Hundreds honor Ravi Shankar in California

Hundreds of friends and family have paid tribute to sitar virtuoso Ravi Shankar at a public memorial service near his San Diego-area home. The musician was remembered Thursday as an unfailingly generous teacher with a gentle spirit and sense of humor whose music fostered understanding between East and West. Conductor Zubin Mehta said he felt like a "little crumb" listening to Shankar play. Olivia Harrison said Shankar helped a young George Harrison achieve a more meaningful life. Shankar's daughters, singer Norah Jones and Grammy-nominated sitarist Anoushka Shankar, were in the audience at the Self-Realization Fellowship center in Encinitas, the oceanfront suburb where the musician lived for the last two decades.

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Rapper 'Fat Joe' admits tax evasion in NJ court

The rap artist "Fat Joe" pleaded guilty Thursday to failing to pay taxes on nearly $3 million in income he earned over two years for performances and music royalties. The platinum-selling artist, whose real name is Joseph Cartagena, was once a Billboard chart topper with hits like the duet "What's Luv" with the R&B singer Ashanti. Cartagena entered the plea in federal court in Newark because some of the companies he earned money from are incorporated in New Jersey. The 42-year-old Miami Beach, Fla., resident entered pleas to two counts covering years 2007 and 2008. His sentencing will take into consideration the government's initial allegation that he failed to pay income taxes for years 2007 through 2010. Federal prosecutors said the total tax loss to the government for those four years was $718,038. Wearing a navy suit, Cartagena looked fit and considerably slimmer than the former size that had earned him his rapper nickname. He has been very public about his efforts to shed weight after fellow rap stars died from obesity-related issues and was recently in Newark to speak to schoolchildren about health and fitness. In federal court Thursday, when asked by U.S. Magistrate Cathy Waldor if he understood the charges he was facing, he replied, "I super-understand it." Cartagena's lawyer, Jeffrey Lichtman, said outside federal court that his client "had already taken steps to resolve this situation" before he had been charged. He said the rapper hoped to pay back the taxes by the time of his sentencing April 3. Cartagena owned the Somerville-based Terror Squad Production Inc. and Miramar Music Touring Inc., according to court papers. He also earned income from FJTS Corp., during the time in question. The judge set bail at $250,000 and released Cartagena until his sentencing. He could face up to two years in prison and a fine of up to $200,000, plus penalties from the Internal Revenue Service.

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Twitter post offers clue to The Civil Wars' future

While there still remain questions about the future of The Civil Wars, there's new music on the way. Joy Williams, one half of the Grammy Award-winning duo with John Paul White, said Thursday during a Twitter chat that she was in the studio listening to new Civil Wars songs. It's a tantalizing clue to the future of the group, which appeared in doubt when a European tour unraveled last month due to "irreconcilable differences." At the time, the duo said it hoped to release an album in 2013. It's not clear if Williams was referring Thursday to music for a new album or for a documentary score they have composed with T Bone Burnett. They're also set to release an "Unplugged" session on iTunes on Jan. 15. Nate Yetton, the group's manager and Williams' husband, had no comment — though he has supplied a few hints of his own by posting pictures of recording sessions on his Instagram account recently. The duo announced last summer it would be working with Charlie Peacock, who produced its gold-selling debut "Barton Hollow." The photos do not show Williams or White, but one includes violin player Odessa Rose. Rose says in an Instagram post: "Playing on the new Civil Wars record... Beautiful sounds." Even with its future in doubt, the duo continues to gather accolades. Williams and White are up for a Golden Globe on Jan. 13, and two Grammy Awards on Feb. 10, for their "The Hunger Games" soundtrack collaboration "Safe & Sound" with Taylor Swift. Williams' comments came during an installment of an artist interview series with Alison Sudol of A Fine Frenzy sponsored by The Recording Academy.

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Hundreds honor Ravi Shankar at California memorial

Hundreds of friends and family on Thursday remembered sitar virtuoso Ravi Shankar as an unfailingly generous teacher with a gentle spirit and sense of humor whose music fostered understanding between East and West. Olivia Harrison said Shankar helped her late husband George Harrison achieve a more meaningful life when he was a young Beatle. "They were like father and son as well as brothers," Harrison said on an outdoor stage decorated with garlands of white flowers at the Self Realization Fellowship center in Encinitas, the oceanfront suburb north of San Diego where Shankar lived for the last two decades. Conductor Zubin Mehta said he felt like a "little crumb" listening to Shankar play and credited his close friend with introducing India to the world. Shankar died last week in San Diego at age 92. His wife, Sukanya Rajan, and daughters — singer Norah Jones and Grammy-nominated sitarist Anoushka Shankar — sat in the front row as speakers paid tribute. The audience listened to clips of Shankar's music and recorded voice. "Music is the only language I really know," Shankar said in one clip. Under blue skies on a warm Southern California morning, a family friend read messages from political and cultural luminaries including musicians Phillip Glass and Peter Gabriel, who thanked him for teaching them. The audience heard excerpts from newspaper stories that trumpeted Shankar's enormous influence. Labeled "the godfather of world music" by Harrison, Shankar helped millions of Westerners — classical, jazz and rock lovers — discover the centuries-old traditions of Indian music. From Harrison to John Coltrane, from Yehudi Menuhin to Andre Previn, he bridged the musical gap between East and West. Pirashanna Thevarajah, one of his students, said Shankar was the reason he pursued a music career and that his teacher sometimes believed more in him than he believed in himself. He called Shankar "a very simple soul with a wonderful sense of humor." Thevarajah said Shankar followed his puns with the line, "That's why the call me a pundit." Film director Joe Wright, Shankar's son-in-law, recalled a risky medical operation that Shankar's family was unsure he would survive. Though he made it through, Wright thought he might never again see Shankar alive as he was rolled into the operating room. Wright saw Shankar's fingers moving as he was wheeled away.

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New Miss Universe says win shows confidence is all

The 20-year-old Rhode Islander who brought the Miss Universe crown back to the U.S. for the first time in 15 years is hoping that her quick rise through the beauty contest ranks and an onstage stumble will show women that anything is possible. Perched high above the Las Vegas Strip in the Planet Hollywood winner's suite Thursday, Olivia Culpo told The Associated Press that her yearlong transformation from Boston University sophomore to pageant winner proves that women can accomplish anything to which they set their minds. "My first pageant was a year ago and already I'm Miss Universe. It's kind of incredible," she said. She pointed to the fact that she stumbled on her red velvet evening dress Wednesday night before beating out beauty queens from 88 countries as proof that confidence and poise matter more than perfect performance. "I like the fact that I tripped last night in my evening gown. I think that that's cool," she said. "And you learn from it: Don't step on your dress," she added with a laugh. The former Miss USA spent the first day of her reign surrounded by stylists and handlers, wearing a scarlet mini-dress with cutout cap sleeves and sky-high silver heels. Plates of cupcakes and croissants went untouched as she sipped from a water bottle with a straw. For the past six months, Culpo has shared a New York City apartment with outgoing Miss Universe, Leila Lopes of Angola. The two titleholders traditionally room together. Her coronation ended a long losing spell for the U.S. in the competition. An American had not won the Miss Universe title since Miss Hawaii, Brook Lee, won in 1997. A middle child of five, Culpo was studying theater and communications at Boston University when she decided to enroll in the Miss Rhode Island pageant last year to improve her stage presence. The petite brunette ended up winning that contest in a rented $20 dress with a hole in the back. She claimed the Miss USA crown in the spring, despite losing an earring during the interview portion. Culpo said she studied world events, prepared for interview questions and memorized proper walking and posing techniques using stacks of flashcards. The aspiring actress took a year off from Boston University to fulfill the travel and charity obligations that come along with the Miss USA crown, and now says she will not return to her former college. "I do want to finish my education," she said. "I just don't think that Boston has a big enough market for what I want to do." As Miss Universe, Culpo will advocate for HIV prevention, the official platform of the title holder, but does not intend to speak out on other issues. She did have a word for the "pageant moms" who have caught the nation's attention on reality television shows such as TLC's "Toddlers & Tiaras." "If you think that your child is going to be really sensitive to the fact that they might not win — which they probably won't — you shouldn't do it because it's not healthy if they get the feeling that they're not good enough or they're not worthy," she said. Culpo's mother, a professional viola player, discouraged her from entering the world of beauty competitions last year. "I didn't see the point; I thought it was silly and a waste of time," Susan Culpo said. But she changed her mind when she saw the joy her daughter brought to hometown fans. On Thursday, the mayor of Culpo's home town of Cranston, R.I., called her win an inspiration for the city, state and nation. Asked moments before the Miss Universe show why pageants remain relevant, Donald Trump, who co-owns the competition with NBC, responded that everyone likes beautiful women. His winner had a different take: "It really comes down to being able to inspire others by being comfortable with yourself. You have to show girls that everyone is different, everyone has things they don't like, but they work it and walk the runway," Culpo said. "There is no ideal body. It's just taking what you have and working it.

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Wall Street dealers lose edge in U.S. Treasury auctions as investor clout grows

NEW YORK (Reuters) - A dramatic increase in the amount of government bonds that investors purchase directly from the U.S. Treasury Department in its regular debt auctions is reducing the advantage large dealers have traditionally held in the sale process. The Treasury will not disclose the names of investors who can purchase directly from the government in its auctions but speculation is rife that the participants include an expanding number of the world's largest governments and asset management firms. BlackRock , the world's largest asset manager, has access to the auctions as a "direct bidder", but does not use it, said Lauren Post, a spokeswoman for the firm in New York. A spokesman for PIMCO, which manages the world's largest bond fund, did not respond to inquiries over whether they have direct bidding access. Qualified investment funds, insurance companies, banks, and foreign governments may all bid directly in U.S. Treasury auctions, but only the 21 authorized "primary dealers" are required to bid to fulfill their role as market makers in the securities. "Direct bidders" are showing an increasing presence in the auctions in the last three years, and this week they bought a record share of seven-year notes and the most five-year debt in the auctions in five years. The shift in the auction procedure is expected to continue, as asset managers increasingly take advantage of the debt sales to buy big positions and leave dealers increasingly in the dark over their purchase plans, while dealers continue to shrink balance sheets weakened by loss making positions taken before the credit crisis of 2007-2009. "It's becoming more consistent that they are doing that now," said Richard Gilhooly, an interest rate strategist at TD Securities in New York. "They are concealing information and they may think that it might help them get the auction cheaper, because the dealers may bid back thinking the demand isn't there." Reuters in May reported that China, the largest holder of U.S. Treasuries with more than $1 trillion, has direct bidder status, and market participants surmise other major central banks may also, although this could not be verified. Japan is close to approaching the size of China's Treasuries holdings, while Switzerland has been dramatically increasing its Treasuries holdings as its central bank accumulates more cash to invest from its foreign exchange intervention against the Swiss franc. In the auction on Tuesday this week, direct bidders bought 30.4 percent, or $10.62 billion, out of $35 billion in five-year notes, while dealers purchased 37.2 percent, or $12.98 billion. On Wednesday the bidders bought 23.1 percent, or $6.69 billion in seven-year notes, a record for a those notes. Dealers took 37 percent, or $10.72 billion of the $29 billion sale. Those recent auctions may have been influenced by year-end demand for low risk assets amid concerns about the impact on U.S. economic growth from the approaching "fiscal cliff" but the results still trail behind a July auction of 10-year notes that stunned dealers. In that month direct bidders bought 45.4 percent of a 10-year note auction, the largest on record for any Treasuries auction, eclipsing dealer purchases of 14 percent. LOSING THE INFORMATION ADVANTAGE The presence of direct bidders in Treasuries auctions has been growing over the past three years, building from a sporadic presence that would involve less than 10 percent of a sale to a consistent attendance that approaches the amount of dealer purchases. For dealers, the increased presence of direct bidders is making it harder for them to gauge demand for bonds ahead of a sale, and therefore hard to know how aggressively to bid for the debt. "If you are a direct bidder you're under no obligation to bid, you just have access to go directly to the Fed, which is a complete advantage for you," said Tom Tucci, head of Treasuries trading at CIBC in New York, which is not a primary dealer. For dealers, "that they are bidding on securities where now they don't see the bids coming, so they are at a disadvantage," he added. By bypassing a dealer, an investor wanting to purchase a large block of bonds may estimate they can obtain a more favorable price. Some primary dealers have argued, however, that the shift might cause long-term harm to the auction process, which they say so far has been stable in large part because of support from the Federal Reserve's massive monthly bond purchases. "The primary dealers are having less information on flows and liquidity. They will take less risk," said Brian Edmonds, head of rates trading at Cantor Fitzgerald, a primary dealer based in New York. "Down the road, you could have sloppy auctions because if the direct bidders step away, primary dealers are not going to fill the void." STRUCTURAL SHIFT For large investors with growing assets under management that need to be invested, government debt auctions are one of the few places they can buy in large amounts with sufficient liquidity, and also without tipping their hand over their positions. "They are trying to get large size because they have much larger portfolios than before," said TD's Gilhooly. While asset managers grow their investments, dealers have pared back assets and shrunk their balance sheets, because they are still hurting from risky loans bought and made before the 2007-2009 financial crisis. Countries which have been active in curbing the appreciation of their currencies in order to help their exporters, may now also have the ability to buy Treasuries in large quantities and direct access may be more appealing, analysts said. According to U.S. Treasury data released earlier this week, Japan's Treasuries holdings were $1.135 trillion in October, up nearly $130 billion from a year earlier, while Switzerland's U.S. bond ownership grew to $194.4 billion from $143.9 billion 12 months earlier. China's Treasuries holdings fell to $1.162 trillion in October from $1.256 trillion a year earlier, but analysts have said China has been storing their Treasuries in overseas accounts which are not counted as a part of its official U.S. bond holdings.

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S&P downgrades Cyprus on default fears

NICOSIA, Cyprus (AP) — The Cyprus government has vowed to do what is needed to finalize a bailout agreement with international lenders after ratings agency Standard & Poor's downgraded Cyprus further into junk status amid concerns that the country could default on its debts. The U.S. agency said Friday that the two-notch downgrade to CCC+ was due to a "considerable and rising" risk that the country, one of the 17 European Union countries that use the euro, may default. It also maintained its negative outlook on the country, meaning that further downgrades are possible. S&P said it went ahead with the downgrade because the Cypriot government is running out of money while uncertainty remains over the terms of a bailout that the country is trying to negotiate with international lenders and its euro partners. The rescue loans will be used to salvage the country's banks, which are heavily exposed to Greece. "With the government's financing options increasingly limited — coupled with what we view as the hesitant attitude of Cyprus' eurozone partners toward sharing the cost of a severe banking crisis — we view the risk of a sovereign debt default as considerable and rising," S&P said. Unable to borrow from international markets for more than a year, the Cypriot government this week had to tap the pension funds of the country's top three state-owned companies to cover salaries and benefits up until March when it's hoped the first batch of bailout cash will arrive. Germany's Foreign Minister Guido Westerwelle said Friday that there are "appropriate aid mechanisms" for Cyprus, but that the country must first make "serious reforms" and achieve "real budget savings." Cyprus government spokesman Stefanos Stefanou played down the S&P downgrade, saying the country is "making every effort" to clinch a bailout accord and attributed any difficulties with doing so to squabbles among its euro partners. Cyprus' Finance Minister Vassos Shiarly said one such difficulty is the International Monetary Fund's insistence on money being pumped directly into troubled banks from the European Union's bailout fund instead of lending it to governments first and pushing up public debt. The EU is balking at that because its single banking supervisor isn't in place yet. S&P said some progress has been made putting together the bailout with the "troika" of international creditors — the European Commission, the European Central Bank and the IMF. It also acknowledged the country's efforts to shore up public finances with this week's approval of the 2013 budget that incorporates troika-mandated spending cuts totaling almost 6 percent of the country's €17.5 billion ($23.2 billion) gross domestic product. Cyprus is the third-smallest economy in the eurozone, ahead of Estonia and Malta. Shiarly said the fact that the country has done "all and more" that the troika has asked it to do even before a bailout accord has been signed — from slashing government workers' salaries and benefits to raising a host of taxes — will stand it in good stead when its eurozone partners decide on the bailout on Jan. 21. But S&P said it doubts whether state-owned companies have much more money to help the government pay its bills if a bailout deal isn't finalized by March, while presidential elections set for February could complicate matters. The agency said it's still unclear how Cypriot banks — whose assets total more than five times the country's economy — will get the money they need to replenish their depleted capital buffers. A draft version of the bailout foresees Cypriot banks needing up to €10 billion ($13.25 billion) to recapitalize, raising questions whether Cyprus can pay off any such loan when its economy is projected to contract by 3.5 percent of its GDP next year. S&P said if the government were to take on the cost of the bank's recapitalization, the Cyprus' debt would rise "well above" 100 percent of GDP. Shiarly said that it's premature to talk about whether the country's debt would be sustainable since an exact figure on the banks' actual needs won't be known before sometime next month when an assessment by investment firm PIMCO and auditors Deloitte will have wrapped up. Cyprus' left-wing President Dimitris Christofias — who won't run for re-election in the February poll — said Friday that he would never accept a writedown of Cyprus' debt in order to make it sustainable, but Germany didn't rule it out. Shiarly said any such haircut would do more harm than good because a large amount of Cypriot government bonds are held by Cypriot banks and the losses they would sustain would push their recapitalization needs even higher.

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