We Look Back Earthily At 2012

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Stories for 2013: Syria to 'post-Gangnam'

Among the few virtual certainties of 2013 is the ongoing anguish of Syria and the decline of its president, Bashar al-Assad.

STORY HIGHLIGHTS

• Look for more unrest amid power transitions in the Middle East


• Disputes and economic worries will keep China, Japan, North Korea in the news


• Europe's economy will stay on a rough road, but the outlook for it is brighter


• Events are likely to draw attention to cyber warfare and climate change

(CNN) -- Forecasting the major international stories for the year ahead is a time-honored pastime, but the world has a habit of springing surprises. In late 1988, no one was predicting Tiananmen Square or the fall of the Berlin Wall. On the eve of 2001, the 9/11 attacks and the subsequent invasion of Afghanistan were unimaginable. So with that substantial disclaimer, let's peer into the misty looking glass for 2013.

More turmoil for Syria and its neighbors

If anything can be guaranteed, it is that Syria's gradual and brutal disintegration will continue, sending aftershocks far beyond its borders. Most analysts do not believe that President Bashar al-Assad can hang on for another year. The more capable units of the Syrian armed forces are overstretched; large tracts of north and eastern Syria are beyond the regime's control; the economy is in dire straits; and the war is getting closer to the heart of the capital with every passing week. Russian support for al-Assad, once insistent, is now lukewarm.

Amid the battle, a refugee crisis of epic proportions threatens to become a catastrophe as winter sets in. The United Nations refugee agency says more than 4 million Syrians are in desperate need, most of them in squalid camps on Syria's borders, where tents are no match for the cold and torrential rain. Inside Syria, diseases like tuberculosis are spreading, according to aid agencies, and there is a danger that hunger will become malnutrition in places like Aleppo.

The question is whether the conflict will culminate Tripoli-style, with Damascus overrun by rebel units; or whether a political solution can be found that involves al-Assad's departure and a broadly based transitional government taking his place. U.N. envoy Lakhdar Brahimi has not been explicit about al-Assad's exit as part of the transition, but during his most recent visit to Damascus, he hinted that it has to be.

2012: The year in pictures

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"Syria and the Syrian people need, want and look forward to real change. And the meaning of this is clear to all," he said.

The international community still seems as far as ever from meaningful military intervention, even as limited as a no fly-zone. Nor is there any sign of concerted diplomacy to push all sides in Syria toward the sort of deal that ended the war in Bosnia. In those days, the United States and Russia were able to find common ground. In Syria, they have yet to do so, and regional actors such as Turkey, Qatar, Saudi Arabia and Iran also have irons in the fire.

Failing an unlikely breakthrough that would bring the regime and its opponents to a Syrian version of the Dayton Accords that ended the Bosnian war, the greatest risk is that a desperate regime may turn to its chemical weapons, troublesome friends (Hezbollah in Lebanon and the Kurdish PKK in Turkey) and seek to export unrest to Lebanon, Iraq and Jordan.

The Syrian regime has already hinted that it can retaliate against Turkey's support for the rebels -- not by lobbing Scud missiles into Turkey, but by playing the "Kurdish" card. That might involve direct support for the PKK or space for its Syrian ally, the Democratic Union Party. By some estimates, Syrians make up one-third of the PKK's fighting strength.

To the Turkish government, the idea that Syria's Kurds might carve out an autonomous zone and get cozy with Iraq's Kurds is a nightmare in the making. Nearly 800 people have been killed in Turkey since the PKK stepped up its attacks in mid-2011, but with three different sets of elections in Turkey in 2013, a historic bargain between Ankara and the Kurds that make up 18% of Turkey's population looks far from likely.

Many commentators expect Lebanon to become more volatile in 2013 because it duplicates so many of the dynamics at work in Syria. The assassination in October of Lebanese intelligence chief Brig. Gen. Wissam al-Hassan -- as he investigated a pro-Syrian politician accused of obtaining explosives from the Syrian regime -- was an ominous portent.

Victory for the overwhelmingly Sunni rebels in Syria would tilt the fragile sectarian balance next door, threatening confrontation between Lebanon's Sunnis and Hezbollah. The emergence of militant Salafist groups like al-Nusra in Syria is already playing into the hands of militants in Lebanon.

Iraq, too, is not immune from Syria's turmoil. Sunni tribes in Anbar and Ramadi provinces would be heartened should Assad be replaced by their brethren across the border. It would give them leverage in an ever more tense relationship with the Shia-dominated government in Baghdad. The poor health of one of the few conciliators in Iraqi politics, President Jalal Talabani, and renewed disputes between Iraq's Kurds and the government over boundaries in the oil-rich north, augur for a troublesome 2013 in Iraq.

More worries about Iran's nuclear program

Syria's predicament will probably feature throughout 2013, as will the behavior of its only friend in the region: Iran. Intelligence sources say Iran continues to supply the Assad regime with money, weapons and expertise; and military officers who defected from the Syrian army say Iranian technicians work in Syria's chemical weapons program. Al-Assad's continued viability is important for Iran, as his only Arab ally. They also share sponsorship of Hezbollah in Lebanon, which, with its vast supply of rockets and even some ballistic missiles, might be a valuable proxy in the event of an Israeli strike against Iran's nuclear program.

Speaking of which, there are likely to be several more episodes in the behind-closed-doors drama of negotiations on Iran's nuclear sites. Russia is trying to arrange the next round for January. But in public, at least, Iran maintains it has every right to continue enriching uranium for civilian purposes, such as helping in the treatment of more than 1 million Iranians with cancer.

Iran "will not suspend 20% uranium enrichment because of the demands of others," Fereydoun Abbasi-Davani, head of Iran's Atomic Energy Organization, said this month.

International experts say the amount of 20% enriched uranium (estimated by the International Atomic Energy Agency in November at 297 pounds) is more than needed for civilian purposes, and the installation of hundreds more centrifuges could cut the time needed to enrich uranium to weapons-grade. The question is whether Iran will agree to intrusive inspections that would reassure the international community -- and Israel specifically -- that it can't and won't develop a nuclear weapon.

This raises another question: Will it take bilateral U.S.-Iranian talks -- and the prospect of an end to the crippling sanctions regime -- to find a breakthrough? And will Iran's own presidential election in June change the equation?

For now, Israel appears to be prepared to give negotiation (and sanctions) time to bring Iran to the table. For now.

Egypt to deal with new power, economic troubles

Given the turmoil swirling through the Middle East, Israel could probably do without trying to bomb Iran's nuclear program into submission. Besides Syria and Lebanon, it is already grappling with a very different Egypt, where a once-jailed Islamist leader is now president and Salafist/jihadi groups, especially in undergoverned areas like Sinai, have a lease on life unimaginable in the Mubarak era.

The U.S. has an awkward relationship with President Mohamed Morsy, needing his help in mediating with Hamas in Gaza but concerned that his accumulation of power is fast weakening democracy and by his bouts of anti-Western rhetoric. (He has demanded the release from a U.S. jail of Sheikh Omar Abdel Rahman, convicted of involvement in the first bombing of the World Trade Center in 1993.)

The approval of the constitution removes one uncertainty, even if the opposition National Salvation Front says it cements Islamist power. But as much as the result, the turnout -- about one-third of eligible voters -- indicates that Egyptians are tired of turmoil, and more concerned about a deepening economic crisis.

Morsy imposed and then scrapped new taxes, and the long-expected $4.8 billion loan from the International Monetary Fund is still not agreed on. Egypt's foreign reserves were down to $15 billion by the end of the year, enough to cover less than three months of imports. Tourism revenues are one-third of what they were before street protests erupted early in 2011. Egypt's crisis in 2013 may be more about its economy than its politics.

Libya threatens to spawn more unrest in North Africa

Libya's revolution, if not as seismic as anything Syria may produce, is still reverberating far and wide. As Moammar Gadhafi's rule crumbled, his regime's weapons found their way into an arms bazaar, turning up in Mali and Sinai, even being intercepted off the Lebanese coast.

The Libyan government, such as it is, seems no closer to stamping its authority on the country, with Islamist brigades holding sway in the east, tribal unrest in the Sahara and militias engaged in turf wars. The danger is that Libya, a vast country where civic institutions were stifled for four decades, will become the incubator for a new generation of jihadists, able to spread their influence throughout the Sahel. They will have plenty of room and very little in the way of opposition from security forces.

The emergence of the Islamist group Ansar Dine in Mali is just one example. In this traditionally moderate Muslim country, Ansar's fighters and Tuareg rebels have ejected government forces from an area of northern Mali the size of Spain and begun implementing Sharia law, amputations and floggings included. Foreign fighters have begun arriving to join the latest front in global jihad; and terrorism analysts are seeing signs that al Qaeda in the Islamic Maghreb (AQIM) and groups like Boko Haram in Nigeria are beginning to work together.

There are plans for an international force to help Mali's depleted military take back the north, but one European envoy said it was unlikely to materialize before (wait for it) ... September 2013. Some terrorism analysts see North Africa as becoming the next destination of choice for international jihad, as brigades and camps sprout across a vast area of desert.

A bumpy troop transition for Afghanistan

The U.S. and its allies want to prevent Afghanistan from becoming another haven for terror groups. As the troop drawdown gathers pace, 2013 will be a critical year in standing up Afghan security forces (the numbers are there, their competence unproven), improving civil institutions and working toward a post-Karzai succession.

In November, the International Crisis Group said the outlook was far from assuring.

"Demonstrating at least will to ensure clean elections (in Afghanistan in 2014) could forge a degree of national consensus and boost popular confidence, but steps toward a stable transition must begin now to prevent a precipitous slide toward state collapse. Time is running out," the group said.

Critics have also voiced concerns that the publicly announced date of 2014 for withdrawing combat forces only lets the Taliban know how long they must hold out before taking on the Kabul government.

U.S. officials insist the word is "transitioning" rather than "withdrawal," but the shape and role of any military presence in 2014 and beyond are yet to be settled. Let's just say the United States continues to build up and integrate its special operations forces.

The other part of the puzzle is whether the 'good' Taliban can be coaxed into negotiations, and whether Pakistan, which has considerable influence over the Taliban leadership, will play honest broker.

Private meetings in Paris before Christmas that involved Taliban envoys and Afghan officials ended with positive vibes, with the Taliban suggesting they were open to working with other political groups and would not resist girls' education. There was also renewed discussion about opening a Taliban office in Qatar, but we've been here before. The Taliban are riven by internal dissent and may be talking the talk while allowing facts on the ground to work to their advantage.

Where will North Korea turn its focus?

On the subject of nuclear states that the U.S.-wishes-were-not, the succession in North Korea has provided no sign that the regime is ready to restrain its ambitious program to test nuclear devices and the means to deliver them.

Back in May 2012, Peter Brookes of the American Foreign Policy Council said that "North Korea is a wild card -- and a dangerous one at that." He predicted that the inexperienced Kim Jong Un would want to appear "large and in charge," for internal and external consumption. In December, Pyongyang launched a long-range ballistic missile -- one that South Korean scientists later said had the range to reach the U.S. West Coast. Unlike the failure of the previous missile launch in 2009, it managed to put a satellite into orbit.

The last two such launches have been followed by nuclear weapons tests -- in 2006 and 2009. Recent satellite images of the weapons test site analyzed by the group 38 North show continued activity there.

So the decision becomes a political one. Does Kim continue to appear "large and in charge" by ordering another test? Or have the extensive reshuffles and demotions of the past year already consolidated his position, allowing him to focus on the country's dire economic situation?

China-Japan island dispute to simmer

It's been a while since East Asia has thrown up multiple security challenges, but suddenly North Korea's missile and nuclear programs are not the only concern in the region. There's growing rancor between China and Japan over disputed islands in the East China Sea, which may be aggravated by the return to power in Japan of Shinzo Abe as prime minister.

Abe has long been concerned that Japan is vulnerable to China's growing power and its willingness to project that power. Throughout 2012, Japan and China were locked in a war of words over the Senkaku or Diaoyu islands, with fishing and Coast Guard boats deployed to support claims of sovereignty.

In the days before Japanese went to the polls, Beijing also sent a surveillance plane over the area, marking the first time since 1958, according to Japanese officials, that Bejing had intruded into "Japanese airspace." Japan scrambled F-15 jets in response.

The islands are uninhabited, but the seas around them may be rich in oil and gas. There is also a Falklands factor at play here. Not giving in to the other side is a matter of national pride. There's plenty of history between China and Japan -- not much of it good.

As China has built up its ability to project military power, Japan's navy has also expanded. Even a low-level incident could lead to an escalation. And as the islands are currently administered by Japan, the U.S. would have an obligation to help the Japanese defend them.

Few analysts expect conflict to erupt, and both sides have plenty to lose. For Japan, China is a critical market, but Japanese investment there has fallen sharply in the past year. Just one in a raft of problems for Abe. His prescription for dragging Japan out of its fourth recession since 2000 is a vast stimulus program to fund construction and other public works and a looser monetary policy.

The trouble is that Japan's debt is already about 240% of its GDP, a much higher ratio than even Greece. And Japan's banks hold a huge amount of that debt. Add a shrinking and aging population, and at some point the markets might decide that the yield on Japan's 10-year sovereign bond ought to be higher than the current 0.77%.

Economic uncertainty in U.S., growth in China

So the world's third-largest economy may not help much in reviving global growth, which in 2012 was an anemic 2.2%, according to United Nations data. The parts of Europe not mired in recession hover close to it, and growth in India and Brazil has weakened. Which leaves the U.S. and China.

At the time of writing, the White House and congressional leadership are still peering over the fiscal cliff. Should they lose their footing, the Congressional Budget Office expects the arbitrary spending cuts and tax increases to be triggered will push the economy into recession and send unemployment above 9%.

A stopgap measure, rather than a long-term foundation for reducing the federal deficit, looks politically more likely. But to companies looking for predictable economic policy, it may not be enough to unlock billions in investment. Why spend heavily if there's a recession around the corner, or if another fight looms over raising the federal debt ceiling?

In September, Moody's said it would downgrade the U.S. sovereign rating from its "AAA" rating without "specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term." In other words, it wants action beyond kicking the proverbial can.

Should the cliff be dodged, most forecasts see the U.S. economy expanding by about 2% in 2013. That's not enough to make up for stagnation elsewhere, so a great deal depends on China avoiding the proverbial hard landing.

Until now, Chinese growth has been powered by exports and infrastructure spending, but there are signs that China's maturing middle class is also becoming an economic force to be reckoned with. Consultants PwC expect retail sales in China to increase by 10.5% next year -- with China overtaking the U.S. as the world's largest retail market by 2016.

Europe's economic outlook a little better

No one expects Europe to become an economic powerhouse in 2013, but at least the horizon looks a little less dark than it did a year ago. The "PIGS' " (Portugal, Ireland/Italy, Greece, Spain) borrowing costs have eased; there is at least rhetorical progress toward a new economic and fiscal union; and the European Central Bank has talked tough on defending the Eurozone.

Mario Draghi, president of the European Central Bank, fended off the dragons with the declaration in July that "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."

Draghi has promised the bank has unlimited liquidity to buy sovereign debt, as long as governments (most likely Spain) submit to reforms designed to balance their budgets. But in 2013, the markets will want more than brave talk, including real progress toward banking and fiscal union that will leave behind what Draghi likes to call Europe's "fairy world" of unsustainable debt and collapsing banks. Nothing can be done without the say-so of German Chancellor Angela Merkel, renowned for a step-by-step approach that's likely to be even more cautious in a year when she faces re-election.

Elections in Italy in February may be more important -- pitching technocrat Prime Minister Mario Monti against the maverick he replaced, 76-year old Silvio Berlusconi. After the collapse of Berlusconi's coalition 13 months ago, Monti reined in spending, raised the retirement age and raised taxes to bring Italy back from the brink of insolvency. Now he will lead a coalition of centrist parties into the election. But polls suggest that Italians are tired of Monti's austerity program, and Berlusconi plans a populist campaign against the man he calls "Germano-centric."

The other tripwire in Europe may be Greece. More cuts in spending -- required to qualify for an EU/IMF bailout -- are likely to deepen an already savage recession, threatening more social unrest and the future of a fragile coalition. A 'Grexit' from the eurozone is still possible, and that's according to the Greek finance minister, Yannis Stournaras.

Expect to see more evidence of climate change

Hurricane Sandy, which struck the U.S. East Coast in November, was the latest indicator of changing and more severe weather patterns. Even if not repeated in 2013, extreme weather is beginning to have an effect -- on where people live, on politicians and on the insurance industry.

After Sandy, New York Gov. Andrew Cuomo said that after "the last few years, I don't think anyone can sit back anymore and say, 'Well, I'm shocked at that weather pattern.' " The storm of the century has become the storm of every decade or so, said Michael Oppenheimer, professor of geosciences at Princeton.

"Climate change will probably increase storm intensity and size simultaneously, resulting in a significant intensification of storm surges," he and colleagues wrote in Nature.

In the U.S., government exposure to storm-related losses in coastal states has risen more than 15-fold since 1990, to $885 billion in 2011, according to the Insurance Information Institute. The Munich RE insurance group says North America has seen higher losses from extreme weather than any other part of the world in recent decades.

"A main loss driver is the concentration of people and assets on the coast combined with high and possibly growing vulnerabilities," it says.

Risk Management Solutions, which models catastrophic risks, recently updated its scenarios, anticipating an increase of 40% in insurance losses on the Gulf Coast, Florida and the Southeast over the next five years, and 25% to 30% for the mid-Atlantic and Northeastern states. Those calculations were done before Sandy.

Inland, eyes will be trained on the heavens for signs of rain -- after the worst drought in 50 years across the Midwest. Climatologists say that extended periods of drought -- from the U.S. Midwest to Ukraine -- may be "the new normal." Jennifer Francis at the Institute of Marine and Coastal Sciences at Rutgers University has shown that a warmer Arctic tends to slow the jet stream, causing it to meander and, in turn, prolong weather patterns. It's called Arctic amplification, and it is probably aggravating drought in the Northwest United States and leading to warmer summers in the Northern Hemisphere, where 2012 was the hottest year on record.

It is a double-edged sword: Warmer temperatures may make it possible to begin cultivating in places like Siberia, but drier weather in traditional breadbaskets would be very disruptive. The U.N. Food and Agriculture Organization reports that stocks of key cereals have tightened, contributing to volatile world markets. Poor weather in Argentina, the world's second-largest exporter of corn, may compound the problem.

More cyber warfare

What will be the 2013 equivalents of Flame, Gauss and Shamoon? They were some of the most damaging computer viruses of 2012. The size and versatility of Flame was unlike nothing seen before, according to anti-virus firm Kaspersky Lab.

Gauss stole online banking information in the Middle East. Then came Shamoon, a virus that wiped the hard drives of about 30,000 computers at the Saudi oil company Aramco, making them useless. The Saudi government declared it an attack on the country's economy; debate continues on whether it was state-sponsored.

Kaspersky predicts that in 2013, we will see "new examples of cyber-warfare operations, increasing targeted attacks on businesses and new, sophisticated mobile threats."

Computer security firm McAfee also expects more malware to be developed to attack mobile devices and apps in 2013.

U.S. Defense Secretary Leon Panetta is more concerned about highly sophisticated attacks on infrastructure that "could be as destructive as the terrorist attack on 9/11."

"We know that foreign cyber actors are probing America's critical infrastructure networks. They are targeting the computer control systems that operate chemical, electricity and water plants and those that guide transportation throughout this country," he said in October.

Intellectual property can be stolen, bought or demanded as a quid pro quo for market access. The U.S. intelligence community believes China or Chinese interests are employing all three methods in an effort to close the technology gap.

In the waning days of 2012, the interagency Committee on Foreign Investment in the United States said "there is likely a coordinated strategy among one or more foreign governments or companies to acquire U.S. companies involved in research, development, or production of critical technologies."

It did not name the country in its unclassified report but separately noted a growing number of attempts by Chinese entities to buy U.S. companies.

Who will be soccer's next 'perfect machine'?

There's room for two less serious challenges in 2013. One is whether any football team, in Spain or beyond, can beat Barcelona and its inspirational goal machine Lionel Messi, who demolished a record that had stood since 1972 for the number of goals scored in a calendar year. (Before Glasgow Celtic fans start complaining, let's acknowledge their famous win against the Spanish champions in November.)

Despite the ill health of club coach Tito Vilanova, "Barca" sits imperiously at the top of La Liga in Spain and is the favorite to win the world's most prestigious club trophy, the European Champions League, in 2013. AC Milan is its next opponent in a match-up that pits two of Europe's most storied clubs against each other. But as Milan sporting director Umberto Gandini acknowledges, "We face a perfect machine."

Will Gangnam give it up to something sillier?

Finally, can something -- anything -- displace Gangnam Style as the most watched video in YouTube's short history? As of 2:16 p.m. ET on December 26, it had garnered 1,054,969,395 views and an even more alarming 6,351,871 "likes."

Perhaps in 2013 the YouTube audience will be entranced by squirrels playing table tennis, an octopus that spins plates or Cistercian nuns dancing the Macarena. Or maybe Gangnam will get to 2 billion with a duet with Justin Bieber.

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Body of India rape victim cremated in New Delhi

NEW DELHI (Reuters) - The body of a woman, whose gang rape provoked protests and rare national debate about violence against women in India, arrived back in New Delhi on Sunday and was cremated at a private ceremony.

Scuffles broke out in central Delhi between police and protesters who say the government is doing too little to protect women. But the 2,000-strong rally was confined to a single area, unlike last week when protests raged up throughout the capital.

Riot police manned barricades along streets leading to India Gate war memorial - a focal point for demonstrators - and, at another gathering point - the centuries-old Jantar Mantar - protesters held banners reading "We want justice!" and "Capital punishment".

Most sex crimes in India go unreported, many offenders go unpunished, and the wheels of justice turn slowly, according to social activists, who say that successive governments have done little to ensure the safety of women.

The unidentified 23-year-old victim of the December 16 gang rape died of her injuries on Saturday, prompting promises of action from a government that has struggled to respond to public outrage.

The medical student had suffered brain injuries and massive internal injuries in the attack and died in hospital in Singapore where she had been taken for treatment.

She and a male friend had been returning home from the cinema, media reports say, when six men on a bus beat them with metal rods and repeatedly raped the woman. The friend survived.

New Delhi has the highest number of sex crimes among India's major cities, with a rape reported on average every 18 hours, police figures show. Reported rape cases rose by nearly 17 percent between 2007 and 2011, according to government data.

Six suspects were charged with murder after her death and face the death penalty if convicted.

In Kolkata, one of India's four biggest cities, police said a man reported that his mother had been gang-raped and killed by a group of six men in a small town near the city on Saturday.

She was killed on her way home with her husband, a senior official said, and the attackers had thrown acid at the husband, raped and killed her, and dumped her body in a roadside pond.

Police declined to give any further details. One officer told Reuters no criminal investigation had yet been launched.

"MISOGYNY"

The leader of India's ruling Congress party, Sonia Gandhi, was seen arriving at the airport when the plane carrying the woman's body from Singapore landed and Prime Minister Mannmohan Singh's convoy was also there.

A Reuters correspondent saw family members who had been with her in Singapore take her body from the airport to their Delhi home in an ambulance with a police escort.

Her body was then taken to a crematorium and cremated. Media were kept away but a Reuters witness saw the woman's family, New Delhi's chief minister, Sheila Dikshit, and the junior home minister, R P N Singh, coming out of the crematorium.

The outcry over the attack caught the government off guard. It took a week for the prime minister to make a statement, infuriating many protesters. Last weekend they fought pitched battles with police.

Issues such as rape, dowry-related deaths and female infanticide rarely enter mainstream political discourse.

Analysts say the death of the woman dubbed "Amanat", an Urdu word meaning "treasure", by some Indian media could change that, though it is too early to say whether the protesters can sustain their momentum through to national elections due in 2014.

U.N. Secretary General Ban Ki-Moon added his voice to those demanding change, calling for "further steps and reforms to deter such crimes and bring perpetrators to justice".

Commentators and sociologists say the incident earlier this month has tapped into a deep well of frustration many Indians feel over what they see as weak governance and poor leadership on social issues.

Newspapers raised doubts about the commitment of both male politicians and the police to protecting women.

"Would the Indian political system and class have been so indifferent to the problem of sexual violence if half or even one-third of all legislators were women?" the Hindu newspaper asked.

The Indian Express said it was more complicated than realizing that the police force was understaffed and underpaid.

"It is geared towards dominating citizens rather than working for them, not to mention being open to influential interests," the newspaper said. "It reflects the misogyny around us, rather than actively fighting for the rights of citizens who happen to be female."

(Additional reporting by Ross Colvin and Diksha Madhokin New Delhi and Sujoy Dhar in Kolkata; Editing by Louise Ireland)

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Wall Street skids as U.S. heads for "fiscal cliff"

NEW YORK (Reuters) - Stocks fell on Friday, putting the S&P 500 on track for a fifth straight decline, as President Barack Obama and top congressional leaders were to make a last-ditch attempt to steer the United States away from driving off the "fiscal cliff."

Obama and lawmakers will meet at the White House Friday afternoon for talks before a New Year's deadline to keep large tax hikes and spending cuts from taking effect and threatening the economy with recession.

Investors' pessimism about achieving anything more than a stop-gap deal by the deadline showed in the benchmark S&P index's 1.6 percent decline this week. The broad index was on pace for its worst weekly performance since the U.S. elections.

With time running short, members of Congress may attempt to pass a retroactive fix on tax rises and spending cuts soon after the automatic fiscal policies come into effect on January 1.

"It doesn't matter which side wins, but at this point nobody wants to play a game where there aren't rules," said Joe Costigan, director of equity research at Bryn Mawr Trust in Bryn Mawr, Pennsylvania.

"So everybody is talking about what the prospects are for changes in the rules, but at the end of the day nothing is happening."

Highlighting Wall Street's sensitivity to developments in Washington, stocks took a dive of more than 1 percent on Thursday after Senate Majority Leader Harry Reid warned a deal was unlikely before the deadline. But later the index rebounded after the House of Representatives said it hold an unusual Sunday session to work on a fiscal solution.

With many market participants away for the holiday-shortened week, volume is expected to remain light, which could exacerbate market swings.

The Dow Jones industrial average <.dji> dropped 90.70 points, or 0.69 percent, to 13,005.61. The Standard & Poor's 500 Index <.spx> lost 9.74 points, or 0.69 percent, to 1,408.36. The Nasdaq Composite Index <.ixic> fell 16.25 points, or 0.54 percent, to 2,969.66.

Market breadth was skewed to the negative, with declining stocks outnumbering gainers on the NYSE by 2,044 to 690, while on the Nasdaq, decliners outnumbered advancers 1,466 to 707.

Positive economic data failed to alter the market's downtrend.

The National Association of Realtors said contracts to buy previously owned U.S. homes rose in November to their highest level in 2-1/2 years, while a report from the Institute for Supply Management-Chicago showed business activity in the U.S. Midwest expanded in December.

Barnes & Noble Inc rose 8.2 percent to $15.55 after the company said Pearson had agreed to make a strategic investment in its Nook Media subsidiary, but the Nook business will also not meet the bookseller's prior projection for fiscal year 2013.

MagicJack Vocaltec Ltd forecast over $39 million in GAAP revenue and over 70 cents per share in operating income for the fourth quarter and appointed Gerald Vento president and CEO, effective January 1. Shares jumped 6.9 percent to $17.40.

Aeterna Zentaris Inc U.S.-listed shares surged 18.4 percent to $2.57 after the company said it had reached an agreement with the U.S. Food and Drug Administration on a special protocol assessment by the FDA for phase 3 registration trial in endometrial cancer with AEZS-108 treatment.

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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Stomach bug knocks Nadal from Australian Open

MADRID (AP) — Rafael Nadal says he will not play the Australian Open because of a stomach virus, further delaying his comeback after being sidelined since June.

The Spaniard also will skip the preceding Qatar Open. The Australian Open, the year's first Grand Slam tournament, begins Jan. 14. The same virus kept Nadal from making his return at Abu Dhabi this week.

Nadal has been out because of tendinitis in his left knee since a second-round loss to then-100th-ranked Lukas Rosol at Wimbledon. He was forced to miss the London Olympics.

Nadal says in a statement that his knee is "much better" but the virus prevented him from practicing this past week, and "therefore I am sorry to announce that I will not play in Doha and the Australian Open."

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Starvation Didn’t Wipe Out Sabertooth Cats

Saber-toothed cats apparently did not go extinct for lack of prey, contradicting a popular explanation for why they died off, fossil evidence now suggests.

Even near their extinction, saber-toothed cats likely had enough to eat, researchers noted.

Saber-toothed cats, American lions, woolly mammoths and other giant creatures once roamed across the American landscape. However, at the end of the late Pleistocene about 12,000 years ago, these “megafauna” went extinct, a die-off called the Quaternary extinction.

“The popular theory for the megafaunal extinction is that either the changing climate at the end of the last ice age or human activity, or some combination of the two, killed off most of the large mammals,” said researcher Larisa DeSantis, a vertebrate paleontologist at Vanderbilt University in Nashville. “In the case of the great cats, we expect that it would have been increasingly difficult for them to find prey, especially if had to compete with humans. We know that when food becomes scarce, carnivores like the great cats tend to consume more of the carcasses they kill. If they spent more time chomping on bones, it should cause detectable changes in the wear patterns on their teeth.”

Tale of the teeth

To learn more about saber-toothed diets, the researchers analyzed the fossil teeth of 15 saber-toothed cats (Smilodon fatalis) and 15 American lions (Panthera atrox) recovered from the La Brea tar pits in Los Angeles. These specimens ranged from about 11,500 to 35,000 years in age.

To study the fossils, the scientists used dental microwear texture analysis, developed by anthropologist Peter Ungar at the University of Arkansas. This involves using generating three-dimensional images of a tooth’s surface. The image is then analyzed for microscopic grooves — devouring red meat produces small parallel scratches, while biting on bones lead to larger, deeper pits.

The investigation found the pattern of wear on the teeth of the saber-toothed cat most closely resembled those of present-day African lions, which sometimes crush bone when they eat. The wear pattern on American lion teeth, on the other hand, echoed that of the present-day cheetah, which deliberately avoids bones when it feeds. [Photos: A Lion's Life]

Analysis of both older fossils and more recent ones did not reveal any evidence that patterns of wear changed over time, and none had extreme microwear like living hyenas, which consume entire carcasses, bones included. This suggests that prey for these carnivores was not scarce — the animals were not gnawing their victims to the bone.

“Tooth wear patterns suggest that these cats were not desperately consuming entire carcasses, as was expected, and instead seemed to be living the ‘good life’ during the late Pleistocene, at least up until the very end,” DeSantis said.

Big predator extinction

Past research of teeth from American lions, saber-tooth cats, dire wolves and coyotes from La Brea revealed they experienced three times the number of broken teeth of contemporary predators, hinting that these species were having trouble finding prey and were thus urgently devouring or “processing” whole carcasses. This led scientists to suspect that climate change and human competition were making life tough for the big predators.

Instead, DeSantis and her colleagues argue this high rate of damage seen in teeth more likely resulted during capture of prey instead of feeding on carcasses.

“We expected extinct carnivores to show evidence for extreme bone processing, based on the high number of broken teeth determined from prior research. Finding the complete opposite pattern was shocking!” DeSantis said.

The researchers noted that saber-toothed cats were about the size of today’s African lion, while the American lion was about 25 percent larger. They fed on giants such as mammoths and four-ton giant ground sloths. The fact these ancient carnivores and their prey were bigger than contemporary predators and their victims could help explain why the extinct cats had more broken teeth than their living brethren, the investigators said. . [Gallery: Today's Threatened Mammals]

Specifically, larger teeth break more easily than smaller teeth, so larger carnivores may be likely to break more teeth when attempting to take down larger prey. The researchers noted past studies that found the canines of a predator the size of fox can support more than seven times the fox’s weight before breaking, while a carnivore the size of lion can only support about four times its weight and the curved teeth of saber-toothed cats could only support about twice the animal’s weight.

“The net result of our study is to raise questions about the reigning hypothesis that ‘tough times’ during the late Pleistocene contributed to the gradual extinction of large carnivores,” DeSantis said. “While we can not determine the exact cause of their demise, it is unlikely that the extinction of these cats was a result of gradually declining prey.”

Currently, the scientists are examining other carnivores at the La Brea tar pits, “including the extinct giant short-faced bear and the extant mountain lion that is found both during the Pleistocene at La Brea and in southern California and elsewhere today,” DeSantis told LiveScience. “Essentially, we are trying to clarify the biology and diets of these carnivores during the past to further evaluate why the short-faced bear went extinct and, potentially, why the mountain lion did not.”

DeSantis and Ungar, with their colleagues Blaine Schubert and Jessica Scott, detailed their findings online Dec. 26 in the journal PLOS ONE.

Follow LiveScience on Twitter @livescience. We’re also on Facebook & Google+.

Copyright 2012 LiveScience, a TechMediaNetwork company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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2013: A year for big issues in the courts

By Jeffrey Toobin, CNN Senior Legal Analyst

December 27, 2012 -- Updated 1445 GMT (2245 HKT)

Chief Justice John Roberts re-administers the oath of office to Barack Obama at the White House on January 21, 2009.

STORY HIGHLIGHTS

• Jeffrey Toobin: 2013 will see pivotal decisions in several key areas of law


• He says Supreme Court could decide fate of same-sex marriage


• Affirmative action for public college admissions is also on Court's agenda


• Toobin: Newtown massacre put gun control debate back in the forefront

Editor's note: Jeffrey Toobin is a senior legal analyst for CNN and a staff writer at The New Yorker magazine, where he covers legal affairs. He is the author of "The Oath: The Obama White House and the Supreme Court."

(CNN) -- What will we see in 2013?

One thing for sure: The year will begin with Chief Justice John Roberts and President Obama getting two chances to recite the oath correctly.

Jeffrey Toobin

After that, here are my guesses.

1. Same-sex marriage and the Supreme Court. There are two cases, and there are a Rubik's Cube-worth of possibilities for their outcomes. On one extreme, the court could say that the federal government (in the Defense of Marriage Act) and the states can ban or allow same-sex marriage as they prefer. On the other end, the Court could rule that gay people have a constitutional right to marry in any state in the union. (Or somewhere in between.)

CNN Opinion contributors weigh in on what to expect in 2013. What do you think the year holds in store? Let us know @CNNOpinion on Twitter and Facebook/CNNOpinion

2. The future of affirmative action. In a case pending before the Supreme Court, the Court could outlaw all affirmative action in admissions at public universities, with major implications for all racial preferences in all school or non-school settings.

3. Gun control returns to the agenda. The Congress (and probably some states) will wrestle with the question of gun control, an issue that had largely fallen off the national agenda before the massacre in Newtown. Expect many invocations (some accurate, some not) of the Second Amendment.

4. The continued decline of the death penalty. Death sentences and executions continue to decline, and this trend will continue. Fear of mistaken executions (largely caused by DNA exonerations) and the huge cost of the death penalty process will both accelerate the shift.

5. Celebrity sex scandal. There will be one. There will be outrage, shock and amusement. (Celebrity to be identified later.)

Follow @CNNOpinion on Twitter

Join us at Facebook/CNNOpinion

The opinions expressed in this commentary are solely those of Jeffrey Toobin.

Part of complete coverage on

December 27, 2012 -- Updated 1445 GMT (2245 HKT)

Jeffrey Toobin says key rulings will likely be made regarding same-sex marriage and affirmative action for public college admissions.

December 28, 2012 -- Updated 0041 GMT (0841 HKT)

Frida Ghitis says that after years in which conservative views dominated the nation, there's now majority support for many progressive stances.

December 28, 2012 -- Updated 0316 GMT (1116 HKT)

John MacIntosh says gun manufacturer Freedom Group should be acquired by public-spirited billionaires and turned into a company with ethical goals.

December 27, 2012 -- Updated 0237 GMT (1037 HKT)

Bassam Gergi and Ali Breland says we should mourn for Newtown's victims, but also take steps to stop the slaughter of young people in inner cities

Get the latest opinion and analysis from CNN's columnists and contributors.

December 26, 2012 -- Updated 1445 GMT (2245 HKT)

Tseming Yang says the 25 major carbon emitters should come to an agreement just among themselves about fighting climate change.

December 25, 2012 -- Updated 1252 GMT (2052 HKT)

David Frum says the National Rifle Association's "Death Wish" style vision of America as a land of armed civilians fending off criminals is a fantasy.

December 27, 2012 -- Updated 0207 GMT (1007 HKT)

Lawrence Krauss says the nation must grieve with the families of Newtown after such a tremendous loss, but religion is not the right framework

December 28, 2012 -- Updated 1044 GMT (1844 HKT)

Jonathan Batiste says jazz is a complex, traditional and utterly contemporary art -- the language that we use to state our deepest, truest feelings

December 26, 2012 -- Updated 1540 GMT (2340 HKT)

Dean Obeidallah says "Zero Dark Thirty" and "Promised Land" present hot button issues that fire up people from the left and right.

December 26, 2012 -- Updated 1344 GMT (2144 HKT)

MADD started as a small grass-roots movement that grew and radically changed society's views on drunk driving, says Candace Lightner.

December 22, 2012 -- Updated 1706 GMT (0106 HKT)

David Gergen says the hope for cooperation is gone in the capital as people spar over fiscal cliff, gun control, and nominations

December 19, 2012 -- Updated 2054 GMT (0454 HKT)

William Bennett says having armed and trained people could help protect schools and other vulnerable places from gun violence

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Putin signs ban on U.S. adoptions of Russian children

MOSCOW (Reuters) - President Vladimir Putin signed a law on Friday that bans Americans from adopting Russian children and imposes other sanctions in retaliation for a new U.S. human rights law that he says is poisoning relations.

The law, which has ignited outrage among Russian liberals and child rights' advocates, takes effect on January 1. Washington has called the law misguided and said it ties the fate of children to "unrelated political considerations."

It is likely to deepen a chill in U.S.-Russian relations and deal a blow to Putin's image abroad.

Fifty-two children whose adoptions by American parents were underway will remain in Russia, Interfax news agency cited Russia's child rights commissioner, Pavel Astakhov, as saying.

The law, whose text was issued by the Kremlin, will also outlaw some non-governmental organizations that receive U.S. funding and impose a visa ban and asset freeze on Americans accused of violating the rights of Russians abroad.

Pro-Kremlin lawmakers initially drafted the bill to mirror the U.S. Magnitsky Act, which bars entry to Russians accused of involvement in the death in custody of anti-corruption lawyer Sergei Magnitsky and other alleged rights abuses.

The restrictions on adoptions and non-profit groups were added to the legislation later, going beyond a tit-for-tat move and escalating a dispute with Washington at a time when ties are also strained by issues such as the Syrian crisis.

Putin's spokesman, Dmitry Peskov, said the Magnitsky Act had "seriously undermined" the "reset" -- the moniker for the effort U.S. President Barack Obama launched early in his first term to improve relations between the former Cold War foes.

Putin has backed the hawkish response with a mix of public appeals to patriotism, saying Russia should care for its own children, and belligerent denunciations of what he says is the U.S. desire to impose its will on the world.

Seeking to dampen criticism of the move, Putin also signed a decree ordering an improvement in care for orphans.

Critics of the Russian legislation say Putin has held the welfare of children trapped in an crowded and troubled orphanage system hostage to political maneuvering.

"He signed it after all! He signed one of the most shameful laws in Russia history," a blogger named Yuri Pronko wrote on the popular Russian site LiveJournal.

BLOW TO RUSSIA'S IMAGE

The acquittal on Friday of the only person being tried over Magnitsky's death will fuel accusations by Kremlin critics that the Russian authorities have no intention of seeking justice in a case that has blackened Russia's image.

A Russian court on acquitted Dmitry Kratov, a former deputy head a jail where Magnitsky was held before his death in 2009 after nearly a year in pre-trial detention, after prosecutors themselves dropped charges against him.

Lawyers for Magnitsky's family said they will appeal and called for further investigation.

Magnitsky's colleagues say he is the victim of retribution from the same police investigators he had accused of stealing $230 million from the state through fraudulent tax refunds -- the very same crimes with which he was charged.

The case against Magnitsky was closed after his death but then was reopened again in August 2011.

In an unprecedented move, Russia is trying Magnitsky posthumously for fraud, despite protests from his family and the lawyers that it is unconstitutional to try a dead man. A preliminary hearing is scheduled next month.

Magnitsky's death triggered an international outcry and Kremlin critics said it underscored the dangers faced by Russians who challenge the authorities. The Kremlin's own human rights council said Magnitsky was probably beaten to death.

The adoption ban may further tarnish Putin's international standing at a time when the former KGB officer is under scrutiny over what critics say is a crackdown on dissent since he returned to the Kremlin for a six-year third term in May.

"The law will lead to a sharp drop in the reputation of the Kremlin and of Putin personally abroad, and signal a new phase in relations between the United States and Russia," said Lilia Shevtsova, an expert on Putin with the Carnegie Moscow Centre.

"It is only the first harbinger of a chill."

(Additional reporting by Alexei Anishchuk and Maria Tsvetkova; Editing By Steve Gutterman, Andrew Osborn and Roger Atwood)

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Syria opposition leader rejects Moscow invitation

ALEPPO PROVINCE, Syria/BEIRUT (Reuters) - Syria's opposition leader has rejected an invitation from Russia for peace talks, dealing another blow to international hopes that diplomacy can be resurrected to end a 21-month civil war.

Russia, President Bashar al-Assad's main international protector, said on Friday it had sent an invitation for a visit to Moaz Alkhatib, whose six-week-old National Coalition opposition group has been recognized by most Western and Arab states as the legitimate voice of the Syrian people.

But in an interview on Al Jazeera television, Alkhatib said he had already ruled out such a trip and wanted an apology from Moscow for its support for Assad.

"We have clearly said we will not go to Moscow. We could meet in an Arab country if there was a clear agenda," he said.

"Now we also want an apology from (Russian Foreign Minister Sergei) Lavrov because all this time he said that the people will decide their destiny, without foreign intervention. Russia is intervening and meanwhile all these massacres of the Syrian people have happened, treated as if they were a picnic."

"If we don't represent the Syrian people, why do they invite us?" Alkhatib said. "And if we do represent the Syrian people why doesn't Russia respond and issue a clear condemnation of the barbarity of the regime and make a clear call for Assad to step down? This is the basic condition for any negotiations."

With the rebels advancing steadily over the second half of 2012, diplomats have been searching for months for signs that Moscow's willingness to protect Assad is faltering.

So far Russia has stuck to its position that rebels must negotiate with Assad's government, which has ruled since his father seized power in a coup 42 years ago.

"I think a realistic and detailed assessment of the situation inside Syria will prompt reasonable opposition members to seek ways to start a political dialogue," Lavrov said on Friday.

That was immediately dismissed by the opposition: "The coalition is ready for political talks with anyone ... but it will not negotiate with the Assad regime," spokesman Walid al-Bunni told Reuters. "Everything can happen after the Assad regime and all its foundations have gone. After that we can sit down with all Syrians to set out the future."

BRAHIMI TO MOSCOW

Russia says it is behind the efforts of U.N. mediator Lakhdar Brahimi, fresh from a five-day trip to Damascus where he met Assad. Brahimi, due in Moscow for talks on Saturday, is touting a months-old peace plan for a transitional government.

That U.N. plan was long seen as a dead letter, foundering from the outset over the question of whether the transitional body would include Assad or his allies. Brahimi's predecessor, Kofi Annan, quit in frustration shortly after negotiating it.

But with rebels having seized control of large sections of the country in recent months, Russia and the United States have been working with Brahimi to resurrect the plan as the only internationally recognized diplomatic negotiating track.

Russia's Middle East envoy, Deputy Foreign Minister Mikhail Bogdanov, who announced the invitation to Alkhatib, said further talks were scheduled between the "three B's" - himself, Brahimi and U.S. Undersecretary of State William Burns.

Speaking in Damascus on Thursday, Brahimi called for a transitional government with "all the powers of the state", a phrase interpreted by the opposition as potentially signaling tolerance of Assad remaining in some ceremonial role.

But such a plan is anathema to the surging rebels, who now believe they can drive Assad out with a military victory, despite long being outgunned by his forces.

"We do not agree at all with Brahimi's initiative. We do not agree with anything Brahimi says," Colonel Abdel-Jabbar Oqaidi, who heads the rebels' military council in Aleppo province, told reporters at his headquarters there.

Oqaidi said the rebels want Assad and his allies tried in Syria for crimes. Assad himself says he will stay on and fight to the death if necessary.

In the rebel-held town of Kafranbel, demonstrators held up cartoons showing Brahimi speaking to a news conference with toilet bowls in front of him, in place of microphones. Banners denounced the U.N. envoy with obscenities in English.

DIPLOMATS IMPOTENT

Diplomacy has largely been irrelevant to the conflict so far, with Western states ruling out military intervention like the NATO bombing that helped topple Libya's Muammar Gaddafi last year, and Russia and China blocking U.N. action against Assad.

Meanwhile, the fighting has grown fiercer and more sectarian, with rebels mainly from the Sunni Muslim majority battling Assad's government and allied militia dominated by his Alawite sect, an offshoot of Shi'ite Islam.

Still, Western diplomats have repeatedly touted signs of a change in policy from Russia, which they hope could prove decisive, much as Moscow's withdrawal of support for Serbian leader Slobodan Milosevic heralded his downfall a decade ago.

Bogdanov said earlier this month that Assad's forces were losing ground and rebels might win the war, but Russia has since rowed back, with Lavrov last week reiterating Moscow's position that neither side could win through force.

Still, some Moscow-based analysts see the Kremlin coming to accept it must adapt to the possibility of rebel victory.

"As the situation changes on the battlefield, more incentives emerge for seeking a way to stop the military action and move to a phase of political regulation," said Dmitry Trenin, director of the Carnegie Moscow Center.

Meanwhile, on the ground the bloodshed that has killed some 44,000 people continues unabated. According to the pro-opposition Syrian Observatory for Human Rights, a monitoring group based in Britain, 150 people were killed on Thursday, a typical toll as fighting has escalated in recent months.

Government war planes bombarded the town of Assal al-Ward in the Qalamoun district of Damascus province for the first time, killing one person and wounding dozens, the observatory said.

In Aleppo, Syria's northern commercial hub, clashes took place between rebel fighters and army forces around an air force intelligence building in the Zahra quarter, a neighborhood that has been surrounded by rebels for weeks.

(Additional reporting by Omar Fahmy in Cairo, Dominic Evans in Beirut and Steve Gutterman and Alissa de Carbonnel in Moscow; Writing by Peter Graff; Editing by Giles Elgood)

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Wall Street falls as senator sees "fiscal cliff" fall

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

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

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

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

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

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

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

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

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

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

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

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

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

(Reporting by Chuck Mikolajczak; Editing by Kenneth Barry)

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