Syria to discuss Brahimi peace proposals with Russia

BEIRUT (Reuters) - Syrian President Bashar al-Assad sent a senior diplomat to Moscow on Wednesday to discuss proposals to end the conflict convulsing his country made by international envoy Lakhdar Brahimi, Syrian and Lebanese sources said.

Brahimi, who saw Assad on Monday and is planning to hold a series of meetings with Syrian officials and dissidents in Damascus this week, is trying to broker a peaceful transfer of power, but has disclosed little about how this might be done.

More than 44,000 Syrians have been killed in a revolt against four decades of Assad family rule, a conflict that began with peaceful protests but which has descended into civil war.

Past peace efforts have floundered, with world powers divided over what has become an increasingly sectarian struggle between mostly Sunni Muslim rebels and Assad's security forces, drawn primarily from his Shi'ite-rooted Alawite minority.

Deputy Foreign Minister Faisal Makdad flew to Moscow to discuss the details of the talks with Brahimi, said a Syrian security source, who would not say if a deal was in the works.

However, a Lebanese official close to Damascus said Makdad had been sent to seek Russian advice on a possible agreement.

He said Syrian officials were upbeat after talks with Brahimi, the U.N.-Arab League envoy, who met Foreign Minister Walid Moualem on Tuesday a day after his session with Assad, but who has not outlined his ideas in public.

"There is a new mood now and something good is happening," the official said, asking not to be named. He gave no details.

Russia, which has given Assad diplomatic and military aid to help him weather the 21-month-old uprising, has said it is not protecting him, but has fiercely criticized any foreign backing for rebels and, with China, has blocked U.N. Security Council action on Syria.

"ASSAD CANNOT STAY"

A Russian Foreign Ministry source said Makdad and an aide would meet Foreign Minister Sergei Lavrov and Mikhail Bogdanov, the Kremlin's special envoy for Middle East affairs, on Thursday, but did not disclose the nature of the talks.

On Saturday, Lavrov said Syria's civil war had reached a stalemate, saying international efforts to get Assad to quit would fail. Bogdanov had earlier acknowledged that Syrian rebels were gaining ground and might win.

Given the scale of the bloodshed and destruction, Assad's opponents insist the Syrian president must go.

Moaz Alkhatib, head of the internationally-recognized Syrian National Coalition opposition, has criticized any notion of a transitional government in which Assad would stay on as a figurehead president stripped of real powers.

Comments on Alkhatib's Facebook page on Monday suggested that the opposition believed this was one of Brahimi's ideas.

"The government and its president cannot stay in power, with or without their powers," Alkhatib wrote, saying his Coalition had told Brahimi it rejected any such solution.

While Brahimi was working to bridge the vast gaps between Assad and his foes, fighting raged across the country and a senior Syrian military officer defected to the rebels.

Syrian army shelling killed about 20 people, at least eight of them children, in the northern province of Raqqa, a video posted by opposition campaigners showed.

The video, published by the Syrian Observatory for Human Rights, showed rows of blood-stained bodies laid out on blankets. The sound of crying relatives could be heard in the background.

The shelling hit the province's al-Qahtania village, but it was unclear when the attack had occurred.

STRATEGIC BASE

Rebels relaunched their assault on the Wadi Deif military base in the northwestern province of Idlib, in a battle for a major army compound and fuel storage and distribution point.

Activist Ahmed Kaddour said rebels were firing mortars and had attacked the base with a vehicle rigged with explosives.

The British-based Observatory, which uses a network of contacts in Syria to monitor the conflict, said a rebel commander was among several people killed in Wednesday's fighting, which it said was among the heaviest for months.

The military used artillery and air strikes to try to hold back rebels assaulting Wadi Deif and the town of Morek in Hama province further south. In one air raid, several rockets fell near a field hospital in the town of Saraqeb, in Idlib province, wounding several people, the Observatory said.

As violence has intensified in recent weeks, daily death tolls have climbed. The Observatory reported at least 190 had been killed across the country on Tuesday alone.

The head of Syria's military police changed sides and declared allegiance to the anti-Assad revolt.

"I am General Abdelaziz Jassim al-Shalal, head of the military police. I have defected because of the deviation of the army from its primary duty of protecting the country and its transformation into gangs of killing and destruction," the officer said in a video published on YouTube.

A Syrian security source confirmed the defection, but said Shalal was near retirement and had only defected to "play hero".

Syrian Interior Minister Mohammed Ibrahim al-Shaar left Lebanon for Damascus after being treated in Beirut for wounds sustained in a rebel bomb attack this month.

(Additional reporting by Laila Bassam; Writing by Alistair Lyon; Editing by Andrew Osborn)

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Samsung expects to ship more than half a billion phones in 2013

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Miranda Cosgrove's Surprise Christmas Gift: A New Puppy!

People Pets

By Amy Jamieson

12/26/2012 at 04:00 PM EST

Miranda Cosgrove and her new dog Penelope

Courtesy of Miranda Cosgrove

Miranda Cosgrove's Christmas was extra merry this year.

Just a few months after losing her beloved 14-year-old poodle Pearl, she was surprised with a new dog a few days before the big holiday.

"Most amazing surprise early Christmas gift #penny #inlove," she Tweeted on Friday, with a photo of her new fluffy black and white pup named Penelope, or Penny for short.

In October, the former iCarly star told PEOPLE how much she missed Pearl, who had been a fixture in her life for many years.

"She was a part of our family, and because I was an only child, she was a really big part of my life," Cosgrove said. "Every time I look back on a memory, she was there."

Now the actress, who is a freshman at the University of Southern California, will be making new memories with Penelope. In fact, it seems like she's already started. On Dec. 22 and again on Dec. 23, she Tweeted more photos of her new pooch.

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Predicting who's at risk for violence isn't easy

CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.

Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.

But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.

"They're yellow flags. They only become red flags once the blood is spilled," he said.

Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.

Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)

Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.

Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.

"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."

The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."

In a guidelines for families, the academy lists several risk factors for violence, including:

—Previous violent or aggressive behavior

—Being a victim of physical or sexual abuse

—Guns in the home

—Use of drugs or alcohol

—Brain damage from a head injury

Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.

Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.

Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.

According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.

Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.

Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.

And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.

All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.

Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.

Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.

Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.

___

Online:

American Academy of Child & Adolescent Psychiatry: http://www.aacap.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

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Yen on defensive on U.S. fiscal worry, helps Nikkei

TOKYO (Reuters) - Uncertainty over whether U.S. lawmakers will strike a deal by an end-of-year deadline to avert a severe fiscal retrenchment undermined the yen and bolstered Japanese shares on Tuesday in low volume, with many participants away on Christmas holiday.

The dollar rose to a 20-month high of 84.965 yen early on Tuesday in Asia, as Japanese markets caught up with global investors who had reacted overnight to incoming Japanese Prime Minister Shinzo Abe's weekend comments that raised the pressure on the Bank of Japan.

During a meeting on Tuesday with officials from Japan's major business lobby, Keidanren, Abe reiterated calls on the BOJ to conduct bold monetary easing to beat deflation by setting an inflation target of 2 percent.

The head of Abe's coalition partner said on Tuesday the coalition party and Abe had agreed to set a 2 percent inflation target and compile a large stimulus budget to help the economy return to growth and overcome deflation.

The yen has come under pressure as a result of expectations that the BOJ will be compelled to adopt more drastic monetary stimulus measures next year.

The dollar was expected to stay firm this week as investors repatriate dollars, and as the U.S. fiscal impasse is likely to continue to sap investor appetite for risky assets and raise the dollar's safe-haven appeal.

"The dollar is seen relatively well bid, with all focus on the fiscal cliff," said Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo.

"Negotiations may be carried over the weekend, but markets still expect a deal to be struck by December 31. It is unthinkable that the U.S. will risk driving its economic growth sharply lower by not agreeing to avoid it."

U.S. lawmakers and President Barack Obama were on Christmas holiday and talks were unlikely to resume until later in the week.

House of Representatives Speaker John Boehner failed to gain support for a tax plan at the end of last week, raising fears that the United States may face the "fiscal cliff" of some $600 billion in automatic spending cuts and tax increases set to start on January 1.

Japan's Nikkei stock average <.n225> resumed trading after a three-day weekend with a 1.1 percent gain, recapturing the key 10,000 mark it ceded on Friday after Boehner's failure sparked a broad market sell-off and the Tokyo benchmark closed down 1 percent. The Nikkei was likely to be supported as long as the yen stayed weak. <.t/>

"Ongoing optimism about the weak yen is lifting hopes that exporters' earnings will be better than expected," said Hiroichi Nishi, general manager at SMBC Nikko Securities.

Analysts say a near-term correction may be possible as the index is now in "overbought" territory after gaining 16.2 percent over the last six weeks, hitting a nine-month high last Friday. Its 14-day relative strength index was at 72.34, above the 70 level that signals an overbought condition.

MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> nudged up 0.1 percent, driven higher by surging Shanghai shares, as most Asian bourses were shut for Christmas.

The Shanghai Composite Index <.ssec> soared over 2 percent to five-month highs as investors bought property stocks on mounting optimism about the sector. Taiwan shares <.twii> jumped 1.3 percent on gains in technology and financial shares.

Asset performance in 2012: http://link.reuters.com/muc46s

2012 commodities returns: http://link.reuters.com/faz36s

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

U.S. HOLDS 2013 KEY

Goro Ohwada, president and CEO at Japan-based fund of hedge funds Aino Investment Corp, said investors were likely to focus on economic fundamentals and the United States for cues on investment direction in 2013.

"There is a feeling that an investment strategy based on economic fundamentals may finally work next year, with asset prices more closely reflecting fair value. The problem is, we don't know yet which asset is a better bet than others," Ohwada said, adding that oil and gold appeared to be near their highs.

Naohiro Niimura, a partner at research and consulting firm Market Risk Advisory, said commodities and energy prices will likely move in tight ranges in 2013, with investors eyeing political events, including the U.S. fiscal cliff outlook, Italian parliamentary election set for February 24-25, and Germany's elections in September.

"The macroeconomic policies taken this year around the world to support growth are expected to result in a moderate recovery in 2013 to reduce an excessive downside risk to prices. This will likely keep commodities, gold and energy prices near their highs," Niimura said.

(Additional reporting by Ayai Tomisawa in Tokyo; Editing by Edmund Klamann and Daniel Magnowski)

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Egypt approves new constitution drafted by Mursi allies

CAIRO (Reuters) - Egyptian voters overwhelmingly approved a constitution drafted by President Mohamed Mursi's allies, results announced on Tuesday showed, proving that liberals, leftists and Christians have been powerless to halt the march of Islamists in power.

Final elections commission figures showed the constitution adopted with 63.8 percent of the vote in the referendum held over two days this month, giving Mursi's Islamists their third straight electoral victory since veteran autocrat Hosni Mubarak was toppled in a 2011 revolution.

Opposition groups had taken to the streets to block what they see as a move to ram through a charter that mixes politics and religion dangerously and ignores the rights of minorities.

Mursi says the text - Egypt's first constitution since Mubarak's fall - offers enough protection for minorities, and adopting it quickly is necessary to end two years of turmoil and political uncertainty that has wrecked the economy.

"I hope all national powers will now start working together now to build a new Egypt," Murad Ali, a senior official in the Muslim Brotherhood's Freedom and Justice Party, told Reuters.

"I see this as the best constitution in Egypt's history."

In a sign that weeks of unrest have taken a further toll on the economy, the government ordered new restrictions on foreign currency apparently designed to prevent capital flight. Leaving or entering with more than $10,000 cash is now banned.

Two years since waves of unrest broke out across the Middle East and North Africa - sweeping away long-entrenched rulers in Tunisia, Libya and Yemen as well as Egypt - well-organized Islamist parties have emerged as the main beneficiaries.

Urban secularists and liberals who were behind the revolts complain that their success has been hijacked.

"We need a better constitution," said Khaled Dawood, an opposition spokesman. "It does not represent all Egyptians."

Mursi's opponents say the new constitution could allow clerics to intervene in lawmaking, while offering scant protections to minorities and women. Mursi dismisses those criticisms, and many Egyptians are fed up with street protest movements that have prevented a return to normality.

Immediately after the announcement, a small group of protesters set tires on fire and blocked traffic near the central Tahrir square, the cradle of Egypt's uprising, but there were no immediate signs of violence or major demonstrations.

Washington, which provides billions of dollars a year in military and other support for Egypt and regards it as a pillar of security in the Middle East, called on Egyptian politicians to bridge divisions and on all sides to reject violence.

"President Mursi, as the democratically elected leader of Egypt, has a special responsibility to move forward in a way that recognizes the urgent need to bridge divisions," State Department spokesman Patrick Ventrell said. He noted that many Egyptians had voiced "significant concerns" over the constitutional process.

WORSENING ECONOMY

The government says its opponents are worsening the economic crisis by prolonging political upheaval. It has pledged to impose unpopular tax increases and spending cuts to win a loan package from the International Monetary Fund.

The ban on travelling with more than $10,000 in cash followed a pledge by the central bank to take unspecified measures to protect Egyptian banks. Some Egyptians have begun withdrawing their savings in fear of more restrictions.

"I am not going to put any more money in the bank and neither will many of the people I know," said Ayman Osama, father of two young children.

He said he had taken out the equivalent of about $16,000 from his account this week and planned to withdraw more, adding that he had also told his wife to buy more gold jewellery.

The "yes" vote paves the way for a parliamentary election in about two months, setting the stage for another battle between surging Islamists and their fractious opponents.

The final result, announced by the election commission, matched - to the last decimal place - an earlier unofficial tally announced by Mursi's Muslim Brotherhood.

But the opposition said it was disappointed - it had appealed for the result to be amended to reflect what it described as major vote violations during the two-round vote.

Officials said there were no violations serious enough to change the result significantly. "We have seriously investigated all the complaints," said judge Samir Abu el-Matti of the Supreme Election Committee. The final turnout was 32.9 percent.

SENSE OF CRISIS

The referendum has sharpened painful divisions in the Arab world's most populous nation and a growing atmosphere of crisis has gripped Egypt's polarized society.

Anxiety about the economy deepened this week when Standard and Poor's cut Egypt's long-term credit rating. Prime Minister Hisham Kandil told the nation of 83 million on Tuesday the government was committed to fixing the economy.

"The main goals that the government is working towards now is plugging the budget deficit, and working on increasing growth to boost employment rates, curb inflation, and increase the competitiveness of Egyptian exports," he said.

The referendum follows Islamist victories in parliamentary and presidential elections, representing a decisive shift in a country at the heart of the Arab world where Mursi's Muslim Brotherhood was suppressed for generations by military rulers.

However, secularist and liberal opposition members hope they can organize better in time for the next parliamentary vote.

Hossam El-Din Ali, a 35-year-old newspaper vendor in central Cairo, said he agreed the new constitution would help bring some political stability but like many others he feared the possible economic austerity measures lying ahead.

"People don't want higher prices. People are upset about this," he said. "There is recession, things are not moving. But I am wishing for the best, God willing."

(Additional reporting by Patrick Werr, Tamim Elyan, Ahmed Tolba and Marwa Awad; Writing by Maria Golovnina)

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Netflix suffers Christmas Eve outage, points to Amazon

NEW YORK (Reuters) – An outage at one of Amazon‘s web service centers hit users of Netflix Inc.’s streaming video service on Christmas Eve and was not fully resolved until Christmas day, a spokesman for the movie rental company said on Tuesday.

The outage impacted Netflix subscribers across Canada, Latin America and the United States, and affected various devices that enable users to stream movies and television shows from home, Netflix spokesman Joris Evers said. Such devices range from gaming consoles such as Nintendo Wii and PlayStation 3 to Blu-ray players.

Evers said that the issue was the result of an outage at an Amazon Web Services‘ cloud computing center in Virginia, and started at about 12:30 p.m. PST (2030 GMT) on Monday and was fully restored Tuesday morning, although streaming was available for most users late on Monday.

“We are investigating exactly what happened and how it could have been prevented,” Evers said.

“We are happy that people opening gifts of Netflix or Netflix capable devices can watch TV shows and movies and apologize for any inconvenience caused last night,” he added.

An outage at Amazon Web Services, or AWS, knocked out such sites as Reddit and Foursquare in April of last year.

Amazon Web Services was not immediately available for comment. Evers, the Netflix spokesman, declined to comment on the company’s contracts with Amazon.

(Reporting by Sam Forgione; Editing by Leslie Gevirtz)

Internet News Headlines – Yahoo! News

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Predicting who's at risk for violence isn't easy

CHICAGO (AP) — It happened after Columbine, Virginia Tech, Aurora, Colo., and now Sandy Hook: People figure there surely were signs of impending violence. But experts say predicting who will be the next mass shooter is virtually impossible — partly because as commonplace as these calamities seem, they are relatively rare crimes.

Still, a combination of risk factors in troubled kids or adults including drug use and easy access to guns can increase the likelihood of violence, experts say.

But warning signs "only become crystal clear in the aftermath, said James Alan Fox, a Northeastern University criminology professor who has studied and written about mass killings.

"They're yellow flags. They only become red flags once the blood is spilled," he said.

Whether 20-year-old Adam Lanza, who used his mother's guns to kill her and then 20 children and six adults at their Connecticut school, made any hints about his plans isn't publicly known.

Fox said that sometimes, in the days, weeks or months preceding their crimes, mass murderers voice threats, or hints, either verbally or in writing, things like "'don't come to school tomorrow,'" or "'they're going to be sorry for mistreating me.'" Some prepare by target practicing, and plan their clothing "as well as their arsenal." (Police said Lanza went to shooting ranges with his mother in the past but not in the last six months.)

Although words might indicate a grudge, they don't necessarily mean violence will follow. And, of course, most who threaten never act, Fox said.

Even so, experts say threats of violence from troubled teens and young adults should be taken seriously and parents should attempt to get them a mental health evaluation and treatment if needed.

"In general, the police are unlikely to be able to do anything unless and until a crime has been committed," said Dr. Paul Appelbaum, a Columbia University professor of psychiatry, medicine and law. "Calling the police to confront a troubled teen has often led to tragedy."

The American Academy of Child & Adolescent Psychiatry says violent behavior should not be dismissed as "just a phase they're going through."

In a guidelines for families, the academy lists several risk factors for violence, including:

—Previous violent or aggressive behavior

—Being a victim of physical or sexual abuse

—Guns in the home

—Use of drugs or alcohol

—Brain damage from a head injury

Those with several of these risk factors should be evaluated by a mental health expert if they also show certain behaviors, including intense anger, frequent temper outbursts, extreme irritability or impulsiveness, the academy says. They may be more likely than others to become violent, although that doesn't mean they're at risk for the kind of violence that happened in Newtown, Conn.

Lanza, the Connecticut shooter, was socially withdrawn and awkward, and has been said to have had Asperger's disorder, a mild form of autism that has no clear connection with violence.

Autism experts and advocacy groups have complained that Asperger's is being unfairly blamed for the shootings, and say people with the disorder are much more likely to be victims of bullying and violence by others.

According to a research review published this year in Annals of General Psychiatry, most people with Asperger's who commit violent crimes have serious, often undiagnosed mental problems. That includes bipolar disorder, depression and personality disorders. It's not publicly known if Lanza had any of these, which in severe cases can include delusions and other psychotic symptoms.

Young adulthood is when psychotic illnesses typically emerge, and Appelbaum said there are several signs that a troubled teen or young adult might be heading in that direction: isolating themselves from friends and peers, spending long periods alone in their rooms, plummeting grades if they're still in school and expressing disturbing thoughts or fears that others are trying to hurt them.

Appelbaum said the most agonizing calls he gets are from parents whose children are descending into severe mental illness but who deny they are sick and refuse to go for treatment.

And in the case of adults, forcing them into treatment is difficult and dependent on laws that vary by state.

All states have laws that allow some form of court-ordered treatment, typically in a hospital for people considered a danger to themselves or others. Connecticut is among a handful with no option for court-ordered treatment in a less restrictive community setting, said Kristina Ragosta, an attorney with the Treatment Advocacy Center, a national group that advocates better access to mental health treatment.

Lanza's medical records haven't been publicly disclosed and authorities haven't said if it is known what type of treatment his family may have sought for him. Lanza killed himself at the school.

Jennifer Hoff of Mission Viejo, Calif. has a 19-year-old bipolar son who has had hallucinations, delusions and violent behavior for years. When he was younger and threatened to harm himself, she'd call 911 and leave the door unlocked for paramedics, who'd take him to a hospital for inpatient mental care.

Now that he's an adult, she said he has refused medication, left home, and authorities have indicated he can't be forced into treatment unless he harms himself — or commits a violent crime and is imprisoned. Hoff thinks prison is where he's headed — he's in jail, charged in an unarmed bank robbery.

___

Online:

American Academy of Child & Adolescent Psychiatry: http://www.aacap.org

___

AP Medical Writer Lindsey Tanner can be reached at http://www.twitter.com/LindseyTanner

Read More..

Start of "Santa Claus rally" dampened by "cliff' worries

NEW YORK (Reuters) - U.S. stocks edged lower on Monday as caution over the potential for volatility driven by worries about the U.S. "fiscal cliff" dampened enthusiasm at the start of a seasonally strong period for equities.

Investors are betting Congress will reach a deal to avert most of the austerity measures due to come into force at the start of next year. That has led to the best year for stocks since the post-financial crisis rebound. But those gains may be quickly reversed if a deal is not reached soon.

The S&P 500 index posted its biggest drop in more than a month on Friday as a Republican plan to avoid the cliff - $600 billion in tax hikes and spending cuts that could tip the U.S. economy into recession - failed to gain traction on Thursday night.

Sharp moves like that highlight how headlines from Washington can whipsaw markets, especially during the thinly traded period over the Christmas holiday.

Still, with the S&P 500 up 0.7 percent in December and on course for its strongest month since September, some analysts are predicting that stocks will find their footing during a market seasonality known as the "Santa Claus rally."

"Right now we've seen some very constructive action in the market so I think that bodes well for this being a positive seasonal 'Santa' period over the coming seven days," said Ari Wald, a technical analyst at The PrinceRidge Group.

He noted an all-time high in the NYSE advance-decline line, which compares advancing and declining stocks, as indication of strong participation in the rally off November lows.

"Pull-backs are buying opportunities," said Wald. "There has been really great participation on this move, a lot of small- and mid-cap stocks behaving well, pushing out to the upside; we're seeing some good leadership from offensive sectors of the market as well."

A high ratio of advancing stocks to declining issues shows there is broad participation across the equity market.

The Santa seasonality covers the last five trading days of the year and the first two of the new year. Since 1928, the S&P 500 has averaged a gain of 1.8 percent during this period and risen 79 percent of the time, according to data from PrinceRidge.

The Dow Jones industrial average <.dji> dropped 51.76 points, or 0.39 percent, to 13,139.08. The Standard & Poor's 500 Index <.spx> fell 3.49 points, or 0.24 percent, to 1,426.66. The Nasdaq Composite Index <.ixic> lost 8.41 points, or 0.28 percent, to 3,012.60.

The S&P 500 is up more than 13 percent for the year, having recovered nearly all the losses suffered in the wake of the U.S. election. The yearly gain would be the best since 2009.

Some U.S. lawmakers expressed concern on Sunday the country would go over the cliff, as some Republicans charged that was President Barack Obama's goal. Talks are stalled with Obama and House of Representatives Speaker John Boehner out of Washington for the holidays.

"It does seem like we are continuing through the same drift of the same thing we've had the past couple of weeks - 'cliff' talk," said Nick Scheumann, wealth partner at Hefty Wealth Partners in Auburn, Indiana.

"You can't trade on what you don't know and we truly don't know what they are going to do," he said.

Congress is expected to return to Washington next Thursday as President Barack Obama returns from a trip to Hawaii. As the deadline draws closer, a 'stop-gap' deal appears to be the most likely outcome of any talks.

Trading volume was muted, with U.S. equity markets closing at 1 p.m. (1800 GMT) ahead of the Christmas Day holiday on Tuesday.

In addition, a number of European markets operated on a shortened session, with other markets closed.

U.S. retailers may not see a sales surge from this weekend as ho-hum discounts and fears about imminent tax hikes and cuts in government spending give Americans fewer reasons to open their wallets in the last few days before Christmas.

Aegerion Pharmaceuticals Inc said the U.S. Food and Drug Administration approved Juxtapid capsules in patients with homozygous familial hypercholesterolemia, but will conduct a post-approval study to test long-term safety and efficacy. Shares fell 1.8 percent to $25.25.

Herbalife Ltd dipped 4.4 percent to $26.06 after the company said it expects to exceed its previously announced repurchase authorization guidance and has retained Moelis & Company as its strategic adviser. The declines put the stock on track for a ninth straight decline.

Yum Brands Inc advanced 1.8 percent to $65.01 after Shanghai's food safety authority said the level of antibiotics and steroids in the company's KFC chicken was within official limits.

(Reporting By Edward Krudy; Editing by Chizu Nomiyama and Dan Grebler)

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Afghan policewoman kills coalition contractor in Kabul: NATO

KABUL (Reuters) - An Afghan woman wearing a police uniform shot dead on Monday a civilian contractor working for Western forces in the police chief's compound in Kabul, NATO said.

The incident is likely to raise troubling questions about the direction of an unpopular war.

It appeared to be the first time that a woman member of Afghanistan's security forces carried out such an attack.

There were conflicting reports about the victim.

A spokesman for the NATO-led International Security Assistance Force (ISAF) said a U.S. police adviser was killed by an Afghan policewoman. Then ISAF said in a statement only that it was a "contracted civilian employee" who was killed.

Mohammad Zahir, head of the police criminal investigation department, described the incident as an "insider attack" in which Afghan forces turn their weapons on Western troops they are supposed to be working with. He initially said the victim was a U.S. soldier.

After more than 10 years of war, militants are capable of striking Western targets in the heart of the capital, and foreign forces worry that Afghan police and military forces they are supposed to work with can suddenly turn on them.

The policewoman approached her victim as he was walking in the heavily guarded police chief's compound in a bustling area of Kabul. She then drew a pistol and shot him once, a senior police official told Reuters.

The police complex is close to the Interior Ministry where in February, two American officers were shot dead at close range at a time anger gripped the country over the burning of copies of the Muslim holy book at a NATO base.

"She is now under interrogation. She is crying and saying 'what have I done'," said the official, of the police officer who worked in a section of the Interior Ministry responsible for gender awareness issues.

TIPS FOR TROOPS

The insider incidents, also known as green-on-blue attacks, have undermined trust between coalition and Afghan forces who are under mounting pressure to contain the Taliban insurgency before most NATO combat troops withdraw by the end of 2014.

Security responsibilities in a country plagued by conflict for decades will be handed to Afghan security forces.

Many Afghans fear a civil war like one dominated by warlords after the withdrawal of Soviet occupying forces in 1989 could erupt again, or the Taliban will make another push to seize power if they reject a nascent peace process.

At least 52 members of the NATO-led International Security Assistance Force have been killed this year by Afghans wearing police or army uniforms.

Insider attacks now account for one in every five combat deaths suffered by NATO-led forces in Afghanistan, and 16 percent of all U.S. combat casualties, according to 2012 data.

Hoping to stop the increase in the attacks, Afghan Defense Ministry officials have given their troops tips in foreign culture.

They are told not to be offended by a hearty pat on the back or an American soldier asking after your wife's health.

NATO attributes only about a quarter of the attacks to the Taliban, saying the rest are caused by personal grievances and misunderstandings. Last year, there were 35 deaths in such attacks.

Afghan forces are vulnerable to "insider attacks" of their own. In Jawzjan province in the north, a police commander shot and killed five comrades overnight, the Interior Ministry said.

Last year, he defected from the Taliban, said the ministry.

Taliban spokesman Zabihullah Mujahid said in a statement that the commander had rejoined the Taliban. That could not be confirmed.

(Writing by Michael Georgy; Editing by Robert Birsel)

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