Obama Wants More Violent Video Game Studies, and That’s Okay

Here’s an interesting fact that came out of the recent debate over gun control: Thanks to the U.S. Congress, the government has been unable to fully research firearm safety for the last 16 years.

In 1996, as Reuters tells it, the National Rifle Association pressured lawmakers into cutting $ 2.6 million worth of Centers for Disease Control funding, which was being used for firearms research. Congress later restored the funds, but with a restriction on any research that “may be used to advocate or promote gun control.” Apparently the NRA had been dismissing past studies as “anti-gun propaganda,” but it’s hard to see the group as anything but afraid of what we might learn through more research.

Now that President Obama wants Congress to fund research into violent video games, I’m sad to see a parallel among some of my fellow gamers and game journalists, who think the government should just leave games alone.

“Dear Mr. President, We are not ignorant about the relationship between media including videogames and violence. Studies show there isn’t one,” Garnett Lee, Editorial Director of GameFly Media, wrote on Twitter.

“No matter how many studies show no links, it’ll never be seen as a reason to not fund another one,” Wired Editor Chris Kohler wrote.

Sorry, but I can’t join in on this collective freak out. For as defensive as I am about video games, and my right to enjoy them like any other form of speech, I draw the line at declaring we don’t need any more knowledge.

True, there isn’t much strong evidence to prove that violent video games make children violent in the real world. That’s why, in 2011, the U.S. Supreme Court refused to let California outlaw the sale of violent games to minors. The state didn’t have enough evidence to prove that violent video games cause violence — certainly not more than any other media — so just like the movie and music industries, the video game industry gets to regulate itself. It uses its own ratings system, and retailers take it upon themselves not to sell mature-rated games to minors. They happen to do an extremely good job, too, according to the FTC.

But just because existing research doesn’t link violent games with violent behavior doesn’t mean we know everything there is to know about how these games affect us. Just today, Kotaku published a lengthy story on everything we do know from violent games research. One of the most surprising takeaways: hardly anyone has studied whether video games are bigger primers for aggression than non-interactive media, such as movies. As Polygon reports, the CDC has supported violent media research before, and believes there’s more work to be done. We shouldn’t be afraid of that.

We also shouldn’t be afraid of the implications. There is a serious debate to be had about whether a certain level of media violence — I’m talking really gruesome, depraved stuff — deserves the same type of classification as pornography, which is illegal to sell to minors in the United States. The Supreme Court actually allowed for this possibility in its 2011 ruling, but it tossed out California’s violent game law in part because it was too broadly-defined, and because it unfairly targeted video games instead of all media. The government long ago decided that minors shouldn’t be allowed to see hardcore sex on the belief that it’s harmful, so either we start figuring out similar parameters for media violence, or we decide that trying to legally prevent minors from seeing anything is an impractical and misguided enterprise. Either way, it’s hard to have that debate without more knowledge about how violent media affects us.

I do wish Obama hadn’t singled out video games over all other media in Wednesday’s briefing to the press. And I admit that the parallel to the NRA’s crackdown on firearms research is a bit unfair. After all, guns literally are weapons; video games are not. One of these things is clearly more dangerous to possess than the other, and unless you’re NRA CEO Wayne LaPierre, it shouldn’t be hard to recognize which.

The good news is that the Obama administration seems to be aware of all this, and I don’t see much evidence that there’s a video game witch hunt at hand. Obama’s official memorandum on gun violence research doesn’t specifically mention video games at all, and mentions the importance of giving parents the tools to decide what media their children consume. Even the video game industry’s main trade group, the Entertainment Software Association, is okay with Obama’s push for more research. That’s a pretty good indication that the government isn’t coming after our right to virtually shoot aliens in the face. It just wants to know more about what happens in our brains when we do. So should we.

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Inspiring Singers Outshine American Idol's Feuding Judges

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American Idol

By Steve Helling

01/17/2013 at 11:00 PM EST

From left: Randy Jackson, Mariah Carey, Ryan Seacrest, Nicki Minaj and Keith Urban

George Holz/FOX

The second episode of American Idol delivered more drama, but a handful of singers managed to eclipse the ongoing feud between new judges Mariah Carey and Nicki Minaj. And that's no easy task considering one of the battling divas is wearing a blonde and pink wig.

The night's most memorable contestant was Lazaro Arbos. As he entered the audition room, one thing became immediately clear: the 21-year-old from Naples, Fla., had a severe stutter. Arbos, who emigrated from Cuba when he was 10, told viewers that he had few friends growing up due to his speech impediment.

But something magical happened when he began to sing. His stutter vanished and he gave a moving performance of "Bridge Over Troubled Water." As the judges unanimously put him through to Hollywood, Arbos dissolved into tears.

Equally inspiring was Mariah Pulice, a 19-year-old restaurant hostess from Darien, Ind. The last two years have been difficult for Pulice, who told judges she was recovering from anorexia. "If there was no music," she said, "I would not be alive." After singing the Beatles' "Let it Be," the judges were unanimous in their praise. "I really, really, really felt that song coming from you," said Minaj.

Carey agreed: "You touched me," she said. "I know what it's like to have to sing through tears. I'm proud of you."

But it wasn't all drama and emotion. Minaj started a baffling trend of asking handsome singers if they had a girlfriend. (She also managed to charm the shirts off of a couple of them, although you get the feeling they were happy to show their abs on national TV.) "You have a hole in your pants," she told one contestant. "Why are you looking?" he shot back.

And poor Keith Urban. Sitting between Minaj and Carey, he found himself in the crossfire. "I feel like a scratching post," he said at one point, before repeatedly banging his head on the table.

The judges found a lot of talent in Chicago. All told, 46 contestants were put through to Hollywood. The competition will head to Charlotte, N.C., next Wednesday.

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Will Obama's order lead to surge in gun research?

MILWAUKEE (AP) — Nearly as many Americans die from guns as from car crashes each year. We know plenty about the second problem and far less about the first. A scarcity of research on how to prevent gun violence has left policymakers shooting in the dark as they craft gun control measures without much evidence of what works.

That could change with President Barack Obama's order Wednesday to ease research restrictions pushed through long ago by the gun lobby. The White House declared that a 1996 law banning use of money to "advocate or promote gun control" should not keep the Centers for Disease Control and Prevention and other federal agencies from doing any work on the topic.

Obama can only do so much, though. Several experts say Congress will have to be on board before anything much changes, especially when it comes to spending money.

How severely have the restrictions affected the CDC?

Its website's A-to-Z list of health topics, which includes such obscure ones as Rift Valley fever, does not include guns or firearms. Searching the site for "guns" brings up dozens of reports on nail gun and BB gun injuries.

The restrictions have done damage "without a doubt" and the CDC has been "overly cautious" about interpreting them, said Daniel Webster, director of the Center for Gun Policy and Research at the Johns Hopkins Bloomberg School of Public Health.

"The law is so vague it puts a virtual freeze on gun violence research," said a statement from Michael Halpern of the Union of Concerned Scientists. "It's like censorship: When people don't know what's prohibited, they assume everything is prohibited."

Many have called for a public health approach to gun violence like the highway safety measures, product changes and driving laws that slashed deaths from car crashes decades ago even as the number of vehicles on the road rose.

"The answer wasn't taking away cars," said Dr. Georges Benjamin, executive director of the American Public Health Association.

However, while much is known about vehicles and victims in crashes, similar details are lacking about gun violence.

Some unknowns:

—How many people own firearms in various cities and what types.

—What states have the highest proportion of gun ownership.

—Whether gun ownership correlates with homicide rates in a city.

—How many guns used in homicides were bought legally.

—Where juveniles involved in gun fatalities got their weapons.

—What factors contribute to mass shootings like the Newtown, Conn., one that killed 26 people at a school.

"If an airplane crashed today with 20 children and 6 adults there would be a full-scale investigation of the causes and it would be linked to previous research," said Dr. Stephen Hargarten, director of the Injury Research Center at the Medical College of Wisconsin.

"There's no such system that's comparable to that" for gun violence, he said.

One reason is changes pushed by the National Rifle Association and its allies in 1996, a few years after a major study showed that people who lived in homes with firearms were more likely to be homicide or suicide victims. A rule tacked onto appropriations for the Department of Health and Human Services barred use of funds for "the advocacy or promotion of gun control."

Also, at the gun group's urging, U.S. Rep. Jay Dickey, a Republican from Arkansas, led an effort to remove $2.6 million from the CDC's injury prevention center, which had led most of the research on guns. The money was later restored but earmarked for brain injury research.

"What the NRA did was basically terrorize the research community and terrorize the CDC," said Dr. Mark Rosenberg, who headed the CDC's injury center at the time. "They went after the researchers, they went after institutions, they went after CDC in a very big way, and they went after me," he said. "They didn't want the data to be collected because they were threatened by what the data were showing."

Dickey, who is now retired, said Wednesday that his real concern was the researcher who led that gun ownership study, who Dickey described as being "in his own kingdom or fiefdom" and believing guns are bad.

He and Rosenberg said they have modified their views over time and now both agree that research is needed. They put out a joint statement Wednesday urging research that prevents firearm injuries while also protecting the rights "of legitimate gun owners."

"We ought to research the whole environment, both sides — what the benefits of having guns are and what are the benefits of not having guns," Dickey said. "We should study any part of this problem," including whether armed guards at schools would help, as the National Rifle Association has suggested.

Association officials did not respond to requests for comment. A statement Wednesday said the group "has led efforts to promote safety and responsible gun ownership" and that "attacking firearms" is not the answer. It said nothing about research.

The 1996 law "had a chilling effect. It basically brought the field of firearm-related research to a screeching halt," said Benjamin of the Public Health Association.

Webster said researchers like him had to "partition" themselves so whatever small money they received from the CDC was not used for anything that could be construed as gun policy. One example was a grant he received to evaluate a community-based program to reduce street gun violence in Baltimore, modeled after a successful program in Chicago called CeaseFire. He had to make sure the work included nothing that could be interpreted as gun control research, even though other privately funded research might.

Private funds from foundations have come nowhere near to filling the gap from lack of federal funding, Hargarten said. He and more than 100 other doctors and scientists recently sent Vice President Joe Biden a letter urging more research, saying the lack of it was compounding "the tragedy of gun violence."

Since 1973, the government has awarded 89 grants to study rabies, of which there were 65 cases; 212 grants for cholera, with 400 cases, yet only three grants for firearm injuries that topped 3 million, they wrote. The CDC spends just about $100,000 a year out of its multibillion-dollar budget on firearm-related research, New York Mayor Michael Bloomberg has said.

"It's so out of proportion to the burden, however you measure it," said Dr. Matthew Miller, associate professor of health policy at the Harvard School of Public Health. As a result, "we don't know really simple things," such as whether tighter gun rules in New York will curb gun trafficking "or is some other pipeline going to open up" in another state, he said.

What now?

CDC officials refused to discuss the topic on the record — a possible sign of how gun shy of the issue the agency has been even after the president's order.

Health and Human Services Secretary Kathleen Sebelius said in a statement that her agency is "committed to re-engaging gun violence research."

Others are more cautious. The Union of Concerned Scientists said the White House's view that the law does not ban gun research is helpful, but not enough to clarify the situation for scientists, and that congressional action is needed.

Dickey, the former congressman, agreed.

"Congress is supposed to do that. He's not supposed to do that," Dickey said of Obama's order. "The restrictions were placed there by Congress.

"What I was hoping for ... is 'let's do this together,'" Dickey said.

___

Follow Marilynn Marchione's coverage at http://twitter.com/MMarchioneAP

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Analysis: More Americans leave parental nest in boost for housing

WASHINGTON (Reuters) - Americans are feeling increasingly confident in the future and more and more are striking out to set up their own homes, a move that is helping propel the housing recovery.

The deep financial crisis and recession of 2007-2009 kept many Americans from leaving their parents' nests and drove others back into them, putting a sharp brake on the pace at which new households formed.

Household growth averaged about 500,000 per year from 2008 through 2010 - less than half the rate seen at the height of the housing boom in the years just before that. The pace in 2010 was the weakest since 1947.

But the rate at which individuals or families are getting their own homes picked up over the past two years, underpinned by a steady if tepid economic recovery and gradual labor market gains. In 2011, households increased 1.1 million and they grew closer to 1.2 million last year.

"The rise in household formation bodes well for the housing recovery. Instead of having too many houses, we are turning to a situation where there aren't enough," said Guy Berger a U.S. economist at RBS in Stamford, Connecticut.

Indeed, housing has turned from the economy's sorest spot to its brightest, with new building activity at 4-1/2-year highs. Housing activity in turn spurs related areas like furniture.

That is because of people like Linna Chhean. After graduating from college in May 2007, she moved back in with her parents, helping out in a family-run business.

The 27-year-old finally moved into her own one-bedroom apartment four weeks ago after she was hired as a designer in the Dallas offices of a global public relations firm.

"I wanted to get a job in my field, which is art. I was working for them in a convenience store, which is not what I wanted to do at all," said Chhean.

BRIGHTENING PROSPECTS

The worst recession since the Great Depression of the 1930s cost the economy 8.8 million jobs and drove the unemployment rate up to 10 percent.

Dim job prospects and growing financial stress undercut the pace of household formation - a central force behind housing demand - even though the population kept growing at a rate of about 2.7 million per year.

Republican vice presidential candidate Paul Ryan seized on the dashed hopes of young Americans in bashing President Barack Obama's policies at the Republican national convention in August.

"College graduates should not have to live out their 20s in their childhood bedrooms, staring up at fading Obama posters and wondering when they can move out and get going with life," he said.

An analysis by economist Timothy Dunne at the Cleveland Federal Reserve Bank found there was a shortfall of 2.6 million households from 2008 through 2011 compared to what pre-recession trends would have suggested.

Younger adults between the ages of 18 and 34 accounted for almost three quarters of this gap; the number of people in this age cohort living with their parents increased by 2 million between 2007 and 2011.

But the tide appears to be turning.

Last August, Edward Kennedy, 22, moved into his own apartment in Bridgeport, Connecticut, after landing a job at Sacred Heart University's undergraduate admissions office.

"I moved home after graduating in May 2012. It seemed like the best idea to save some money," said Kennedy. "I plan on getting my MBA over the next year and a half, while working at the university."

He said more and more of his peers were likewise setting out on their own.

HOUSEHOLD GROWTH BOOSTS RENTAL MARKET

The gains are being felt primarily in the rental market, where rising demand has spurred a sharp pick up in construction of apartment buildings. In contrast, the U.S. homeownership rate hasn't risen much from a 15-year low reached in early 2012.

"We are going to see more recovery in the rental market, in the very short run. As the market improves, people will start to face higher rents and over time, that will spill over into the owner-occupied market," said Gary Painter, a public policy professor at the University of Southern California.

New home completions have lagged the increase in household formation, leading to a tightening supply.

According to RBS' Berger, more than 1.3 million new residential structures should have been completed last year to keep pace with household growth. But only 651,400 homes were finished, the second lowest on record.

"Given that the stock of homes available for sale is already very low, inventories alone are unlikely to meet the demand presented by these new households," said Berger.

A monthly survey conducted by the National Association of Home Builders shows that growing demand and tightening supply have pushed homebuilder sentiment up to a near seven-year high.

NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Florida, said builders were now gearing up, unperturbed by the possibility that banks could dump an increasing number of foreclosed homes onto the market as conditions improve.

"Even if we have a wall of supply coming in, we will have a wall of demand to balance it," he said.

Rutenberg estimated 916,000 new residential projects would be started this year, compared to 780,000 in 2012. And Rutenberg expects rising demand to keep builders busy for years to come.

He said new construction would satisfy about 46 percent of the demand for single-family homes this year, and 83 percent of the demand for apartment buildings over the next 10 years.

Although home building accounts for only about 2.5 percent of U.S. gross domestic product, economists believe the turnaround in the housing market has just enough momentum to take over the baton from manufacturing as a driver of growth.

Economists estimate that for every new single family home constructed, at least three permanent jobs are created. There is also a boost through demand for items ranging from furniture to paints.

"Housing will take a leading role. We anticipate that (inflation-adjusted) residential investment will grow 22 percent this year, the fastest since the early 1980s," economists at JPMorgan wrote in a research note.

They estimate homebuilding could add around 0.5 of a percentage point to economic growth this year.

(Reporting by Lucia Mutikani; Editing by Tim Ahmann and Tim Dobbyn)

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Torrential Rains Paralyze Jakarta

JAKARTA, Indonesia — Torrential rains caused flooding that paralyzed much of Jakarta on Thursday, resulting in the deaths of at least four people and forcing the evacuations of tens of thousands of others.

Parts of the capital were under at least six feet of water, and even the presidential palace was not spared as waters rushed into the complex. The central business district saw water levels rise to at least 18 inches.

“This is the worst I’ve ever seen it,” said Yudi Sukarno, 40, who has lived in the Bendungan Hilir neighborhood since he was a child. “There’s all this asphalt and concrete, so the water doesn’t have anywhere to go.”

Thirteen rivers run through Jakarta, but poor drainage caused by rubbish and a low water table frequently causes them to overflow. The problems have recently been exacerbated by deforestation outside the city.

In central Jakarta on Thursday, muddy torrents filled major thoroughfares as evacuees tramped through waist-deep water in one central neighborhood. A group of men balanced an air mattress with a sick elderly woman on their shoulders in an effort to get her to a hospital.

Flood walls in one neighborhood collapsed, inundating neighborhoods in east Jakarta. Residents in one area there, Kampung Melayu, were forced to the second levels of their homes and some have taken refuge on a highway overpass, while others gathered in mosques, which were filled with people escaping the floods, according to volunteers.

The Indonesian Meteorological Agency said that heavy rains are expected in the Jakarta region for the next three days.

“Because of the rain’s intensity we’ve declared an emergency situation from now until Jan. 27,” Jokowi Widodo, the governor of Jakarta, told reporters.

He also declared a school holiday for children in the most flooded parts of the city and many offices have told their employees to stay at home. The American Embassy issued a message telling people to exercise caution, saying, “Walking and driving in flooded areas can be dangerous and should be avoided if possible.”

Local news broadcasts showed images of President Susilo Bambang Yudhoyono standing shin deep in water that had flooded into the presidential palace.

“It’s O.K. if the palace is flooded,” Mr. Yudhoyono told reporters. “What is important is that the people are protected.”

The sluice gates upstream from Jakarta have reached record levels, according to officials at the National Disaster Management Agency. Power outages have prevented pumps from being able to drain the water from streets and houses.

Officials at the National Disaster Management Agency have encouraged residents to stay inside to reduce road congestion.

In many areas residents have filled the streets, where vendors were still preparing food and selling fruits and vegetables.

“You can’t go anywhere,” said Sigit Hardisumarjo, who was buying fried bread and hoping his home stayed dry. “It feels like we’re handicapped.”

Despite the lack of movement, Mr. Sigit said flooding was common during the rainy season. Many people in his neighborhood have elevated their houses to prepare for flooding like this.

In 2007, Jakarta saw some of the worst flooding in recent memory, with hundreds of thousands forced to flee.

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Mysterious Samsung smartphone pictured with Verizon branding

Earlier this week, a mysterious Samsung (005930) smartphone appeared on GLBenchmark’s database with the model number SCH-I425. The number fell in line with previous Verizon (VZ) devices, leading us to speculate that it could be the Stratosphere III. New images posted by Engadget on Wednesday confirmed that the handset is real, however it does not feature earlier Stratosphere devices’ signature QWERTY keyboard. The device resembles the Galaxy S III mini, although the smartphone includes four capacitive buttons rather than Samsung’s physical home key. As the benchmarks revealed, the SCH-I425 is also equipped with a 720p display, a 1.4GHz dual-core Snapdragon S4 processor, 4G LTE and Android 4.1.2. While the actual screen size is unknown, it appears to be in the 4-inch range. A second image of the unannounced phone follows below.

[More from BGR: The true genius of Facebook’s Graph Search]

This article was originally published on BGR.com

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American Idol's New Judges Make Their Debut

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American Idol

01/16/2013 at 11:00 PM EST

From left: Randy Jackson, Mariah Carey, Ryan Seacrest, Nicki Minaj and Keith Urban

Michael Becker/FOX.

American Idol is back!

Season 12 premiered Wednesday night with the first auditions in New York City. And fans hoping to get a taste of drama from new judges Mariah Carey and Nicki Minaj were not disappointed.

"Right away we knew it was going to be an interesting couple of days," host Ryan Seacrest said at the start of the two-hour episode.

And he was right. (Spoilers ahead!) While fellow newbie Keith Urban and veteran judge Randy Jackson were all about the business of finding talented singers, there was immediate tension between Carey and Minaj, who wore a drum major's hat to her first day on the job.

"We can have accessories?" Carey said disapprovingly after taking her seat at the panel. "I didn't know that was allowed."

"Why did you have to reference my hat?" Minaj responded.

Later, when Carey boasted about her holiday hit, "All I Want for Christmas," Minaj clenched her fists, gritted her teeth and used the b-word. Carey's response? "I rebuke it," she said.

The two women talked over each other at times, rolled eyes and seemed to annoy one another. More than once Carey said "Nicki" like an frustrated mother calls her child out for misbehaving. And Minaj pushed Carey's buttons by talking in a British accent.

But as the two formerly feuding judges have said in recent interviews, the show should be about the hopeful contestants – and there were a handful of talented singers who earned golden tickets to Hollywood:

• Tenna Torres, who attended Camp Mariah and had previously sung for the singer, impressed the panel with her version of "You've Got a Friend," and made her idol very proud.

• Christina "Isabelle," who told a story of losing weight and finding confidence, had Minaj saying, "OMG! OMG!" with her version of "Summertime."

• Frankie Ford, who sings for change on the New York City subway system, stumbled at first but delivered a soulful version of the Eurythmics' "Sweet Dreams." "I like your big voice," Urban said. "There's a lot of musicality in the tone."

Added Carey: "You have an inner glow, which is always beautiful to see."

• Despite hearing loss in both ears, Angela Miller, who sang "Mama Knows Best" by Jessie J, was "definitely one of the best," according to Jackson.

• And Ashlee Feliciano thrilled the female judges with her version of Corinne Bailey Rae's "Put Your Records On." "So pretty," Minaj said. "I want to come to your show ... I'm so inspired by you."

"The potential is great. It was beautiful," Carey said. "You should be really proud of yourself."

At the end of the first two days of auditions, the re-invented Idol panel had done its job: the judges praised the talented singers and handed out 41 tickets to Hollywood; they sent home the kooky contestants (often sweetly) and offered constructive criticism and an invitation to come back next year to the ones still on their way to greatness.

"We gel well in a weird crazy way," Minaj said at the end of the show. Carey said, "I agree."

We'll see how long that lasts! Auditions continue Thursday (8 p.m. ET) on Fox.

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Large study confirms flu vaccine safe in pregnancy

NEW YORK (AP) — A large study offers reassuring news for pregnant women: It's safe to get a flu shot.

The research found no evidence that the vaccine increases the risk of losing a fetus, and may prevent some deaths. Getting the flu while pregnant makes fetal death more likely, the Norwegian research showed.

The flu vaccine has long been considered safe for pregnant women and their fetus. U.S. health officials began recommending flu shots for them more than five decades ago, following a higher death rate in pregnant women during a flu pandemic in the late 1950s.

But the study is perhaps the largest look at the safety and value of flu vaccination during pregnancy, experts say.

"This is the kind of information we need to provide our patients when discussing that flu vaccine is important for everyone, particularly for pregnant women," said Dr. Geeta Swamy, a researcher who studies vaccines and pregnant women at Duke University Medical Center.

The study was released by the New England Journal of Medicine on Wednesday as the United States and Europe suffer through an early and intense flu season. A U.S. obstetricians group this week reminded members that it's not too late for their pregnant patients to get vaccinated.

The new study was led by the Norwegian Institute of Public Health. It tracked pregnancies in Norway in 2009 and 2010 during an international epidemic of a new swine flu strain.

Before 2009, pregnant women in Norway were not routinely advised to get flu shots. But during the pandemic, vaccinations against the new strain were recommended for those in their second or third trimester.

The study focused on more than 113,000 pregnancies. Of those, 492 ended in the death of the fetus. The researchers calculated that the risk of fetal death was nearly twice as high for women who weren't vaccinated as it was in vaccinated mothers.

U.S. flu vaccination rates for pregnant women grew in the wake of the 2009 swine flu pandemic, from less than 15 percent to about 50 percent. But health officials say those rates need to be higher to protect newborns as well. Infants can't be vaccinated until 6 months, but studies have shown they pick up some protection if their mothers got the annual shot, experts say.

Because some drugs and vaccines can be harmful to a fetus, there is a long-standing concern about giving any medicine to a pregnant woman, experts acknowledged. But this study should ease any worries about the flu shot, said Dr. Denise Jamieson of the Centers for Disease Control and Prevention.

"The vaccine is safe," she said.

___

Online:

Medical journal: http://www.nejm.org

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European shares retreat on corporate worries, growth outlook

LONDON (Reuters) - European shares edged down on Thursday as concerns grow over the outlook for growth and corporate earnings, while oil prices gained support after Islamist militants attacked an Algerian gas field.

Worries about the global economic outlook have revived since the World Bank cut its 2013 forecast for global growth to 2.4 percent from its previous estimate of 3 percent, citing the prospect of poor performance across the developed world.

A massive $14 billion writedown at global mining giant Rio Tinto amid fears weak growth in the fourth quarter of 2012 will result in poor corporate results has further undermined investor confidence.

"The market will remain predominantly in a consolidation mood following a cautious outlook on earnings. I think European companies will disappoint a bit," said Christian Stocker, equity strategist at UniCredit in Munich.

The FTSEurofirst 300 index <.fteu3> of top European shares slipped nearly 0.1 percent to 1,159.00 points in early trade. London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were flat to 0.3 percent lower.

"There's been a mixed bag on the earnings front so far," said Darren Easton, director of trading at Logic Investments.

"In the short-term, we're in the bear camp," he added.

MSCI's broadest index of Asian shares outside Japan <.miapj0000pus> fell 0.2 percent, extending declines for a third consecutive session.

The falls were led by a slump in Chinese stocks as investors retreated ahead a slew of key economic data due on Friday including fourth-quarter GDP, December industrial output, retail sales and house prices.

Oil prices, which are under pressure from the prospects of weaker demand in 2013, gained support from concerns about supplies being affected by military activity in Algeria and Mali.

Islamist fighters seized dozens of Western and Algerian hostages in a dawn raid on a natural gas facility deep in the Sahara on Wednesday and demanded France halt a new offensive against rebels in neighboring Mali.

Brent added 2 cents to $109.70 a barrel, though U.S. oil slipped 10 cents to $94.14.

In the debt market, yields on safe-have German bonds were creeping lower as equity markets softened, but investors were reluctant to make big bets before a Spanish debt sale.

Spain plans to tap the market for up to 4.5 billion euros in short and long-term bonds and is expected to see good demand and sharply lower yields as the European Central Bank's promise to support the debt of struggling nations has encouraged investors.

The dollar and the euro were choppy, as both currencies pared back some of their recent big gains against the yen after a Japanese official this week expressed concerns about excessive yen weakness.

The yen is expected to remain on a weakening trend amid expectations for bolder BOJ monetary easing measures at its January 21-22 policy meeting as part of the new government's push to drive Japan out of years of deflation and economic slump.

The dollar rose 0.25 percent to 88.60 yen, off its peak since June 2010 of 89.67 touched on Monday, while the euro gained 0.4 percent to 117.95 yen, after surging to its highest since May 2011 of 120.13 yen on Monday.

"The BOJ will probably disappoint to some degree. They'll deliver what the market expects but no more than that," said Gareth Berry, G10 FX strategist for UBS in Singapore.

(Reporting by Richard Hubbard; Editing by Will Waterman)

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Facing the French, Mali Rebels Dig In and Blend In

Joe Penney/Reuters

As France fortified its ground forces in Mali, French soldiers refueled armored personnel carriers, newly arrived from Ivory Coast, at a Bamako air base on Tuesday.

BAMAKO, Mali — In the face of fierce, all-night bombardment by the French military, Mali’s Islamist insurgents have hunkered down to fight again.

Barging into some of the mud-brick houses in the battle zone and ejecting residents, they have sought to implant themselves in the local population and add to the huge challenges facing the French military campaign to loosen their grip on Mali.

“They are in the town, almost everywhere in the town,” said Bekaye Diarra, who owns the pharmacy in Diabaly, which experienced French bombing on Tuesday but remained under the control of the insurgents. “They are installing themselves.”

Benco Ba, a parliamentary deputy there, described residents in fear of the conflict that had descended on them. “The jihadists are going right into people’s families,” he said. “They have completely occupied the town. They are dispersed. It’s fear.”

Six days into the French military campaign, it was becoming clear that airstrikes alone will probably not be enough to root out these battle-hardened fighters, who know well the harsh grassland and desert terrain of Mali.

French Defense Minister Jean-Yves Le Drian, speaking as French ground forces deployed in the north, said on Wednesday that the campaign would be long, Reuters reported.

“We’re in a better position than last week, but the combat continues and it will be long, I imagine,” he said on RTL radio. “Today the ground forces are in the process of deploying,” he said. “Now the French forces are reaching the north,” Reuters said.

Adm. Edouard Guillaud, the French chief of staff, was quoted by The Associated Press as saying that ground operations began overnight. “Now we’re on the ground,” Admiral Guillaud said. “We will be in direct combat within hours.”

Containing the rebels’ southern advance toward Bamako, the capital, is proving more challenging than anticipated, French military officials have acknowledged. And with the Malian Army in disarray and no outside African force yet assembled, displacing the rebels from the country altogether appears to be an elusive, long-term challenge.

The jihadists are “dug in” at Diabaly, Mr. Le Drian said Tuesday at a news conference. From that strategic town, they “threaten the south,” he said, adding: “We face a well-armed and determined adversary.”

Mr. Le Drian also acknowledged that the Malian Army had not managed to retake the town of Konna, whose seizure by the rebels a week ago provoked the French intervention. “We will continue the strikes to diminish their potential,” the minister said.

Using advanced attack planes and sophisticated military helicopters, the French campaign has forced the Islamists from important northern towns like Gao and Douentza. But residents there say that while the insurgents suffered losses, many of them had simply gone into the nearby bush.

“Bombing will weaken them, and it will stop their advance,” said Djallil Lounnas, an expert on the region at the University of Montreal who has written widely on Al Qaeda in the Islamic Maghreb, one of the main extremist groups in northern Mali. “But as soon as the bombing stops, they’ll come back.”

Since the French started bombing, he said, “the situation has changed slightly, but not fundamentally.”

Other analysts said that while forcing the insurgents from the cities was achievable, eliminating them altogether would require considerable additional effort.

“You can’t launch a war of extermination against a very tenacious and mobile adversary,” said Col. Michel Goya of the French Military Academy’s Strategic Research Institute. “We are in a classic counterinsurrectionary situation. They are well armed, but the weapons are not sophisticated. A couple of thousand men, very mobile.”

And they have been preparing for battle for months.

One resident of Gao who accompanied Islamist fighters to a desert hide-out in recent months described a vast system of underground caves big enough to drive cars into, said Corinne Dufka, a senior researcher at Human Rights Watch.

Adam Nossiter reported from Bamako, and Eric Schmitt from Washington. Steven Erlanger and Scott Sayare contributed reporting from Paris, and Elisabeth Bumiller from Madrid.

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