Short-sellers circle stocks as confidence wavers

LONDON (Reuters) - How durable is the Wall Street bounce following last week's U.S. budget deal? Not very, some speculators believe.
Hedge funds are betting that a rally in U.S. stocks after a retreat from the "fiscal cliff" will reverse as doubts grow that politicians are ready to sacrifice party interests to keep the world's economic engine running, early data shows.
On the cusp of a January 1 deadline, Republicans and Democrats agreed a moratorium on a package of tax hikes and budget cuts critics claimed would tip the United States back into recession.
The news triggered sharp gains in the S&P 500 index <.spx>, which rose 2.5 percent to 1,462 points on January 2. But the momentum is fading, leading some funds and analysts to predict a tough near-term outlook for U.S. equities.
"The recent rally is an opportunity to open promising short positions. Taxes are going up in some shape and form and spending will have to be reduced," said Athanasios Ladopoulos, chief investment officer of hedge fund firm Swiss Investment Managers. "Both feed into negative sentiment down the road."
Data measuring demand to borrow U.S. shares - a proxy for the level of short-selling, or bets on a share price fall - reflects expectations that markets will falter when the next bout of negotiations collides with talks to extend a $16.4 trillion national debt ceiling in February.
According to Sungard Astec Analytics, the aggregate value of U.S. shares on loan rose by 3 percent to $358 billion in the week to January 4, as skeptical funds bet on falls in consumer confidence and company earnings.
That compares with a peak of $404 billion, seen in June when the Federal Reserve rowed back on employment predictions and cut 2012 economic growth forecasts to 2.4 percent from 2.9 percent.
By contrast, the aggregated value of shares in the FTSE 100 <.ftse> on loan fell 4 percent to $1.4 billion in the week to January 4, while the equivalent for the STOXX Europe 600 <.stoxx> dropped 3 percent to $6.6 billion.
Because such bets are struck privately, it's tough to pinpoint exactly when shares are expected to fall. Some bets may be pegged to the impending corporate earnings season, while others will be timed to exploit February's looming fiscal cliff worries.
SHORT, SHARP SHOCK
But even top stock market performers are seen suffering share price volatility until a compromise on cuts and taxes is reached.
Short-sellers are speculators who borrow shares then sell them in the hope of being able to buy them back at a cheaper price, before returning the stock to the original owner.
"While we are positive on U.S. equities for the year, the possibility of a short, sharp contraction on news flow is material in our view," equity strategists at BNP Paribas warned in a note, arguing equity valuations looked over-optimistic.
"The trailing price-to-earnings ratio of 15 times is above long-term averages and earnings growth has slowed to a crawl at best, compared with a consensus forecast for 10 percent," the note said.
Stock lenders - typically long-term investors such as pension funds who can earn a fee by loaning out a stock at little risk to themselves - have also spotted an increased appetite to bet on falling stock prices and have raised the cost to borrow shares by 5 basis points (bps) to about 75 bps on aggregate over the first week of 2013, Astec data shows.
This brings borrowing rates closer to the 78 bps average earned on U.S. equity lending in 2012.
"There is much unfinished business ... not to mention the much bigger question about how the U.S. can meet its long term spending commitments in the face of an ageing population," Ian Kernohan, economist at Royal London Asset Management said.
"Given the polarized nature of U.S. politics at the moment, trying to sort all this out will be an uphill task."
The S&P 500, which rose 13.4 percent in 2012, closed 0.3 percent down at 1,457 on Tuesday. Some commentators say much of the recent growth in U.S. stocks is not due to an influx of optimistic buyers, but short-sellers closing out old bets from 2012 before embarking on a fresh set of short positions.
NOT MAINSTREAM
Heavily-shorted firms like $3.7 billion-valued U.S. Steel Corp and $1.9 billion Advanced Micro Devices saw volumes of stock on loan drop by 15.1 percent to 17.5 percent and 18.6 percent to 14.6 percent respectively in the past month.
This data from financial information firm Markit supports the argument that bears, not bulls, are perversely largely responsible for driving the recent upward move in U.S. stocks.
Certainly a negative view is not mainstream for the year as a whole.
The consensus forecast from respondents to a Reuters poll in December was for the S&P 500 to finish 2013 close to its lifetime high of 1,576.09 set in October 2007.
But signs of fresh short-selling coupled with Friday's underwhelming December jobs data is putting pressure on market optimists.
Speaking at an investment forum hosted by asset manager Notz Stucki on Tuesday, Anatole Kaletsky, a financial economist and Reuters columnist, said cyclical factors such as weak housing markets have been major headwinds but there was evidence these have been neutralised.
But it may take time for this view to be adopted by many consumers. A Reuters/IPSOS online poll of U.S. consumers on Monday found four-fifths of respondents were bracing for another economic downturn.
Additional data from Markit showed sharp increases in demand to short a range of U.S. stocks who stand to lose from a dip in consumer sentiment.
But the list of the 30 most heavily-shorted U.S. names in the week to January 4 spans most sectors including pharmaceuticals, machinery and aerospace & defence, indicating broader pessimism in the market as well as cyclical or stock-specific concerns.
The volume of bets on a fall in the share price of $7.75 billion Tiffany & Co for instance shot up 17 percent last week to 6.4 percent, more than double the 3 percent average short interest on individual S&P stocks.
Demand to short leisure dot-com TripAdvisor Inc was up 11.6 percent to 5.2 percent and Dr Pepper Snapple Group Inc saw stock volumes on loan jump 15.1 percent to 7.8 percent.
"I am of the opinion that when Q4 earnings season starts investors will come to realise that the prospects for 2013 are not that bright," Ladopoulos said. "When the market turns down, it will take with it many of those too optimistic investors."

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Markets rise as Alcoa sees stronger demand

LONDON (AP) — World stock markets rose Wednesday after the fourth-quarter earnings season got off to a positive start in the U.S. with aluminum giant Alcoa forecasting higher demand for 2013.
Sales of aluminum have been hurt by the weak global economy, but Alcoa predicted a 7 percent increase in demand this year, slightly better than the 6 percent increase in 2012. Because Alcoa supplies so many key industries, investors study its results for clues about the health and direction of the overall economy.
"Regional markets are mostly firmer after the Alcoa result set the tone early," said Stan Shamu of IG Markets in Melbourne in a market commentary. "Alcoa's results are generally considered a bellwether for the global economy and the fact that the aluminum giant forecasts higher demand in 2013 appeased investors."
Britain's FTSE 100 rise 1 percent to close at 6,098.65, having earlier traded above 6,100 for the first time since the spring of 2008. France's CAC-40 rose 0.3 percent to 3,717.45.
Germany's DAX ended 0.3 percent higher at 7,720.47, after official figures showed industrial production rose less than expected in November. The 0.2 percent gain was also not enough to offset a 2 percent fall the previous month and means German economic output overall likely fell in the fourth quarter.
Investors will look forward to a monetary policy meeting by the European Central Bank on Thursday for clues on whether the weakening economic outlook is likely to trigger an interest rate cut in the coming months.
On Wall Street, stocks rose as investors there got their first chance to react to the Alcoa results. The Dow Jones industrial average was up 0.6 percent at 13,414.66 while the S&P 500 rose 0.4 percent to 1,463.59.
In Asia, Hong Kong's Hang Seng advanced 0.5 percent to 23,218.47 after a downturn in the prior session, with sentiment helped by gains in mainland Chinese shares.
"Stability in China is helping. We are taking a lot of cues from China-Asia," said Jackson Wong, vice-president of Tanrich Securities in Hong Kong.
Japan's Nikkei 225 index opened lower on a strengthening yen but reversed course as the currency slipped against the dollar. The benchmark in Tokyo gained 0.7 percent to close at 10,578.57.
Australia's S&P/ASX 200 added 0.4 percent to 4,708.10. South Korea's Kopsi was 0.3 percent lower at 1,991.20. Benchmarks in Singapore, Taiwan, Thailand, and the Philippines rose. Indonesia and Malaysia fell. Mainland Chinese stocks were mixed.
Major indexes surged last week after U.S. lawmakers passed a bill to avoid a combination of government spending cuts and tax increases that have come to be known as the fiscal cliff. The deal, however, remains incomplete, and trading has been cautious since then. Politicians will face another deadline in two months to agree on more spending cuts.
In commodity markets, the benchmark crude oil contract for February delivery was down 13 cents to $93.02 per barrel in electronic trading on the New York Mercantile Exchange.
In currencies, the euro fell 0.1 percent to $1.3072 while the dollar rose against the Japanese yen, to 87.92 yen from 87.19 yen.

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Timeline: Geithner's stormy tenure at Treasury nears end

(Reuters) - President Barack Obama will nominate White House chief of staff Jack Lew on Thursday to succeed Timothy Geithner as U.S. Treasury secretary, according to a source familiar with the matter.
Geithner, the longest-serving member of Obama's economic team, had a stormy tenure at Treasury, where he was at the center of the fight against the 2007-2009 financial crisis and deep recession.
Here is a look at the highs and lows of his time at Treasury.
November 24, 2008: President-elect Obama nominates Geithner, then president of the New York Federal Reserve Bank, for Treasury.
January 2009: Nomination hits speed bump when top Republican on Senate Finance Committee reveals irregularities in Geithner's tax returns. Obama administration says Geithner made common mistake with regard to self-employment taxes and Geithner corrects the problem by paying $25,970 in back taxes.
January 26, 2009: Senate votes 60-34 to approve nomination.
February 10, 2009: Stock markets plunge after Geithner sketches out administration's plan to get rid of banks' toxic assets.
Mid-March 2009: Lawmakers start calling for Geithner's resignation after it is revealed that bailed-out insurer AIG paid $165 million in retention bonuses to employees of unit that destroyed the company with bad derivatives bets.
March 21, 2009: Obama says would not accept Geithner's resignation even if he tried to resign.
March 23, 2009: Geithner rolls out toxic asset plan for second time with more details. Stock markets rally.
Early June 2009: GM files for bankruptcy. The Treasury buys bulk of automaker's assets and takes a 60 percent stake in the company.
Mid-June 2009: Obama announces reforms for the financial system that sets the Dodd-Frank regulation bill in motion. Geithner, a key architect, starts selling the plan to Congress.
July 21, 2010: Dodd-Frank becomes law.
November 17, 2010: GM raises $20.1 billion in initial public offering. Treasury sells $13 billion of GM stock, leaving it with about 500 million shares.
February 14, 2011: Geithner unveils three options for future of housing finance market that range in levels of government support. Obama administration does not choose a specific path but says it wants to eventually wind-down Fannie Mae and Freddie Mac, the government controlled financial firms that help finance bulk of new home loans. A revamp of the housing finance system remains unfinished business.
March 8, 2011: Geithner meets then-European Central Bank President Jean-Claude Trichet and German Finance Minister Wolfgang Schaeuble in a surprise visit in Germany ahead of a EU summit to press them to beef up rescue fund for debt-laden euro zone nations.
May through July 2011: Geithner battles with House Republicans over raising the U.S. debt limit.
August 2, 2011: Congress approves increase in debt limit as part of deal that also puts in place a plan to automatically cut $1.2 trillion in defense and domestic programs over ten years if no other agreement is reached to trim nation's budget -- a key element of the so-called "fiscal cliff"
August 5, 2011: S&P downgrades long-term U.S. credit rating by one notch, citing the political dysfunction around the debt ceiling battle. Geithner is outraged and Treasury questions S&P's credibility, noting the agency's initial analysis relied on a government discretionary spending estimate that was $2 trillion too high.
September 16, 2011: Geithner, speaking at EU finance ministers meeting in Poland, rankles some of the ministers as he urges them to beef up Europe's financial bailout fund.
February 22, 2012: Obama administration rolls out corporate tax reform plan that would cut top rate to 28 percent from 35 percent, but declines to push plan ahead of November elections.
August/September 2012: Geithner in spotlight over probe into bank rigging of international interest rate benchmark Libor that dates back to his time at New York Fed. Documents show Geithner urged British authorities to look into how the rate was set, but critics question why New York Fed did not do more.
Late-November 2012: Obama chooses Geithner to lead negotiations with Congress to avert year-end fiscal cliff of spending cuts and tax hikes.
December 10, 2012: Treasury announces plan to sell its remaining shares in AIG, says combined Treasury-Fed $182 billion bailout had positive return of $22.7 billion.
December 19, 2012: Treasury says to sell remaining shares in GM within 12-15 months; taxpayers stand to lose billions of dollars.
January 1, 2013: Congress approves deal to avert fiscal cliff. Plan lets tax rates rise only for wealthiest Americans; postpones first installment of automatic spending cuts for two months.

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Business leaders warn UK PM against leaving EU

LONDON (AP) — Top business executives have warned U.K. Prime Minister David Cameron that he could damage Britain's economy if he seeks to renegotiate the terms of its membership in the 27-country European Union.
In a letter published in the Financial Times on Wednesday, Virgin Group's Richard Branson, London Stock Exchange head Chris Gibson-Smith and eight other business leaders challenged Cameron's plan to renegotiate the U.K.'s EU membership terms and put the matter to a referendum.
The executives warned that such a plan could fail, pushing the U.K. out of the EU and hurting business in the process.
Membership in the EU has given the U.K. access to the massive European market as well as a say in how the region should govern itself and run its financial markets. The country has also benefited from EU funds to build infrastructure such as broadband networks.
However, popular distrust of the EU has grown in Britain — one of the 10 countries in the region that doesn't use the euro. The British public shows no interest in the EU's plans to move closer together. Most can't even seem to stomach the current level of power of the EU, which many Britons see as meddlesome and inefficient.
Though the business leaders urged EU reform in their letter, they argued "we must be very careful not to call for a wholesale renegotiation of our EU membership, which would almost certainly be rejected."
"To call for such a move in these circumstances would be to put our membership of the EU at risk and create damaging uncertainty for British business, which are the last things the prime minister would want to do," they said.
A senior U.S. official also expressed concern about the prospect of a referendum, saying the Obama administration wants to see a "strong British voice" in the EU.
Philip Gordon, the U.S. assistant secretary for European affairs, told reporters in London that "referendums have often turned countries inward" — but stressed that whatever is in the U.K.'s interest is up to the U.K.
"We welcome an outward-looking EU with Britain in it," he said.
Tough economic times are forcing the 17 EU countries that use the euro to move ever closer, creating a more powerful union that could leave non-euro members like Britain with less negotiating power.
But while Cameron wants Britain to remain in the EU and to retain influence in the body, he is also resisting a push by many member states, like France and Germany, to grant central authorities in Brussels greater powers over financial and legal affairs for the whole of the EU. In the long run, many EU countries want to turn the bloc into a United States of Europe, an idea British politicians, particularly among Cameron's Conservatives, abhor.
Cameron is due to make a speech in mid-January to outline his position and the requests he will make. On Wednesday, he told lawmakers that Britain could get the changes it wanted.
"We're active players in the European Union but there are changes we would like in our relationship that would be good for Britain and good for Europe and I think, because of the changes in eurozone which is driving a lot of change in the European Union, there's every opportunity to achieve that settlement and seek consent for it," he said.

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Google executive chairman arrives in North Korea

PYONGYANG, North Korea (AP) — Google's chairman wants a firsthand look at North Korea's economy and social media landscape during his private visit Monday to the communist nation, his delegation said, despite misgivings in Washington over the timing of the trip.
Eric Schmidt, executive chairman of one of the world's biggest Internet companies, is the highest-profile U.S. executive to visit North Korea — a country with notoriously restrictive online policies — since young leader Kim Jong Un took power a year ago. His visit has drawn criticism from the U.S. State Department because it comes only weeks after a controversial North Korean rocket launch; it has also prompted speculation about what the businessman hopes to accomplish.
Schmidt arrived on a commercial Air China flight with former New Mexico Gov. Bill Richardson, who has traveled more than a half-dozen times to North Korea over the past 20 years.
Richardson, speaking ahead of the flight from Beijing, called the trip a private, humanitarian mission.
"This is not a Google trip, but I'm sure he's interested in some of the economic issues there, the social media aspect. So this is why we are teamed up on this," Richardson said without elaborating on what he meant by the "social media aspect."
"We'll meet with North Korean political leaders. We'll meet with North Korean economic leaders, military. We'll visit some universities. We don't control the visit. They will let us know what the schedule is when we get there," he said.
U.S. officials have criticized the four-day trip. North Korea on Dec. 12 fired a satellite into space using a long-range rocket. Washington condemned the launch, which it considers a test of ballistic missile technology, as a violation of U.N. Security Council resolutions barring Pyongyang from developing its nuclear and missile programs. The Security Council is deliberating whether to take further action.
"We continue to think the trip is ill-advised," State Department spokeswoman Victoria Nuland told reporters Monday, reiterating the U.S. position that the visit is badly timed. However she added that the government would be open to hearing from the delegation after they return from North Korea.
The trip was planned well before North Korea announced its plans to send a satellite into space, two people with knowledge of the delegation's plans told The Associated Press. AP first reported the group's plans last Thursday.
Schmidt, a staunch proponent of Internet connectivity and openness, is expected to make a donation during the visit, while Richardson will try to discuss the detainment of a U.S. citizen jailed in Pyongyang, members of the delegation told AP. They asked not to be named, saying the trip was a private visit.
"We're going to try to inquire the status, see if we can see him, possibly lay the groundwork for him coming home," Richardson said of the U.S. citizen. "I heard from his son who lives in Washington state, who asked me to bring him back. I doubt we can do it on this trip."
The visit comes just days after Kim, who took power following the Dec. 17, 2011, death of his father, Kim Jong Il, laid out a series of policy goals for North Korea in a lengthy New Year's speech. He cited expanding science and technology as a means to improving the country's economy as a key goal for 2013.
North Korea's economy has languished for decades, particularly after the collapse of the Soviet Union, which since the mid-1940s had provided the country with an economic safety net. North Korea, which has very little arable land, has relied on outside help to feed its people since a famine in the 1990s.
In recent years, North Korea has aimed to modernize its farms and digitize its factories. Farmers told the AP that management policies were revamped to encourage production by providing workers with incentives.
Computer and cellphone use is gaining ground in North Korea's larger cities.
However, most North Koreans only have access to a domestic Intranet system, not the World Wide Web. For North Koreans, Internet use is still strictly regulated and allowed only with approval.
Schmidt, who oversaw Google's expansion into a global Internet giant, speaks frequently about the importance of providing people around the world with Internet access and technology.
Google now has offices in more than 40 countries, including all three of North Korea's neighbors: Russia, South Korea and China, another country criticized for systematic Internet censorship.
Accompanying Schmidt is Jared Cohen, a former U.S. State Department policy and planning adviser who heads Google's New York-based think tank. The two collaborated on a book about the Internet's role in shaping society called "The New Digital Age" that comes out in April.
Also leading the delegation is Kun "Tony" Namkung, a Korea expert who has made frequent trips to North Korea over the past 25 years and has worked as a consultant for The Associated Press.

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Softer liquidity rules lift Europe's banks

LONDON (Reuters) - French and German bank shares rose on Monday after regulators softened draft rules aimed at preventing a Lehman Brothers-style collapse that critics said threatened to delay a European economic recovery.
Global regulators on Sunday gave banks four more years and greater flexibility to improve their funding positions, due to fears that an earlier plan for new liquidity rules would have made them reluctant to lend, particularly in Europe where credit conditions are already tough.
Europe's bank index <.sx7p> rose 1.1 percent to 172 points by 1600 GMT, after hitting 173.7, its highest in 17 months. France's Societe Generale and Credit Agricole , Germany's Deutsche Bank , Italy's Unicredit and Britain's Barclays all rose by more than 2 percent.
"This is a clear sign that regulators are adapting to the changing economic environment," said Carla Antunes-Silva, analyst at Credit Suisse.
Global financial regulators have tightened bank rules since the 2008 financial crisis and the liquidity coverage ratio (LCR) will be the first global liquidity standard when it comes into force from 2015. It aims to safeguard taxpayers by ensuring banks hold easily tradeable assets to keep them afloat if markets freeze up.
The pullback from an earlier draft at a meeting in Basel on Sunday went further than many analysts had expected.
The regulators decided to allow a wider pool of assets to count as highly liquid, including good quality corporate bonds, some equities and retail mortgage-backed securities (RMBS). They also changed their estimates for the outflow of deposits in a "stressed" situation and agreed that the standards will be phased in from 2015 and not fully implemented until 2019.
The changes could give a lift to earnings for banks across the board, with firms in a weaker funding position now under less strain to conform, and banks with better funding probably able to reduce their surplus liquidity and cut interest payments, analysts said.
LOW YIELD
European banks such as Societe Generale, Credit Agricole, Deutsche Bank and Commerzbank risked having to build up bigger holdings of low-risk and low-yielding government bonds, so the relaxation in the planned rules should cut the increase in interest rates they face.
The cost of holding those extra assets could have run to tens of billions of euros for the industry.
"This is significant progress which addresses issues already raised by the European Commission," said EU Commissioner Michel Barnier.
The rules will be formally implemented under EU law in 2015, he said.
The French Banking Federation said the changes were a "step in the right direction" and should reduce constraints on banks' ability to lend. German and British bank groups welcomed the changes, particularly the expansion of assets that can be used.
The changes should also allow stronger banks to cut surplus liquidity they hold, allowing them to benefit from shifting from cash or governments bonds into assets that pay higher interest.
Barclays, for example, had a liquidity pool of 160 billion pounds ($257 billion) at the end of September, giving it an LCR of just below 100 percent under the proposed rules. Under the relaxed rules, 30 billion pounds of that could be considered surplus liquidity and release about 300 million pounds in annual interest costs, analysts at Espirito Santo estimated.
A liquidity rule could have prevented the short-term funding freeze that brought down lenders like U.S. investment bank Lehman Brothers and UK mortgage lender Northern Rock during the 2007-09 crisis.
But banks and some regulators had warned the original plan could spark another huge wave of deleveraging.
Banks are still restructuring and shrinking their balance sheets. Euro zone banks are two-thirds through their deleveraging process and are likely to shed another 132 billion euros of assets this year, Ernst & Young estimated on Monday, and regulators want to stop that retreat being too aggressive.
The liquidity rules will run alongside tougher capital rules - covering the amount banks have to hold to absorb losses - and could have forced banks to cut back on domestic lending.
The Basel Committee, made up of financial regulators from nearly 30 countries, said Sunday's changes mean the average LCR at the world's top 200 banks would rise to 125 percent from 105 percent under the old rules, putting it well above full compliance.
But there is wide range of liquidity across the banks.
If the original plan had been in force at the end of 2011, banks would have needed 1.8 trillion euros more liquidity, or about 3 percent of their assets, the Basel Committee estimated. Two-thirds of that shortfall would have been in Europe.
Some 38 percent of the banks would have had a ratio of below 75 percent - above the 60 percent level they now need to reach by 2015, but below the 100 percent standard set for 2019.
Analysts said major banks are likely to remain under pressure from investors to fully meet the rules by 2015, so the main winners of the longer time-frame will be smaller euro zone banks who were struggling to get cheap funding.
Widening the pool of assets should boost the market for RMBS and ease the pressure on banks to hold government bonds, after the euro zone crisis showed their risks to banks and sovereigns.
But the changes may have a muted impact on attempts to kick-start economic growth, as there remains scant appetite to take on debt, economists warned.

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Egypt talking to IMF again about crucial loan

 Doubts are emerging about the Egyptian government's ability to implement painful austerity measures linked to the International Monetary Fund's critical $4.8 billion loan that could stop an economic collapse.
A top IMF official began talks in Cairo Monday, the latest in the drawn-out negotiations for the loan. The government is confident that the loan would not only cover part of its huge deficit, but also, it would signal to investors that Egypt is again a safe bet after two years of turmoil that started with the 2011 uprising that unseated longtime President Hosni Mubarak.
But the Islamist government that replaced Mubarak has already had to postpone final talks on the loan because it was unable to carry out the first steps required by the IMF. President Mohammed Morsi of the Muslim Brotherhood announced some of the measures, including tax increases, but quickly rescinded them over unrest surrounding his proposed constitution, perceived as pro-Islamist.
Now, with parliamentary elections upcoming, critics doubt Morsi will want to — or be able to — implement measures that could stoke new public anger, like cuts in subsidies for fuel and food that allow millions of Egyptians to survive despite their meager incomes.
Despite economic growth in Mubarak's last years in office, poverty deepened. About 40 percent of Egypt's people live near or under the international poverty line of $2 a day.
The head of the IMF's Middle East and Central Asia Department, Masood Ahmed, met Monday with Morsi and his prime minister ahead of the technical talks due to start soon.
Masood's visit comes a day after Prime Minister Hesham Kandil named a new finance minister, aiming to tackle Egypt's deteriorating economy.
The numbers are daunting. The budget deficit from July to November last year reached about $13 billion, compared to $9.5 billion in the same period last year.
The government admitted that its foreign currency reserves are at a critical level — enough for only three months of vital imports. Reserves have plummeted over the past two years, as foreign investment and tourism have dried up.
According to the new constitution, Morsi has to call for new parliamentary elections within the next two months. The parliament to be chosen would be the first to flesh out the constitution with legislation, making its composition — the proportion of Islamists to secular and liberal parties — crucial to the nation's future.
Critics warn that Morsi, as a politician, would be hesitant to impose austerity measures that could further inflame sentiment against the Brotherhood, already losing support because of Egypt's troubles an opposition suspicious of the group's attempt to monopolize power.
"They are in a very difficult situation," said Ahmed Shokr, a founding member of Drop Egypt's Debt Campaign. "They are trying to demonstrate to the IMF they are committed to this program, but on the other hand don't want to do it too quickly ahead of coming elections. I expect whatever they introduce will be very gradual."
Brotherhood officials acknowledge the seriousness of the economic situation and its impact on their popularity.
"The government must take these measures. They can't be postponed, even if they have a negative impact on the party," said Mohammed Gouda, an economic expert in the Brotherhood's political arm, the Freedom and Justice Party. He added, "I have to deal with" the consequences.
After Morsi rescinded the first round of tax hikes on items like cooking oil, alcohol and cigarettes, the government offered a social dialogue on the economy. Gouda predicted some of the taxation measures might be altered after discussion with those involved.
Already the government has introduced a system designed to control the devaluation of the currency, long propped up by foreign currency reserves that are now too depleted to continue. Under an auction system, Egypt's central bank sold $360 million, allowing the currency to lose about 5 percent of its value in recent days
A devaluation has been anticipated as part of the talks with the IMF, but it is likely to further harm Egypt's trade deficit, because the country relies on imports for much of its basic food, including wheat, sugar and tea.
Samer Atallah, a professor of economics at the American University in Cairo, warned of implications from the negotiations for the loan.
"The whole process has been lacking transparency, and they put themselves in a difficult position without the political consensus needed to sell this to the public," he said. "I think austerity measures are extremely difficult to carry out before any elections, even with the Brotherhood's ability to mobilize" voters.
Fady Mohammed, a 21-year-old student who works on awareness campaigns in low-income neighborhoods, said discussions with people there focus on frustration at lack of change in their living conditions, two years after the ouster of Mubarak.
"Many say neither the Brotherhood nor the revolutionaries have done them any good," Mohammed said. "People feel that the government never takes the side of the poor and is more concerned about establishing control."
Gouda had no good news for the impoverished. He said years of poor economic policies were bound to hit Egyptians hard.
"We will have to rely on local civil groups and charities to compensate some of the low-income groups," he said.

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"Fiscal cliff" deal a budget help or hindrance? Yes, says CBO

WASHINGTON (Reuters) - So does Congress' landmark deal to avert the "fiscal cliff" by canceling tax hikes on most Americans increase or decrease long-term U.S. budget deficits?
The answer is a definitive "yes," the Congressional Budget Office said on Friday. It all depends on the comparison. And by the way, it also helps - and hurts - the economy.
As it said earlier this week in its official budget scoring of the legislation passed on January 1, the deal adds $4 trillion to deficits over a 10-year period compared to allowing all income tax rates to jump back to their pre-2001 levels and allowing automatic spending cuts to bite -- effectively a leap off the fiscal cliff.
Add in the increased debt service costs through 2022, and you have $4.6 trillion in new debt burden. The main culprit is simple: the legislative deal brings in less revenue than called for by tax laws that would have reinstated the old rates.
But few in Washington believed it was realistic to allow a full return to Clinton-era tax rates, sharply lower Medicare payments to doctors and a failure to stop the dreaded alternative minimum tax from ensnaring ever-larger numbers of middle-class taxpayers.
So the CBO last year came up with an alternative scenario, which assumed that all tax rates were left unchanged and the AMT indexed for inflation. Had this been enacted, deficits would have risen $4.5 trillion, or $5.2 trillion including debt service costs, CBO estimated in August.
After making some adjustments in the agency's calculations due to the fiscal cliff legislation, CBO director Doug Elmendorf said in a blog posting that the deal would produce 10-year budget savings of $600 billion to $700 billion compared to this alternative tax-extension scenario.
Add in lower debt service costs, and the savings would be $700 billion to $800 billion.
CBO also had predicted that going over the fiscal cliff had dire consequences for the economy, plunging it back into recession. This would have caused U.S. gross domestic product to shrink by 0.5 percent in 2013 - a huge plunge from Federal Reserve forecasts of 2.3 percent to 3.0 percent growth.
An economy in recession generates less tax revenue and prompts higher spending on unemployment benefits, which widens a deficit and forces more borrowing.
But due to this week's deal, the CBO's estimate is now back in the black, with the office expecting 2013 GDP growth of around 2.5-2.75 percent. This could decline due to some further fiscal tightening still on the books for this year, however.
The CBO's analysis does not include any further spending cuts that Congress may make in the next two months as a looming battle over the federal debt limit heats up.
Longer term, however, CBO estimates that the fiscal cliff deal will reduce GDP output compared to allowing all of the tax rates to snap back to Clinton-era levels.
While some short-term pain will be avoided, it will do little to halt the growth of U.S. debt in the long run. The debt service costs and the lower national savings and reduced capital stock associated with this will eventually start to sap economic growth, the CBO said.

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Wall Street economists see Fed's Treasury buying ending in 2013: Reuters poll

NEW YORK (Reuters) - Most economists at Wall Street's top financial institutions expect the Federal Reserve in 2013 to end the program with which it bought Treasury debt in an effort to stimulate the economy, according to a Reuters poll on Friday.
Economists at nine of 16 primary dealers -- the large financial institutions that do business directly with the Fed -- said they expect the current Fed program of buying $45 billion per month of Treasuries to end in 2013.
Of the nine, eight said the central bank would quit the program in the fourth quarter or the end of the year. One forecast the end of the program in June.
Six of 15 economists at primary dealers said the Treasury purchase program would close in 2014, while one said it would continue through to the first half of 2016.
Minutes from the Fed's December policy meeting, released on Thursday, showed "several" top officials expected to slow or stop the so-called quantitative easing program "well before" the end of the year. That news surprised some on Wall Street and prompted a drop in stocks and bonds, and a rise in the dollar.
"It is hard to be as confident of the purchases continuing at the same pace, because we had originally thought they were going to last through the fourth quarter of 2014, but now it is not as clear that is going to be the case," said Tom Simons, money market economist with Jefferies & Co. in New York.
St. Louis Fed President James Bullard, a voting member of the Fed's monetary policy panel this year, said on Friday the Fed could be in a position to halt its asset purchases this year if the U.S. economy improves.
The Fed this week began buying longer-dated Treasuries in an open-ended stimulus program that replaced its "Operation Twist" stimulus, under which it was selling shorter-dated Treasuries and using the proceeds to buy longer-dated U.S. government debt. Twist expired at the end of December, with analysts noting the central bank had few shorter-dated Treasuries left to sell.
The central bank is already buying about $40 billion per month of mortgage-backed securities in an effort to prop up the economy.
The median of forecasts from 13 primary dealers was for the Fed to buy a total of $540 billion of Treasuries under the current stimulus program. Estimates ranged from $270 billion to $1 trillion.
Nine of 16 primary dealers said the U.S. unemployment rate would fall to 6.5 percent in 2015, while six said it would dip to that level in 2014 and one said it would happen in 2016.
The Fed at the conclusion of its December policy meeting said it expects to hold interest rates at the current level of zero to 0.25 percent at least as long as the unemployment rate remains above 6.5 percent and inflation between one and two years ahead is projected to be no more than 2.5 percent.
Previously, the Fed had said it expects to hold rates near zero at least through mid-2015.
The Reuters poll was conducted on Friday after the government reported the pace of hiring by U.S. employers eased slightly in December, while the unemployment rate held steady from November at 7.8 percent.
"In the context of the Fed's now explicit unemployment rate target, (Friday's payrolls data) at the margin theoretically extends the timing of the first tightening," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York.
"That said, at the current six month pace in monthly payroll gains and labor force growth, the unemployment rate would still hit 6.5 percent by June 2014 - much sooner than the Fed's prior mid-2015 launch point," he said.
There are 21 U.S. primary dealers. Not all of the dealers responded to the Reuters poll.

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Egypt's Mursi to meet IMF aide on $4.8 billion loan request: newspaper

CAIRO (Reuters) - A senior official in the International Monetary Fund (IMF) will meet Egyptian President and other top officials on Monday to discuss Cairo's request for a $4.8 billion loan, a major state-run Egyptian newspaper reported on Saturday.
The IMF loan is seen as crucial to easing Egypt's budget deficit and an economic slump caused by the turmoil that followed the popular uprising that ousted autocratic president Hosni Mubarak in February 2011.
"Egyptian President Mohamed Mursi will receive on the day after tomorrow Masood Ahmed, the IMF director for the Middle East and Central Asia... and it is expected that the meeting will include talks about the IMF's loan to Egypt," the Akhbar Al-Youm daily reported.
It said Masood would also meet Prime Minister Hisham Kandil, some ministers and the central bank governor. Officials from the cabinet, presidency and IMF were not immediately available to comment on the report.
Egypt's currency has lost about 10 percent against the dollar since the start of 2011. But about a third of that plunge has come in the last week alone, since the central bank began auctioning $75 million a day out of its reserves on December 30.
The pound slid further on Thursday at the central bank's fourth auction of foreign currency, with $74.9 million sold to banks at a cut-off price of 6.386 pounds, weaker than Wednesday's 6.351 to the dollar.
The cabinet spokesman said on Thursday that an IMF mission would visit in January to discuss the loan deal, which was postponed last month at Cairo's behest because of violent anti-Mursi protests raging at the time.
The IMF said last week that it welcomed steps Egypt had taken to stop a drain on its international reserves, which had driven the Egyptian pound down to record lows.
Egypt's budget deficit in the year to end-June 2013 could widen by 50 percent from the original forecast made in July, according to a figure released by the planning minister last Monday.

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Google filing error shocks investors, exposes process

SAN FRANCISCO/NEW YORK (Reuters) - R.R. Donnelley & Sons Co handles thousands of securities filings a year for corporate clients in a routine process that is invisible to most investors. On Thursday Google and its shareholders found out just what happens when that process goes wrong.
Google issued a statement blaming Donnelley, its filing agent, after the Internet search company's quarterly results were released by the U.S. Securities and Exchange Commission hours ahead of schedule.
Earnings were far less than analysts expected and Google shares immediately plunged as much as 10.5 percent, knocking $26 billion off its market capitalization - the equivalent, as it happens, of about 13 R.R. Donnelleys.
It was quickly obvious that a mistake had been made -- the second paragraph of the filing said "PENDING LARRY QUOTE" instead of an actual quote from Google CEO Larry Page -- but it was not clear why.
Within minutes, though, an unknown prankster set up a "PendingLarry" Twitter feed to hypothesize what the missing quote might be. Among the highlights: "Man, our privacy was WAY violated today."
Donnelley shares lost more than 5 percent after Google started pointing the finger, though they recovered later in the day. The company did not respond to a call for comment, but issued a statement to CNBC in which it said it was investigating the circumstances of the release.
Best known as a provider of printing services, Donnelley is also the top SEC filing agent in the country, handling more than 75,000 submissions this year as of mid-October, according to SECInfo.com.
Filing agents like Donnelley take paper documents and convert them for submission to the SEC in the appropriate format. The company also owns the filing portal EDGAR Online.
WHO GOOFED?
It is far from the first time a company's earnings have somehow gotten out early.
In late 2010 and early 2011, inadvertent releases - usually by a misplaced release on a website - plagued companies like Walt Disney Co (NYS:DIS) and Microsoft Corp (NSQ:MSFT).
The common thread in all of those cases is that investors who are not in the right place at the right time to see the news may suffer for it.
"Some who didn't get a chance to sell will try to, and others will be looking for bargains. I'm sure a lot of Google owners were caught off guard," said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas.
After the first question of "who goofed?" was sorted out Thursday afternoon, the second one being asked by investors was "can we sue?"
"Everyone is trying to figure out if there's any legal issue with respect to R.R. Donnelley. Google is halted, Donnelley is down big-time on the news since they're allegedly not supposed to have released the information," said Michael Matousek, senior trader at U.S. Global Investors in San Antonio.
But one plaintiffs lawyer who sues companies on behalf of investors said shareholders would not have a claim against either Google or R.R. Donnelley because the earnings disclosure was likely a mistake.
"There's no fraudulent intent here," said Reed Kathrein with Hagens Berman.
R.R. Donnelley may not be entirely off the hook with Google, however. The company could have a negligence claim to recover any additional costs it incurred in responding to the incident, Kathrein said.
Any potential damages against R.R. Donnelley could be limited, though, by the contract between the two companies.
Late Thursday, Google filed an amended press release with the missing quote and a confirmation that the figures in the original were accurate.
R.R. Donnelley shares were up 2 cents at $10.87 in late trading. Google was down 8.1 percent to $693.94 after trading resumed.

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Who Owns America’s Debt?

As the U.S. continues to rack up more than $1 trillion of new debt every year, Americans are beginning to worry about who we owe this money to and how much power our creditors have over us.
According to Barry P. Bosworth, a senior fellow at the Brookings Institution, our two biggest foreign creditors are Japan and China.
Although it may seem as though our debt to these countries renders us a puppet on strings, Bosworth says this fear is overblown. The U.S. market is very important to China's economy, so China would be loathe to do anything that might exacerbate tensions or disrupt trade between the two countries. And the same can be said for Japan. China owns $1.15 trillion of U.S. government debt -- more than any other country -- but U.S. taxpayers actually owe less money to China compared to recent years. China holds 10% of U.S. Treasuries, down from 12% two years ago.
Related: China's Slow Growth 'Marks An End of an Era' But No Hard Landing
And what about all the anti-China rhetoric that we hear about on the campaign trail?
Republican Presidential Nominee Mitt Romney has been promising the country that he will declare China a "currency manipulator" on the first day of his presidency--and then enact tariffs as necessary until he forces China to level the trading playing field. Is that something that Romney is actually likely to do if he gets elected?
No, says Bosworth.
Tough talk with respect to China has become standard rhetoric for any presidential challenger. If and when Romney becomes president, his position will likely mellow.
Bosworth also says that the problem with the U.S.-China trade relationship is not, as is commonly believed, that China doesn't play fair. China has actually addressed lots of its unfair practices over the past decade, Bosworth says, while the U.S. is still pursuing the same old self-destructive habits. Until we stop consuming so much and start producing more, Bosworth says, we're in no position to demand anything.

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Earnings from McDonald's, Microsoft sink stocks

NEW YORK (AP) -- Poor earnings reports from three companies in the Dow Jones industrial average — Microsoft, General Electric and McDonalds — sent indexes down sharply Friday, marking a sour end to an otherwise strong week in the stock market.
McDonald's led a broad drop in the Dow, falling 3 percent. The Dow was down 151 points at 13,397 shortly after noon.
"I'm concerned about corporate earnings, but I'm not alarmed yet," said Doug Cote, chief market strategist at ING Investment Management in New York.
Cote cautions that it's still early in reporting season, but what's worrying is that companies have reported an overall drop in earnings so far. "And once you get one quarter of negative earnings, it's a precursor," he said. "It's the cockroach theory: if you find one, there's probably many more."
The Standard & Poor's 500 sank 17 points to 1,440 and the Nasdaq composite dropped 52 points to 3,020. All 10 industry groups in the S&P 500 fell, led by materials and technology stocks.
McDonald's profit sank as a strong dollar hurt international results, which account for two-thirds of its business. The fast-food giant's stock lost $3.51 to $89.35.
Microsoft's income fell 22 percent as PC sales took a dive and as troubles in Europe took their toll. Its stock lost 67 cents to $28.82.
General Electric, another economic bellwether, fell 3 percent. The company reported stronger profits early Friday but its revenue missed Wall Street's expectations. Orders for new equipment and services sank, mainly because wind turbine orders have fallen because a key U.S. federal subsidy for wind power expires at the end of the year.
GE's stock lost 60 cents to $22.21.
Analysts currently expect companies in the S&P 500 to post their worst earnings results since the third quarter of 2009, according to S&P Capital IQ. Banks and consumer discretionary companies are projected to report the best growth. Analysts expect companies dealing in metals and other materials to report the worst results, followed by energy companies.
But it's technology companies like IBM, Intel and Google whose weak results have grabbed the most attention so far.
Weak earnings from Google and a rise in claims for unemployment benefits helped pull the stock market lower Thursday. That snapped a four-day run of gains for the Dow. Google fell again Friday, giving up $14.14 to $680.86.
The Dow is still up 0.6 percent for the week. The S&P 500 up is up 0.8 percent.
In other Friday trading, the yield on the 10-year Treasury note slipped to 1.77 percent from 1.83 percent late Thursday.
Among other stocks making big moves, Chipotle Mexican Grill plunged 14 percent after the burrito chain forecast that revenue growth would slow sharply next year. The stock had been a favorite among investors thanks to super-fast growth in recent years. The stock fell $41.32 to $244.61.

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McDonald's Canada Reveals How They Make Famous Fries

McDonald's Canada is at it again, demystifying their french fry recipe "from the farm to all the way to the fryer."
In their new behind-the-scenes video, Scott Gibson, manager of the company's supply chain, takes customer questions on their world-famous fries.
Gibson addresses the first question asking whether or not the potatoes used by the fast food restaurant are real. Standing in the middle of the Levesque farm with farmer Angelo Levesque, the two discuss how the potatoes are harvested and sorted at the farm. Then they are then brought to McCain, the company's fries supplier, to be prepped before heading to stores.
SLIDESHOW: Fast Food Ads vs. Reality: How Do They Size Up?
Mario Dupuis, production manager at McCain, describes how they prepare the fries by washing the potatoes to remove the rocks and the dirt and put them through a "peeling system."
Afterwards, they are cut and blanched "to remove the natural sugars from the strips, this will prevent some variation in the color once we cook the product," said McCain.
Next they are washed in a textural solution to give it the "nice even coat we see in the restaurants," said McCain, adding they also use an ingredient on the strips to prevent the fries from greying or oxidizing. Afterwards, they are then dried and fried for 45 to 60 seconds. Finally, they are frozen, packaged and shipped to stores.
Once in stores, the fries are deep-fried in 100 percent vegetable oil. They are salted with about 1 tablespoon of salt per four orders of medium fries. For those concerned about salt intake, Gibson suggests that customers can order their fries without the salt.

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Apple’s New iPad Mini Is Pricey but That Won’t Deter Fans: TechCrunch’s John Biggs

It's officially here: The iPad mini, the subject of endless speculation and rumors over the past year, made its debut Tuesday at the California Theater in San Jose, Calif. The iPad mini starts at $329 and hits store shelves Nov. 2. Pre-sales begin Oct. 26. It boasts a 7.9-inch display, weighs 0.68 pounds and is 7.2mm thick. The design closely resembles the iPod Touch and comes in both black and white.
Related: Get Ready for a Big Week in Tech: Apple & Facebook Earnings, Mini iPad, Windows 8 & More
As is the case with all Apple products, there is an option to pay up for more hardware. Here are the price points:
$329 for 16GB
$429 for 32GB
$529 for 64GB
In mid-November Apple will roll out the Wi-fi and 4G mini for $459 for 16GB, $559 for 32GB, and $659 for 64GB.
The iPad mini screen measures 1,024x768, the same resolution as the iPad 2. It also includes a dual-core A5 processor, a front-facing FaceTime HD camera, Apple's "Lightning" connector and a 5-megapixel back camera. A fully charged iPad mini will get 10 hours of battery life.
Apple (AAPL) stock was trading nearly two percent lower after the iPad mini presentation.
Related: Why Apple's Stock is Dropping
John Biggs, East Coast editor of TechCrunch, says the Apple event lacked the shock and awe of previous product announcements.
"Everybody was expecting an iPad mini and we got an iPad mini," he says in an interview with The Daily Ticker. "To see an iPad mini pop up is no huge surprise."
Biggs says the new mini may be pricey but it would not deter Apple devotees and tech "dorks" from adding to their Apple collections. The smaller screen will attract consumers who use tablet devices for reading -- "it's Apple's e-reader" -- Biggs says, and the new mini is not likely to cut into sales of the larger iPad versions, which still feature bigger screens and a higher resolution display.
The starting price for the iPad mini is $130 more than the Kindle Fire HD and Nexus 7 — Apple's two main competitors in the e-reader space. Most Apple insiders and analysts were expecting a lower entry point for the mini, says CNET's Brian Tong, and consumer sticker shock could drag down sales expectations. The mini's price would have been even higher if Apple made it with a retina display, he adds.
"It will sell well but won't break records," Tong says. "It will sell because it's Apple. Never underestimate the Apple consumer."
Microsoft will unveil its first tablet device, Surface, next week.
Related: Microsoft Launches Its Own Tablet--and Admits Apple Was Right
Biggs says the Surface's size and user-face are more conducive to typing, an important feature for some consumers. The tablet market may be expanding but there's still only one winner, according to Biggs — Apple. "You're getting the premium product," he says.

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Top Realtor in Gainesville VA, Linton Hall Realtors, Launches Interactive Web Experience

A top performing realtor in Gainesville, VA - Linton Hall Realtors - is pleased to announce the launch of an interactive live chat system to aid their website visitors, who are looking to buy or sell homes in the Gainesville, VA area. The addition of the interactive service will allow for expanded real estate client service in an increasingly competitive marketplace.

Gainesville, VA (PRWEB) December 20, 2012
Linton Hall Realtors, one of the highest producing realtors in Gainesville, VA, is pleased to announce the launch of an interactive system to allow real time communications with website visitors. The system will be used to help prospective home buyers search the Gainesville, VA home listings on Linton Hall Realtor's company website. By offering a live chat solution, Linton Hall Realtors expects to help sellers get information they need about listing a home, aid home buyers in finding the right home in the right area, and lead to greater levels of client satisfaction.
Finding homes for sale in Gainesville, VA can be a daunting task. From the Piedmont community in the north down the entire length of Linton Hall Road neighborhoods and communities are springing up. Even as new developments are emerging, some of the older areas are now 15 years old or more. This makes for an area where many families are upgrading and moving within the same community. This is when sellers frequently begin looking for a local agent representative.
Listing a home includes many dynamics. Listing price, marketing the home, and even staging and curb appeal are all important considerations. By implementing the live chat system on the website, people selling their home in Gainesville, VA will be able to interact with a real estate professional right at the moment they begin looking for information. "By providing this type of real time information, we can make the home selling process much easier," said Ashley Leigh, founder of Linton Hall Realtors. "The live chat feature allows us to get critical information to home sellers quickly and easily," he added. Indeed, with programs like the Guaranteed Sale Program, the Move Up to Savings program and even specialized help with short sales, there is a huge quantity of information.
Although there is so much to learn and investigate when selling your home, most sellers conduct extensive research when they are planning to buy new home. Searching for new homes in Gainesville VA is often the more exciting part of the process. That's another reason why Linton Hall Realtors implemented the live chat website feature. "The first thing a buyer/seller does is start searching for their new house. By providing them information when they first begin their search, we can make the entire process work better and smoother," Leigh said. Questions about are schools, planned expansion; home builders and community amenities are all popular questions.
When a user comes to LintonHallRealtors.com, they typically start browsing for a new home and then examining all the program information available to sellers. This process usually continues for weeks or months. When an agent is right there, available for quick questions or even more detailed phone consultations, the home buyer/seller gets exactly the information he or she needs, right at the moment in time it is needed. This leads to an overall improved client experience. "By providing excellent information with real-time technology, we can begin our work with them much earlier in the sales cycle and create a better overall client experience," said Leigh.
About Linton Hall Realtors:

Linton Hall Realtors pledge is to provide unsurpassed real estate service. Linton Hall Realtors has been named the #1 selling broker of the year by the Northern Virginia Association of Realtors three times and has billions in real estate transactions to its name. The company has passed the $2 billion in transaction mark and continues to help clients list and buy homes in Gainesville, VA and the surrounding area. For more information visit us at: http://www.lintonhallrealtors.com.

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Mission Impossible?: Can Tom Cruise Launch a Box-Office Franchise with 'Jack Reacher'?

LOS ANGELES (TheWrap.com) - Paramount hopes it's launching a franchise with "Jack Reacher," the Tom Cruise action thriller that hits theaters Friday.
It will be tricky in a crowded holiday marketplace, and Cruise isn't the box-office bonanza he once was. But one need only look back to last year's "Mission: Impossible - Ghost Protocol" to see how it might work. That film opened to $12 million on December 16 and went on to make $209 million and nearly $700 million worldwide for Paramount.
"Jack Reacher" will be in about 3,200 theaters, and it will have plenty of competition. Universal's Judd Apatow comedy "This Is 40" opens wide Friday, and Paramount's ‘Guilt Trip" and Disney's 3D re-release of "Monsters Inc." opened Wednesday.
A slew of limited releases, led by Kathryn Bigelow's "Zero Dark Thirty," along with this year's winner of the Palme d'Or at Cannes "Amour," and tsunami survival tale "The Impossible" are also competing for moviegoers' attention, along with a number of holdover hits.
No movie, though, will come close to catching reigning box-office champ "The Hobbit: An Unexpected Journey," which remains in more than 4,000 theaters. Peter Jackson's latest Middle-earth epic will take in north of $40 million, industry analysts say, with "Jack Reacher" and "This Is 40" battling for second with less than half of that.
Warner Bros.' "Hobbit" has rolled to $106 million in the U.S. since opening to $85 million last weekend. Its international total - $188 million as of Thursday - is even bigger.
In "Jack Reacher," Cruise plays an ex-military investigator; the film is based on bestselling author Lee Child's novel "One Shot" and written for the screen and directed by Christopher McQuarrie. It's from David Ellison's Paramount-based Skydance Productions and was produced for about $60 million by Cruise, Don Granger, Paula Wagner and Gary Levinsohn.
Robert Duvall and Richard Jenkins co-star in the PG-13 crime thriller, which has a 53 percent positive rating at Movie Review Intelligence.
No is expecting "Jack Reacher" to match "MI:4" at the box office. The Reacher novels have a following, but nowhere near that of the "Mission Impossible" franchise. Cruise's recent box-office record has been uneven, and the film's Facebook and Twitter activity is not particularly strong.
"Jack Reacher" could wind up playing more like Cruise's "Knight and Day," which opened to $20 million and went on to make $76 million for Fox in 2010, or "Valkyrie," which did $83 million in 2008 after opening to $21 million. Cruise was critically lauded for his foray earlier this year as an aging rock icon in the musical "Rock of Ages," but that was one of the year's bigger box-office duds.
"Jack Reacher" should play strongly with action fans, but Cruise's personal problems could limit its broader appeal.
"I can't imagine his divorce from Katie Holmes and the custody battle hasn't hurt him some with women," BoxOffice.com vice president and chief analyst Phil Contrino told TheWrap Thursday. "Actions fans will come out, but going beyond that demographic is going to be tough for him."
On the other hand, Universal says that it tracking suggests "This Is 40" will do quite well with women -- and women over 25 in particular.
"This Is 40," is, as the marketing campaign points out, a "sort of sequel" to Apatow's "Knocked Up," which opened to $30 million and went on to make nearly $150 million five years ago. Like "This Is 40," that one was written and directed by Apatow and starred Paul Rudd and Leslie Mann.
"40" is the fourth film Apatow has directed, all for Universal ("Funny People" and "40-Year-Old Virgin" are the other two). The ensemble cast also features Albert Brooks, John Lithgow, Megan Fox, Maude Apatow, Iris Apatow, Chris O'Dowd, Jason Segel, Melissa McCarthy and Lena Dunham.
It's R-rated and has a 62 percent positive rating at Movie Review Intelligence. The production budget was $35 million.
"This looks like the strongest comedy of the season," Jeff Bock, senior analyst at Exhibitor Relations told TheWrap, "but it's still a bit of a wild card. It's going to connect with the New York and L.A. crowds; the key will be whether the Heartland audiences embrace it or see it as a little too hip. It will take time to tell, because of the season."
Films released at this time of year tend to open lower because the marketplace is so crowded - by Friday, 11 new films will have hit opened this week - and the fact that many potential moviegoers are districted by shopping and other holiday preps. On the other hand, they often show lasting power and make up what they don't take in on the weekend with stronger showings on the weekdays.
"Things could well come in lower than people are expecting across the board this weekend," Bock said, "but look for many of these movies to make it up over the holidays."
Summit will be looking for that kind of slow build on "The Impossible," the English-language film from Spain based on a true story about a family's fight to survive the 2004 tsunami in Thailand. Ewan McGregor and Naomi Watts, who received a Best Actress nomination from SAG recently, star.
Summit is releasing it Friday in 15 theaters in New York, Los Angeles, Chicago, Philadelphia, Phoenix, San Francisco, Washington, D.C., and Toronto. The plan is to go nationwide early next year.
"The Impossible" already has taken in $52 million in Spain, the home of the real-life couple upon whom the story is based as well as director Juan Antonio Bayona ("The Orphanage") and screenwriter Sergio Sanchez.
Other limited rollouts set for Friday include Paramount's 3D concert film "Cirque du Soleil: Worlds Away," in 800 theaters; "On the Road," IFC Films' adaptation of the Jack Kerouac's beat generation novel, in four theaters; and "Not Fade Away," the Paramount Vantage tale of a group of 1960 New Jersey friends launching a rock band, written and directed by "Sopranos" creator David Chase, in three locations.
Sony's "Zero Dark Thirty," about the manhunt for Osama bin Laden, got off to a terrific start Wednesday. It racked up $124,848 from five theaters in its first day of release. That's an average of $24,969, making it one of the biggest limited mid-week openings in history.

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ReferralBuzz Announces Partnership with TruliaTwin Cities’ Referral Service for Home Remodeling Experts and Their Customers Partners with Leading Online Real Estate Market

Twin Cities’ referral service for home remodeling experts and their customers partners with leading online real estate marketplace.

Minneapolis, MN (PRWEB) December 21, 2012
Starting in January 2013, ReferralBuzz Inc., in Minneapolis, will be the exclusive partner in the 7 county Twin Cities metro and St Cloud, MN, Madison, WI, Cedar Rapids, IA for the new "Find a Pro - Home Improvement" feature on Trulia. Trulia is a leading online marketplace for home buyers, sellers, renters, and real estate professionals. ReferralBuzz will be the first home improvement recommendation resource on the Trulia website.
Founded in 2011, ReferralBuzz gives consumers a free, easy way to find great service providers - including providers who’ve earned recommendations from social media, neighbors, and friends. ReferralBuzz also gives home remodeling experts the tools they need to market their services and increase referrals using the power of social media.
With unique info on areas people want to live that can’t be found anywhere else, Trulia provides the inside scoop on properties, places, and real estate professionals. Prospective home buyers, sellers, and renters can learn about agents, neighborhoods, schools, crime, commute times, and even ask the local community questions. Meanwhile, real estate professionals use Trulia to connect with millions of transaction-ready buyers and sellers each month via Trulia’s hyper-local advertising services, social recommendations, and top-rated mobile real estate apps.
"The partnership with Trulia will provide a huge benefit to our customers through greater exposure,” says ReferralBuzz Founder Lisa Schneegans. “We will be able to feed information onto the "find a pro" section of Trulia's website from the ReferralBuzz website and provide the inside scoop to homeowners, buyers and sellers on local home improvement service providers."
For ReferralBuzz Service Providers, the partnership with Trulia means:

Service Provider’s ReferralBuzz profile will be seen by hundreds of thousands of consumers interested in home improvement in your service area.
Service Providers ReferralBuzz subscription will include a Trulia "Find A Pro" listing that will be automatically be uploaded from your ReferralBuzz profile.
Referral Buzz Service Providers will be able to participate in Trulia Voices "Ask an Expert"
ReferralBuzz will have the exclusive banner ad on the new Trulia mobile app for our metro area. Subsequently giving the service provider’s profile an opportunity to be seen by thousands of people.
How It Works for Homeowners

To get started, homeowners simply sign on at http://www.referralbuzz.com. Homeowners can view exclusive deals, request estimates and get ideas for their own projects from other customers’ pictures and feedback. Homeowners can sign in through Facebook and see which providers their “Friends” have used and recommend.
How It Works For Service Providers

ReferralBuzz provides a set of very easy to use tools for service providers to help them enhance their business. Automated tools include:
Social Referrals-Get customer referrals through their social networks, the “word of mouth” in the digital age.
Customer Feedback-After a job is completed ReferralBuzz makes the request for feedback automatically.
Stay In Touch Email-This in-touch e-mail system turns great customers into repeat customers and helps customers keep you in mind.
Facebook Posting-Automatically post your projects, photos and specials on your own Facebook page.
Digital Portfolio-Keep your visual assets at your fingertips. Photos sell your service better than any sales pitch. Email your presentation to the prospect, right from your IPad.
Project Communication-Communication during a project is often the key to keeping a job on track. ReferalBuzz makes that easy. And, once the project is done, an automated sequence of feedback requests, social referrals and emails begins. Clients feel well taken care of, long after you’ve left the job site.

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Politis & Matovina, P.A. Earns BBB Accreditation

Politis & Matovina, P.A. announced its recent accreditation by BBB Serving Central Florida. As a BBB Accredited Business, Politis & Matovina, P.A. is dedicated to promoting trust in the marketplace.

Daytona Beach, FL (PRWEB) December 21, 2012
Politis & Matovina, P.A. is committed to BBB's Standards of Trust. This week, Politis & Matovina, P.A. announced its recent accreditation by BBB Serving Central Florida. As a BBB Accredited Business, Politis & Matovina, P.A. is dedicated to promoting trust in the marketplace. According to BBB reports by Princeton Research, seven in ten consumers say they are more likely to buy from a company designated as a BBB Accredited Business. BBB is a resource for the public, providing objective, unbiased information about businesses.
"We are pleased to be a BBB Accredited Business because we value building trust with our clients," said Michael Politis, Senior Partner/Owner. "Our BBB Accreditation gives our clients confidence in our commitment to maintaining high ethical standards of conduct."
BBB Accredited Businesses must adhere to BBB's "Standards of Trust," a comprehensive set of policies, procedures and best practices representing trustworthiness in the marketplace. The standards call for building trust, embodying integrity, advertising honestly and telling the truth, being transparent, honoring promises, being responsive and safeguarding privacy.
About Politis & Matovina, P.A.

Politis & Matovina, P.A. is a personal injury law firm known for providing aggressive and high quality representation to injured victims, not insurance companies. With offices located in Port Orange, Ormond Beach, Palm Coast and Orange City, our firm focuses on ALL injury cases involving wrongful death, auto/motorcycle accidents, slips and falls, boating accidents, pedestrian accidents and bicycle/moped accidents. We also have departments dedicated to criminal defense and immigration law. We can be reached 24 hours a day, 7 days a week for your legal emergencies. Driven to achieve justice for our clients, we know that Results Matter. Let us put our experience to work for you. Visit http://www.TheJusticeAttorneys.com for more information.
About BBB

BBB's mission is to be the leader in advancing marketplace trust. BBB accomplishes this mission by creating a community of trustworthy businesses, setting standards for marketplace trust, encouraging and supporting best practices, celebrating marketplace role models and denouncing substandard marketplace behavior. Businesses that earn BBB Accreditation contractually agree and adhere to the organization's high standards of ethical business behavior. BBB is the preeminent resource to turn to for objective, unbiased information on businesses and charities. Contact BBB serving Central Florida at (407) 789-9008.

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Car-Specials.com Set to Give Customers a Fresh Car-Shopping Experience

Car-Specials.com is a new car search service that is bringing fun and excitement back to the car shopping game. With an ultra-fast, intuitive interface and a superior selection of new and used cars from local dealerships, Car Specials offers consumer-friendly search options and low-cost, dealer-centric service.

Carmel, Indiana (PRWEB) December 21, 2012
Car-Specials.com is a new kind of online automotive marketplace, offering efficient, customizable search options that cater to every different kind of car shopper. Whether a customer is looking for a new or used vehicle, or wants to search by color, make or body style, Car-Specials.com provides incomparable search functionality and a large selection of vehicles.
Veering away from the kind of automotive website that focuses on the sale and not the customer relationship, Car Specials.com focuses on giving consumers the connection to a particular vehicle that they would expect from walking into a dealership, all from the comfort of their own home. Car-Specials.com is currently in its pilot phase, adding new and used car deals from new dealerships every week.
By enabling visitors the option of selecting make, model, year, price range, body style, geographic location, and more, Car-Specials.com allows customers to take total control over their search. Unlike some of the larger car search engines, visitors can even search new and used vehicles at the same time. From sedans and coupes to SUVs, wagons, and sports cars, a wide variety of vehicles and brands assures that each customer can find their ideal vehicle, matching their lifestyle and budget, all in one place.
“Online car shoppers don’t want just any vehicle, they want the perfect one,” said Roger Laurendeau, President of Car-Specials.com. “We strive to provide the best vehicle choices and a streamlined system that makes the process of finding and purchasing a new car fast, convenient, and fun.”
Online car shopping is packed with large companies that charge dealers huge sums of money to list their vehicles. By contrast, Car-Specials.com is a small company with lower costs for dealerships, affording dealers the option of passing those savings on to the customer.
Customers interested in taking Car Specials for a test drive may visit http://www.car-specials.com. Dealers interested in working with Car-Specials.com to market their vehicles should contact Roger Laurendeau at 317-805-4933.

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