Treasuries Extend Slump as S&P 500 Adds to Weekly Gain

Treasury 10-year notes extended the biggest weekly drop in eight months amid concern inflation may accelerate as the economy improves. Oil increased, while U.S. stocks capped the biggest weekly gain of the year.

Ten-year Treasury yields added one basis point to 2.29 percent at 4 p.m. in New York after the cost of living in the U.S. rose the most in 10 months. The benchmark note’s rate surged 26 basis points this week. The S&P 500 added 0.1 percent to 1,404.17, the highest since May 2008, and climbed 2.4 percent in five days. The VIX, the benchmark gauge of U.S. stock options, slid to an almost five-year low. Oil halted a two-day drop as the dollar fell versus 14 of 16 major peers.
Stocks rallied this week, Treasuries slid and money-market rates rose after the Federal Open Market Committee members raised their assessment of the U.S. economy on March 13. Reports yesterday showing growth in manufacturing in America’s northeast and a drop in jobless claims also bolstered confidence in the world’s largest economy.

“We’ve seen stronger data in the U.S.,” said Ira Jersey, an interest-rate strategist in New York at Credit Suisse Group AG, one of 21 primary dealers that trade Treasuries with the central bank. “The Treasury market is trading on U.S. fundamentals and Fed expectations.”

The difference in yields between 10-year notes and Treasury Inflation Protected Securities climbed to 2.41 percentage points, the most since August, as investors sought a hedge against rising prices.

The consumer-price index climbed 0.4 percent in February, matching the median economist forecast and reflecting a jump in gasoline that failed to spread to other goods and services. The so-called core measure, which excludes more volatile food and energy costs, climbed 0.1 percent, less than projected.
Fed Statement

The Fed’s policy statement on March 13 drove money-market derivative traders to bring forward the time when they predict the Fed will first lift its target of zero to 0.25 percent and damped speculation the Fed will buy more debt in a third round of quantitative easing, or QE3.

Forward markets for overnight index swaps, whose rate shows what traders expect the federal funds effective rate to average over the life of the contract, signal a quarter percentage point advance in approximately the September and October 2013 period, according to data compiled by Bloomberg as of March 15. Last month, such an increase in the effective rate wasn’t predicted until early 2014. This year the effective rate has averaged 0.15 percentage point below the top end of the target range that the Fed reiterated three days ago.
Gains Pared

The S&P 500 pared early gains today after reports on industrial production and consumer confidence trailed estimates, tempering optimism about the economy after data yesterday showed jobless claims matched a four-year low and a Fed gauge of manufacturing in the New York area showed the strongest growth in a year. The Dow (INDU) Jones Industrial Average slipped 20.14 points, or 0.2 percent, to 13,232.62 to snap a streak of seven straight gains and retreat from the highest level since 2007.

Energy, raw-material producers and financial shares led gains among the 10 main groups in the S&P 500, while consumer- discretionary companies and utilities fell the most. Bank of America Corp. and Alcoa Inc. rose at least 1.4 percent for the biggest gains in the Dow, while United Technologies Corp., Microsoft Corp. and Walt Disney Co. fell the most.

The S&P 500 closed above 1,400 for the first time in almost four years yesterday and is up almost 12 percent this year, poised for its best first quarter since 1998.
Financials Rally

Financial shares in the S&P 500 rose 5.9 percent as a group this week to lead gains among 10 industries after most U.S. banks passed Fed stress tests. The group has surged 21 percent this year. Thomas Lee, JPMorgan’s chief U.S. equity strategist, and Jonathan Golub, his counterpart at UBS AG, said in reports that financial companies may add to the rally if longer-term interest rates continue to rise, boosting profitability from lending.

The yield curve, or difference between rates on 10-year and two-year Treasuries, climbed to a five-month high of 193 basis points today.

“We believe this week’s move in Treasuries is the culmination of recent economic success,” Golub wrote in a report dated today.
Quadruple Witching

Futures and options on equity indexes expire today in a process known as quadruple witching. About 1.1 billion shares of S&P 500 companies changed hands in the first hour of trading, almost double the average for that time period over the past 10 days. About 8.3 billion shares had changed hands on all U.S. exchanges by the end of the day, the second-busiest session of the year.

The Chicago Board Options Exchange Volatility Index slid 6.2 percent to 14.47, the lowest level on a closing basis since June 2007, amid reduced demand for options to protect against losses in stocks. The gauge known as the VIX (VIX) lost 15 percent this week, its biggest slide in more than three months.

Oil increased 1.9 percent to $107.06 a barrel on speculation demand will climb as the economy gains momentum. Treasury Secretary Timothy F. Geithner said yesterday rising oil prices show “we still face a dangerous and uncertain world” and there’s no easy way to lower gasoline costs. Brent crude, gasoline, heating oil and natural gas rose at least 2 percent to lead gains among 13 of 24 commodities in the S&P GSCI Index, which rallied 1.5 percent for its biggest gain in almost a month.
European Shares

Three shares gained for every two that fell in the Stoxx 600. Subsea 7 SA, the oilfield-services provider formerly known as Acergy SA, rose 5.3 percent after declaring a special dividend and saying it will buy back shares. Porsche SE (PAH3) retreated 3.6 percent as Sanford C. Bernstein & Co. downgraded the sports-car maker.

The German five-year yield rose nine basis points to 1.06 percent, its highest level of the year.

The yen was poised for its sixth consecutive weekly decline against the dollar. The Dollar Index (DXY), which tracks the U.S. currency against those of six trading partners, slipped 0.5 percent.

The MSCI Emerging Markets Index (MXEF) fell 0.2 percent, trimming its weekly gain to 0.3 percent. India’s Sensex index fell 1.2 percent and Russia’s Micex Index (MICEX) lost 0.7 percent. China’s Shanghai Composite Index (IFB1) increased 1.3 percent, halting a two- day slide. Emerging-market equity funds lured $456 million for the week ended March 14, Citigroup Inc. analysts led by Markus Rosgen wrote in a report today, citing data compiled by EPFR Global.

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Dodd-Frank Rules Slow at SEC After Court Cost-Benefit Challenge

Less than halfway through the process of implementing the 2010 Dodd-Frank Act, the pace of rule-writing by the U.S. Securities and Exchange Commission has slowed by about half.

The agency’s five commissioners haven’t met once in the last four months to approve or propose regulations required under Dodd-Frank, designed to curb the kind of risky practices that fueled the 2008 financial crisis.
Enlarge image SEC Chairman Mary Schapiro

SEC Chairman Mary Schapiro told reporters in Washington last month, “It’s easier to propose rules than it is to adopt them.” Photographer: Joshua Roberts/Bloomberg

SEC Chairman Mary Schapiro acknowledged the slowdown, describing it as a “natural lull” after an initial gush of proposals.

“It’s easier to propose rules than it is to adopt them,” Schapiro told reporters in Washington last month, particularly after a court rejected one agency rule over its costs.

The rule-making holdup is extending a period of uncertainty for affected firms -- some welcome the delay of unwelcome regulations, others would prefer clarity.

Tom Quaadman, vice president of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness, described the law as imposing “impossible deadlines.”

“They’ve given them a 2,400-page piece of legislation that really directs the regulators to do all the hard work,” Quaadman said.

Among the rules in limbo are the so-called Volcker rule to ban banks’ proprietary trading, restrictions on asset-backed securities deals, and forcing firms to disclose whether manufacturing metals were mined in war-ravaged parts of Africa.
Financial Revamp

Enacted in 2010, Dodd-Frank requires U.S. regulators to write hundreds of new rules to revamp how the financial sector does business, and more of those rules were assigned to the SEC than any other agency.

In the first year after the law’s passage, the agency voted to approve 108 proposals, adoptions and rule concept releases, according to data compiled by Bloomberg, most of them related to Dodd-Frank. That’s an average of nine per month.

Since the law’s one-year anniversary July 21, the register has recorded only 39 rulemaking SEC votes, or about 5.3 a month, the data show.

Much of the recent activity has taken place behind closed doors, adding to the appearance of a slowdown. Since Oct. 26, the agency has adopted only nine rules and did so without holding a single public meeting, conducting the votes by paper ballot.

Schapiro offered several explanations for the SEC’s slower pace, including the complexity and high volume of public comments on recent rules, and the fact that a new commissioner joined the five-person panel last November.
Rule Rejected

The most important factor cited both by Schapiro and agency observers, however, is legal. Last July, the U.S. Court of Appeals rejected an SEC rule that would have made it easier for shareholders to insert board candidates onto public-company ballots, saying the agency failed to adequately assess the costs.

The rejection of the so-called proxy access rule made all future SEC rules vulnerable to a similar challenge, forcing Schapiro and her agency to redouble efforts to study cost- benefit effects.

“We are clearly taking more time on cost-benefit analysis,” Schapiro said.

The court decision was “like sticking a two-by-four in the spokes” of SEC rulemaking, said Lynn E. Turner, a former chief accountant at the agency who is now managing director of Litinomics Inc., an economic and legal consulting firm. “I think it’s going to get worse, not better.”

Congress may exacerbate the problem, he noted: A House committee recently approved a bill that would demand a more rigorous cost-benefit justification for each rule.
Two Votes

The SEC -- like other U.S. agencies -- uses a two-step process for writing and approving rules. The first stage is to issue a proposal and then invite public comments; the second stage is to adopt the final version. The commission votes on both stages.

So far the agency has proposed about 75 percent of its Dodd-Frank rules, and completed about 20 percent of them.

“We are currently reviewing thousands of comments from some of the proposals we issued to ensure that we get the final rules right,” said John Nester, an SEC spokesman, in a statement.

Over the same timeframe, another agency working to implement Dodd-Frank, the Commodity Futures Trading Commission, has managed to accelerate its rulemaking. According to the Federal Register, the CFTC proposed or adopted about seven rules a month in the first year after Dodd-Frank and 10.2 per month since then. Though both agencies are focusing on Dodd-Frank work, including some joint rules, the rulemaking isn’t always comparable.
Financial Crisis

Some of the SEC’s delayed rules strike at the roots of the 2008 crisis. One example is a rule that would ban firms from designing asset-backed securities deals that put their interests in conflict with investors. The SEC didn’t propose the rule until September, five months after the law said it should be adopted. The proposal’s comment period was extended twice; the commission has yet to schedule a final vote.

Other rules are being drafted and revised in coordination with other regulators, complicating the process further. Those include the so-called Volcker rule to ban proprietary trading at banks, the risk-retention rule forcing lenders to keep a stake in loans they bundle and several rules defining new swaps market oversight.
Conflict Minerals

Among SEC-only measures delayed by the slowdown is a Dodd- Frank rule requiring companies to trace the origins of metals linked to violence in central Africa.

“It is critically important the SEC quickly finalize the rule,” U.S. Senator Patrick Leahy of Vermont and six other Democratic lawmakers wrote to Schapiro on Feb. 16. With a rule in place, “the smuggling that has emerged will become less economically viable, and the people of central Africa will benefit from further reduced violence and increased economic opportunities.”

The SEC is now almost a year past the congressional statutory deadline for a similar rule to require oil, gas and mining companies to disclose payments to foreign governments for access to resources, said Ian Gary, a senior policy manager at Oxfam America, the humanitarian group’s U.S. arm.

Every year of delay “is another year that people go hungry and have a lack of education and schools because oil and mining revenues aren’t being used properly,” Gary said.

The regulator is also working on assigning broker-dealers a new standard for dealing with retail clients -- a fiduciary duty to parallel the standard that investment advisers work under.

In April, that rule was moved from the agency’s Dodd-Frank working calendar to a catch-all category: “Dates still to be determined.”

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Tax Liens Promising 18% Returns May Be a Case of ‘Buyer Beware’

After Brian Finkelstein first heard about tax-lien investments three years ago, the former bond trader found the potential for 18 percent returns so compelling he jumped into the business full-time.

Like other investors, Finkelstein, chief executive of Broad Financial LLC in Monsey, New York, is hunting for yield as the Federal Reserve indicates it may keep interest rates “exceptionally low” through 2014. Yet high fees, illiquidity and a lack of transparency are a few of the pitfalls investors may encounter with private funds that buy claims to delinquent property taxes, said Alan Zafran, a partner with Luminous Capital.
Enlarge image Tax Liens Promising 18% Returns May Be a Case

An unfinished house, fenced and abandoned, in Hinsdale, Illinois. Photographer: Chuck Berman/Chicago Tribune/MCT via Getty Images
Enlarge image Tax Liens

Carl Smith, tax collector for the town of Orange, second from right, prepares to record payments from winning tax-lien auction bidders, lined up at left, at the municipal building in Orange, New Jersey. Photographer: Emile Wamsteker/Bloomberg

“It’s caveat emptor: Buyer beware,” said William Waller, a Washington-based real-estate lawyer who has worked on about 2,000 to 3,000 tax-lien cases, referring to the fact that jurisdictions that sell the liens generally don’t guarantee the condition or market value of the properties.

Tax liens, or tax certificates, generally are sold to investors at auctions and are secured by claims on the underlying real estate that take priority over mortgages. Interest generally accrues on the taxes owed at rates set by auction, which property owners must pay to clear up the debt. If they don’t, an investor who bought the lien may foreclose on the property.
Market Size

About $7 billion to $10 billion in delinquent property taxes are sold to investors annually, according to estimates by Trace Platform LLC, which provides clearing, transfer and escrow services for tax-lien trades and isn’t related to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Counties and cities in 28 states and Washington, D.C., sell the liens to investors, according to Brad Westover, executive director of the Jupiter, Florida-based National Tax Lien Association, a membership group for tax-lien investors and servicers.

The certificates generally are regulated by the states, Waller said. Rules on maximum interest rates, waiting periods before a foreclosure may proceed, how fees and interest are assessed on the debts and how auctions are conducted vary among jurisdictions, said Tom McOsker, head of the tax-receivables brokerage unit for New York-based GFI Group Inc. (GFIG), which runs a secondary market for the certificates. Florida auctions the certificates online, and the District of Columbia holds live bidding. In New Jersey the maximum interest rate a lien may accrue is 18 percent, and in Iowa it’s 24 percent.
New Jersey Auction

At an auction in December, bidders on a first-name basis with one another chatted in the aisles and cracked jokes as they trickled in to the second-floor courtroom of the municipal court in West New York, New Jersey. In the hour leading to the auction some bidders, a few wearing wireless headsets and hunched over laptops, combed through lists of the more than 400 liens up for sale with highlighters.

Kerri Tierney-Campen, the tax collector for the Town of West New York, began the auction by calling out liens that were no longer available because they’d been paid off that morning. The liens up for auction ranged in size from $189 in taxes owed to one debt of $105,478. Once bidding started, potential investors called out the interest rates they’d want to earn on each lien, with bids starting at 18 percent and then moving lower. About 20 people attended, including about 13 bidders.
Tax Treatment

Average returns for tax-lien funds aren’t available, GFI’s McOsker said. A diversified portfolio of “quality” assets, meaning liens that redeem before the waiting period is over and before the buyer may foreclose, could return about 6 percent to 9 percent annually, he said. Most tax-lien funds sell shares directly to investors, rather than going through a broker- dealer, he said.

The tax treatment of profits and losses on tax-lien investments varies, depending on several factors, said Eric Smith, a spokesman for the U.S. Internal Revenue Service.

Investors may be better off buying shares in certain bond mutual funds that invest in mortgage debt, such as DoubleLine Total Return Bond Fund (DLTNX), said Zafran of Luminous Capital, which manages about $4.7 billion for individuals and families, and doesn’t own tax liens.

The DoubleLine fund had about 83 percent of assets in mortgage-related securities as of December, according to the fund’s website. It returned 9.2 percent in 2011, according to data compiled by Bloomberg. High-yield corporate bonds, or those rated below investment grade, returned about 4.4 percent in 2011, as measured by the Bank of America Merrill Lynch U.S. High Yield Master II Index, Bloomberg data show.
‘High Fees’

“You have limitations on when and if you can pull your capital” from a private fund, Zafran said. “And you’re going to be subjecting yourself to a high set of fees.”

Finkelstein, 52, who traded bonds and derivatives for 15 years prior to starting his company, now manages private placements that invest in the liens. When buying into one of Finkelstein’s funds, investors generally must commit to locking up their money for a certain period of time, such as one year. After that point the funds begin to distribute cash to investors as liens are paid off, a process that may take about 1 1/2 years to complete, Finkelstein said. Because the funds don’t liquidate until the last lien or foreclosure in the portfolio is paid off or resolved, there’s no precise certainty as to when investors will get all of their cash back.
Accredited Investors

Finkelstein said after fees, which are 2 percent annually plus 20 percent of gains, one of the funds he manages returned about 8 percent in 2010. Returns aren’t yet available for 2011 and as of Aug. 1 the fund was on track to earn about 7 percent for the year, he said. The funds are available only to accredited investors, which generally means individuals with assets of greater than $1 million, excluding a primary residence, or earning more than $200,000 annually.

Finkelstein invests primarily in New Jersey and said he mostly buys liens on single-family homes in more affluent areas, where he said the certificates are backed by stronger collateral and there’s less of a chance a lien will go to foreclosure.

“More than 99 percent of the time the bank will pay you off,” rather than allow a foreclosure to proceed, if a homeowner hasn’t paid the taxes and the property hasn’t dramatically depreciated, he said. That’s because the lien can wipe out a mortgage of greater value.
Distressed Properties

“If you have a $100,000 property and a $2,000 tax bill -- well good heavens -- no one’s ever going to walk away from a $100,000 property for $2,000, if the value truly is $100,000 and the property is still standing,” Westover, of the tax-lien association, said.

One risk with purchasing liens on distressed properties is that between the time an investor buys the certificate and the date they could foreclose, additional taxes and assessments can add up even as the value of the property may fall.

Some certificate buyers have seen their investments go underwater, meaning the value of the liens exceeds the value of the real estate, as property values have declined, said John Reid, an attorney with Tobin, O’Connor & Ewing in Washington.

“You’re investing today on a lien-to-value ratio and hoping it either stays the same, or appreciates,” Reid said.

Nationally, lien-to-value ratios average less than 10 percent, McOsker said. Those ratios may afford investors a margin of safety, yet tax-lien investors generally must pay off additional liens that have accrued on a property, such as for unpaid water bills, additional property taxes or related fees from the county or municipality, to complete a foreclosure, Waller said.
Bankruptcy Priority

Liens for taxes owed to the IRS generally take priority over liens for property taxes in a bankruptcy, said Donald Dinan, a partner with Roetzel & Andress in Washington and general counsel for the association of lien investors. Homeowner bankruptcies generally halt the progress of foreclosures and can tie up investors’ money for years, Reid said.

If there are multiple tax liens and multiple investors attached to a property, generally the buyer with the earliest certificate has the right to foreclose first, with rules varying by jurisdiction, Dinan said.

A certain portion of lien sales get voided after an auction because the taxes were improperly assessed, Reid said. In some areas, such as Washington, D.C., the jurisdiction pays the purchaser interest owed on voided certificates and in some, including most parts of Maryland, they don’t, Dinan said.

Ruben Rodriguez, 37, who lives in West New York, attended the December auction and said he was there to learn.
‘Safe Investment’

“I definitely want to invest in my own neighborhood,” he said. Rodriguez works in New York City as a billing manager for the Mount Sinai Medical Center, he said in a telephone interview after the auction. He said he’s attracted by the potential to acquire properties for less than 10 percent of their values, if the liens go to foreclosure.

“If you know what you’re doing and you’re buying properly it’s a relatively safe investment and gives you an outsized yield, compared to what else would be available in the marketplace,” said Albert Friedman, who manages about $60 million in a tax-lien fund for Boca Raton, Florida-based Alterna Capital Management, which bid at the West New York auction in December. “You have to be big enough to attend a number of auctions, buy a number of certificates and have people on the ground,” Friedman said. He declined to comment on the fund’s returns or redemptions policy, citing regulatory restrictions on advertising by private placements.
EBay Store

When institutional investors want to unload a lien prior to foreclosure they may sell it to a specialist such as Dan Friedman, managing member of Elmhurst, Illinois-based Optimum Asset Management LLC. In addition to managing about $15 million in liens on behalf of family offices and other investors, Friedman’s firm sometimes negotiates directly with homeowners to come up with a payment plan, and in other cases forecloses and then resells the properties.

“We move a fairly high volume of foreclosure properties online,” through the firm’s store on the EBay Inc. (EBAY) website, which on Feb. 7 had two properties listed for sale, including a single-family home in Cleveland with a current bid of $920.

Investors considering putting money into a tax-lien private placement should take precautions to ensure they’re not the victims of fraud, said Andrew Altfest, executive vice president of Altfest Personal Wealth Management, a New York-based investment adviser that manages about $800 million on behalf of individuals and families.
Investor Precautions

“You’re investing with a private fund that’s not going to have the same amount of regulation,” as securities offered to the general public such as mutual funds, Altfest said. Investors should “make sure that the fund has a reputable auditor,” and an administrator who signs off on every transaction, he said.

Investors should check the background of tax-lien fund managers with their state securities regulator before investing, said Jack E. Herstein, assistant director of the Nebraska Bureau of Securities.

Since 2008 at least six individuals have pleaded guilty to conspiring to rig bids at New Jersey and Maryland tax-lien auctions, according to press releases from the U.S. Department of Justice. The Justice Department continues to investigate the auctions, said Gina Talamona, a spokeswoman.

“At an open outcry auction there’s always the possibility of three guys hunkered around the water cooler talking about what they’re interested in,” Westover said.

JPMorgan Chase & Co.’s Xspand unit received a subpoena as part of a Justice Department investigation in 2009, according to a prospectus for New York City tax-lien bonds serviced by the firm. The firm announced in July it would begin exiting the business. Jennifer Zuccarelli, a spokeswoman for the New York- based bank, declined to comment on the subpoenas.

“The beautiful thing I’ve learned over the years is: Delinquent taxes never go away,” Westover said. “Even in a good economy, there are still delinquent taxes.”

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Weekend Sales February 25th

It must be BOGO weekend or something because several of the online game stores are having "Buy One Get One Free" sales all weekend long. This includes classic Dungeons & Dragons games, blockbusters from Electronic Arts, plus some other big sales on recent hits. Take a look at the deals with our compilation of all the weekends sales.

Gog.com is doing a BOGO sale on Dungeons & Dragons games. There are eight of them, including classics like Icewind Dale and Baldur's Gate, each is ten dollars, but if you buy one, you'll get the second free, plus a free copy of Temple of Elemental Evil, so that's actually a buy one get TWO free sale.

Steam has a pair of shooters on sale this weekend. First is Serious Sam. Everything in the Serious Sam franchise is marked down by 66%. This puts the Complete Pack at $28.90, and many of the individual games at two or three dollars. While that's a great deal, we'd recommend that you take a look at Deus Ex: Human Revolution and all of its DLC on sale at 66% off. That puts the game at $10.19, the special Augmented Edition at $13.59 and the three DLC packs between .67 and $1.09. You can get this awesome cyberpunk game plus all of its bell 'n' whistles for just over twenty bucks.

ImpulseDriven.com is also part of the BOGO trend; when you buy one of five selected EA games, you'll get the first game in that series for free. The franchises include Mass Effect, Dragon Age, Dead Space, Crysis and Need for Speed. This is good way to catch up on Mass Effect if you still haven't tried it but want to check out ME3 in two weeks.

Origin also has a BOGO and are offering a free Sims 3 Expansion pack if you buy the new "Showtime" expansion.

GamersGate.com has a sale on "Nordic Games" which features dozens of games developed by the sturdy barbarians of the frigid northlands of the exotic land of Europe. Franchises include Gothic, Spellforce, Painkiller and many, many more. All of them are half off.

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Information about the Whitney Houston Memorial Service

This Saturday, February 18th, the Houston family will celebrate the life of Whitney Houston. They ask that we all come together to remember Whitney and invite you to view the memorial service online.
New York – February 12, 2012 – Sony Music Entertainment today issued the following statement regarding Whitney Houston:

“Whitney Houston was an icon and a once-in-a-lifetime talent who inspired a generation of singers and brought joy to millions of fans around the world. She had a voice of unmatched beauty and power that changed music forever, and she leaves behind an indelible legacy of timeless songs that will never be forgotten. She also was an important member of the Sony Music family who spent her storied recording career with Arista Records. She will be greatly missed. Our deepest condolences go out to her daughter and her entire family.”
Whitney At The Grammys
It's one of the biggest weekends in music - that's right The Grammys! We just love this adorable pic of Whitney when she won "Best Pop Vocal Performance" at the 28th Awards for her hit "Saving All My Loving."

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Pop queen Whitney Houston dies at 48

Whitney Houston, who ruled as pop music's queen until her majestic voice and regal image were ravaged by drug use, has died at the age of 48.

Police responded to an emergency call at the Beverly Hilton hotel in Los Angeles at about 3:45 p.m. PT, said Lt. Mark Rosen with the Beverly Hills police. Paramedics who were already at the hotel because of a Grammy party rushed to Houston's fourth-floor suite and attempted to revive her but they were unsuccessful, Rosen told KABC-TV.

Houston was pronounced dead just before 4 p.m., Rosen said. Her body remained at the hotel while detectives were investigating.

"There were no obvious signs of any criminal intent," Rosen said.

Houston's publicist, Kristen Foster, said the cause of death was unknown.

Her death came on the eve of music's biggest night the Grammy Awards. It's a showcase where she once reigned, and her death was sure to cast a heavy pall on Sunday's ceremony.

Houston's longtime mentor Clive Davis held his annual pre-Grammy concert and dinner Saturday at the Beverly Hills Hilton. It was a bizarre scene as stars walked the red carpet amid a heavy police presence while news vans snaked around the block and paparazzi staked out every hotel exit.

Stars including Dr. Dre, Adam Lambert, Serena Williams and Kim Kardashian were in attendance.

In another development, Sunday's Grammy Awards show will feature a "musical tribute" to Houston by Jennifer Hudson. A spokesman for the show said Houston's death is too fresh to do more, but they had to note the Grammy-winner's amazing accomplishments.

Expected appearance

Houston was supposed to appear at the gala, and Davis had told The Associated Press that she would perhaps perform: "It's her favourite night of the year … (so) who knows by the end of the evening," he said.

Houston had been at rehearsals for the show Thursday, coaching singers Brandy and Monica, according to a person who was at the event but was not authorized to speak publicly about it. The person said Houston looked disheveled, was sweating profusely and liquor and cigarettes could be smelled on her breath.

Two days ago, she performed at a pre-Grammy party with singer Kelly Price.

At her peak, Houston was the golden girl of the music industry. From the middle 1980s to the late 1990s, she was one of the world's bestselling artists. She wowed audiences with effortless, powerful and peerless vocals that were rooted in the black church but made palatable to the masses with a pop sheen.

Her success carried her beyond music to movies, where she starred in hits such as The Bodyguard and Waiting to Exhale.

She had the perfect voice, and the perfect image: A gorgeous singer who had sex appeal but was never overtly sexual, who maintained perfect poise.

She influenced a generation of younger singers, from Christina Aguilera to Mariah Carey, who when she first came out sounded so much like Houston that many thought it was Houston.

Addiction woes

But by the end of her career, Houston became a stunning cautionary tale of the toll of drug use. Her album sales plummeted and the hits stopped coming; her once serene image was shattered by a wild demeanour and bizarre public appearances. She confessed to abusing cocaine, marijuana and pills, and her once pristine voice became raspy and hoarse, unable to hit the high notes as she had during her prime.

"The biggest devil is me. I'm either my best friend or my worst enemy," Houston told ABC's Diane Sawyer in an infamous 2002 interview with then-husband Bobby Brown by her side.

'The time that I first saw her singing… it was such a stunning impact.'—Clive Davis, Houston's longtime mentor

It was a tragic fall for a superstar who was one of the top-selling artists in pop music history, with more than 55 million records sold in the United States alone.

She seemed to be born into greatness. She was the daughter of gospel singer Cissy Houston, the cousin of 1960s pop diva Dionne Warwick and the goddaughter of Aretha Franklin.

Houston first started singing in the church as a child. In her teens, she sang backup for Chaka Khan, Jermaine Jackson and others, in addition to modeling. It was around that time when music mogul Clive Davis first heard Houston perform.

"The time that I first saw her singing in her mother's act in a club … it was such a stunning impact," Davis told Good Morning America. "To hear this young girl breathe such fire into this song. I mean, it really sent the proverbial tingles up my spine."

Before long, the rest of the country would feel it, too. Houston made her album debut in 1985 with Whitney Houston, which sold millions and spawned hit after hit. Saving All My Love for You brought her her first Grammy, for best female pop vocal. How Will I Know, You Give Good Love and The Greatest Love of All also became hit singles.

Another multiplatinum album, Whitney, came out in 1987 and included hits like Where Do Broken Hearts Go and I Wanna Dance With Somebody.
Early critical praise

The New York Times wrote that Houston "possesses one of her generation's most powerful gospel-trained voices, but she eschews many of the churchier mannerisms of her forerunners. She uses ornamental gospel phrasing only sparingly, and instead of projecting an earthy, tearful vulnerability, communicates cool self-assurance and strength, building pop ballads to majestic, sustained peaks of intensity."

Houston's decision not to follow the more soulful inflections of singers like Franklin drew criticism by some who saw her as playing down her black roots to go pop and reach white audiences. The criticism would become a constant refrain through much of her career. She was even booed during the Soul Train Awards in 1989.

"Sometimes it gets down to that, you know?" she told Katie Couric in 1996. "You're not black enough for them. I don't know. You're not R&B enough. You're very pop. The white audience has taken you away from them."
In this Oct. 13, 1997 file photo, Whitney Houston looks over her shoulder as her then husband Bobby Brown looks to her at the premiere of the movie Cinderella in Los Angeles. In this Oct. 13, 1997 file photo, Whitney Houston looks over her shoulder as her then husband Bobby Brown looks to her at the premiere of the movie Cinderella in Los Angeles. (Rene Macura, File/Associated Press)

Some saw her 1992 marriage to former New Edition member and soul crooner Bobby Brown as an attempt to refute those critics. It seemed to be an odd union; she was seen as pop's pure princess while he had a bad-boy image, and already had children of his own. (The couple had a daughter, Bobbi Kristina, in 1993.) Over the years, he would be arrested several times, on charges ranging from DUI to failure to pay child support.

But Houston said their true personalities were not as far apart as people may have believed.

"When you love, you love. I mean, do you stop loving somebody because you have different images? You know, Bobby and I basically come from the same place," she told Rolling Stone in 1993.

"You see somebody, and you deal with their image, that's their image. It's part of them, it's not the whole picture. I am not always in a sequined gown. I am nobody's angel."

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Demi Moore: Where is She Now?

It's been nearly two weeks since she was rushed to the hospital after going into convulsions, however Demi Moore's whereabouts following her emergency visit to a Los Angeles, CA medical facility are still unknown.

While speculation over the location of her recovery has had the Internet abuzz, friends of the 49-year-old are staying mum. telling People, "Demi is such a private person and where she is now is being kept top secret," while another pal added that only a "very close" circle of the star's friends know where she's currently residing.
Several reports claim Moore is undergoing "spiritual counseling," while others suggest that she's being treated at the Cirque Lodge in Sundance, Utah.

Despite the rumors, the only confirmation Demi's camp has given since her medical emergency is that she was seeking "professional assistance to treat her exhaustion and improve her overall health."

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Kim Kardashian's Salon Run-In with Kyle Richards

Just a day away from her E! show's big second season finale, Kim Kardashian spent her Saturday afternoon (January 28) getting pampered in Los Angeles, California.

The 31-year-old brunette beauty first tended to an appointment at Anastasia Salon before hitting Nail Salon across the street, where she bumped into "The Real Housewives of Beverly Hills" star Kyle Richards.

The sighting comes as Kim is gearing up for tomorrow's airing of “Kourtney & Kim Take New York" - during which she's seen in a preview clip dealing with the emotional rollercoaster of her marital demise with ex-husband Kris Humphries.

In the teaser, Miss Kardashian's heard saying of the inevitable split, "It's hard for me. He's a good heart, he's a Christian - everything on paper I want in someone, but for some reason, my heart isn't connecting."

"I feel awful that I made him move out here and change his whole life. I feel sad, I feel bad for the guy," Kim continues, with all of the drama set to unfold beginning at 10/9c on E!

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Legendary 427 Corvette

More than 40 years have passed since Chevrolet labeled a Corvette with a 427 badge, but beginning this summer for a limited run the legendary nameplate will return on a convertible model commemorating the marque’s 60th anniversary. The car was unveiled to the public for the first time Friday night at the Barrett-Jackson auction in Scottsdale, Ariz., where the rights to purchase the first car with serial number 001 will be auctioned off Saturday night. Proceeds from the sale will go toward the AARP’s Drive to End Hunger charity, coordinated through Chevy dealer and NASCAR team owner Rick Hendrick.

The 2013 Corvette 427 Convertible Collector Edition will be the fastest and most capable convertible in Corvette’s history, according to Corvette chief engineer Tadge Juechter. Along with the 427, Chevy will offer a 60th Anniversary Package available on all 2013 Corvette models.

The 427 Convertible takes elements from both the Z06 and ZR1 models. The 427 is fitted with the LS7 engine from the Z06 that makes 505 hp and 470 lb-ft, making it the most powerful engine ever put into a Vette convertible. Like the Z06, the 427 Convertible is only available with a six-speed manual.

The Corvette 427 Convertible will have the same driveline and rear axle system from the Corvette Z06, a rear-mounted battery and standard Magnetic Selective Ride Control. The standard 19-inch front and 20-inch rear wheels are wrapped in ZR1-style Michelin PS2 tires. Lightweight machine-face Cup wheels--introduced on the 2012 Corvette Z06 with Z07 and Corvette ZR1 with PDE performance packages--come standard and include unique gray-painted pockets. Black Cup wheels or chrome ZR1-style wheels are also available.

The 427 Convertible is fitted with several carbon-fiber components to help reduce weight, including carbon fiber raised hood (introduced on the 2011 Z06 Carbon Edition), carbon fiber Z06-style fenders and carbon fiber floor panels. “CFZ” carbon fiber front splitter and rocker panels are optional on the 427 Convertible and included with the 60th Anniversary package.

Juechter said the 427 is also being used a bit as a test-bed for some C7 Corvette technology, where they are using advanced composite materials to help reduce the weight of the car by some 40 pounds, tipping the scales at 3,555 pounds. Juechter said he wouldn’t reveal which components have been modified but that the overall weight savings gives the 427 Convertible a power-to-weight ratio of 6.64--in other words, 1 horsepower to every 6.64 pounds of vehicle weight. According to Chevrolet, that’s better than the Porsche 911 Turbo S Cabriolet at 6.90; the Audi R8 GT 5.2 FSI Spyder at 7.58; the Aston Martin DBS Volante Convertible at 7.82; and the Ferrari California Convertible at 8.31.

Juechter said the 427 Convertible should make the trip from 0 to 60 mph in 3.8 seconds, run a quarter-mile in 11.8 seconds and have a top speed of more than 190 mph. Lateral acceleration is 1.04 g.

The 427 Convertible is available in 2LT, 3LT and 4LT trim levels and will carry a unique vehicle identification number sequence, similar to the Corvette ZR1.

All 2013 Corvette models, including the 427 Convertible, will be available with a 60th Anniversary Package, featuring an Arctic White exterior with a Blue Diamond leather-wrapped interior with suede accents. Convertible models will have a blue fabric top.

Additional content includes a ZR1-style rear spoiler, special badging, gray-painted brake calipers and the “60th” logo on the wheel center caps, steering wheel and seat headrests. An optional graphics package adds full-length racing stripes in Pearl Silver Blue, including a tonal stripe stitched into the convertible top, extending the graphic theme over the roof.

For 2013, all Corvettes will feature 60th Anniversary badges on the fascias and the “waterfall” panel on convertible models, as well as 60th logos in the instrument panel gauge cluster and on the sill plates.

The 2013 427 Convertible is not being built in limited numbers, Juechter said they will build as many as they can sell. But it will be built only for the 2013 model year as the sixth generation of Corvettes wind down. Chevrolet officials have not said when the seventh-generation Vette will be launched, but Juechter said C6 model production will stop about a month before the C7 builds begin, giving the plant in Bowling Green, Ky., time to make the model switchover.

Prices for the 427 Convertible were not released but sources expect the model to start at less than $80,000.

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Call of Duty: Modern Warfare 3 - Record Breaking Video Game

We don't write about video games here but this time we decided to make an exception and later you will understand why. The reason is the video game Call of Duty: Modern Warfare 3 that managed to break another record in sales.

Just five days after its release the video game was able to gather a whooping figure of 5 million. This record break the older one set by the previous Call of Duty that gathered 0 million in the first five days after the launch.

In addition, the figure registered by Call of Duty: Modern Warfare 3 is not only the most remarkable among video games. It surpassed all other entertainment products such as movies and music albums in terms of earning in the first days of release.

It would be also interesting to note that Activision also unveiled other incredible statistics on the number of that have been playing the video game on Xbox Live. Here are the numbers:

- 7 million online multiplayer hours were logged in the game by the end of launch day;
- at a certain point there were 3.3 million players playing the game at the same time.

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Redknapp: We can still do it. Tottenham 1 Wolves 1

HARRY REDKNAPP urged Spurs fans to keep the faith despite being held by lowly Wolves.

Luka Modric cancelled out Steven Fletcher's strike as Tottenham dropped two crucial points in the title race.

But boss Redknapp insisted his side must remain positive if they are to stay with Manchester pair City and United at the top.

Redknapp again played down the significance of this draw, insisting that the top four remains the club's aim.

He said: "I've never said to anybody that we are going to win the league.

"I know where we are at and if we can get a Champions League position again this season it will be great for us.

"I only answered their question of if it is possible and of course it is possible.

"Man City and Man United will be red hot favourites to win the league. But if we had a fantastic run in the second half like we have had in the first half of the season it could happen."

Spurs must start beating sides like Wolves if they are to sustain their challenge. But former West Ham and Portsmouth chief Redknapp knows all about sides fighting for their lives at the bottom of the table.

He added: "You know they are going to be difficult. When you turn up here on a Saturday afternoon you know you are in for a tough game.

"Teams are going to drop points against these teams, they are all working hard and fighting for survival.

"If you look at the results over the holiday period it shows how difficult it is.

"We all get disappointed when we don't win. But they are not just going to roll over. A point's a point. We're still on a great run.

"One wouldn't quite drop for us and they defended for their lives, worked hard and pressed us, closed us down and made it difficult."

Redknapp insisted he has no imminent plans to bring in new faces this month.

He said: "I'm off to watch a game tomorrow but whether its worth going in the end I won't know.

"We keep looking but we are not chasing too much I'll be honest with you.

"I haven't got anyone in mind I'd like to sign. Unless I could find someone who I thought could make a difference to us."

Wolves boss Mick McCarthy was full of praise for striker Fletcher, who scored his ninth league goal of the season and he also felt his side were worth the draw.

He said: "He is one of those rare commodities, a talented footballer who does everything else as well — he runs back for you, blocks shots and puts himself about.

"I'm delighted with the result because I though we deserved something from the game.

"I'm not suggesting we kept them quiet for 95 minutes because we didn't — but I think it was a good performance.

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U.S. National Parks Free for Martin Luther King Day Weekend

More than a hundred sites waive entrance fee over next few days.

More than a hundred national parks and historical sites across the United States will waive admissions fees from Friday through Monday to commemorate Martin Luther King Day.
"Dr. King's story and those of so many others whose efforts changed our country are preserved in the national parks, places where history happened," U.S. National Park Service Director Jonathan Jarvis said in a statement.

Visitors can retrace King's footsteps at the Martin Luther King, Jr., National Historic Site in Georgia, the Selma to Montgomery National Historic Trail in Alabama, or the Lincoln Memorial in Washington, D.C., as well as other sites that have direct ties to King or the civil rights movement.

"Fee-free days are important opportunities where the Park Service puts out the welcome mat and invites all Americans to relax, recreate, and learn about our shared heritage," Bryan Faehner, the associate director for park uses at the independent National Parks Conservation Association, told National Geographic News.

Other parks that will hold special events honoring King this weekend include the new Martin Luther King, Jr., Memorial in Washington, D.C., Morristown National Historical Park in New Jersey, Fort Donelson National Battlefield in Tennessee, and the Frederick Douglass National Historic Site in Washington, D.C.

More Free-Parks Days Ahead

More traditional nature and wilderness parks such as Yellowstone and the Grand Canyon will also waive entry fees this weekend. Fees vary for different sites, but can be as high as $25 per vehicle. Still, many of the country's nearly 400 national parks never charge an entrance fee at all.

The National Park Service will also waive admission fees on 14 other days in 2012:

--National Park Week (April 21 to 29)
--Get Outdoors Day (June 9)
--National Public Lands Day (September 29)
--Veterans Day Weekend (November 10 to 12)

"People have to get themselves there," Faehner said, "but they won't have to pay an entrance fee, which can turn certain people away."

(Related: U.S. national park tours from National Geographic Expeditions.)

Faehner recommends people to visit national parks during the fall and winter to avoid the summer crowds and to get a different perspective on the sites.

For example, "Civil War and Revolutionary War soldiers fought and struggled throughout the winter months, so park visitors can get a better perspective on what these soldiers went through," he said.

Off-peak visits to wildlife parks can also be rewarding. January is a great time to see bison at Yellowstone National Park, for example, or grey whales at Point Reyes National Seashore in California.

"The changing of the seasons affects what and how you experience national parks," Faehner said.

"Especially in the winter, when you can oftentimes experience a kind of solitude that you might not find otherwise."

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World’s Largest Interactive 3-D Projection is world’s biggest claw game

GM has recently created an outrageous promotion for the Chevy Sonic at the famous Roosevelt Hotel in Los Angeles. It involves the world’s biggest 3D projection and the world’s biggest claw game.

Yes, those claw games from the arcade has become bigger with bigger prizes. The ad agency Gooby Silverstein & Partners have created this fantastic 3D projection with an oversized gear shift as a joystick, with prizes of snowboards, electronics, and the 2012 Chevy Sonic.

There is a video of this after the jump if you want to see how it went. What really makes this cool is that the claw picks up a 3D version of the car for the lucky winner. Not only that, the 3D version of the car turns into a real version of the car after the projection has been “dropped”. You have to see it to believe it.

I wish I could say that I have seen this massive 3D display for myself, but it looks pretty realistic on video, especially as the walls of the hotel seem to shift. I’m guessing that was probably the hardest part.

Man, I really hope to actually see more of these types of promos in the near future, in person. It would totally make my trip to CES if someone big company had some gigantic 3D projection on the Las Vegas Strip.

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