Asian shares firm as China, U.S. data brighten outlook

SINGAPORE (Reuters) - Asian shares clambered to a 16-month high on Monday as investors took heart from economic data from China and the United States that raised hopes about the outlook for growth in the world's top two economies.

The euro was under pressure, having been knocked by the prospect of a recession in Germany and political uncertainty in Italy after Prime Minister Mario Monti, an investors' favorite, said at the weekend he intended to resign early.

MSCI's broadest index of Asia Pacific shares outside Japan <.miapj0000pus> and Tokyo's Nikkei share average <.n225> both gained 0.3 percent. <.t/>

The MSCI index rose more than 1 percent last week, its third successive weekly gain, taking it to levels not seen since early August 2011, and there was a further boost for regional markets on Sunday when China reported a pick-up in factory output and retail sales growth to eight-month highs.

"We had some really good economic data coming out from China," said Juliana Roadley, market analyst at Commonwealth Securities. "Over the last few years, you had the Chinese government pulling back on growth and trying to control things so that it didn't over-boil. Now it looks like all that good work has been done."

Hopes that China's economy is revving up again after seven straight quarters of slowing growth also boosted riskier assets such as oil and copper.

Asian "risk" markets took in their stride China trade data on Monday that showed both imports and exports below forecasts.

"The export slowdown shows external demand faces uncertainty due to concerns over the fiscal cliff in the US," Zhang Zhiwei, chief China economist at Nomura in Hong Kong, said. "Nonetheless it does not change our view that growth is on track for a strong recovery in Q4, as (growth) is mostly domestically driven."

On Wall Street, the Dow <.dji> and S&P 500 <.spx> had risen modestly on Friday after an unexpected fall in the U.S. unemployment rate. S&P 500 futures were up 0.1 percent on Monday. <.n/>

MARKETS WATCH ITALY

The euro slid in early trading towards a two-week low of $1.2876 plumbed on Friday, before popping back above $1.29. Investors had sold the euro after Germany's central bank on Friday warned that the euro zone's biggest economy could soon enter recession.

Italian Prime Minister Monti's surprise announcement at the weekend came a few days after former Prime Minister Silvio Berlusconi abruptly withdrew support for Monti's technocrat government, formed over a year ago in an effort to restore Italy's credibility with investors.

"If Monti's pro-euro stance is to back off, that should raise concerns about the euro," said Junya Tanase, chief currency strategist at JPMorgan Chase in Tokyo.

Italian bond yields will be closely watched on Monday. The 10-year yield, the main barometer of investor confidence, stood at 4.5 percent at the end of last week, 323 basis points higher than the yield on the lower risk German equivalent but well below the 7.3 percent peak hit last year, when the spread over German Bunds hit 550 points.

The U.S. dollar rose about 0.3 percent against a basket of major currencies <.dxy>.

Commodity markets were also generally firmer, with copper, which draws strength from expectations of Chinese industrial demand, rising 0.2 percent to around $8,050 a metric ton (1.1023 tons) and oil rising around 0.3 percent.

Brent crude trade around $107.40 a barrel and U.S. crude fetched about $86.20.

"Investors are slightly more optimistic about China's economic recovery than before and that is supportive for oil," said Ken Hasegawa, a commodity sales manager at Newedge Japan.

The easy outlook for monetary policy continued to support gold, with the U.S. Federal Reserve expected to signal this week it will continue to pump money into the economy in 2013. Also, there was talk of a possible rate cut next year by the European Central Bank.

Spot gold firmed 0.1 percent to around $1,705 an ounce.

(Additional reporting by Thuy Ong in Sydney and Manash Goswami in Singapore; Editing by Richard Borsuk)

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Memo From Italy: In Italy, Mario Monti Morphs From Technocrat to Politician

ROME — For months, he had flirted with the idea of staying out of politics, but in the end former Prime Minister Silvio Berlusconi just could not resist. His statement on Saturday that he would seek office again out of a sense of “responsibility” for Italy effectively ended the mandate of Prime Minister Mario Monti, who said he would step down after Parliament passes a budget bill this month.

Mr. Monti’s surprise announcement on Saturday raised the prospect of more political uncertainty and market turmoil for Italy, Europe’s fourth-largest economy, in what is expected to be a gloves-off political campaign. But it also increased the possibility that Mr. Monti might run as a candidate — a shift from the role of an apolitical leader — who is open to governing if no clear winner emerges from elections expected as soon as February.

Three years into Europe’s debt crisis, the new developments in Italy underscored the clash between the economically sound and the politically sustainable. While Mr. Monti, an economist and a former European commissioner, has reassured investors and helped keep Italian borrowing rates down, the tax increases and spending cuts passed by his Parliament have eroded lawmakers’ standing with voters.

Mr. Monti’s grasp of economics and experience in European politics made him a power broker who took regular calls from the White House and worked with France and Spain to wring euro-zone concessions from a reluctant German chancellor, Angela Merkel.

“He’s ushered in a turning point in Italian politics and has been a major influence in Europe,” said Thomas Klau, director of the Paris office of the European Council on Foreign Relations. “He has helped turn Italy into a serious country again in the eyes of foreign investors and also many of its own citizens.”

Even if Mr. Monti decides not to run as a political candidate, his decision to step down sets the stage for a battle that pits him — a subtly ironic technocrat who attended Wagner’s “Die Lohengrin” at La Scala on Friday — against Mr. Berlusconi, who made his announcement at the training site of his soccer team, A. C. Milan.

“The war will be between Monti and Berlusconi,” said Massimo Franco, chief political commentator for the newspaper Corriere della Sera. “The moderate votes are in play, not the leftist ones.”

Although Mr. Berlusconi said he was motivated by a sense of responsibility, European leaders and market analysts immediately accused him of the opposite. Martin Schulz, president of the European Parliament, called his return to politics “a threat for Italy and Europe,” the ANSA news agency reported.

With the aid of Mario Draghi, president of the European Central Bank, Mr. Monti calmed the financial markets this year, but investors and European leaders now worry that many of Mr. Monti’s initiatives could be undone by future governments.

In an interview with the business newspaper Il Sole 24 Ore, José Manuel Barroso, president of the European Commission, said that Italy was at risk of being hit by deeper financial problems. “The next elections must not serve as a pretext for putting in doubt how indispensable these measures are,” he said. “The relative calm on the markets does not mean we are out of the crisis.”

Analysts said that Mr. Monti’s decision to step down ahead of schedule was aimed at preventing Mr. Berlusconi from running a campaign that undermined him. Mr. Berlusconi, always attuned to the national mood, even of voters increasingly weary of him, now looks poised to run a populist campaign that will criticize Mr. Monti for foisting unpopular measures on Italians and that may attack the adoption of a single currency for eroding Italian sovereignty.

Stepping down now, rather than early next year, as was expected, also puts Mr. Monti in the fray. “Monti becomes a politician at this point,” said Stefano Folli, a political columnist for Il Sole 24 Ore. “If Monti helps create a space on the ballot for an electoral alliance that recognizes the seriousness of what has been achieved, this could create a new political balance. That’s the challenge.”

Polls show that the center-left Democratic Party is likely to place first in elections, but without enough votes for a majority. But the party remains divided over which ally to choose to form a government.

Mr. Berlusconi is expected to secure enough votes to stay in Parliament and keep his immunity from prosecution in various trials, but not enough votes to govern.

“It is extremely unlikely that we will see a dynamic unfolding which would bring Mr. Berlusconi back to power,” Mr. Klau said. “So even if Mr. Monti were to leave the political stage for good, we would not go back to the political situation we were in before.”

Although Parliament has blocked some of the measures on Mr. Monti’s agenda — in recent weeks, lawmakers have proposed more than 1,500 amendments to the budget bill — the budget is likely to be approved, as is a law that requires Italy to balance its budget each year.

But analysts said that other changes aimed at improving Italy’s competitiveness were at risk. And before the end of the legislative session this month, lawmakers must also vote on a bill that would simplify the tax code, another meant to streamline the cumbersome bureaucracy and a measure that to allow the Ilva steel plant — a major economic engine for Italy — to stay open while it modernizes to meet environmental standards.

As the debt crisis has lingered, such local issues, as well as Italy’s chaotic political system, have taken on international importance.

On Sunday, Ferruccio de Bortoli, the editor in chief of Corriere della Sera, offered his review of the political drama: “The ‘Lohengrin’ at La Scala ended in applause. The Italian tragedy continues. The libretto still needs writing, so does the music. The guaranteed audience is international, but unfortunately not terribly forgiving about the cast. The curtain never falls.”

Reporting was contributed by Elisabetta Povoledo from Rome, Stephen Castle from London and Jack Ewing from Frankfurt.

This article has been revised to reflect the following correction:

Correction: December 9, 2012

An earlier version of this story stated that the the Ilva steel plan was responsible for 8 million euro. The correct number was 8 billion euro.

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In giant “garage sale”, Japan’s TV giants hawk $3 billion of assets

TOKYO (Reuters) – Panasonic Corp, Japan‘s struggling maker of Viera brand TVs, owns more than 10 million square meters of office and factory space, dormitories for its workers and sports facilities for its rugby, baseball and women’s athletics teams.

As it battles for Christmas shoppers’ wallets in the year-end holiday season, the sprawling electronics conglomerate is also seeking buyers for some of those properties to trim its fixed costs and improve cashflow at a time of intense competition, particularly from South Korean rivals such as Samsung Electronics Co.

Japan’s other troubled TV makers, Sony Corp and Sharp Corp, are also selling buildings and businesses in a giant ‘garage sale’ that could raise a combined $ 3 billion.

Panasonic plans to raise $ 1.34 billion from offloading property and shares in other Japanese companies by end-March, the group’s chief financial officer Hideaki Kawai told Reuters.

“We have a lot of land and buildings in Japan and overseas,” he said in an interview at the company’s head office in Osaka, in western Japan. He declined to list which properties would go on the block, but said most are in Japan.

Included is a 24-storey central Tokyo block – built in 2003 with more than 47,300 square meters and housing 2,000 Panasonic workers – a source familiar with the plan told Reuters.

Kawai added that Panasonic would raise about a quarter of the sell-off funds by getting rid of shares it owns in other companies – a common practice of cross-shareholdings in Japan.

The proceeds would help bolster free cashflow to 200 billion yen ($ 2.43 billion) for the business year to March, Kawai said, and allow Panasonic to reduce its debt and maintain its crucial research and development effort as it revamps its business portfolio.

It will sell more assets in the year starting in April if cashflow dips below 200 billion yen, Kawai added. Panasonic President Kazuhiro Tsuga has promised to shut or sell businesses operating at below a 5 percent margin. Those sales could start as soon as April.

Panasonic’s fixed assets of $ 21 billion are around 30 percent more than those of Apple Inc, and are almost double the company’s market value. The company, founded almost a century ago as a small electrical extension socket maker, trades at around half its book value – which includes intangible assets such as patents. Sony trades at 39 percent of book, Sharp at 30 percent.

The fixed assets – buildings, land and machinery – of the three companies that were not so long ago a byword for innovation in household gadgetry total around $ 42 billion, while their combined market value is $ 24 billion.

CASHFLOW IS KING

The three firms have been downgraded by credit ratings agencies, making it tougher to raise funding on capital markets, and making asset sales more urgent.

Selling assets “is good in terms of their credit ratings because, for all three, it will lower fixed costs and they can reduce their capex requirements. Eventually, this could improve operating margins and, more importantly, cashflow,” said Alvin Lim, an analyst at Fitch Ratings in Seoul.

Fitch, which makes its ratings without input from company management, last month cut Panasonic to BB and Sony to BB minus, the first time one of the major agencies has relegated either company to junk status. Sharp is ranked B minus, adding to its borrowing costs.

“We rate Panasonic as investment grade, and it should have various funding options. Selling assets it can do without, to avoid raising additional borrowing, can be an option,” said Osamu Kobayashi, an analyst at Standard & Poor’s.

While Korean rivals have also benefited from a weaker local currency, data from the Japan Electronics and Information Technology Industries Association shows that Japanese production of consumer electronic equipment fell to just above $ 15 billion last year from more than $ 19 billion a decade ago. Output in September was just $ 980 million, half last year’s level.

“The gap with Korean makers seems to be widening. It’s going to be very difficult for them to regain their top-tier position,” said Fitch’s Lim.

As the three Japanese firms, all under new leadership, have sketched out restructuring plans, the cost of insuring their debt against defaulting in 5 years has dropped from spikes just a month ago. Credit default swaps for Sharp and Sony are down to levels last seen 3 months ago, while Panasonic’s have dropped 40 percent in the past month.

THREE PATHS

While Panasonic is looking to revamp its business around batteries, auto parts and household appliances, Sony is doubling down on smartphones, gaming and cameras. Sharp, meanwhile, is focusing on display screens and is forging alliances with the likes of Taiwan’s Hon Hai Precision Industry and U.S. chipmaker Qualcomm Inc.

Sony may also take the real estate sale route to raise much-needed cash, with a possible sale of its 37-storey New York headquarters, dubbed by New Yorkers as the ‘Chippendale’ because of its design that is reminiscent of the period English furniture. Selling that jewel could raise $ 1 billion, media have reported.

The maker of Vaio laptops, PlayStation gaming consoles and Bravia TVs may also sell its battery business, which makes lithium ion power packs for tablets, PCs and mobile phones. The company has been approached by investment banks offering to sell the unit, which employs 2,700 people and has three factories in Japan and two overseas assembly plants. Sony values the business’s fixed assets at $ 636 million.

Potential buyers could include BYD Co Ltd, a Chinese carmaker backed by billionaire investor Warren Buffett, and Taiwan’s Hon Hai – which part owns Sharp’s advanced LCD panel plant in Sakai, western Japan, and is in talks to buy TV assembly plants in China, Malaysia and Mexico for $ 667 million, Japan’s Sankei newspaper has reported.

Sharp has mortgaged nearly all its properties to secure a $ 4.6 billion bailout from Japanese banks and so has few assets to offer in a grand garage sale.

Instead, it’s selling part of the garage.

Qualcomm has agreed to buy a 5 percent stake in Sharp, making it the largest shareholder. Hon Hai, which earlier this year agreed to invest in Sharp – before its stock slumped in the wake of record losses – has said it remains interested in taking a stake.

“Whatever they can get to get through this fiscal period by scaling down their operation is a critical step for them to remain afloat,” said Fitch’s Lim.

($ 1 = 82.4700 Japanese yen)

(Additional reporting by Reiji Murai; Editing by Ian Geoghegan)

Tech News Headlines – Yahoo! News

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

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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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Morsi Extends Compromise to Egyptian Opposition

Tara Todras-Whitehill for The New York Times

Protesters against President Mohamed Morsi next to a destroyed barricade near the presidential palace in Cairo on Saturday. More Photos »

CAIRO — Struggling to quell violent protests that have threatened to derail a referendum on an Islamist-backed draft constitution, President Mohamed Morsi of Egypt moved Saturday to appease his opponents with a package of concessions hours after state news media reported that he was moving toward imposing a form of martial law to secure the streets and allow the vote.

Mr. Morsi did not budge on a critical demand of the opposition: that he postpone the referendum set for next Saturday to allow a thorough overhaul of the proposed charter, which liberal groups say has inadequate protection of individual rights and provisions that could someday give Muslim religious authorities new influence.

But in a midnight news conference, his prime minister said Mr. Morsi was offering concessions that he had appeared to dismiss out of hand a few days before. The president rescinded most of his sweeping Nov. 22 decree that temporarily elevated his decisions above judicial review and drew tens of thousands of protesters into the streets calling for his downfall. He also offered a convoluted arrangement for the factions to negotiate constitutional amendments this week that would be added to the charter after the vote.

Taken together, the announcements, rolled out over a confusing day, appeared to indicate the president’s determination to do whatever it takes to get to the referendum, which his Islamist supporters say will lay the foundation of a new democracy and a return to stability.

Amid growing concerns among his advisers that the Interior Ministry might be unable to secure either the polls or the institutions of government in the face of renewed violent protests, the state media reported early Saturday that he would soon order the armed forces to keep order and authorize its solders to arrest civilians.

In recent days, mobs have attacked more than two dozen Muslim Brotherhood offices and ransacked the group’s headquarters, and more than seven people have died in street fighting between Islamists and their opponents.

As of early Sunday, Mr. Morsi had not yet formally issued an order calling out the military, raising the possibility that the announcement was intended as a warning to tell his opponents their protests would not derail the vote.

The moves on Saturday offered little hope of fully resolving the standoff, in part because opposition leaders had ruled out — even before his concessions were announced — any rushed attempt at a compromise just days before the referendum.

“No mind would accept dialogue at gunpoint,” said Mohamed Abu El Ghar, an opposition leader, alluding to previously floated ideas about last-minute talks for constitutional amendments.

Nor did Mr. Morsi’s Islamist allies expect his proposals to succeed. Many said they had concluded that much of the secular opposition was primarily interested in obstructing the transition to democracy at all costs, to try to block the Islamists from winning elections. Instead, some of the president’s supporters privately relished the bind they believed Mr. Morsi had built for the opposition by giving in to some demands, forcing their secular opponents to admit they are afraid to take their case to the ballot box.

For now, the military appears to back Mr. Morsi. Soon after the state newspaper Al Ahram suggested the president would impose martial law, a military spokesman read a statement over state television that echoed Mr. Morsi’s own speeches.

The military “realizes its national responsibility for maintaining the supreme interests of the nation and securing and protecting the vital targets, public institutions and the interests of the innocent citizens,” the spokesman said, warning of “divisions that threaten the State of Egypt.”

“Dialogue is the best and sole way to reach consensus that achieves the interests of the nation and the citizens,” he added. “Anything other than that puts us in a dark tunnel with drastic consequences, which is something that we will not allow.”

If Mr. Morsi goes through with the plan, it would represent a historic role reversal. For six decades, Egypt’s military-backed authoritarian presidents used martial law to hold on to power and to jail Islamists like Mr. Morsi, a former leader of the Muslim Brotherhood. It would also come just four months after he managed to pry power out of the hands of the country’s top generals, who had seized control when Hosni Mubarak was ousted last year and then held on to it for three months after Mr. Morsi’s election.

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Synacor partners with Zynga to bring social games to pay TV

(Reuters) – Synacor Inc, partly owned by Intel Corp, said it partnered with Zynga Inc to allow pay TV and broadband providers offer social games to their customers.

Zynga shares rose about 3 percent to $ 2.30 in premarket trading, while Synacor shares were up about 5 percent at $ 6.60.

Synacor said certain pay-TV subscribers will get in-game currency each month as part of their subscription that can be redeemed for popular Zynga games such as Zynga Poker and FarmVille2.

The partnership comes days after Zynga revised its pact with Facebook Inc to lower its dependence on the social network.

Synacor, which debuted on the Nasdaq in February, offers authentication and management services to companies offering on-demand content, primarily cable and telecom service providers and consumer electronics brands.

(Reporting by Chandni Doulatramani in Bangalore; Editing by Sriraj Kalluvila)

Gaming News Headlines – Yahoo! News

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Susan Powell's Father-in-Law Secretly Took 4,500 Pictures of Her

12/07/2012 at 07:30 PM EST

Wrapping up a year that has brought unimaginable frustration and heartbreak, Susan Powell's family marked the three-year anniversary of her disappearance at a ceremony this week near where her two sons are buried.

"It's a hard time of year," Susan's father, Chuck Cox, tells PEOPLE. "Our daughter's still missing. Someday, we will find out what happened to her."

He added that he is not sure what to make of a West Valley City, Utah, police announcement Thursday that their investigation into Susan's Dec. 6, 2009 disappearance remains active but "has been scaled down," with a reduction in the number of full-time investigators working the case.

The announcement came at the same time that more evidence emerged of the alleged obsession Susan's father-in-law, Steven Powell, had toward her. Authorities released nearly 4,500 pictures that they say he secretly took of her at home and elsewhere.

Cox says he's hopeful that the police are still doing everything possible to solve Susan's case, but he hasn't ruled out suing the department for failing to arrest Susan's husband, Josh Powell, for her murder.

More than two years after Susan's disappearance, Josh on Feb. 5 murdered the couple's two sons and committed suicide by blowing up his house.

Cox's lawyer, Anne Bremner, says Cox "goes back and forth" over whether to sue West Valley City. "He wants them to find her. A lawsuit can have a chilling affect on things."

Cox and Bremner say they do plan to file a lawsuit against the state of Washington for continuing to give Josh visitation with his children despite what they claim were mounting concerns regarding his mental stability.

Although Cox and the police believe that Josh Powell knew more than anyone what happened to Susan, they also strongly suspect that his father, Steven Powell, should still be looked at more closely.

Steven Powell

Ted S. Warren / AP

The Coxes hoped Steve Powell's voyeurism trial in May would unearth some answers but it did not. Powell invoked his Fifth Amendment right against self-incrimination when asked in jail about Susan.

In numerous interviews with PEOPLE, Steve and Josh Powell denied any involvement in Susan's disappearance and have suggested that she ran off with another man.

Steve Powell was prosecuted for surreptitiously photographing his neighbor's young daughters (and is serving a 30-month sentence), but the investigation also unearthed journals in which Powell described his interest in his daughter-in-law, as well as the thousands of photos, which were released Thursday to the Associated Press.

In a journal entry, Steven Powell recalls a sexually charged dream in which Susan asks him, “Do you think I would make a good wife for you?” None of the pictures show Susan naked, although there are images of her crotch and backside.

"We think he knows exactly where our daughter is," Cox says.

Once Susan disappeared, Josh sold the family's home in Utah and moved with the boys into Steven Powell's house in Puyallup, Wash., only about two miles from the Cox family.

On Thursday, families streamed to Puyallup’s Woodbine Cemetery to remember the Powell boys and other children who died tragically and to dedicate a memorial: a bronze angel inspired by the novella The Christmas Box, in which strangers learn the value of love following a child’s death.

The novella's author, Richard Paul Evans, also attended the dedication. The memorial is on a hill overlooking the boys' gravesites 75 yards away.

"We get a lot of support from a lot of people and we're going to make it through," Cox says.

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Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

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Johnson can be reached at https://twitter.com/GeneAPseattle

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T-Mobile to Offer Cheapest iPhone 5 in 2013

T-Mobile, the smallest of the “big four” wireless carries in the United States, already offers the country’s cheapest iPhone service — if you have an unlocked iPhone. And according to Engadget’s Brad Molen, more than a million unlocked iPhones are on T-Mobile‘s network already.

Now, T-Mobile has announced that it will “add Apple products to its portfolio in the coming year,” according to parent company Deutsche Telekom AG. And while that could mean anything from the new iPad Mini to an as-yet-unreleased Apple product of some kind, many expect T-Mobile to finally get the iPhone, making it the last major carrier in the United States to get it.

If T-Mobile does, and it continues to offer its $ 30 “Unlimited Web & Text with 100 Minutes” plan, that may make T-Mobile’s iPhone the cheapest one out there — even if it costs hundreds of dollars more up front than on AT&T.

Subsidies aren’t just for big corporations

Most of the big-name wireless carriers in the United States offer what are called “subsidized” smartphones, meaning you don’t pay their whole cost up front. Instead, you pay a discounted price (which can be as little as $ 0.01), but are locked into a wireless contract for up to 2 years. Wireless customers who switch before their contract is up have to pay an “early termination fee,” which can go over and above the actual cost of the smartphone.

Buy now, save later

With prepaid smartphone plans, on the other hand, you pay the whole cost of the phone up front and afterward it’s yours to keep (whether its SIM card is locked into one network or not). And with the announcement that T-Mobile is going prepaid-only starting next year, that means any iPhone the company carries will be of the unsubsidized variety.

Apple currently sells the 16 GB iPhone 5 for $ 649, contract-free, on its website. It also sells the 16 GB iPhone 4S for $ 549, however, while contract-free carrier Virgin Mobile sells the same phone unsubsidized for $ 449 with a $ 35 per month data plan — not too much more expensive than T-Mobile’s.

Lessons of the past​

It’s hard to say how much T-Mobile would offer an iPhone 5 for if the device landed on its network. Virgin Mobile started out charging more up front and offering a $ 30 plan, while Cricket currently sells the contract-free iPhone 5 for $ 499 but its service starts at $ 55.

Assuming T-Mobile continues to offer its current “web exclusive” $ 30 unlimited plan for a hypothetical iPhone 5 on its network, it’s not likely to be discounted much if at all from Apple’s asking price. Just paying for 5 GBs of data per month from AT&T would cost $ 1,200 over 2 years, however, plus the $ 199 cost of a subsidized iPhone (and you have to pay for voice minutes and texting on top of that). Meanwhile, it’s possible right now to buy an unlocked iPhone 5 from Apple and get 2 years of T-Mobile’s $ 30 service for $ 1,369. That includes 5 GBs of data before connection speed throttling, plus unlimited texting and 100 voice minutes per month.

​Looking to the future

T-Mobile offers the cheapest iPhone 5 service right now. And if the “Apple products” T-Mobile is getting next year include the iPhone 5, T-Mobile customers may see even better offerings coming their way in the near future.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.

Linux/Open Source News Headlines – Yahoo! News

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