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Australia’s Gillard in spoof: Mayans were right, world is ending

CANBERRA (Reuters) – According to Australian Prime Minister Julia Gillard, the Mayans were right and the apocalypse is near.

In a spoof 50-second video appearance promoting a local radio station‘s breakfast show, Gillard provided hair-raising details that she said would come when the world ends this month, as the ancient Mayans calendar predicted.

With the straight face she often uses in a normal press conference, and surrounded by Australian national flags, Gillard addressed viewers as “My dear remaining fellow Australians.”

“The end of world is coming. It wasn’t Y2K, it wasn’t even the carbon price,” said Gillard firmly. “It turns out that the Mayan calendar is true.”

Y2K was the computer glitch feared globally just before the year 2000, while the carbon tax refers to a major controversial policy put forward by her Labour government in 2012.

She went into terrifying details about the end of the world such as “flesh-eating zombies” and “demonic hell beasts”, but then wooed her constituents with promises.

“If you know one thing about me it is this: I will always fight for you to the very end,” she said, but noted that there is also a bright spot.

“At least this means I won’t have to do Q&A again,” she said, referring to an Australian TV show where politicians usually have to face tough questions from the audience.

A spokesman for Gillard said the video, which was uploaded by radio station Triple J on Thursday and has already been viewed more than 232,000 times on YouTube, was simply a spoof.

“It’s just bit of fun,” he told Reuters. “It’s just a bit of humor for the end of the year. Nothing else.”

The video comes out in the wake of a phone hoax in which two Australian presenters from another local radio station called the hospital which is treating Prince William’s wife Kate and posed as Queen Elizabeth and Prince Charles to ask questions about her condition.

(Reporting By Maggie Lu Yueyang, editing by Elaine Lies)

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Trade-offs in raising Medicare eligibility age

WASHINGTON (AP) — Americans are living longer, and Republicans want to raise the Medicare eligibility age as part of any deal to reduce the government’s huge deficits.

But what sounds like a prudent sacrifice for an aging society that must watch its budget could have some surprising consequences, including higher premiums for people on Medicare.

Unlike tax hikes, which spawn hard partisan divisions, increasing the Medicare age could help ease a budget compromise because President Barack Obama has previously been willing to consider it. A worried AARP, the seniors’ lobby, is already running ads knocking down the idea as a quick fix that would cause long-term problems. House Democratic Leader Nancy Pelosi, D-Calif., doesn’t like it either.

But for Republicans seeking more than just tweaks to benefit programs, raising the current eligibility age of 65 has become a top priority, a symbol of their drive to rein in government. If Obama and the GOP can’t agree soon on a budget outline, it may trigger tax increases and spending cuts that would threaten a fragile economic recovery.

Increasing the eligibility age to 67 would reduce Medicare spending by about 5 percent annually, compounding into hundreds of billions of dollars over time. But things aren’t that simple.

“This is a policy change that seems straightforward, but has surprising ripple effects,” said Tricia Neuman, a leading Medicare expert with the nonpartisan Kaiser Family Foundation. “It’s a simple thing to describe, and the justification is that people are living longer, but I don’t think people have thought through the indirect effects.”

Among the cost shifts identified in a Kaiser study:

—Higher monthly premiums for seniors on Medicare. Their costs would go up because keeping younger, healthier 65- and 66-year-olds out of Medicare’s insurance pool would raise costs for the rest. The increase would be about 3 percent when the higher eligibility age is fully phased in.

—Higher premiums for private coverage under Obama’s health overhaul. That’s because older adults would stick with private insurance for two extra years before moving into Medicare. Compared with younger adults, they are more expensive to insure.

—An increase in employer costs because older workers would try to stay on company insurance plans.

—Higher out-of-pocket health care costs for two out of three older adults whose entry into Medicare would be delayed.

The Congressional Budget Office has also projected an increase in the number of uninsured. That possibility becomes more real with populous states like Texas saying they won’t accept the Medicaid expansion in Obama’s health overhaul, which would provide coverage to low-income adults. Then there’s the impact on people with physically demanding jobs, for whom extending their working years may be difficult.

Still, the idea isn’t going away.

Polls show that many Americans are willing to consider raising the age at which people become eligible for Medicare benefits as part of a plan to reduce deficits, even if on the whole it’s still unpopular.

A new Associated Press-GfK poll found that four in 10 back gradually raising the eligibility age, while 48 percent oppose that plan.

Those under age 30 were most supportive, while a clear majority of those between the ages of 30 and 64 were opposed. Seniors were split. Surprisingly, there were no significant differences by political party. Overall, foes of the idea were more adamant, with strong opponents outnumbering strong supporters by 2-1.

U.S. life expectancy has risen by about eight years since Medicare was created in 1965. During the 1980s, Republican President Ronald Reagan and Democratic congressional leaders agreed to gradually increase the age for receiving full Social Security benefits from 65 to 67. But they didn’t touch Medicare eligibility.

Since then, some policy experts have advocated aligning the Medicare and Social Security eligibility ages through a gradual phase-in that would spare those close to retirement.

The idea gained new life when Republicans won the House in 2010, and Budget Chairman Paul Ryan, R-Wis., embraced it. Obama indicated he was open to it during budget talks with Republicans in 2011. But the president quickly retreated, and now says he’s not willing to consider cutting Medicare unless Congress agrees to raise taxes on the wealthy.

The No. 2 Democrat in the House, Maryland Rep. Steny Hoyer, says raising the eligibility age and other cuts “clearly are on the table,” although he doesn’t see much chance for them if Republicans don’t yield on taxes.

For his part, House Speaker John Boehner, R-Ohio, has relented from pursuing other major changes to Medicare, such as privatization. But when it comes to the eligibility age, he is still pushing.

“It’s a structural change but it doesn’t require you to adopt a whole new model,” said Scott Gottlieb, a health policy expert with the business-oriented American Enterprise Institute. “It can be enacted quickly so you get the savings, and it can be phased in so you don’t affect people about to retire.”

AARP and other groups representing older adults are mobilizing against it.

“We are prepared to oppose this one pretty strongly,” said AARP legislative policy director David Certner. “It’s a pretty big deal.”

Raising the eligibility age is not the only Medicare cut in play. Hospitals and other service providers could see reductions in payments, drug companies may owe new rebates to the government and upper-income seniors would face higher monthly premiums. The total package could reach around $ 400 billion over 10 years.

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Wall Street Week Ahead: “Cliff” worries may drive tax selling

NEW YORK (Reuters) – Investors typically sell stocks to cut their losses at year end. But worries about the “fiscal cliff” – and the possibility of higher taxes in 2013 – may act as the greatest incentive to sell both winners and losers by December 31.

The $ 600 billion of automatic tax increases and spending cuts scheduled for the beginning of next year includes higher rates for capital gains, making tax-loss selling even more appealing than usual.

Tax-related selling may be behind the weaker trend in the shares of market leader Apple , analysts said. The stock is down 20 percent for the quarter, but it’s still up nearly 32 percent for the year.

Apple dropped 8.9 percent in this past week alone. For a stock that gained more than 25 percent a year for four consecutive years, the embedded capital gains suddenly look like a selling opportunity if one’s tax bill is going to jump sharply just because the calendar changes.

“Tax-loss selling is always a factor (but) tax-gains selling has been a factor this year,” said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

“You have a lot of high-net-worth individuals in taxable accounts, and that could be what’s affecting stocks like Apple. If you look at the stocks that people have their largest gains in, they seem to be under a little bit more pressure here than usual.”

Of this year’s top 20 performers in the S&P 1500 index, which includes large, small and mid-cap stocks, all but four have lost ground in the last five trading sessions.

The rush to avoid higher taxes on portfolio gains could cause additional weakness.

The S&P 500 ended the week up just 0.1 percent after another week of trading largely tied to fiscal cliff negotiation news, which has pushed the market in both directions.

A PAIN PILL FROM THE FED?

Next week’s Federal Reserve meeting could offer some relief if policymakers announce further plans to help the lackluster U.S. economy. The Federal Open Market Committee will meet on Tuesday and Wednesday. The policy statement is expected at about 12:30 p.m. on Wednesday after the conclusion of the meeting – the Fed’s last one for the year.

Friday’s jobs report showing non-farm payrolls added 146,000 jobs in November eased worries that Superstorm Sandy had hit the labor market hard.

“After the FOMC meeting, I think it’s going to be downhill from there as worries about the fiscal cliff really take center stage and prospects of a deal become less and less likely,” said Mohannad Aama, managing director of Beam Capital Management LLC in New York.

“I think we are likely to see an escalation in profit-taking ahead of tax rates going up next year,” he said.

MORE VOLUME AND VOLATILITY

Volume could increase as investors try to shift positions before year end, some analysts said.

While most of that would be in stocks, some of the extra trading volume could spill over into options, said J.J. Kinahan, TD Ameritrade’s chief derivatives strategist.

Volatility could pick up as well, and some of that is already being seen in Apple’s stock.

“The actual volatility in Apple has been very high while the market itself has been calm. I expect Apple’s volatility to carry over into the market volatility,” said Enis Taner, global macro editor at RiskReversal.com, an options trading firm in New York.

Shares of Apple, the largest U.S. company by market value, registered their worst week since May 2010. In another bearish sign, the stock’s 50-day moving average fell to $ 599.52 – below its 200-day moving average at $ 601.38.

“There’s a lot of tax-related selling happening now, and it will continue to happen. Apple is an example, even (though) there are other factors involved with Apple,” Aama said.

While investors may be selling stocks to avoid higher taxes in 2013, companies may continue to announce special and accelerated dividend payments before year end. Among the latest, Expedia announced a special dividend of 52 cents a share to be paid on December 28.

To be sure, the big sell-off in stocks following the November 6 election was likely related to tax selling, making it hard to judge how much more is to come.

Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said there’s a decent chance that the market could rally before year end.

“Even with little or spotty news that one would put in the positive bucket regarding the (cliff) negotiations, the market has basically hung in there, and I think it’s hung in there in anticipation of something coming,” he said.

(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: caroline.valetkevitch(at)thomsonreuters.com)

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal; Multimedia versions of Reuters Top News are now available for:; 3000 Xtra: visit Reuters Top News; BridgeStation: view story .134; For London stock market outlook please click on .L/O; Pan-European stock market outlook .EU/O; Tokyo stock market outlook .T/O; Wall St Week Ahead runs every Friday.)

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Protesters surge around Egypt’s presidential palace

CAIRO (Reuters) – Tens of thousands of Egyptian protesters surged around the presidential palace on Friday and the opposition rejected President Mohamed Mursi‘s call for dialogue to end a crisis that has polarized the nation and sparked deadly clashes.

The Islamist leader’s deputy said he could delay a December 15 referendum on a constitution that liberals opposed, although the concession only partly meets a list of opposition demands that include scrapping a decree that expanded Mursi‘s powers.

“The people want the downfall of the regime” and “Leave, leave,” crowds chanted after bursting through barbed wire barricades and climbing on tanks guarding the palace of Egypt‘s first freely elected president.

Their slogans echoed those used in a popular revolt that toppled Mursi’s predecessor Hosni Mubarak in February 2011.

Vice President Mahmoud Mekky said in a statement sent to local media that the president was prepared to postpone the referendum if that could be done without legal challenge.

The dialogue meeting was expected to go ahead on Saturday in the absence of most opposition factions. “Tomorrow everything will be on the table,” a presidential source said of the talks.

The opposition has demanded that Mursi rescind a November 22 decree giving himself wide powers and delay the vote set for December 15 on a constitution drafted by an Islamist-led assembly which they say fails to meet the aspirations of all Egyptians.

The state news agency reported that the election committee had postponed the start of voting for Egyptians abroad until Wednesday, instead of Saturday as planned. It did not say whether this would affect the timing of voting in Egypt.

Ahmed Said, leader of the liberal Free Egyptians Party, told Reuters that delaying expatriate voting was made to seem like a concession but would not change the opposition’s stance.

He said the core opposition demand was to freeze Mursi’s decree and “to reconsider the formation and structure of the constituent assembly”, not simply to postpone the referendum.

The opposition organized marches converging on the palace which elite Republican Guard units had ringed with tanks and barbed wire on Thursday after violence between supporters and opponents of Mursi killed seven people and wounded 350.

Islamists, who had obeyed a military order for demonstrators to leave the palace environs, held funerals on Friday at Cairo’s al-Azhar mosque for six Mursi partisans who were among the dead. “With our blood and souls, we sacrifice to Islam,” they chanted.

“ARM-TWISTING”

In a speech late on Thursday, Mursi had refused to retract his November 22 decree or cancel the referendum on the constitution, but offered talks on the way forward after the referendum.

The National Salvation Front, the main opposition coalition, said it would not join the dialogue. The Front’s coordinator, Mohamed ElBaradei, a Nobel peace laureate, dismissed the offer as “arm-twisting and imposition of a fait accompli”.

Murad Ali, spokesman of the Brotherhood’s Freedom and Justice Party (FJP), said opposition reactions were sad: “What exit to this crisis do they have other than dialogue?” he asked.

Mursi’s decree giving himself extra powers sparked the worst political crisis since he took office in June and set off renewed unrest that is dimming Egypt’s hopes of stability and economic recovery after nearly two years of turmoil following the overthrow of Mubarak, a military-backed strongman.

The turmoil has exposed contrasting visions for Egypt, one held by Islamists, who were suppressed for decades by the army, and another by their rivals, who fear religious conservatives want to squeeze out other voices and restrict social freedoms.

Caught in the middle are many of Egypt’s 83 million people who are desperate for an end to political turbulence threatening their precarious livelihoods in an economy under severe strain.

“We are so tired, by God,” said Mohamed Ali, a laborer. “I did not vote for Mursi nor anyone else. I only care about bringing food to my family, but I haven’t had work for a week.”

ECONOMIC PAIN

A long political standoff will make it harder for Mursi’s government to tackle the crushing budget deficit and stave off a balance of payments crisis. Austerity measures, especially cuts in costly fuel subsidies, seem inevitable to meet the terms of a $ 4.8-billion IMF loan that Egypt hopes to clinch this month.

U.S. President Barack Obama told Mursi on Thursday of his “deep concern” about casualties in this week’s clashes and said “dialogue should occur without preconditions”.

The upheaval in the most populous Arab nation worries the United States, which has given billions of dollars in military and other aid since Egypt made peace with Israel in 1979.

The conflict between Islamists and opponents who each believe the other is twisting the democratic rules to thwart them has poisoned the political atmosphere in Egypt.

The Muslim Brotherhood’s spokesman, Mahmoud Ghozlan, told Reuters that if the opposition shunned the dialogue “it shows that their intention is to remove Mursi from the presidency and not to cancel the decree or the constitution as they claim”.

Ayman Mohamed, 29, a protester at the palace, said Mursi should scrap the draft constitution and heed popular demands.

“He is the president of the republic. He can’t just work for the Muslim Brotherhood,” Mohamed said of the eight-decade-old Islamist movement that propelled Mursi from obscurity to power.

(Additional reporting by Omar Fahmy; Writing by Edmund Blair and Alistair Lyon; Editing by Giles Elgood)

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Apple to return some Mac production to U.S. in 2013

SAN FRANCISCO/NEW YORK (Reuters) – Apple Inc plans to move some production of Macintosh computers to the United States from China next year, Chief Executive Tim Cook said in remarks published on Thursday, in what could be a important test of the nascent comeback in U.S. electronics manufacturing.

Apple makes the majority of its products, from Macs to the iPhone and iPad, in China, the world’s factory floor for electronics. But like other U.S. corporations, it has come under fire for relying on low-cost Asian labor and contributing to the decline of the U.S. manufacturing sector.

Cook did not say which Macintosh products will be produced in the United States. But the effort is expected to go well beyond simple final assembly of devices, with Apple and unnamed partners building most or all of the components in the United States as well.

The company will spend more than $ 100 million on the U.S. manufacturing initiative, Cook said in an interview with Bloomberg Businessweek, published on Thursday.

“This doesn’t mean that Apple will do it ourselves, but we’ll be working with people and we’ll be investing our money,” Cook said.

He told NBC’s “Rock Center” program, in an interview to be aired later Thursday, that only one of the existing Mac product lines would be manufactured exclusively in the United States.

Apple declined to comment beyond the interview.

Apple’s decision, hailed by some analysts as an important first step even if it affected a tiny fraction of its overall output, was dismissed by others who saw it as an opportunistic public relations ploy with little effect on jobs.

Some Apple suppliers were struggling to assess its impact.

“At the end of the day, Apple knows moving production to the U.S. means lower profits for Apple,” said a senior executive at Taiwan’s Quanta Computer Inc who declined to be named because of the companies’ business relationship.

“If Apple is really serious about moving production to the U.S., they would need to invest 10 times or even 100 times of that amount. We see only a minor impact on Apple suppliers.”

Cross Research analyst Shannon Cross said it made sense for Apple to bring some manufacturing back to the United States, because some components were already being produced there.

Also, while cheaper labor costs have been a key factor in encouraging U.S. manufacturers to move production to China, wages and other costs have risen sharply – particularly in the main coastal manufacturing centers. Labor costs, moreover, account for only a tiny portion of overall expenses: the research firm iSupply says the total cost, including labor, for final manufacturing of an iPhone 5 is just $ 8.

Experts estimate that the total base cost of all components that go into the gadget, or bill of materials, comes to around $ 200.

Cross pointed to other potential benefits of U.S. manufacturing, including mitigating the risk of intellectual property theft.

Cook has said in the past that he would like to see more of the company’s products assembled back home, but declining U.S. manufacturing expertise made that difficult. Apple makes applications processors for the iPad and iPhone via Samsung Electronics in Austin, Texas, and sources glass for the same devices from a Corning facility in Kentucky.

IHS iSuppli, a research firm that tracks supply chains, said the company now outsources production of notebook personal computers to Taiwan’s Quanta Inc and Foxconn, which also makes the iPhone and iPad, and Pegatron Corp. Foxconn and Quanta have U.S. facilities.

“Apple’s move appears to be a symbolic effort to help improve its public image, which has been battered in recent years by reports of labor issues at its contract manufacturing partners in Asia,” Craig Stice, senior principal analyst for computer systems at His. “However, given Apple’s high profile in the market, the company’s ‘insourcing’ initiative could compel other companies to follow suit and transfer production to the United States over the next few years.”

Apple’s stock rose 1.6 percent on Thursday, a tepid bounceback from Wednesday’s 6.4 percent dive that was its biggest single-day loss in almost four years.

MAKING STRIDES

Analysts say the stock, which has fallen steadily since September, has come under pressure from investors worried about the rapidly intensifying competition from Google Inc’s Android products.

Samsung, in particular, has emerged as a formidable competitor, chipping away at Apple’s dominance in the tablet market and leading the smartphone pack in China, where the U.S. company’s smartphone market ranking fell to No. 6 in the third quarter from No. 4 in the previous three months, research outfit IDC estimates.

Samsung’s stock has climbed 8 percent since the end of September.

Apple’s domestic manufacturing effort will likely buy the brand some goodwill at home, where the debate about off-shoring has heated up as the economy sputters along. It has also come under fire for excessive working hours and dismal conditions at Foxconn’s plants in China, and critics have accused Apple of helping to create a high-stress environment for migrant workers.

Beyond the marketing boost, some analysts said Apple could blaze a trail should it prove that American manufacturing of electronics can be profitable.

“It seems to me like a nice time for Apple to do something,” Gartner analyst Carolina Milanesi said. “If it can be a profitable business, and others follow, then Apple has shown the way.”

Others were skeptical that Apple’s latest move was much more than a symbolic gesture.

“Such a strategy has been used by other companies in the past, which had no actual impact on their outsourcing,” said Li Qiang, director of New York-based China Labor Watch, in an emailed statement.

“The key question is how many jobs (percentage of the entire workforce) and what kind of jobs (production or administration) are to be moved back. I don’t think Apple is ready to relocate a large percentage of its production jobs back to U.S.”

Earlier this year, Google made waves when it announced it would build its Nexus Q home entertainment streaming device – deemed by many analysts to be an experimental product – in the heart of Silicon Valley. Google said it hoped to speed up innovation on the device and improve time-to-market.

Lenovo Group Ltd – China’s largest PC maker – said this year it will move a limited amount of computer manufacturing to North Carolina, to be closer to the market.

“Lenovo’s announcement appears to have flown under the radar,” said Jeffrey Wu, senior analyst for OEM research at IHS.

“Apple is a company that is always in the spotlight, and the company’s image sets the standard in the PC world. If Apple is doing it, will others follow?”

(Additional reporting by Faith Hung in TAIPEI, Lucy Hornby in BEIJING and Lee Chyen Yee in HONG KONG; Editing by Maureen Bavdek, Richard Chang and Ken Wills)

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Spotify gains more listeners and Metallica

(Reuters) – Digital music service Spotify rolled out new features and said it increased the number of active users at a press event that featured a special musical performance by Frank Ocean.

Spotify now has 20 million active users worldwide, up 33 percent in less than six months. The company counts five million people among paying subscribers, a 25 percent increase during the same time period.

Spotify also revealed it has one million paid subscribers in the United States, that it added a Twitter like functionality that allows users to follow one another, and that the rock band Metallica‘s music was now available on the service.

The company made the announcements at a splashy New York event on Thursday that included a conversation between Spotify backer Sean Parker and Metallica drummer Lars Ulrich.

Ulrich’s appearance is notable since his band was one of the leading crusaders against Napster, the digital music sharing company co-founded by Parker more than a decade ago that was a flashpoint for digital rights and artist compensation.

“We have more in common than the whole thing that happened 12 years ago,” said Ulrich about Parker.

Ulrich said the decision to join Spotify coincided with the fact the band now owns its entire catalogs of music.

Spotify, which strikes royalty deals with record labels, has paid more than $ 500 million to the music industry since its launch four years ago – an amount that has more than doubled in the past nine months. It pays roughly 70 percent of its revenue back to rights holders.

“The more music that gets shared the more money goes back to artists,” said Daniel Ek, CEO and co-founder of Spotify.

Spotify is a free on-demand streaming music service that is rising in popularity. People can pay to hear music without interruptions from advertising and the ability to play lists and preferences from any device any time.

The company has struck up a partnership with Facebook – Parker is Facebook’s founding president – that allows listener’s to display their music choices on their personal pages.

Streaming music services such as Spotify and Pandora are being carefully watched by the music industry concerned over the royalty payments.

For example, Pandora is pushing the Internet Radio Fairness Act, which would change how royalties are paid to artists. As of now, online streaming music companies like Pandora pay a different rate to license music than say traditional radio companies.

Many of music’s most notable names like Billy Joel and Rihanna are opposing the proposed change.

(Reporting By Jennifer Saba in New York)

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Men more likely to die of cancer: study

(Reuters) – Not only are men more likely than women to be diagnosed with cancer, men who get it have a higher chance of dying from the disease, according to a U.S. study.

In an analysis of cases of all but sex-specific cancers such as prostate and ovarian cancer, for example, men were more likely than women to die in each of the past ten years, said researchers, whose findings appeared in The Journal of Urology.

That translates to an extra 24,130 men dying of cancer in 2012 because of their gender.

“This gap needs to be closed,” said Shahrokh Shariat from Weill Cornell Medical College in New York, who worked on the study. “It’s not about showing that men are only doing worse and, ‘poor men.’ It’s about closing gender differences and improving health care.”

Using U.S. cancer registry data from 2003 through 2012, Shariat and his colleagues found the ratio of deaths to cancer diagnoses decreased 10 percent over the past decade – but was consistently higher among men than women.

Overall, men with any type of cancer were six percent more likely to die of their disease than women with cancer. When men and women with the same type of cancer were compared, that rose to more than 12 percent.

In 2012, Shariat’s team calculated that about 575,130 men and 457,240 women would be diagnosed with a non-sex specific cancer. Also this year, an estimated 243,620 men will die of cancer – one death for every 2.36 new diagnoses, compared to 182,670 women dying, or one for each 2.5 new diagnoses.

“We found that from the 10 most common cancers in males and females… men present at a higher stage than females, and adjusted for the incidence, are more likely to die from the cancer,” Shariat told Reuters Health.

“If you take an average of the 10 most common cancers, men are more likely to die in seven out of the ten,” he added. In contrast, women are more likely to die only from bladder cancer.

The new study can’t show what’s behind the differences in cancer deaths, but possible theories include men’s higher rates of smoking and drinking combined with less frequent doctor’s visits – which cause men’s cancers to be diagnosed in later, more advanced stages.

Sex hormones may also contribute to differences in men’s and women’s immune systems, metabolism and general susceptibility to cancer, according to Yang Yang, a sociologist and cancer researcher from the University of North Carolina at Chapel Hill, who studies health disparities but wasn’t part of the study.

She said the new findings are consistent with work suggesting a higher risk of death for men from many causes, not just cancer.

But a full understanding of the origins and mechanisms in sex differences in cancer, as well as overall mortality, has remained elusive,” Yang told Reuters Health in an email.

Shariat said men should be particularly proactive about their health care.

“That means going to screening programs, seeing a general practitioner or primary care provider on a regular basis and as soon as symptoms arise that are new, mentioning that to their primary care physicians,” he added. SOURCE: http://bit.ly/Vz8RJI

(Reporting from New York by Genevra Pittman at Reuters Health, editing by Elaine Lies)

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Starbucks agrees to pay more tax

6 December 2012 Last updated at 13:49 ET

Starbucks UK’s Kris Engkov: “We are going to do what’s required beyond the law”

Coffee chain Starbucks has agreed to pay more UK corporation tax, after a public outcry over how little it pays.

Kris Engskov, managing director of Starbucks UK, announced that the company would pay “a significant amount of tax during 2013 and 2014, regardless of whether the company is profitable”.

One tax expert described the move as “unprecedented”.

HM Revenue and Customs reacted by saying that corporation tax “is not a voluntary tax”.

“The public expects businesses to pay their fair share,” the tax authorites added, “and HMRC will challenge, through the courts if necessary, any structures or tax payments that do not comply with the UK tax law.”

But Amazon and Google, also under fire for paying little UK tax, held firm.

The extra tax could amount to £20m over the next two years, Mr Engskov said.

Bill Dodwell, head of tax policy at the accountants Deloitte, told the BBC that he suspected the figure was a “sensible number taking account of the scale of the business and their history of past losses”.

“This is an unprecedented move for a company to announce this sort of change,” he said.

‘Joke’

Starbucks’ announcement comes after much public anger over the revelation of how little corporation tax it pays in the UK, with some people saying they would boycott its outlets.

Continue reading the main story

“Start Quote

Offering to pay some tax if and when it suits you doesn’t stop you being a tax dodger”

End Quote UK Uncut

The company has paid just £8.6m in corporation tax in its 14 years of trading in the UK, and nothing in the last three years, despite UK sales of nearly £400m in 2011.

Starbucks has reported a taxable profit only once in its 15 years of operating in the UK, often reporting losses.

“It is extraordinary,” Stephen Williams, Treasury spokesman for the Liberal Democrats, told the BBC. “People have been joking that some of these multinationals seem to think that paying tax is voluntary. Well Starbucks have just confirmed the joke really.

“Tax is something that is a legal obligation that you should pay according to the tax rules of a particular country. It’s not a charitable donation in order to gain sort of brand value. But that seems to be what Starbucks are doing.”

Continue reading the main story

“Start Quote

I don’t think there will be many people who stop using Google… but the problem for Starbucks is there is a coffee shop on every High Street”

End Quote Richard Bacon Conservative MP

Conservative MP Richard Bacon, who is a member of the Public Accounts Committee, expressed surprise at the move.

“They have recognised the public outrage at the fact that a company as large as Starbucks would… not be paying any corporation tax.

“They have realised that it is a PR problem and it is a PR response. It is nice for the exchequer to have a bit more money, but it is not a long-term solution to the problem that we face.”

Starbucks admitted that the degree of hostility and emotion surrounding the tax issue had “taken us a bit by surprise” and that the move was an attempt to rebuild trust with its customers.

“Since we started doing business here, we have always organised our tax affairs according to the letter of the law,” said Mr Engskov.

“[But] with the backdrop of these difficult times, in the area of tax, our customers clearly expect us to do more,” he said.

Mr Engskov added that the company had found it difficult to make profits in the UK, which has “the most competitive espresso market in the world”, despite “two million customers visiting us each week in hundreds of stores across the UK”.

The extra tax payments will be funded by not claiming “tax deductions for royalties or payments related to our intercompany charges”, Mr Engskov said.

Margaret Hodge, the chair of the Public Accounts Committee, says this is a welcome first step

Mr Dodwell said he thought the coffee chain would not claim some of the deductions they may otherwise have been allowed to claim.

“We don’t know the details – that will be between the company and HM Revenue and Customs,” he said.

More protests

UK Uncut, a group that protests against corporate tax avoidance in the UK, said that Starbucks’ announcement was not enough and that 40 “actions” would take place in Starbucks stores up and down the country.

“There’s no money yet, and hollow promises on press releases don’t fund women’s refuges or child benefits,” the group said. “Offering to pay some tax if and when it suits you doesn’t stop you being a tax dodger. Today’s announcement is just a desperate attempt to deflect public pressure.

“The £10m that Starbucks has estimated it may end up paying is £5m less than that paid by their nearest competitor Costa coffee.”

Starbucks has 760 outlets across the UK and says it contributes “£300m to the UK economy” each year. Rival Costa has 1,479 coffee shops.

In a statement, Amazon said: “Amazon pays all applicable taxes in every jurisdiction that it operates within.”

Continue reading the main story

And Google said: “We comply with all the tax rules in the UK. We make a substantial contribution to the UK economy through local, payroll and corporate taxes.”

Mr Bacon said that Starbucks’ move will likely have an effect on its fellow US giants.

“I suspect what companies do is when they see their name in the public lights and they don’t like it and then they take action,” the MP said. “I don’t think there will be many people who stop using Google… and probably for their Christmas shopping lots of people will still use Amazon.

“But the problem for Starbucks is there is a coffee shop on every High Street.”

Companies pay corporation tax on any profit they make in the UK, not their revenue or takings. Hence, allegations that multinationals move money to other countries to reduce how much tax they pay in the UK.

John Whiting, director at the Chartered Institute of Taxation, told the BBC that Starbucks was trying to protect its image.

“I think what it demonstrates is that companies big or small do care about their reputation,” he said.

“I mean, you can say Starbucks depends on its coffee….but a real key thing they depend on, is what people think about them, the trust. Do they like the image they portray?”

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Toronto mayor to stay in power pending appeal of ouster

TORONTO (Reuters) – Toronto Mayor Rob Ford can stay in power pending an appeal of a conflict of interest ruling that ordered him out of his job as leader of Canada’s biggest city, a court ruled on Wednesday.

Madam Justice Gladys Pardu of the Ontario Divisional Court suspended a previous court ruling that said Ford should be ousted. Ford’s appeal of that ruling is set to be heard on January 7, but a decision on the appeal could take months.

Justice Pardu stressed that if she had not suspended the ruling, Ford would have been out of office by next week. “Significant uncertainty would result and needless expenses may be incurred if a by-election is called,” she said.

If Ford wins his appeal, he will get to keep his job until his term ends at the end of 2014. If he loses, the city council will either appoint a successor or call a special election, in which Ford is likely to run again.

“I can’t wait for the appeal, and I’m going to carry on doing what the people elected me to do,” Ford told reporters at City Hall following the decision.

Ford, a larger-than-life character who took power on a promise to “stop the gravy train” at City Hall, has argued that he did nothing wrong when he voted to overturn an order that he repay money that lobbyists had given to a charity he runs.

Superior Court Justice Charles Hackland disagreed, ruling last week that Ford acted with “willful blindness” in the case, and must leave office by December 10.

Ford was elected mayor in a landslide in 2010, but slashing costs without cutting services proved harder than he expected, and his popularity has fallen steeply.

He grabbed unwelcome headlines for reading while driving on a city expressway, for calling the police when a comedian tried to film part of a popular TV show outside his home, and after reports that city resources were used to help administer the high-school football team he coaches.

The conflict-of-interest drama began in 2010 when Ford, then a city councillor, used government letterhead to solicit donations for the football charity created in his name for underprivileged children.

Toronto’s integrity commissioner ordered Ford to repay the C$ 3,150 ($ 3,173) the charity received from lobbyists and companies that do business with the city.

Ford refused to repay the money, and in February 2012 he took part in a city council debate on the matter and then voted to remove the sanctions against him – despite being warned by the council speaker that voting would break the rules.

He pleaded not guilty in September, stating that he believed there was no conflict of interest as there was no financial benefit for the city. The judge dismissed that argument.

In a rare apology after last week’s court ruling, he said the matter began “because I love to help kids play football”.

Ford faces separate charges in a C$ 6 million libel case about remarks he made about corruption at City Hall, and is being audited for his campaign finances. The penalty in the audit case could also include removal from office.

(Reporting by Claire Sibonney; Editing by Janet Guttsman, Russ Blinch, Nick Zieminski; and Peter Galloway)

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Apple’s shares swallow biggest loss in four years

NEW YORK/SAN FRANCISCO (Reuters) – Apple Inc shares tumbled more than 6 percent on Wednesday, chalking up their biggest single-day loss in four years as fears grow about intensifying competition in the mobile device market.

Investors and analysts blamed the sell-off on a mix of factors, including a forecast by an influential research firm that the iPad maker is continuing to cede ground to rival Google Inc’s Android gadgets, and unconfirmed reports that at least one major stock-clearing house was raising margin requirements on Apple stock trades.

Analysts also cited fears about a hike in the capital gains tax in 2013 in the event that ongoing Washington fiscal negotiations fail, as well as news that Nokia had beat Apple to the punch by striking a deal to sell its flagship Lumia through China Mobile, that country’s largest wireless carrier.

Wednesday’s drop rounded off a bleak 10 weeks for the most valuable U.S. company.

The stock was one of the day’s biggest percentage losers on the S&P 500, shedding $ 35 billion of market value as more than 37 million shares changed hands — blowing past the company’s average daily volume over 50 days of 21 million.

Apple‘s shares, once among the most desirable of portfolio holdings, have headed steadily lower since September on growing uncertainty about the company’s ability to fend off unprecedented competition. This year saw a surge in sales of Amazon.com Inc’s cheaper Kindle Fire and Microsoft Corp’s first foray into the tablet market with its Surface.

Meanwhile, Samsung Electronics continues to chip away at the iPad‘s dominance with its Galaxy line.

The assault on Apple‘s consumer-electronics home turf presents a stiff challenge for CEO Tim Cook, who was elevated shortly before the death of Silicon Valley legend Steve Jobs and is now charged with keeping the world’s largest technology company humming.

“This is not going to be a short-term trend. This is a management test, of how well they can perform without Steve Jobs,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. Referring to Apple‘s new iPad mini, which is only a smaller version of the existing iPad, Battle said the company needs “another home run” for shares to return to levels around $ 700.

“They need another new product that hits it out of the park. Without that, they could get a gradual grind-down in confidence,” he said.

On Wednesday, research firm International Data Corp said Apple most likely shed market share in the tablet computer space in 2012. Its worldwide tablet market share will slip to 53.8 percent in 2012 from 56.3 percent in 2011, while Android products would increase their share to 42.7 percent from 39.8 percent, IDC said.

Concerns that tax rates on dividends and capital gains may rise next year were also cited as contributing to the Apple sell-off.

The stock’s massive market value meant Apple was almost single-handedly responsible for Wednesday’s 1.1 percent decline in the Nasdaq 100 Index.

Apple is still up 33 percent this year, but is down nearly 24 percent from its record high of $ 705.07, hit on September 21. The stock slid more than 6.4 percent on Wednesday to close at $ 538.7923.

BEFUDDLING SLIDE

Some analysts were perplexed at the fall from favor in Apple stock, which has been a staple in almost all growth portfolios. The company is expected to deliver reliably high revenue and earnings expansion for years to come, and one in two tablets sold globally remains an iPad.

It is now gearing up for the introduction of its latest iPhone 5 and iPad mini in international markets. It will begin selling the iPhone 5 in 50 countries in December, including China and South Korea.

“Apple stock is significantly more volatile than its earnings and innovation stream,” said Daniel Ernst, analyst with Hudson Square Research. “And yet the wind blows slightly from the south instead of the east one particular morning, and the stock is down 6 percent.”

“It makes no sense. There are lines around the block for their products all around the world,” he added. “No other company has that.”

Separately, Nokia said it will partner with China Mobile, in a sales deal that will give the Finnish company an opportunity to win back Chinese market share from Apple‘s iPhone.

But some analysts continue to believe the dominant carrier in the world’s largest cellular market will eventually embrace the iPhone as well.

“China Mobile already carries multiple smartphones from multiple vendors. We continue to expect China Mobile to add the iPhone in the back half of 2013,” Piper Jaffray’s Gene Munster wrote in a research note.

While lines for the latest iPad model appeared lighter than usual when it hit stores in November, Apple said at the time that demand was so strong that it “practically sold out of iPad minis.” It sold 3 million of the new iPads — including the full-sized version — in the first three days on the market.

Some analysts suggested that investors also sold shares of Apple amid uncertainty over ongoing fiscal negotiations in Washington. If no agreement is reached on the issue, higher tax rates on dividends and capital gains are possible in 2013.

Investors who had hoped for a special dividend this year, as many other corporations have announced on expectations of higher tax rates next year, may be disappointed as time is running out.

“If you were expecting a special dividend by year end, that’s less likely to happen because its December 5,” said Colin Gillis, an analyst with BGC Partners.

The fear of higher taxes on capital gains also has prompted some investors to lock in profits now, particularly on a stock like Apple, which has posted gains of at least 25 percent for four consecutive years.

“Depending on what happens with the (U.S. fiscal negotiations), rates could rise next year or they could stay the same,” said Battle, of Performance Trust Capital. “They will not be lower, so if you’re an investor who has seen gains in Apple, it is better to take those gains this year rather than next.”

Tax selling “can take a life of its own,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

“Some taxable investors take the gains, that creates some negative momentum, institutional investors are heavily weighted the stock and reduce exposure.”

Some market participants also cited reports by media including CNBC, which Reuters could not confirm, that margin requirements on the trading of Apple stock had been raised by at least one clearing firm.

(Additional reporting by Charles Mikolajczak in New York and Doris Frankel in Chicago; Editing by Bernadette Baum, Andrew Hay, Leslie Adler and Ken Wills)

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Dueling Fiscal Cliff Deceptions

A fog of misinformation has settled on the fiscal cliff, as both House Speaker John Boehner and Treasury Secretary Timothy Geithner have traded conflicting, misleading and false statements in recent days on the president’s deficit-reduction plan:

• Geithner falsely claimed on “Fox News Sunday” that the president’s proposals to slow Medicare growth are “not shifting costs to seniors.” There are four proposals that would increase costs to some seniors by $ 32.9 billion over 10 years, beginning in 2017, including higher premiums and new fees and surcharges.


• Boehner, also on Fox News, wrongly stated that the administration has proposed “$ 400 billion worth of unspecified cuts.” The administration has itemized nearly $ 600 billion worth of what it calls “cuts and reforms to mandatory programs” — half of that from Medicare.


• Geithner exaggerates when he says the ratio of spending cuts to tax increases is “roughly 2 to 1.” The administration’s $ 3 trillion in “spending cuts” includes more than $ 800 billion on two wars financed by deficit spending and already set to end, and tens of billions in new or higher fees and surcharges described as “reforms.”


• Boehner and other GOP leaders claimed in a letter to Obama that the president’s “proposal calls for $ 1.6 trillion in new tax revenue, twice the amount you supported during the campaign.” But the fact is that Obama’s fiscal 2013 budget proposal calls for $ 1.6 trillion in new tax revenues — which his opponent, Mitt Romney, attacked during the campaign.


• Boehner repeatedly (and falsely) says the president’s fiscal 2013 budget plan will create “trillion-dollar deficits for as far as the eye can see.” It’s true the fiscal 2013 deficit is projected to be close to $ 1 trillion, but annual deficits would fall each year thereafter — dropping to $ 488 billion by Obama’s final year in 2017.

There is also much confusion on what exactly is in the president’s plan — despite Geithner’s briefing to Republican leaders and their staffs on Nov. 29.

Boehner says the administration has proposed more in new stimulus spending than it proposes in spending cuts. His office says the new stimulus spending could exceed $ 600 billion but the president proposes only $ 400 billion in spending cuts. The administration tells us that the stimulus package would not exceed $ 200 billion.

Obama’s Plan: Neither Painless nor Lacking Specifics

Geithner and Boehner have been the point men for their respective sides of the fiscal cliff debate.

Geithner briefed Republican leaders on Nov. 29 and made multiple TV appearances on Dec. 2 to talk about the president’s plan — which we detail in our Nov. 30 article, “Facing Facts on Fiscal Cliff.”

Geithner and Boehner both appeared on “Fox News Sunday” and each provided misleading information about the Obama administration’s proposed plan.

Geithner claimed that the president’s deficit reduction plan is about “strengthening Medicare, not shifting costs to seniors.” However, the president’s plan does shift some costs to seniors — mostly to higher-income beneficiaries, but also for all new beneficiaries.

There are four proposals, contained in both the president’s 2011 deficit-reduction plan and his fiscal 2013 budget, that would increase costs to seniors by $ 32.9 billion over 10 years. All four proposals would begin in 2017 — after Obama leaves office:

• Expanded means testing for Medicare Parts B and D Premiums. The administration proposes to increase premiums under Medicare Part B (medical insurance) and D (prescription drugs) for higher-income seniors by 15 percent and freeze the high-income thresholds at current levels “until 25 percent of beneficiaries under parts B and D are subject to these premiums.” In 2012, only 5.1 percent of Part B enrollees and 3 percent of Part D enrollees pay higher premiums based on income, according to the Kaiser Family Foundation. The current thresholds for higher premiums are $ 85,000 for individuals and $ 170,000 for couples. Kaiser estimates that the income thresholds for paying higher premiums by 2035 will be equivalent to about $ 47,000 for individuals and $ 94,000 for couples “in today’s adjusted inflation dollars.” Cost to seniors: $ 28 billion over 10 years (pages 34-35).


• Increased Medicare Part B deductible for new beneficiaries. The administration would increase the deductibles paid by new beneficiaries by $ 25 in 2017, 2019 and 2021. Cost to seniors: $ 2 billion over 10 years (page 35).


• A copay for Medicare home-health care for new beneficiaries. There’s currently no copay. This proposal would create a new copay of $ 100 for each “home health episode.” Cost to seniors: $ 350 million over 10 years (page 35).


• Medicare Part B premium surcharge for new beneficiaries who purchase Medigap coverage. The administration would impose a Part B premium surcharge for new beneficiaries who purchase “near first-dollar Medigap coverage.” Medigap policies cover Medicare’s out-of-pocket expenses, such as copays and deductibles. The administration’s plan says Medigap provides “less incentive” to make cost-efficient health care decisions. Cost to seniors: $ 2.5 billion over 10 years (page 35).

As he made the rounds of the other Sunday talk shows, Geithner gave an accurate — but incomplete — accounting of the president’s Medicare proposals. On “Meet the Press,” for example, Geithner said that “we’re proposing to modestly increase premiums for high income beneficiaries of Medicare.” But he did not mention that the president’s plan also raises costs for all new beneficiaries, not just those with high incomes.

For his part, Boehner twice criticized the administration for failing to provide detailed cuts, claiming the administration “put $ 400 billion worth of unspecified cuts that they’d be willing to talk about.” Geithner said that’s not true, claiming the administration has “proposed $ 600 billion of detailed reforms and savings, to our health care and other government programs.”

Boehner is wrong.

The president’s deficit-reduction plan, as proposed to Congress in September 2011, itemizes “nearly $ 580 billion in cuts and reforms to mandatory programs, of which $ 320 billion is savings from Federal health programs such as Medicare and Medicaid.” Those proposals are also listed in the president’s fiscal 2013 budget proposal in a section, beginning on page 23, titled “Cutting Waste, Reducing the Deficit.”

The Medicare proposals, for example, are a mix of reduced payments to certain providers, including teaching hospitals and post-acute care facilities — as well as the higher premiums and new fees for certain beneficiaries that we mentioned above.

White House spokesman Jay Carney made this point at a press briefing on the day of Geithner’s meeting with Republican leaders.

Carney, Nov. 29: [T]he President has put forward, in September of 2011 with his proposal to the so-called super committee, in his budget in February of 2012, very specific spending cuts, including savings from health care entitlement programs.

Spending Cuts vs. Tax Increases

Geithner and Obama, however, exaggerate the amount of spending cuts in the president’s plan.

On NBC’s “Meet the Press,” Geithner said, “We have laid out a very detailed plan of spending cuts, $ 600 billion dollars in spending in mandatory programs over 10 years.” The president made the same claim in a Dec. 4 interview with Bloomberg News, saying his proposal has “$ 600 billion in additional cuts in mandatory spending.”

It’s true that there’s nearly $ 600 billion in estimated savings from mandatory programs: $ 326 billion in health programs, including Medicare and Medicaid, and $ 254 billion in other programs, such as farm subsidies. But not all of these are “spending cuts,” and the administration’s own deficit-reduction plan doesn’t label them as such — instead calling them a combination of “cuts and reforms.”

There are tens of billions in new fees and surcharges and increased premiums in Medicare alone. Table S-10 of the revised fiscal 2013 budget proposal outlines numerous other new and higher fees under the section titled “Mandatory Initiatives and Savings.”

“Fox News Sunday” host Chris Wallace asked Geithner about the spending cuts-to-tax increase ratio in the president’s plan, and the Treasury secretary replied, “roughly 2 to 1.”

When we asked how Geithner arrived at his 2-to-1 ratio, Treasury told us there is roughly $ 1.6 trillion in new tax revenues (which is not in dispute) and $ 3 trillion in spending cuts — which is not quite 2-to-1, even if you accept the administration’s definition of cuts.

In addition to the $ 600 billion, the list of $ 3 trillion in “spending cuts” provided to us by the administration includes:

• The caps on discretionary spending approved in the Budget Control Act of 2011, which will reduce future spending by an estimated $ 1 trillion. Republicans don’t view these as new spending cuts, because these were approved in exchange for raising the debt ceiling in 2011 and they are not part of the current negotiations.


• An estimated savings of more than $ 800 billion from ending the wars in Iraq and Afghanistan. But as we have written before, Maya MacGuineas, president of the bipartisan Committee for a Responsible Federal Budget, called this a “gimmick,” because the wars were financed by deficit spending and already set to end.


• About $ 600 billion in reduced debt service payments.

The administration’s $ 3 trillion in “spending cuts” also does not take into account its proposal for at least $ 200 billion in new stimulus spending — which, obviously, reduces the net savings.

Treasury declined to give us a detailed list of proposals for new spending, although it did confirm published reports that some of the elements of the stimulus plan could include an extension of the Social Security payroll tax holiday ($ 110 billion), infrastructure spending ($ 50 billion) and an unemployment benefits extension ($ 30 billion).

The Republicans, however, are also playing fast and loose with the facts when they calculate the ratio of spending cuts to tax increases.

In a Dec. 3 letter to the president outlining the GOP counterproposal for deficit reduction, Boehner and other GOP leaders said there is “four times as much tax revenue as spending cuts” in the president’s proposal.

The GOP math works like this: Obama’s proposal includes $ 1.6 trillion in new tax revenue and roughly $ 400 billion in spending cuts. In an email to us, Boehner spokesman Brendan Buck said that “when Sec. Geithner made his proposal to us, the number he used – repeatedly – was $ 400 billion.” However, as we mentioned earlier, on several Sunday talk shows, Geithner said the total savings comes to $ 600 billion over 10 years.

In part, the discrepancy is a matter of language. Republicans are saying “spending cuts” while Democrats are saying “savings,” “reforms” and “spending cuts.” But the more substantial difference between the Democrats’ and Republicans’ spending cuts-to-tax hike ratios is that Republicans do not count the $ 1 trillion in discretionary spending cuts agreed to in the Budget Control Act of 2011. The White House argues those are part of the ongoing negotiations to resolve a deficit crisis. Nor does the GOP include the $ 800 billion “saved” from ending the wars in Iraq and Afghanistan.

Stimulus Spending: How Much?

The two sides also disagree on how much the president’s plan would provide in new stimulus spending.

On Fox, Boehner claimed that “all of this stimulus spending would literally be more than the spending cuts that he was willing to put on the table.” Geithner said that is “not true.”

Who’s right? It’s hard to say since, as we mentioned earlier, the Obama administration has not provided specifics on its stimulus package.

Boehner’s claim assumes, again, that the Democratic plan is for $ 400 billion worth of spending cuts. His office released a comparison of the Obama and GOP plans that shows the administration seeking anywhere from $ 287 billion to $ 617 billion worth of new stimulus. The White House says it is seeking $ 200 billion.

According to the calculations provided by Boehner’s office, the White House offer included $ 110 billion for a payroll tax extension; $ 30 billion for unemployment insurance; $ 27 billion for stimulus tax extenders; $ 25 billion in unpaid expense related to the so-called “doctor fix” to prevent a cut in Medicare payments to doctors; and anywhere from $ 95 billion to $ 425 billion in infrastructure spending. According to Buck, in Geithner’s meeting with Republican leaders, the way White House officials described the infrastructure spending was $ 50 billion in the first year of a multi-year bill, and $ 25 billion above baseline for five years after that. “One could calculate that at $ 425 billion,” Buck said.

A Treasury official told us, however, that Obama’s proposal includes “around $ 200 billion in short-term measures to strengthen the economy and create jobs.”

“This could include a variety of measures such as infrastructure, the payroll tax, unemployment insurance benefits, refinance, and extension of 50 percent of bonus depreciation — and would very likely be a mix of revenues and spending,” the official said. “It’s not possible to allocate these measures until we know what this mix would look like, but it’s unlikely that they would greatly change the ratio. In addition, these are short-term jobs measures that would be in place only on a temporary basis. In thinking about the mix of revenues and spending, it makes more sense to focus on the permanent policies in the package.”

We can’t fact-check what was or was not offered in a closed-door session, but that explains the difference between the stimulus-to-spending cuts ratios cited by the opposing camps.

Double the Revenue?

In their letter to Obama, GOP House leaders also claimed that Obama’s “proposal calls for $ 1.6 trillion in new tax revenue, twice the amount you supported during the campaign.”

Did Obama renege on a campaign promise to raise just $ 800 billion in new revenue, and double his proposal during the fiscal cliff negotiations? In short, no. Obama has not wavered from his 2013 budget proposal, which included roughly $ 1.6 trillion in new revenues over 10 years.

Boehner’s spokesman said that during the campaign Obama only ever talked about allowing the Bush tax cuts to expire for upper-income earners — which would only generate about $ 850 billion.

“The average American (as well as every reporter I’ve quizzed on this) would say that the President campaigned on allowing the top rates expire,” Buck wrote to us in an email. “You’d be hard pressed to find him talking about going beyond that when campaigning. (He also regularly calls on Congress to pass a bill that does nothing more than allow top rates to expire.) That yields about $ 800 billion in revenue. He’s now asking for double that.”

Actually, just raising the rates on the top two income brackets is estimated to generate $ 442 billion over 10 years, according to the president’s budget plan (page 219). But there’s more to the Bush tax cuts than just marginal rates. Allowing all of the Bush tax cuts to expire for upper-income earners — as Obama has proposed — would also include such things as higher capital gains and dividends tax rates. Together, those come to about $ 850 billion.

But there was more revenue than that in Obama’s budget plan. For example, Obama proposed to reduce the value of itemized deductions and other tax preferences to 28 percent for families with incomes over $ 250,000. That is expected to generate $ 584 billion over 10 years — even more than raising the top tax rates (page 220).

It’s true that Obama made little or no mention of those particulars on the 2012 campaign trail — focusing instead on “everybody … doing their fair share” and “a balanced approach that says folks like me can pay a little bit more and go back to the Clinton rates.”

Neither, however, did Obama change course or distance himself from the fuller fiscal plan that he outlined in his budget.

More often, Obama vaguely said, “I’m not going to ask middle-class families to give up their deductions for owning a home, or raising their kids, or sending their kids to college just to pay for another millionaire’s tax cut.” He made no mention of upper-income deductions.

“He was campaigning on what he was asking for in the budget,” said Roberton Williams of the nonpartisan Tax Policy Center. “He may not have outlined the particulars during the campaign. But we always knew that was his plan, and that it was more than just tax rates.”

Mitt Romney knew. In fact, the Republican presidential nominee campaigned against it. In an April 17, 2012, press release, the Romney campaign warned: “In 2013, President Obama Will Usher In ‘One Of The Biggest Tax Increases In History’ By Passing $ 1.5 Trillion In New Tax Hikes.”

In other words, Obama may not have detailed his proposal to reduce the value of itemized deductions and other tax preferences to 28 percent for families with incomes over $ 250,000. That’s quite a mouthful for a campaign speech. But Obama never backed off his 2013 budget plan, which did lay out that proposal, and others, in greater detail.

Trillion-Dollar Deficits?

Lastly, Boehner falsely claimed on “Fox News Sunday” that the president’s budget will create “trillion-dollar deficits for as far as the eye can see.” He repeated the claim at a Dec. 5 press conference.

It’s true that the fiscal 2013 deficit under the president’s proposed budget would be close to $ 1 trillion, but the deficit would fall steadily after that for the next three years — dropping to $ 488 billion by Obama’s final year in 2017, according to the nonpartisan Congressional Budget Office.

Boehner, Dec. 2: We have a debt burden that’s crushing us, and it is — you look at the president’s budget, we’ve got trillion-dollar deficits for as far as the eye can see.

The federal government has run trillion-dollar deficits for four consecutive years, so it’s not partisan hyperbole when he speaks of “a debt burden that’s crushing.” However, he does misstate the facts when he speaks of future deficits.

In its analysis of the president’s proposed budget for fiscal 2013, CBO projects an end to the string of $ 1 trillion deficits in 2013 — but just barely. CBO estimates the deficit at $ 977 billion in 2013 and dropping every year thereafter until it reaches $ 488 billion by 2017. At that point, deficits are projected to rise again — but not reach $ 1 trillion. The highest the deficit would reach from 2014 to 2022 would be $ 728 billion in 2022. (See Table 1.)

– Eugene Kiely and Robert Farley

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Exclusive: HSBC might pay $1.8 billion money laundering fine – sources

NEW YORK/WASHINGTON (Reuters) – HSBC Holdings Plc might pay a fine of $ 1.8 billion as part of a settlement with U.S. law-enforcement agencies over money-laundering lapses, according to several people familiar with the matter.

The settlement with Europe’s biggest bank – which could be announced as soon as next week – will likely involve HSBC entering into a deferred prosecution agreement with federal prosecutors, said the sources, who spoke on condition of anonymity.

The potential settlement, which has been in the works for months, is emerging as a test case for just how big a signal U.S. prosecutors want to send to try to halt illicit flows of money moving through U.S. banks.

An HSBC spokesman said: “We are cooperating with authorities in ongoing investigations. The nature of discussions is confidential.”

HSBC said on November 5 that it set aside $ 1.5 billion to cover a potential fine for breaching anti-money laundering controls in Mexico and other violations, although Chief Executive Stuart Gulliver said the cost could be “significantly higher.

In regulatory filings, HSBC has said it could face criminal charges. But similar U.S. investigations have culminated in deferred prosecution deals, where law-enforcement agencies delay or forgo prosecuting a company if it admits wrongdoing, pays a fine and agrees to clean up its compliance systems. If the company missteps again, the Justice Department could prosecute.

A deferred prosecution agreement could raise questions over whether HSBC is simply paying a big fine and nothing more, said Jimmy Gurule, a former enforcement official at the U.S. Treasury.

It would make a “mockery of the criminal justice system,” said Gurule, who is now a University of Notre Dame law-school professor.

In his view, the only way to really catch the attention of banks is to indict individuals.

“That would send a shockwave through the international finance services community,” Gurule said. “It would put the fear of God in bank officials that knowingly disregard the law.”

An HSBC settlement, long rumored, has been slow in coming. Inside the Justice Department, prosecutors in Washington, D.C. and West Virginia argued over how to best investigate HSBC. According to documents reviewed by Reuters, the U.S. Attorney’s office in Wheeling, West Virginia, was prepared as far back as 2010 to indict HSBC and include more than 170 money laundering counts.

Prosecutors in Washington ultimately took charge.

In July, the U.S. Senate Permanent Subcommittee on Investigations released a report saying HSBC allowed clients to move shadowy funds from Mexico, Iran, the Cayman Islands, Saudi Arabia and Syria.

The use of deferred prosecution agreements has surged in recent years because Justice Department officials believe they give prosecutors an option aside from indicting a company or dropping a case.

According to a report in May by the Manhattan Institute for Policy Research, a conservative-leaning think tank, there have been 207 deferred or non-prosecution agreements since 2004.

The agreements “have become a mainstay of white collar criminal law enforcement,” U.S. Assistant Attorney General Lanny Breuer said in September during an appearance at the New York City Bar Association.

“I’ve heard people criticize them and I’ve heard people praise them. DPAs have had a truly transformative effect on particular companies and, more generally, on corporate culture across the globe.”

If U.S. prosecutors agree to a deferred agreement, they still could wield a powerful legal tool by accusing the bank of laundering money.

That would be a much more serious charge than if prosecutors, in a deferred agreement, charged HSBC with criminal violations of the Bank Secrecy Act, a law that requires banks to maintain programs that root out suspicious transactions.

In March 2010, for example, Wells Fargo & Co’s Wachovia entered into a deferred prosecution agreement to pay $ 160 million as part of a Justice Department probe that examined how drug traffickers moved money through the bank. Wachovia was accused of violating the Bank Secrecy Act, a decision that prompted criticism from some observers who thought a money laundering charge should have been employed and individual bankers prosecuted.

A charge of money laundering would be a rare move by the Justice Department and would send a signal to other big banks that the agency is intent on cracking down on dirty money moving through the U.S. financial system.

(This story corrects month the Senate report was published to July in paragraph 13)

(Reporting by Carrick Mollenkamp and Brett Wolf; Additional reporting by Emily Flitter and Aruna Viswanatha)

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Amazon launches Kindle content service for kids

NEW YORK (AP) — Amazon is launching a subscription service for children’s games, videos and books aimed at getting more kids to use its Kindle Fire tablet devices.

Amazon.com Inc. plans to announce Wednesday that the Kindle FreeTime Unlimited service will be available in the next few weeks as part of an automatic software update.

Amazon said subscribers will have access to “thousands” of pieces of content, though the company did not give a specific number. Kids will be able to watch, play and read any of the content available to them as many times as they want. Parents can set time limits, however.

The service, aimed at kids aged 3 to 8, will cost $ 4.99 per month for one child. It’ll cost $ 2.99 per child for members of Amazon Prime, the company’s premium shipping service. Amazon Prime costs $ 79 per year for free shipping of merchandise purchased in the company’s online store.

Family plans for up to six kids will cost $ 9.99 per month and $ 6.99 for Prime members.

The Kindle already allows for parental controls through its FreeTime service. Parents can set up profiles for up to six children and add time limits to control how long kids can spend reading, watching videos or using the Kindle altogether. With the content subscription service, kids can browse age-appropriate videos, games and books and pick what they want to see. They won’t be shown ads and will be prevented from accessing the Web or social media. Kids also won’t be able to make payments within applications.

Amazon is launching the service as competition heats up in the tablet market among Apple, Barnes & Noble, Microsoft and Samsung. Amazon’s strategy is to offer the Kindle at a relatively low price and make money selling the content.

Offering a subscription service aimed at kids helps set the Kindle apart from its many competitors.

“We hope that our devices are really, really attractive for families,” said Peter Larsen, vice president of Amazon’s Kindle business.

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Countries With the Greatest Use of High-Fructose Corn Syrup Also Have More Diabetes

The soaring rates of diabetes in the United States and many other developed countries over the past three decades has been generally blamed on obesity. We’re getting fatter, and that puts us at risk for developing diabetes. But a new theory suggests that the diabetes epidemic is not just a matter of eating too much and moving too little. It could have more to with some components  of our diet.

High-fructose corn syrup, that staple of many soft drinks and packaged snack foods, is associated with a higher prevalence of diabetes regardless of obesity, according to a new study. The paper raises the question of whether our bodies respond to a steady diet of high-fructose corn syrup by becoming resistant to insulin and developing the inability to process sugar—which results in diabetes.

The paper strikes at the heart of an ongoing controversy in the nutrition world about whether high-fructose corn syrup is just another sugar, like it’s cousin sucrose, or acts differently in the body. That debate is far from settled.

MORE: FDA Says No to Corn Sugar

“It’s controversial,” Dr. Michael I. Goran, professor of preventive medicine at the University of Southern California and a co-author of the paper, told TakePart. “There are strong feelings on both sides.”

Goran’s paper, co-authored with researchers from the University of Oxford, found that countries that use high-fructose corn syrup in their food supply had a 20 percent higher prevalence of diabetes than countries that did not use the substance. Even when researchers controlled for obesity rates and total sugar intake, the presence of high-fructose corn syrup in the diet significantly boosted diabetes rates. The paper appears in the journal Global Public Health.

“Fructose may contribute to obesity and obesity contributes to diabetes. We are not denying that,” says Goran, director of the Childhood Obesity Research Center and codirector of the Diabetes and Obesity Research Institute at the Keck School of Medicine at USC. “But not all obese people are diabetic. On top of that, there is an independent affect of fructose on diabetes over and above what you get from obesity.”

The authors examined data from 42 countries. The United States has the highest per capita consumption of high-fructose corn syrup at 55 pounds per year. The second highest is Hungary, with an annual rate of 46 pounds, per capita. Canada, Slovakia, Bulgaria, Belgium, Argentina, Korea, Japan and Mexico are also heavy users of the substance.

MORE: High-Fructose Diet Makes You Stupid

Countries that have lower consumption rates include Germany, Poland, Greece, Portugal, Egypt, Finland and Serbia. And countries that average only about one pound per person annually include Australia, China, Denmark, France, India, Ireland, Italy, Sweden, the United Kingdom, and Uruguay.

The study found that countries with higher use of high-fructose corn syrup had an average prevalence of type 2 diabetes of 8 percent compared to 6.7 percent in countries not using the sugar.

About 6.4 percent of the world’s population is diabetic, a rate that is expected to rise to 7.7 percent by 2030, according to the paper. In the United States, 8.3 percent of adults are diabetic.

“What was different about our study is we took a much broader, macro look at the issue,” Goran says. “We did that because there is no other good way to look at it. It’s really impossible to know how much is consumed by an individual because it’s so ubiquitous in the food supply and in unknown amounts.”

MORE: Government Subsidizes Junk Food More Than Produce

The study has limitations, he notes. The research only looks at high-fructose corn syrup produced in that country and does not take into account imports.

High-fructose corn syrup is a manmade sweetener that is a popular ingredient in processed foods like ketchup, crackers, cookies and salad dressings. It’s found in many types of soft drinks. According to the U.S. Department of Agriculture, domestic production of the substance increased from 2.2 million tons in 1980 to an average of 9.2 million tons during the 2000s “as high fructose corn syrup replaced more expensively priced sugar in a variety of uses.”

Diabetes rates in the United States began to climb at about the same time that high-fructose corn syrup began playing a bigger role in the food supply. But how high-fructose corn syrup might contribute to diabetes is unknown. Some nutritionists contend that the substance is chemically similar to table sugar and is metabolized similarly in the body. But others say that high-fructose corn syrup causes a different biological reaction than does exposure to sugar. Fructose is also sweeter, which may lead consumers to crave it more or consume more of a food item containing fructose.

“Even in the scientific community, I hear people say all the time that there is no difference” between fructose and sucrose, Goran says. “They are clearly not identical. The next question is how they are different? One of the main things that make them different is in their most popular form, high-fructose corn syrup has more fructose in it, at least 10 percent more. The higher fructose makes it sweeter, so people will probably consume more of it. It’s cheaper to make and you need to add less.”

MORE: Sugar Shock: 9 Drinks Worse Than a Candy Bar

The food industry is sensitive to the idea that fructose is somehow worse than sugar. In a statement, the Corn Refiners Assn., said the study “uses a severely flawed statistical methodology and ignores well established medical facts to ‘suggest’ a unique link between high fructose corn syrup (HFCS) and type 2 diabetes…Most importantly, Dr. Goran’s newest attack on HFCS fails to account for widespread agreement among scientists and medical doctors that HFCS and sucrose (table sugar) are nutritionally equivalent.” 

High-fructose corn syrup is eyed suspiciously be some consumers, however. In May, the Food and Drug Administration turned down a request by the Corn Refiners Assn. to allow them to use the term “corn sugar” on labels instead of high-fructose corn syrup.

Goran is in favor of stricter labeling regulations regarding high-fructose corn syrup. The type of sugar in a product should be clearly labeled in the same way that various types of fats are specified on food labels, he argues.

“Trans fat labeling is a good analogy,” he says. “The public totally buys into the trans fat thing. Trans fats are bad and omega 3 fats are good. You don’t need to understand the chemistry of that. It’s just good fat and bad fat. I think the label should indicate the amount of fructose and let the consumer decide.”

Question: Is high-fructose corn syrup worse than regular table sugar? Tell us what you think in the comments?

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Shari Roan is an award-winning health writer based in Southern California. She is the author of three books on health and science subjects.

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The U.S.-China Cold War Over Accounting

U.S. regulators are cracking down on Chinese companies for issuing misleading financial reports. But the feds have been stymied so far by a wall of resistance to U.S. accounting rules—and not just from the companies.

The Securities Exchange Commission on Dec. 3 formally accused the Chinese affiliates of the Big Four accounting firms of violating U.S. law. The issue at hand: failure to provide documents in ongoing accounting fraud investigations of nine U.S.-listed, China-based companies.

Ernst & Young Hua Ming, Deloitte Touche Tohmatsu Certified Public Accountants, KPMG Huazhen, and PricewaterhouseCoopers Zhong Tian CPAs have been charged “with violating the Securities Exchange Act and the Sarbanes-Oxley Act, which requires foreign public accounting firms to provide the SEC upon request with audit work papers involving any company trading on U.S. markets,” said a statement on the SEC website. The SEC also named a fifth U.S. firm, BDO China Dahua.

“Only with access to work papers of foreign public accounting firms can the SEC test the quality of the underlying audits and protect investors from the dangers of accounting fraud,” SEC Enforcement Director Robert Khuzami said in a prepared statement. “Firms that conduct audits knowing they cannot comply with laws requiring access to these work papers face serious sanctions.”

Over the past two years, the SEC has audited scores of Chinese firms amid concerns that many are issuing financial statements that don’t reflect their real operations. The alleged violations include overstating revenue and profit. Many of them have listed on U.S. exchanges through so-called reverse mergers—when a company buys a largely inactive shell company that already has a listing and so can avoid strict disclosure requirements. To date, the SEC has deregistered almost 50 companies, including China MediaExpress Holdings, and launched fraud investigations against more than 40 issuers and company executives.

The investigations, however, have faced serious obstacles to gathering evidence within China. Beijing’s attitude has been that its own accounting system is fully adequate and that there is no need for the U.S. to conduct its own probe. And China’s security regulators and finance officials have been loathe to participate in any joint investigation.

The international accounting firms, for their part, say compliance with SEC demands would mean breaking Chinese law. “The fact that the action is being taken collectively against all of the four largest audit firms and one other firm demonstrates that this is a profession-wide issue,” Caroline Nolan, a PricewaterhouseCoopers spokeswoman, said in an e-mail statement. “For its part, PwC China has cooperated with the SEC at every opportunity. However, PwC China will, and must, comply with its legal obligations under China law.”

“Ernst & Young Hua Ming supports close working relationships between regulators to enable them to cooperate and share information with one another,” Will White, director of global and EMEIA media relations for Ernst & Young, said in an e-mail statement. “We hope that an agreement can be reached between U.S. and Chinese regulators that will enable our compliance with all applicable laws and regulations.”

The issue is also tied up with China’s historic resistance to perceived foreign meddling in its internal affairs, says Paul Gillis, a professor at Peking University’s Guanghua School of Management and an expert on China’s accounting standards. National security has also been raised as a possible concern by Beijing. This makes any resolution even less likely, and the impasse could eventually lead to the delisting of all Chinese companies in the U.S., predicts Gillis.

“The U.S. is looking at this in terms of its own laws and regulations,” says Gillis, who maintains a blog on China accounting. “China is approaching this issue more ideologically, from a national sovereignty issue. This involves Chinese views of foreign oppression going all the way back to the Opium Wars and Japanese occupation. The idea of foreigners pushing around Chinese is deeply offensive.”

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