US economic growth improves to 2 pct. rate in Q3

WASHINGTON (AP) -- The U.S. economy expanded at a slightly faster 2 percent annual rate from July through September, buoyed by an uptick in consumer spending and a burst of government spending.
Growth improved from the 1.3 percent rate in the April-June quarter, the Commerce Department said Friday.
The pickup in growth may help President Barack Obama's message that the economy is improving. Still, growth remains too weak to rapidly boost hiring. And the 1.74 percent rate for 2012 so far trails last year's 1.8 percent growth, a point GOP nominee Mitt Romney will emphasize.
The report is the last snapshot of economic growth before Americans choose a president in 11 days.
The economy improved because consumer spending rose 2 percent in the July-September quarter, up from 1.5 percent in the second quarter. Spending on homebuilding and renovations increased more than 14 percent. And federal government spending expanded sharply on the largest increase in defense spending in more than three years.
Growth was held back by the first drop in exports in more than three years and flat business investment in equipment and software.
The economy was also slowed by the severe drought this summer in the Midwest. That sharply cut agriculture stockpiles and reduced growth by nearly a half-point.
The government's report covers gross domestic product. GDP measures the nation's total output of goods and services — from restaurant meals and haircuts to airplanes, appliances and highways.
The first of three estimates of growth for the July-September quarter sketched a picture that's been familiar all year: The economy is growing at a tepid rate, slowed by high unemployment and corporate anxiety over an unresolved budget crisis and a slowing global economy.
While growth remains modest, the factors supporting the economy have changed. Exports and business investment drove growth for most of the recovery, but are now fading. Meanwhile, consumer spending has ticked up and housing is adding to growth after a six-year slump.
Consumer spending drives nearly 70 percent of economic activity.
Businesses have grown more cautious since spring, in part because customer demand has remained modest and exports have declined as the global economy has slowed.
Many companies worry that their overseas sales could dampen further if recession spreads throughout Europe and growth slows further in China, India and other developing countries. Businesses also fear the tax increases and government spending cuts that will kick in next year if Congress doesn't reach a budget deal.
Since the recovery from the Great Recession began in June 2009, the U.S. economy has grown at the slowest rate of any recovery in the post-World War II period. And economists think growth will remain sluggish at least through the first half of 2013. Some analysts believe the economy will start to pick up in the second half of next year.

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Disney buying Lucasfilm for $4.05 billion

LOS ANGELES (AP) — Disney is paying $4.05 billion to buy Lucasfilm Ltd., the production company behind "Star Wars," from its chairman and founder, George Lucas. It's also making a seventh movie in the "Star Wars" series called "Episode 7," set for release in 2015, with plans to follow it with Episodes 8 and 9 and then one new movie every two or three years.
The Walt Disney Co. announced the blockbuster agreement to make the purchase in cash and stock Tuesday. The deal includes Lucasfilm's prized high-tech production companies, Industrial Light & Magic and Skywalker Sound, as well as rights to the "Indiana Jones" franchise.
Disney CEO Bob Iger said in a statement that the acquisition is a great fit and will help preserve and grow the "Star Wars" franchise.
"The last 'Star Wars' movie release was 2005's 'Revenge of the Sith' — and we believe there's substantial pent-up demand," Iger said.
Kathleen Kennedy, the current co-chairman of Lucasfilm, will become the division's president and report to Walt Disney Studios Chairman Alan Horn. Lucas will be creative consultant on new "Star Wars" films.
Lucas said in a statement, "It's now time for me to pass 'Star Wars' on to a new generation of filmmakers."
The deal brings Lucasfilm under the Disney banner with other brands including Pixar, Marvel, ESPN and ABC, all companies that Disney has acquired over the years. A former weatherman who rose through the ranks of ABC, Iger has orchestrated some of the company's biggest acquisitions, including the $7.4 billion purchase of animated movie studio Pixar in 2006 and the $4.2 billion acquisition of comic book giant Marvel in 2009.
Disney shares were not trading with stock markets closed due to the impact of Superstorm Sandy in New York.

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Has Obama Been Good for Millionaires?

The question of whether Americans are better off than they were four years ago depends, of course, on the American.
For the 12 million unemployed, the answer is most certainly no.
But for many of America's millionaires, the answer may be more affirmative.
A new study from WealthInsight, the London-based wealth-research and data firm (and yes, they are non-partisan), showed that the United States added 1.1 million millionaires between Jan. 1, 2009 and the end of 2011, the latest period measured. There were 5.1 million millionaires in America at the end of 2011, compared with around 4 million at the end of 2008.
That works out to more than 1,000 millionaires a day under the Obama administration. (They defined millionaires as people with total net worth of $1 million or more, excluding primary residence).
(Read more: Rich Will Spend More Under Romney: Poll)
"It's true that Obama has been good for millionaires, at least in absolute terms," said Andrew Amoils, analyst at WealthInsight. "He certainly hasn't been bad for millionaires."
Amoils said that quantitative easing and financial bailouts especially helped the finance sector, which accounts for the largest share of millionaires. It also helped that markets recovered in 2009.
The timeframe is worth noting. Measured against the 2007 peak, when 5.27 million Americans had a net worth of at least $1 million, the nation lost 165,360 millionaires. Their combined wealth is down six percent, to $18.8 trillion from a peak of more than $20 trillion in 2007.
We don't know how 2012 will turn out, though if stock markets continue to strengthen, the millionaire count for 2012 is likely to increase. Wealth Insight says the number of millionaires in America will grow to more than six million by 2016, and their combined fortunes will jump 25 percent over the same period.
(Read more: Millionaires Give Nine Percent of Income to Charity)
Where did all the millionaires come from between 2008 and 2011?
Mainly from retail, tech and finance -- and in both blue and red states.
Of the sectors adding the largest number of people worth $30 million or more, the retail, fashion, and luxury goods sector ranked first. That was followed by energy and utilities, then tech, telecoms and finance. Transportation and construction saw the biggest drops.
The number of people worth $30 million or more grew 26 percent in Connecticut since 2008, 20 percent in Kansas, 12 percent in Michigan, showing that the wealth creation was nationwide.

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Obama Wins 2012 Election: Why Your Taxes Are Going Up

When President Obama and the new Congress begin to tackle important legislation and federal policy in January, one of the key issues will be how to reform America's byzantine tax code.
Obama campaigned on a platform to raise taxes on the wealthiest Americans, declaring that millionaires and billionaires need to "pay their fair share." The president proposed the highly controversial "Buffett Rule," which would make sure those individuals earning more than $1 million a year would pay at least 30% of their income in federal taxes.
Related: Do the Rich Have a Moral Obligation to Pay Higher Taxes? Gov. Jerry Brown Says 'Yes'
The top individual tax rate is currently 35% but few U.S. households and individuals actually pay that much; various tax deductions and loopholes reduce one's tax burden.
According to the Obama campaign, the richest 400 taxpayers in 2008 (who each made more than $110 million that year) paid an average income tax rate of just 18%. In 2009 over 20,000 U.S. households with more than $1 million in income paid a federal tax rate of less than 15%.
Obama has vowed to raise the top income tax rate for individuals to 39.6% and let the Bush-era tax breaks end for the highest income earners. The majority of Americans — those who are lower to middle class — could also see a 2% tax increase if Congress allows the temporary payroll tax holiday to expire at the end of the year.
Related: Here's Why Your Taxes Are Going Up 2% Next Year: Just Explain It
Nearly half of voters support raising taxes on incomes over $250,000, according to Tuesday night's exit polls.
Len Burman, a professor of public affairs at Syracuse University and a co-founder of the bipartisan Tax Policy Center, believes higher tax rates play just a small role in resolving the nation's budget woes.
"In the long term [Obama] is going to need to raise taxes on more than just the rich," Burman says in an interview with The Daily Ticker. "The budget problem isn't going to be solved without broader-based tax increases, preferably done in the context of tax reform and also serious entitlement reform. We're not going to be able to solve this on the tax side alone."
Burman, who recently co-wrote the new book "Taxes in America: What Everyone Needs to Know," says tax rates do not need to be raised for any income group if Congress and the White House would agree on one simple change: raising the capital gains rate, i.e. the profits from the sale of an investment. Assets, such as stocks, art or real estate, that are held for at least a year are currently taxed at a special 15% rate; Obama wants to raise that to 20%.
"The problem with a low tax rate on capital gains is not that it allows Mitt Romney and Warren Buffett to pay very low taxes but that it creates this huge opportunity for tax sheltering," he notes. "There's a whole industry that's devoted to coming up with these schemes. [Raising capital gains rates] could make the tax system more progressive and allow for lower tax rates" and a reduction in the deficit Burman says.
Obama's tax proposal also targets the Alternative Minimum Tax, the Estate Tax and as well as many personal tax credits and itemized deductions. Obama would make permanent the 2007 AMT patch and index it for inflation. He would raise the estate tax to 45% from 35% on estates worth more than $3.5 million. He would lower the corporate tax rate to 28% from 35% and provide a refundable $3,000 credit per added employee for companies that expand their workforce. He would tax carried interest as ordinary income.
Related: Corporate Tax Loopholes=Corporate Socialism: Pulitzer Prize Winner David Cay Johnston
A divided Congress refused to compromise with Obama during his first term and could very well dismiss the president's tax reforms for the next four years. Republicans are loathe to raise taxes by even a penny and Obama has said he would veto any budget bills that did not include tax increases. Neither party wants to raise taxes in a weak economy. But the options available for reducing the deficit and generating new revenue are few and far between

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Senators Watch ‘Lincoln’ with Steven Spielberg and Daniel Day-Lewis

Grab the popcorn: Its movie night tonight in the Senate.

The Senate has taken an official recess from floor debate for a few hours to screen the movie “Lincoln” in the Capitol Visitors Center within the Capitol complex.

Appearing with director Steven Spielberg and actor Daniel Day-Lewis on Capitol Hill this evening, Senate Majority Leader Harry Reid, D-Nev., said that he hopes the message of the movie with resonate with senators and the American people.

“I hope everybody who shared his anti-political mood will go out there and see Lincoln. The movie portrays a nobility of politics in exactly the right way,” Reid said.

All senators and their spouses were invited to tonight’s special screening. Without mentioning the fight over the fiscal cliff going on within the halls of Congress as the clock clicks closer to a deadline, Reid said tonight’s screening is an opportunity for “bipartisanship,” among the members.

“For me, it’s what I work with every day but it’s good the American people have seen or will see what the great Abraham Lincoln did to get things done,” Reid said. “It’s remarkable.”

Spielberg said he was honored to show his movie in the Senate and to be able to see ‘”both sides sitting in the same room watching a president put the people out in front of the abyss.”

Because even senators need snacks, a special waiver was granted by the Senate Rules Committee to allow popcorn in for the screening.

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Videogames under fire, Hollywood lays low after school shooting

LOS ANGELES (Reuters) - The multi-billion-dollar videogame industry came under scrutiny on Wednesday after Hollywood canceled, postponed or played down a slew of movies and TV shows with violent content in the wake of last week's shooting at a Connecticut elementary school.

In Washington, Senator John Rockefeller called for a national study of the impact of violent videogames on children and a review of the rating system.

Although investigators in Newtown, Connecticut, have given no motive for Friday's shooting rampage, some U.S. media have reported that the 20-year-old gunman played popular videogame "Call of Duty" - in which players conduct simulated warfare missions - in the basement of his home.

The gunman, Adam Lanza, killed himself at the scene after gunning down 20 young children, six school employees and his mother.

Rockefeller said he had long been concerned about the impact of violent games and videos on children.

"Major corporations, including the video game industry, make billions on marketing and selling violent content to children. They have a responsibility to protect our children," Rockefeller said in a statement.

The Entertainment Software Association, which represents the $78 billion U.S. videogame industry, on Wednesday offered its "heartfelt prayers and condolences" to the Newtown families.

But it said in a statement that "the search for meaningful solutions must consider the broad range of actual factors that may have contributed to this tragedy.

"Any such study needs to include the years of extensive research that has shown no connection between entertainment and real-life violence," the association said.

NEW 'CALL OF DUTY,' 'HALO' GAMES RAKE IN BILLIONS

Activision Blizzard's latest title in its "Call of Duty" franchise - "Call of Duty: Black Ops II" - hit $1 billion in sales two weeks after its launch last month.

Other popular videogames include Microsoft's "Halo 4," in which players kill evil aliens. The game racked up $220 million in global sales on its launch day in November.

Mike Hickey, an analyst at National Alliance Capital Markets, said backlashes against videogames were not rare, but he was unaware of an instance of games being pulled off store shelves in the past.

When the Columbine school shooting happened in 1999, there was a similar outcry because the two perpetrators were students who played the shooter game "Doom," Hickey told Reuters.

Executives at Hollywood movie studios and TV networks have mostly laid low this week as Americans seek answers to the Newtown slaughter, and discuss how to prevent similar gun violence.

However, content seen as sensitive has been pulled from the airwaves, including an episode of the SyFy TV series "Haven" that contained violent scenes in a high school setting, and the premiere next week of a TLC show called "Best Funeral Ever."

Discovery Channel canceled a third season of its reality series "American Guns" about a family of gun makers. Some radio stations stopped playing pop star Ke$ha's bubbly new single "Die Young" to avoid any potential offense.

Glitzy red carpet premieres for violent upcoming new movies "Jack Reacher," starring Tom Cruise, and "Django Unchained" starring Jamie Foxx, were canceled out of respect for the Newtown victims, but both movies will open in theaters as planned in the next seven days.

INSENSITIVE TODAY, OK TOMORROW?

The Parents TV Council praised the response of the entertainment industry this week, but said it shouldn't be confined to the immediate aftermath of such tragedies.

"If a television network changes its programming because of content that could be insensitive today, why would that same content be appropriate at a later time?," council president Tim Winter said in a statement.

"If producers and performers rightly question whether their industry is complicit in creating a violent media culture that feeds real-life tragedies, why would there be a later time to produce and distribute more of it?," Winter added.

Most major Hollywood stars have remained silent about the potential influence of violent movies on U.S. society. But "Django Unchained" star Foxx was quoted as saying the movie industry should not shirk its responsibility.

"We cannot turn our back and say that violence in films or anything that we do doesn't have a sort of influence," Foxx was quoted as saying while promoting the film in New York.

Director Quentin Tarantino called the Newtown shootings "a horrible tragedy," but in an interview with CNN on Monday he declined to link screen violence with real life events.

"This has gone back all the way down to Shakespeare's days ... when there's violence in the street, the cry becomes 'blame the playmaker.' And you know, I actually think that's a very facile argument to pin on something that's a real life tragedy," Tarantino said.

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'Homeland' star Claire Danes gives birth to first child

LOS ANGELES (Reuters) - Emmy-winning actress Claire Danes has given birth to her first child, a boy, the publicist for the "Homeland" star said on Wednesday.

Cyrus Michael Christopher Dancy was born on Monday to Danes, 33, and her husband, British actor Hugh Dancy.

Danes' performance as CIA operative Carrie Matheson on Showtime's "Homeland" series scored her an Emmy win in September, while the psychological thriller won the TV industry's highest honor of best drama series.

Danes is nominated for her second Golden Globe award in the role at the Hollywood awards show in January. She also has won multiple awards for her past work on 2010 TV film "Temple Grandin," and as a 15-year-old on the 1990s coming-of-age television drama "My So-Called Life."

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'Lincoln' at the Capitol draws director and star

WASHINGTON (AP) — Today's lawmakers might be excused for thinking they've seen this movie: A recently re-elected president spars with a quarrelsome Congress over an issue that roils the nation.

The so-called fiscal cliff wasn't at the core of the film screened Wednesday in the Capitol for lawmakers. The movie "Lincoln" explores the political machinations involving President Abraham Lincoln and Congress in 1865 as they considered the 13th Amendment, which abolished slavery.

On hand before the evening screening at the U.S. Capitol Visitors Center were the movie's director, Steven Spielberg, and its star, Daniel Day-Lewis, who portrays Lincoln. Both also met privately with Senate Majority Leader Harry Reid.

Earlier Wednesday, reporters and congressional staff members filled a Senate corridor to get a view of Day-Lewis, considered a top contender for an Oscar.

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Book Talk: The sin of envy on a small Greek island

TOKYO (Reuters) - After a Greek bride is abandoned at the altar and her prospective bridegroom is found blinded from an acid attack, local villagers are baffled until Hermes Diaktoras, a portly man in white tennis shoes, arrives to help.

So begins "The Doctor of Thessaly," the third in a series of detective stories by British-born author Anne Zouroudi that feature Hermes, who even as he works to unravel the crime has more than a hint of mystery about himself.

Zouroudi, who married a Greek fisherman and lived for a while in the remote Greek islands, spoke with Reuters about the origins of her sleuth and the themes that underpin her series.

Q: What started the series?

A: "When I came back to England with my tail between my legs and a failed marriage and a small child in tow, I wrote the first book in the series, 'The Messenger of Athens' kind of to get the issues out for myself, to understand for myself what had gone wrong and why it hadn't been this idyll. I was expecting to live the rest of my life there. So I think 'The Messenger of Athens' is quite a bleak book, really, sort of explaining to myself and to the world what I found in a very isolated and very tiny Greek community.

"But the lead character in that book is obviously slightly worldly and I based him on my interest in Jungian archetypes, actually. The idea of this figure of justice had immense appeal to me and I think he really appealed to readers as well. So when the first book was published, Bloomsbury really liked that character and said, come on, we can do more with him.

"So because the first book was based around lust and love, and there were very blurred lines between lust and love, I thought, you know, lust is supposed to be a sin so we could go through the seven deadly sins. That's how the series was born."

Q: You said you were working through issues, why choose the detective story form?

A: "Because I wanted to write something that I would like to read, and I love to read crime ... When I travel, I like to read books that are about the place that I'm visiting, and yet I could find very few novels of any description based in Greece.

"It seemed to be a market where there was a bit of a dearth, actually. So I really wrote originally a book that I would like to read, and happily other readers seemed to like them too."

Q: You said Hermes was kind of a Jungian archetype - how else did you come up with him?

A: "The story of his appearance is actually quite an interesting one. In the Greek islands in winter, there isn't very much to do. One Sunday afternoon, my ex-husband and I took a walk to the local cemetery because where else are you going to go? When we got there, there was another couple there, and one of them was a man I didn't know. I hadn't seen him before, which once again is very unusual in small Greek islands in winter.

"He was a very elegant man. He was wearing a suit and a raincoat, and he had owlish glasses and a quite distinctive hairstyle, distinctive longish gray curls. He was standing on the cemetery wall and looking down onto the sea. He was such a striking character that when I came to think of a description of Hermes he immediately came to mind. But rather unglamorously, he turned to out to be the new manager of the bank of the island where I was living ... I should say, though, that the bank manager was not wearing the white tennis shoes, they were another quirky detail that came from childhood."

Q: So then he gradually developed?

A: "The fact is, through the books Hermes never changes because it's the nature of who he is and what he is, not to change. Readers can make of him what they will, but to me, he is an incarnation of the god Hermes. My theory on the gods is this: as we have slowly forgotten about them, the immortals have begun to age, very slowly. So over millennia Hermes has begun to age and become quite portly, he is going a bit gray. My theory is that if we started to remember the old gods -- and I think to an extent that's happening (and) the Greek myths are becoming quite voguish at the moment -- perhaps he might reverse and revert to his original golden youth and become young and dashingly handsome again."

Q: Are you doing books on all the seven deadly sins?

A: "Yes, I've just finished the seventh. It's out next June in the U.K. So we're at a bit of a crossroads with Hermes right now, where should we go next?"

Q: So you're not finished with him?

A: "No, I don't think so, because I have a quite big fan base here in the U.K and abroad. People are just loving the character. They love the idea of this character who just turns up from nowhere, fixes everything and then quietly melts away ... It's at the heart of all crime fiction, really, but I think because Hermes is not a policeman and it's based more on natural justice rather than legal justice, people find that really appealing. But now having done the seven deadly sins, where should he go next? I'm thinking the Ten Commandments, maybe. We're still thinking about it."

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Smoking in pregnancy tied to lower reading scores

NEW YORK (Reuters Health) - Babies exposed to their mother's cigarette smoke in the womb later perform more poorly on reading comprehension tests, according to a new study.

"It's not a little difference - it's a big difference in accuracy and comprehension at a critical time when children are being assessed, and are getting a sense of what it means to be successful," lead author Dr. Jeffrey Gruen of Yale University told Reuters Health.

In the study, researchers found that children born to mothers who smoked more than one pack per day struggled on tests specifically designed to measure how accurately a child reads aloud and if she understands what she read.

On average, children exposed to high levels of nicotine in utero -- defined as the minimum amount in one pack of cigarettes per day -- scored 21 percent lower in these areas than classmates born to non-smoking mothers. The difference remained even when researchers took other factors -- such as if parents read books to their children, worked in lower-paying jobs or were married -- into account.

Put another way, among students who share similar backgrounds and education, a child of a smoking mother will on average be ranked seven places lower in a class of 31 in reading accuracy and comprehension ability, said co-author Jan Frijters of Brock University in Ontario, Canada.

Previous studies have found smoking during pregnancy is linked to lower IQ scores and academic achievement, and more behavioral disorders. The authors found no reports so far that zeroed in on specific reading tasks like accuracy and comprehension in a large population.

The team, which published their results in The Journal of Pediatrics, pulled data from more than 5,000 children involved in the Avon Longitudinal Study of Parents and Children (ALSPC) study that began in the early 1990s in the UK. Only data from children with IQ scores of 76 and higher were used. An IQ score of 70 and below can be the sign of a mental disability.

UK researchers collected questionnaires from mothers before and after giving birth. This helps make the self-reported data more trustworthy, explained Sam Oh of the University of California, San Francisco, who wasn't involved with the work. If mothers knew their child's reading scores beforehand, they might subconsciously report more or less smoking.

"To me, this study suggests that the effects attributed to in utero smoking can in fact be attributed to the intrauterine environment, and not due to environmental differences that the children grow up in," Oh told Reuters Health by email.

Large observational studies like this one call attention to patterns, but do not prove a direct cause-effect relationship between cigarette smoking and low reading scores.

Despite public health initiatives to discourage smoking, as many as one in six pregnant American women still light up, according to national surveys by the Centers for Disease Control and Prevention and the U.S. Department of Health and Human Services.

"That is a lot of children," Dr. Tomáš Paus of the University of Toronto told Reuters Health.

Paus added that the study tied the effects of low test scores to nicotine in cigarettes, which also produce other harmful chemicals and carbon dioxide. Either way, smoking while pregnant seems to put a baby at risk for negative health outcomes.

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