U.S. to Pass Saudi Arabia in Energy Production, IEA Says: Huge Foreign Policy, Economic Implications

A new report by the International Energy Association says the U.S. will become the world's largest oil producer by 2017, overtaking current leaders Saudi Arabia and Russia. U.S. energy policies initiated by the George W. Bush administration and implemented by President Barack Obama have moved the U.S. toward energy independence and away from Middle East energy sources. U.S. oil production has risen rapidly since 2008 and oil imports are at their lowest level in two decades.
"North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency," says IEA Executive Director Marian von der Hoeven in a statement.
The IEA also says the U.S. could become self-sufficient in energy by 2035 and a net exporter of natural gas by 2020. The Obama administration's push to develop and grow domestic natural gas capabilities has led to a natural gas drilling boom. Production has jumped 15% in four years but the glut in natural gas supplies have also caused the price of natural gas to plummet. According to the White House, the U.S. holds a 100-year supply of natural gas and domestic production is at an all-time high. The Daily Ticker's Aaron Task and Henry Blodget both agree that the explosion in domestic energy production could alter the geopolitical landscape and U.S. labor market.
"The foreign policy implications are maybe even bigger than the economic ones," says Task.
"For 50 years or more we have been just addicted and coupled to a region of the world where so many people hate us," Blodget adds.
Oil and petroleum imports have fallen an average of more than 1.5 million barrels per day and domestic crude oil production has increased by an average of more than 720,000 barrels per day since 2008. As domestic drilling has expanded so has the number of oil and gas production jobs. According to the Federal Reserve Bank of St. Louis, job growth in these industries has risen 25% since January 2010.
Related: The Fracking Revolution: More Jobs and Cheaper Energy Are Worth the "Manageable" Risks, Yergin Says
President Obama says natural gas production could support 600,000 jobs by the end of the decade. Most of these positions are highly desirable from a financial standpoint. Drilling and support jobs pay about $34.50 an hour, 50% more than the national average according to The New York Times.
Cheap natural gas and the administration's eagerness to expand U.S. energy production has shifted resources away from green energy technologies like solar and wind.
Related: Robert F. Kennedy Jr.: Renewable Energy Is Key to U.S. Growth
The method of extracting natural gas from shale rock formations has come under intense scrutiny. Many local cities and communities have already banned the practice. Hydraulic fracturing, more commonly referred to as hydrofracking or fracking, involves injecting large amounts of sand, water and chemicals into the ground at high pressures. Critics of fracking say this process produces millions of gallons of wastewater that contain highly corrosive salts and carcinogens. These radioactive elements could pollute water sources such as rivers and underground aquifers and pose serious dangers to the environment and individuals.

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Eurozone back in recession in Q3

LONDON (AP) -- The 17-country eurozone has bowed to the inevitable and fallen back into recession for the first time in three years as a sprawling debt crisis took its toll on the region's stronger economies.
And with surveys pointing to increasingly depressed conditions across the eurozone at a time of high unemployment in many countries, there are fears that the recession will deepen, and make the debt crisis even more difficult to handle.
Official figures Thursday showed that the eurozone contracted by 0.1 percent in the July to September period from the quarter before as economies including Germany and the Netherlands suffer from falling demand.
The decline reported by Eurostat, the EU's statistics office, was in line with market expectations and follows on from the 0.2 percent fall recorded in the second quarter. As a result, the eurozone is officially in recession, commonly defined as two straight quarters of falling output.
"We can dispense with the euphemisms and equivocation, and openly proclaim that the euro area economy is indeed in technical recession," said James Ashley, senior European economist at RBC Capital Markets.
Because of the eurozone's grueling three-year debt crisis, the region has the focus of concern for the world economy. The eurozone's economy is worth around €9.5 trillion, or $12.1 trillion, which puts it on a par with the U.S. economy. The region, with its 332 million population, is the U.S.'s largest export customer, and any fall-off in demand will hit order books.
While the U.S has managed to bounce back from its own savage recession in 2008-09, albeit inconsistently, and China continues to post still-strong growth, Europe's economies have been on a downward spiral — and there is little sign of any improvement in the near-term.
The eurozone has managed to avoid returning to recession for the first time since the financial crisis following the collapse of U.S. investment bank Lehman Brothers, mainly thanks to the strength of its largest single economy, Germany.
But even that country is struggling now as confidence wanes and exports drain in light of the debt problems afflicting large chunks of the eurozone.
Germany's economy grew a muted 0.2 percent in the third quarter, down from a 0.3 percent increase in the previous quarter. Over the past year, Germany's annual growth rate has more than halved to 0.9 percent from 1.9 percent.
Perhaps the most dramatic decline among the eurozone's members was seen in the Netherlands, whose economy shrank 1.1 percent on the previous quarter.
Five eurozone countries are in recession — Greece, Spain, Italy, Portugal and Cyprus. Those five are also at the center of Europe's debt crisis and are imposing austerity measures, such as cuts to pensions and increases to taxes, in an attempt to stay afloat.
As well as hitting workers' incomes and living standards, these measures have also led to a decline in economic output and a sharp increase in unemployment.
Spain and Greece have unemployment rates of over 25 percent. Their young people are faring even worse with every other person out of work. As well as being a cost to governments who have to pay out more for benefits, it carries a huge social and human cost.
Protests across Europe on Wednesday highlighted the scale of discontent and with economic surveys pointing to the downturn getting worse, the voices of anger may well get louder still.
"The likelihood is that this anger will continue to grow unless European leaders and policymakers start to act as if they have a clue as to how to resolve the crisis starting to unravel before their eyes," said Michael Hewson, markets analyst at CMC Markets.
The wider 27-nation EU, which includes non-euro countries, avoided the same fate. It saw output rise 0.1 percent during the quarter, largely on the back of an Olympics-related boost in Britain.
The EU's output as a whole is greater than the U.S. It is also a major source of sales for the world's leading companies. Forty percent of McDonald's global revenue comes from Europe - more than it generates in the U.S. General Motors, meanwhile, sold 1.7 million vehicles in Europe last year, a fifth of its worldwide sales.

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Are We Regulating Ourselves Back Into Recession?

"Let us put an end to self-inflicted wounds," President Gerald Ford told Congress in 1975. "And let us remember that our national unity is a most priceless asset." While Ford was talking about the scars from the Vietnam War, his words seem relevant today. Our nation grapples with not one divisive issue, but a basket of them, each pulling and undermining our already battered confidence, while testing our resolve and straining the limits of logic.
What are we doing to ourselves, America?
In just two short weeks, instead of closing the books after a bruising election, we've not only kept the rancor alive but have doubled down on it. In this morning's papers alone, I easily counted a dozen different areas of discourse before growing tired of it all. As my colleague Mike Santoli and I discuss in the attached video, with so much going on — and with so much wrong — is it any wonder stocks are moving in reverse at a fast clip since the second quarter correction.
"It feels like a particularly heavy round of one of these anti-business — or at least calling business to task — moments," Santoli says in the face of my long and growing list of negatives, which include higher taxes, the fiscal cliff, the Benghazi aftermath, turnover at the CIA, federal probes of FedEx and UPS over mail-order medicine, BP's record fine, further investigation into banks for money laundering, as well as another round of mandatory stress testing.
Before you go off and call me some kind of zero-regulation advocate or pessimist, all I am saying is that it strikes me as slightly counterproductive to be building up and and tearing down the banks at the same time. And Santoli seems to agree, saying that it is alarming to see how much banks have to spend on compliance, legal and regulatory issues, calling it a "massive weight."
As much as we had recently been gaining some degree of comfort over the economy, housing and jobs, it suddenly seems as if we're doing everything wrong.
''Is it ever going to be a good time to cinch up tax rates?" Santoli questions. Obviously the answer is no, and yet the markets cling to the belief that our elected officials will break ranks and reach some sort of last-minute grand bargain solution.
Maybe I am just being cynical, but I am of the mind that no major changes will emerge without first going through a period of calamity. Santoli is a smidge more optimistic, however, clinging to a ''residual hope'' that the President has a ''Nixon-to-China moment" and that his second term is not about fighting individual, ideological fight. "That is the distant hope you have to hold," he says.
How about you? Have you given up hope in the face of so much negativity?

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Nintendo's TVii a replacement for the remote

LOS ANGELES (AP) — Nintendo is switching on a television service that transforms the tablet-like controller for its new Wii U game console into a remote that changes the channel on your TV and puts programs from the Internet just a few finger taps away.
The TVii service will debut in the U.S. and Canada on Thursday, the company said. That's a delay from previous plans to have the service available when the game console went on sale in North America on Nov. 18. The TVii service launched in Japan on Dec. 8.
The aim of TVii is to bring order to the hundreds of channels on regular TV and the thousands of shows and movies available through apps from Netflix Inc., Amazon.com Inc., Hulu Plus and Google Inc.'s YouTube.
It's the first time a video game console maker has integrated live TV controls in a device and could be the extra incentive needed for on-the-fence shoppers ahead of the Christmas holiday.
Nintendo Co.'s Wii U console has a unique controller — the GamePad — which is covered with joysticks and buttons and boasts a front-facing camera and 6.2-inch touch screen. The GamePad also houses an infrared emitter that talks directly to your TV or set-top box.
TVii scans what's available and offers you the option of watching a show, sports event or movie on live TV or through apps that connect to the Internet. By the end of March, Nintendo says that it will integrate TVii with TiVo so that it will be possible to program a TiVo digital video recorder through the game console as well.
"This is a way to get every member of the household to pick up the GamePad hopefully every day," said Reggie Fils-Aime, president of Nintendo of America. "Hopefully this leads to a significant change in how consumers view and interact with their TV."
For years, home entertainment enthusiasts have had to grapple with a bunch of different controllers to work their televisions, set-top boxes, DVRs, disc players and game consoles. TVii has the potential to dispense with some of that hassle.
If you search for "The Walking Dead," for example, TVii will show you the next time it's on AMC and give you the option of buying previous episodes from Amazon or watching them on Netflix. If it's on now, you can change the channel from the GamePad. Users will be able to watch only channels they already get via antenna or through their TV provider, but search results will include all the options available, which could entice some people to upgrade their channel packages. Netflix and Hulu Plus require separate subscriptions that cost $8 a month each. TVii itself is free.
TVii also has a traditional channel guide and will recommend shows you might like based on favorite shows, networks and movies that you enter. Different users can have different profiles, and parental controls are included.
Nintendo hopes the service boosts sales of its console. About 425,000 Wii U units were sold in the first seven days on sale. That's faster than the rollout of Microsoft Corp.'s Xbox 360 and Sony Corp.'s PlayStation 3 when they debuted in November 2005 and November 2006 respectively, although initial sales are often constrained by supply, not demand.
Analyst Michael Pachter of Wedbush Securities said the TVii service puts Nintendo a step ahead of its competitors, but he expects Microsoft to close the gap next year with a next-generation Xbox that includes a TV tuner. Microsoft hasn't announced such a device.
"It gives them a head start. I think they should be congratulated on making this a truly multimedia device," Pachter said. "I don't think that advantage is going to last very long."
Nintendo has also added social networking features to its service. A team of curators will watch the top 100 shows on live TV and post details and a screenshot of important events, such as "a great shot in a basketball game or an unexpected twist in 'Mad Men,'" according to Zach Fountain, director of network business for Nintendo of America.
Users can then comment on these moments and have those posts show up on Nintendo's Miiverse network, as well as Facebook and Twitter if they choose. Users that express emotions could wind up with a sad or happy-looking Mii avatar.
Live sporting events such as pro or college football will also be accompanied by scores and play-by-play summaries on the GamePad's screen.
One problem with the service could be the GamePad's battery life. Nintendo says the controller can be used three to five hours depending on activity and screen brightness before it needs to be charged. But TV ratings agency The Nielsen Co. says the average American watches nearly five hours of TV per day. Heavy users may need to keep the controller plugged in to a wall socket, or buy a $25 battery pack that its maker, Nyko, promises will double the battery life.

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News summary: Nintendo's TVii replaces the remote

TVii LAUNCH: Nintendo if flipping on its TVii service Thursday, a month after sales started for its Wii U game console. The service turns the GamePad controller into a TV remote control, channel guide and Web video surfer.
SALES HOPES: Nintendo hopes the free service boosts sales of the console after recording 425,000 sales in the first week since its Nov. 18 launch.
HEAD START: It's the first time a game console maker has put live TV controls into a device, but analyst Michael Pachter says competitors will copy the function soon.

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Wii U finally gets Nintendo’s TVii service on December 20th

After a month-long delay,Nintendo (NTDOY) will launch itsNintendo TVii service for the Wii U on December 20th in the U.S. and Canada. Nintendo TVii is the company’s take on organizing all of the various video streaming and DVR services a user might subscribe to and then displaying them in an easy-to-navigate touchscreen-based interface on the Wii U GamePad. With Nintendo TVii, Nintendo hopes to make content discovery an easier task, rather than a chore. At the same time, Nintendo TVii will offer new “second-screen” experiences (similar to Xbox SmartGlass) with built-in social sharing options to Facebook (FB), Twitter and the Wii U console’s Miiverse.

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Nintendo TVii will support Amazon (AMZN) Instant Video, Hulu Plus and cable and satellite providers on Thursday, but Netflix (NFLX) and TiVo (TIVO) support won’t hit the U.S. until “early 2013.” Nintendo didn’t state when TVii support for the latter two will hit Canada.

For the consumer’s sake, we hope the download for Nintendo TVii doesn’t take as long as past system updates.

Nintendo’s press release follows below.

Nintendo Makes TV Smart and Social – Nintendo TVii Launches Dec. 20

New Wii U Service Gives Every Member of the Family His or Her Own Personalized, Easy-to-Use Second-Screen Viewing Experience

REDMOND, Wash.–(BUSINESS WIRE)–The company that changed how we play is about to change how we watch. On Dec. 20, Nintendo will introduce Nintendo TVii, a free, integrated service for the recently launched Wii U console that combines what you watch and how you watch into one seamless, second-screen experience on the revolutionary new Wii U GamePad controller.

The rapid increase in both the quality and availability of video entertainment content – hundreds of satellite and cable channels, a seemingly endless amount of video-on-demand options – has made finding something to watch a complex and occasionally frustrating process. The solution to this problem is coming from perhaps an unexpected place: a video game console.

“After Dec. 20, you’ll never look at your TV the same way again,” said Nintendo of America President and COO Reggie Fils-Aime. “Wii U owners have already experienced the transformative effect that the GamePad has on game play and social interaction. Nintendo TVii shows how the integrated second screen of the GamePad can also transform and enhance the TV viewing experience. Welcome to the new world of TVii.”

Nintendo TVii maximizes Wii U owners’ current cable, satellite and video-on-demand services by pulling all of their available content sources – such as a Comcast cable package or Hulu Plus subscription – into one place. This empowers Wii U owners to focus on whatthey want to watch and not how they want to watch. And once users find the show, sporting event or movie they want, they press an icon and Nintendo TVii does the rest.

In addition to greatly simplifying finding and watching video content, Nintendo TVii also includes a series of social features that enable Wii U owners to share experiences and exciting moments with friends as they are happening on live TV. People can engage with others by commenting and sharing on Miiverse, Facebook and Twitter. Or they can comment, post or tweet about an incredible touchdown, a remarkable performance or a shocking plot twist, all using the personal screen of the Wii U GamePad.

Nintendo TVii requires no additional equipment and can be enjoyed with very little setup, demonstrating what’s possible when the second screen is truly integrated with the TV. Wii U owners can also discover more information about what they’re watching by easily accessing information on the GamePad via an Internet connection, including cast details, movie reviews from Rotten Tomatoes and sports data such as live stats and scores.

Nintendo TVii launches in the United States and Canada on Dec. 20. At launch, the service will support cable and satellite providers in both regions, as well as direct integration with Amazon Instant Video and Hulu Plus subscriptions in the United States. Further integration with Netflix subscriptions and TiVo are expected in early 2013 in the United States. Wii U owners with a Netflix subscription can still access the Netflix application from the Wii U system’s main menu and enjoy their favorite content accordingly.

All elements of the Nintendo TVii service are included in the purchase price of the Wii U system. Users will define which services they currently subscribe to – including the channel lineup in their cable package and video-on-demand service subscriptions – as part of the setup process.

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Shooting renews argument over video-game violence

WASHINGTON (AP) -- In the days since the massacre at Sandy Hook Elementary School in Newtown, Conn., a shell-shocked nation has looked for reasons. The list of culprits cited include easy access to guns, a strained mental-health system and the "culture of violence" — the entertainment industry's embrace of violence in movies, TV shows and, especially, video games.
"The violence in the entertainment culture — particularly, with the extraordinary realism to video games, movies now, et cetera — does cause vulnerable young men to be more violent," Sen. Joe Lieberman, I-Conn., said.
"There might well be some direct connection between people who have some mental instability and when they go over the edge — they transport themselves, they become part of one of those video games," said Gov. John Hickenlooper of Colorado, where 12 people were killed in a movie theater shooting in July.
White House adviser David Axelrod tweeted, "But shouldn't we also quit marketing murder as a game?"
And Donald Trump weighed in, tweeting, "Video game violence & glorification must be stopped — it is creating monsters!"
There have been unconfirmed media reports that 20-year-old Newtown shooter Adam Lanza enjoyed a range of video games, from the bloody "Call of Duty" series to the innocuous "Dance Dance Revolution." But the same could be said for about 80 percent of Americans in Lanza's age group, according to the Pew Internet and American Life Project. Law enforcement officials haven't made any connection between Lanza's possible motives and his interest in games.
The video game industry has been mostly silent since Friday's attack, in which 20 children and six adults were killed. The Entertainment Software Association, which represents game publishers in Washington, has yet to respond to politicians' criticisms. Hal Halpin, president of the nonprofit Entertainment Consumers Association, said, "I'd simply and respectfully point to the lack of evidence to support any causal link."
It's unlikely that lawmakers will pursue legislation to regulate the sales of video games; such efforts were rejected again and again in a series of court cases over the last decade. Indeed, the industry seemed to have moved beyond the entire issue last year, when the Supreme Court revoked a California law criminalizing the sale of violent games to minors.
The Supreme Court decision focused on First Amendment concerns; in the majority opinion, Justice Antonin Scalia wrote that games "are as much entitled to the protection of free speech as the best of literature." Scalia also agreed with the ESA's argument that researchers haven't established a link between media violence and real-life violence. "Psychological studies purporting to show a connection between exposure to violent video games and harmful effects on children do not prove that such exposure causes minors to act aggressively," Scalia wrote.
Still, that doesn't make games impervious to criticism, or even some soul-searching within the gaming community. At this year's E3 — the Electronic Entertainment Expo, the industry's largest U.S. gathering — some attendees were stunned by the intensity of violence on display. A demo for Sony's "The Last of Us" ended with a villain taking a shotgun blast to the face. A scene from Ubisoft's "Splinter Cell: Blacklist" showed the hero torturing an enemy. A trailer for Square Enix's "Hitman: Absolution" showed the protagonist slaughtering a team of lingerie-clad assassins disguised as nuns.
"The ultraviolence has to stop," designer Warren Spector told the GamesIndustry website after E3. "I do believe that we are fetishizing violence, and now in some cases actually combining it with an adolescent approach to sexuality. I just think it's in bad taste. Ultimately I think it will cause us trouble."
"The violence of these games can be off-putting," Brian Crecente, news editor for the gaming website Polygon, said Monday. "The video-game industry is wrestling with the same issues as movies and TV. There's this tension between violent games that sell really well and games like 'Journey,' a beautiful, artistic creation that was well received by critics but didn't sell as much."
During November, typically the peak month for pre-holiday game releases, the two best sellers were the military shooters "Call of Duty: Black Ops II," from Activision, and "Halo 4," from Microsoft. But even with the dominance of the genre, Crecente said, "There has been a feeling that some of the sameness of war games is grating on people."
Critic John Peter Grant said, "I've also sensed a growing degree of fatigue with ultra-violent games, but not necessarily because of the violence per se."
The problem, Grant said, "is that violence as a mechanic gets old really fast. Games are amazing possibility spaces! And if the chief way I can interact with them is by destroying and killing? That seems like such a waste of potential."
There are some hints of a growing self-awareness creeping into the gaming community. One gamer — Antwand Pearman, editor of the website GamerFitNation — has called for other players to join in a "Day of Cease-Fire for Online Shooters" this Friday, one week after the massacre.
"We are simply making a statement," Pearman said, "that we as gamers are not going to sit back and ignore the lives that were lost.

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Nintendo’s amazing triumph in Japan may doom the company

According to Japanese gaming bible Famitsu, Nintendo 3DS sold 333,000 units in the week ending December 16. Sony’s PS Vita limped along at 13’000 units. The new Wii U did an OK 130,000 units and PS3 managed 46,000 units.  The utter hardware domination of the 3DS is reshaping the Japanese software market. Franchises that were thought to be fading have been revitalized in their portable versions. The 3DS version of the ancient “Animal Crossing” series, famed for being the game where nothing happens, hit a staggering 1.7 million units last week in Japan. “Inazuma Eleven” sold 170,000 units in its launch week, up from 140’000 units its DS version managed in 2011.
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Nintendo’s portable console 3DS had a muted start in its home market in the spring of 2011. Many thought that Sony would have a fair shot at competing with Nintendo once Playstation Vita launched at the end of 2011. But once Nintendo executed an aggressive price cut for 3DS in the summer of 2011 and then launched a large-screen version of the console in mid-2012, the gadget has grown into a godzilla in Japan, demolishing both Sony Vita and aging tabletop console competition.
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3DS is doing well also in America, where its lifetime sales are moving close to the 6 million unit mark this holiday season. According to NPD, the 3DS sales in the US market topped 500,000 units in November. That’s a decent number, though far from the torrid volume the portable is racking up in its home market. The US November video game software chart was dominated by massive home console juggernauts: new installments of Call of Duty, Halo and Assassin’s Creed franchises  shifted more than 13 million units in retail. At the same time, the Japanese software chart remains in a Nineties time warp,  dominated by Nintendo’s musty masterpieces: Super Mario Brothers, Pokemon, Animal Crossing, etc.
Japanese and American tastes have always been different. But what we are witnessing now is a particularly fascinating divergence. American consumers are spending more of their time and money on smartphone and tablet games, while console game spending is increasingly focusing on massive, graphically stunning blockbuster titles on Xbox360 and PS3. The casual gamers are shifting to mobile games, while hardcore gamers remain attracted to sprawling epics on home consoles. The overall video game spending in America keeps declining month after month, as casual titles and mid-list games slide. But the Triple A whales like Call of Duty series are doing better than ever.
In Japan, Nintendo has been able to battle back iPhone and Android game invasion with a nostalgic series of portable games that basically recycle the biggest hits of Eighties and early Nineties. Mario, Pokemons and other portable heroes are slowly losing their grip on US and European consumers. But in Japan, some form of national nostalgia is keeping Nintendo on track.
The problem here is that the Japanese success of the 3DS may now be convincing Nintendo that it does not have to rethink its business strategy. The smartphone and tablet game spending continues growing explosively across the world. Unlike console games, mobile game sales in China are legal. The global gaming spending is shifting towards new hardware platforms even as console mammoths like Halo still reign in America. At this critical juncture, Nintendo has managed to cocoon its home market in a web of nostalgia, turning the 3DS console and its Eighties left-over franchises into epic bestsellers yet again.
This means that there is no sense of urgency to push Nintendo into rethinking its long-term plans. The company may continue simply ignoring the smartphone and tablet challenge, designing new portable consoles and the 28th Mario game to support it. 20 years ago, Japan’s insularity doomed its chances to succeed in the mobile phone business. Ithe idiosyncratic nature of Japan may now be leading its biggest entertainment industry success astray.

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Bigger fights loom after "fiscal cliff" deal

WASHINGTON (Reuters) - President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought "fiscal cliff" deal narrowly averted devastating tax increases and spending cuts.
The agreement, approved late on Tuesday by the Republican-led House of Representatives and signed by Obama on Wednesday, was a victory for the president, who had won re-election in November on a promise to address budget woes, partly by raising taxes on the wealthiest Americans.
But it set up potentially bruising showdowns over the next two months on spending cuts and an increase in the nation's limit on borrowing. Republicans, angry the fiscal cliff deal did little to curb the federal deficit, promised to use the debt-ceiling debate to win deep spending cuts next time.
Republicans believe they will have greater leverage over Democrat Obama when they must consider raising the borrowing limit in February because failure to close a deal could mean a default on U.S. debt or another downgrade in the U.S. credit rating. A similar showdown in 2011 led to a credit downgrade.
"Our opportunity here is on the debt ceiling," Republican Senator Pat Toomey of Pennsylvania said on MSNBC. "We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean."
But Obama and congressional Democrats may be emboldened by winning the first round of fiscal fights when dozens of House Republicans buckled and voted for major tax hikes for the first time in two decades.
"We believe that passing this legislation greatly strengthens the president's hand in negotiations that come next," House Minority Leader Nancy Pelosi told NBC in an interview to air on Thursday.
Obama, who is vacationing in Hawaii, signed the legislation late on Wednesday, the White House said.
"We received the bill late this afternoon, and it was immediately processed. A copy was delivered to the president for review. He then directed the bill be signed by autopen," a senior administration official said. An autopen is an automatic pen with the president's signature.
Deteriorating relations between leaders in the two parties do not bode well for the more difficult fights ahead. Vice President Joe Biden and Republican Senate leader Mitch McConnell had to step in to work out the final deal as the relationship between House Speaker John Boehner and Obama unraveled.
Senate Majority Leader Harry Reid also drew the ire of Boehner, who told Reid in the White House to "Go fuck yourself" after a tense meeting last week, aides said. His remark came after the Democrat accused Boehner of running a "dictatorship" in the House.
Bemoaning the intensity of the fiscal cliff fight, Obama urged "a little less drama" when the Congress and White House next address budget issues like the government's rapidly mounting $16 trillion debt load. He vowed to avoid another divisive debt-ceiling fight before the late-February deadline for raising the limit.
"While I will negotiate over many things, I will not have another debate with this Congress about whether or not they should pay the bills they have already racked up," Obama said before he headed to Hawaii to resume an interrupted vacation.
NOT TIME TO CELEBRATE
Analysts warned that might not be so easy. "While the markets and most taxpayers may breathe a sigh of relief for a few days, excuse us for not celebrating," said Greg Valliere, chief political strategist at Potomac Research Group.
"We have consistently warned that the next brawl represents a far greater threat to the markets - talk of default will grow by February, accompanied by concerns over a credit rating downgrade," he said.
Rating agencies Moody's Investors Service and Standard & Poor's said the "fiscal cliff" measure did not put the budget on a more sustainable path. The International Monetary Fund said raising the debt ceiling would be a critical move.
"More remains to be done to put U.S. public finances back on a sustainable path without harming the still fragile recovery," said Gerry Rice, a spokesman for the IMF.
Financial markets that had been worried about the fiscal cliff showdown welcomed the deal, with U.S. stocks recording their best day in more than a year. The S&P 500 achieved its biggest one-day gain since December 20, 2011, pushing the benchmark index to its highest close since September 14.
The debate over "entitlement" programs is also bound to be difficult. Republicans will be pushing for significant cuts in government healthcare programs like Medicare and Medicaid for retirees and the poor, which are the biggest drivers of federal debt. Democrats have opposed cuts in those popular programs.
"This is going to be much uglier to me than the tax issue ... this is going to be about entitlement reform," Republican Senator Bob Corker of Tennessee said on CNBC.
"Now that we have this other piece behind us - hopefully - we'll deal in a real way with the kinds of things our nation needs to face," he said.
The fiscal cliff crisis ended when dozens of Republicans in the House relented and backed a bill passed by the Democratic-controlled Senate that hiked taxes on household income above $450,000 a year. Spending cuts of $109 billion in military and domestic programs were delayed for two months.
Economists had warned that the fiscal cliff of across-the-board tax hikes and spending cuts would have punched a $600 billion hole in the economy this year and threatened to send the country back into recession.
Dozens of House Republicans reluctantly approved the Senate bill, which passed by a bipartisan vote of 257-167 and sent it to Obama to sign into law.
Peter Huntsman, chief executive of chemical producer Huntsman Corp, said the vote did little to reduce the U.S. budget deficit and would hinder growth.
"We haven't even begun to address the basic issues behind this," Huntsman told Reuters. "We haven't fixed anything. All we've done is addressed the short-term pain.
The vote underlined the precarious position of Boehner, who will ask his Republicans to re-elect him as speaker on Thursday when a new Congress is sworn in. Boehner backed the bill, but most House Republicans, including his top lieutenants, voted against it.
The Ohio congressman also drew criticism on Wednesday from his fellow Republicans for failing to schedule a House vote on a bill passed by the Senate that would provide federal aid to Northeastern states hit by the storm Sandy.

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Oil prices tumble over ample supplies, flat demand

BANGKOK (AP) — Oil prices fell Thursday as fiscal-cliff euphoria fizzled and the traders evaluated ample energy supplies against lackluster demand.
Benchmark crude for February delivery fell 21 cents at midday Bangkok time to $92.91 in electronic trading on the New York Mercantile Exchange. Prices had jumped Wednesday after a deal in Washington averted the dreaded "fiscal cliff." The contract rose $1.30 to finish at $93.12 a barrel on the Nymex.
Despite the stopgap budget deal, more hurdles are ahead for the U.S. economy, including a new deadline for more spending cuts in two months.
Moreover, Moody's Investors Services said the U.S. government's "AAA" credit rating could be at risk if lawmakers fail to take additional steps to lower the deficit, which has topped $1 trillion annually in each of the past four years.
Platts, the energy information arm of McGraw-Hill Cos., said it expects data from the U.S. Energy Information Agency and the American Petroleum Institute to show a 1 million barrel draw for the week ending Dec. 28. Still, the U.S. market is "well-supplied," Platts said, citing analysts.
U.S. supplies, at 371 million barrels for the week ending Dec. 21, are 15.6 percent higher than the five-year average, Platts said, citing EIA data. For the same week, data showed U.S. production at nearly 7 million barrels per day, the highest since December 1993.
Carl Larry of Oil Outlooks and Opinions said production levels were "at new high" and noted that "the room for demand to expand is not even close to what we had just a few short years ago before the global recession."
Brent crude, used to price various kinds of international oil, fell 30 cents to $112.17 a barrel on the ICE Futures exchange in London.

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Asia stocks eke out gains on China hopes, oil eases

HONG KONG (Reuters) - Most Asian stock markets edged higher on Thursday on hopes of a steady economic revival in China, although oil gave back part of the previous session's strong gains as investors took some money off the table and braced for more U.S. budget battles.
The MSCI Asia Pacific ex-Japan index of stocks <.miapj0000pus> rose 0.2 percent following Wednesday's 2 percent jump on relief that U.S. politicians had averted the "fiscal cliff".
Data from China showing the services sector expanded in December continued to underpin expectations of an economic recovery that has helped spur a strong rally in Hong Kong-listed Chinese shares <.hsce> over the past month.
The China Enterprises index <.hsce> which rallied more than 4 percent in the previous session eased 0.2 percent. Onshore Chinese markets will resume trading on Friday.
"China looks like it's improving at the margin and the market has momentum that could last for at least a few months," said Christian Keilland, head of trading at BTIG in Hong Kong.
"Investors seem to have accepted that reforms are underway but they're going to happen at a slower pace."
Australian stocks <.axjo> rose 0.7 percent to their highest in more than 19 months, with mining giants Rio Tinto up 2.4 percent and BHP Billiton up 0.8 percent, among the top gainers on the benchmark S&P ASX/200 index. <.axjo>
South Korea's Kospi <.ks11> underperformed the region, falling 0.4 percent as automakers and other exporters slumped on a stronger Korean won, which hit a 16-month high against the dollar overnight.
In other currency markets, the Japanese yen bounced after hitting a 29-month low versus the dollar earlier in the day but analysts warned that any strength is likely to be short-lived.
"Technically dollar/yen looks somewhat overbought here. It's gone a long way in a very short time," said Callum Henderson, global head of FX research for Standard Chartered Bank in Singapore, adding that the dollar could see some consolidation in the near term before heading higher.
The euro which in overnight trading was close to a 8-1/2 month high against the dollar, slipped 0.1 percent.
The U.S. dollar rose 0.2 percent <.dxy> against a basket of major currencies.
President Barack Obama and congressional Republicans face even bigger budget battles in the next two months after a hard-fought deal averted the fiscal cliff of automatic tightening that threatened to push the U.S. into recession.
Strength in the dollar and profit-taking pushed oil prices lower with Brent crude slipping 0.3 percent and U.S. crude futures down 19 cents to $92.93.
"After the initial excitement, reality sets in," said Victor Shum, oil consultant at IHS Purvin & Gertz. "There will be other negotiations and the deal is a compromise."

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'Fiscal cliff' deal leaves lots of issues dangling

The "fiscal cliff" compromise on taxes leaves a big part of the nation's budget crisis still dangling.
Lawmakers bought a little time with a New Year's agreement to hold income tax rates steady for 99 percent of Americans while allowing payroll taxes to go up. But they left themselves only two months to settle seemingly irreconcilable differences over how much the United States should borrow and spend and where painful budget cuts should land.
Here's a look at what's been resolved and what's left hanging:
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AUTOMATIC SPENDING CUTS
The bipartisan deal approved by the Senate and House put off dealing with the nearly $110 billion in automatic spending cuts set for this year.
Unless Congress stops them by March 1, automatic cuts of about 8 or 9 percent are set to sweep through nearly all federal agencies, with half the money coming out of the military.
Both parties talk about the need to control spending, but lawmakers don't want the kinds of chaotic cuts now barreling toward them. Republicans worry that the Pentagon would be hamstrung; Democrats say vital federal programs would be crippled.
Federal workers would face furloughs or even layoffs, Americans would see all sorts of government services curtailed, and businesses would feel the pinch of reduced government spending.
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DEBT LIMIT SHOWDOWN
Around the same time, the United States would lose its ability to borrow money to pay its debts, unless Congress acts. That's a big deal, especially since the government borrows about 31 cents of every dollar it spends.
The U.S. bumped against its $16.4 trillion borrowing limit Monday, but the Treasury Department is using special accounting measures to avoid default for now. Private economists say those methods could probably stretch through late February or early March.
After that, the United States would risk its first-ever default.
Hopes of wrapping the issue into the year-end negotiations were dashed, setting up the potential for another standoff. House Speaker John Boehner says any debt increase must be paired with equal spending cuts. Obama says the debt ceiling is too important to negotiate.
The last time such a showdown brought the nation close to default, in the summer of 2011, it roiled the financial markets and contributed to Standard & Poor's decision to strip the U.S. government of its AAA bond rating.
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A GOVERNMENT SHUTDOWN?
Yet another deadline looms on March 27. The stopgap measure that funds government activities expires; congressional approval will be needed to keep the government running. It's another chance to fight over spending.
In 2011, the nation came within hours of a partial government shutdown that would have furloughed an estimated 800,000 government workers, closed national parks and halted the work of the IRS.
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THE NATIONAL DEBT
The "fiscal cliff" deadline was originally designed to force lawmakers to confront trillion-dollar annual budget deficits that pile the nation's debts higher each year. As larger and larger numbers of baby boomers receive retirement benefits in coming years, the strain on the budget will be unsustainable.
Obama says Medicare's climbing costs must be addressed to fix this. Republicans want to rein in Medicare, Social Security and other entitlement programs more sharply. Many Democratic lawmakers object. And tampering with programs so popular with voters is never easy.
The "fiscal cliff" was supposed to be a way to force Washington to confront the long-term debt problem. The next two months will be another opportunity to come up with a plan or dodge the issues again.
The tough, unpopular decisions are further complicated by concerns that cutting spending too quickly could damage the nation's sluggish economic recovery.
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WHAT'S DONE
The year-end "fiscal cliff" deadline did inspire compromise between Republicans and Democrats on some hotly debated tax questions. Some of the issues settled:
— Payroll taxes are going back up, after being trimmed for two years to help stimulate spending and boost the economy. For most workers, that means paychecks will shrink by 2 percent — another $1,000 for someone earning $50,000 a year. The wealthiest pay a lower share of their income, however, because the Social Security payroll tax applies only to the first $113,700 of earnings.
— The top 1 percent are getting socked with higher income tax rates. Income over $400,000 for individuals or $450,000 for couples will be taxed at a top rate of 39.6 percent, up from 35 percent. Everyone else gets to keep their current income tax rates, which date back to the George W. Bush-era tax cuts.
— The wealthiest Americans will pay higher taxes on their investments. Rates for their capital gains and dividends are rising from 15 to 20 percent. And the tax on estates worth more than $5 million will go up to 40 percent, from 35 percent.
— The alternative minimum tax — designed to keep the wealthy from using loopholes to avoid taxes — will be permanently indexed for inflation so it doesn't catch millions of middle- and upper-middle-income people in its net.
— Tax breaks for families with children, college tuition and low-income workers will continue for five years. A diverse group of temporary business tax breaks were extended for one year.
— Emergency federal unemployment benefits to help 2 million people out of work for at least six months will be extended a year.
— A scheduled 27 percent cut in Medicare payments to doctors will be held off for a year in what's become a congressional ritual.

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2016 politics on display as Congress ends term

WASHINGTON (AP) — Rep. Paul Ryan, the GOP's 2012 vice presidential candidate, voted for the "fiscal cliff" compromise that raised taxes on the wealthiest Americans. Republican Sens. Marco Rubio and Rand Paul voted against it. And Vice President Joe Biden helped broker the deal with GOP leaders in the Senate.
As Congress closed out its term this week, New Jersey Gov. Chris Christie accused fellow Republicans of showing "callous indifference to the suffering of the people of my state" by not holding a vote on Superstorm Sandy aid. New York Gov. Andrew Cuomo joined him in the rebuke.
And Secretary of State Hillary Rodham Clinton drew headlines for a different reason after being hospitalized for a blood clot in her head, an illness that raised questions about the Democrat's political future.
While the next presidential primary voting is still three years away, the political implications of the actions and whereabouts of the potential field of 2016 candidates hung over extraordinary year-end Washington drama.
The fiscal cliff vote forced those in Congress who are eyeing presidential runs to stake out early positions which signal how they may be aligning themselves — and which could come back to haunt them should they move forward.
The intense legislative debate also gave would-be candidates involved in them an opportunity to command the spotlight while rivals were on the sidelines. And the weeks of gridlock over the looming fiscal cliff of big tax increases and spending cuts provided governors weighing bids a chance to cast themselves as outsiders and, perhaps, start building a case for taming Washington paralysis.
For Republican White House hopefuls in Congress, the votes on the compromise that raised taxes on the wealthiest Americans could help frame future presidential primary debates over the debt ceiling, tax code reforms and how to fund government and entitlement programs. The party has rejected tax increases for more than two decades but now finds itself trying to regroup after President Barack Obama's re-election and dealing with a struggle between Republicans who want to take a more pragmatic tax approach and tea party loyalists advocating a firm anti-tax position.
"The American people chose divided government. As elected officials, we have a duty to apply our principles to the realities of governing," Ryan said after joining with House Speaker John Boehner, R-Ohio, in support of the bill, putting him in the minority of the GOP caucus and against the tea party.
Ryan may be spared some political fallout from the right, given that Republican activist Grover Norquist, who for years has pushed GOP lawmakers to pledge not to raise taxes, and several other conservative heavyweights supported the bill, including Oklahoma Sen. Tom Coburn and Pennsylvania Sen. Pat Toomey, the former head of the anti-tax Club for Growth.
Two other potential 2016 presidential candidates drew praise from conservative opponents of the measure for voting to refuse tax increases.
Rubio, a prominent Hispanic lawmaker in a party trying to connect with Latino voters, called the legislation an impediment to "rapid economic growth and job creation." The Florida senator also said it failed to control runaway debt. Paul, the son of GOP presidential candidate Ron Paul, opposed the bill because of the combination of spending and tax increases. The Kentucky senator said: "We're going to raise taxes and we're going to raise spending. Tell me what's good about that?"
On the Democratic side, Biden played a major role in the deal-making, with his late-night talks with Senate Republican leader Mitch McConnell leading to the compromise plan. It was a reminder of the former Delaware senator's legislative skills, which could either impress Democratic primary voters or anger liberals who may view the deal as too much of a compromise with Republicans.
As the vice president helped broker a deal, it was hard for Democrats to overlook where Clinton, the party's formidable potential contender, was: She revealed she was being treated in a New York hospital for a blood clot in her head that formed after she suffered a concussion during a fainting spell in early December. She was released from the hospital Wednesday and doctors said they were confident she would make a full recovery. But the extended illness made it more likely that Clinton, 65, would face scrutiny over her health should she run.
Beyond Washington, two prominent Northeast governors weighed in on Congress' year-end wrangling, and wasted little time assailing the House GOP leadership over hurricane relief.
Christie said his state had been betrayed by his fellow Republicans in the House, who refused to bring a Superstorm Sandy aid package to a vote, adding, "America deserves better than just another example of a government that has forgotten who they are there to serve and why."
Cuomo, a Democrat long considered by party insiders to be a possible White House candidate, issued a joint statement with Christie condemning the "inaction and indifference" by the House. "The people of our states can no longer afford to wait while politicians in Washington play games," they said. House Republicans said after Christie's blistering news conference that they would hold a vote Friday for $9 billion for the national flood insurance program and another on Jan. 15 for a remaining $51 billion in the relief package.
It's impossible to say whether this week's votes and comments will become 2016 campaign fodder. But they certainly give hints about how possible candidates are testing the waters — and how their positions are faring with certain parts of the electorate.
"It strikes me that Ryan is thinking he wants to be the establishment candidate," said Doug Gross, an Iowa Republican who chaired Mitt Romney's 2008 campaign in the state. Conservatives may agree — and not look kindly on that. As Erick Erickson, a conservative commentator and the editor of RedState.com, put it on Twitter, "Thus ends the Paul Ryan 2016 Presidential Exploratory Committee."
Still, some Republicans dismissed any fallout from their candidates' votes.
"I don't ultimately think this one vote will hurt any of them," said Sara Taylor Fagen, a Republican strategist. "But to some degree it probably forecasts their voting patterns for the future.

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UN envoy tries to revive Syria peace plan

• A daily summary of global reports on security issues.
Lakhdar Brahimi, the United Nations special envoy to Syria, said today that he is in Damascus and Moscow this week to try to revive a peace plan for Syria that was shelved this summer. However, rebel gains on the ground make it unlikely that the plan will go anywhere without more concessions to the Syrian opposition.
Russia is standing by its red line – that the plan not push President Bashar al-Assad from power. Meanwhile, the opposition still wants to bar current members of the Syrian regime from participating in a transitional government; the current proposal doesn’t appear to contain any such provision, the Associated Press reports.
What has changed is the opposition's strength: In recent months, it has captured swaths of territory, acquired better weaponry, and organized itself into a true fighting force, all allowing it to pose a legitimate challenge to the Syrian Army. The progress makes it unlikely the opposition will accept a proposal that allows former regime officials to participate in a new government if it rejected such a plan previously, when it was considerably weaker.
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Mr. Brahimi was vague about how the plan might be amended this time around. CNN reports that during an appearance on Syrian state-run television today, he said only that, "The Geneva communique had all that is needed for a road map to end the crisis in Syria within few months."
The shift in the opposition's fortunes has led to a corresponding shift in Russia's own position. While Russia, where Brahimi will be later this week, was previously a steadfast supporter of the Assad regime and refused to entertain any proposals for a post-Assad Syria, Moscow now seems "resigned" to the possibility, the AP says.
Reuters reports that Foreign Ministry Spokesman Alexander Lukashevich stated plainly that Mr. Assad's departure could not be treated as a precondition for talks this time around, but did not insist that the possibility of his removal be off the table.
"The biggest disagreement ... is that one side thinks Assad should leave at the start of the process – that is the US position, and the other thinks his departure should be a result of the process – that would be the Russian position," Dmitry Trenin, an analyst at the Moscow Carnegie Center, told Reuters.
But Trenin said battlefield gains made by the Syrian rebels were narrowing the gap between Moscow and Washington.
Mr. Lukashevich said, contrary to speculation, there is not yet a concrete plan for resolving the Syrian conflict. "In our talks with Mr. Brahimi and with our American colleagues, we are trying to feel a way out of this situation on the basis of our common plan of action that was agreed in Geneva in June," he said, according to Reuters.
Officials have been vague about what is on the table as a series of high-level officials meet. Brahimi arrived in Damascus on Dec. 24 and Syrian Deputy Foreign Minister Faisal Makdad was in Moscow today, possibly meeting with Foreign Minister Sergei Lavrov and Russia's envoy for Middle East affairs, Reuters reports.
CNN says that the Geneva plan was able to find some common ground between Russia and China on one side and France, Britain, the US, and Turkey on the other. That was, however, partially due to the fact that it didn’t address question of Assad's role in a transitional government.
According to the communique, the transitional government "could include members of the present Government and the opposition and other groups and shall be formed on the basis of mutual consent."
Ghanem Nuseibeh, founder of political risk analysis firm Cornerstone Global Associates, told Bloomberg that it is unlikely we will see a public "abandonment" of Assad because of Russia's naval base in the Syrian port of Tartus and billions of dollars worth of arms contracts with Damascus.

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Syrian conflict threatens to fracture Iraq

In September, as the Iraqi government reached one of its lowest points in relations with Turkey in years, Ankara welcomed Iraqi Kurdistan's President Massoud Barzani as a guest of honor at a convention hosted by the ruling Justice and Development Party.
The semi-autonomous Kurdistan Regional Government (KRG) in northern Iraq and the federal government in Baghdad have not seen eye to eye for years, and the gap between the two is now widening, particularly when it comes to foreign policy. That's been put in stark relief by the ongoing civil war in Syria, which has shifted the fortunes of Iraq's Kurds.
A decade ago, Iraq was a Sunni Arab-dominated dictatorship that shared many problems with the Sunni Turks to the north. Both countries had restive ethnic-Kurdish separatist movements and uneasy relations with their Shiite and Persian neighbor, Iran.
Today, Iraq has a Shiite-dominated government that is close to Tehran, which is supporting Syrian President Bashar al-Assad's regime in Syria's civil war. Turkey, still eager to prevent Kurdish separatist sentiments within its borders, now sees the Iraqi Kurds as a potential ally in opposition to the interests of Iran, Baghdad and Damascus.
The emerging sectarian alliances have prompted Baghdad and the KRG to throw themselves into opposing camps in the Syrian war, creating conflicting interests in the supposedly unified country.
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As regional and Western diplomats point fingers at Iraqi Prime Minister Nouri al-Maliki for aiding embattled Syrian President Bashar al-Assad – a charge which Baghdad vehemently denies – Iraqi Kurds are increasingly involved with the opposition, lured by the possibility that in a post-Assad Syria, Kurds there might achieve some degree of autonomy. That would allow the KRG to expand its foothold.
The KRG has hosted leaders of the Syrian opposition in its regional capital, Erbil, much to Baghdad's dismay. It has also lent support to Kurds in northeastern Syria – Barzani publicly admitted in July that his government is providing them with military training. And now some of the Kurdish factions there are holding talks with the mostly Arab Syrian opposition to decide whether and how to join them in the fight against President Bashar al-Assad, even though the relationship between the two camps has been strained by several bouts of fighting.
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"The Syria crisis is forcing everyone around Syria to choose sides," says Joost Hiltermann, who follows Iraq for the International Crisis Group (ICG). "Maliki is worried about the emergence of a post-Assad Sunni Islamist order in Syria... he finds that he has to support Assad by default. This puts him de facto in the Iranian camp and in conflict with Turkey."
The Iraqi Kurds are at the opposite end of the equation from Maliki. Though Turkey treats its own Kurdish population poorly, the KRG's deep mistrust of Baghdad has seen a tactical relationship developing between Ankara and Erbil and, by extension, the regional Sunni powers backing the Syrian uprising.
Although the majority of Kurds are Sunni Muslims, Hiltermann says the KRG's interest is not about religion, but an attempt to further nationalist goals. "They [Kurds] have long-term aspirations to independence, and today this means allying themselves with Turkey, which is encouraging them to take distance from Baghdad," Hiltermann says.
Although Iraq's constitution gives the federal government theoretical control of the country's foreign policy, the KRG seldom defers to Baghdad on matters of international relations.
Iraq's Kurds have enjoyed a high level of autonomy in northern Iraq since the 1990s, when the West backed a no-fly zone to protect the Kurds during an uprising against Saddam Hussein's regime. The KRG has its own diplomatic representatives in some key international capitals – Washington, London, Paris, and Moscow among them – and more than 20 countries, including the US, have diplomatic missions in Erbil.
To say that Baghdad has a problem with the KRG's overtures to the Syrian opposition and its backers is to put it mildly.
"They have completely gone their way and are sometimes on a collision line with the federal government [in Baghdad]," says Saad al-Muttalebi, a prominent figure in Maliki's coalition. "Unfortunately the KRG behaves as if it's an independent state and sets up its own international policies... without any consideration to the central government."
Politicians in Baghdad are particularly unhappy with KRG's closer ties to Turkey, which harbored exiled Sunni Iraqi Vice President Tariq al-Hashemi after he fled Iraq earlier this year. Mr. Muttalebi, who used to serve as an adviser to Maliki, lashed out at Turkey for choosing "an unwise course of action" and "misusing its relations with Iraq."
But Erbil sees Ankara as a critical counterbalancing factor against Baghdad, which the Kurdish government accuses of being increasingly heavy-handed.
"It is true that there is a federal broad-based coalition government in Baghdad, but day after day we see it becoming more autocratic," Safin Dizayee, the official spokesperson for the KRG, told The Monitor at his office in Erbil.
"[Iraq's] foreign policy is determined not by the institutions of the state, but by certain individuals within the state or a certain party," Dizayee explains, referring indirectly to Maliki and his Shiite Dawa Party. "And when it comes to the policy of that party toward Syria, that might be actually questionable."
Turkey's annual trade with Iraq stood at around $11 billion in 2011, according to Turkish government's figures, but Kurdish officials say about 70 percent of the trade occurs with the Kurdish region. The discovery of large oil reserves in Iraqi Kurdistan has only made the energy-thirsty Turkey more interested in developing closer ties with the KRG without much regard for Baghdad's opposition. Erbil has been happy to go along.
But for a country with a long history of internal conflict and instability, the current regional shift may not pay off in the end.
"Baghdad and Erbil are taking decisions that they believe will enhance their regional and domestic positions," says Ahmed Ali, a Middle East analyst at Georgetown University. But in a region of ever-shifting alliances, there is danger in charting "domestic policy while thinking that regional alliances are permanent and will help them fulfill their plans.

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In 2013, possibilities for stability from Somalia to South China Sea

The international news of any year is a disparate affair, a global chronicle of courage, calamity, and close calls. The interconnectedness of events is not always clear.
But looking ahead to 2013, whether in Syria, South America, or the South China Sea, policymakers have a common New Year's wish: for unity to usher in and consolidate political and economic stability.
EUROPE TURNS TOWARD INTEGRATION
After another year in the depths of a debt crisis that has tested the viability of the European Union, leaders made a major step forward at the end of the year: agreeing to give the European Central Bank oversight of the biggest banks in the Union.
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Skeptics dismiss the agreement as a watered-down initiative of common-denominator compromises and delays. But it paves the way for an eventual banking union, and caps off a year of expressed commitments to deeper integration.
"The decision of European heads of state to create a banking union and a fiscal union still needs to be implemented. But that was a genuine game changer in a sense," says Jan Techau, director of Carnegie Europe at the Carnegie Endowment for International Peace in Brussels. "It is by no means perfect and is not seen in action yet; but if this comes, that will create momentum for more political integration."
IN AFRICA, A NEW DAWN FOR SOMALIA?
In Somalia, Al Qaeda was on the run in 2012 after four years in control of the country's south, pushed out of all of its major urban strongholds by African Union military offensives.
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Somalia's Western allies – also its financiers – have begun proclaiming a new dawn. International commercial flights now land regularly at Mogadishu's refurbished airport. Investors from the large Somali diaspora are returning home. Aid workers have ever-greater access to the millions of people still in grave need.
But analysts are wary. A large number of rank-and-file fighters may have deserted Al Shabab, but hard-line commanders remain. Many of them, trained in Pakistan with Al Qaeda, are regrouping in Somalia's north.
"The Somali government is going to need very quickly to show that it brings dividends, health, education, road repairs, to the population, or they may well turn back to supporting Shabab," one Western diplomat focused on Somalia says in an e-mail. "There is a very narrow window to prove the government is the better option. Probably less than nine months. The early part of 2013 will be crucial."
Meanwhile, across the continent in Mali, events moved in the opposite direction in 2012. An ethnic Taureg rebellion spiraled into a takeover of the north by Islamist militants, while the army ousted Mali’s democratically elected president. Malians hope that in 2013 their country can reunite and that democracy will be restored. If not, Western and African leaders fear Mali could become a failed state.
Some Malians say only force can dislodge the Islamists, while others place hope in dialogue. Meanwhile, worry is growing that ethnic grudges might transform a possible intervention into a tragedy of unintended consequences.
“Families affected by crisis may seek vengeance,” says Mohamed Ag Ossad, the director of Tumast, a Tuareg cultural center in Bamako. “The state should take things in hand before there’s an ethnic war.”
This month soldiers loyal to coup leader Captain Amadou Sanogo removed Mali’s interim prime minister – a brazen show of force that the US said endangered national dialogue and delayed a government recapture of the north, according to a statement on Dec. 11. Members of the security forces are also accused of beating, detaining, and killing critics of the army, as well as Tuareg and Arab men, said a December 20 report by Human Rights Watch.
For Moussa Mara, an accountant and district mayor in Bamako, such problems underline the need to reestablish democratic rule by holding presidential elections that were derailed by this year’s coup. “Crisis can be an opportunity for our country,” he says. “If we’re intelligent.”
MIDDLE EAST: TO THE VICTORS, MORE DIVISIONS?
As pressure has mounted against Syria's embattled president, Bashar al-Assad, many are starting to ask what will come of the opposition Free Syrian Army should the regime fall.
A number of Syria experts warn that without a plan to disarm opposition groups, they risk destabilizing the country.
"What do you do with the men with guns? The men who don't have jobs.... We've seen this in Libya, and we also saw it in Iraq," says Aram Nerguizian, a Syria expert at the Center for Strategic and International Studies.
The vast majority of Free Syrian Army units in Syria say they will put down their weapons and let democracy determine their future after Mr. Assad. Still, a number of observers worry that there is a possibility armed groups may want an undue stake in Syria's government, and the challenge for 2013 will be to incorporate them into civilian life.
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In Israel and the Palestinian territories, positions on both sides hardened as the window for a two-state solution rapidly closed. Israel moved further to the right heading into January elections, while Palestinians became more assertive with a perceived victory against Israel in the November Gaza conflict and an overwhelming vote recognizing Palestine as a state at the United Nations.
Israeli Prime Minister Benjamin Netanyahu has repeatedly invited the Palestinians to return to the negotiating table without preconditions at any time and indicated that the Palestinians’ failure to do so shows they are not serious about peace. But Palestinians say they cannot afford to negotiate while Israel steadily expands settlements in the West Bank. Nearly 10 percent of Israeli Jews now live over the 1967 borders, which the recent UN resolution recognized as the basis for a future Palestinian state.
In 2013, Palestinians want to see an end to settlement expansion before it is too late to implement a two-state solution. “We are witnessing today a very crucial moment … a moment of irreversibility,” says Mustapha Barghouthi, a former Palestinian presidential candidate and democracy activist.
Israelis, for their part, seek Palestinian recognition of Israel as a Jewish state, as well as assurances that a peace deal will mark the end to the conflict and not merely a stepping stone to regaining all of historic Palestine.
EAST ASIA'S SYMBIOTIC TIES
In a year when China made several neighbors nervous over its territorial claims, Beijing's most alarming spat was with Japan over a handful of uninhabited islands known in China as the Diaoyu and in Japan as the Senkaku. Although a war over the issue is highly unlikely, it has come to be seen as not altogether impossible, as tensions have risen in recent months.
But it is the economic fallout already under way that analysts say the two must address immediately. "China is Japan's biggest market, and Japan is a very important source for China to learn new science and technology," says Zhou Weihong, a Japan expert at Beijing Foreign Studies University. If the second-largest economy in the world [China] and the third-largest [Japan] are not getting along, "that is bad news for the rest of the world," Professor Zhou says. "There are big enough motives for both sides to want to improve their relationship."
THE REACH OF CHáVEZ
The biggest story of 2012 in Venezuela was the reelection of President Hugo Chávez in October, despite significant gains made by the opposition. But now, facing illness, Mr. Chávez might not be able to stand for his Jan. 10 inauguration – and may have to step down.
Venezuela is holding its breath – as is the region that sees Chávez as a beacon of the left, some of whose members, like Cuba, depend heavily on his largess. Within the oil-rich country, political tensions will flare in 2013 until a new leader is selected, while daily problems such as crime and inflation mount, says Caracas-based political analyst Jose Vicente Carrasquero. "Over time, we will adjust under a new government," he says, "and surely after this process of transition we will discover a new way of doing politics in Venezuela, something that we need.

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Benazir Bhutto's son takes up the family trade in Pakistan

Five years after the assassination of Pakistan’s former Prime Minister Benazir Bhutto, her son Bilawal Bhutto Zardari made his first major speech today aimed at galvanizing supporters of the Bhutto family-led Pakistan Peoples Party.
The speech, delivered in the family’s hometown of Garhi Khuda Bux in Pakistan’s Sindh Province, was attended by thousands of party supporters gathered to mark the anniversary of Benazir Bhutto’s death. Days after her 2007 assassination, the then 19-year-old Bilawal was elected as the party’s chairperson, though his role has been largely symbolic until now.
As Mr. Bhutto Zardari takes a more active role in his party, it is a reminder that Pakistani politics have long been dominated by influential families and that one's position in government is often determined by family ties.
While many of the Pakistan Peoples Party's voters, particularly in rural areas, are happy that the party is led by Benazir's son, nepotism in politics and government has increasingly become a sore point for urban, middle class voters who are less supportive of the PPP. Of late, most political scandals in Pakistan have involved family members of leading politicians, including the Chief Justice's son, who is accused of taking money from a prominent businessman.
“If you look at any mainstream political party in Pakistan, it is seen as a family business at every level, passed down from father to son – and occasionally daughter – to grandson,” says Cyril Almeida, an assistant editor at Pakistan’s leading daily Dawn. “It is the nature of politics out here. Society puts a premium on personality rather than performance; and so last names matter.”
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The Pakistan Peoples Party was founded in 1967 by Zulfikar Ali Bhutto, a charismatic yet controversial leader, who was deposed in a military coup and executed on charges of abetting murder. After he was imprisoned, his widow Nusrat Bhutto led the party, followed by his daughter Benazir, who chaired the party until her death. Though grandson Bilawal was elected to lead the Pakistan Peoples Party, his father Asif Ali Zardari was also elected co-chairperson before he became president of Pakistan in 2008, and has largely run party affairs.
The trend of family-dominated politics is prevalent across the subcontinent.
In India, members of the Gandhi/Nehru dynasty have led the Congress Party and the country as prime ministers for decades. Sheikh Hasina, the twice-elected prime minister of Bangladesh, is the daughter of the country’s founder, and her leading rival Khaleda Zia is the widow of a former president. The other leading political party in Pakistan, the Pakistan Muslim League, features a number of members of the Sharif family in prominent positions, and many major politicians in Pakistan have a similarly strong lineage.
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Mr. Almeida points out that in the case of Sindh Province, where the Pakistan Peoples Party has long held sway, there is a “cult of personality and a client-patron relationship in politics,” and Bilawal leading the party was a “a connection to the original person who energized political support.” In some way, he says, the parties are just trying to capture that original energy the name still garners to affect political change.
In his speech, Bhutto Zardari did mention his bloodline, but also reaffirmed the party’s vision, including providing basic needs to every citizen and opposition to terrorist groups. He recalled the assassinations of prominent party leaders such as Punjab Governor Salmaan Taseer and Federal Minister for Minorities Affairs Shahbaz Bhatti, who were killed in 2011 for their opposition to misuse of the country’s controversial blasphemy laws.
Still, says journalist Sohail Warraich, the author of an extensive tome on the assassination of Benazir Bhutto and who was on stage as Bhutto Zardari spoke on Thursday, “You have to know how to handle people. Both Zulfikar Ali Bhutto and Benazir Bhutto made their way [in] politics” by proving they had what it took to govern, he says.
Mr. Warraich acknowledges there are many challenges ahead for the aspiring politician, despite his name and because of his name: He still has to answer for the PPP-led government’s failures in governance.
“Even abroad, you see the Kennedy family etc, people do have these feelings of attachment toward them [family names]. But the real test is in politics. Benazir, after 1988 [when she became prime minister], was assessed on how she conducted politics, not just because of Zulfikar Ali Bhutto,” he says. “Bilawal will also be tested on the same.

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India gang rape spurs national dialogue

The Indian government’s crackdown on the anti-rape protests that have continued for nearly two weeks in New Delhi has only aggravated public anger and concern about women’s safety.
The protests were sparked by the gang rape and brutal assault of a 23-year-old student on a bus in the elite South Delhi district on Dec. 16.
As the girl battles for her life in a Singapore hospital, Indians are debating how to make the country safer for women. Ten days after the incident, it dominates newspaper headlines and op-ed pages, pushing to the margins stories like the retirement of cricketer Sachin Tendulkar, the popular Indian sportsperson, highlighting just how much the case has affected people.
Sexual harassment is rampant in India, and the public has been largely apathetic to women’s plight, but many are hoping the attack could be a turning point in the way India treats women.
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Calls for capital punishment, including the chemical castration of rapists, have died down, with various women’s groups decrying them. Given that in 94 percent of rape cases the rapist is known to the victim, Nilanjana S. Roy, writing in the Hindu, she wonders if the protestors would be okay with death penalty for fathers, uncles, neighbors, and Indian security forces in conflict zones.
The Monitor reported that India is considering a fast-track court process to expedite rape cases and step up punishment for sexual violence on the heels of the bus rape incident.
Beyond the law, what needs to happen, writes Shilpa Phadke, author of a book on women’s safety in Mumbai, has to do with how Indians use their streets: “We are safer when there are more women (and more men) on the streets. When shops are open, when restaurants are open, when there are hawkers and yes, even sex workers on the street, the street is a safer space for us all.”
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The outrage that this case has spurred might finally bring about a cultural change in India, Stephanie Nolen of The Globe and Mail suggests in a report:
Women assaulted leaving bars or late at night or while wearing Western clothes have been chastised by police, judges and politicians for bringing their misfortune on themselves. This time, however, there is a current of defiance in the protests, noted Subhashini Ali of the All India Democratic Women’s Association. A young woman in central Delhi on Tuesday carried a sign saying, “Stop telling me how to dress, start telling your sons not to rape.”
But rape is still not seen as a men’s issue, Ms. Ali said. “I don’t think many people are asking that question yet [of how men are being brought up and how it shapes their attitude toward rape].”
“But that’s where we have to go.”
And that should start with using sexual education in schools as a means to counter systemic patriarchal attitudes, writes Ketaki Chowkhani in Kafila, a collaborative blog that I work with.
That need for an emphasis on social change rather than law enforcement was also highlighted by Praveen Swami in The Hindu newspaper. India could learn a lot from the United States, he writes, where the incidence of rapes have fallen:
“The decline in rape in the U.S. has mainly come about not because policing has become god-like in its deterrent value, but because of hard political and cultural battles to teach men that when a woman says no, she means no.”
Meanwhile, the crackdown on the protests in Delhi has drawn sharp reactions and much anger across the Internet. On Facebook, graphic designer Sangeeta Das narrated her experience of the protests on Dec. 23, republished on the Kafila blog:
“There were many volunteers distributing biscuits and water to every protestor. We were talking ... on how to tackle the violence on women and children starting from ourselves, our homes, and communities. We were simply talking ... when the police, hundreds of them ... charged at us from behind, without any warning.”
Meanwhile, the media have drawn the government’s ire. On Sunday, the same day one journalist was killed in Manipur when police opened fire on protestors, the government issued an advisory to news channels to show “maturity and responsibility” in their coverage of protests:
No programme should be carried in the cable service which is likely to encourage or incite violence or contains anything against maintenance of law and order or which promotes anti-national attitude.

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