"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.

(Reporting By Caroline Valetkevitch; Editing by Kenneth Barry)

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Assad Says Syria ‘Accepts Advice but Not Orders’

BEIRUT, Lebanon — President Bashar al-Assad of Syria, sounding defiant, confident and, to critics, out of touch with the magnitude of his people’s grievances, proposed Sunday what he called a plan to resolve the country’s 21-month uprising with a new constitution and cabinet.

But he offered no new acknowledgment of the gains by the rebels fighting against him, the excesses of his government or the aspirations of the Syrian people. Mr. Assad also ruled out talks with the armed opposition and pointedly ignored its central demand that he step down, instead using much of a nearly hourlong speech to justify his harsh military crackdown.

Mr. Assad waved to a cheering, chanting crowd as he strode to the stage of the Damascus Opera House in the central Umayyad Square — where residents said security forces had been deployed heavily the night before. In his first public speech since June 2012, he repeated his longstanding assertions that the movement against him was driven by “murderous criminals” and terrorists receiving financing from abroad, and he appeared to push back hard against recent international efforts to broker a compromise.

“Everyone who comes to Syria knows that Syria accepts advice but not orders,” he said.

His speech came a week after the United Nations and Arab League envoy on Syria, the senior Algerian diplomat Lakhdar Brahimi, visited Damascus, the capital, in a push for a negotiated solution.

“Who should we negotiate with? Terrorists?” Mr. Assad asked. “We will negotiate with their masters.”

Mr. Assad’s speech was a disappointment for international mediators and many Syrians who say they believe that without a negotiated settlement, Syria’s conflict will descend into an even bloodier stage. The United Nations estimates that more than 60,000 people have died in what began as a peaceful protest movement and transformed into armed struggle after security forces fired on demonstrators.

Rebels have made gains in the north and east of Syria and in the Damascus suburbs, but Mr. Assad’s government has pushed back with devastating airstrikes and artillery bombardments and appears confident that it can hold the capital. Neither side appears ready to give up the prospect of a military victory.

The tenor of Mr. Assad’s speech is likely to raise the question of whether Mr. Brahimi’s mission serves any purpose; there was no immediate comment from him or his staff.

Mr. Assad’s opponents rejected the proposal as meaningless, sticking to their longstanding demand that the president resign as a precondition to negotiations.

“We can’t deal with this murderous regime at all,” George Sabra, a member of the opposition Syrian National Council, said in a brief interview. “This regime has killed 60,000 people, so no one could possibly think that working with this regime is a possibility. It is out of the question.”

Mr. Assad, whose family has ruled Syria for 42 years, said Sunday that he was open to dialogue with “those who have not betrayed Syria,” apparently a reference to tolerated opposition groups that reject armed revolution, like the National Coordination Body for Democratic Change, whose members have been floated by Syria’s allies China and Russia as possible compromise brokers.

Yet Mr. Assad’s speech appeared unlikely to satisfy even those among his opponents who reject the armed rebellion, since it made no apology for the arrests of peaceful activists or for airstrikes that have destroyed neighborhoods. Mr. Assad gave no sign of acknowledging that the movement against him was anything more than a foreign plot or had any goals other than to inflict suffering and destroy the country.

“They killed the intellectuals in order to afflict ignorance on us,” Mr. Assad said. “They attacked the infrastructure in order to make our life difficult, they deprived children from school in order to bring the country backward.”

He added, “The enemies of the people are the enemies of God, and the enemies of God will burn in hell.”

Mr. Assad has framed the uprising as an attack by the West and its allies, and the members of the exile opposition leadership as puppets of their foreign supporters, including Turkey, Qatar, Saudi Arabia and the United States, which has offered what it calls nonlethal support and recognized the main opposition body, now known as the National Coalition of Syrian Revolutionary and Opposition Forces.

Some armed rebel groups have used techniques that randomly target civilians, like car bombs, and there are foreign fighters among the rebels. But most of the armed movement is made up of Syrians who took up arms during the uprising or defected from the armed forces.

In his speech, Mr. Assad thanked officers and conscripts and vowed that he would stay by their side, apparently seeking to dispel speculation that he will flee the country. He spoke against a backdrop of snapshots that was reminiscent of montages that the opposition shows of people killed by the government.

When he finished the crowd chanted, “With our souls, with our blood, we defend you, Assad,” and vowed to be his “shabiha,” the term that has come to designate pro-government militias that have attacked demonstrators.

Scores of people then rushed toward him with an almost aggressive frenzy. Bodyguards pushed them back to form a phalanx that slowly escorted Mr. Assad through the crowd.

Many observers wryly noted on social media that the opera house was a fitting setting for the speech.

“It was operatic in its otherworldly fantasy, unrelated to realities outside the building,” Rami G. Khouri, of the Beirut-based newspaper The Daily Star, wrote on Twitter.

Mr. Assad said the first step in his plan would be for foreign countries to stop financing the rebels; then his government would put down its weapons, he said — although he reserved the right to continue to fight terrorism, which his government has defined as nearly any opponent.

Next would come national dialogue, but only with groups Mr. Assad termed acceptable; then a constitution approved by referendum; then a coalition government. There was no mention of holding elections before Mr. Assad’s term expires in 2014.

Hania Mourtada contributed reporting.

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Ohio sheriff confronts protesters in football rape case

STEUBENVILLE, Ohio (Reuters) – A county sheriff under fire for how he has handled a high school rape investigation faced down a raucous crowd of protesters on Saturday and said no further suspects would be charged in a case that has rattled Ohio football country.

Ma’lik Richmond and Trenton Mays, both 16 and members of the Steubenville High School football team, are charged with raping a 16-year-old fellow student at a party last August, according to statements from their attorneys.

Jefferson County Sheriff Fred Abdalla, accused of shielding the popular football program from a more rigorous investigation, told reporters no one else would be charged in the case, just moments after he addressed about 1,000 protesters gathered in front of the Jefferson County Courthouse.

“I’m not going to stand here and try to convince you that I’m not the bad guy,” he said to a chorus of boos. “You’ve already made your minds up.”

The “Occupy Steubenville” rally was organized by the online activist group Anonymous.

Abdalla declined to take the investigation over from Steubenville police, sparking more public outrage. Anonymous and community leaders say police are avoiding charging more of those involved to protect the school’s beloved football program.

The two students will be tried as juveniles in February in Steubenville, a close-knit city of 19,000 about 40 miles west of Pittsburgh.

The case shot to national prominence this week when Anonymous made public a picture of the purported rape victim being carried by her wrists and ankles by two young men. Anonymous also released a video that showed several other young men joking about an assault.

Abdalla, who said he first saw the video three days ago, said on Saturday that it provided no new evidence of any crimes.

“It’s a disgusting video,” he said. “It’s stupidity. But you can’t arrest somebody for being stupid.”

The protest’s masked leader, standing atop a set of stairs outside the courthouse doors, invited up to the makeshift stage anyone who was a victim of sexual assault. Protesters immediately flooded the platform, which was slightly smaller than a boxing ring.

Victims passed around a microphone, taking turns telling their stories. Some called for Abdalla and other local officials to step down from office for not charging more of the people and for what they called a cover-up by athletes, coaches and local officials.

Abdalla then climbed the stairs himself and addressed the protest over a microphone.

Abdalla said he had dedicated his 28-year career to combating sexual assault, overseeing the arrest of more than 200 suspects.

Clad in a teal ribbon symbolizing support for sexual assault victims, Abdalla later told Reuters that he stood by his decision to leave the investigation with local police. He would have had to question all 59 people that the Steubenville Police Department had already interviewed in its original investigation, he said.

“People have got their minds made up,” he said. “A case like this, who would want to cover any of it up?”

(Editing by Daniel Trotta and Eric Walsh)

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Bethenny Frankel Divorcing Jason Hoppy

By Sarah Michaud

01/05/2013 at 05:00 PM EST

Bethenny Frankel and Jason Hoppy

Albert Michael/Startraks

It's official – Bethenny Frankel and Jason Hoppy's marriage is over.

Having announced a separation over the holidays, the reality star began the divorce process by filing earlier this week in New York, TMZ reports.

"It brings me great sadness to say that Jason and I are separating," Frankel, 42, had said in a statement Dec. 23. "This was an extremely difficult decision that as a woman and a mother, I have to accept as the best choice for our family."

The split comes after months of rumors that the pair – who married in 2010 and are parents to daughter Bryn, 2½ – were on the rocks.

"Bethenny is devastated," a friend tells PEOPLE.

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FDA: New rules will make food safer

WASHINGTON (AP) — The Food and Drug Administration says its new guidelines would make the food Americans eat safer and help prevent the kinds of foodborne disease outbreaks that sicken or kill thousands of consumers each year.

The rules, the most sweeping food safety guidelines in decades, would require farmers to take new precautions against contamination, to include making sure workers' hands are washed, irrigation water is clean, and that animals stay out of fields. Food manufacturers will have to submit food safety plans to the government to show they are keeping their operations clean.

The long-overdue regulations could cost businesses close to half a billion dollars a year to implement, but are expected to reduce the estimated 3,000 deaths a year from foodborne illness. The new guidelines were announced Friday.

Just since last summer, outbreaks of listeria in cheese and salmonella in peanut butter, mangoes and cantaloupe have been linked to more than 400 illnesses and as many as seven deaths, according to the federal Centers for Disease Control and Prevention. The actual number of those sickened is likely much higher.

Many responsible food companies and farmers are already following the steps that the FDA would now require them to take. But officials say the requirements could have saved lives and prevented illnesses in several of the large-scale outbreaks that have hit the country in recent years.

In a 2011 outbreak of listeria in cantaloupe that claimed 33 lives, for example, FDA inspectors found pools of dirty water on the floor and old, dirty processing equipment at Jensen Farms in Colorado where the cantaloupes were grown. In a peanut butter outbreak this year linked to 42 salmonella illnesses, inspectors found samples of salmonella throughout Sunland Inc.'s peanut processing plant in New Mexico and multiple obvious safety problems, such as birds flying over uncovered trailers of peanuts and employees not washing their hands.

Under the new rules, companies would have to lay out plans for preventing those sorts of problems, monitor their own progress and explain to the FDA how they would correct them.

"The rules go very directly to preventing the types of outbreaks we have seen," said Michael Taylor, FDA's deputy commissioner for foods.

The FDA estimates the new rules could prevent almost 2 million illnesses annually, but it could be several years before the rules are actually preventing outbreaks. Taylor said it could take the agency another year to craft the rules after a four-month comment period, and farms would have at least two years to comply — meaning the farm rules are at least three years away from taking effect. Smaller farms would have even longer to comply.

The new rules, which come exactly two years to the day President Barack Obama's signed food safety legislation passed by Congress, were already delayed. The 2011 law required the agency to propose a first installment of the rules a year ago, but the Obama administration held them until after the election. Food safety advocates sued the administration to win their release.

The produce rule would mark the first time the FDA has had real authority to regulate food on farms. In an effort to stave off protests from farmers, the farm rules are tailored to apply only to certain fruits and vegetables that pose the greatest risk, like berries, melons, leafy greens and other foods that are usually eaten raw. A farm that produces green beans that will be canned and cooked, for example, would not be regulated.

Such flexibility, along with the growing realization that outbreaks are bad for business, has brought the produce industry and much of the rest of the food industry on board as Congress and FDA has worked to make food safer.

In a statement Friday, Pamela Bailey, president of the Grocery Manufacturers Association, which represents the country's biggest food companies, said the food safety law "can serve as a role model for what can be achieved when the private and public sectors work together to achieve a common goal."

The new rules could cost large farms $30,000 a year, according to the FDA. The agency did not break down the costs for individual processing plants, but said the rules could cost manufacturers up to $475 million annually.

FDA Commissioner Margaret Hamburg said the success of the rules will also depend on how much money Congress gives the chronically underfunded agency to put them in place. "Resources remain an ongoing concern," she said.

The farm and manufacturing rules are only one part of the food safety law. The bill also authorized more surprise inspections by the FDA and gave the agency additional powers to shut down food facilities. In addition, the law required stricter standards on imported foods. The agency said it will soon propose other overdue rules to ensure that importers verify overseas food is safe and to improve food safety audits overseas.

Food safety advocates frustrated over the last year as the rules stalled praised the proposed action.

"The new law should transform the FDA from an agency that tracks down outbreaks after the fact, to an agency focused on preventing food contamination in the first place," said Caroline Smith DeWaal of the Center for Science in the Public Interest.

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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.

(Reporting By Caroline Valetkevitch; Editing by Kenneth Barry)

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Travel Disrupted in China Amid Unusually Cold Weather

China Daily/Reuters

Investigators inspected a port where ships are stuck in ice in Jinzhou, Liaoning Province, on Saturday.

BEIJING (AP) — China is experiencing unusually cold weather this winter, with the national average temperature hitting the lowest point in 28 years, and snow and ice leading to closed highways, canceled flights, stranded tourists and power failures in several provinces.

The China Meteorological Administration on Friday said the national average temperature had been 25 degrees Fahrenheit since late November, the coldest in nearly three decades.

The average temperature in northeast China dipped to 4.5 degrees, the coldest in 43 years, and dropped to a 42-year low of 18.7 degrees in northern China.

In some areas — northeastern China, eastern Inner Mongolia and the north part of the Xinjiang region in the far west — the low has hit minus 40 degrees, the meteorological agency said.

The state-run English-language newspaper China Daily reported Friday that about a thousand ships were stuck in ice in Laizhou Bay in the eastern Bohai Sea. The agency said Saturday that ice was covering 10,500 square miles of the sea’s surface. In Sichuan Province in southwest China, more than a thousand tourists were stranded Wednesday in a scenic mountainous area because of icy roads, the state-run Beijing News reported.

In southern China, snowstorms from Thursday night have disrupted air and road traffic.

The meteorological agency said the dropping temperatures were partly because of southward-moving polar cold fronts, caused by melting polar ice from global warming. It said the air was moist and was expected to lead to heavy snow in China, Europe and North America.

On Saturday, the forecast by the National Meteorological Center said that southern China would have more snow and rain in the coming days and that some regions could get icy rain.

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“GameStick” Will Be the Size of a USB Memory Stick, Plug into Your TV

When the Ouya game console (scheduled to launch in April) made headlines last year, it was for three reasons. One, its size and price — the $ 99 box, which plugs into a TV, is the size of a Rubik’s cube. Two, its choice of operating system — it runs the same Android OS which powers smartphones and tablets. And three — its rise to fame on Kickstarter, where it shattered records and received millions of dollars in funding not from venture capitalists, but from gamers who wanted to see it made.

Now GameStick, “The Most Portable TV Games Console Ever Created,” is preparing to make a name for itself in exactly the same ways. Except that in some of them, it surpasses the Ouya.

Not even a set-top box

Up to this point, pretty much all home game consoles have been a box that sits on your shelf and plugs in to your TV. (Some PCs even do this these days.)

The GameStick, on the other hand, is about the size of a USB memory stick or a tube of lip balm. It plugs into a TV’s HDMI port, and connects to a wireless controller (or even a mouse and keyboard) via Bluetooth. It “works with any Bluetooth controller supporting HID,” and will come with its own small gamepad, which features twin analog sticks and a slot to put the GameStick itself inside when not in use.

Do we know if it works yet?

GameStick’s creators showed off pictures of a nonworking “Mark 1 Prototype Model,” and posted video of a “Reference Board” actually playing games while plugged into a television. This was a roughly USB-stick-sized circuit board, which lacked an outer case.

The reference unit had wires coming out of it, but the GameStick FAQ explains that on new, “MHL compliant TVs” it can draw power straight from the HDMI port, in much the same way that many USB devices are powered by a USB connection. A USB connector cable will be supplied with GameStick just in case, and “there will also be a power adapter.”

What about the games?

The GameStick reference unit was playing an Android game called Shadowgun, an over-the-shoulder third-person shooter which is considered technically demanding by Android device standards.

GameStick’s creators say “We have some great games lined up already,” and AFP Relax confirms that it has roughly the same internal specs as the Ouya, plus a lineup at launch of about a dozen games including several AAA Android titles.

How much will it cost, and when will it be out?

GameStick is available for preorder now from its Kickstarter page for $ 79. (The price includes the controller as well.) It has an estimated delivery date of April if the project is fully funded — and with 28 days to go, it had more than reached its $ 100,000 goal.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.

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Taylor Swift, Harry Styles Pose with Fans in the Caribbean

01/04/2013 at 04:30 PM EST

Taylor Swift in a photo by @emmycfield

Courtesy Emily Canfield

It looks like Taylor Swift and Harry Styles are having a relaxing holiday ... with fans!

Before Christmas, the couple enjoyed the snowy slopes of Park City, Utah, but now they're making new friends in the Caribbean.

"@taylorswift13 thanks for the pic and nice meeting you! #13 #bestvacation," Twitter user @emmycfield, identified as Emily Canfield, wrote in a post Thursday.

"It was crazy she was walking into the restaurant I was walking out of [to] meet her in the parking lot," Canfield added in a photo posted in Instagram.

Canfield does not identify where she is, however several other Twitter users that posted photos of Swift and Styles claimed to be in the Caribbean.

"British Virgin Islands have no idea what's coming their way," @LilHELDD, who is identified as Hannah Held, wrote on Dec. 29. A couple of days, she later breathlessly posted, "Just bought Taylor swift and Harry Styles a drink. No joke. #whathappensinBVI…. DEAD FREAKIN SERIOUS I'm gonna try to get a pic with them but I'm scared."

She was, however, successful! Held later posted a picture of Styles with two unidentified women and wrote, "Still in a daze." A picture of Swift with four women also reads, "She's awesome. Better in person. I LOVE TSWIFT."

Another fan, @ban_ANNIE, who is identified as Annie Donatelli, said on Twitter that she's in the Caribbean, and wrote, "I actually made friends with fish and Taylor Swift and Harry Styles!!! So ha!!!"

To accompany a photo she posted with both singing stars, Donatelli added. "I've never been so happy."

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FDA proposes sweeping new food safety rules

WASHINGTON (AP) — The Food and Drug Administration on Friday proposed the most sweeping food safety rules in decades, requiring farmers and food companies to be more vigilant in the wake of deadly outbreaks in peanuts, cantaloupe and leafy greens.

The long-overdue regulations are aimed at reducing the estimated 3,000 deaths a year from foodborne illness. Just since last summer, outbreaks of listeria in cheese and salmonella in peanut butter, mangoes and cantaloupe have been linked to more than 400 illnesses and as many as seven deaths, according to the Centers for Disease Control. The actual number of those sickened is likely much higher.

The FDA's proposed rules would require farmers to take new precautions against contamination, to include making sure workers' hands are washed, irrigation water is clean, and that animals stay out of fields. Food manufacturers will have to submit food safety plans to the government to show they are keeping their operations clean.

Many responsible food companies and farmers are already following the steps that the FDA would now require them to take. But officials say the requirements could have saved lives and prevented illnesses in several of the large-scale outbreaks that have hit the country in recent years.

In a 2011 outbreak of listeria in cantaloupe that claimed 33 lives, for example, FDA inspectors found pools of dirty water on the floor and old, dirty processing equipment at Jensen Farms in Colorado where the cantaloupes were grown. In a peanut butter outbreak this year linked to 42 salmonella illnesses, inspectors found samples of salmonella throughout Sunland Inc.'s peanut processing plant in New Mexico and multiple obvious safety problems, such as birds flying over uncovered trailers of peanuts and employees not washing their hands.

Under the new rules, companies would have to lay out plans for preventing those sorts of problems, monitor their own progress on those safety efforts and explain to the FDA how they would correct them.

"The rules go very directly to preventing the types of outbreaks we have seen," said Michael Taylor, FDA's deputy commissioner for foods.

The FDA estimates the new rules could prevent almost 2 million illnesses annually, but it could be several years before the rules are actually preventing outbreaks. Taylor said it could take the agency another year to craft the rules after a four-month comment period, and farms would have at least two years to comply — meaning the farm rules are at least three years away from taking effect. Smaller farms would have even longer to comply.

The new rules, which come exactly two years to the day President Barack Obama's signed food safety legislation passed by Congress, were already delayed. The 2011 law required the agency to propose a first installment of the rules a year ago, but the Obama administration held them until after the election. Food safety advocates sued the administration to win their release.

The produce rule would mark the first time the FDA has had real authority to regulate food on farms. In an effort to stave off protests from farmers, the farm rules are tailored to apply only to certain fruits and vegetables that pose the greatest risk, like berries, melons, leafy greens and other foods that are usually eaten raw. A farm that produces green beans that will be canned and cooked, for example, would not be regulated.

Such flexibility, along with the growing realization that outbreaks are bad for business, has brought the produce industry and much of the rest of the food industry on board as Congress and FDA has worked to make food safer.

In a statement Friday, Pamela Bailey, president of the Grocery Manufacturers Association, which represents the country's biggest food companies, said the food safety law "can serve as a role model for what can be achieved when the private and public sectors work together to achieve a common goal."

The farm and manufacturing rules are only one part of the food safety law. The bill also authorized more surprise inspections by the FDA and gave the agency additional powers to shut down food facilities. In addition, the law required stricter standards on imported foods. The agency said it will soon propose other overdue rules to ensure that importers verify overseas food is safe and to improve food safety audits overseas.

Food safety advocates frustrated over the last year as the rules stalled praised the proposed action.

"The new law should transform the FDA from an agency that tracks down outbreaks after the fact, to an agency focused on preventing food contamination in the first place," said Caroline Smith DeWaal of the Center for Science in the Public Interest.

Read More..