Citigroup to seek permission to buy back shares - WSJ

NEW YORK (Reuters) - Citigroup Inc is planning to ask regulators for permission to buy back a "minimal" number of shares, the Wall Street Journal reported on Friday.
The bank is not planning to ask to increase its quarterly dividend, which is currently a penny a share, the newspaper reported, citing people familiar with the company's plans.
Citigroup Chairman Michael O'Neill and newly installed CEO Michael Corbat have told company executives that the capital plan the company submits to the Federal Reserve must be so conservative that it will not be rejected, the Journal said.
Big banks are due to submit their capital plans to the Fed on Monday.
Another bank, JPMorgan Chase & Co , has reason to be "cautiously optimistic" about its chances of winning approval to raise its dividend and buy back more stock, an official who asked not to be named told Reuters.
In November, JPMorgan won approval from the Fed to resume previously approved buybacks it had suspended in May after a multi-billion dollar loss surfaced on derivatives transactions in its London office. JPMorgan's operations have generated more than enough capital to cover those losses.
The Journal reported that Morgan Stanley will focus its plan for the Fed on using its capital to complete its purchase of Citigroup's minority stake of a joint venture the two companies have in a wealth-management business. A spokesman for the investment bank declined to comment.
Citigroup's last annual plan was rejected by the Fed in March after former CEO Vikram Pandit led analysts and investors to believe the company would be allowed to spend a few billion dollars on share buybacks and additional dividends. The rejection became a major embarrassment for the bank and contributed to the board's decision to replace Pandit.

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"Cliff" concerns give way to earnings focus

NEW YORK (Reuters) - Investors' "fiscal cliff" worries are likely to give way to more fundamental concerns, like earnings, as fourth-quarter reports get under way next week.
Financial results, which begin after the market closes on Tuesday with aluminum company Alcoa , are expected to be only slightly better than the third-quarter's lackluster results. As a warning sign, analyst current estimates are down sharply from what they were in October.
That could set stocks up for more volatility following a week of sharp gains that put the Standard & Poor's 500 index <.spx> on Friday at the highest close since December 31, 2007. The index also registered its biggest weekly percentage gain in more than a year.
Based on a Reuters analysis, Europe ranks among the chief concerns cited by companies that warned on fourth-quarter results. Uncertainty about the region and its weak economic outlook were cited by more than half of the 25 largest S&P 500 companies that issued warnings.
In the most recent earnings conference calls, macroeconomic worries were cited by 10 companies while the U.S. "fiscal cliff" was cited by at least nine as reasons for their earnings warnings.
"The number of things that could go wrong isn't so high, but the magnitude of how wrong they could go is what's worrisome," said Kurt Winters, senior portfolio manager for Whitebox Mutual Funds in Minneapolis.
Negative-to-positive guidance by S&P 500 companies for the fourth quarter was 3.6 to 1, the second worst since the third quarter of 2001, according to Thomson Reuters data.
U.S. lawmakers narrowly averted the "fiscal cliff" by coming to a last-minute agreement on a bill to avoid steep tax hikes this weeks -- driving the rally in stocks -- but the battle over further spending cuts is expected to resume in two months.
Investors also have seen a revival of worries about Europe's sovereign debt problems, with Moody's in November downgrading France's credit rating and debt crises looming for Spain and other countries.
"You have a recession in Europe as a base case. Europe is still the biggest trading partner with a lot of U.S. companies, and it's still a big chunk of global capital spending," said Adam Parker, chief U.S. equity strategist at Morgan Stanley in New York.
Among companies citing worries about Europe was eBay , whose chief financial officer, Bob Swan, spoke of "macro pressures from Europe" in the company's October earnings conference call.
REVENUE WORRIES
One of the biggest worries voiced about earnings has been whether companies will be able to continue to boost profit growth despite relatively weak revenue growth.
S&P 500 revenue fell 0.8 percent in the third quarter for the first decline since the third quarter of 2009, Thomson Reuters data showed. Earnings growth for the quarter was a paltry 0.1 percent after briefly dipping into negative territory.
On top of that, just 40 percent of S&P 500 companies beat revenue expectations in the third quarter, while 64.2 percent beat earnings estimates, the Thomson Reuters data showed.
For the fourth quarter, estimates are slightly better but are well off estimates for the quarter from just a few months earlier. S&P 500 earnings are expected to have risen 2.8 percent while revenue is expected to have gone up 1.9 percent.
Back in October, earnings growth for the fourth quarter was forecast up 9.9 percent.
In spite of the cautious outlooks, some analysts still see a good chance for earnings beats this reporting period.
"The thinking is you need top line growth for earnings to continue to expand, and we've seen the market defy that," said Mike Jackson, founder of Denver-based investment firm T3 Equity Labs.
Based on his analysis, energy, industrials and consumer discretionary are the S&P sectors most likely to beat earnings expectations in the upcoming season, while consumer staples, materials and utilities are the least likely to beat, Jackson said.
Sounding a positive note on Friday, drugmaker Eli Lilly and Co said it expects profit in 2013 to increase by more than Wall Street had been forecasting, primarily due to cost controls and improved productivity.

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Fed officials suggest possible end to asset purchases in 2013

SAN DIEGO (Reuters) - The Federal Reserve could halt its asset purchases this year, two top Fed officials suggested on Friday, a view also gaining traction among economists at Wall Street's top financial institutions.

St. Louis Fed President James Bullard, a voting member of the Fed's monetary policy panel in 2013, said a drop in the unemployment rate to 7.1 percent would probably constitute the "substantial improvement" in the labor market that the central bank seeks.

That's the bar for the Fed's policy-setting committee to halt the current round of asset purchases that it began in September. The Fed is currently buying $40 billion in mortgage-backed securities and $45 billion in Treasuries each month in a bid to push down borrowing costs and spark faster growth.

"If we get even moderately good growth this year I would expect unemployment to continue to tick down," Bullard later told reporters. "I would say that that would put the committee in a good position to think about doing a pause with the balance sheet policy."

Bullard also acknowledged that he had a more optimistic view on unemployment than some other Fed officials, and sees it in the "low 7's" by year-end.

Thousands of economists have gathered in San Diego for the annual American Economic Association meeting, drawing some of the biggest names in the profession as well as top policymakers.

Bullard stressed that the Fed would decide about changing its bond-buying program on the basis of the outlook for the labor market, and said that if it decided to pause, and then saw conditions weaken, it might resume the purchases.

The Fed has also promised to keep interest rates at their current near-zero level until unemployment drops to 6.5 percent, as long as inflation does not threaten to rise above 2.5 percent.

Philadelphia Fed Bank President Charles Plosser, who spoke separately at the conference, said he expects unemployment to drop to between 6.8 percent and 7.0 percent by the end of 2013.

As a result, he hopes the Fed will stop buying bonds before the 6.5 percent threshold, implying he anticipates the asset purchases could halt this year. Unemployment registered 7.8 percent last month.

Economists at nine of 16 primary dealers -- the large financial institutions that do business directly with the Fed -- told Reuters on Friday they expect the Fed to end its Treasuries purchases in 2013.

Fed policymakers are increasingly concerned about the impact of their monthly purchases, which currently total $85 billion.

Minutes from their December policy meeting showed that "several" top officials expected to slow or stop the so-called quantitative easing program, dubbed QE3, "well before" the end of the year - news that surprised some on Wall Street and prompted a drop in stocks and bonds, and a rise in the dollar.

CREDIBILITY

Meanwhile, another top Fed official warned the U.S. central bank's aggressive easing plan threatens the Fed's credibility.

Jeffrey Lacker, president of the Richmond Fed, on Friday held his ground opposing QE3, arguing that continued monetary policy is not the appropriate way to tackle the problem.

"It is unlikely that the Federal Reserve can push real growth rates materially higher than they otherwise would be, on a sustained basis," Lacker, who dissented on all Fed easing moves last year, told a meeting of the Maryland Bankers Association.

The U.S. economy expanded 3.1 percent in the third quarter on an annualized basis, but growth is believed to have slowed sharply to barely above 1.0 percent in the last three months of the year.

"I see an increased risk, given the course the committee has set, that inflation pressures emerge and are not thwarted in a timely way," he said.

Bullard, speaking on a panel in San Diego, warned that central bankers, in fighting to stabilize financial markets, have sacrificed some of their cherished independence, an attribute many Fed historians and policymakers argue is key to keeping inflation under control.

Bullard singled out the European Central Bank as one of the worst offenders, but warned more broadly about the "creeping politicization" of central banking globally -- something that he said would deliver disappointing economic results.

EYEING 7.1 PERCENT UNEMPLOYMENT

While Lacker and Plosser are outspoken policy hawks, Bullard is more of a centrist who is nonetheless toward the hawkish end of the spectrum of Fed officials. The three were the first top central bank officials to speak publicly since the minutes were unveiled on Thursday.

After the December meeting, the Fed said it would continue buying bonds until the labor market outlook improves "substantially," which Fed Chairman Ben Bernanke has characterized as a "sustained" decline in the unemployment rate.

Government data released on Friday showed the U.S. jobless rate held steady from November to December. Bullard called the December jobs number - a boost of 155,000 in new non-farm jobs - "reasonably good.

Fed Vice Chair Janet Yellen, a proponent of aggressive Fed easing, also spoke at the conference on Friday, but confined her comments to how regulators are tackling risks to financial stability.

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Gunman kills 3 people, injures 2 in Swiss village

A shooting in southern Switzerland has left three women dead, two men wounded and highlighted the ease of access to firearms in gun-loving nations.
The shooting — which came on the eve of students' return to classes in Newtown, Connecticut, after a horrific school shooting — also raised questions about why a troubled suspect was able to go on a rampage with an old military rifle.
The suspect, a 33-year-old unemployed man living on disability payments, fired about 20 shots Wednesday night in the village of Daillon, authorities in the Swiss canton (state) of Valais said Thursday.
He opened fire from his apartment and pursued people in the street, police said. Armed with a Swiss military rifle and a handgun, the man then threatened to shoot the elite troops that were sent in to stop him, police said.
"The shooter pointed his weapon at our colleagues, so they had to open fire to neutralize him, to avoid being injured themselves," police spokesman Jean-Marie Bornet told Swiss radio.
The suspect, who police did not identify, was arrested and taken to the hospital with serious wounds. Bornet said the shooter lived in Daillon but the motive for the shooting was not clear.
The suspect was using a military rifle that was once standard issue in the Swiss army, interim cantonal police chief Robert Steiner said.
Guns are popular among the Swiss — the Alpine country has at least 2.3 million weapons among a population of less than 8 million. Gun clubs are popular in rural areas, with children as young as 10 taking part in shooting competitions.
Authorities say firearms are involved in nearly a quarter of the 1,100 suicides a year in Switzerland — which don't include another 300 cases a year of assisted suicide — but shooting rampages are rare in peaceful, prosperous Switzerland.
A gunman who killed 14 people at a city meeting in Zug in 2001 was the nation's worst such rampage, leading to calls to tighten national gun-buying laws. Friedrich Leibacher used a commercial version of the Swiss army's SG 550 assault rifle for the rampage, then killed himself.
Buying a firearm in a Swiss shop requires a permit, a clean criminal record and no psychiatric disability, but buying a firearm from another person is less restrictive. Most types of ammunition can be bought, while automatic firearms generally require a special police permit.
The police said they are still unclear about the shooter's motive — or where he got the guns — but old-style Army rifles are often sold at military surplus markets. Prosecutor Catherine Seppey said the shooter knew several of the victims but "he was not known for making threats."
The suspect was unemployed and had been receiving psychiatric care since at least 2005, when he was first admitted to a psychiatric hospital, and was under the care of the cantonal agency for the disabled, Seppey said.
The victims were three women aged 32, 54 and 79 who died at the scene, and two injured men, aged 33 and 63, who were taken to the hospital, Seppey said. The two youngest victims were a couple with small children.
"We have no words to express ourselves after an event like this," Christophe Germanier, head of the Conthey district where the shooting occurred, told a news conference.
All able-bodied Swiss men who are required to perform military duty often take their army-issued rifle home with them after completing military service. In 2007, the government began requiring that nearly all army ammunition is kept at secure army depots.
In 2011, voters rejected a proposal to tighten the gun laws.
Many in Switzerland believe that distributing guns to households helped dissuade a Nazi invasion during World War II.
"This is part of Switzerland's self-defense, where the entire army can be mobilized in 24 hours, said Daniel Warner of the Geneva Center for the Democratic Control of Armed Forces. "I don't think (the latest shooting) is going to cause a change in attitude here.

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Briton on trial for hurling abuse and bottle at Usain Bolt

LONDON (Reuters) - A British man went on trial on Thursday accused of screaming abuse at Usain Bolt and hurling a beer bottle onto the track as the Olympic men's 100 metres final was starting, a climactic moment of the London Games in August.
The court heard that the packed 80,000-seat Olympic Stadium had fallen silent in anticipation of the race when Ashley Gill-Webb, 34, began shouting insults like "Usain I want you to lose, Usain you are bad, you are an arsehole".
The Jamaican sprinter did not hear the abuse or see a green Heineken bottle land behind the starting line, and went on to win the race in 9.63 seconds, the second-fastest time recorded.
Gill-Webb did not have a ticket to attend the 100 metres final but had somehow pushed his way to the front of an exclusive seating area, among members of the Dutch Olympic team.
After his outburst, Gill-Webb was confronted by Dutch judoka Edith Bosch, an Olympic bronze medallist, then restrained by volunteer workers and arrested.
He has pleaded not guilty to a public order offence, the Press Association (PA) reported from Stratford Magistrates' Court in east London, without saying what penalties he might face.
"In the stadium, along with the many thousands who should have been there legitimately and were watching the race in hushed anticipation, was also Mr Gill-Webb who it is now accepted was unwell at the time," said prosecutor Neil King.
"This bottle landed extremely close to the athletes and it's probably luck rather than Mr Gill-Webb's judgment that it did not do anything far more serious," said King, quoted by the PA.
In a written witness statement read out in court, Bosch said Gill-Webb's taunts against Bolt had gone on for about two minutes. As he started to move away after tossing the beer bottle, she confronted him, saying: "Dude, are you crazy?"
"He was trying to walk away so I pushed him hard to stop him," Bosch said in her statement. "I was angry with what he had done which was so disrespectful."
"I was sad to miss the 100 metres," she added.
The court heard that Gill-Webb's behaviour after he was escorted to a police station had been "somewhat unusual".
He gave some "no comment" answers to police questions but also handed over a prepared statement signed "Alan Cumming", the name of a Scottish actor.
He maintained he had nothing to do with throwing the bottle but said he had been "quite hyper" in the stadium.
Prosecutor King said although it was accepted Gill-Webb was unwell at the time, he knew what he was doing and intentionally caused distress to those around him.

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Swiss gunman kills 3 people, had troubled history

 A shooting in southern Switzerland has left three women dead, two men wounded and raised questions about how a troubled suspect was able to go on a rampage with an old military rifle.
The shooting — which came on the eve of students' return to classes in Newtown, Connecticut, after a horrific school shooting — also highlighted the easy access to firearms in gun-loving nations.
The suspect, a 33-year-old unemployed man living on disability payments, fired about 20 shots Wednesday night in the village of Daillon, authorities in the Swiss canton (state) of Valais said Thursday.
He opened fire from his apartment and pursued people in the street, police said. Armed with a Swiss military rifle and a handgun, he then threatened to shoot the officers sent in to stop him, police said.
"The shooter pointed his weapon at our colleagues, so they had to open fire to neutralize him, to avoid being injured themselves," police spokesman Jean-Marie Bornet told Swiss radio.
The suspect, who police did not identify, was arrested and taken to the hospital with serious wounds. Bornet said he lived in Daillon but the motive for the shooting was unclear.
Guns are popular among the Swiss — the Alpine country has at least 2.3 million weapons among a population of less than 8 million. Many rural areas have gun clubs, with children as young as 10 taking part in shooting competitions.
The suspect was using a military rifle that was once standard issue in the Swiss army, interim cantonal police chief Robert Steiner said.
Prosecutor Catherine Seppey said the suspect was unemployed and had been receiving psychiatric care since at least 2005, when he was first admitted to a psychiatric hospital. He was currently under the care of the cantonal agency for the disabled, she said.
His weapons were confiscated and destroyed in 2005, she said, "and currently no arms register showed he had a weapon. The inquiry will have to determine where the weapons came from."
Buying a firearm in a Swiss shop requires a permit, a clean criminal record and no psychiatric disability, but buying a firearm from another person is less restrictive and old-style Army rifles are often sold at military surplus markets.
Most types of ammunition can be bought, while automatic firearms generally require a special police permit.
Seppey said the shooter knew several of the victims but "he was not known for making threats."
The victims were three women aged 32, 54 and 79 who died at the scene, and two injured men, aged 33 and 63, who were taken to the hospital, Seppey said. The two youngest victims were a couple with small children.
"We have no words to express ourselves after an event like this," Christophe Germanier, head of the Conthey district where the shooting occurred, told a news conference.
Daillon is near some of Switzerland's most popular ski resorts, such as Verbier and Crans-Montana, and is in the country's main wine-producing region. The area also boasts a sizeable share of the country's federally protected hunting reserves.
Authorities say firearms are involved in nearly a quarter of the 1,100 suicides a year in Switzerland — which don't include another 300 cases a year of assisted suicide — but shooting rampages are rare in peaceful, prosperous Switzerland.
A gunman who killed 14 people at a city meeting in Zug in 2001 was the nation's worst rampage, leading to calls to tighten national gun-buying laws. Friedrich Leibacher used a commercial version of the Swiss army's SG 550 assault rifle for the rampage, then killed himself.
All able-bodied Swiss men who are required to perform military duty often take their army-issued rifle home with them after completing military service. In 2007, the government began requiring that nearly all army ammunition is kept at secure army depots.
Many in Switzerland believe that distributing guns to households helped dissuade a Nazi invasion during World War II. In 2011, Swiss voters rejected a proposal to tighten gun laws.
"This is part of Switzerland's self-defense, where the entire army can be mobilized in 24 hours," said Daniel Warner of the Geneva Center for the Democratic Control of Armed Forces. "I don't think (the latest shooting) is going to cause a change in attitude here.

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British government extradites al-Qaida suspect

WASHINGTON (AP) — Police in Britain have extradited a terror suspect to the United States to face charges that he took part in an alleged al-Qaida plot to detonate explosives aboard the New York City subway system.
British authorities handed over Abid Naseer, 26, to U.S. authorities on Thursday.
Prosecutors want Naseer to stand trial in New York for his alleged role in a terror campaign that would have also struck targets in Britain and Norway.
Federal prosecutors in Brooklyn have said they aim to prove that Naseer collected bomb ingredients, conducted reconnaissance and was in frequent contact with other al-Qaida operatives as part of a foiled New York plot and a second suspected plot to bomb a busy shopping area in the northern English city of Manchester.
Naseer "is one of a long line of terrorist suspects extradited to these shores," said U.S. Attorney Loretta Lynch in Brooklyn. She said the extradition underscored the importance of international cooperation in bringing down terror suspects.
Naseer was due in federal court Monday. If convicted in the U.S., Naseer would face a maximum penalty of life in prison. At the Justice Department, spokesman Dean Boyd declined to comment.
Naseer was one of 12 people arrested in a counterterrorism operation in April 2009, but all were subsequently released without charge. They were ordered to leave Britain, but Naseer escaped deportation to Pakistan after a judge ruled it was likely he would be mistreated if he were sent home.
Naseer was re-arrested in July 2010 at the request of the prosecutors in Brooklyn, where a federal indictment named him as a co-defendant with Adis Medunjanin.
In January 2011, a British judge approved Naseer's extradition. The judge acknowledged there was a "very real risk" Naseer would be tortured if the U.S. ultimately returned him to Pakistan but said he believed the U.S. justice system would not ignore that concern.
Naseer's lawyer had argued that the U.S. would have fewer inhibitions about returning him to Pakistan.
U.S. authorities allege Medunjanin and former high school friends Najibullah Zazi and Zarein Ahmedzay — all three attended Flushing High School in Queens — traveled to Pakistan in 2008 to seek terror training from al-Qaida.
Zazi, an airport van driver from Colorado, admitted in a guilty plea that once back from Pakistan he tested peroxide-based explosive materials in a makeshift lab in Denver in the fall of 2009 before traveling by car to New York to carry out the scheme.
Authorities say Medunjanin and Ahmedzay agreed to join Zazi in three coordinated suicide bombings on Manhattan subway lines during rush hour near the eighth anniversary of the Sept. 11 terror attacks — what Zazi called a "martyrdom operation."
The plot was disrupted when police stopped Zazi's car as it entered New York.
At Medunjanin's trial last year, Zazi and Ahmedzay, who testified as part of a plea deal, told jurors that the scheme was designed to avenge the U.S. invasion of Afghanistan. Medunjanin was sentenced to life in prison.

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Northern Irish police injured as flag row turns violent again

 Eight police officers were injured in Northern Ireland on Thursday when protests at the removal of the British flag from Belfast City Hall turned violent for the first time in more than two weeks.
Pro-British loyalists began rioting and fighting street battles with police after a decision a month ago by mostly nationalist pro-Irish councillors to end the century-old tradition of flying the British flag from City Hall every day in the British-controlled province.
More than 40 police officers were injured in the initial wave of violence, which stopped over Christmas. Protesters took to the streets in recent days but had remained peaceful until Thursday, when the community divisions were exposed once more.
At least 3,600 people were killed during Northern Ireland's darkest period as Catholic nationalists seeking union with Ireland fought British security forces and mainly Protestant loyalists determined to remain part of the United Kingdom.
Missiles, including petrol bombs, rained down on police in the Mountpottinger area of Belfast, a loyalist stronghold that borders the only Catholic enclave in the east of the city. A burning barricade was also used to block a major route into the city centre and a nearby car was set on fire.
Police said a crowd of around 100, some in masks and waving British flags, were involved in the unrest that lasted for several hours and led to two arrests.
Almost 50 rioters have been charged so far, the youngest a boy of 11, after deeming the vote to only fly the Union flag on 17 specified days a year - such as Queen Elizabeth's birthday - as a step too far in the ebbing away of Protestant dominance.
The protests marred a visit by U.S. Secretary of State Hillary Clinton who travelled to Belfast last month to lend her support to a 15-year-old peace process that helped mostly end three decades of sectarian bloodshed.
Another rally outside City Hall has been scheduled for Saturday and organisers say the demonstrations will continue until the flag is restored to the City Hall roof.
The now regular weekend rallies have mostly remained peaceful but disrupted pre-Christmas trade in Belfast city centre shops.

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Just Explain It: Why the Fiscal Cliff May Trigger a Recession

Lawmakers in Washington appear to be making little to no progress in avoiding the impending so-called fiscal cliff.  House Speaker John Boehner, R-Ohio, said Friday the negotiations are "almost nowhere." On Thursday Boehner rejected a proposal from the Obama administration saying that the Democrats need to "get serious about real spending cuts."
President Obama's offer continues to call for higher taxes on the wealthy and an extension of the payroll tax cut.   But Republicans say they will not agree to a plan that raises taxes.
As the country continues to head toward the fiscal cliff, this Just Explain It helps to make sense of what it is.
On December 31st, most of us would like to be thinking about a prosperous new year ahead…drinking bubbly and singing Auld Lang Syne with friends.  But there's a chance we could be singing a different tune if President Obama and Congress don't agree on measures to avoid the fiscal cliff.
First, let me explain what the fiscal cliff is.
The fiscal cliff refers to the potentially disastrous situation the U-S faces at the end of this year.  At midnight on December 31st, a number of laws are set to expire.  If the President and the Republicans don't reach an agreement before then, Americans could face broad government spending cuts and tax increases on January 1st.   The combined amount would total over 500 billion dollars. Those 500 billion dollars equal about three to four percent of the nation's entire gross domestic product.  This is what's referred to as the fiscal cliff.
If there isn't a resolution, here are the specifics of what will happen.
Taxes would go up for almost every taxpayer and many businesses. The Bush-era tax cuts, which tax relief for middle and upper-class tax payers, would be a thing of the past.  So would President Obama's payroll tax cut which added about a thousand dollars a year to the average worker's income.
Government spending would be slashed.  That means less money for most military, domestic and federal programs.  $26 billion in emergency unemployment-compensation would be gone. Medicare payments to doctors would be reduced by $11 billion. Federal programs would take the biggest hit.  They stand to lose a total of $65 billion.
If the fiscal cliff isn't avoided, some investors will be hit hard.  Those who receive qualified dividends could see the tax rate on those dividends go from 15% to almost 40% in 2013.
Many business owners believe going over the fiscal cliff will cripple the economy, triggering a deep recession.  They fear demand for their products or services will decrease because consumers will have less money to spend.  It also means that they won't be able to afford new hires or expand their businesses.   Since most Americans would be paying more in taxes, they'd be less inclined to make big purchases, like a home or a new car.
None of this is set in stone, but that's part of the problem.  Markets, businesses and people in general hate uncertainty. The fear of the unknown facing us at the beginning of next year is exactly why so many people are so worked up over the fiscal cliff.
Did you learn something? Do you have a topic you'd like explained?  Give us your feedback in the comments below or on twitter using #justexplainit.

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Retailers report higher December sales

A last-minute surge in spending saved the holiday shopping season.
Major retailers including Costco, Gap and Nordstrom on Thursday reported better-than-expected revenue in December. That comes as a relief for stores, which can make up to 40 percent of their annual revenue in the last two months of the year.
Americans spent cautiously early in the season as the Northeast recovered from Superstorm Sandy. Then they held back because of fears that the U.S. economy would fall off the "fiscal cliff," triggering massive budget cuts and tax increases that would have amounted to less money in their pockets. But shoppers spent more freely in the final shopping days of the year.
Twenty retailers reported that revenue at stores open at least a year — an indicator of a store's health — rose an average of 4.5 percent in December compared with the same month a year ago, according to the International Council of Shopping Centers. That's on the high end of the expected range of 4 percent to 4.5 percent. Only a small group of stores that represent about 13 percent of the $2.4 trillion U.S. retail industry report monthly revenue, but the data offers a snapshot of consumer spending.
"I wouldn't be doing cartwheels that it was a particularly great or strong holiday season, but it could have been worse given the headwinds," said Ken Perkins, president of RetailMetrics, a research firm. "The government and Mother Nature were not as cooperative as retailers would have liked. But it was definitely not as bad as feared."
December's results provide a brighter picture than reports last month that proclaimed that the holiday shopping season was shaping up to be the worst since 2008 when the U.S. was in a deep recession.
To be sure, the season had multiple fits and starts, with healthy spending during certain periods followed by stretches of tepid sales. Overall, revenue for the combined months of November and December rose 3.1 percent, roughly on par with the 3 percent rise that the ICSC had predicted.
Sales were weak at the beginning of November in the wake of Superstorm Sandy and the distraction of the U.S. presidential campaign, followed by a surge later in the month during the four-day Thanksgiving weekend. Spending fell off after that until a rush before and after Christmas when some stores began offering bigger discounts.
Nordstrom, for instance, had a particularly strong December, with revenue at stores open at least a year up 8.6 percent, more than double the 3.4 percent analysts expected. The Seattle-based department store operator said revenue was particularly strong in the last week of the season.
"That last-minute shopping, coupled with post-Christmas bargain hunting and early gift-card redemption, helped propel sales at the end of the month," said Michael P. Niemira, ICSC's chief economist.
Kelly Tenedini, 35, decided to pick up some "filler" gifts for her mom and her sister on the Sunday before Christmas at the Target in the Edgewood Retail District in Atlanta. Tenedini, who spent about $400 during the season, bought a sweater for her mom and gloves for her mother and sister that day.
Tenedini, who works in marketing, said the biggest deal she found was for herself: $50 off a pot and pan set on Target.com.
Manuel Gonzalez, 52, from Manhattan borough of New York City, spent about $150 on the Saturday before Christmas when he went to The Garden State Plaza in Paramus, N.J. He scooped up bargains, including 75 percent off Sketcher sneakers at Macy's.
For the season, he was planning to spend about $400 to $500 for gifts for his three boys, ages 5, 8 and 22 -- the same amount he spent a year ago.
Gonzales, who works at a bank, said he's glad he waited until later in the season to shop: "I am budgeting."
While the last-minute promotions may have drawn shoppers like Tenedini and Gonzalez, they also ate into stores' profits.
For instance, Kohl's said its December revenue at stores open at least a year increased 3.4 percent, beating Wall Street predictions. But the retailer said that the growth came from heavy discounts, and it cut its profit outlook for the current quarter and full year.
"Sales came late in the holiday shopping season and, as a result, were at deeper discounts than planned," said CEO Kevin Mansell. "We are taking the necessary markdowns in the fourth quarter to manage our inventory as we transition into the Spring season.

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