Hamas aims rockets at Israeli heartland

GAZA CITY, Gaza Strip (AP) — Palestinian militants targeted densely populated Tel Aviv in Israel's heartland with rockets for the first time Thursday, part of an unprecedented barrage that threatened to provoke an Israeli ground assault on Gaza. Three Israelis were killed in a separate rocket attack in southern Israel.

Air raid sirens wailed and panicked residents ran for cover in Tel Aviv, Israel's commercial and cultural capital. Israel responded by moving troops and heavy weapons toward Gaza and authorizing the call-up of tens of thousands of reservists.

There was no word on where the two rockets aimed at Tel Aviv landed, raising the possibility they fell into the Mediterranean. A third rocket landed in an open area on the southern outskirts of Tel Aviv.

The fighting, the heaviest in four years, came after Israel launched a ferocious air assault Wednesday to stop repeated rocket fire from Gaza. The powerful Hamas military chief was killed in that strike, and another 18 Palestinians have died over two days, including five children. Some 100 Palestinians have been wounded.

Israeli warplanes struck dozens of Hamas-linked targets in Gaza on Thursday, sending loud booms echoing across the narrow Mediterranean coastal strip at regular intervals, followed by gray columns of smoke. After nightfall, several explosions shook Gaza City several minutes apart, a sign the strikes were not letting up, and the military said the targets were about 70 underground rocket-launching sites.

Israeli Prime Minister Benjamin Netanyahu said the army was hitting Hamas hard with what he called surgical strikes, and warned of a "significant widening" of the Gaza operation. Israel will "continue to take whatever action is necessary to defend our people," said Netanyahu, who is up for re-election in January.

There were mounting signs of a ground operation. At least 12 trucks were seen transporting tanks and armored personnel carriers toward Gaza late Thursday, and a number of buses carrying soldiers arrived. Israeli TV stations said a Gaza incursion was expected on Friday, though military officials said no decision had been made.

Defense Minister Ehud Barak said he authorized the call-up of reservists, and the army said up to 30,000 additional troops could be drafted.

"We will continue the attacks and we will increase the attacks, and I believe we will obtain our objectives," said Lt. Gen. Benny Gantz, Israel's military chief.

Hamas, meanwhile, warned it would strike deeper inside Israel with Iranian-made Fajr-5 rockets, acknowledging for the first time it has such longer-range weapons capable of hitting targets some 47 miles (75 kilometers) away. Tel Aviv is 40 miles (70 kilometers) from Gaza.

By nightfall Thursday, Hamas said it had fired more than 350 rockets into Israel. Israel, which estimates Gaza militants have as many as 12,000 rockets, said some 220 rockets struck the Jewish state and another 130 were intercepted by an anti-missile shield.

Israel believes Hamas has significantly boosted its arsenal since the last Gaza war four years ago, including with weapons from Iran and from Libyan stockpiles plundered after the 2011 fall of the regime there.

"After four years, we became stronger, we have a strategy and we became united with all the military wings in Gaza," said Hamas spokesman Fawzi Barhoum, referring to Hamas' setbacks during Israel's last major offensive in late 2008.

In the current round of fighting, Israel is facing an emboldened Hamas with a stronger arsenal and greater regional backing. Egyptian President Mohammed Morsi, like Hamas a member of the region-wide Muslim Brotherhood, said he was sending a high-level delegation to Gaza on Friday in a show of support for the fellow Islamists there.

Both Israel and Hamas had largely observed an informal truce over the last four years, marred by occasional flare-ups. In recent days, however, border tensions escalated, then exploded into major violence Wednesday when Israel assassinated Hamas' secretive military chief, Ahmed Jabari, with a missile strike on his car.

Jabari led Hamas' 2007 takeover of the territory, turning small squads of Hamas gunmen into a fighting force and supervising Gaza's fledgling arms industry, including rocket production. He was long No. 1 on Israel's most-wanted list, particularly for his role in capturing Israeli Sgt. Gilad Schalit and holding him for more than five years.

On Thursday, Hamas gunmen fired machine guns in the air as frenzied mourners carried Jabari's body, wrapped in a white burial shroud, through the streets of Gaza City on a wooden stretcher. At the cemetery, young men surged toward the corpse, trying to touch Jabari's face before he was lowered into the grave in a chaotic scene.

Hamas' top leaders have dropped out of sight since the assassination, but it was not clear if they would be targets. The Hamas prime minister, Ismail Haniyeh, said in a televised speech Thursday that the group "will not forget and not forgive" the killing of Jabari.

Late Thursday, Hamas security said an Israeli navy vessel fired toward a building about 50 yards (meters) from Haniyeh's house, where a generator supplies electricity for the prime minister and his neighbors in Shati, a beach-front refugee camp in Gaza City. It was not clear if Haniyeh was home at the time.

In Israel, a rocket hit a four-story apartment building in the southern town of Kiryat Malachi on Thursday, killing two men and a pregnant woman. A 4-year-old boy and two babies were wounded in the attack.

Many Gazans stayed indoors and streets were largely empty, though there was no sense of widespread panic. Some said Hamas should take revenge, even at the price of further Israeli retaliation.

"If Israel strikes us, we have to strike back," said Ahmed Barakat, a 33-year-old laborer from Gaza City attending the Jabari funeral. "An eye for an eye, a tooth for a tooth."

In Jerusalem, thousands of mourners attended the funeral of Mira Scharf, a 26-year-old mother of three who was killed in Thursday's rocket strike in Israel. Israeli media said she was pregnant and had recently returned to Israel from New Delhi to give birth.

In central Tel Aviv, Adrian Cisser, a 35-year-old electrician, was in a bicycle shop when an air raid siren went off.

"People on the street started running," he said. "The public shelter nearby was locked so we just stayed in the shop, and two minutes after it started we heard this big bang."

Cisser said he had gotten a preliminary call from the army and expects to be called up for reserve duty next week.

In the southern Tel Aviv suburb of Rishon Lezion, where a Hamas rocket landed in an empty field, a siren sent people rushing for shelter.

"There is panic in our house and we can hear shouts from the street," a resident who gave her first name, Lital, told the Israeli news site YNet. "Children were running away, trying to find shelter. It was very stressful. I am shaken up."

From Israel's perspective, Hamas escalated the fighting with a pair of attacks in recent days, an explosion in a tunnel along the Israeli border and a missile attack on an Israeli military jeep that seriously wounded four soldiers.

An Israeli ground offensive could be costly to both sides. In the last Gaza war, Israel devastated large areas of the territory, setting back Hamas' fighting capabilities but also paying the price of increasing diplomatic isolation because of the high civilian casualty toll.

The current round of fighting is reminiscent of the first days of Israel's three-week offensive against Hamas that began in December 2008. At the time, Israel also caught Hamas off-guard with a barrage of missile strikes and threatened to follow up with a ground offensive.

However, much has also changed since then.

Israel has improved its missile defense systems, but is facing a more heavily armed Hamas.

Netanyahu, who has clashed even with his allies over the deadlock in Mideast peace efforts, appears to have less diplomatic leeway than his predecessor, Ehud Olmert, making a protracted military offensive harder to sustain.

The White House came out in support of Israel on Thursday, with spokesman Jay Carney saying there is "no justification" for rocket fire from Gaza and urging militants to stop "cowardly acts."

However, the regional constellation has changed dramatically since the last Gaza war. Hamas has emerged from its political isolation as its parent movement, the region-wide Muslim Brotherhood, rose to power in several countries in the wake of last year's Arab Spring uprisings, particularly in Egypt.

On Thursday, the Egyptian president ordered his prime minister, Hesham Kandil, to lead a senior delegation to Gaza on Friday in a show of support for Hamas. Morsi has called Israel's campaign against Hamas "unacceptable" and has recalled Egypt's ambassador to Israel in protest.

___

Associated Press writers Ariel David in Tel Aviv and Ian Deitch in Jerusalem contributed to this report.

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Egypt recalls envoy to Israel after Gaza strike
















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


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













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


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


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


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Verizon says 1.4 million customers back on its fiber optic network
















(Reuters) – Verizon Communications said fiber optic services have been restored to more than 1.4 million customers hurt by Hurricane Sandy.


The provider of telephone, Internet and television services said on November 1 that it may take another two weeks to restore telecommunication services for its customers after flooding and power outages knocked out services.













The company said it completed 364,000 repairs across the mid-Atlantic and northeast regions.


Verizon said it will provide credits for landline customers and fix equipment damaged due to the hurricane.


Verizon shares were up at $ 42.39 after the bell on Wednesday. They closed at $ 42.24 on the New York Stock Exchange.


(Reporting By Pallavi Ail in Bangalore; Editing by Maju Samuel)


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BAFTA Shifts Corporate Sponsors for Film Awards
















LOS ANGELES (TheWrap.com) – You can’t buy awards, but when it comes to the BAFTAs you can certainly sponsor them.


The British Academy of Film and Television is switching up its corporate partners for its annual film awards ceremony. That means it’s out with telecom company Orange, and in with broadband network EE.













The overhaul will require some rechristening of BAFTA‘s hardware. After 15 years with Orange in the title, the ceremony will now be known as the EE British Academy Film Awards. Moreover, its award for best newcomer will now be named the EE Rising Star Award.


The BAFTAs are the U.K. equivalent of the Oscars. EE is a sister company of Orange, so the shakeup is not seismic.


The EE British Academy Film Awards will be broadcast on the BBC on February 10, 2013 and will be hosted by satirist Stephen Fry.


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Breast Cancer Risk Increases in Women Who Put Cell Phones in Their Bras
















COMMENTARY | A disturbing trend is becoming apparent in young women. Those who keep their cell phones in their bras seem to be at a higher risk for breast cancer than women who do not. KTVU spoke with breast surgeons who claim they are seeing a disturbing trend in a link between breast cancer and cell phones.


How big a risk













KTVU spoke with two women who kept cell phones in their bras for five years or more. Both women developed breast cancer in the same place the cell phone rested against their skin. I have breast cancer, but I never kept my cell phone in my bra; I don’t know anyone who does.


Breast surgeons Dr. John West and Dr. Lisa Bailey, say that there is most likely a link and are warning people to be careful. Both claim there is an increase in male breast cancer from men who keep cell phones in their shirt pockets. The World Health Organization (WHO) agrees with them. If you are keeping your cell phone in your bra or shirt pocket, this is something to pay attention to.


Why just a breast cancer link


The wireless companies are denying any link between their products and an increase in cancer. They may have a point. Many people, men and women, keep cell phones in their pants pockets. No links to cancer in the hip bones or genital cancers are attributed to cell phones, so why breast tissue? Maybe breast tissue is more sensitive to changes than the tissue in our thighs and backsides.


Cause for concern


Judy Peres quotes Dr. John Samet, overall chair of the WHO International Agency for Research on Cancer, (IARC) in her article “WHO Classification Sparks Debate Over Cell Phone Safety” as saying, “there could be some risk, and therefore we need to keep a close watch for a link between cell phones and cancer risk.” Dr. Samet is also the chair of preventative medicine at the University of Southern California.


WHO classifies cell phones as potentially carcinogenic. The IARC lists it as a class 2B. This means that the phones might cause cancer but there is no concrete evidence to show that this is true. More research is needed to make a hard fast link between the two.


Maybe it is just a coincidence, but what if they are right? Could keeping a cell phone in your bra give you breast cancer? As a breast cancer patient still going through treatment, I would not want to risk it. My cell phone is staying in my pocketbook — right where I always keep it. My cell phone did not give me breast cancer, but there are other women who say their phones did.


Lynda Altman was diagnosed with breast cancer in November 2011. She writes a series for Yahoo! Shine called “My Battle With Breast Cancer.”


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Clinton-Lewinsky 'spinners' resurface

WASHINGTON (Reuters) - It's a case of déjà vu in D.C.: some of the same high-profile, high-priced handlers who played supporting roles in the scandal over President Bill Clinton's affair with intern Monica Lewinsky have re-emerged in the sex scandal that has toppled one U.S. national security chief and threatens another.


It is unclear what will be the roles of the expensive legal and crisis-management talent drawn into the uproar over the relationships between former CIA director David Petraeus and Marine General John Allen and two female acquaintances. Neither Republicans nor Democrats in Congress appear to have an appetite for another year-long Monica-style media spectacle.


The latest scandal began with an FBI investigation into cyber-harassment, and indications so far are that ultimately the inquiry will produce no criminal charges.


Nonetheless, both women at the center of attention - Petraeus biographer and former mistress Paula Broadwell and Tampa socialite Jill Kelley, the woman to whom Broadwell is alleged to have sent suspected harassing emails - have turned for advice to veteran Washington lawyers and spin doctors with connections to the Lewinsky brouhaha.


On Monday, a source close to the Kelley family said that two Washington-based players in the Lewinsky scandal, trial lawyer Abbe Lowell and public relations adviser Judy Smith, were working for Kelley.


A day later, a Washington law firm which represented Lewinsky herself confirmed that one of its partners, Robert F. Muse, was representing Broadwell. The three advisors either were unavailable for comment or declined to comment.


It is not known whether Petraeus or Allen, who is the top U.S. military commander in Afghanistan, have retained attorneys.

 

A complaint by Kelley to the FBI about the harassing emails sparked an investigation that implicated Petraeus in a career-ending affair with Broadwell.


It also embroiled Kelley herself in the uproar over her still-murky relationship with Allen.


Kelley's lawyer, Lowell, who an insider said she had known for years, served as pro-Clinton Democratic Party chief counsel on a House impeachment inquiry. Recently he won a partial acquittal and partial mistrial for John Edwards, a former Democratic U.S. senator and vice presidential candidate who had been indicted for misusing undeclared campaign funds to support his mistress.


During the Clinton sex scandal, Smith, a one-time press aide to President George H.W. Bush, served as Lewinsky's spokeswoman. Smith also represented NFL quarterback Michael Vick, who was charged and convicted in a dogfighting cruelty case.


Smith also is a model for the main character in the ABC-TV drama "Scandal," a prime-time series in which ace spin-doctor Olivia Pope, along with a team of spies and ex-convicts, not only manages to sort out or cover up sex and spy scandals but also carries on a secret affair with a fictional U.S. president.


Muse's senior partner, Jacob Stein, and another prominent criminal lawyer from a different firm, Plato Cacheris, represented Lewinsky personally in a criminal investigation of Clinton by special prosecutor Kenneth Starr and a congressional inquiry which led to Clinton's impeachment by the House of Representatives but subsequent acquittal by the Senate. Muse himself did not represent Lewinsky, according to Cacheris.


Starr and a substantial special prosecution team pursued Clinton during the Lewinsky scandal. Starr turned his evidence over to the Republican-controlled House, which in a nationally televised broadcast impeached Clinton for high crimes and misdemeanors.


But Republicans could not muster the two-thirds majority in the Senate needed to remove Clinton from office. Republicans later were punished at the polls for what many of them conceded was a perceived overzealousness in pursuing Clinton.


CONGRESS WARY OF SPECTACLE


Lewinsky's lawyers were critical in helping her negotiate a legal thicket that included dealing with Starr's criminal investigators and the impeachment inquiry launched by Congress; she testified in both investigations. Lewinsky was also besieged for months by the media; eventually her team arranged decorous interviews with U.S. and British television networks.


Mindful of how the Lewinsky scandal played out, officials familiar with the views of both senior Democrats and Republicans in Congress say that congressional leaders are keen to avoid turning the scandal into a public extravaganza, even though there remain many unanswered questions.


If there are no public congressional hearings or a criminal prosecution, it is unclear what Broadwell's and Kelley's legal and public relations teams would do, apart from trying to manage news coverage and the hordes of paparazzi and TV cameramen now outside their clients' homes.


Lewinsky's lawyer, Cacheris, told Reuters that from what he could see, at this point Broadwell and Kelley do not know if there will be any charges against them. "These people are getting lawyers to ensure there is no criminal case," he added.


But Eric Dezenhall, a Washington crisis management expert, said some clients did not understand that there was a limit to how much even the most skilled lawyer and public relations specialist could do.


"You have to be very selective in the cases you take because you're going to end up with some very disgruntled clients," Dezenhall said.


(Editing by Warren Strobel and Paul Simao)

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General investigated for emails to Petraeus friend
















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


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













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


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


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


Petraeus resigned as CIA director on Friday.


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


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


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


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


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


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


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


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


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


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


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


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


___


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


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RIM to release new BlackBerrys soon after Jan. 30
















TORONTO (AP) — Research In Motion Ltd. will release its much-delayed BlackBerry 10 smartphones “not too long” after a launch event on Jan. 30, a senior executive said Tuesday.


Chief Operating Officer Kristian Tear said the company is still fine-tuning the new phones.













The new phones are seen as critical to RIM‘s survival as the smartphone pioneer struggles in North America to hold on to customers who are abandoning BlackBerrys for flashier iPhones and Android phones. The new BlackBerry 10 system is designed for the touch screen, Internet browsing and apps experience that customers now expect. RIM’s current software is still focused on email and messaging and is less user-friendly, agile and robust than iPhone or Android.


On Monday, RIM said details on the BlackBerry 10, including specific availability, will be announced at the event. A touch-screen-only device is expected to be released first followed shortly after by a version with a physical keyboard. Many people still gravitate to BlackBerrys specifically for their physical keyboards, and RIM hasn’t succeeded in the past with touch-only offerings.


Tear said RIM wants to be the No. 1 mobile computing platform, despite the dominance of Apple and Android. He said the Waterloo, Ontario-based company believes it can compete with Silicon Valley because it has access to a lot of talented people and two great universities in the area. He said he’s been involved in two turnarounds before with Sony Ericsson and Ericsson and believes in RIM’s new management.


“It’s not going to be easy,” Tear said. “But everybody is super-focused and super-commited. We’re going to show the world that we are turning this around.”


Steve Zipperstein, RIM’s new chief legal officer, said RIM invented the smartphone and has been the innovator in the mobile space for a long time.


“We’re not going away,” Zipperstein vowed. “We’re going to succeed with BB 10. We’re going to impress our customers. We’re going to fight every day.”


Tear and Zipperstein were hired this past summer by CEO Thorsten Heins, who took over RIM in January after it lost tens of billions of dollars in market value. Heins had vowed to do everything he could to release BlackBerry 10 this year but said in June that the timetable wasn’t realistic. The new BlackBerrys will be released after the holiday shopping season and well after Apple’s September launch of the iPhone 5.


Heins is counting on BlackBerry 10 for a turnaround.


RIM’s platform transition is happening under a new management team and as RIM lays off 5,000 employees as part of a bid to save $ 1 billion this year.


RIM was once Canada‘s most valuable company with a market value of more than $ 80 billion in 2008, but the stock has plummeted since, from over $ 140 per share to around $ 8. Its decline evokes memories of Nortel, another former Canadian tech giant, which declared bankruptcy in 2009.


RIM’s stock fell 41 cents, or 4.7 percent, to close at $ 8.40 Tuesday in New York after rising as high as $ 9.07 the previous day, when RIM announced its Jan. 30 launch date.


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Petraeus enlisted for cameo in ‘Call of Duty’ game
















LOS ANGELES (AP) — David Petraeus has landed on his feet with a new gig in “Call of Duty: Black Ops II.”


The retired Army general who stepped down as CIA director last week amid a scandal surrounding his extramarital affair pops up in the highly anticipated Activision Blizzard Inc. first-person shooter game released Tuesday.













A character with Petraeus’ name and likeness voiced by Jim Meskimen briefly appears as the Secretary of Defense in the year 2025.


The cameo was first reported by the gaming site Kotaku.com.


“Call of Duty” games have often employed virtual renditions of political figures.


“Black Ops II” also features an encounter with Manuel Noriega, a female president resembling current Secretary of State Hillary Rodham Clinton, an aircraft carrier named the USS Barack Obama and an appearance by retired Lt. Col. Oliver North.


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
















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


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













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


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


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


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


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


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


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


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


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


UNCERTAINTY FACTOR


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


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


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


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


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


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


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


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


NO SIGNS OF PANIC


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


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


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


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


WEAPONS, MEDICINES IN THE CROSS-HAIRS


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


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


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


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


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


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


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


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


Health News Headlines – Yahoo! News



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