Wall Street falls as senator sees "fiscal cliff" fall

NEW YORK (Reuters) - Stocks declined on Thursday after the leader of Senate Democrats warned the United States appeared headed over the "fiscal cliff" and data showed consumer confidence fell to a four-month low.


With only a few days left before devastating tax hikes and spending cuts go into effect, Senate Majority Leader Harry Reid said about the fiscal cliff, "It looks like where we're headed."


Reid criticized Republicans for refusing to go along with any tax increases as part of a compromise solution with Democrats to avoid the fiscal cliff, which economists warn will knock the economy into recession.


President Barack Obama was flying back to Washington from a Christmas holiday to push for more talks, while the top Republican in Congress planned to speak with House lawmakers to avoid the year-end deadline. Still, gaps remained between the two sides.


The benchmark S&P 500 index is on track for its fourth straight decline and is down 2 percent as negotiations over the budget crisis stalled. A four-day decline would mark the longest losing streak for the index in three months.


The Conference Board, an industry group, said its index of consumer attitudes in December fell to 65.1 as the budget crisis took the steam out of a growing sense of optimism about the economy. The gauge fell more than expected from a downwardly revised 71.5 in November.


Initial claims for unemployment benefits dropped 12,000 to a seasonally adjusted 350,000 last week and the four-week moving average fell to the lowest since March 2008.


"Unfortunately, a term all of us are sick of hearing - the fiscal cliff - appears to be dominating all aspects of the financial market and consumer confidence," said Joe Heider, principal at Rehmann Financial in Cleveland Ohio.


"What has happened here is even though the consumer confidence number had a sharp decline, most people write it off as a result of what is happening in Washington rather than economic reality that is occurring in people's everyday lives."


Treasury Secretary Timothy Geithner announced the first of a series of measures that should push back the government's debt ceiling by around two months.


The Dow Jones industrial average <.dji> dropped 77.41 points, or 0.59 percent, to 13,037.18. The Standard & Poor's 500 Index <.spx> lost 9.71 points, or 0.68 percent, to 1,410.12. The Nasdaq Composite Index <.ixic> fell 18.36 points, or 0.61 percent, to 2,971.80.


Marvell Technology Group fell 3.4 percent to $7.15 after it said it would seek to overturn a jury's finding of patent infringement. The stock had fallen more than 10 percent in the prior session after a federal jury found the company infringed two patents held by Carnegie Mellon University and ordered the chipmaker to pay $1.17 billion in damages.


The PHLX semiconductor index <.sox> lost 0.7 percent.


(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)



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Syria envoy calls for political change to end conflict


BEIRUT (Reuters) - The international envoy seeking a solution to Syria's 21-month-old conflict said on Thursday political change was needed to end the violence which has killed 44,000 people, and called for a transitional government to rule until elections.


Speaking in Damascus at the end of a five-day trip during which he met President Bashar al-Assad, Lakhdar Brahimi did not spell out detailed proposals but said that only substantial change would meet the demands of ordinary Syrians.


Russian Foreign Minister Sergei Lavrov added to the envoy's call for a peaceful solution when he told a senior Syrian diplomat that only a "broad inter-Syria dialogue and political process" could end the crisis.


Brahimi's push for a transitional government suggested he was trying to build on an international agreement in Geneva six months ago which said a provisional body - which might include members of Assad's government as well as the opposition - should lead the country into a new election.


But the mainly Sunni Muslim Syrian rebels have seized the military initiative since the Geneva meeting in June and the political opposition has ruled out any transitional government in which Assad, from Syria's Alawite minority, plays a role.


Rebel fighters resumed attacks on Thursday against the military base of Wadi Deif, which lies next to Syria's main north-south highway linking Aleppo with Damascus. Around the capital itself, Assad's forces have tried for weeks to dislodge rebels from suburbs which ring the east and south of the city.


"Certainly it was clear in Geneva, and it's even clearer now that the change which is needed is not cosmetic or superficial," Brahimi told a news conference in Damascus before leaving Syria.


"I believe the Syrian people need, want and aspire to genuine change and everyone knows what this means," he said.


"A government must be created ... with all the powers of the state," Brahimi added. He said it should hold power for a transitional period until elections - either for a new president or a new parliament - are held.


"This transitional process must not lead to the ... collapse of state institutions. All Syrians, and those who support them, must cooperate to preserve those institutions and strengthen them," he said.


Radwan Ziadeh of the opposition Syrian National Council dismissed Brahimi's proposal as "unrealistic and fanciful" and said a transitional government could not be built on the same "security and intelligence structure as the existing regime".


TOO SOON FOR COMPLETE PLAN


Russia's Lavrov met Syrian Deputy Foreign Minister Faisal Makdad in Moscow on Thursday and underscored "the lack of an alternative to a peaceful resolution of (Syria's) internal conflict through a broad inter-Syria dialogue and political process," a Russian Foreign Ministry statement said. But it made no mention of ways to achieve those goals.


Syrian and Lebanese sources said Makdad had been sent to Moscow to discuss details of a peace plan proposed by Brahimi.


Brahimi is due in Moscow on Saturday and said he also expected to have a third joint meeting with U.S. and Russian officials soon following two rounds of talks earlier this month. But he denied the existence of a U.S.-Russian plan to end the crisis and said it was too soon to present a "complete plan".


"What is preferred is that we don't present such a plan until we feel that all sides have agreed to it. That way, implementing it is easy. If that doesn't happen, the other solution could be to go to the (United Nations) Security Council to issue a binding resolution for everyone," he said.


A Russian Foreign Ministry spokesman also denied any joint initiative between Moscow and Washington.


World powers remain divided over what has become an increasingly sectarian struggle, with Sunni Muslim states such as Turkey and the Gulf Arab countries supporting the rebels while Shi'ite Iran and Hezbollah have backed Assad, whose Alawite community has its roots in Shi'ite Islam.


Syria's struggle "has taken a vicious form of sectarian confrontation," Brahimi said. "Syrian officials foremost, as well as the international community, must not let Syria slide down this very dangerous path which threatens the future of Syria."


Deep differences between Western powers opposed to Assad - led by the United States - and Russia and China which have supported his government, have left the U.N. Security Council paralyzed and largely sidelined throughout the conflict.


The political stalemate has helped transform a once-peaceful uprising into a civil war in which rebels have grown in military strength and taken control of swathes of territory in the north, leaving Assad increasingly reliant on air power to curb them.


Activists in the central province of Hama, where rebels launched an offensive last week to extend their control southwards towards the capital, reported on Thursday that rebels shot down a MiG jet near the town of Morek.


The Syrian Observatory for Human Rights, which monitors violence across Syria, said air force jets launched three raids on rebel forces around Wadi Deif. The British-based group also reported fierce clashes in the area.


The violence has been accompanied by an escalation in apparently sectarian attacks between the Sunni Muslim majority and minorities such as Assad's Alawite sect, which has largely supported the president.


Activists in Hama uploaded a video of what appeared to be Assad soldiers and shabbiha militia members stabbing the body of a dead man and setting it on fire. The man looked as if he had been beaten to death.


"This is a terrorist, a brother of a whore, one of those trying to destroy the country," one of the men shouted. Two men in camouflage uniforms and army helmets stood by watching. Samer al-Hamawi, an activist from Hama, said rebels in his area found the video on the phone of a soldier they captured this week.


The video emerged a day after Islamist rebel units released footage showing the bodies of dozens of Assad's fighters along a highway near an Alawite town in Hama.


(Additional reporting by Marwan Makdesi in Damascus and Steve Gutterman in Moscow; Editing by Pravin Char)



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Carlyle takes on KKR in race for Reynolds and Reynolds: sources






NEW YORK (Reuters) – Private equity firms Carlyle Group LP and KKR & Co LP have emerged as the lead contenders to take over Reynolds and Reynolds, a software company hoping to sell itself for $ 5 billion, three people familiar with the matter said.


Dayton, Ohio-based Reynolds, which provides business management software for auto dealers in North America and Europe, had hired technology-focused investment bank Qatalyst Partners to run a sale, people familiar with the matter told Reuters in October.






The process has progressed and is now in its final stages, though no decision is expected before January, the sources said.


Reynolds may be sold to Carlyle or KKR for between $ 4 billion and $ 5 billion, less than the company had hoped, one of the people added.


The people spoke on condition of anonymity because the negotiations are confidential. Spokesmen for Reynolds, Carlyle and KKR declined to comment.


Reynolds sells software tools that allow car dealers to run their operations, including providing car dealer websites, digital advertising and marketing services, as well as data archiving.


Reynolds was founded in 1866 by Lucius Reynolds and his brother-in-law as a company that prints standardized business forms. It started to serve automotive retailers as major clients in the 1920s.


In October 2006, the company was acquired by Universal Computer Systems (UCS) for $ 2.8 billion. The merged company retained the Reynolds name and is currently headed by Chairman and Chief Executive Bob Brockman, who used to run UCS.


Brockman’s $ 2.8 billion buyout was funded primarily by a group of investors that included Goldman Sachs Capital Partners, the private equity arm of Goldman Sachs Group Inc, and Vista Equity Partners.


(Reporting by Greg Roumeliotis and Soyoung Kim in New York; editing by John Wallace)


Tech News Headlines – Yahoo! News





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Kim Kardashian Tries a New Hair Color







Style News Now





12/26/2012 at 11:30 AM ET











Kim Kardashian Hair
SPW/Splash News Online. Inset: Startraks


The bangs may have been fake (turns out they were just clip-ins), but Kim Kardashian‘s new hair shade is definitely for real.


Just before Christmas, the reality star decided to go back to her roots — literally — and color her mane a super-deep brown, almost black hue.


For the past few months (while filming Kim and Kourtney Take Miami) the star had been sporting light caramel locks, but Kardashian was clearly ready for a change.


“After Miami I was honestly just soooo over it being light and listened to the suggestions to take my hair back to my natural color!” the star wrote on her website.


Hmm … wonder who it was offering up the suggestions … Her boyfriend and occasional stylist Kanye West, perhaps? After all, he’s supposedly the one responsible for getting her to wear so much black in her wardrobe.


The last time Kardashian had hair this dark was in August, and we’re happy to see her go back to her natural color. Tell us: Do you prefer Kardashian with dark or light hair?


–Jennifer Cress


PHOTOS: SHARE YOUR THOUGHTS ON 2012′s CELEBRITY HAIR MAKEOVERS!




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Predicting who's at risk for violence isn't easy


CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.


Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.


But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.


"They're yellow flags. They only become red flags once the blood is spilled," he said.


Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.


Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)


Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.


Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.


"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."


The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."


In a guidelines for families, the academy lists several risk factors for violence, including:


—Previous violent or aggressive behavior


—Being a victim of physical or sexual abuse


—Guns in the home


—Use of drugs or alcohol


—Brain damage from a head injury


Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.


Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.


Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.


According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.


Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.


Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.


And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.


All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.


Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.


Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.


Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.


___


Online:


American Academy of Child & Adolescent Psychiatry: http://www.aacap.org


___


AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner


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Wall Street down on soft retail data, "cliff" worries suspected


NEW YORK (Reuters) - Socks fell on Wednesday as retailers dropped sharply after a report that showed holiday shoppers were less enthusiastic than last year, with investors saying worries about the "fiscal cliff" may have kept them away from stores.


The Dow Jones industrial average <.dji> dropped 29.08 points, or 0.22 percent, to 13,110.00. The Standard & Poor's 500 Index <.spx> dropped 6.41 points, or 0.45 percent, to 1,420.25. The Nasdaq Composite Index <.ixic> dropped 20.63 points, or 0.68 percent, to 2,991.97.


(Reporting by Edward Krudy; Editing by Chizu Nomiyama)



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Syria to discuss Brahimi peace proposals with Russia


BEIRUT (Reuters) - Syrian President Bashar al-Assad sent a senior diplomat to Moscow on Wednesday to discuss proposals to end the conflict convulsing his country made by international envoy Lakhdar Brahimi, Syrian and Lebanese sources said.


Brahimi, who saw Assad on Monday and is planning to hold a series of meetings with Syrian officials and dissidents in Damascus this week, is trying to broker a peaceful transfer of power, but has disclosed little about how this might be done.


More than 44,000 Syrians have been killed in a revolt against four decades of Assad family rule, a conflict that began with peaceful protests but which has descended into civil war.


Past peace efforts have floundered, with world powers divided over what has become an increasingly sectarian struggle between mostly Sunni Muslim rebels and Assad's security forces, drawn primarily from his Shi'ite-rooted Alawite minority.


Deputy Foreign Minister Faisal Makdad flew to Moscow to discuss the details of the talks with Brahimi, said a Syrian security source, who would not say if a deal was in the works.


However, a Lebanese official close to Damascus said Makdad had been sent to seek Russian advice on a possible agreement.


He said Syrian officials were upbeat after talks with Brahimi, the U.N.-Arab League envoy, who met Foreign Minister Walid Moualem on Tuesday a day after his session with Assad, but who has not outlined his ideas in public.


"There is a new mood now and something good is happening," the official said, asking not to be named. He gave no details.


Russia, which has given Assad diplomatic and military aid to help him weather the 21-month-old uprising, has said it is not protecting him, but has fiercely criticized any foreign backing for rebels and, with China, has blocked U.N. Security Council action on Syria.


"ASSAD CANNOT STAY"


A Russian Foreign Ministry source said Makdad and an aide would meet Foreign Minister Sergei Lavrov and Mikhail Bogdanov, the Kremlin's special envoy for Middle East affairs, on Thursday, but did not disclose the nature of the talks.


On Saturday, Lavrov said Syria's civil war had reached a stalemate, saying international efforts to get Assad to quit would fail. Bogdanov had earlier acknowledged that Syrian rebels were gaining ground and might win.


Given the scale of the bloodshed and destruction, Assad's opponents insist the Syrian president must go.


Moaz Alkhatib, head of the internationally-recognized Syrian National Coalition opposition, has criticized any notion of a transitional government in which Assad would stay on as a figurehead president stripped of real powers.


Comments on Alkhatib's Facebook page on Monday suggested that the opposition believed this was one of Brahimi's ideas.


"The government and its president cannot stay in power, with or without their powers," Alkhatib wrote, saying his Coalition had told Brahimi it rejected any such solution.


While Brahimi was working to bridge the vast gaps between Assad and his foes, fighting raged across the country and a senior Syrian military officer defected to the rebels.


Syrian army shelling killed about 20 people, at least eight of them children, in the northern province of Raqqa, a video posted by opposition campaigners showed.


The video, published by the Syrian Observatory for Human Rights, showed rows of blood-stained bodies laid out on blankets. The sound of crying relatives could be heard in the background.


The shelling hit the province's al-Qahtania village, but it was unclear when the attack had occurred.


STRATEGIC BASE


Rebels relaunched their assault on the Wadi Deif military base in the northwestern province of Idlib, in a battle for a major army compound and fuel storage and distribution point.


Activist Ahmed Kaddour said rebels were firing mortars and had attacked the base with a vehicle rigged with explosives.


The British-based Observatory, which uses a network of contacts in Syria to monitor the conflict, said a rebel commander was among several people killed in Wednesday's fighting, which it said was among the heaviest for months.


The military used artillery and air strikes to try to hold back rebels assaulting Wadi Deif and the town of Morek in Hama province further south. In one air raid, several rockets fell near a field hospital in the town of Saraqeb, in Idlib province, wounding several people, the Observatory said.


As violence has intensified in recent weeks, daily death tolls have climbed. The Observatory reported at least 190 had been killed across the country on Tuesday alone.


The head of Syria's military police changed sides and declared allegiance to the anti-Assad revolt.


"I am General Abdelaziz Jassim al-Shalal, head of the military police. I have defected because of the deviation of the army from its primary duty of protecting the country and its transformation into gangs of killing and destruction," the officer said in a video published on YouTube.


A Syrian security source confirmed the defection, but said Shalal was near retirement and had only defected to "play hero".


Syrian Interior Minister Mohammed Ibrahim al-Shaar left Lebanon for Damascus after being treated in Beirut for wounds sustained in a rebel bomb attack this month.


(Additional reporting by Laila Bassam; Writing by Alistair Lyon; Editing by Andrew Osborn)



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Just got a new iPhone, iPad or Android device for Christmas? Gameloft cuts popular iOS and Android games to 99¢









Title Post: Just got a new iPhone, iPad or Android device for Christmas? Gameloft cuts popular iOS and Android games to 99¢
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Predicting who's at risk for violence isn't easy


CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.


Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.


But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.


"They're yellow flags. They only become red flags once the blood is spilled," he said.


Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.


Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)


Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.


Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.


"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."


The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."


In a guidelines for families, the academy lists several risk factors for violence, including:


—Previous violent or aggressive behavior


—Being a victim of physical or sexual abuse


—Guns in the home


—Use of drugs or alcohol


—Brain damage from a head injury


Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.


Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.


Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.


According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.


Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.


Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.


And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.


All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.


Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.


Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.


Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.


___


Online:


American Academy of Child & Adolescent Psychiatry: http://www.aacap.org


___


AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner


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Yen on defensive on U.S. fiscal worry, helps Nikkei

TOKYO (Reuters) - Uncertainty over whether U.S. lawmakers will strike a deal by an end-of-year deadline to avert a severe fiscal retrenchment undermined the yen and bolstered Japanese shares on Tuesday in low volume, with many participants away on Christmas holiday.


The dollar rose to a 20-month high of 84.965 yen early on Tuesday in Asia, as Japanese markets caught up with global investors who had reacted overnight to incoming Japanese Prime Minister Shinzo Abe's weekend comments that raised the pressure on the Bank of Japan.


During a meeting on Tuesday with officials from Japan's major business lobby, Keidanren, Abe reiterated calls on the BOJ to conduct bold monetary easing to beat deflation by setting an inflation target of 2 percent.


The head of Abe's coalition partner said on Tuesday the coalition party and Abe had agreed to set a 2 percent inflation target and compile a large stimulus budget to help the economy return to growth and overcome deflation.


The yen has come under pressure as a result of expectations that the BOJ will be compelled to adopt more drastic monetary stimulus measures next year.


The dollar was expected to stay firm this week as investors repatriate dollars, and as the U.S. fiscal impasse is likely to continue to sap investor appetite for risky assets and raise the dollar's safe-haven appeal.


"The dollar is seen relatively well bid, with all focus on the fiscal cliff," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.


"Negotiations may be carried over the weekend, but markets still expect a deal to be struck by December 31. It is unthinkable that the U.S. will risk driving its economic growth sharply lower by not agreeing to avoid it."


U.S. lawmakers and President Barack Obama were on Christmas holiday and talks were unlikely to resume until later in the week.


House of Representatives Speaker John Boehner failed to gain support for a tax plan at the end of last week, raising fears that the United States may face the "fiscal cliff" of some $600 billion in automatic spending cuts and tax increases set to start on January 1.


Japan's Nikkei stock average <.n225> resumed trading after a three-day weekend with a 1.1 percent gain, recapturing the key 10,000 mark it ceded on Friday after Boehner's failure sparked a broad market sell-off and the Tokyo benchmark closed down 1 percent. The Nikkei was likely to be supported as long as the yen stayed weak. <.t/>


"Ongoing optimism about the weak yen is lifting hopes that exporters' earnings will be better than expected," said Hiroichi Nishi, general manager at SMBC Nikko Securities.


Analysts say a near-term correction may be possible as the index is now in "overbought" territory after gaining 16.2 percent over the last six weeks, hitting a nine-month high last Friday. Its 14-day relative strength index was at 72.34, above the 70 level that signals an overbought condition.


MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> nudged up 0.1 percent, driven higher by surging Shanghai shares, as most Asian bourses were shut for Christmas.


The Shanghai Composite Index <.ssec> soared over 2 percent to five-month highs as investors bought property stocks on mounting optimism about the sector. Taiwan shares <.twii> jumped 1.3 percent on gains in technology and financial shares.



Asset performance in 2012: http://link.reuters.com/muc46s


2012 commodities returns: http://link.reuters.com/faz36s


^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>


U.S. HOLDS 2013 KEY


Goro Ohwada, president and CEO at Japan-based fund of hedge funds Aino Investment Corp, said investors were likely to focus on economic fundamentals and the United States for cues on investment direction in 2013.


"There is a feeling that an investment strategy based on economic fundamentals may finally work next year, with asset prices more closely reflecting fair value. The problem is, we don't know yet which asset is a better bet than others," Ohwada said, adding that oil and gold appeared to be near their highs.


Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory, said commodities and energy prices will likely move in tight ranges in 2013, with investors eyeing political events, including the U.S. fiscal cliff outlook, Italian parliamentary election set for February 24-25, and Germany's elections in September.


"The macroeconomic policies taken this year around the world to support growth are expected to result in a moderate recovery in 2013 to reduce an excessive downside risk to prices. This will likely keep commodities, gold and energy prices near their highs," Niimura said.


(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Edmund Klamann and Daniel Magnowski)



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