deadly poisons on elephant carcasses to kill vultures. By taking out the birds that serve as a natural early warning system that a kill has been made, the poachers make it even more dangerous for rangers because they have no idea when the poachers are around. In Mozambique, the authorities said that poachers have recently begun using land mines.


Kenya, which is considered tame compared with some of these other places, has lost six rangers this year, more than in recent memory. One of them was Florence Hadia Abae, pregnant and the mother of a small boy. In March, she was following the footprints of suspected poachers near Tsavo National Park, a fabled tourist destination, when a poacher popped out of the bush and shot her in the face.


One of her colleagues was killed in the same ambush, shot in the leg, then finished off with a short, brutish stroke of an ax.


“They had no idea what they were walking into,” said Rob Dodson, a British conservationist working near Tsavo.


In the Zakouma attack, which happened about 50 miles outside the park boundaries in September, five rangers were killed on the spot; one remains missing and is presumed dead. Mr. Seid, the cook, was seriously wounded. The attack appeared to be revenge for a raid on a poachers’ camp, and much of the evidence points to the Sudanese military. For years, wildlife groups have blamed the janjaweed — Sudanese horseback raiders who traditionally work in tandem with the government military — for wiping out many of Central Africa’s elephant herds.


But specific evidence recovered from the poachers suspected of killing Zakouma’s rangers strengthens the Sudanese government link, the Chadian authorities and human rights groups say. A few weeks before the attack, Zakouma rangers raided a poachers’ camp nearby and discovered one uniform for Abu Tira, Sudan’s notorious paramilitary service, which has been blamed for burning down villages and committing other atrocities. The rangers also found several elephant tusks and a stamped leave slip from the Sudanese Army granting four soldiers permission to go to the Chadian border.


Most incriminating, though, were the digital photos recovered from a phone showing stacks of elephant carcasses that looked similar to photos from a horrific massacre of hundreds of elephants in Cameroon this year, suggesting that the Sudanese poachers who killed the Zakouma rangers may have been involved in one of the biggest single elephant slaughters in decades.


“This is not some random group of thugs,” said Jonathan Hutson, a spokesman for the Satellite Sentinel Project, a nonprofit group that helped analyze some of the evidence. “They’re poaching for profit to fund mass atrocities in Sudan.”


Officials at the United States Africa Command, based in Stuttgart, Germany, have also been helping analyze some of the forensics.


At first, Rabie A. Atti, a Sudanese government spokesman, reflexively dismissed the evidence.


“Pictures can be fabricated,” he said.


But then he added, “If there is concrete evidence, and someone is proven to be corrupt, he can be taken to court.”


Isma’il Kushkush contributed reporting from Khartoum, Sudan.



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Eric Prydz Picks a New Year's Eve Playlist















12/31/2012 at 06:50 PM EST



Unfortunately not everyone can be in Las Vegas when the ball drops this year, but Eric Prydz is bringing the party to PEOPLE.com readers in advance.

The DJ and producer, 36 – best known for his 2004 hit single, "Call on Me" – is playing a three-hour extended set at Surrender Nightclub on Monday, and he's sharing the tracks he's most excited to spin, including songs from his album, Eric Prydz Presents Pryda.

"I love to play on New Year's Eve because it has that special tension in the air," Prydz says. "People are so excited about the new year coming, leaving the old behind and starting fresh. It's also the perfect excuse to blow off some steam after that long Christmas with family. Let's make New Year's Eve 2013 one to remember!"

Recently scoring a Grammy nomination for his remix of M83's "Midnight City," Prydz, who is relocating to Los Angeles, already predicts 2013 "is going to be an amazing year."

As for his evening playlist, he plans to "blend a lot of the highlights from the past year with classics and brand new music set to blow up in 2013."

Check out part of his planned set below:

Jeremy Olander – "Let Me Feel"
"This tune has spring/summer of 2013 written all over it. It's such a feel good track!"
Listen here

Fehrplay – "I Can't Stop It"
"Fehrplay had a great year in 2012 and is set to blow up in 2013. This is his forthcoming single on my Pryda Friends imprint. The first time I heard this record, it took me somewhere really nice."
Listen here

Rone – "Parade (Dominik Eulberg Remix)"
"Every now and then there is a track that comes along and blows your mind. This is one of those tracks. Nine minutes of pure emotion."
Listen here

Eric Prydz – "Every Day"
"This one has been huge for me this summer and fall. Enough said."
Listen here

Pachanga Boys – "Time"
"This was the soundtrack of my summer 2012. And I'm sure I'm not alone on that one."
Listen here

Para One – "When the Night (Breakbot Remix)"
"I've been a fan of Para One's music for many years and this one is no exception. This song has a great retro vibe with a modern touch from Breakbot on this remix."
Listen here

Pig & Dan – "Savage"
"This is a real club stomper. I can't wait to play this one out."
Listen here

Pryda – "The End"
"I had to throw this one in. It's one of the biggest releases on Pryda to date."
Listen here

Green Velvet & Harvard Bass – "Lazer Beams"
"Hit me with those laser beams!"
Listen here.

Deetron feat. Hercules & Love Affair – "Crave (Deetron cRAVE Dub)"
"This song is a dark, big room destroyer."
Listen here

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Clinton's blood clot an uncommon complication


The kind of blood clot in the skull that doctors say Hillary Rodham Clinton has is relatively uncommon but can occur after an injury like the fall and concussion the secretary of state was diagnosed with earlier this month.


Doctors said Monday that an MRI scan revealed a clot in a vein in the space between the brain and the skull behind Clinton's right ear.


The clot did not lead to a stroke or neurological damage and is being treated with blood thinners, and she will be released once the proper dose is worked out, her doctors said in a statement.


Clinton has been at New York-Presbyterian Hospital since Sunday, when the clot was diagnosed during what the doctors called a routine follow-up exam. At the time, her spokesman would not say where the clot was located, leading to speculation it was another leg clot like the one she suffered behind her right knee in 1998.


Clinton had been diagnosed with a concussion Dec. 13 after a fall in her home that was blamed on a stomach virus that left her weak and dehydrated.


The type of clot she developed, a sinus venous thrombosis, "certainly isn't the most common thing to happen after a concussion" and is one of the few types of blood clots in the skull or head that are treated with blood thinners, said neurologist Dr. Larry Goldstein. He is director of Duke University's stroke center and has no role in Clinton's care or personal knowledge of it.


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


It should have no long-term consequences if her doctors are saying she has suffered no neurological damage from it, he said.


Dr. Joseph Broderick, chairman of neurology at the University of Cincinnati College of Medicine, also called Clinton's problem "relatively uncommon" after a concussion.


He and Goldstein said the problem often is overdiagnosed. They said scans often show these large "draining pipes" on either side of the head are different sizes, which can mean blood has pooled or can be merely an anatomical difference.


"I'm sure she's got the best doctors in the world looking at her," and if they are saying she has no neurological damage, "I would think it would be a pretty optimistic long-term outcome," Broderick said.


A review article in the New England Journal of Medicine in 2005 describes the condition, which more often occurs in newborns or young people but can occur after a head injury. With modern treatment, more than 80 percent have a good neurologic outcome, the report says.


In the statement, Clinton's doctors said she "is making excellent progress and we are confident she will make a full recovery. She is in good spirits, engaging with her doctors, her family, and her staff."


___


Online:


Medical journal: http://dura.stanford.edu/Articles/Stam_NEJM05.pdf


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Senate approves "fiscal cliff" deal, crisis eased


WASHINGTON (Reuters) - The Senate moved the U.S. economy back from the edge of a "fiscal cliff" on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives.


In a rare New Year's session at around 2 a.m. EST (0700 GMT), senators voted 89-8 to raise some taxes on the wealthy while making permanent low tax rates on the middle class that have been in place for a decade.


But the measure did little to rein in huge annual budget deficits that have helped push the U.S. debt to $16.4 trillion.


The agreement came too late for Congress to meet its own deadline of New Year's Eve for passing laws to halt $600 billion in tax hikes and spending cuts which strictly speaking came into force on Tuesday.


But with the New Year's Day holiday, there was no real world impact and Congress still had time to draw up legislation, approve it and backdate it to avoid the harsh fiscal measures.


That will need the backing of the House where many of the Republicans who control the chamber complain that President Barack Obama has shown little interest in cutting government spending and is too concerned with raising taxes.


All eyes are now on the House which is to hold a session on Tuesday starting at noon (1700 GMT).


Members were thankful that financial markets were closed, giving them a second chance to return to try to head off the fiscal cliff.


But if lawmakers cannot pass legislation in the coming days, markets are likely to turn sour. The U.S. economy, still recovering from the 2008/2009 downturn, could stall again if Congress fails to fix the budget mess.


"If we do nothing, the threat of a recession is very real. Passing this agreement does not mean negotiations halt, far from it. We can all agree there is more work to be done," Majority Leader Harry Reid, a Democrat, told the Senate floor.


A new, informal deadline for Congress to legislate is now Wednesday when the current body expires and it is replaced by a new Congress chosen at last November's election.


The Senate bill, worked out after long negotiations on New Year's Eve between Vice President Joe Biden and Senate Republican Minority Leader Mitch McConnell, also postpones for two months a $109 billion "sequester" of sweeping spending cuts on military and domestic programs.


It extends unemployment insurance to 2 million people for a year and makes permanent the alternative minimum tax "patch" that was set to expire, protecting middle-income Americans from being taxed as if they were rich.


'IMPERFECT SOLUTION'


The tax hikes do not sit easy with Republicans but conservative senators held their noses and voted to raise rates for the rich because not to do so would have meant increases for almost all working Americans.


"It took an imperfect solution to prevent our constituents from a very real financial pain, but in my view, it was worth the effort," McConnell said.


House Speaker John Boehner - the top Republican in Congress - said the House would consider the Senate deal. But he left open the possibility of the House amending the Senate bill, which would spark another round of legislating.


"The House will honor its commitment to consider the Senate agreement if it is passed. Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members ... have been able to review the legislation," Boehner and other House Republican leaders said in a statement.


Boehner has struggled for two years to get control over a group of several dozen Tea Party fiscal conservatives in his caucus who strongly oppose tax increases and demand that he force Obama to make savings in the Medicare and Social Security healthcare and retirement programs.


A campaign-style event held by Obama in the White House as negotiations with Senate leaders were taking place on Monday may have made it more difficult for Republicans to back the deal. In remarks to a group of supporters that resembled a victory lap, the president noted that his rivals were coming around to his way of seeing things.


"Keep in mind that just last month Republicans in Congress said they would never agree to raise tax rates on the wealthiest Americans. Obviously, the agreement that's currently being discussed would raise those rates and raise them permanently," he said to applause before the Senate deal was sealed.


Obama's words and tone annoyed Republican lawmakers who felt that the Democrat was gloating.


"That's not the way presidents should lead," said Republican Senator John McCain, Obama's rival in the 2008 election.


A deal with the House on Tuesday, while uncertain, would not mark the end of congressional budget fights. The "sequester" spending cuts will come up again in February as will the contentious "debt ceiling," which caps how much debt the federal government can hold.


Republicans may see those two issues as their best chance to try to rein in government spending and clip Obama's wings at the start of his second term.


(Additional reporting by Richard Cowan, Mark Felsenthal, Rachelle Younglai, Kim Dixon and Jeff Mason; Writing by Alistair Bell; Editing by Eric Walsh)



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