Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.


A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.


Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.


Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.


"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.


"The markets still basically believe that something will be done," he said.


If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.


For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.


Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.


IT COULD GET A LITTLE CRAZY


Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.


If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.


"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.


"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."


Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.


Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.


"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.


"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."


Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.


The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.


Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.


U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.


(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)


(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)



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Taliban Claim Role in Attack That Kills Pakistan Politician





PESHAWAR, Pakistan — The Pakistani Taliban claimed responsibility on Saturday for a suicide bomb attack that killed a senior politician in northwest Pakistan who was one of the group’s most vocal critics. At least eight other people were killed in the attack and more than 15 others were wounded, senior government officials and doctors at a local hospital said.




The politician, Bashir Ahmad Bilour, was a senior minister in the northwestern Khyber-Pakhtunkhwa Province, where the Taliban have a strong presence. Mr. Bilour was long on the target list of the Tehrik-i-Taliban Pakistan, an umbrella organization of the Pakistani militant groups, for publicly denouncing them and challenging their violent policies.


Mr. Bilour was coming out of a meeting of his Pashtun nationalist Awami National Party in the provincial capital of Peshawar, when the suicide bomber blew himself up, said the secretary of home and tribal affairs, Azam Khan.


Mr. Bilour had been taken to the hospital in critical condition, said Dr. Arshad Javed, chief executive of the city’s Lady Reading Hospital.


Among those killed were Mr. Bilour’s secretary and a police officer, Mr. Khan said.


The provincial information minister, Mian Iftikhar Hussain, called for immediate action against militants in the nearby tribal region of North Waziristan, the safest haven for militants in Pakistan, saying it was time to take action against all militants. “Let there be no difference between good Taliban and bad Taliban,” he said.


A security analyst, Asad Munir, a retired brigadier, said the attack would further complicate campaigning in Khyber-Pakhtunkhwa Province for a national election expected next year. He said that secular, liberal and nationalist parties would have a difficult time because they are on the Taliban hit list, and that, “Religious parties will take advantage of the situation.”


Also on Saturday, police officials in the southern province of Sindh said that a mob had tortured and killed a man accused of burning the Koran, the latest in a series of violent episodes in Pakistan stemming from allegations of blasphemy.


The killing occurred Friday in Seeta, a remote village in the Dadu district in southern Sindh Province. The village’s head cleric, Usman Memon, said charred remnants of the Koran had been found in the mosque that morning, and that the victim had been staying at the mosque alone. It is common for impoverished travelers and religious proselytizers to stay at mosques while traveling.


The man, whose name was not known, was handed over to the police and accused of violating Pakistan’s blasphemy laws, Mr. Memon said.


But as news of the episode spread later on Friday, an angry crowd gathered outside the police station and eventually forced its way in. The man was dragged out, tortured and killed, and his body was set on fire, according to the police.


Usman Ghani, the district’s senior police superintendent, said that he had suspended the official in charge of the police station and filed administrative charges against seven other officers for negligence.


He said that charges had been filed against 1,000 people believed to have participated in the mob action and that 150 people had been arrested.


Little was known about the victim or what motive he was thought to have had for burning the Koran, if he did so. Cases of violence arising from blasphemy accusations appear to be on the rise in Pakistan. Human rights groups have said that most of those victimized are members of religious minorities, particularly Christians, but Muslims are sometimes accused.


In a case similar to Friday’s, a mentally disabled man was beaten and burned to death in Punjab Province in July, also after an angry crowd broke into a police station.


Blasphemy is a capital crime in Pakistan, and it is a highly delicate and emotional issue for the deeply conservative country. Calls for repealing or revising the blasphemy laws have met with strong resistance from religious leaders, who have organized large protests against efforts to amend them. Two prominent advocates of changing the laws were assassinated last year.


Ismail Khan reported from Peshawar, and Salman Masood from Islamabad, Pakistan. Zia ur-Rehman contributed reporting from Karachi, Pakistan.



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Vatican says pope beats Justin Bieber on re-tweets






VATICAN CITY (Reuters) – Pope Benedict, white-haired, 85, and a neophyte to social media site Twitter, has beaten out 18-year old heartthrob Justin Bieber to set a percentage record for re-tweeting by his followers, the Vatican said on Thursday.


The Vatican newspaper said that as of noon Italian time on Thursday the pope had 2.1 million followers on Twitter, eight days after his first tweet was sent.






While Canadian singer-songwriter Bieber has roughly 15 times as many followers – 31.7 million – the Vatican newspaper said Benedict had beaten Bieber on re-tweets.


It said about 50 percent of the pope’s followers had re-tweeted his first tweet on December 12 while only 0.7 percent of Bieber’s followers had re-tweeted one of the singer’s most popular tweets on September 26, when he commented on the death by cancer of a six-year-old fan.


The Vatican said this was part of a wider trend in which people were looking for more spiritual content.


The pope already tweets in English, German, Italian, French, Spanish, Portuguese, Polish and Arabic. The newspaper said he will start tweeting in Latin and Chinese soon.


(Reporting By Philip Pullella, editing by Paul Casciato)


Internet News Headlines – Yahoo! News





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Erin Burnett Weds in N.Y.C















12/22/2012 at 11:45 AM EST







Erin Burnett and David Rubulotta


Courtesy of David Gordon


Breaking news: CNN'S Erin Burnett is a married woman!

The 36-year-old anchor married David Rubulotta, 42, a managing director at Citigroup, in a ceremony at City Hall on Friday that was officiated by a Justice of the Peace.

The bride donned a red dress to the ceremony, a departure from what she told PEOPLE she planned to wear.

"We're very casual. I love how at City Hall people come in everything from wedding gowns to jeans. It's so mellow and chill, just how we like it," she said.

Later, for their reception at Atlantic Grill, the bride changed into a gold, floor-length beaded gown by Carmen Marc Valvo couture. And the couple entered to Frank Sinatra's "New York, New York."

As for the party, Burnett planned it herself, and she included many holiday-themed touches such as a classical guitarist playing Christmas carols. "Christmas is our favorite time of year," Burnett said. "We thought it would be the perfect time to get married."

"I was overflowing with joy to have those I love together," she said of the reception.

The couple met on a blind date eight years ago. Burnett recalled that when she walked into the restaurant and saw Rubulotta, she thought, "I hope that's him."

In September, they announced their engagement just as Burnett revealed her latest CNN show, Erin Burnett OutFront.

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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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Wall Street Week Ahead: A lump of coal for "Fiscal Cliff-mas"

NEW YORK (Reuters) - Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all.


A traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this "fiscal cliff" will push the economy into recession.


Thursday's debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013.


Still, the market remains resilient. Friday's decline on Wall Street, triggered by Boehner's fiasco, was not enough to prevent the S&P 500 from posting its best week in four.


"The markets have been sort of taking this in stride," said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.


"The markets still basically believe that something will be done," he said.


If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break.


For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average <.dji> up 0.4 percent, the S&P 500 <.spx> up 1.2 percent and the Nasdaq Composite Index <.ixic> up 1.7 percent.


Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent.


IT COULD GET A LITTLE CRAZY


Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion.


If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington.


"I'm guessing it's going to be a low volume week. There's not a whole lot other than the fiscal cliff that is going to continue to take the headlines," said Joe Bell, senior equity analyst at Schaeffer's Investment Research, in Cincinnati.


"A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility."


Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along.


Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index <.mid> overcame a technical level by confirming its close above 1,000 for a second week.


"We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market," Schaeffer's Bell said.


"Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite."


Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks.


The PHLX defense sector index <.dfx> hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent.


Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains.


U.S. jobless claims on Thursday are seen roughly in line with the previous week's level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week's 361,000.


(Wall St Week Ahead runs every Friday. Questions or comments on this column can be emailed to: rodrigo.campos(at)thomsonreuters.com)


(Reporting by Rodrigo Campos; Additional reporting by Chuck Mikolajczak; Editing by Jan Paschal)



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Kerry Is Pick for Secretary of State, Official Says





WASHINGTON — President Obama plans to nominate Senator John Kerry of Massachusetts as secretary of state, a senior administration official said. He would succeed Hillary Rodham Clinton and become the first member of Mr. Obama’s second-term national security team.







Brendan Hoffman for The New York Times

Senator John Kerry during a hearing last week in Washington.








The appointment of Mr. Kerry, a Massachusetts Democrat and his party’s former presidential nominee in 2004, has been widely expected since last week, when Susan E. Rice, the ambassador to the United Nations, asked Mr. Obama to withdraw her candidacy for the post.


Ms. Rice had come under weeks of attack from Republicans in Congress over her role in the aftermath of the deadly attack on the United States mission in Benghazi, Libya. Mr. Kerry, as chairman of the Senate Foreign Relations Committee, oversaw a hearing on Benghazi on Thursday, at which the State Department came under renewed criticism for its failure to respond to requests for additional security in Libya.


The decision by Mr. Obama, expected to be announced early Friday afternoon, comes at a time when Mrs. Clinton has been recovering from a concussion suffered earlier this month. Mrs. Clinton, who has long said she would leave the post after Mr. Obama’s first term, is not expected to attend the announcement.


An elder of the Democratic foreign-policy establishment, Mr. Kerry, 69, has long coveted the job of secretary of state. He built close ties to Mr. Obama, giving him the keynote speech assignment that helped begin his national political career at the Democratic convention in 2004 and becoming an early Senate supporter of Mr. Obama’s presidential run.


Mr. Kerry has carried out several diplomatic missions for the Obama administration, helping to persuade President Hamid Karzai of Afghanistan to agree to a runoff election in 2009. Early in the administration, he also tried to engage President Bashar al-Assad of Syria, who has waged a brutal crackdown on his own people as he fights to cling to power.


President Obama does not intend to name a new secretary of defense or director of the Central Intelligence Agency on Friday, an official said.


One of the front-runners for the Pentagon post, former Senator Chuck Hagel, is fighting off a series of criticisms of his record, not unlike the campaign that dogged Ms. Rice. The White House has defended Mr. Hagel, though officials said on Thursday that Mr. Obama had not yet decided whom to nominate for that post.


The contest for C.I.A. has come down to two names: Michael J. Morrell, the current acting director, and John O. Brennan, the president’s counterterrorism adviser.


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Kelly Osbourne Says Loving Herself Was Key to Her Major Weight Loss















12/21/2012 at 11:15 AM EST







Kelly Osbourne


Nicky Johnston/Courtesy of Cosmopolitan Body


Kelly Osbourne credits her recent weight loss and new career as a style expert to one (pretty simple) thing.

"People think I lost weight and that's what made me happier. That's not true: I had to learn to love myself first," Osbourne tells Cosmopolitan Body, a spinoff of British Cosmopolitan magazine, in its latest issue, available Dec. 27.

"Losing weight was just one benefit of putting the hard work in and sorting myself out on the inside first through therapy," Osbourne, 28, says of her personal transformation, which involved losing more than 60 pounds. "That was one of the scariest times of my life. I swear I've never felt more naked, because I had to actually be me and couldn't mask it."

Kelly Osbourne Says Loving Herself Was Key to Her Major Weight Loss| Health, Bodywatch, Kelly Osbourne

Kelly Osbourne

Nicky Johnston / Courtesy of Cosmopolitan Body


Happily in love with boyfriend Matthew Mosshart – and now comfortable wearing a bikini – the lavender-haired Osbourne, co-host of E!'s Fashion Police, says there's no simple trick to losing weight. She's just careful about her food – enjoying pizza and chocolate cake in moderation. But she also exercises every day, something she says has become addictive in a good way.

"When I started exercising I couldn't even do one sit-up," Osbourne said. "By the end of the first week I could do three, and that was a big deal. Now I work out every day and I just don't feel good if I miss it. It's amazing how quickly your fitness builds, but you have to really want it."

Her Cinderella moment came at last year's Emmy Awards when she zipped up easily into a Zac Posen couture dress the designer shipped specifically to her.

"I'll never be the kind of person who thinks, 'I'm so hot.' I don’t want to be," she said.

"But I learned to respect and love myself – something I didn't think I would ever be capable of," continued Osbourne. "I put on my dress, and when I looked at myself in the mirror I cried. Never in my life did I think that Zac Posen would fly in a dress for me that he could have given to any nominee. It fit me perfectly!"

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AP IMPACT: Big Pharma cashes in on HGH abuse


A federal crackdown on illicit foreign supplies of human growth hormone has failed to stop rampant misuse, and instead has driven record sales of the drug by some of the world's biggest pharmaceutical companies, an Associated Press investigation shows.


The crackdown, which began in 2006, reduced the illegal flow of unregulated supplies from China, India and Mexico.


But since then, Big Pharma has been satisfying the steady desires of U.S. users and abusers, including many who take the drug in the false hope of delaying the effects of aging.


From 2005 to 2011, inflation-adjusted sales of HGH were up 69 percent, according to an AP analysis of pharmaceutical company data collected by the research firm IMS Health. Sales of the average prescription drug rose just 12 percent in that same period.


___


EDITOR'S NOTE — Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the second of a two-part series.


___


Unlike other prescription drugs, HGH may be prescribed only for specific uses. U.S. sales are limited by law to treat a rare growth defect in children and a handful of uncommon conditions like short bowel syndrome or Prader-Willi syndrome, a congenital disease that causes reduced muscle tone and a lack of hormones in sex glands.


The AP analysis, supplemented by interviews with experts, shows too many sales and too many prescriptions for the number of people known to be suffering from those ailments. At least half of last year's sales likely went to patients not legally allowed to get the drug. And U.S. pharmacies processed nearly double the expected number of prescriptions.


Peddled as an elixir of life capable of turning middle-aged bodies into lean machines, HGH — a synthesized form of the growth hormone made naturally by the human pituitary gland — winds up in the eager hands of affluent, aging users who hope to slow or even reverse the aging process.


Experts say these folks don't need the drug, and may be harmed by it. The supposed fountain-of-youth medicine can cause enlargement of breast tissue, carpal tunnel syndrome and swelling of hands and feet. Ironically, it also can contribute to aging ailments like heart disease and Type 2 diabetes.


Others in the medical establishment also are taking a fat piece of the profits — doctors who fudge prescriptions, as well as pharmacists and distributors who are content to look the other way. HGH also is sold directly without prescriptions, as new-age snake oil, to patients at anti-aging clinics that operate more like automated drug mills.


Years of raids, sports scandals and media attention haven't stopped major drugmakers from selling a whopping $1.4 billion worth of HGH in the U.S. last year. That's more than industry-wide annual gross sales for penicillin or prescription allergy medicine. Anti-aging HGH regimens vary greatly, with a yearly cost typically ranging from $6,000 to $12,000 for three to six self-injections per week.


Across the U.S., the medication is often dispensed through prescriptions based on improper diagnoses, carefully crafted to exploit wiggle room in the law restricting use of HGH, the AP found.


HGH is often promoted on the Internet with the same kind of before-and-after photos found in miracle diet ads, along with wildly hyped claims of rapid muscle growth, loss of fat, greater vigor, and other exaggerated benefits to adults far beyond their physical prime. Sales also are driven by the personal endorsement of celebrities such as actress Suzanne Somers.


Pharmacies that once risked prosecution for using unauthorized, foreign HGH — improperly labeled as raw pharmaceutical ingredients and smuggled across the border — now simply dispense name brands, often for the same banned uses. And usually with impunity.


Eight companies have been granted permission to market HGH by the U.S. Food and Drug Administration, which reviews the benefits and risks of new drug products. By contrast, three companies are approved for the diabetes drug insulin.


The No. 1 maker, Roche subsidiary Genentech, had nearly $400 million in HGH sales in the U.S. last year, up an inflation-adjusted two-thirds from 2005. Pfizer and Eli Lilly were second and third with $300 million and $220 million in sales, respectively, according to IMS Health. Pfizer now gets more revenue from its HGH brand, Genotropin, than from Zoloft, its well-known depression medicine that lost patent protection.


On their face, the numbers make no sense to the recognized hormone doctors known as endocrinologists who provide legitimate HGH treatment to a small number of patients.


Endocrinologists estimate there are fewer than 45,000 U.S. patients who might legitimately take HGH. They would be expected to use roughly 180,000 prescriptions or refills each year, given that typical patients get three months' worth of HGH at a time, according to doctors and distributors.


Yet U.S. pharmacies last year supplied almost twice that much HGH — 340,000 orders — according to AP's analysis of IMS Health data.


While doctors say more than 90 percent of legitimate patients are children with stunted growth, 40 percent of 442 U.S. side-effect cases tied to HGH over the last year involved people age 18 or older, according to an AP analysis of FDA data. The average adult's age in those cases was 53, far beyond the prime age for sports. The oldest patients were in their 80s.


Some of these medical records even give explicit hints of use to combat aging, justifying treatment with reasons like fatigue, bone thinning and "off-label," which means treatment of an unapproved condition. In other cases, the drug was used "for an unknown indication," meaning that the reason for treatment wasn't clear.


Even Medicare, the government health program for older Americans, allowed 22,169 HGH prescriptions in 2010, a five-year increase of 78 percent, according to data released by the Centers for Medicare and Medicaid Services in response to an AP public records request. And nearly half the increase came in one year: 2007.


"There's no question: a lot gets out," said hormone specialist Dr. Mark Molitch of Northwestern University, who helped write medical standards meant to limit HGH treatment to legitimate patients.


And those figures don't include HGH sold directly by doctors without prescriptions at scores of anti-aging medical practices and clinics around the country. Those numbers could only be tallied by drug makers, who have declined to say how many patients they supply and for what conditions.


The AP approached every U.S.-authorized manufacturer to ask what efforts they make to market responsibly and prevent abuse. Only one HGH supplier, Novo Nordisk, agreed to an interview.


"We're doing our level best to make sure that the right patients are getting the right medicine at the right time," said company spokesman Ken Inchausti.


He said the company is aware of the abuse issue. He said if patients apply for assistance from the company's patient-support hub, prescriptions will be flagged for review if they are missing the most rigorous test or an endocrinologist's signature. He said the company won't sell HGH directly to doctors accused of bad practices and does not deal with anti-aging clinics.


Representatives of other FDA-approved HGH makers insist they do not encourage use by bodybuilders or athletes or wealthy baby boomers trying to recapture their youth. But some said they are largely powerless to control who uses their medications or why.


"Lilly cannot restrict the actions of distributors, pharmacies or doctors," Eli Lilly spokeswoman Kelley Murphy said in a written statement.


That argument doesn't fly for critics like Dr. Peter Rost, a retired Pfizer executive who filed a whistleblower lawsuit over the HGH marketing practices of Pharmacia, which later merged with Pfizer. He said drug companies are simply looking the other way and betting that their profits will eclipse the cost of any fines.


They view it as "good business," he said.


___


PEDDLED ON INTERNET


Type "human growth hormone" into any Internet search engine, and it will spit back countless websites with overblown promises of smoother skin, better sex, weight loss and even renewed body organs.


Any doctor who actually prescribes the drug for those purposes is taking a legal risk.


FDA regulations ban the sale of HGH as an anti-aging drug. In fact, since 1990, prescribing it for things like weight loss and strength conditioning has been punishable by 5 to 10 years in prison.


Such marketing claims are routinely made at hormone clinics like Palm Beach Life Extension, whose owners are among 13 people now awaiting trial on federal charges in Florida in a steroids and HGH distribution case brought last year.


"Grow YOUNG with Us!" screamed a banner on the company's now-defunct website, which advertised that HGH can reduce body fat, improve vision, strengthen the immune system, aid kidney function, lower blood pressure and enhance memory and mood.


The clinic arranged to have its clients' prescriptions filled at Treasure Coast Pharmacy, in Jensen Beach, Fla.


In 2009, the FBI recorded a phone call between the pharmacy's owner, Peter Del Toro, and a doctor in Elkton, Md., who was cooperating with agents after being implicated in a related steroid-distribution case.


Their talk, documented in a court filing, illustrates how things often work in the networks of pharmacies and clinics that drive HGH sales.


Patients submitted a medical history form by mail and took a blood test. But in most instances, the indictment said, the evaluation was a sham: One doctor was charged with giving a clinic a pad of blank, signed prescriptions to save him the chore of signing off on each diagnosis. He got $50 for every drug order bearing his name, the indictment said.


Dr. Rodney Baltazar, the Maryland physician cooperating with the FBI, sometimes consulted briefly with patients via webcam. But he made it clear in the call that those evaluations were perfunctory at best.


Baltazar was a gynecologist, not an endocrinologist. He said he knew "a little bit" about HGH and testosterone, which are often prescribed in tandem, but he relied largely on clinic salespeople to set doses.


The pharmacist coached the doctor: Keep detailed medical charts documenting that patients are taking the drug for at least some kind of health problem, just in case the U.S. Drug Enforcement Administration ever came calling.


"Because somebody questions you, you want to be able to say, 'Here, look at his chart. You know, he's got fatigue. He's got, you know, a decreased sex drive. He's got increased body fat. He has some -- some slight depression, probably.' Whatever his signs and symptoms are."


None of these conditions is a legal reason to prescribe HGH. But the pharmacist said that most investigators will be satisfied and move on "because there's guys that are just selling stuff basically like a boiler room."


Del Toro was arrested along with 12 other people in September 2011 on charges that they distributed steroids and human growth hormone to people who had no legitimate medical need. He is awaiting trial. His lawyer declined to comment. Baltazar was sentenced to six months in prison for involvement in steroid distribution schemes.


At the height of the crackdown in 2007, the federal government went after Pfizer in a case involving anti-aging clinics. The company paid $34.7 million in fines to settle the case — 11 percent of the company's annual revenue from the drug.


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TROUBLED HISTORY


Blockbuster U.S. sales of HGH represent the latest frustration in 25 years of government efforts to control abuse of the growth drug made infamous by sports scandals.


First marketed in 1985 for children with stunted growth, HGH was soon misappropriated by adults intent on exploiting its modest muscle- and bone-building qualities. Congress limited HGH distribution to the handful of rare conditions in an extraordinary 1990 law, overriding the generally unrestricted right of doctors to prescribe medicines as they see fit.


Despite the law, illicit HGH spread around the sports world in the 1990s, making deep inroads into bodybuilding, college athletics, and professional leagues from baseball to cycling. The even larger banned market among older adults has flourished more recently.


For years, cheaper supplies from unauthorized foreign factories, particularly in China, fed the market via direct and Internet sales that sidestepped the medical establishment.


Though such shipments were banned under other law, the imports initially attracted little attention because they were usually labeled as raw pharmaceutical ingredients, which compounding pharmacies are allowed to bring into the country.


That flow began to be curtailed in 2006, when U.S. drug authorities stepped up efforts to block shipments at the border.


A handful of pharmacies across the country were hit with criminal charges over their handling of HGH. Federal prosecutors charged China's biggest HGH maker, GeneScience Pharmaceutical, with illegally distributing its Jintropin brand in the U.S. The company's CEO pleaded guilty in 2010.


With illicit supplies crimped, many pharmacies stopped selling unauthorized HGH. But tens of thousands of adult abusers began buying pricey U.S.-approved HGH that remained available in abundant supply, the AP found in its analysis of sales data.


Thus, pushed by a powerful demand, sales of U.S.-approved brands have swelled far beyond expected levels for a drug approved in just a handful of rare conditions.


Dr. Robert Marcus, a retired hormone specialist who left HGH manufacturer Eli Lilly and Co. in 2008, said that company was bent on stopping foreign counterfeits, not on cutting off abusers. "That's where their major level of frustration was — pharmaceutical fraud — rather than focusing on people who were using growth hormone illegitimately," he said.


Dr. Jim Meehan, of Tulsa, Okla., who has used HGH to treat aging problems and sports injuries, said the federal clampdown "never seemed to affect my patients and their ability to get Omnitrope, Tev-Tropin" and other government-approved brands.


The big drug companies have applauded the foreign crackdown and urged the government to do even more to combat sales of fake or fraudulently labeled HGH. In 2004, Bruce Kuhlik, speaking for the Pharmaceutical Research and Manufacturers of America, told a federal task force that unauthorized drug importation "is inherently unsafe" and industry representatives used Chinese HGH imports as their poster child.


In 2007, as the HGH embargo gained momentum, authorized makers picked up 41 percent more HGH orders, raising their annual total from 245,000 to 345,000, according to the analysis of the IMS Health data. Similarly, most of the drug's sales boom happened in the first two years of the crackdown, with 46 percent inflation-adjusted growth in yearly sales to $1.1 billion.


Steve Kleppe, of Scottsdale, Ariz., a restaurant entrepreneur who has taken HGH for almost 15 years to keep feeling young, said he noticed a price jump of about 25 percent after the block on imports. He now buys HGH directly from a doctor at an annual cost of about $8,000 for himself and the same amount for his wife.


Despite higher prices, the business has expanded in recent years largely on the strength of sales to healthy adults who can afford to indulge their hope of retaining youthful vigor.


___


GROWING OLD


Many older patients go for HGH treatment to scores of anti-aging practices and clinics heavily concentrated in retirement states like Florida, Nevada, Arizona and California.


These sites are affiliated with hundreds of doctors who are rarely endocrinologists. Instead, many tout certification by the American Board of Anti-Aging and Regenerative Medicine, though the medical establishment does not recognize the group's bona fides.


The clinics offer personalized programs of "age management" to business executives, affluent retirees, and other patients of means, sometimes coupled with the amenities of a vacation resort.


The clinics insist there are few, if any, side effects from HGH. Mainstream medical authorities say otherwise.


A 2007 review of 31 medical studies showed swelling in half of HGH patients, with joint pain or diabetes in more than a fifth. A French study of about 7,000 people who took HGH as children found a 30 percent higher risk of death from causes like bone tumors and stroke, stirring a health advisory from U.S. authorities.


For proof that the drug works, marketers turn to images like the memorable one of pot-bellied septuagenarian Dr. Jeffry Life, supposedly transformed into a ripped hulk of himself by his own program available at the upscale Las Vegas-based Cenegenics Elite Health. (He declined to be interviewed.)


These promoters of HGH say there is a connection between the drop-off in growth hormone levels through adulthood and the physical decline that begins in late middle age. Replace the hormone, they say, and the aging process slows.


"It's an easy ruse. People equate hormones with youth," said Dr. Tom Perls, a leading industry critic who does aging research at Boston University. "It's a marketing dream come true."


Some scientific studies of HGH have found modest benefits: some muscle and bone building, as well as limited fat loss, but nothing like the claims of the anti-aging industry. And some of the value credited to HGH may instead come from testosterone, which is routinely provided with HGH by anti-aging doctors and sports suppliers.


Endocrinologists say it's natural for the body to produce less growth hormone as people age beyond their early 20s, because they aren't growing anymore. Only a tiny number of adults with extraordinarily low HGH levels — perhaps several thousand of them — are believed to suffer real deficiencies that can properly be treated with the hormone.


Still, anti-aging doctors routinely diagnose otherwise healthy middle-aged people with an HGH deficiency, simply because their levels are lower than in young adults. "Basically anyone going through midlife," can benefit from the drug, declared one prescriber, Dr. Howard Elkin, of Whittier, Calif., who has himself competed as a bodybuilder.


Dr. Kenneth Knott, of Marietta, Ga., said HGH helps his older patients feel "more vibrant" and look "more alive."


Like many anti-aging doctors, he diagnoses patients by testing for a blood component called insulin growth factor, which is indirectly tied to HGH. Endocrinologists use a more authoritative test that stimulates the pituitary gland to make HGH itself. Nearly all insurers insist on this stimulation testing, and that's why clinic patients almost always pay for HGH out of their own pockets.


Bob Vitols, a 50-year-old lab assistant at a veterinary medicine company in Lincoln, Neb., is a rare exception. His unusually generous health plan isn't allowed to challenge a doctor's prescription.


Four years ago, Vitols began feeling run down. So he Googled his symptoms on the Internet, decided he had a hormone deficiency, and sought out a clinic.


One doctor put him on testosterone replacement therapy. A second clinic added HGH after diagnosing him with osteopenia, a mild bone thinning common in aging adults. It is not, however, a condition that can properly be treated with HGH.


Despite the diagnosis, the treatments — which can cost $10,000 per year — have been covered by his health insurance, he said. He takes Genotropin, the HGH made by Pfizer. His prescriptions are filled via mail order by CVS Caremark Corp., one of the largest dispensers of prescription drugs in the U.S.


Vitols said the drug changed his life: his mood is better, and he isn't burning out every day at 2 p.m. "I feel like I could walk outside and just walk through a fence — and come out fine on the other side," he said.


His experiences with the drug haven't all been positive, though. Vitols said he initially developed elevated liver enzymes and went to a specialist, who told him to stop taking hormones immediately.


Instead, Vitols said, he adjusted his dosage, and the problem disappeared.


He also dumped the specialist:


"I could tell he was against hormones right at the start," Vitols said.


___


Associated Press Writer David Caruso reported from New York and AP National Writer Jeff Donn reported from Plymouth, Mass. AP Writer Troy Thibodeaux provided data analysis assistance from New Orleans.


___


AP's interactive on the HGH investigation: http://hosted.ap.org/interactives/2012/hgh


___


The AP National Investigative Team can be reached at investigate(at)ap.org


EDITOR'S NOTE _ Whether for athletics or age, Americans from teenagers to baby boomers are trying to get an edge by illegally using anabolic steroids and human growth hormone, despite well-documented risks. This is the second of a two-part series.


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Wall Street drops 1 percent, fiscal deal unlikely before 2013

NEW YORK (Reuters) - Stocks lost more than 1 percent on Friday after a Republican proposal for averting the "fiscal cliff" failed to pass, diminishing hopes that a deal would be reached soon in Washington.


Trading is expected to be volatile as investors view a fiscal agreement between the White House and Republicans before the end of the year as increasingly unlikely. Lower volume heading into next week's Christmas holiday could increase volatility. The CBOE Volatility Index, or VIX, <.vix> was up 10 percent.


Late on Thursday, Republican House Speaker John Boehner conceded there were insufficient votes from his party to pass a tax bill, dubbed "Plan B," to help avert the so-called fiscal cliff - $600 billion of tax hikes and spending cuts due to start in January. The fear is that failure to come up with a solution to avoid the cliff could tip the U.S. economy into recession.


Plan B had called for tax increases on those who earn $1 million or more a year, and the bill's failure suggested it would be difficult to get Republican support for the more expansive tax increases that Obama has urged, making it less likely an agreement will be reached between the White House and Republicans before the end of the year.


While Friday's slide reflected investors' anxiety, it was not a large enough drop to suggest they believed a deal would be reached too late to avoid damage to the economy, said Mark Lehmann, president of JMP Securities, in San Francisco.


"You could have easily woken up today and seen the market down 300 or 400 points, and everyone would have said, 'That's telling you this is really dire,'" Lehmann said.


"I think you get into mid-January and (the talks) keep going like this, you get worried, but I don't think we're going to get there."


Banking shares, which outperform in times of economic expansion and have led the market on signs of progress with resolving the fiscal impasse, were among the laggards. Citigroup Inc sank 2.7 percent to $39.10, while Bank of America slid 2.5 percent to $11.22. The KBW Banks index <.bkx> lost 1.7 percent.


The Dow Jones industrial average <.dji> dropped 185.38 points, or 1.39 percent, to 13,126.34. The Standard & Poor's 500 Index <.spx> tumbled 20.88 points, or 1.45 percent, to 1,422.81. The Nasdaq Composite Index <.ixic> lost 46.64 points, or 1.53 percent, to 3,003.74.


Even with the declines, the S&P 500 is up nearly 1 percent for the week and about 13 percent for the year, though uncertainty over the cliff may prompt many traders to lock in gains as the year draws to a close.


The day's round of data indicated that the economy showed surprising signs of resilience in November as consumer spending rose by the most in three years and a gauge of business investment jumped.


But separate data showed consumer sentiment slumped in December. The S&P Retail Index <.spxrt> fell 1.5 percent.


U.S.-listed shares of Research in Motion sank 17 percent to $11.72 after the Canadian company, which makes the BlackBerry, reported its first-ever decline in its subscriber numbers late on Thursday.


(Reporting by Leah Schnurr; Editing by Jan Paschal)



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