Online gambling companies struggle to clear EU hurdles

LONDON (Reuters) – A partnership stuck on Friday between bwin.party Digital Entertainment and a Belgian casino group has defused one of many disputes pitting online gambling companies against governments across Europe.

The agreement came a month after bwin.party’s co-CEO was questioned by Belgian authorities in an escalating license dispute the company said was costing it 700,000 euros ($ 916,000) in monthly revenue.

By joining forces with Belcasinos, a unit of local casino owner Group Partouche, bwin.party neatly met a requirement to have a presence in Belgium to win a license for online poker, casino and sports betting.

The agreement is a rare bright spot in a tough regulatory environment for online gambling companies across the continent.

Betting online on sports events or playing poker on the Internet are increasingly popular pastimes in Europe, where operators say they are held back by unfair and discriminatory rules in many European Union countries.

“It is not a European Union in any way, it is a patchwork of different countries who happen to be in the EU,” said Professor Leighton Vaughan Williams, director of the betting research unit at Nottingham Business School in central England.

“Different countries have different vested interests and different ideas they are trying to promote. Are they trying to protect consumers or to maximize their tax take?” he said.

The 27 EU member states retain the right to regulate their gambling sectors as they see fit, but rules must comply with EU law, broadly meaning they must be consistent and proportionate.

Some companies are scaling back activities in European markets where, they say, regulatory risks are too high or tax rates are punitive.

Betting exchange operator Betfair for instance said this week it was halting marketing and investment in unregulated markets, including EU members Cyprus, Germany and Greece.

William Hill, Britain‘s largest bookmaker, has joined Betfair in pulling out of Greece and has also stopped offering sports betting to German residents because of a 5 percent turnover tax.

STAKES RISE

The stakes are high. Online gambling is growing at an annual rate of almost 15 percent in the EU and will be worth an estimated 13 billion euros ($ 17 billion) by 2015, according to EU figures.

The European Commission, the EU’s executive, stepped in to the debate in October when it published a medium-term plan to clarify regulations and promote cooperation between member states, ruling out EU-wide legislation for the time being.

“All citizens must be adequately protected, money laundering and fraud must be prevented, sport must be safeguarded against betting-related match-fixing and national rules must comply with EU law,” Internal Market and Services Commissioner Michel Barnier said, setting out his approach.

The online operators accuse the European Commission of failing to follow through properly on complaints lodged about regulation in no fewer than 20 or the 27 EU member states.

Barnier has written to member states accused of breaching EU law in the way they handle gambling, seeking an update on the situation by the end of the year.

However, the industry questions whether the EU will go into battle over gambling when it is facing so many other problems.

“They will chip away at some of the most blatant ones,” said Clive Hawkswood, chief executive of trade body the Remote Gambling Association. “What we really need is for them to take some to the European Court and take enforcement action.”

BRITISH TAXES

Gambling companies themselves have taken advantage of different tax regimes where they work in their favor.

This is illustrated in Britain, historically the biggest betting market in Europe and a place with a well-developed gambling culture where bookmakers have operated in town centers for 50 years.

In recent years, most betting companies have moved their British online betting operations to Britain’s overseas territory of Gibraltar. There they are sheltered from a 15 percent tax on gross profit faced by operators based in Britain.

New legislation will close off that loophole after 2014. The shift to a taxation model based on the location of the consumer was expected to cost gambling companies as much as 270 million pounds ($ 435 million) by 2016-17.

Analyst Nick Batram at brokerage Peel Hunt said smaller players would likely be picked off because of the impact of higher tax and regulatory burdens across Europe.

“It is getting more complicated and more expensive. There is more change afoot but it should ultimately play into the hands of the better-capitalized companies.”

In that vein, William Hill has provisionally agreed a 485 million pound takeover of smaller rival Sportingbet, keen to get its hands on the company’s regulated Australian betting business.

“I think there is a lot more M&A activity to come,” said Batram.

(Additional reporting by Rosalba O’Brien; Editing by David Holmes)

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Britney Spears, Taylor Swift are top-earning women in music

NEW YORK (Reuters) – Pop star Britney Spears edged past Taylor Swift to claim the title of top-earning woman in music after bringing in an estimated $ 58 million from her album, endorsements and a perfume in the past year, Forbes said on Wednesday.

Country-pop singer Swift, 22, was a close second with an estimated $ 57 million paycheck thanks to her tour – which made more than $ 1 million each night – a contract with CoverGirl cosmetics, her own line of fragrances and her new album “Red.”

R&B star Rihanna, 24, earned an estimated $ 53 million to put her at No. 3, two places up from last year, followed by Lady Gaga, 26, who slipped from No. 1 in 2011 to fourth place with $ 52 million.

Katy Perry, 28, the only musician other than Michael Jackson to produce five No. 1 hit singles from one album, rounded out the top five with about $ 45 million in earnings.

“I think people love the comeback story – Britney never really finished her run as a superstar,” Steve Stoute, marketing expert and author of “The Tanning of America” told Forbes.

Spears, 31, who was No. 10 last year, earned most of her money from her latest album “Femme Fatale” and her tour, according to Forbes, which compiled the list with estimated earnings from May 2011 to May 2012.

In September, Spears became a judge on the reality TV singing show “The X Factor,” reportedly for $ 15 million.

Despite their huge incomes, only eight of the top women music earners were among the 25 best-paid musicians, which Forbes attributes in part to career breaks to have children.

Madonna made the list in ninth place with an estimated $ 30 million in earnings, which did not include profits from her latest tour because it was outside the time period considered for the ranking.

Forbes compiled the list after estimating pretax income based on record sales, touring information merchandise sales and interviews with concert promoters, lawyers and managers.

The full list can be found at http://www.forbes.com/sites/zackomalleygreenburg/2012/12/12/the-top-earning-women-in-music-2012/

(Reporting by Patricia Reaney; Editing by Nick Zieminski and Maureen Bavdek)

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Best Pals Paralyzed Just 2 Years Apart

Alan Brown had just wrapped up a fundraiser for his high school best friend, Danny Heumann, who had been paralyzed after he broke his back in a car accident.

“We were 18 years old, ready to live life,” said Brown, who became his friend’s caregiver, staying by his side at New York City‘s Rusk Institute after the 1985 accident.

But just six weeks after he had helped raise $ 15,000 for his friend’s new foundation, Brown himself suffered a cruel twist of fate. He, too, was paralyzed after diving into the surf on a Club Med vacation in Martinique. It was Jan. 2, 1988, a bit more than two years after Heumann’s accident.

Brown said that he quite literally “saw the light” when he shattered his neck. The undertow threw him head-first against the ocean floor.

“I heard it snap,” he said. “I was under water two or three minutes holding my breath to survive. But I thought this was it.”

He never lost consciousness and remembered from his friend’s accident not to be jostled, so he refused a ride in the bumpy ambulance until he could be airlifted to the hospital. En route, he said he quoted lines from the comedy film, “Fletch” — “It’s all ball bearings.”

Just short of his 21st birthday, he lost the use of his legs, but not his sense of humor or his drive.

Today, at 45, Brown says he is doing what he has always done best: facing a challenge.

He has pledged to raise $ 250,000 — $ 25,000 for each year he has been paralyzed — for the Christopher and Dana Reeve Foundation. His one-year campaign is aptly named the “Power of We.”

“There’s no ego here — we’re building an army,” said Brown, who is director of impact for the Reeve Foundation. “Spinal cord injuries don’t discriminate. In one split second my life changed.”

Both Heumann and Brown now sit on the board of the Reeve Foundation.

An estimated 5.6 million Americans live with some form of paralysis, according to Centers for Disease Control and Prevention, and most, like Brown, were injured when they were young.

The Reeve Foundation has become the “hub” of most of the research and advocacy for those who suffer from paralysis. It is named for the actor Christopher Reeve, who was injured in a horseback riding accident and died in 2004. His wife, Dana, worked with him and chaired the foundation; she died in 2006.

Spinal cord research is “painstakingly slow and expensive,” according to Susan Howley, executive vice-president of research at the Reeve Foundation. And there are never any quick fixes.

But this is a pivotal time in research and more is being done to improve quality of life and independence for those who are paralyzed.

“It’s actually a phenomenally interesting and exciting time in the field of spinal cord research,” said Howley. “The old dogmas haven’t really been overturned for a very long time.”

As recently as two decades ago, an injured adult was never expected to recover. Today, scientists are discovering activity-based exercise or locomotor training that can “remind” the spinal cord how to step and stand again, she said.

But being wheelchair-bound is only part of the medical, psychological and financial challenge of a spinal cord injury.

Depending on the severity of the injury, the yearly expense for treatment can be anywhere from $ 300,000 to nearly $ 1 million, according to The University of Alabama National Spinal Cord Injury Statistical Center and the Centers for Disease Control and Prevention.

The lifetime cost of caring for a 25-year-old can range from $ 1.5 to $ 4 million.

Pain, Bladder and Skin Issues Plague Those With Paralysis

The secondary effects of spinal cord injuries are as challenging as the mobility issues: constant pain, bowel and bladder issues, and skin problems; shoulder and back injuries from years of strain and aging in a wheelchair.

“There are so many of them,” said Brown. “Care giving and the psychological are part of it — developing your own confidence to face the world. Some people don’t even want to leave their homes.”

Brown’s generation is the first to even survive spinal cord injuries. “There is no road map for us,” he said. “In the past, if they didn’t die, they were put away in a nursing home to die.”

Relationships are tested; Brown said his own marriage broke up.

Since the early days of treatment at Jackson Memorial in Miami and later in outpatient therapy at Mt. Sinai Hospital in New York City, his humor has kept him going.

“They put me in a halo backwards and had to unscrew it and screw it back into my head,” said Brown. “I laughed the entire time. I laughed every day and cried every day.”

He said he learned to hold his breath so the nurses would talk to him.

Laughter has carried him through six surgeries and physical ordeals. “I am an emergency room frequent flyer,” Brown jokes.

He has 11 screws and two metal plates that were inserted after his neck was rebuilt.

“Technically I’m three people,” said Brown. “My head is screwed on, my body is in the middle and there is my soul.”

Brown has always been a giver — as a child growing up in a Jewish family in New York City, he used to help prepare dead bodies for burial — “one of the biggest mitzvahs,” he said.

“I was always a person who wanted to overcome, an overachiever,” he said. “I wasn’t a great student, but I was there by your side. I would help the elderly at Rosh Hashanah — it’s in my make-up.”

While he was still bedridden and his health was touch and go, Brown asked his rabbi what he would say in a eulogy. The rabbi told Brown he had the “spirit to help others.”

Today he says he leads a full life, helping to raise his two sons, Max, 15, and Sam, 10.

Brown uses a power wheelchair and has difficulty using his hands. He said he battles constant pain, but is able to get himself in and out of the chair and drives a car.

A former hockey player, Brown keeps fit. He participates in marathons in his wheelchair and has tried both scuba and sky diving.

Professionally, Brown has worked his entire life — at public relations, recruiting NFL players for ad campaigns and even running a radio station.

“Nothing will ever stop me,” said Brown, who has also begun a book.

He confesses he doesn’t sleep much, especially with an eye to the fundraising campaign for the Reeve Foundation.

“There totally is hope,” he said when talking about medical advances. “Cures come in different shapes and sizes. A lot of us would take just not being in pain.”

Meanwhile, Brown’s attitude and energy astound his colleagues.

“Alan lives with his injury day in and day out,” said Howley at the Reeve Foundation. “He, better than anyone else, understands what the challenges and needs are. He is so articulate and compassionate. We are very lucky. God bless him.”

For more information and to help, go to the donor page for the Alan T. Brown Power of We Campaign.

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Airlines: 2013 profits to rise thanks to cost cuts

GENEVA (AP) — Airlines‘ profits will improve to $ 8.4 billion in 2013, mainly reflecting cost cuts and restructuring measures taken to compensate for stalling economic growth, the global industry‘s trade group forecast Thursday.

For 2012, the industry anticipates net profits of $ 6.7 billion based on strong second and third quarters — particularly for larger carriers with bigger economies of scale — despite high fuel prices and weaker demand.

But the 2013 results would still be below the $ 8.8 billion earned in 2011 and $ 15.8 billion in 2010. The net profit margin, at 1 percent, would also be well below the 7 to 8 percent officials say is needed to recover capital costs.

The International Air Transport Association‘s annual review focused on the impact of annual world economic growth falling below 2 percent and Brent crude oil trading at $ 109.5 a barrel.

“Airlines have adjusted to this difficult environment through improving efficiency and restructuring,” said Tony Tyler, chief executive of the Geneva-based global trade group.

Tyler told reporters in Geneva that airlines’ financial performance hinged partly on their size.

“Economies of scale are helping larger airlines to cope much better with the difficult environment than small and medium-sized carriers which continue to struggle,” he said.

IATA, whose 240 member airlines carry 84 percent of all passengers and cargo, said the industry’s overall revenue in 2013 is expected to rise to $ 659 billion from $ 637 billion this year, while costs will go up to $ 640 billion from $ 623 billion.

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Aides: Chavez in tough fight, may miss swearing-in

CARACAS, Venezuela (AP) — Somber confidants of President Hugo Chavez say he is going through a difficult recovery after cancer surgery in Cuba, and one close ally is warning Venezuelans that their leader may not make it back for his swearing-in next month.

Information Minister Ernesto Villegas said Wednesday night that Chavez was in “stable condition” and was with close relatives in Havana. Reading a statement, he said the government invites people to “accompany President Chavez in this new test with their prayers.”

Villegas expressed hope about the president returning home for his Jan. 10 swearing-in for a new six-year term, but said in a written message on a government website that if Chavez doesn’t make it, “our people should be prepared to understand it.”

Villegas said it would be irresponsible to hide news about the “delicateness of the current moment and the days to come.” He asked Venezuelans to see Chavez’s condition as “when we have a sick father, in a delicate situation after four surgeries in a year and a half.”

Moving to prepare the public for the possibility of more bad news, Vice President Nicolas Maduro looked grim when he acknowledged that Chavez faced a “complex and hard” process after his latest surgery.

At the same time, officials sought to show a united front amid the growing worries about Chavez’s health and Venezuela’s future. Key leaders of Chavez’s party and military officers appeared together on television as Maduro gave updates on Chavez’s condition.

“We’re more united than ever,” said Maduro, who was flanked by National Assembly President Diosdado Cabello and Oil Minister Rafael Ramirez, both key members of Chavez’s inner circle. “We’re united in loyalty to Chavez.”

Analysts say Maduro could eventually face challenges in trying to hold together the president’s diverse “Chavismo” movement, which includes groups from radical leftists to moderates, as well as military factions.

Tapped by the 58-year-old president over the weekend as his chosen political heir, Maduro is considered to be a member of radical left wing of Chavez’s movement that is closely aligned with Cuba’s communist government.

Cabello, a former military officer who also wields power within Chavez’s movement, shared the spotlight with Maduro by speaking at a Mass for Chavez’s health at a military base.

Just returned from being with Chavez for the operation, Cabello called the president “invincible” but said “that man who is in Havana … is fighting a battle for his life.”

After Chavez’s six-hour operation Tuesday, Venezuelan television broadcast religious services where people prayed for Chavez, interspersed with campaign rallies for upcoming gubernatorial elections.

On the streets of Caracas, people on both sides of the country’s deep political divide voiced concerns about Chavez’s condition and what might happen if he died.

At campaign rallies ahead of Sunday’s gubernatorial elections, Chavez’s candidates urged Venezuelans to vote for pro-government candidates while they also called for the president to get well.

“Onward, Commander!” gubernatorial candidate Elias Jaua shouted to a crowd of supporters at a rally Wednesday. Many observers said it was likely Chavez’s candidates could get a boost from their supporters’ outpouring of sympathy for Chavez.

Opposition leader Henrique Capriles, who lost to Chavez in the October presidential election and is running against Jaua, complained Wednesday that Chavez’s allies are taking advantage of the president’s health problems to try to rally support. He took issue with Jaua’s statement to supporters that “we have to vote so that the president recovers.”

Maduro looked sad as he spoke on television, his voice hoarse and cracked at times after meeting in the pre-dawn hours with Cabello and Ramirez. The pair returned to Venezuela about 3 a.m. after accompanying Chavez to Cuba for his surgery.

“It was a complex, difficult, delicate operation,” Maduro said. “The post-operative process is also going to be a complex and hard process.”

Without giving details, Maduro reiterated Chavez’s recent remarks that the surgery presented risks and that people should be prepared for any “difficult scenarios.”

The constitution says presidents should be sworn in before the National Assembly, and if that’s not possible then before the Supreme Court.

Former Supreme Court magistrate Roman Duque Corredor said a president cannot delegate the swearing-in to anyone else and cannot take the oath of office outside Venezuela. A president could still be sworn in even if temporarily incapacitated, but would need to be conscious and in Venezuela, Duque told The Associated Press.

If a president-elect is declared incapacitated by lawmakers and is unable to be sworn in, the National Assembly president would temporarily take charge of the government and a new presidential vote must be held within 30 days, Duque said.

Chavez said Saturday that if an election had to be held, Maduro should be elected president.

The dramatic events of this week, with Chavez suddenly taking a turn for the worse, had some Venezuelans wondering whether they were being told the truth because just a few months ago the president was running for his fourth presidential term and had said he was free of cancer.

Lawyer Maria Alicia Altuve, who was out in bustling crowds in a shopping district of downtown Caracas, said it seemed odd how Maduro wept at a political rally while talking about Chavez.

“He cries on television to set up a drama, so that people go vote for poor Chavez,” Altuve said. “So we don’t know if this illness is for that, or if it’s that this man is truly sick.”

Some Chavez supporters said they found it hard to think about losing the president and worried about the future. His admirers held prayer vigils in Caracas and other cities this week, holding pictures and singing hymns.

Chavez has undergone four cancer-related surgeries since June 2011. He has also undergone months of chemotherapy and radiation treatments. Throughout his treatments, Chavez has kept secret some details of his illness, including the exact location and type of the tumors.

Ecuadorean President Rafael Correa wished his close ally the best, while also acknowledging the possibility that cancer might end his presidency. “Chavez is very important for Latin America, but if he can’t continue at the head of Venezuela, the processes of change have to continue,” Correa said at a news conference in Quito.

___

Associated Press writer Christopher Toothaker contributed to this report.

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iPad mini deemed a ‘game changer,’ outgrew Kindle Fire by nearly 50%

Smaller tablets in the 7-inch range have been on the market for more than two years now, but it looks like it took Apple (AAPL) just one month to vault to the top of the category. Mobile advertising firm Millennial Media recently published the findings of a study pitting the iPad mini against Amazon’s (AMZN) popular Kindle Fire, which has been an extremely popular iPad alternative since it first launched last year. According to Millennial, iPad mini usage grew about 50% faster during early November than the Kindle Fire did immediately following its successful launch last year, as measured by ad impressions served by the firm’s network.

Millennial found that impressions served to the iPad mini in early November grew at an average daily rate of 28%. In the weeks following the Kindle Fire’s launch last year, usage of Amazon’s tablet grew roughly 19% each day.

“In the first weeks after the iPad mini went on sale, we saw an average daily growth in impressions of 28 percent. Last holiday season, Amazon launched the Kindle Fire to much anticipation, Millennial Media’s Matt Mills wrote on the company’s blog. “As a comparison, we saw Kindle Fire impressions grow at an average daily rate of 19 percent in the first two weeks after it went on sale last year. So, by our math it looks like Apple could have itself another massive holiday season.”

Mills called the iPad mini a “game changer” and said he expects “a massive amount” of iPad mini tablets to be given as gifts this holiday season.

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TV’s “Storage Wars” is rigged, fired cast member charges

LOS ANGELES (Reuters) – The popular TV show “Storage Wars” – in which treasure hunters bid to buy unseen items in abandoned units – is rigged, with producers sometimes planting valuable items among the junk, a former contestant said in a lawsuit on Tuesday.

David Hester, one of the reality TV show‘s longest-serving cast members, said producers buried a BMW Mini under trash in one unit featured in the A&E cable series, and a pile of newspapers announcing the death of Elvis Presley in another.

“A&E regularly plants valuable items or memorabilia,” Hester charged in his lawsuit, filed in Los Angeles Superior Court on Tuesday against the cable channel and the show’s producers.

When he complained, Hester was fired from the show. He is claiming fraud, wrongful dismissal, breach of contract and unfair business practices, and asking for at least $ 750,000 in damages.

A&E declined to comment on the lawsuit on Tuesday, saying it did not comment on pending litigation.

“Storage Wars,” which made its debut in 2010, is the highest-rated non-fiction program on U.S. cable television, and draws about 5 million viewers per episode. It is also broadcast in Canada, Australia, Britain and other countries.

The show follows a group of modern treasure-hunters who compete at public auctions of abandoned storage lockers in the hope of finding valuable items which they can re-sell for a profit.

Hester said that “nearly every aspect of the show is faked.” He said producers regularly place in the lockers “valuable or unusual effects to add dramatic effect” and sometimes stage entire units, according to the lawsuit.

Hester, who lives in Orange County, California, has been featured on the show since 2010. He was fired in October 2012 shortly after a meeting in which he complained about rigging in a meeting with producers, the lawsuit says.

A&E Television Networks is a joint venture of the Hearst Corporation and Disney-ABC Television – a unit of Walt Disney Co.

(Reporting By Jill Serjeant; Editing by Eric Walsh)

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Medicines Co to spend $300 million to boost hospital products line

(Reuters) – Medicines Company, a maker of drugs used in hospitals, will spend about $ 300 million in two deals to bulk up its surgical care products portfolio.

The company will pay $ 105 million upfront for a two-year license to market Bristol-Myers Squibb Company‘s device to control bleeding during surgery.

Medicines Co also said it agreed to pay $ 185 million to acquire privately held Incline Therapeutics, which is developing a device to manage post-operative pain.

“Both assets fit well with Medicines Co’s current hospital franchise. It follows the company’s historical ability to bring in interesting assets that may need further work, but can be picked up at a reasonable price because they could need more development,” RBC Capital Markets analyst Adnan Butt said.

The deal with Bristol gives Medicines Co the option to acquire the device, Recothrom, for a price based on average net sales during the two-year collaboration term.

Bristol recorded net revenue of $ 65 million from the Recothrom sales in the United States and Canada in 2011. It will be the manufacturer and sole supplier of Recothrom during the deal term.

Medicines Co would also pay an upfront option fee of $ 10 million to Bristol and tiered royalties on annual net revenue of the device during the term.

The deal is expected to add to Medicines Co’s earnings per share in 2013, and add minimally to Bristol’s earnings per share in 2013 and 2014, both companies said in a joint statement.

Redwood City, California-based Incline is developing a patient-controlled analgesia system called IONSYS for short-term management of acute post-operative pain in hospitals. The device was launched in Europe, but recalled later on stability issues.

“We expect that if we obtain IONSYS approval, we could launch IONSYS in early 2014 in the United States and soon thereafter in Europe,” Medicines Co’s Chief Financial Officer Glenn Sblendorio said.

San Diego, California-based Cadence Pharmaceuticals Inc had an exclusive option to buy Incline, which it ended on Wednesday.

Cadence said it will receive about $ 13 million for the termination of its agreement with Incline.

Medicines Co will also pay about $ 1.5 million to buy out Cadence’s holdings in Incline and potentially a pro rata share of future milestone payments, Cadence said.

Medicines Co’s shares closed at $ 21.85 on Tuesday on the Nasdaq.

(Reporting by Zeba Siddiqui in Bangalore; Editing by Roshni Menon)

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The Home Foreclosure Wave That Wasn’t

When banks pulled back on foreclosures two years ago following a government investigation into faulty paperwork by lenders, Wall Street analysts, academics, and researchers thought the lull would be followed by a storm. They believed that once banks resolved the claims of delinquent homeowners piling up in courts and worked through their backlog of foreclosures, tens of thousands of houses would hit the market, driving down prices for years to come.

It never happened—even after the five biggest U.S. mortgage servicers reached a $ 25 billion settlement with federal and state regulators in February. Instead, the number of residential properties for sale in the U.S. shrank to the lowest level in a decade, while prices have appreciated at the fastest pace since 2005. An index of pending home resales compiled by the National Association of Realtors climbed 5.2 percent in October, the most recent month for which data are available. The median price of an existing home sold in October jumped 11 percent from a year earlier, to $ 178,600, the steepest annual increase since November 2005, according to the group. “Many of us, myself included, feared a wave of foreclosures when the settlement came,” says Susan Wachter, professor of real estate and finance at the University of Pennsylvania’s Wharton School. “I was wrong.”

One reason she and her fellow real estate watchers got it wrong was that in the wake of the settlement, banks were compelled to cut more deals with strapped homeowners. Since March, the five largest U.S. mortgage servicers provided loan relief to 309,385 borrowers, according to a Nov. 19 report by Joseph Smith, who heads the independent office established to monitor compliance with the settlement. Almost 22,000 borrowers had principal forgiveness totaling $ 2.55 billion. And 113,000 borrowers won bank approval for short sales, yielding another $ 13.1 billion in principal writedowns.

Federal government loan-modification programs are also gaining traction as the economy improves and fewer reworked loans re-default. Record low interest rates have triggered a spike in mortgage refinancings, which has helped homeowners stay current on their loans by lowering monthly payments. At the same time, institutional investors including Blackstone Group (BX) and Colony Capital have been purchasing thousands of foreclosed homes in bulk before they even hit the market and then renting the properties out instead of reselling them. The Federal Reserve Bank of New York had estimated that as many as 1.8 million properties would be taken back by banks in 2012. Yet through October, there have been only about 559,000 home seizures, according to RealtyTrac.

“In hindsight, by delaying and prolonging the foreclosure process, that gave the market time to stabilize and get back on its feet,” says Daren Blomquist, vice president of RealtyTrac, which warned a year ago that huge numbers of foreclosed homes were going to hit the market. “Maybe bureaucracy is actually helping, in this case, to diffuse the impact of the foreclosures. Talk about unintended consequences.”

In Stockton, Calif., one of the U.S. cities hit hardest by the housing crisis, the number of homes for sale fell 42 percent in October from a year earlier, thanks in part to a 21 percent decline in foreclosure filings over the same period. Listings routinely attract multiple offers, and prices are on the rise. “We don’t have enough homes now to meet the needs of the market,” says Paul Jacobson, a Stockton native and real estate broker for 22 years, as he cruises the city’s northern fringe, where suburbia meets farmland. “People see a foreclosed home for sale in this area and they’re going to jump on it.”

Stockton resident William Hoeurn last month secured a $ 337,906 principal reduction on his mortgage from Bank of America (BAC), shrinking monthly payments on his three-bedroom house to $ 884 from $ 2,362. The 66-year-old teaching assistant fell behind on his loan payments after his wife lost her job and two of his grown children, who helped pay the mortgage, moved out. “Before, I was having bad dreams that I am losing my house,” says Hoeurn, a refugee from Cambodia. “Now, I feel very happy.”

It still may be a little early to pronounce the housing slump over. Almost a quarter of all U.S. homeowners with a mortgage owe more than their homes are worth, making them candidates for future defaults. Robert Shiller, an economics professor at Yale University and co-creator of the S&P Case-Shiller home price indexes, believes the inventory of potential foreclosures remains a threat across the U.S., especially if the economy slows. “It’s funny how people have so much confidence in the recovery. History shows that these markets are hard to predict.”

The bottom line: The number of properties for sale has shrunk to the lowest level in a decade, easing concerns about a new wave of foreclosures.

With Jody Shenn

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North Korea’s new leader burnishes credentials with rocket

SEOUL/TOKYO (Reuters) – North Korea successfully launched a rocket on Wednesday, boosting the credentials of its new leader and stepping up the threat the isolated and impoverished state poses to its opponents.

The rocket, which North Korea says put a weather satellite into orbit, has been labeled by the United States, South Korea and Japan as a test of technology that could one day deliver a nuclear warhead capable of hitting targets as far as the continental United States.

“The satellite has entered the planned orbit,” a North Korean television news-reader clad in traditional Korean garb triumphantly announced, after which the station played patriotic songs with the lyrics “Chosun (Korea) does what it says”.

The rocket was launched just before 10 a.m. Korea time (9 p.m. ET on Tuesday), according to defense officials in South Korea and Japan, and easily surpassed a failed April launch that flew for less than two minutes.

The North American Aerospace Defense Command (NORAD) said that it “deployed an object that appeared to achieve orbit”, the first time an independent body has verified North Korean claims.

North Korea followed what it said was a similar successful launch in 2009 with a nuclear test that prompted the United Nations Security Council to stiffen sanctions that it originally imposed in 2006 after the North’s first nuclear test.

The state is banned from developing nuclear and missile-related technology under U.N. resolutions, although Kim Jong-un, the youthful head of state who took power a year ago, is believed to have continued the state’s “military first” programs put into place by his deceased father Kim Jong-il.

North Korea lauded Wednesday’s launch as celebrating the prowess of all three Kims to rule since it was founded in 1948.

“At a time when great yearnings and reverence for Kim Jong-il pervade the whole country, its scientists and technicians brilliantly carried out his behests to launch a scientific and technological satellite in 2012, the year marking the 100th birth anniversary of President Kim Il Sung,” its KCNA news agency said.

Washington condemned Wednesday’s launch as a “provocative action” and breach of U.N. rules, while Japan’s U.N. envoy called for a Security Council meeting. However, diplomats say further tough sanctions are unlikely to be agreed at the body as China, the North’s only major ally, will oppose them.

“The international community must work in a concerted fashion to send North Korea a clear message that its violations of United Nations Security Council resolutions have consequences,” the White House said in a statement.

Japan’s likely next prime minister, Shinzo Abe, who is leading in opinion polls ahead of an election on December 16 and who is known as a North Korea hawk, called on the United Nations to adopt a resolution “strongly criticizing” Pyongyang.

BEIJING BLOCK

China had expressed “deep concern” prior to the launch which was announced a day after a top politburo member, representing new Chinese leader Xi Xinping, met Kim Jong-un in Pyongyang.

On Wednesday its tone was measured, regretting the launch but calling for restraint on possible counter-measures, in line with previous policy when it has effectively vetoed tougher sanctions.

“China believes the Security Council’s response should be cautious and moderate, protect the overall peaceful and stable situation on the Korean peninsula, and avoid an escalation of the situation,” Chinese Foreign Ministry spokesman Hong Lei told journalists.

Bruce Klingner, a Korea expert at the Heritage Foundation, told a conference call: “China has been the stumbling block to firmer U.N. action and we’ll have to see if the new leadership is any different than its predecessors.”

A senior adviser to South Korea’s president said last week it was unlikely there would be action from the U.N. and that Seoul would expect its allies to tighten sanctions unilaterally.

Kim Jong-un, believed to be 29 years old, took power when his father died on December 17 last year and experts believe the launch was intended to commemorate the first anniversary of the death.

The April launch was timed for the centennial of the birth of Kim Il Sung, the grandfather of its current ruler.

Wednesday’s success puts the North ahead of the South which has not managed to get a rocket off the ground.

“This is a considerable boost in establishing the rule of Kim Jong-un,” said Cho Min, an expert at the Korea Institute of National Unification.

There have been few indications the secretive and impoverished state, where the United Nations estimates a third of the population is malnourished, has made any advances in opening up economically over the past year.

North Korea remains reliant on minerals exports to China and remittances from tens of thousands of its people working on labor projects overseas.

The 22 million population often needs handouts from defectors who have escaped to South Korea in order to afford basic medicines.

Given the puny size of its economy – per capita income is less than $ 2,000 a year – one of the few ways the North can attract world attention is by emphasizing its military threat.

Pyongyang wants the United States to resume aid and to recognize it diplomatically, although the April launch scuppered a planned food deal.

It is believed to be some years away from developing a functioning nuclear warhead although it may have enough plutonium for around half a dozen nuclear bombs, according to nuclear experts.

The North has also been enriching uranium, which would give it a second path to nuclear weapons as it sits on vast natural uranium reserves.

“A successful launch puts North Korea closer to the capability to deploy a weaponized missile,” said Denny Roy, a senior fellow at the East-West Center in Hawaii.

“But this would still require fitting a weapon to the missile and ensuring a reasonable degree of accuracy. The North Koreans probably do not yet have a nuclear weapon small enough for a missile to carry.”

Pyongyang says that its development is part of a civil nuclear program, but has also boasted of it being a “nuclear weapons power”.

(Additional reporting by Jumin Park and Yoo Choonsik in SEOUL; David Alexander, Matt Spetalnick and Paul Eckert in WASHINGTON; Linda Sieg in TOKYO; Sui-Lee Wee in BEIJING; Rosmarie Francisco in MANILA; Writing by David Chance; Editing by Raju Gopalakrishnan)

World News Headlines – Yahoo! News

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