Republicans put squeeze on Obama in "fiscal cliff" talks

WASHINGTON (Reuters) - Republicans tried to wring more tax-rate concessions out of the White House  on Tuesday as political maneuvering intensified over an agreement to keep the U.S. economy from tumbling off the "fiscal cliff" next year. Markets rallied on hopes for a deal.

After important concessions in recent days from both President Barack Obama and House of Representatives Speaker John Boehner, Republicans moved to increase pressure on the Democrats by vowing to vote in the House on a "Plan B" back-up measure that would largely disregard the progress made so far.

The Republican proposal was part of a political dance by both parties to try to spin the "fiscal cliff" narrative in their favor even as they edged closer together. The White House rejected the offer but remained confident of an agreement.

"The president has demonstrated an obvious willingness to compromise and move more than halfway toward the Republicans," White House spokesman Jay Carney told reporters, adding that Obama is making a "good faith" effort to reach a compromise.

House Republicans were still meeting to discuss the matter on Tuesday evening.

Global stocks advanced to their highest levels since September amid rare signs of compromise on Capitol Hill. Investors shifted funds to stocks and the euro and pulled away from safe-harbor assets such as bonds, gold and the U.S. dollar.

The benchmark Dow Jones industrial average of 30 industrial stocks closed at 13,232.4, up less than 1 percent on the day.

"They've still got a long way to go, but you can't help but say that the odds are better today than they were on Friday that we'll get some sort of agreement," said Republican Representative Tom Cole.

While a bipartisan bargain could still fall apart, hopes of an accord rose on Monday night after Obama made a concession to Republicans by offering to limit tax increases to incomes exceeding $400,000 per household. That is a higher threshold than the $250,000 that the president had sought earlier.

Boehner, the top Republican in Congress, had earlier conceded on Obama's insistence that tax rates rise on the wealthiest Americans, but the two have been unable to agree on what income levels should be included in that category.

Analysts said Obama and Boehner may strike a compromise at $500,000 or close to that, though time was running short.

Boehner told reporters that he planned to move a "Plan B" bill to the House floor, possibly this week, in a move that could spur forward his talks with Obama. The House is controlled by Republicans and the Senate by Democrats.

One House Republican aide, asked about prospects for "Plan B" on the House floor, said: "It wouldn't be surprising ... if a lot of conservatives balk at something like that."

'WE CAN DO BETTER'

If the back-up plan fails, Republicans supporting it could afterward tell constituents back home that at least they voted for it and, in doing so, did their best to try to block Obama's agenda.

Even as he presented the Plan B measure, Boehner said he would continue to negotiate with Obama on a broader agreement.

"Plan B is Plan B for a reason. It's a less-than-ideal outcome. I've always believed we can do better," Boehner said.

The expiration of low tax rates enacted under former President George W. Bush is a key component of the "fiscal cliff" that lawmakers are trying to prevent from taking hold next month, along with deep automatic government spending cuts.

Left unchecked, these fiscal jolts could trigger another recession, economists have warned.

Often challenged by the conservative wing of his caucus, Boehner held Republican lawmakers together in support of his efforts to forge a deal with Obama. The speaker emerged largely unscathed from a potentially tough meeting with his fellow House Republicans on Tuesday morning.

Representative Darrell Issa, a key committee chairman, said his fellow House Republicans "were supportive of the speaker. ... I saw no one there get up and say, 'I can't support the speaker.'"

With opinion polls showing broad support in the United States for raising taxes on the wealthiest Americans and Obama still buoyed by his re-election last month, the Republicans' traditional opposition to tax hikes has waned somewhat.

The Obama-Boehner talks have largely overcome stark ideological differences and are focused increasingly on narrower disagreements over numbers.

COST-OF-LIVING INCREASES

Still, Obama could face unrest from fellow Democrats. Liberals were likely to oppose a key compromise he has offered to permit shrinking cost-of-living increases for all but the most vulnerable beneficiaries of the Social Security retirement program. His proposal calls for using a different formula, known as "chained Consumer Price Index," to determine the regular cost-of-living increases, essentially reducing benefits.

"I am committed to standing against any benefit cuts to programs Americans rely on, and tying Social Security benefits to chained CPI is a benefit cut," Democratic Representative Keith Ellison said in a statement.

Obama also moved closer to Boehner on the proportion of a 10-year deficit reduction package that should come from increased revenue, as opposed to cuts in government spending. Obama is now willing to accept a revenue figure of $1.2 trillion, down from his previous $1.4 trillion proposal.

Boehner's latest proposal calls for $1 trillion in new tax revenue from higher tax rates and the curbing of some tax deductions taken by high-income Americans.

Missing from Obama's latest offer was any extension of the so-called "payroll tax holiday" that ends on January 1, bringing an immediate tax increase on wage earners.

Possible plans to produce cuts in spending for Medicare and Medicaid, the government health insurance programs for seniors and low-income Americans respectively, remained to be discussed.

Boehner and Obama have made headway on the politically explosive question of the president's ability to avoid constant battles over raising the nation's debt ceiling, which controls the level of borrowing by the government. Boehner is ready to give Obama a year of relative immunity from conservative strife over the debt ceiling, while Obama is pushing for two years.
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Insight: The booming Philippines' missing link - foreigner investors

MANILA (Reuters) - The gathering had the air of a post-mortem. About 100 executives and government officials listened quietly as Guillermo Luz poked holes in the Philippines' fairytale economic revival.

Luz, head of the Philippines' National Competitiveness Council, projected a deck of slides onto two pull-down screens that showed the fast-growing Philippine economy slipping in the World's Bank's "Ease of Doing Business" index to 138 out of 185 countries, near Tajikistan and Sudan.

"It's a lousy neighborhood," he said of the two-notch fall this year. "I do not want to live with that ranking."

As the Philippines gallops ahead with the strongest economic growth in Southeast Asia and one of the world's best-performing stock markets, its shortcomings are being laid bare, including stubborn problems that have already started to undermine its economic renaissance.

While foreign funds have poured into Philippine assets this year, driving the main stock index <.psi> up around 30 percent to a succession of record highs and lifting the peso currency about 7 percent, foreign direct investment (FDI) remains embarrassingly low.

Total FDI is on course to hit around $1.5 billion this year -- about half its level in 2007 and less than the average $1.7 billion received every month in remittances from Filipinos overseas.

That is only about 3 percent of the total that flowed last year to a group of five peer economies including the Philippines in the 10-member Association of Southeast Asian Nations (ASEAN).

In his presentation in Manila's Makati business district, Luz highlighted the Philippines' lowly ranking in a range of categories, from "paying taxes" (143rd), to "starting a business" (161st) and "resolving insolvency" (165th).

Since coming to power in 2010, President Benigno Aquino has made headway against long-standing problems of corruption, shaky public finances and low infrastructure investment that earned the country the unwanted sobriquet of the "sick man" of Asia.

But he has yet to show his government can translate the torrent of hot money and improved market confidence that is also fuelling a property boom into real gains such as an expansion of higher-paying jobs and better transport links.

Calls by congressional leaders to loosen constitutional restrictions on foreign ownership have met with a lukewarm response from Aquino, a scion of an elite family whose mother, democracy icon Corazon Aquino, passed the 1987 constitution as president.

"I do not believe that foreigners would be that foolish to come here and put their money in business," Juan Ponce Enrile, the Senate president who is calling for the constitution to be revised, told Reuters. "They are at the mercy of local people who are not quite familiar to them. That is to me the reason why we lag in investment attractiveness in Asia."

"SALESMAN IN CHIEF"

The absence of FDI is a missing link that raises doubts over how much has really changed in the nation of 96 million people, where many an investor has been stung by copious red tape, unpredictable policymaking and graft.

Aquino has vowed to change the country's tarnished reputation among foreign investors, billing himself as the country's "salesman in chief". But to do so he needs to tackle vested business interests who benefit from a protected domestic market. So far, there are few signs he is doing so.

The constitution and current rules allow foreign investors to own no more than 40 percent in most industries and bars foreigners entirely in areas such as media and the practice of licensed professions such as engineering, law and medicine.

From 2000 to 2011, net FDI to the Philippines totaled $18.9 billion, according to United Nations Conference on Trade and Development, less than a third of what Singapore attracted in 2011 alone. As a proportion of the economy, the Philippines' net FDI stood at 0.6 percent last year, compared with 2.2 percent in Indonesia and 6.2 percent in Vietnam.

Strong foreign investment has been a vital ingredient in the rise of better-off Asian neighbors like Malaysia and Thailand, boosting job creation and deepening technological capabilities.

Foreign executives here are quick to complain there has been little concrete improvement on the ground, despite a surge of money into financial markets and credit rating upgrades on the back of improving fiscal health and lower borrowing costs.

"For me it's extremely frustrating," said Hubert D'Aboville, former head of the European Chamber of Commerce.

"We should welcome foreign investment, giving them the majority of 51 percent or 100 percent. What is important is to create jobs. We are not creating jobs."

EXODUS OF WORKERS

The Philippines has among the highest jobless rates in Southeast Asia at around 7 percent, helping to fuel an exodus of about 10 million Filipino workers in total that has yet to reverse course or even slow significantly.

Officials close to Aquino say he recognizes the need to attract more foreign investment, but is wary of broaching a reform of the constitution that could open up a complex, messy and energy-sapping political process.

"I don't think it's going to be touched for now," Budget Secretary Florencio Abad, who is also vice president of Aquino's party and one of his close advisers, told Reuters.

"You create another uncertainty. Investments are coming in anyway, predominantly by local guys."

Combined investment by the public and private sector grew an annual 7.9 percent in the first nine months against just 1.1 percent a year earlier, with more than half made up of investments in machinery and equipment.

While policy transparency is widely seen as improving under Aquino, the Philippines' volatile political and legal systems regularly throw up unpleasant surprises for foreigners.

Aquino's government has halted new mining projects, stalling development of an estimated $850 billion in mineral reserves, until Congress approves a mining tax reform -- a vote that is unlikely to take place before May 2013 mid-term elections.

In October, Manila added to restrictions on ownership of real estate, lending firms and professions.

Meanwhile, the Securities and Exchange Commission is looking at expanding the 40 percent foreign ownership limit to apply to all classes of shares in a company, rather than just common or voting shares, following a Supreme Court ruling last year that telecoms firm PLDT had breached the cap.

"The Philippines will be shooting itself in the foot because it will severely restrict the available shares for foreigners," said Francis Ed Lim, managing partner of the Accra law firm and a former head of the stock exchange.

TWO PHILIPPINES

While service sectors such as call centers, retail and tourism are growing strongly, the manufacturing sector - an engine of development in countries like Vietnam and Thailand - struggles to compete with neighbors and attract investment.

Ford Motor Co announced in June it was closing its Philippine production factory, citing an inadequate supply network and a lack of economies of scale.

Foreign executives here tell a tale of two Philippines. One is the country's special export zones, where companies can set up wholly owned units easily and receive incentives and efficient services as long as they ship their output abroad.

Total investments by local and foreign firms in economic zones totaled nearly 660 billion pesos ($16 billion) by the end of 2011, more than doubling since Aquino took office in 2010.

The other Philippines is encountered when companies try to tap the domestic market, running a gauntlet of heavy bureaucracy, local government corruption and sometimes troublesome partnerships with Filipino firms.

Companies have to go through 16 separate procedures to start a business in the Philippines, compared with three in Singapore and nine in Indonesia, according to the World Bank report.

Japanese firms have rekindled their long-dormant interest in the Philippines this year, prompted by rising wages in China and Beijing's territorial dispute with Japan. Still, a potential flood of money has been slowed by ownership limits and other restrictions, said Takashi Ishigami, president of Japanese trading house Marubeni Corp in the Philippines.

Marubeni is teaming up with a local firm to bid for a $1 billion railway project, among at least eight major Public-Private Partnerships (PPPs) that make up Aquino's flagship plan to improve infrastructure.

But Ishigami said Marubeni was only supplying equipment as part of the bid, and had been deterred from taking an operational role by the government's refusal to guarantee rail fares. That shortcoming would likely deter Japanese firms from bidding for other PPPs, he said.
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Asia stocks rise over US budget deal optimism

BANGKOK (AP) — Asian stock markets  rose Wednesday after U.S. political leaders appeared to be closing in on a budget deal to avert the "fiscal cliff" by the year-end deadline. Economists have been warning the U.S. economy could be thrown back into recession without a deal.

Japan's Nikkei 225 index jumped 1.1 percent to 10,034.45. Hong Kong's Hang Seng index rose 0.7 percent to 22,640.25. Australia's S&P/ASX 200 advanced 0.3 percent to 4,608.90. Benchmarks in New Zealand, Taiwan, and Malaysia also rose, while those in Singapore and mainland China fell. Stock markets in South Korea were closed for a public holiday during Wednesday's presidential election.

Stock markets have been on edge for weeks as President Barack Obama and Republican leaders struggle to hammer out an agreement before Jan. 1, when automatic tax hikes and government spending cuts will take effect if no deal is reached.

The two sides appear to be moving closer together, on income taxes at least.

On Monday, Obama offered to freeze income tax rates for taxpayers making $400,000 or less and raise them for people making more. Previously, Obama wanted higher taxes for individual income above $200,000, or $250,000 for couples.

Republican House Speaker John Boehner would allow income tax rates to rise for people making more than $1 million per year and would hold rates where they are for everyone making less. The top rate on income exceeding $1 million would go from 35 percent to 39.6 percent. Previously, Boehner opposed allowing any tax rates to go up.

"To be honest, the numbers are irrelevant at the moment and will change numerous times before a final deal is settled on," said Cameron Peacock of IG Markets in Melbourne said in an email commentary. "What is important and what is driving the market higher is that the two parties are now in constructive discussions over specific tax levels and spending programs and working toward a common middle ground."

Investor sentiment also got a boost after the Standard & Poor's rating agency said Tuesday that it had raised Greece's credit grade by six notches to B-, lifting the country out of default. The threat of a Greek default had roiled markets in the first half of this year.

Investors worried that the heavily indebted nation would leave the euro, opening the way for a break-up of the currency block. The ratings firm said the upgrade reflected its view that the other 16 countries using the euro are determined to keep the Greece inside the currency union.

In Japan, the focus remains on the weekend landslide election victory of the Liberal Democratic Party, whose leader, Shinzo Abe, in line to become prime minister, wants to shore up growth with higher public works spending. That was despite concern about the consequences of adding to Japan's towering public debts and doubts about the effectiveness of looser policy.

Benchmark oil for January delivery rose 2 cents to $88.42 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 73 cents Tuesday to finish at $87.93 on the Nymex.

In currencies, the euro rose to $1.3226 from $1.3220 late Tuesday in New York. The dollar rose to 84.36 yen from 84.20 yen.

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Smooth ANC vote keeps S.Africa's rand near 2-month high

JOHANNESBURG (Reuters) - The rand traded near a two-month high early on Wednesday and looked to further those gains in an upbeat market after an internal ANC election passed off smoothly and U.S. officials appeared to make progress in talks about the fiscal cliff.

The unit held firm on Tuesday after President Jacob Zuma won a second term as party leader, almost certainly giving him a second five-year term as the country's president in 2014 elections.

Investors also took heart at the ANC's choice of respected businessman Cyril Ramaphosa as deputy president.

"There could have been a shift towards a leader or group of leaders that may favour greater state intervention," said Christopher Shiells, emerging market analyst at Informa Global Markets.

"Investors see Ramaphosa as pro-business and are hoping that early signs of a more business-friendly approach develop during the rest of the conference."

The rand was at 8.4525/dollar at 0600 GMT, just slightly firmer than its previous close in New York on Tuesday.

"There is something to be said about understanding the environment in which one will be trading and it is clear that with Zuma at the helm, it will be business as usual and more of the same," ETM analysts said in a note.

"The markets can be content in the knowledge that someone who understands business and the importance of delivery is playing a key role," they added, referring to Ramaphosa.

The conference ends on Thursday and with the leadership election out of the way, investors will focus on any policy changes such as new regulations or taxation for the mining sector.

Changes look to be on the cards after Deputy Finance Minister Nhlanhla Nene said on Monday the government would not be "reckless" with the decision.

Optimism that the United States would resolve expiring laws that would cut government spending, raise taxes and reduce the budget deficit - but also likely plunge the world's biggest economy into recession - were also boosting risk appetite.

The South African Reserve Bank will release its business cycle indicators at 0700 GMT. The leading indicator ticked up by 0.1 percent in September and is expected to have continued its slow rise in October.
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Syrian rebels now have a tank operated with a PlayStation controller

As Syria's rebels work to overthrow the tank-equipped Assad regime, they've learned that it helps to have tanks of their own. They deserve bonus points for integrating video game technology. This is no exaggeration. Have a look at the opposition forces' "100 percent made in Syria" armored vehicle, the Sham II. RELATED: What Dennis Kucinich Really Said in Syria Named for ancient Syria and assembled out of spare parts over the course of a month, the Sham II is sort of rough around the edges, but it's got impressive guts. It rides on the chassis of an old diesel car and is fully encased in light steel that's rusted from the elements. Five cameras are mounted on the tank's exterior, and there's a machine gun mounted on a turning turret. Inside, it kind of looks like a man cave. A couple of flat-screen TVs are mounted on opposite walls. The driver sits in front of one, controlling the vehicle with a steering wheel, and the gunner sits at the other, aiming the machine gun with a PlayStation controller. RELATED: It's Never a Good Idea to Put Your Torture Victims on YouTube Sham II is heading up to the devastated city of Aleppo to join the combat forces there. Meanwhile, rebel forces continue to close in on Damascus and Assad's shrinking regime. Diplomats have already begun to speculate about what the Syrian president's next move would be. We do know that Assad has been exploring the option of seeking political asylum in the Middle East or in Latin America. However, it looks more likely that Assad and his cronies will retreat to the Alawite-controlled mountains on Syria's Mediterranean coast. The only other alternative -- chemical weapons attack notwithstanding -- would be for Assad to stay in the palace and fight to the end. And can you imagine standing helpless as a fierce machine like Sham II roared up the palace steps? Run, Bashar. Run.
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The Wii U uses less than half the power of the Xbox 360 and the PS3

Nintendo’s (NTDOY) Wii prided itself for being a super energy-efficient console that ran nearly silent and sipped very little electricity. And although Microsoft’s (MSFT) Xbox 360 was originally a loud monster with a penchant for Red-Ring-of-Death-ing itself, the amount of power it consumed was never as much as Sony’s (SNE) launch PlayStation 3, which used more power than a refrigerator. Eurogamer took it upon itself to pit the Wii U against the Xbox 360 S and new super slim PS3 and concluded that Nintendo’s new console “draws so little power in comparison to its rivals that its tiny casing still feels cool to the touch during intense gaming.” Most impressive is that the Wii U maintains its low-wattage while fitting in a chassis that’s smaller than both the Xbox 360 and PS3. According to Eurogamer’s tests, the Wii U draws only 32 watts of power during gameplay of games that are as graphically intensive as the 360 and PS3, with both consoles using 118% and 139$% more power, respectively. To achieve such “green” levels, Nintendo clocks the Wii U’s CPU to 1.24GHz and “uses far fewer transistors than the competition.” While there are still some mysteries as to how the hardware remains cool, Eurogamer also discovered that the AMD-built GPU increases performance by “40 per cent per square millimetre of silicon – another big leap in efficiency.” Most disappointing in Eurogamer’s analysis is that they weren’t able to get the Wii U’s wattage to spike more than 33 watts, suggesting that the console can’t be over-clocked in the future to pump out more polygons. If you’re still on the fence on which console you should buy or play games on, the Wii U looks to be the one that’ll keep your electric bill nice and low.
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'Angry Birds' Movie Arrives in 2016 From Producer of 'Despicable Me'

Rovio Entertainment celebrated the three-year anniversary of the Angry Birds franchise Tuesday by releasing 30 new levels for the game and announcing details for the Angry Birds movie. The still untitled 3D computer generated feature film will debut in mid-2016 with Despicable Me producer John Cohen taking the production helm. Former Marvel Studios chairman David Maisel, a senior adviser to Rovio, will remain as executive producer. . "With John's hands-on producer background and David's expertise in establishing and running his own successful studio, these two are the dream team for making a movie outside the studio system," Rovio's CEO Mikael Hed said in a statement. "Both professionals have the ideal skills and vision to achieve incredible things.” [More from Mashable: 7 Kid-Friendly Games for the Holidays] SEE ALSO: 'Angry Birds' Turns Queen's Freddie Mercury Into an Honorary Character Cohen -- who also lent his talents to such movies as Hop, Ice Age, Alvin and the Chipmunks, Dr. Seuss' Horton Hears a Who, Robots and Ice Age: The Meltdown -- touts Rovio for "trailblazing terrific new ways for Angry Birds fans to interact with these characters." [More from Mashable: Big Boi: Music Piracy Produces ‘Bullsh-t’ Records] No plot details about the movie have been revealed, but Rovio plans to produce and finance the movie to avoid losing "creative control" at the hands of a movie studio. 1. Torchlight 2 The fantasy-RPG sequel to the wildly popular 2009 game Torchlight, Runic Games' latest installment in the franchise, doesn't mess with its recipe too much. And in this case, that's a big positive. Part steam-punk treasure hunt, part magic-heavy flight of fancy, Torchlight 2 capitalizes on the fast-paced, action-filled environment crafted by the designers of Diablo, Diablo 2 and Fate. Expect a lot of loot-grabbing from this game, as a bulk of the fun takes place in expansive and randomly generated cave systems practically filled to the brim with treasure and fancy equipment for your specific character class. Torchlight 2 really gilds the lily with a long-awaited and happily embraced local LAN option — meaning you can raid dungeons with three of your closest friends. This makes the experience, for the first time, a cooperative one, and has been one of the best new features. This game is really a continuation of that old-school play style seen in the previous Diablo installments, so if solo (or small group) hunting is your thing, download away. Price: $19.99 on Steam Platform: Windows Click here to view this gallery.
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