News Summary: US 30-yr mortgage rate at record low

RATES AT RECORD LOW: Average U.S. mortgage rates fell to fresh record lows this week, a trend that is boosting home sales.
THE NUMBERS: Mortgage buyer Freddie Mac said the average 30-year loan rate dipped to 3.31 percent, the lowest on records dating back to 1971. The average on the 15-year fixed mortgage dropped to 2.63 percent, also a record.
HOUSING RECOVERY: Home sales and construction are rising, providing a much-needed boost to the economy. Lower rates have also persuaded more people to refinance. That usually leads to lower monthly mortgage payments and more consumer spending.
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Retirement Savings Plan Reality: Save More

There's a buzz building in California over a state move to create a retirement savings plan for private employees with no workplace 401k. It might seem that everyone has plenty of access to a retirement savings plan, but at least a third of U.S. households get to retirement with just Social Security to back them up, reports MarketWatch.
The "pioneering" part of such a retirement savings plan would be the opt-out clause. Under the California plan, which has to get past some federal rules and IRS hurdles, eligible workers would be automatically registered with the plan at a deduction rate of 3% of pay. They would have to choose to quit the plan, although of course they could instead choose to increase the takeout.
The enforced deductions requirement of a good retirement savings plan is backed by research from Harvard and the University of Copenhagen. According to the research, giving people a tax break encourages them to save, but not much. Using data from Denmark, which is similar to the U.S. system but offers more detail, academics found that tax subsidies worth $1 raised the national savings rate by a penny.
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That's not much bang for a buck. Meanwhile, previous research found that an automatic retirement savings plan, such as the proposed California "opt-out" model, is very effective at raising savings rates.
The reason, the researchers conclude, is that only about 15% of people in the system are active savers, that is, people who think about retirement and how much money it will take to achieve that goal. The remainder, a whopping 85%, are totally passive savers. They will save if obligated but make no concrete plan regarding their life after work.
All of this would be quite the revelation, except that private pensions have a long and quite well-documented history, starting back in 1980 in Chile. Under reforms instituted by the military regime of the time, anyone with a formal job in the South American country is required to pay 10% beyond a minimum monthly income level. There is an income tax break, too, on retirement savings plan contributions, which can be up to 20%.
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The Chilean system was reformed in 2008 to create a bigger safety net for the poor, essentially granting public pensions to those who did not earn enough to participate in the private system. Currently, 13 countries have either private or quasi-mandatory pension systems, reports the OECD.
All pension plans fall into two categories, defined benefit or defined contribution (DC). A defined benefit plan puts the burden on future taxpayers to meet a minimum payout, which is essentially how Social Security works in the United States. A defined contribution retirement savings plan, the basis for private pension systems such as a 401k, means it's up to savers to put enough away and to invest and manage their savings carefully over decades.
Your retirement savings plan
As the OECD notes, "the starting point for a successful DC plan is a sufficiently high contribution rate." Put another way, depending on the market to deliver miracles is a mistake, but a similarly large (and common) mistake is believing that setting aside pennies in a retirement savings plan will add up to big dollars down the line.
The agency concludes:
In DC pension systems, one clear goal for policymakers should be to improve the design of default investment strategies so that investment risk is reduced as the worker approaches retirement. Such lifecycle investment strategies may need to be carefully regulated to ensure that workers are offered sufficient diversification and protection from market shocks in old age.
Amen and hallelujah, we say. Whatever the outcome in California, two points about a proper retirement savings plan by now should be impressively clear to everyone: You need to save more, sooner, and you absolutely must have a serious, long-term investment plan to protect and grow that nest egg over time.
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US pending home sales jump to nearly a 6-year high

An index measuring the number of Americans who signed contracts to buy homes in October jumped to nearly its highest level in almost six years. Steady job gains and record-low mortgage rates have made home buying more attractive.
The National Association of Realtors said Thursday that its seasonally adjusted pending home sales index rose 5.2 percent to 104.8 in October. Excluding a few months when the index spiked because of a homebuyer tax credit, that is the highest level since March 2007.
The increase points to healthy sales increases of previously occupied homes in the months ahead. There's generally a one- to two-month lag between a signed contract and a completed sale.
The rise in sales adds to evidence of a steady housing recovery. Builders are more confident in sales and are starting construction on more homes. Home prices are rising on a consistent basis, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they gain confidence that they can sell at a good price.
The report is "another indicator suggesting that the recovery in housing has broadened and has sustained momentum," Michael Gapen, an economist at Barclays Capital, said in a note to clients.
Signed contracts jumped 15.6 percent in the Midwest and rose 5.5 percent in the South. But they fell 1.1 percent in the West and dipped 0.1 percent in the Northeast.
Superstorm Sandy lowered pending sales in the Northeast, the Realtors' group said. The West was hurt by low inventories of available homes.
Mortgage rates remained near record lows this week. The average rate on the 30-year loan was 3.32 percent, mortgage buyer Freddie Mac said, just above 3.31 percent last week, which was the lowest on records dating to 1971.
A big reason for the rebound in housing is that the excess supply of homes that built up before the housing crisis has finally thinned out. The number of previously occupied homes available for sale has fallen to a 10-year low. The inventory of new homes is also near the lowest level since 1963.
At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
Those trends are also pushing up home sales and construction. Sales of previously occupied homes are near five-year highs, excluding temporary spikes in 2009 and 2010 when a homebuyer tax credit boosted purchases.
Builders, meanwhile, are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in six and a half years this month. And builders broke ground on new homes and apartments at the fastest pace in more than four years last month.
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US home sales jump to highest level in 3 years

U.S. sales of previously occupied homes jumped to their highest level in three years last month, bolstered by steady job gains and record-low mortgage rates.
The National Association of Realtors said Thursday that sales rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November. That's up from 4.76 million in October.
Previously occupied home sales are on track for their best year in five years. November's sales were the highest since November 2009, when a federal tax credit that was soon to expire spurred sales. Excluding that month, last month's sales were the highest since July 2007.
Sales are up 14.5 percent from a year ago, though they remain below the roughly 5.5 million that are consistent with a healthy market.
Job growth and low home-loan rates have helped drive purchases. Prices are also rising, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they feel confident they can sell at a good price.
In addition, the excess supply of homes that built up during the housing bubble has finally thinned out. The number of previously occupied homes available for sale fell to a 10-year low in October. The supply of new homes is also near its lowest level since 1963.
At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
These trends have supported a steady recovery in housing. Builder confidence rose in December for a seventh straight month to the highest level in more than 6½ years, according to a survey released Tuesday by the National Association of Home Builders/Wells Fargo.
The pace of home construction slipped in November, but it was still nearly 22 percent higher than a year earlier. Builders are on track this year to start work on the most homes in four years.
Economists note that the increase in building should lead to more construction jobs, though it hasn't yet done so. That could mean more construction hiring is coming.
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US home sales surge to highest level in 3 years

U.S. sales of previously occupied homes jumped to their highest level in three years last month, bolstered by steady job gains and record-low mortgage rates. The report was the latest sign of a sustained recovery in the housing market.
The National Association of Realtors said Thursday that sales rose 5.9 percent to a seasonally adjusted annual rate of 5.04 million in November. That's up from 4.76 million in October.
Previously occupied home sales are on track for their best year in five years. November's sales were the highest since November 2009, when a federal tax credit that was soon to expire spurred sales. Excluding that month, last month's sales were the highest since July 2007.
Sales are up 14.5 percent from a year ago, though they remain below the roughly 5.5 million that are consistent with a healthy market.
"The report is encouraging, and the positive momentum established in the housing market during 2012 appears likely to continue into 2013," Michael Gapen, an economist at Barclays Capital, said in an email.
Superstorm Sandy delayed some sales in the Northeast, the Realtors' group said. Those delayed purchases will likely close in the coming months, though the increase will be modest, the group said.
Even so, sales rose 6.9 percent in the Northeast last month compared with October. Sales increased 7.2 percent in the Midwest, 7.9 percent in the South and 0.8 percent in the West.
Job growth and low home-loan rates have helped drive purchases. Prices are also rising, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they feel confident they can sell at a good price.
In addition, the excess supply of homes that built up during the housing bubble has finally thinned out. The number of previously occupied homes available for sale fell to nearly an 11-year low in November. The supply of new homes is also near its lowest level since 1963.
At the current sales pace, it would take 4.8 months to exhaust the supply of homes for sale. That's the shortest such span since September 2005.
At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
As low supply and rising demand push up prices, builders will likely be encouraged to start work on more homes in coming months, economists said.
"That's a good reason to feel optimistic about housing next year," said Patrick Newport, an economist at IHS Global Insight. "We just don't have enough homes right now, and we need to start building."
Builder confidence rose in December for a seventh straight month to the highest level in more than 6½ years, according to a survey released Tuesday by the National Association of Home Builders/Wells Fargo.
The pace of home construction slipped in November, but it was still nearly 22 percent higher than a year earlier. Builders are on track this year to start work on the most homes in four years.
Economists note that the increase in building should lead to more construction jobs, though it hasn't yet done so. That could mean more construction hiring is coming.
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Report: Iran plans Hormuz Strait naval maneuvers

Iran is planning naval maneuvers in international waters near strategic Strait of Hormuz, where one-fifth of world oil supply passes, the official IRNA news agency reported Tuesday.
The report quoted Iran's navy chief, Adm. Habibollah Sayyari, as saying the maneuvers will begin Friday from the Strait of Hormuz to the northern part of Indian Ocean in an area of about 1 million square kilometers (400,000 square miles).
Iran in the past threatened to close the strait over Western sanctions aimed at its suspect nuclear program but has not repeated the threat lately.
Sayyari said Iran will test-fire missiles and deploy vessels and submarines during the six-day war games.
The semi-official Fars news agency reported that navy of the powerful Revolutionary Guards began a limited naval drill Tuesday in central part of the Persian Gulf.
It said the four-day maneuver is meant to test and assess its forces and includes missile firing, the report said.
Iran regularly holds military exercises to test and upgrade its military equipment as well as to boost its regional military standing.
The latest drills come as the West increases its pressure over Iran's nuclear program. The West suspects Iran may be aiming to produce nuclear weapons.
Iran denies the charge, insisting its nuclear activities have peaceful purposes like power generation and cancer treatment.
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In Egypt Islamists' bastion, discontent creeps up

When election-time rolls around, this impoverished province of farmlands south of Cairo has proven one of the most die-hard bastions of support for Islamists in Egypt, producing lopsided victories for the Muslim Brotherhood and its ultraconservative allies.
Last weekend's referendum that approved Egypt's Islamist-backed constitution was no exception. According to final results released Tuesday, nearly 90 percent of voters in Fayoum backed the charter, the second highest margin among the country's 27 provinces, mirroring the levels Islamists received here in other votes since the fall of autocrat Hosni Mubarak nearly two years ago.
But even here, dissident voices creep in. Poverty-stricken farmers, disgruntled youth and even some of the most conservative Islamists show frustration with the Brotherhood less than six months since Islamist President Mohammed Morsi came to power.
The opposition is hoping to build on such discontent as it aims for a stronger showing in upcoming parliamentary elections.
The Brotherhood "burned their bridges quickly," said Ramadan Khairallah, a teacher in the village of Mandara who voted for Morsi in the summer but voted "no" in the referendum.
He said the Brotherhood, from which Morsi hails and which is his core political backer, used to distribute cooking gas among Fayoum residents, but that isn't enough anymore to ensure people's support. Among some resentment has grown over what they see as the Brotherhood's bullying way in power or the lack of change since Morsi was inaugurated in June as Egypt's first freely elected president.
"They want to monopolize power and take everything for themselves. But people don't accept them like before," he said.
The referendum results show the strength of the Brotherhood and other Islamists — and their limits. The constitution passed by some 64 percent nationwide. But turnout was a meager 33 percent. Islamists were unable to expand their base, rallying fewer voters than in last summer's presidential vote. In Fayoum, a province with 1.6 million voters, around 485,000 people voted "yes" on the constitution, down from the 590,000 who voted for Morsi.
If Islamists could only bring out their base, the opposition proved even less able to rouse the discontented — or those confused or apathetic about the charter — to a "no" vote, showing how far it has to go to connect with the public ahead of parliament elections expected within several months. Since Mubarak's ouster, liberal and secular politicians have made little headway in building grassroots support or organizations anywhere close to the Brotherhood's election machine.
In the Fayoum village of Senarow, farmer Mohsen Moufreh echoed often-heard reasons why so many back the Brotherhood.
"I trust them," he said on voting day. "They are good people, they believe in God's justice ... Their charity distributes meat during holidays and if my kid gets sick, they are the ones who help."
The 42-year-old, who has five children and makes the equivalent of about $4 a day, said he didn't read the constitution but voted for it because he trusts the Brotherhood when they say it is the way to stability and a better life.
Fayoum, a fertile oasis just off the Nile River, was once a breeding ground for radical Islamic jihadists who battled Mubarak's rule during 1990s. Since then it has been an active center for the Brotherhood, the ultraconservative Salafis and for former militants who foreswore violence and created political parties after Mubarak's fall. It has also one of Egypt's poorest provinces. People have been falling into poverty here faster than almost anywhere in the country, with the percentage of people earning less than $1 a day rising to 41 percent from 29 percent in 2009, according to government statistics released last month.
During voting Saturday, the Islamists' organizing was on display.
Cars with loudspeakers toured villages, calling on people to vote "yes." Banners with pictures of Egypt's most influential ultraconservative clerics proclaimed, "They say yes to the constitution" and "Islam is the solution." Women cloaked in black with veils that left only their eyes showing were brought in groups from their homes in pick-up trucks to polling stations. There, teams of men with the beards of conservative Muslims passed out cards with blue circles, to ensure illiterate voters knew which circle to check on the ballot — blue for "yes," brown for "no."
Still, voices of discontent were heard. Some are bitter over an enduring economic crisis that hits farmers hard. Others became more critical watching the debates in Cairo that came to their villages though the numerous liberal-minded TV talk shows. Some religious conservatives said they have grown to see the Brotherhood as acting more out of hunger for power than "for the sake of God."
The tempers were high, with Brotherhood members angrily accusing opponents of being "feloul" — remnants of Mubarak's regime — or of having their minds poisoned by liberal media.
Outside a polling station in the village of Sheikh Fadl, one resident complained about Islamists to an Associated Press journalist.
"Look no one in this village read the constitution ... I can read and write, but I don't understand the constitution and I couldn't decide whether to say or no," Said Abdel-Moneim, a driver, said.
"But here the Brotherhood knocks doors and brings people out," he said, "and if someone says no, he gets beaten up."
A Brotherhood member who overheard him protested — and the two quickly fell into a fistfight, kicking each other and throwing punches.
An old man in white robe and scarf around his head yelled, "All this is the account of the people the simple people. The farmer is ignored."
"The prices are high for fertilizers. The (land) costs tripled and revenues dropped," he shouted, saying he was furious at the Brotherhood — but also adding a criticism of the opposition. "The educated and the elite are doing nothing but protests ... people here are tired and sick."
Islam Abdullah, a young voter, complained people follow whatever choice well-known clerics bless.
"People here believe the religious scholars. Most of the people didn't know what to say until Mohammed Hassan came out and said yes. It was over," he said, referring to a prominent Salafi cleric.
He was interrupted by a passing Brotherhood member. "This is not true. Don't talk about things you don't know," he yelled — and another fistfight broke out.
"Everyone who said no is a feloul," said another Brotherhood member near the polls, Sayed Zedan.
In nearby Mandara, a man with the long beard of an ultraconservative complained about the Brotherhood as he watched voters arriving in minibuses.
"We have tried the Muslim Brotherhood in every possible way and they never lived up to their promise," said Mohammed Ali, a history teacher who belongs to the political party of the Gamaa Islamiya, once a violent extremist group.
"They know how to strike the right tone. They tell people that Christians don't want the constitution because they are against Shariah and that Muslims must defend it," he said. "People tend to believe those in power.
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Israel to build 942 more homes in east Jerusalem

 Israel has advanced the process of building 942 more settler homes in east Jerusalem under a new fast-track plan to tighten its grip on the territory, which the Palestinians claim as the capital of a future state.
A government planning committee on Monday moved the project to the advanced stage of asking contractors to submit bids to build them, the Interior Ministry said Tuesday. Once a bid is awarded, construction can begin on the project in the Gilo area, though it can take months, if not longer, to reach that point.
An additional 300 units can be built after further planning, said attorney Daniel Seidemann, an expert on Jerusalem construction who sees the building as an obstacle to peacemaking. About 40,000 Israelis live in Gilo.
"With God's help, we will continue to live and build in Jerusalem, which will remain united under Israeli sovereignty," Israeli Prime Minister Benjamin Netanyahu said at the campaign launch event of his Likud Party. "We will continue to strengthen the settlements." Israeli elections are set for Jan. 22.
Nabil Abu Rdeneh, a spokesman for Palestinian President Mahmoud Abbas, said the new Israeli announcement was a "red line" that would block the chance for a two-state solution to the Israeli-Palestinian conflict, in which a Palestinian state would be established alongside Israel.
"The Palestinian Authority will take all the possible means available to respond to this," said Abu Rdeneh. The statement was posted on the official Palestinian news agency Wafa.
The newly-approved homes are among more than 5,000 new settler homes in east Jerusalem that Israel pressed ahead over the past week. Palestinians do not recognize Israel's 1967 annexation of the territory and say any Israeli construction there undermines their claims to it. The international community has not recognized Israel's 1967 annexation of east Jerusalem.
Prime Minister Benjamin Netanyahu launched a settlement construction push to punish the Palestinians after the United Nations recognized a de facto Palestinian state in east Jerusalem, the West Bank and the Gaza Strip last month. Israel says the Palestinians can achieve a state only through negotiations with the Israeli government, and regards the U.N. bid as a maneuver to sidestep talks.
The Palestinians have said they hope the upgraded status will allow them to return to the negotiating table with a stronger hand. Talks stalled four years ago, primarily over settlement construction.
The construction push in east Jerusalem has drawn international condemnation, as have plans to build thousands of more settler homes in the adjacent West Bank.
Israel captured both areas and Gaza in 1967.
It withdrew settlers and soldiers from Gaza in 2005, but blocks most access to the territory and retains control over the West Bank and east Jerusalem.
Also Tuesday, the Gaza Strip's ruling Hamas announced that Palestinian journalists there have been banned from working for Israeli media outlets.
The official statement from the Hamas Cabinet called Israeli outlets "hostile entity media institutions."
Israeli media have no permanent correspondents in the Gaza Strip, but Israeli TV channels and newspapers often employ local Palestinian journalists as stringers. The Gaza journalists do not generally identify themselves to others as working for Israeli outlets because of a taboo against cooperating with Israel.
Israel bans Israeli journalists from entering the Gaza Strip, saying their presence in Gaza would pose a risk to their security.
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Israel revisits ban on female prayer at holy site

 Israel's prime minister has instructed a quasi-governmental Jewish organization to find a solution for non-Orthodox Jewish female groups wishing to pray at one of Judaism's holiest sites.
An official said Tuesday Prime Minister Benjamin Netanyahu asked Natan Sharansky, chairman of the Jewish Agency, to look into the matter. The official spoke anonymously according to government regulations.
Last week Israeli police detained women from a liberal Jewish group who approached the Western Wall in Jerusalem carrying prayer shawls. Orthodox Jews insist those are for men only. The women seek to worship at the site without such restrictions.
Jewish Agency spokesman Benjamin Rutland said Netanyahu told Sharansky that the Western Wall "must remain a source of Jewish unity rather than division." The wall is a remnant of the biblical Jewish Temple compound.
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Pope decries slaughter of 'defenseless' Syrians

 Pope Benedict XVI wished Christmas peace to the world Tuesday, decrying the slaughter of the "defenseless" in Syria, urging Israelis and Palestinians to find the courage to negotiate and encouraging China's new leaders to allow more religious freedom.
Delivering the Vatican's traditional Christmas day message from the central balcony of St. Peter's Basilica, Benedict also encouraged Arab spring nations, especially Egypt, to build just and respectful societies.
May China's new leadership "esteem the contribution of the religions, in respect for each other" to help build a "fraternal society for the benefit of that noble people," the pope prayed.
It was a clear reference to the Chinese government's often harsh treatment of Catholics loyal to the pontiff instead of to the state-sanctioned church. Earlier this month, the Vatican refused to accept the decision by Chinese authorities to revoke the title of a Shanghai bishop, who had been appointed in a rare show of consensus between the Holy See and China.
As the 85-year-old pontiff, bundled up in an ermine-trimmed red cape, gingerly stepped foot on the balcony, the pilgrims, tourists and Romans below backing St. Peter's Square erupted in cheers.
Less than 12 hours earlier, Benedict had led a two-hour long Christmas Eve ceremony in the basilica. He sounded hoarse and looked weary as he read his Christmas message and then holiday greetings in 65 languages.
In his "Urbi et Orbi" speech, which traditionally reviews world events and global challenges, Benedict prayed that "peace spring up for the people of Syria, deeply wounded and divided by a conflict that does not spare even the defenseless and reaps innocent victims."
He called for easier access to help refugees and for "dialogue in the pursuit of a political solution to the conflict."
Benedict prayed that God "grant Israelis and Palestinians courage to end long years of conflict and division, and to embark resolutely on the path to negotiation."
Israel, backed by the United States, opposed the Palestinian statehood bid, saying it was a ploy to bypass negotiations, something the Palestinians deny. Talks stalled four years ago.
Senior Palestinian official Saeb Erekat said that in a meeting with the pope last week, Palestinian President Mahmoud Abbas "emphasized our total readiness to resume negotiations." The Palestinians have not dropped their demand that Israel first stop settlement activities before returning to the negotiating table.
Hours earlier, in the ancient Bethlehem church built over the site where tradition holds Jesus was born, candles illuminated the sacred site and the joyous sound of prayer filled its overflowing halls.
Overcast skies and a cold wind in the Holy Land didn't dampen the spirits of worshippers in the biblical West Bank town. Bells pealed and long lines formed inside the fourth-century Church of the Nativity complex as Christian faithful waited to see the grotto that is Jesus' traditional birthplace.
Duncan Hardock, 24, a writer from MacLean, Va., traveled to Bethlehem from the republic of Georgia, where he had been teaching English. After passing through the separation barrier Israel built to ward off West Bank attackers, he walked to Bethlehem's Manger Square where the church stands.
"I feel we got to see both sides of Bethlehem in a really short period of time," Hardock said. "On our walk from the wall, we got to see the lonesome, closed side of Bethlehem ... But the moment we got into town, we're suddenly in the middle of the party."
Bethlehem lies 10 kilometers (6 miles) south of Jerusalem. Entry to the city is controlled by Israel, which occupied the West Bank in 1967.
For those who couldn't fit into the cavernous Bethlehem church, a loudspeaker outside broadcast the Christmas day service to hundreds of faithful in the square.
Their Palestinian hosts, who welcome this holiday as the high point of their city's year, were especially joyous this season, proud of the United Nations' recognition of an independent state of Palestine just last month.
"From this holy place, I invite politicians and men of good will to work with determination for peace and reconciliation that encompasses Palestine and Israel in the midst of all the suffering in the Middle East," said the top Roman Catholic cleric in the Holy Land, Latin Patriarch Fouad Twal in his annual address.
Back at the Vatican, Benedict offered encouragement to countries after the Arab spring of democracy protests. He had a special word for Egypt, "blessed by the childhood of Jesus."
Without citing the tumultuous politics and clashes in the region, he urged the North African region to build societies "founded on justice and respect for the dignity of every person."
Benedict prayed for the return of peace in Mali and harmony in Nigeria, where, he recalled "savage acts of terrorism continue to reap victims, particularly among Christians."
The Vatican for decades has been worried about the well-being of its flock in China, who are loyal to the pope in defiance of the communist's government support of an officially sponsored church, and relations between Beijing and the Holy See are often tense.
Speaking about China's newly installed regime leaders, Benedict expressed hope that "they will esteem the contribution of the religions, in respect for each other, in such a way that they can help to build a fraternal society for the benefit of that noble people and of the whole world."
Acknowledging Latin America's predominant Christian population, he urged government leaders to carry out commitments to development and to fighting organized crime.
In Britain, the royal family was attending Christmas Day church services at St. Mary Magdelene Church on Queen Elizabeth II's sprawling Sandringham estate, though there were a few notable absences. Prince William is spending the holiday with his pregnant wife Kate and his in-laws in the southern England village of Bucklebury, while Prince Harry is serving with British troops in Afghanistan.
Later Tuesday, the queen delivered her traditional, prerecorded Christmas message, which for the first time was broadcast in 3D.
At Canterbury cathedral, Anglican leader Rowan Williams delivered his final Christmas day sermon as archbishop of Canterbury. He acknowledged how the church's General Synod's vote against allowing women to become bishops had cost credibility and said the faithful felt a "real sense of loss" over the decision.
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