Red Sox look for innings in Dempster

 The Boston Red Sox have the reliable starter they sought in Ryan Dempster.
He's pitched at least 200 innings in four of the past five seasons, impressive to general manager Ben Cherington but not so special to Dempster.
"That's your responsibility as a starting pitcher in the big leagues," Dempster said Wednesday at a news conference after his $26.5 million, two-year deal was finalized. "The norm used to be 300 and somehow we worked it down to like 200. Even 180 seems to suffice."
He said he works hard to stay in shape "so that I can take on that workload."
Boston had just one starter reach the 200-mark this year, with Jon Lester pitching 205 1-3 innings.
"It's important," Cherington said. "Ryan's got a history of being very effective and a really good pitcher. The consistency he's shown in taking the ball every fifth day was important to us. I think as a team when you start having to fill in for guys, if we don't have a reliable rotation and you start filling in with guys from down below or guys from the bullpen or whatever, it's not so much that move but you've inevitably weakened another area of your team."
Dempster gets $13.25 million a year and would earn an additional $250,000 each season for pitching 190 innings.
"We went into this offseason wanting to add a proven starter to the rotation, someone that has a history of success, reliability and someone who we thought would embrace coming to Boston and everything that comes with pitching and playing in Boston, on and off the field," Cherington said. "We think Ryan is the perfect fit for that."
The 35-year-old right-hander adds experience to a rotation that underachieved this year as the Red Sox went 69-93 and finished last in the AL East in their only season under manager Bobby Valentine. He was fired and replaced by John Farrell.
"Obviously there's a lot of room to go up," Dempster said. "Ben and the organization have done an incredible job of adding a lot of really good players and good baseball guys. So we're just going to go into spring training and work as hard as we can and go out there every day and leave it all on the field and play as hard as we can to get the best out of each other."
Lester and Clay Buchholz had disappointing years and John Lackey returns after missing the season following elbow-ligament replacement surgery. Left-hander Felix Doubront was in the rotation for most of the season.
Dempster reached the major leagues in 1998 with the Florida Marlins and has a 124-124 record with a 4.33 ERA. A Canadian, he said he is undecided about playing in the World Baseball Classic.
But he is confident the Red Sox can reach the playoffs for the first time since 2009.
"That's why we play," he said. "The money and things like that in baseball are great. But I came here because I believe this team has a chance of winning as much as anybody else. I've always believed that should be your mentality going into any season. Because it's proven day in, day out every team's going to win 50 games, every team's going to lose 50 games. It's what you do with the other 62 that matter."
He went 12-8 with a 3.38 ERA this year. After starting 5-5 with a 2.25 ERA in his ninth season with the Chicago Cubs, he was traded to the Texas Rangers and went 7-3 with a 5.03 ERA. That was his first stint in the American League.
"It's going to be a little bit different not being able to hit," he joked. "They're going to miss my bat in the lineup, but we'll get through that.

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Baseball-Angels swap hitting for pitching with Mariners

Dec 19 (Reuters) - The bulked-up Los Angeles Angels swapped some hitting for pitching on Wednesday by sending first baseman/designated hitter Kendrys Morales to the Seattle Mariners for starting pitcher Jason Vargas.
The Angels, who signed power-hitting Josh Hamilton to a free agent contract last week, sent some much-needed punch to Seattle to add lefthander Vargas to a rotation rotation that includes Jered Weaver, C.J. Wilson, Tommy Hanson and Joe Blanton.
"We have been focused on adding offense this offseason, and feel that Kendrys will be a middle-of-the-order bat for us," Seattle General Manager Jack Zduriencik said in a report on Major League Baseball's website.
"He's a switch-hitter with power who has played - and hit - in the AL West. He's familiar with the teams and parks and is a proven run-producer."
Seattle was last in the American League in runs scored with 619, 148 fewer runs than third-best Los Angeles.
The Cuban-born Morales, 29, hit .273 with 22 home runs and 73 RBIs last year in 134 games in his first season back after missing all of 2011 with a broken left leg.
Before his injury, suffered when he landed awkwardly while jumping into a group of team mates after hitting a walk-off grand slam homer, Morales was one of MLB's emerging sluggers after hitting .306 with 34 home runs and 108 RBIS in 2009.
The trade of Morales freed up some lineup space for 26-year-old Mark Trumbo, who hit 32 home runs with 95 RBIs for the Angels last season bouncing between the outfield, first base, third base and designated hitter.
Vargas, also 29, pitched the last four seasons with Seattle, posting a 36-42 record with a 4.09 ERA. The lefty, who went 14-11 with a 3.85 ERA last season, was a Mariners workhorse, logging more than 200 innings in each of the last two years.
He has pitched well in the past at Angel Stadium, registering a 3-1 record with a 2.27 ERA in seven career outings in the ball park.

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Angels swap hitting for pitching with Mariners

The bulked-up Los Angeles Angels swapped some hitting for pitching on Wednesday by sending first baseman/designated hitter Kendrys Morales to the Seattle Mariners for starting pitcher Jason Vargas.
The Angels, who signed power-hitting Josh Hamilton to a free agent contract last week, sent some much-needed punch to Seattle to add lefthander Vargas to a rotation that includes Jered Weaver, C.J. Wilson, Tommy Hanson and Joe Blanton.
"We have been focused on adding offense this offseason, and feel that Kendrys will be a middle-of-the-order bat for us," Seattle General Manager Jack Zduriencik said in a report on Major League Baseball's website.
"He's a switch-hitter with power who has played - and hit - in the AL West. He's familiar with the teams and parks and is a proven run-producer."
Seattle was last in the American League in runs scored with 619, 148 fewer runs than third-best Los Angeles.
The Cuban-born Morales, 29, hit .273 with 22 home runs and 73 RBIs last year in 134 games in his first season back after missing all of 2011 with a broken left leg.
Before his injury, suffered when he landed awkwardly while jumping into a group of team mates after hitting a walk-off grand slam homer, Morales was one of MLB's emerging sluggers after hitting .306 with 34 home runs and 108 RBIS in 2009.
The trade of Morales freed up some lineup space for 26-year-old Mark Trumbo, who hit 32 home runs with 95 RBIs for the Angels last season bouncing between the outfield, first base, third base and designated hitter.
Vargas, also 29, pitched the last four seasons with Seattle, posting a 36-42 record with a 4.09 ERA. The lefty, who went 14-11 with a 3.85 ERA last season, was a Mariners workhorse, logging more than 200 innings in each of the last two years.
He has pitched well in the past at Angel Stadium, registering a 3-1 record with a 2.27 ERA in seven career outings in the ball park.
The deal involved two players entering their final season of arbitration eligibility, with both set to become free agents after the 2013 season.

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YEARENDER-Baseball-Never-say-die Giants cap season of surprises

The never-say-die San Francisco Giants' rousing drive to the World Series title capped a year of surprises, sensational individual achievements and big-name doping controversies in Major League Baseball (MLB).
Miguel Cabrera of the pennant-winning Detroit Tigers claimed the first Triple Crown sweep of the American League's (AL) major offensive categories in 45 years by slugging 44 home runs with 139 runs batted in, while batting .330.
San Francisco's Matt Cain, Phillip Humber of the Chicago White Sox and Felix Hernandez of the Seattle Mariners put their names in the record books with perfect games, a remarkable triple considering the total of 23 perfectos since Lee Richmond threw MLB's first recorded one in 1880 for Worcester.
Los Angeles Angels outfielder Mike Trout had one of the best rookie seasons ever, hitting 30 home runs, 83 RBIs, batting .326 and leading MLB with 49 stolen bases to finish runner-up to Cabrera in the AL Most Valuable Player (MVP) voting at age 21.
Those feats marked 2012 as a special year, with the Giants' rise to the top providing the crowning touch.
San Francisco fought off elimination six times during the playoffs, overcoming a 2-0 deficit with three straight road wins in the best-of-five Division Series against the Cincinnati Reds, and battling back from 3-1 down against the 2011 champion St. Louis Cardinals to reach the World Series.
VENEZUELA POWER
In the Fall Classic against the Tigers, the Giants served immediate notice they would no longer play from behind.
Stocky third baseman Pablo Sandoval, nicknamed Kung Fu Panda, powered home runs in his first three at-bats to kick-start San Francisco on their way to a four-game sweep.
Venezuela's Sandoval, saluted by Venezuelan president Hugo Chavez via Twitter, joined Babe Ruth, Reggie Jackson and Albert Pujols as the only players with three homers in a World Series game.
Giants catcher Buster Posey, 25, returned from a home plate collision that aborted his 2011 season to win National League (NL0 MVP honors.
It was also a banner year for Venezuelan players.
Sandoval won the World Series MVP award, following compatriot Marco Scutaro, who was MVP of the National League Championship Series for San Francisco.
Cabrera claimed the American League MVP award and in addition to the perfect game by fellow-Venezuelan "King Felix" Hernandez, countryman Johan Santana of the Mets threw the first no-hitter by a Mets pitcher in their half-century of existence.
SERIOUS CONCERNS
The Tigers had reached the World Series by sweeping the New York Yankees, who had some serious concerns going forward.
Yankees captain Derek Jeter fractured his ankle diving for a ball at shortstop in the series against Detroit, and slugging third baseman Alex Rodriguez, who suffered through an abysmal postseason, was found after the season to need hip surgery that will sideline him for half the 2013 season.
Making the Giants' climb to the top even more unlikely was the loss of outfielder Melky Cabrera, who was hit with a 50-game suspension in August for testing positive for testosterone while leading the majors with a .346 batting average.
A week later starting pitcher Bartolo Colon (10-9) of the Oakland Athletics, across the bay from San Francisco, also received a 50-game ban for testosterone.
The loss of Colon did not impede the Athletics either, as they rode a rotation that featured four rookie pitchers all the way to AL West title over two-time champion Texas Rangers.
The Baltimore Orioles gave the AL a second Cinderella team, as they reached the postseason for the first time in 15 years, reversing a 69-93 2011 record, and knocked out Texas in this season's debut of a wildcard playoff game.
The Washington Nationals reached the playoffs for the first time in their eighth season in the U.S. capital and posted the best record in the majors with 98 wins.
DOPING ISSUES
Even before the season started, doping was a prominent talking point as NL MVP Ryan Braun of the Milwaukee Brewers was found to have tested positive for a performance enhancing drug.
However, Braun won an appeal against an automatic suspension by proving that his urine test had been mishandled.
Doping news also grabbed attention after the season when Hall of Fame ballots went out with Barry Bonds and Roger Clemens listed as candidates for the first time.
Bonds, a seven-time NL MVP and the all-time career and single season home run king, and seven-time Cy Young winning pitcher Clemens would ordinarily be first-ballot shoo-ins, but a cloud of doping suspicion hovers over both of them and turns the vote into a referendum on the taint of the Steroids Era.
The year closed with some tantalizing prospects for the new season.
The big-spending Los Angeles Dodgers added top free agent pitcher Zack Greinke to MLB's biggest payroll, the Toronto Blue Jays opened their wallets to take on high-priced talent from the economizing Miami Marlins, and the Los Angeles Angels signed premier slugger Josh Hamilton to fortify their lineup.

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Never-say-die Giants cap season of surprises

The never-say-die San Francisco Giants' rousing drive to the World Series title capped a year of surprises, sensational individual achievements and big-name doping controversies in Major League Baseball (MLB).
Miguel Cabrera of the pennant-winning Detroit Tigers claimed the first Triple Crown sweep of the American League's (AL) major offensive categories in 45 years by slugging 44 home runs with 139 runs batted in, while batting .330.
San Francisco's Matt Cain, Phillip Humber of the Chicago White Sox and Felix Hernandez of the Seattle Mariners put their names in the record books with perfect games, a remarkable triple considering the total of 23 perfectos since Lee Richmond threw MLB's first recorded one in 1880 for Worcester.
Los Angeles Angels outfielder Mike Trout had one of the best rookie seasons ever, hitting 30 home runs, 83 RBIs, batting .326 and leading MLB with 49 stolen bases to finish runner-up to Cabrera in the AL Most Valuable Player (MVP) voting at age 21.
Those feats marked 2012 as a special year, with the Giants' rise to the top providing the crowning touch.
San Francisco fought off elimination six times during the playoffs, overcoming a 2-0 deficit with three straight road wins in the best-of-five Division Series against the Cincinnati Reds, and battling back from 3-1 down against the 2011 champion St. Louis Cardinals to reach the World Series.
VENEZUELA POWER
In the Fall Classic against the Tigers, the Giants served immediate notice they would no longer play from behind.
Stocky third baseman Pablo Sandoval, nicknamed Kung Fu Panda, powered home runs in his first three at-bats to kick-start San Francisco on their way to a four-game sweep.
Venezuela's Sandoval, saluted by Venezuelan president Hugo Chavez via Twitter, joined Babe Ruth, Reggie Jackson and Albert Pujols as the only players with three homers in a World Series game.
Giants catcher Buster Posey, 25, returned from a home plate collision that aborted his 2011 season to win National League (NL0 MVP honors.
It was also a banner year for Venezuelan players.
Sandoval won the World Series MVP award, following compatriot Marco Scutaro, who was MVP of the National League Championship Series for San Francisco.
Cabrera claimed the American League MVP award and in addition to the perfect game by fellow-Venezuelan "King Felix" Hernandez, countryman Johan Santana of the Mets threw the first no-hitter by a Mets pitcher in their half-century of existence.
SERIOUS CONCERNS
The Tigers had reached the World Series by sweeping the New York Yankees, who had some serious concerns going forward.
Yankees captain Derek Jeter fractured his ankle diving for a ball at shortstop in the series against Detroit, and slugging third baseman Alex Rodriguez, who suffered through an abysmal postseason, was found after the season to need hip surgery that will sideline him for half the 2013 season.
Making the Giants' climb to the top even more unlikely was the loss of outfielder Melky Cabrera, who was hit with a 50-game suspension in August for testing positive for testosterone while leading the majors with a .346 batting average.
A week later starting pitcher Bartolo Colon (10-9) of the Oakland Athletics, across the bay from San Francisco, also received a 50-game ban for testosterone.
The loss of Colon did not impede the Athletics either, as they rode a rotation that featured four rookie pitchers all the way to AL West title over two-time champion Texas Rangers.
The Baltimore Orioles gave the AL a second Cinderella team, as they reached the postseason for the first time in 15 years, reversing a 69-93 2011 record, and knocked out Texas in this season's debut of a wildcard playoff game.
The Washington Nationals reached the playoffs for the first time in their eighth season in the U.S. capital and posted the best record in the majors with 98 wins.
DOPING ISSUES
Even before the season started, doping was a prominent talking point as NL MVP Ryan Braun of the Milwaukee Brewers was found to have tested positive for a performance enhancing drug.
However, Braun won an appeal against an automatic suspension by proving that his urine test had been mishandled.
Doping news also grabbed attention after the season when Hall of Fame ballots went out with Barry Bonds and Roger Clemens listed as candidates for the first time.
Bonds, a seven-time NL MVP and the all-time career and single season home run king, and seven-time Cy Young winning pitcher Clemens would ordinarily be first-ballot shoo-ins, but a cloud of doping suspicion hovers over both of them and turns the vote into a referendum on the taint of the Steroids Era.
The year closed with some tantalizing prospects for the new season.
The big-spending Los Angeles Dodgers added top free agent pitcher Zack Greinke to MLB's biggest payroll, the Toronto Blue Jays opened their wallets to take on high-priced talent from the economizing Miami Marlins, and the Los Angeles Angels signed premier slugger Josh Hamilton to fortify their lineup.

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AP Interview: Opposition leader says constitution illegitimate, vows liberal parliament win

CAIRO - One of Egypt's leading opposition figures pledges continued resistance to his country's constitution even if it is declared to have passed, contending that the process was fundamentally illegitimate. Unofficial tallies say nearly two-thirds voted in favour of the Muslim-friendly constitution, but turnout was low. Hamdeen Sabahi, who placed third in the nation's first free presidential race over the summer, said in an interview with The Associated Press that the majority of Egypt's people are not Islamists. He argued that successive electoral triumphs by President Mohammed Morsi's Muslim Brotherhood group are the result of unfair electoral practices and key mistakes by the liberal opposition, particularly a lack of unity and organization. "The Muslim Brotherhood is a minority, this is for sure," he said Monday.

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Newtown marks the holiday: 'Christmas will never be the same'

Residents of Newtown prepared on Monday to observe Christmas. Tiny, empty red stockings sewn with the victims' names hung from trees in the neighbourhood where the 20 children and six adults were shot in a school. A steady stream of people lit candles and dropped off toys at a memorial filled with stuffed animals, poems, flowers, posters and cards. "All the families who lost those little kids, Christmas will never be the same," said resident Philippe Poncet. "Everybody across the world is trying to share the tragedy with our community here." Police say 20-year-old resident Adam Lanza killed his mother in her bed before his Dec. 14 school rampage killed himself as he heard officers arriving. Authorities have yet to give a theory about his motive. The guns he used had been legally purchased by his mother, a gun enthusiast. While the grief was still fresh, some residents were urging political activism in the wake of President Barack Obama's call for "real action, right now." A grassroots group called Newtown United has been meeting to talk about national issues ranging from gun control to increasing mental health services. "We seek not to be the town of tragedy," said Rabbi Shaul Praver of Congregation Adath Israel. "But we seek to be the town where all the great changes started." Richard Scinto, a deacon at St. Rose of Lima Roman Catholic Church, which was attended by eight children killed in the massacre, said the church's pastor, Rev. Robert Weiss, told his congregation to get angry and take action against what some consider is a culture of gun violence in the U.S. "These were his mother's guns," Scinto said. "Why would anyone want an assault rifle as part of a private citizen collection?" A handful of people showed up to the first Newtown United meeting two days after the Dec. 14 shooting. A few days later, Sen. Richard Blumenthal and Sen.-elect Chris Murphy told the group they planned to push for gun control legislation. "We don't want Newtown to go on the list with Columbine, Tucson and Virginia Tech and only have it associated with horrible acts," said Lee Shull, who moderated one Newton United meeting. "We want to turn this into something positive. What can we do?"

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Bethlehem enjoys merry Christmas as thousands of pilgrims flock to Jesus' biblical birth town

Thousands of Christians from the world over packed Manger Square in Bethlehem Monday to celebrate the birth of Jesus in the ancient West Bank town where he was born. For their Palestinian hosts, this holiday season was an especially joyous one, with the hardships of the Israeli occupation that so often clouded previous Christmas Eve celebrations eased by the United Nations' recent recognition of an independent state of Palestine. In his annual pre-Christmas homily, the top Roman Catholic cleric in the Holy Land, Latin Patriarch Fouad Twal, said the road to actual freedom was still long, but this year's festivities were doubly joyful, celebrating "the birth of Christ our Lord and the birth of the state of Palestine." "The path (to statehood) remains long, and will require a united effort," added Twal, a Palestinian citizen of Jordan, at the patriarchate's headquarters in Jerusalem's Old City. Then he set off in a procession for the West Bank city of Bethlehem, Jesus' traditional birthplace. There, he was reminded that life on the ground for Palestinians has not changed since the U.N. recognized their state last month in the Israeli-occupied West Bank and east Jerusalem and the Hamas-ruled Gaza Strip. Twal had to enter the biblical town through a massive metal gate in the barrier of towering concrete slabs Israel built between Jerusalem and Bethlehem during a wave of Palestinian suicide bombings in the last decade. The Israeli military, which controls the crossing, said it significantly eased restrictions for the Christmas season. Israel, backed by the United States, opposed the statehood bid, saying it was a Palestinian ploy to bypass negotiations. Talks stalled four years ago. Hundreds of people greeted Twal in Manger Square, outside the Church of Nativity. The mood was festive under sunny skies, with children dressed in holiday finery or in Santa costumes, and marching bands playing in the streets. After nightfall, a packed Manger Square, resplendent with strings of lights, decorations and a 17-meter (55-foot) Christmas tree, took on a festival atmosphere, as pilgrims mixed with locals. A choral group from the Baptist Church in Jerusalem performed carols on one side of the square, handing out sheets of lyrics and encouraging others to sing along with songs such as "We Wish You A Merry Christmas." Vendors sold balloons, cotton candy and corn on the cob, bands played Christmas songs and tourists packed cafes that are quiet most of the rest of the year. Pilgrims from around the world wandered the streets, singing Christmas carols and visiting churches. Festivities led up to the Midnight Mass at St. Catherine's Church, next to the fourth-century Church of the Nativity, built over the grotto where tradition says Jesus was born. Devout Christians said it was a moving experience to be so close to the origins of their faith. "It's a special feeling to be here, it's an encounter with my soul and God," said Joanne Kurczewska, a professor at Warsaw University in Poland, who was visiting Bethlehem for a second time at Christmas. Pastor Al Mucciarone, 61, from Short Hills, New Jersey, agreed. "We come here to celebrate Jesus. This is a very important town. Great things come from small events. The son of God was born in this small village. We hope all will follow Jesus," he said. Audra Kasparian, 45, from Salt Lake City, Utah, called her visit to Bethlehem "a life event to cherish forever. It is one of those events that is great to be a part of." Palestinian President Mahmoud Abbas also visited Bethlehem and said "peace will prevail from the birthplace of Jesus, and we wish everyone peace and happiness," according to the official Palestinian Wafa news agency. Israeli Prime Minister Benjamin Netanyahu issued a special Christmas greeting too, wishing Christians "a year of security, prosperity and peace." Christmas is the high point of the year in Bethlehem, which, like the rest of the West Bank, is struggling to recover from the economic hard times that followed the violent Palestinian uprising against Israel that broke out in late 2000. Tourists and pilgrims who were scared away by the fighting have been returning in larger numbers. Last year's Christmas Eve celebration produced the highest turnout in more than a decade, with some 100,000 visitors, including foreign workers and Arab Christians from Israel. The Israeli Tourism Ministry predicted a 25 per cent drop from that level this year, following last month's clash between Israel and Palestinian militants in Gaza, which put a chill on tourist arrivals. Foreign tourists heading to Bethlehem must pass through Israel or the Israel-controlled border crossing into the West Bank from Jordan. Outside the town's quaint Manger Square, Bethlehem is a drab, sprawling town with a dwindling Christian base — a far cry from the pastoral village of biblical times. About 22,000 Palestinians live in Bethlehem, according to the town council, but combined with several surrounding communities has a population of some 50,000 people. Overall, there are only about 50,000 Christians in the West Bank, less than 3 per cent of the population, the result of a lower birthrate and increased emigration. Bethlehem's Christians make up only a third of its residents, down from 75 per cent a few decades ago. Elias Joha, a 44-year-old Christian who runs a souvenir store, said even with the U.N. recognition, this year's celebrations were sad for him. He said most of his family has left, and that if he had the opportunity, he would do the same. "These celebrations are not even for Christians because there are no Christians. It is going from bad to worse from all sides ... we are not enjoying Christmas as before." Located on the southeastern outskirts of Jerusalem, Bethlehem has the highest unemployment in the West Bank, but the tourist boom of Christmas offered a brief reprieve. Officials say all 34 hotels in the town are fully booked for the Christmas season, including 13 new ones built this year. Israel turned Bethlehem over to Palestinian civil control a few days before Christmas in 1995, and since then, residents have been celebrating the holiday regardless of their religion. Many Muslims took part in celebration Monday as well. Christians across the region marked the holiday. In Iraq, Christians gathered for services with tight security, including at Baghdad's Our Lady of Salvation church, the scene of a brutal October 2010 attack that killed more than 50 worshippers and wounded scores more. Earlier this month, Cardinal Leonardo Sandri, who is responsible for the Vatican's outreach to the Middle East's Catholic communities, travelled to Iraq and presided over a Mass to rededicate the church following renovations. In his homily, he remembered those who were killed and expressed hope that "the tears shed in this sacred place become the good seed of communion and witness and bear much fruit," according to an account by Vatican Radio. The exact number of Christians remaining in Iraq is not known, but it has fallen sharply from as many as 1.4 million before the U.S.-led invasion nearly a decade ago to about 400,000 to 600,000, according community leaders cited by the U.S. State Department. In the Vatican, Pope Benedict XVI lit a Christmas peace candle set on the windowsill of his private studio. Pilgrims, tourists and Romans gathered below in St. Peter's Square for the inauguration Monday evening of a Nativity scene and cheered when the flame was lit. The pope was set to appear in St. Peter's Basilica to lead Christmas Eve Mass.

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If US falls off 'fiscal cliff,' economy could get soft landing - or dizzy dive onto the rocks

WASHINGTON - Efforts to save the nation from going over a year-end "fiscal cliff" were in disarray as lawmakers fled the Capitol for their Christmas break. "God only knows" how a deal can be reached now, House Speaker John Boehner declared. President Barack Obama, on his way out of town himself, insisted a bargain could still be struck before Dec. 31. "Call me a hopeless optimist," he said. A look at why it's so hard for Republicans and Democrats to compromise on urgent matters of taxes and spending, and what happens if they fail to meet their deadline: ___ NEW YEAR'S HEADACHE Partly by fate, partly by design, some scary fiscal forces come together at the start of 2013 unless Congress and Obama act to stop them. They include: — Some $536 billion in tax increases, touching nearly all Americans, because various federal tax cuts and breaks expire at year's end. — About $110 billion in spending cuts divided equally between the military and most other federal departments. That's about 8 per cent of their annual budgets, 9 per cent for the Pentagon. Hitting the national economy with that double whammy of tax increases and spending cuts is what's called going over the "fiscal cliff." If allowed to unfold over 2013, it would lead to recession, a big jump in unemployment and financial market turmoil, economists predict. ___ WHAT IF THEY MISS THE DEADLINE? If New Year's Day arrives without a deal, the nation shouldn't plunge onto the shoals of recession immediately. There still might be time to engineer a soft landing. So long as lawmakers and the president appear to be working toward agreement, the tax hikes and spending cuts could mostly be held at bay for a few weeks. Then they could be retroactively repealed once a deal was reached. The big wild card is the stock market and the nation's financial confidence: Would traders start to panic if Washington appeared unable to reach accord? Would worried consumers and businesses sharply reduce their spending? In what could be a preview, stock prices around the world dropped Friday after House Republican leaders' plan for addressing the fiscal cliff collapsed. Federal Reserve Chairman Ben Bernanke has warned lawmakers that the economy is already suffering from the uncertainty and they shouldn't risk making it worse by blowing past their deadline. ___ WHAT IF THEY NEVER AGREE? If negotiations between Obama and Congress collapse completely, 2013 looks like a rocky year. Taxes would jump $2,400 on average for families with incomes of $50,000 to $75,000, according to a study by the non-partisan Tax Policy Center. Because consumers would get less of their paychecks to spend, businesses and jobs would suffer. At the same time, Americans would feel cuts in government services; some federal workers would be furloughed or laid off, and companies would lose government business. The nation would lose up to 3.4 million jobs, the Congressional Budget Office predicts. "The consequences of that would be felt by everybody," Bernanke says. ___ THE TAXES Much of the disagreement surrounds the George W. Bush-era income tax cuts, and whether those rates should be allowed to rise for the nation's wealthiest taxpayers. Both political parties say they want to protect the middle-class from tax increases. Several tax breaks begun in 2009 to stimulate the economy by aiding low- and middle-income families are also set to expire Jan. 1. The alternative minimum tax would expand to catch 28 million more taxpayers, with an average increase of $3,700 a year. Taxes on investments would rise, too. More deaths would be covered by the federal estate tax, and the rate climbs from 35 per cent to 55 per cent. Some corporate tax breaks would end. The temporary Social Security payroll tax cut also is due to expire. That tax break for most Americans seems likely to end even if a fiscal cliff deal is reached, now that Obama has backed down from his call to prolong it as an economic stimulus. ___ THE SPENDING If the nation goes over the fiscal cliff, budget cuts of 8 or 9 per cent would hit most of the federal government, touching all sorts of things from agriculture to law enforcement and the military to weather forecasting. A few areas, such as Social Security benefits, Veterans Affairs and some programs for the poor, are exempt. ___ THERE'S MORE AT STAKE All sorts of stuff could get wrapped up in the fiscal cliff deal-making. A sampling: — Some 2 million jobless Americans may lose their federal unemployment aid. Obama wants to continue the benefits extension as part of the deal; Republicans say it's too costly. — Social Security recipients might see their checks grow more slowly. As part of a possible deal, Obama and Republican leaders want to change the way cost-of-living adjustments are calculated, which would mean smaller checks over the years for retirees who get Social Security, veterans' benefits or government pensions. — The price of milk could double. If Congress doesn't provide a fix for expiring dairy price supports before Jan. 1, milk-drinking families could feel the pinch. One scenario is to attach a farm bill extension to the fiscal cliff legislation — if a compromise is reached in time. — Millions of taxpayers who want to file their 2012 returns before mid-March will be held up while they wait to see if Congress comes through with a deal to stop the alternative minimum tax from hitting more people. ___ CALL THE WHOLE THING OFF? In theory, Congress and Obama could just say no to the fiscal cliff, by extending all the tax cuts and overturning the automatic spending reductions in current law. But both Republicans and Democrats agree it's time to take steps to put the nation on a path away from a future of crippling debt. Indeed, the automatic spending cuts set for January were created as a last-ditch effort to force Congress to deal with the debt problem. If Washington bypassed the fiscal cliff, the next crisis would be just around the corner, in late February or early March, when the government reaches a $16.4 trillion ceiling on the amount of money it can borrow. Boehner says Republicans won't go along with raising the limit on government borrowing unless the increase is matched by spending cuts to help attack the long-term debt problem. Failing to raise the debt ceiling could lead to a first-ever U.S. default that would roil the financial markets and shake worldwide confidence in the United States. To avoid that scenario, Obama and Boehner are trying to wrap a debt limit agreement into the fiscal cliff negotiations. ___ SO WHAT'S THE HOLDUP? They're at loggerheads over some big questions. Obama says any deal must include higher taxes for the wealthiest Americans. Many House Republicans oppose raising anyone's tax rates. Boehner tried to get the House to vote for higher taxes only on incomes above $1 million but dropped the effort when it became clear he didn't have the votes. Republicans also insist on deeper spending cuts than Democrats want to make. And they want to bring the nation's long-term debt under control by significantly curtailing the growth of Medicare, Medicaid and Social Security — changes that many Democrats oppose. Obama, meanwhile, wants more temporary economic "stimulus" spending to help speed up a sluggish recovery. Republicans say the nation can't afford it. ___ IT'S NOT JUST WASHINGTON Seems like they could just make nice, shake hands and split their differences, right? But there's a reason neither side wants to give ground. The two parties represent a divided and inconsistent America. True, Obama just won re-election. But voters also chose a Republican majority in the House. Republican and Democrats alike say they are doing what the voters back home want. Neither side has a clear advantage in public opinion. In an Associated Press-GfK poll, 43 per cent said they trust the Democrats more to manage the federal budget deficit and 40 per cent preferred the Republicans. There's a similar split on who's more trusted with taxes. About half of Americans support higher taxes for the wealthy, the poll says, and about 10 per cent want tax increases all around. Still, almost half say cutting government services, not raising taxes, should be the main focus of lawmakers as they try to balance the budget. When asked about specific budget cuts being discussed in Washington, few Americans express support for them. ___ THE COUNTDOWN Time for deal-making is short, thanks to the holiday and congressional calendars. Some key dates for averting the fiscal cliff: — Lawmakers aren't expected to return to the Capitol until after Christmas, leaving less than a week to vote on a compromise before year's end. — Obama and his family also left town for a Christmas vacation in Hawaii. The president said because the fiscal cliff was still unresolved, he would return to Washington this week. — If lawmakers reach Dec. 31 without a deal, some economists worry that the financial markets might swoon. — The current Congress is in session only through noon Eastern time on Jan. 3. After that, a newly elected Congress with 13 new senators and 82 new House members would inherit the problem.

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New Jersey pension fund sues NYSE Euronext on ICE deal

A pension fund that holds shares of NYSE Euronext has sued the exchange operator over its proposed $8.2 billion sale to IntercontinentalExchange Inc , saying the deal undervalues the company's stock. The New Jersey Carpenters Pension Fund late on Friday filed a complaint in New York State Supreme Court in Manhattan contending that NYSE Euronext breached its duty to maximize returns for shareholders. The lawsuit seeks class action status on behalf of other NYSE Euronext shareholders and aims to block the sale. It is the second such lawsuit filed against the exchange operator since the deal was announced on Thursday. An individual shareholder, Samuel Cohen, filed a proposed class action in Delaware Chancery Court on Friday that also seeks to prevent the buyout from going forward. Under the deal, NYSE Euronext, which operates the New York Stock Exchange, will sell itself to Atlanta-based ICE. The stock-and-cash deal is expected to close in the second half of 2013. At $33.12 per share, ICE's offer represents a 28 percent premium to NYSE Euronext's closing price last Wednesday. In court papers, the New Jersey pension fund said the deal was based on a "hopelessly flawed process" that would favor NYSE Euronext Chief Executive Duncan Niederauer and several members of its board of directors. The sale was "designed to ensure the sale of NYSE Euronext to ICE on terms preferential to ICE and designed to benefit NYSE Euronext's insiders," the pension fund said. A spokesman for NYSE Euronext declined to comment. A spokeswoman for ICE, which is also named as a defendant in the lawsuit, did not return a call seeking comment. The lawsuit also names as defendants Niederauer, NYSE Euronext Chairman Jan-Michiel Hessels, and other executives and board members. The buyout is expected to help ICE compete in derivatives trading against U.S.-based CME Group, owner of the Chicago Board of Trade. Derivatives trading is highly profitable for the exchanges, and new rules next year will dramatically expand the demand for clearing over-the-counter contracts. NYSE Euronext's stock market businesses are less valuable to ICE, and the company said it will try to spin off the Euronext European stock market businesses in a public offering, generating speculation it may also have little interest in the NYSE trading floor. Profits from stock trading have been significantly eroded by new technology and the rise of other places for investors to trade, including venues known as "dark pools." The cases are New Jersey Carpenters Pension Fund et al. v. NYSE Euronext et al., Supreme Court of the State of New York, No. 654496/2012, and Cohen v. NYSE Euronext et al, Delaware Court of Chancery, No. 8136.

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