USA Stocks: Worst week in 2011

Stocks ended Friday's session sharply lower, posting their worst weekly performance in more than a year, as investors grow increasingly worried that Washington may not reach a deal to raise the debt ceiling before the deadline.

At the preliminary close, the Dow Jones industrial average (INDU) fell 97 points, or 0.8%, to close at 12,143. Friday's selling was broad, with 28 out of the Dow's 30 members trading in the red. The blue chips were led lower by shares of drug maker Merck (MRK, Fortune 500) and technology company Hewlett-Packard (HPQ, Fortune 500).

For the week, the Dow sunk 4.2% -- its worst weekly performance since June 2010.

The S&P 500 (SPX) traded down 8 points, or 0.7%, to 1,292; and the Nasdaq Composite (COMP) lost 10 points, or 0.4%, to 2,756. The S&P 500 dropped 3.6% and the Nasdaq lost 3.9% for the week.

Along with the debt ceiling, investors had to work through a disappointing government report showing the U.S. economy grew at a 1.3% annual rate in the second quarter. The data was far worse than expected.

"The GDP number was nothing short of a disaster and worse," said Dave Rovelli, managing

director of US equity trading at Canaccord Adams. "We went from little growth to no growth."

The Triple-A debt club

America's Debt Crisis: Investors remained unnerved after House Speaker John Boehner delayed a vote late Thursday on his plan to raise the debt ceiling. However, after the initial delay, Boehner's bill now has the votes to pass the House. Republican leadership apparently agreed to attach a balanced budget amendment to Boehner's bill to help court the Tea Party.

The market's fear factor -- the CBOE Market Volatility Index (VIX), commonly called the VIX -- jumped up 8.2% in part on both the GDP and debt ceiling news. That's still below 30, which denotes high fear in the marketplace, but the index has shot up more than 46% in just the past five days.

"People are just crossing their fingers that these morons in Congress will get a deal done by Monday," Rovelli added.

But even if Boehner's plan does pass the House, Senate Majority Leader Harry Reid has promised the Democratic-controlled Senate will block it, and President Obama re-emphasized on Friday that he would veto it.

But investors are mostly positive that a deal will get done.

"There's enough ideas in all the bills that have passed in the House and the Senate, that we can cobble something together that everyone can agree to," Orlando said.

Bonds: The price on the benchmark 10-year U.S. Treasury rose, pushing the yield down to 2.83% from 2.95% late Thursday.

Short-term Treasuries saw moderate selling on Friday, as investors pulled money out of securities that would likely be the first affected by a government default. The yield one-month T-bill was up to 0.18% from 0.15% Thursday.

Currencies and commodities: The dollar strengthened against the euro and British pound, but weakened against the Japanese yen.

Oil for September delivery fell $1.74, or 1.8%, to $95.70 a barrel.

Gold futures for August delivery jumped $14.90, or 0.9%, to $1,628.30 an ounce. Earlier in the session, gold hit an intraday record of $1,634.90 an ounce.

Companies: Drugmaker Merck (MRK, Fortune 500) said it plans reduce its workforce by 12% to 13% from 2009 levels by the end of 2015, as the next phase of a restructuring program. Shares fell 2%

Shares of Newell Rubbermaid (NWL, Fortune 500) rose 8% after the company said it earned 46

cents a share in the second quarter, beating forecasts by four cents. The household products company also lowered its full-year guidance, citing higher commodity costs and weaker sales.

Shares of online travel site Expedia (EXPE) jumped 9%, after the company reported better-than-expected earnings.

Economy: The Chicago purchasing managers index fell to a reading of 58.8 in July. Economists had expected a reading of 58, according to Briefing.com. The level still indicates an expansion in the region's manufacturing activity.

World markets: European stocks fell moderately on Friday. Britain's FTSE 100 lost 1%, the DAX in Germany was off 0.4% and France's CAC 40 slid 0.9%.

In a widening of Europe's debt crisis, Moody's said it may downgrade Spanish debt. The credit rating agency said that while the country's sovereign rating was being placed under review, any downgrade would most likely be "limited to one notch."

Asian markets ended lower. The Shanghai Composite edged down 0.3%, the Hang Seng in Hong Kong fell 0.6% and Japan's Nikkei declined 0.7%

Debt ceiling fiasco risks double-dip recession

Economists say the debt ceiling debate has already damaged the U.S. economy, and many worry that a deadlock could send the country hurtling into a double-dip recession.

"Growing uncertainty about the ultimate outcome inevitably has some negative effect on business capital investment and hiring as the August 2 deadline approaches," said David Crowe of the National Association of Home Builders.

So far, the damage has been fairly limited, with most economists surveyed by CNNMoney saying the debate has reduced the nation's gross domestic product by only a few tenths of a percentage point, at most, to date.

And economists generally aren't too worried about the economic impact of the U.S. briefly breaking past the Aug. 2 deadline.

"If a deal appears imminent, there will not be any impact on GDP," said Bill Watkins, executive director of the Center for Economic Research and Forecasting.

But the impact could be substantial if a prolonged battle prevents the government from sending out millions of checks owed to Social Security beneficiaries, federal employees, active-duty soldiers and other Americans dependent on government funds.

Economy still stuck in the mud

If the debt ceiling isn't raised, the federal government won't be able to pay 44% of its bills in August, worth an estimated $134 billion, according to a Bipartisan Policy Center analysis. That's the rough equivalent of cutting annual spending by $1.6 trillion -- enough to have a major effect on the economy.

But just how major?

One third of economists surveyed said a new recession is possible if there's a prolonged deadlock. And the threat is even greater because the economy is still healing from the last recession.

"It could precipitate a double-dip given that the economy is weak," said Watkins.

Some compared it to the financial meltdown in the fall of 2008 that turned a typical economic downturn into the Great Recession.

"If a default is allowed to occur, this would be the equivalent of self inflicting a financial crisis that is larger and more damaging than the one from which the economy is still struggling to recover," said Sean Snaith, professor of economics at the University of Central Florida.

Economists disagree on just how long past the deadline negotiators could go before triggering a recession. David Wyss, an economist at Brown University, said a couple of weeks of deadlock might not cause too much damage. But "if the problem extends, it probably means a return to recession with a negative third and fourth quarter."

But the majority of the 18 economists surveyed believe the economy will keep growing, albeit more slowly, even with a continued debt ceiling impasse.

A prolonged deadlock would shave a few points off of GDP for the rest of the year, but stop short of an actual recession, said David Nice of Mesirow Financial.

He doesn't think debt debate will drag on for too long, but if it does, he would cut the firm's forecast for economic growth roughly in half in the third quarter.

Economy Grinds To Halt As Consumers Pull Back

Consumers all but shut their wallets in the second quarter, causing the U.S. economy to grow at a tepid pace.

To make matters worse, growth in the first quarter was much slower than initially thought, according to new government figures released Friday.

"It's quite worrisome as the economy remains at stall speed in the second quarter," said Sal Guatieri, senior economist with BMO Capital Markets. "If that continues, then it would raise the risks of a double dip."

Gross domestic product, the broadest measure of the nation's economic health, rose at an annual rate of 1.3% in the second quarter, the Commerce Department said.

While that's an increase from the revised 0.4% growth rate in the first three months of the year, it is hardly good news. The government originally reported that the economy grew at a 1.9% annualized rate in the first quarter.

The growth in the second quarter was also below the 1.8% increase expected by economists surveyed by CNNMoney.

Dubbed a "soft patch" by economists and even Federal Reserve Chairman Ben Bernanke, the economy's sluggishness was due to a variety of factors that weighed on consumers and businesses.

Higher gas prices for one, hit Americans hard when they peaked at a national average of $3.98 a gallon in May.

Top 10 consumer complaints

Overall, consumer spending, which accounts for roughly 70% of gross domestic product, picked up only 0.1% in the second quarter -- marking a significant slowdown from growth of 2.1% in the first three months of the year.

"The major disappointment in the report was the weakness in consumer spending, and it wasn't just fewer automobiles being sold due to Japan's earthquake. There was broad-based softness in consumer spending." Guatieri said.

It marked the slowest growth in consumer spending since the fourth quarter of 2009.

Looking back further, it also now appears that American consumers had less disposable income than originally thought from 2007 through 2010, whereas corporate profits were revised significantly higher for 2009 and 2010.

The government revised the GDP data back to 2003 and also found the recession was worse than originally thought.

Overall, the theme of the U.S. recovery continues to be one driven by companies holding cash on the sidelines and building up their infrastructure, rather than a recovery driven by consumers.

Americans on Main Street continue to be held back by slow job growth and the housing slump, even as major companies report strong profits and have mostly solid balance sheets.

Where the jobs are

According to the latest GDP report, investment in commercial real estate surged 8.1% in the

second quarter, and business spending on equipment and software rose 5.7%.

Meanwhile, exports rose 6%. The U.S. continues to import far more goods and services than it exports to foreign countries, but because imports grew at a slower rate of 1.3%, that also contributed positively to GDP.

The aftermath of Japan's earthquake and tsunami may have been one of the major reasons import growth slowed, as the U.S. bought fewer auto parts from the country.

Friday's GDP report also sparked cries from economists for lawmakers to act quickly in raising the debt ceiling and agree to a deal to cut the national deficit over the long term.

"We don't expect a recession, but if policymakers drag their feet -- which they are doing -- it will be a little more likely," said Paul Dales, senior U.S. Economist for Capital Economics.

Guatieri said: "If the government does not raise the debt ceiling and is forced to cut back spending and Social Security checks, that could undermine consumer spending even further."

U.S. debt downgrade trigger a financial crisis?

As we approach Treasury’s debt-ceiling deadline, attention has shifted from the risks of a default on Treasury debt to the risk of a downgrade of U.S. credit. Many are asking whether a downgrade could itself lead to a financial crisis. With the example of 2008 still fresh in many minds, the question has become: Would it be as bad as the Lehman Bros. bankruptcy?

Some market observers speculate that a downgrade would be a non-event: Japan, for example, went from a rating of AAA to AA without much drama. Others suggest that a downgrade would increase Treasury’s borrowing costs by $100 billion a year or more, making our already unsustainable deficit trajectory even worse.

There are no rules to define what is systemic and what isn’t — or to accurately predict the consequences of an economic shock. Each crisis is unique. How exactly it will affect financial markets, companies and our economy is impossible to know. Nonetheless, recent examples offer guidance.

In 2008, a number of once-cherished beliefs were turned upside down: (1) that home prices in America would never fall; (2) that AAA-rated subprime securities are sound; (3) that a major investment bank would never fail. Consumers, investors and companies allocated capital according to these truths. When the beliefs were revealed to be false, massive shocks were inflicted on the economy as financial markets rapidly adjusted to account for these new risks.

Banks had to reduce their leverage and rein in lending. Companies froze investment. Consumers cut spending and started saving. As a result, the economy plunged into recession, and millions of jobs were lost. Unemployment shot to 10 percent.

The question now is whether U.S. Treasury bonds, which anchor the global economy, really are the gold standard, the risk-free financial instruments they have been trusted to be. What will happen if that truth is revealed to be false?

Four factors in particular can help assess the magnitude of the financial impact from an undermined truth:

(1) How strongly is the belief held?

In 2008, investors around the world generally believed that major U.S. investment banks were so large they would never be allowed to fail. In the six months leading up to Lehman’s bankruptcy, however, it came under increased funding pressure and its stock price slowly collapsed. Markets were not completely convinced that the government would have the will or the ability to save Lehman; otherwise investors would have continued lending to it, as they did to Fannie Mae and Freddie Mac, which had no trouble borrowing money before they were rescued only days ahead of the Lehman bankruptcy.

By comparison, U.S. Treasurys have been defined for decades as the risk-free financial instrument throughout global financial markets. Faith in Treasurys is far stronger than it ever was in Lehman Bros. This suggests a far bigger shock than Lehman if this truth is proven false.

(2) How big an asset class does the belief support?

U.S. Treasurys are a $14 trillion market — the single biggest security market in the global economy. In comparison, Lehman had approximately $600 billion of liabilities before it failed, less than 5 percent of the size of the Treasury market. Treasurys are held by virtually all 8,000 banks in America and nearly all insurance companies, corporations, pension plans and millions of individuals’ 401(k)s. This scale suggests a far larger shock than Lehman.

(3) How wrong was the belief?

Here, Treasurys are not as bad as Lehman. Even if the U.S. credit rating is downgraded, almost no one believes we will actually default on our debt. The United States is not entering bankruptcy, and its debt is not junk. Lehman debt ultimately proved to be worth a fraction of its face value. To some, this suggests a U.S. downgrade would produce a more modest shock than Lehman. But a small deviation from a cherished belief can be as shocking as a large deviation from a weaker belief.

(4) What is the economic context in which the shock is taking place?

Although the United States is technically no longer in recession, the U.S. economy is growing slowly. Unemployment remains at 9.2 percent. Europe is awash in its own fiscal crisis, and much of the developed world is struggling. When Lehman collapsed, U.S. unemployment was at 6 percent, but the economy was contracting and housing markets were plummeting. The global economic context in September 2008 was probably worse than today, but our economy remains vulnerable.

These factors suggest that a U.S. downgrade has the potential to be as bad or perhaps worse than the Lehman shock. The more strongly held a belief, and the larger the asset class it supports, the greater the potential damage to the economy when the belief is turned upside down. We may not be certain what will happen if U.S. credit is downgraded, but there is no upside to finding out.

The writer, a managing director of the investment management firm Pimco, served as an assistant Treasury secretary during the George W. Bush administration. He established and led the Office of Financial Stability and the Troubled Assets Relief Program until May 2009.

Yahoo And Alibaba Deal Over

Yahoo has finally come to an agreement with Chinese Internet giant Alibaba in a months-long battle over the ownership of payment site Alipay.

Yahoo (YHOO, Fortune 500) owns about 40% of Alibaba, which itself owns Yahoo China -- as well as three massive Chinese properties including Alipay. That stake is one of Yahoo's bright spots, so investors weren't pleased when uncertainty developed over Alipay.

Back in May, Yahoo disclosed to the SEC that Alibaba had transferred 100% of its ownership of its e-commerce site, Alipay, to a new company controlled by Alibaba CEO Jack Ma.

Yahoo scrambled to clean up the mess with a statement saying it was not made aware of the asset transfer until March 31 -- and that it "occurred without the knowledge or approval of the Alibaba Group board of directors or shareholders."

Alibaba disputed those claims, saying the transfer was discussed at several board meetings as long as three years ago.

Yahoo shares plunged over that week as the news continued to develop. Investors wondered why Yahoo was so out of the loop, and they questioned whether the company could retain its relationship with Alibaba.

A few weeks later, at Yahoo's analyst day, executives declined to answer most questions about Alibaba. Yahoo CEO Carol Bartz said several times that Yahoo "had an agreement with Alipay that none of us were going to discuss the past, and we're sticking to that."

Then, at Yahoo's annual shareholder day in June, stakeholders slammed the company for its handling of the Alibaba situation.

The announcement of the deal seemed to please investors early Friday, as Yahoo shares rose 6% in premarket trade. But the stock reversed course once the market opened and was down 2% in late morning trading as the broader market fell following a weak GDP report.

Terms of the deal: Under the terms of the deal, which also includes Japanese Internet firm and Alibaba investor Softbank, Alibaba will receive between $2 billion and $6 billion for an initial public offering of Alipay or any other type of Alipay liquidation.

In addition, Alibaba Group will license some technology services and intellectual property to Alipay. In return, Alipay will pay royalties to Alibaba.

The deal is expected to close by the end of 2011 and must be approved by regulators.

JPMorgan analyst Doug Anmuth said in a note to clients Friday that he is retaining his "neutral" rating on Yahoo.

"The agreement provides a definitive range of outcomes for the eventual monetization of Alipay, while also clearing an overhang on [Yahoo] stock," he wrote.

Anmuth noted that there is "very little visibility" into a timeline for an Alipay IPO, but as a major stakeholder Yahoo "can force a liquidity event after 10 years."

The Alipay battle is hardly the first time Ma, the Alibaba CEO, and Bartz have butted heads. In September, Alibaba offered to buy back Yahoo's stake for about $11 billion. Yahoo declined

London 2012: Olympic medals

Thickness: 7mm Diameter : 85mm Weight: 400gQuantity: --

Designer : David Watkins

The biggest Summer Olympics medals to date. Artist David Watkins says the key symbols on front and back juxtapose the goddess Nike, for the spirit and tradition of the Games, and the River Thames, for the city of London. On the back of the medals is the 2012 branding, representing the modern city as a jewel-like, geological growth. The logo is shown against a 'pick-up-sticks' grid which radiates the energy of athletes and a sense of pulling together. The River Thames runs through the middle as a celebratory ribbon. The bowl-like background recalls ancient amphitheatres, with a square balancing the circle to give a sense of place. The sport and discipline is engraved on the rim of each medal, all of which will be produced by the Royal Mint at Llantrisant, South Wales.

BlackBerry Messenger 6 Features

RIM has launched the new BlackBerry Messenger (BBM) 6. The new version delivers a whole new social app experience with the new features like status update via BBM connected apps, BlackBerry app share and more.

Features of BlackBerry Messenger 6

The BBM connected apps feature lets you insert status updates like high scores, trophies, achievements, etc that shows up in the custom area within the BBM profile

• Share the apps with your BBM friends from the app and ask them to download it.
• Now you can have BBM chat within the app so that you could chat with your friends while tracking the game scores
• Launch or install an app within your friend’s profile with the discover app feature

There are a wide range of BBM connected app such as ScoreMobile, Huffington Post, Foursquare, Backgammon King, Dark Galaxy and lots more that could be identified from the “BBM connected” app icon. Your BBM friends could see the status updates from your connected apps even if they have not installed those apps.

Apple is richer than the US Government

According to a recent report by the Financial Post, Apple has more cash than the U.S government. Apple reported the quarterly earnings of US$ 75.876 billion till the 25th of June 2011 . The U.S government reported total operating balance of US$ 73.768 billion on Thursday , which is lesser than Apple.

Apple has seen tremendous growth since they introduced their first iPhone in the year of 2007. According to the recent report from IDC, Apple still holds the 4th place, based on the worldwide mobile phone shipments in Q2 2011 and the shipments have increased 141.8% when compared to Q2 2010.

These figures are not directly comparable, since the U.S government’s balance amount is the amount of money they can spend before they hit the debts and the Apple’s earnings are the operating profits. Based on the market capitalization, Apple is the second largest company in the world after Exxon Mobil.

U.S. Debt Crisis Threatens Europe

This cartoon by Schrank from The Independent on Sunday shows German Chancellor Angela Merkel and French President Nicolas Sarkozy relaxing on a pier in the shape of Europe, while Barack Obama surfs towards them on a giant wave marked 'U.S. Debt Crisis'.

COMMENTARY

Merkel and Sarkozy might have thought that they had earned a holiday after coming up with a second Greek rescue package (the newspaper headline reads "Greece bailed out again"), but the European pier (i.e., economy) looks decidedly rickety and risks being engulfed by the looming U.S. debt crisis. An American default would have disastrous consequences not only for the U.S. but the world economy, possibly starting a new recession.

iPhone 5 Will Be Launch Mid-September

Apple is reportedly prepping for a launch of the iPhone 5 sometime between September 6 and 15. According to China Times (translated via MacRumors ), suppliers are currently preparing 400,000 trial run iPhone 5 units, with an initial shipment slated at 4 million units. As the iPhone 5 features guessing game picks up steam, Apple has not formally announced anything.

Rumors began to swirl this past June at Apple's Worldwide Developers Conference when Apple's lack of iPhone 5 news suggested to some it was prepping for an iPhone announcement later in the year, likely in September. For the past three years Apple has held a media event in September, where it has introduced products in the iPod line, but this year the company is expected to launch the long-awaited iPhone 5 and a final version of iOS 5 at the same time too. iOS 5 is currently advertised on Apple's website as "coming this fall".

The Chinese publication also reports that the iPad 3, a widely rumored upgrade to the iPad 2 with a high-resolution display, is actually delayed until Thanksgiving due to component shortages. A recent report from Taiwan's Economic Daily claims the next-gen iPad display resolution will be five to six times higher than that of the iPad 2. However, some are skeptic that Apple will make the iPad 2, still a best seller, obsolete after nine months of availability.

The iPhone however, is due for a refresh, as the iPhone 4 was launched more than one year ago. Conflicting rumors over the past few months are split between an incremental upgrade to the iPhone 4, with an A5 dual-core chip (as found on the iPad 2), and a camera boost, or a rather more radical refreshed iPhone 5, as suggested by alleged cases for the upcoming device.

Google+ Traffic, Audience Time DroP

Google+ has suffered a setback after a month of meteoric growth. Traffic to Google+ declined last week, as did the amount of time people spent on the site, according to Experian Hitwise.

Hitwise says traffic to the Google+ website fell by 3 percent to 1.79 million US users during the week ending July 23, following a 283 percent rise the week prior. Average time spent on Google+ fell 10 percent to 5 minutes and 15 seconds, Bloomberg reports.

The estimates from Hitwise require one big asterisk: Hitwise doesn't measure visits through mobile apps or APIs, so any use of the Google+ app for iPhone or Android isn't being counted. Given that the Google+ iPhone app launched last week and quickly rose to the top of the App Store rankings, there's a good chance that mobile users displaced the losses that Hitwise is reporting. Google has also been purging business accounts and fake names, which could contribute to the losses.

Even so, for a service that's only one month old, a drop in website traffic and engagement is troubling. Google+ seems to be suffering similar growing pains as Twitter, in which a lot of people check out the service to see what the hype is about, but quickly lose interest. That's certainly what I've observed with friends and family who joined Google+ but became inactive users soon after.

But Google+ is different from Twitter in that it's designed to hook into other Google services that a lot of people already use on a regular basis. As I mentioned when Google+ hit 20 million users, the service's potential lies in its ability to extend users' social circles to products like Gmail, Google Docs and YouTube. The inevitable addition of Google+ games should also keep people coming back. And of course, Google+ is still invite-only, limiting the total number of people who might join the service.

So don't sound the alarms just yet. Google+ still has a lot of potential, but in its early stages, pulling people away from Facebook and Twitter isn't going to be easy.

Debt ceiling deadlock: Who will get paid?

That's the $14.3 trillion question as each day ticks closer to next week's debt ceiling deadline and Congress shows no sign of brokering a deal.

If lawmakers fail to raise the ceiling by Tuesday, the Treasury Department has said it will no longer be able to guarantee that it can pay all the country's bills in full and on time.

That's because Treasury will not be taking in enough revenue to cover all the bills coming due in August. And without a debt ceiling increase, it will be prohibited from borrowing new money in the bond market to make up the difference.

So, something will have to give.

The consensus thinking has been that Treasury will prioritize who to pay first and who to put off. And at the top of the list of who gets paid will be investors owed interest on U.S. debt. If the investors aren't paid, that would constitute a default, which would have a host of negative consequences for the country.

Of course, it's possible Treasury may decide it doesn't actually have the authority to prioritize and will instead pay interest owed to bond investors but pay other bills as they come due -- first come, first served, said former Treasury official Jay Powell, who coauthored a Bipartisan Policy Center report on the consequences of not raising the debt ceiling.

Assuming, however, that Treasury believes it has the authority to prioritize, it's not clear yet who will be paid first alongside investors. The Treasury has said it will provide more information as Tuesday approaches, and Republican Sen. Orrin Hatch has requested that the department turn over its plan by 5 p.m. on Thursday.

The plan, however, isn't likely to make anyone feel better.

Will I get my Social Security check?

That's because everyone to whom money is owed besides bond investors have either qualified for federal benefits, provided goods or services to the government, are serving in the military or otherwise work for Uncle Sam. Money will also be due to agencies to which Congress has legally appropriated money to run federal programs.

On deck to be paid every month: retirees, veterans, business owners, federal workers, active-duty soldiers, Medicare physicians and government agencies that need money to keep the lights on, to name just a few.

"While at midnight on August 2nd we don't all turn into pumpkins," White House spokesman Jay Carney said in a press briefing, he described the process of picking who to pay and who to put off as a "Sophie's choice."

How the math might work: The Bipartisan Policy Center estimates that Treasury will be short by about $134 billion for the month of August.

That cash deficit will build steadily throughout the month.

So, on Aug. 3, for instance, the center estimates that Treasury will take in $12 billion in revenue and have to pay out $32 billion, creating a $20 billion cash deficit. Among the biggest bills due that day: $23 billion for Social Security payments, $2.2 billion for Medicare and Medicaid payments, and $1.8 billion due to defense vendors.

On Aug. 4, the group estimates that the cash deficit will increase to $26 billion, with only $4 billion in revenue coming in, compared to $10 billion in bills, the largest of which would be for Medicaid and Medicare.

Come Aug. 5, the cash deficit grows another $5 billion to $31 billion.

By Aug. 15, the Bipartisan Policy Center estimates that the running cash deficit will hit $74
billion. That day the Treasury will take in an estimated $22 billion in revenue and have to pay out roughly $41 billion. The biggest bill that day is a $30 billion interest payment.

Cash on hand: What's not yet clear is how much cash Treasury might have on hand going into August.

The Bipartisan Policy Center estimates it might have enough, in theory, to pay bills in full until Aug. 10.

Even if that's right, however, Treasury may still decide to withhold some payments sooner to preserve cash to ensure it can make interest payments after Aug. 10.

It may also keep some cash on hand to ensure it can make principal payments on bonds coming due after Aug. 10.

Treasury will be able to hold bond auctions to roll over existing debt as it matures -- more than $450 billion is expected to come due in August.

However, if there isn't enough demand for Treasuries because of the uncertainty the political crisis in Washington has caused, those auctions may fail to raise all that Treasury needs to pay the principal due.

So Uncle Sam would have to pony up using the revenue coming in. That would mean even less money available to pay seniors, vets, small business owners and others who are part of the lifeblood of the U.S. economy.

Debt ceiling deadlock could lower interest rates

The nation is just days away from the debt ceiling deadline, and no one knows exactly what will happen when the borrowing limit is reached. But even in the worst case scenarios, many experts think investors will flock to U.S. Treasuries.

That possibility would mean lower borrowing costs for the government, not the spike in interest rates that many were expecting.

"Intuitively, this might not make sense because you would think there would be selling of Treasuries, but instead the Treasury market is well-supported," said Richard Bryant, head of Treasury trading at MF Global.

The experts admit they're not sure how markets will react if there is no solution by the Aug. 2 deadline. But many believe that stocks will suffer more in the uncertainty caused by a debt ceiling crisis.

"We'll have a liquidation of risky assets and a flight into quality," said Kim Rupert, Managing director of Fixed Income for Action Economics. "There really isn't an alternative [to Treasuries]."

Market news

U.S. Treasuries are such a massive market -- about $9.8 trillion -- that they dwarf the markets of other so-called "safe havens" such as gold, top-rated corporate debt or the bonds of other countries with AAA ratings.

And the expectation that the U.S. Treasury will continue to pay the principal and interest payments owed on existing debt, even in the case of a prolonged deadlock, will give investors a sense of confidence, even if there is a downgrade.

"I don't think a rating change will fundamentally change anyone's view about the likelihood of being paid back on Treasuries," said Josh Fienman, chief economist DB Advisors. "They will continue to think that Treasuries are 'money- good.'"

Fienman said that the U.S. debt ceiling crisis is widely viewed as less serious than the lingering worries about European sovereign debt. He said the U.S. needs to address its long-term government deficits, but that is a problem that needs to be solved in the coming decades, not coming days.

"This is a self-inflicted crisis. No one in the market is unwilling to lend to the U.S., " he said. "Some people find it galling, but no matter what the U.S. does, it's able to borrow at extraordinarily low interest rates."

Some worry about whether foreign investors will sour on U.S. Treasuries if there is a crisis. But countries with huge holdings of U.S. debt, such as China, have an interest in making sure that bonds stay strong during a debt ceiling crisis so as not to hurt the value of their existing holdings.

"We suspect that China would quickly pledge to continue purchases of Treasury securities, just as it has done for debt issued by governments in the eurozone, given the even greater risks to its own wealth from a financial meltdown in the U.S.," said Julian Jessop Chief International Economist for Capital Economics in a note Thursday. "China's own rating is currently AA-, so it would be odd for Beijing to make a big deal of a downgrade that would almost certainly still leave the U.S. rating higher.

A prolonged debt ceiling deadlock could quickly cause the government to stop making other payments , cutting paychecks to federal workers, contractors and citizens depending on payments such as Social Security.

Analysis by the Bipartisan Policy Center estimates that cut in spending could come to $134 billion in August alone, roughly the equivalent of cutting annual spending by $1.6 trillion. And that slashing in spending has many economists worried that the crisis could spark a new recession.

But a recession, while terrible for stocks and a country as a whole, can be good for bond prices, which move in the opposite direction of bond yields. Lower inflation expectations that typically accompany a recession lowers the returns that investors demand on a nation's debt.

The record low yield for the 10-year Treasury of just above 2% came in December 2008, when the country teetered on the edge of a new depression. Rupert said yields could approach those lows, nearly a full percentage point below current levels, if another recession starts.

One other factor that could lift bond prices is that Treasury could be forced to stop selling new bonds, which would limit the supply available for investors. Limiting supply typically helps to lift prices.

Thursday's auction of 7-year Treasuries came in with a yield of 2.25%, the lowest rate Treasury has had to pay for notes of that term since last November.

Ford Open New Unit in India to boost market share

US car maker Ford is planning to expand its operations in India as it attempts to capture a greater share of the country's car market.

The US carmaker says it plans to invest $1bn (£612m) in building a new factory in the western state of Gujarat, its second production line in India.

The announcement comes as Ford is looking to increase its global sales by 50% over the next four years.

India is one of the fastest-growing car markets in the world.

"These new state-of-the-art facilities will help us reach the goal of increasing worldwide sales by nearly 50% by mid-decade to about 8 million vehicles per year," said Michael Boneham, president and managing director of Ford India

'Growth potential'

India's rapid economic expansion has seen demand for higher-value items such as cars increase substantially.

Car sales in the country grew by almost 30% in 2010, making it one of the most attractive markets for manufacturers.

On Wednesday, Toyota, the world's biggest carmaker, said it planned to invest $220m to nearly double its production capacity in India by 2013.

Ford, which has been manufacturing cars in India for more than 10 years, has also been looking to increase its market share.

The launch of new models has led to robust sales growth in the first six months of year. The company said it was looking to exploit the market even further.

"We are aggressively expanding in markets around the world that have the most growth potential," said Mr Boneham.

He added that the company planned to offer more "fuel-efficient, high-quality vehicles from our global portfolio that customers in markets like India want and value".

Afghanistan: Deadly attack in Tarin Kowt, Uruzgan

Insurgents have carried out a gun and bomb attack in the south Afghan town of Tarin Kowt, Uruzgan province, leaving at least 22 dead, officials say.

They said the violence included three suicide bombings followed by fighting in a market, adding that all eight attackers had now been killed.

The dead include Ahmed Omed Khpulwak, a local BBC reporter.

The Taliban say they carried out the attack, which comes amid renewed violence in Afghanistan.

Nato says it is providing air support to Afghan forces in Tarin Kowt.

TV station stormed

Afghan intelligence officials said at least one bomb exploded near the governor's office and one near the offices of a security firm owned by a local militia commander. It is not clear where the third bomb was detonated.

Most of the fighting took place near these offices, which are close to the main market and a building which houses a local radio and TV station.

The BBC's Bilal Sarwary says the market was attacked from four sides, but the siege was broken by elite forces.

Residents said heavy machine guns, rocket-propelled grenades and assault rifles were used by both sides.

Health officials said 22 people had been killed including three women and 40 injured, most of them civilians.

Among the dead is Ahmed Omed Khpulwak, a reporter for the BBC Pashto radio service as well as the Pajhwok news agency.

He was one of several people killed when the TV and radio station was attacked.

BBC Global News director Peter Horrocks said: "The BBC and the whole world are grateful to journalists like Ahmed Omed who courageously put their lives on the line to report from dangerous places."

Two soldiers were among the dead but no senior government officials have been harmed, officials said.

'Doomsday'

Eyewitness Mohammad Dadu, a butcher at the market, told the BBC: ''I didn't have time to close my shop. I saw two dead bodies and four injured people with blood on their clothes.

"It feels like doomsday. Everyday people came to the market to shop. But today people are here collecting the dead and injured bodies of their relatives. There is blood, smoke from explosives and everyone has fled the area."

Afghan militants have stepped up their attacks as Nato troops begin the handover of security to local forces in parts of the country.

On Wednesday the mayor of the volatile city of Kandahar was killed in a suicide attack.

Two weeks ago, President Hamid Karzai's influential half-brother, Ahmad Wali Karzai, was killed in the same city.

China train crash due to Signal design flaw

Wen Jiabao went to the crash site to assuage public anger

Serious flaws in a signalling system caused a fatal collision on China's high-speed rail network, officials say.

Thirty-nine people died when a train ran into the back of another which had stalled on a viaduct near Wenzhou after lightning cut its power supply.

The system "failed to turn the green light into red", said An Lusheng, head of the Shanghai Railway Bureau.

Chinese Premier Wen Jiabao, who has been visiting the crash site, vowed to "severely punish" those responsible.

"The country's development is for the people, so the most important thing is people's lives," Mr Wen told reporters at the scene.

"No matter if it was a mechanical fault, a management problem, or a manufacturing problem, we must get to the bottom of this.

"If corruption was found behind this, we must handle it according to law and will not be soft."

Mr Wen earlier promised to take steps to improve safety on the high-speed rail network - one of the government's flagship projects which it hopes highlights China's development.

Six carriages derailed and four fell between 20m to 30m (65ft to 100ft) from the viaduct after Saturday night's crash, which injured nearly 200 people.

The accident came just four years after the country's first high-speed trains began operating.

Rail experts had warned against the rush to build the world's longest and fastest high-speed rail network in record time amid safety concerns.

There are allegations that corners were cut during construction because of corruption, raising questions about infrastructure across the country.

The BBC's Martin Patience in Wenzhou says it is difficult to get to the truth because of a lack of transparency and accountability.

There is a real sense that things are perhaps being built too quickly and that safety is being jeopardised in the process, our correspondent says.

'Public relations disaster'

Mr Wen's visit to the crash scene comes amid growing public outrage at the accident.

Internet users and relatives of the victims have been angered by the government's apparent unwillingness to answer questions about the crash.

This has led to accusations of government "arrogance", amid suspicions of a cover-up.

The authorities have moved quickly to stem media coverage, urging reporters to focus on "extremely moving" stories, saying the overall theme should be "great love in the face of great disaster".

Chinese media have been ordered not to question the official line on the accident, but several newspapers have published editorials criticising the railway ministry.

In an unusually scathing editorial published in both its English and Chinese versions, the state-run Global Times on Wednesday said the government's handling of the accident aftermath was a "public relations disaster".

"The relationship between the government and the public is like that of a ship and water. Water can keep the ship afloat or sink it," it said.

Some relatives of victims, who include two Americans and an Italian, have reportedly refused compensation and instead demanded to be given answers.

The accident is seen as a blow to China's hopes of selling trains abroad in a bid to become a high-tech exporter.

Shares in Chinese rail and train builders have fallen sharply since the crash.

Karnataka CM Yeddyurappa Resign from CM Post

Karnataka Chief Minister BS Yeddyurappa sent his resignation to Bharatiya Janata Party (BJP) President Nitin Gadkari on Thursday evening, just a few hours after the party's Parliamentary Board asked him to step down following his indictment in the illegal mining case by Lokayukta Justice Santosh Hegde.

In his resignation letter Yeddyurappa told Gadkari that his future in the state must be protected.

However, officially a chief minister must send his resignation to the governor of the state. So Yeddyurappa should have sent his resignation letter to Governor HR Bhardwaj.

The BJP state leaders and MLAs will meet on Friday to elect a new chief minister. Senior BJP leaders Arun Jaitley and Rajnath Singh will be in Bangalore to supervise the selection of the new chief minister.

BJP Parliamentary Board met in New Delhi on Thursday and unanimously decided that Yeddyurappa must put in his papers. Karnataka leaders also said that they would follow the decision taken by the top leadership.

Several senior Karnataka BJP leader are in the race to replace Yeddyurappa. The leaders in the race include Ananth Kumar, Jagdish Shettar and KS Eshwarappa.

Jagdish Shettar, who is the Rural Development Minister is a front-runner for the post. An MLA from Hubli, Shettar is a Lingayat by caste. He was the leader of Opposition in 1999 when SM Krishna was the chief minister of Karnataka.

Karnataka state BJP chief KS Eshwarappa is also a strong contender for the post. This OBC leader is considered to be close to the RSS. He is Yeddyurappa's biggest rival and is also facing corruption charges, two factor that could go against him.

Ananth Kumar, the BJP National General Secretary, and Yeddyurappa's main detractor, has also thrown his hat into the ring. However, chances look slim for this Bangalore South Lok Sabha MP.

Among the dark horses are Higher Education Minister VS Acharya. A Brahmin by caste, sources say that Yeddyurappa may concede to the BJP MLA from Udupi.

The name of Law Minister Suresh Kumar, who has close RSS ties, is also doing the rounds. Yeddyurappa may concede to this Brahmin MLA from Bangalore

3 Olympians have big ambitions again

To East St. Louisan Dawn Harper, a gold medal in the 100-meter hurdles at the Beijing Olympics meant a hometown street renamed in her honor, a relatively cavernous two-bedroom apartment compared to the one she and her husband had been scrunched into in Los Angeles, and a simple sense of "look what I can do."

For Mizzou's Christian Cantwell, a silver in the shot put in Beijing represented a seismic psychological breakthrough. Shrugging off the weight of fouling on five of six throws in failing to make the 2004 Athens Olympics despite a world No. 1 ranking, Cantwell rallied from fifth to second on his final throw in Beijing.

Vianney High's Scott Touzinsky says the gold medal he earned as part of a men's volleyball team contending with the stabbing murder in China of his coach's father-in-law "still hasn't sunk in."

While he believes it helped more than double his salary on the professional circuits, Touzinsky, 29, added Thursday, "Half the time I forget I'm an Olympic gold medalist, to tell you the truth."

While Nerinx Hall's Lori Chalupny, who won a gold medal with the women's soccer team in 2008, is not expected to return to the national team because of recurring concussions, the three others with local ties have ambitions of competing in the London Olympics - which begin a year from this Wednesday. Then again ...

"You can only go downhill after your first one," joked Touzinsky, who served in spot duty in Beijing and says he is competing with four others for a place on the national team as it approaches various Olympic qualifiers. "Hopefully, you get that call in the end."

If not, he said, he can live with it. Part of Touzinzky's perspective stems from an outlook that tells him volleyball has been plenty good to him, allowing him to travel all over the world: In the last few years, he has lived in Slovenia, Turkey and Germany and will play this season in Dubai at a salary "in the hundreds" of thousands to go with a fully furnished apartment and car provided by the team. Part of his perspective also comes from having a 10-month old son, Logan, who along with his wife, Angelique, will spend the nine-month season with him abroad.

Cantwell's world view also has evolved with fatherhood.

"My son, Jackson, changed my life 10 times more than winning the silver," Cantwell said a year after Beijing. "I am pretty much the same guy I was before I (won)."

Just the same, Beijing was the beginning of scaling new heights for Cantwell, who was unable to be reached last week as he traveled to Europe for a meet.

Soon after, he won his second world indoor title. A year later, the native of Eldon, Mo., won his first outdoor world championship. In 2010, he claimed his third world indoor gold and entered 2011 ranked No. 1 in the world.

Cantwell, 30, had surgery on his left, non-throwing shoulder in January and hasn't been as dominant this year, but he finished second in the U.S. championships last month and continues to prepare for the world championships next month in South Korea as part of his quest to turn that Beijing silver into London gold. He's competing in Monaco this week.

While Cantwell's success in Beijing was seen as promise at last fulfilled, Harper's gold was a sheer stunner. Injuries had kept her off the radar after her UCLA career, and she only made the Olympic team by 0.007 of a second after lunging across the finish line at trials.

But she kept advancing in China. Her blinders steered her to gold when favorite Lolo Jones smacked a hurdle down the stretch in the final.

Like Cantwell, Harper, 27, largely has prospered since Beijing. She won a national title and world silver in 2009, finished third at the U.S. championships last month and has qualified for South Korea. She, too is running in Monaco this week. As for London, it's probably her last chance for Olympic glory, as it figures to be for Cantwell and Touzinsky.

Make it or not, earn medals there or not, each has an Olympic legacy already.

"Heck, it's all gravy from here on out," Touzinsky said.

Phelps set for seven events at worlds

Michael Phelps is anguished no more. After a frustrating year marked by losses, lack of motivation and fitness, and indecision about his future in the pool, the 14-time Olympic champion is happy to be working hard again.

Fueled by time standards known only to him and coach Bob Bowman, Phelps is at the world championships, an eight-day meet that will serve as the next-to-last chapter in his storied career.

The ending will be written at next year's London Olympics.

“I kind of feel like my own self,” he said Saturday at a jammed news conference held the day before swimming begins at the Oriental Sports Center's indoor pool. “I've been excited and happy to be around the pool.”

Phelps plans to swim the 200 freestyle, 100 and 200 butterflys and the 200 individual medley.

He still owns the world records in both fly events. Trainer Bob Bowman confirmed that Phelps will swim all three relays, too.

He opens the championships in China today as part of the U.S. 400-meter free relay, the most anticipated event on the opening day of swimming.

Phelps will renew more rivalries in the 200 free final on Tuesday. Awaiting him are teammate Ryan Lochte and Paul Biedermann of Germany, who trounced Phelps with a world-record time in a stunning upset in Rome. Of course, that was before FINA banned the high-tech suits that led to 43 records at those worlds.

Lochte and Phelps will duel in the 200 IM, where Lochte is the defending world champion whose results last year made him the top American swimmer.

“What Michael did in 2008 is definitely going to go down in history, but that was three years ago,” Lochte said. “Anything can happen. I know I'm definitely a better swimmer than in '08. We're going to put on a show.”

Phelps' seven-event program in Shanghai is one less than he swam at the Beijing Olympics, where he burnished his legend as the greatest swimmer in history by winning eight gold medals.

Synchronized: Russia completed a gold-medal sweep of all seven events at the synchronized swimming world championships, winning the final event — the team free — to give Natalia Ishchenko her sixth gold.

Russia's eight-woman team including Ishchenko scored 98.620 points.

China was second with 96.580 and Spain took the bronze.

The 25-year-old Ishchenko has 16 world championship gold medals and a team gold with Russia at the 2008 Beijing Olympics.

USA Senate Offers $3.75 Trillion Deficit Cuts

A bipartisan group of U.S. senators on Tuesday revived an ambitious budget plan that could provide new ideas for breaking the impasse in Congress over raising the nation's credit limit by August 2.

President Barack Obama threw his support behind the proposal by the "Gang of Six" senators, saying it was broadly consistent with his approach on reducing debt and deficits.

Obama urged Senate Majority Leader Harry Reid, a fellow Democrat, and Senate Republican leader Mitch McConnell to start "talking turkey" about it.

Senate Budget Committee Chairman Kent Conrad, one of the six Democratic and Republican senators who have been working since December on a deficit-reduction plan, said the proposed $3.75 trillion in savings over 10 years contains $1.2 trillion in new revenues.

The group briefed about half of the 100-member Senate and "the response was very favorable," Conrad told reporters.

He said the group asked fellow senators to take 24 hours to look at the proposal and "report back to us."

According to an executive summary of the plan, it would immediately impose $500 billion in deficit cuts, cut security and non-security spending over 10 years with spending caps, make the Medicare and Medicaid healthcare programs operate more efficiently and abolish the Alternative Minimum Tax.

Asked whether the plan could become part of urgent negotiations that link deficit reduction to raising the U.S. government's borrowing authority by August 2, Conrad said: "Could the two get married? Could they get combined at some point? I'm sure that's possible."

But leaders must first find out whether the proposal has enough support in the Senate, he said.

But a senior Senate Democratic aide said, for now, "there are no discussions" on incorporating Gang of Six ideas into legislation to raise the debt limit beyond $14.3 trillion.

TAXES AT ISSUE

Conrad was quick to say that while there are $1.2 trillion in new revenues, the overall plan envisions a $1.5 trillion tax cut that would be achieved through broad tax reforms.

Most Republicans, especially Tea Party members in the House of Representatives, have vowed to block any revenue increases.

The Senate group's hope has been that if the three conservative Republican members embrace revenue increases, the idea could catch fire among other Republicans in the Senate and House -- especially if popular but expensive entitlement programs such as Medicare also shoulder some cuts.

In another politically risky move, the Gang of Six plan would achieve significant savings in healthcare programs, Conrad said. The specific spending cuts would be decided later by congressional committees.

Conrad said a separate measure would reform the Social Security retirement program to stabilize its finances for the next 75 years.

The effort got a boost as conservative Republican Senator Tom Coburn rejoined the group after taking a "sabbatical" in mid-May amid heavy disagreement over Medicare spending cuts. It was not yet clear how Coburn's concerns have since been addressed.

On Monday, Coburn unveiled his own plan to cut $9 trillion in deficits over a decade, including nearly $1 trillion in revenue increases.

Revenue proposals are not likely to include income tax rate increases. Instead, they could center on repealing or rolling back special tax favors such as those for ethanol blenders and companies that operate corporate jets, as well as preferential tax treatment for fund managers.

Those specific decisions likely would be up to House and Senate tax-writing committees, along with broader tax reform questions.

Singer Amy Winehouse died at aged 27

Amy Winehouse, one of the most talented singers of her generation whose hit song "Rehab" summed up her struggles with addiction, died in London on Saturday at the age of 27.

The Grammy winner, famed for her black beehive hair, soulful voice and erratic behavior on and off stage, was found dead at her new home in Camden a month after a shambolic performance in Serbia forced her to cancel her entire European tour.

Police were called to the address at around 1500 GMT and nearly five hours later the body was removed for a post mortem after it appeared she had lost her battle with drink and drugs.

"Inquiries continue into the circumstances of the death," said police superintendent Raj Kohli. "At this early stage it is being treated as unexplained and there have been no arrests in connection with the incident."

He said reports that Winehouse had died of a suspected drugs overdose were speculation at this stage.

Family members had long warned that Winehouse's lifestyle, which saw her in and out of rehab and blighted her career as a live and recording artist, could be her downfall.

Her last filmed performance was in Serbia in June, when Winehouse was jeered by the crowd as she struggled to perform her songs and stay upright. On some tunes, the audience did most of the singing.

The gig, posted on the YouTube video sharing site, prompted her management to cancel all scheduled performances and give the performer as long as it took to recover.

Winehouse's record label Universal said in a statement: "We are deeply saddened at the sudden loss of such a gifted musician, artist and performer. Our prayers go out to Amy's family, friends and fans at this difficult time."

Around 50 shocked fans and onlookers as well as camera crews and photographers gathered behind police tape blocking off the leafy street where Winehouse had just moved into a new house.

A few left flowers, candles and a teddy bear. One note of condolence read: "Beautiful Amy, night night, sleep tight."

"BACK TO BLACK"

The British singer was discovered by soul singer Tyler James at the age of 16 and in 2003 her debut album "Frank" was released, to general acclaim.

Her second album "Back to Black" was released in October 2006 and reached the No. 1 spot in Britain and earned her five Grammy awards, pop music's equivalent of the Oscars.

The album produced a string of memorable tunes, including "You Know I'm No Good," "Love Is a Losing Game" and "Rehab," which contained the line: "They tried to make me go to rehab. I said 'no, no, no.'"

Born on September 14, 1983, to a Jewish family with a history of jazz musicians, Winehouse's personal life has filled Britain's tabloid newspapers.

Winehouse was photographed wandering the streets of London barefoot and in only a bra and jeans in 2007 looking confused, the same year she married Blake Fielder-Civil who spent time in prison for beating up a pub landlord. They divorced in 2009.

In 2008, the singer's father Mitch said she had developed the lung condition emphysema and warned it could kill her if she continued to smoke drugs.

Mitch, a taxi driver who launched his own musical career on the back of his daughter's success, was in New York when the news broke. British media said he was on his way back to London.

Tributes poured in for an artist whose personal troubles stole the headlines in recent years and thwarted plans for an eagerly-anticipated third album.

Soccer star and celebrity David Beckham told Sky News: "It's very sad, she was such a talented girl, and a girl with such a huge future. Our hearts go out to her family, her loved ones."

Sarah Brown, wife of former prime minister Gordon Brown, tweeted: "sad sad news of Amy Winehouse - great talent, extraordinary voice, and tragic death, condolences to her family."

Kelly Osbourne, a singer and television personality, also took to the micro blogging site, writing: "i cant even breath right now im crying so hard i just lost 1 of my best friends. i love you forever Amy & will never forget the real you!"

"RICH, SOULFUL VOICE"

The Recording Academy in the United States praised the singer, who brought elements of jazz and Motown back into the musical mainstream.

"Her rich, soulful and unique voice reflected her honest songwriting and earned her a devoted fan following, critical acclaim, and the genuine respect and admiration of her musical peers," said its president Neil Portnow.

Broadcaster and radio DJ Paul Gambaccini said Winehouse's early death was sadly no surprise.

"We have been dreading this news for some time, hoping against hope that she would turn herself around, but she showed no evidence of being able to do so," he told BBC TV.

"She just could not control herself. It's tragic because both (her) albums were superb. We have 40 years of Frank Sinatra records, it turns out we only have two Amy Winehouse records."

Daniel Rossellat, founder of the Paleo Festival in Nyon, Switzerland, where Winehouse had been due to perform before withdrawing from the tour, likened her to Janis Joplin, another gifted singer who died at the age of 27.

"It is the tragic end to a wonderful voice, similar to Janis Joplin both in destiny and in voice," he told Swiss television.

Singer Billy Bragg wrote on his Twitter page that Winehouse joined not only Joplin but also Jimi Hendrix, Jim Morrison and Kurt Cobain -- who all died at the same age.

Olympics 2012 Cultural events starts in Wales

Wales' countdown to the Olympics is starting with events marking a year-long run-up to the London Games.

A cultural Olympiad by heritage body Cadw hosts projects across north Wales, including a celebration of medieval sports at Conwy Castle.

Big screens in Cardiff and Swansea are showing Olympic and Paralympic films, footage and interactive games.

Wednesday marks a year to the Games, and Welsh ministers hope the events will "inspire and engage" young people.

Across the UK, towns, cities and heritage sites are marking the "One Year to Go" countdown to the Olympic and Paralympic Games with the London 2012 Open Weekend.

In Wales, the weekend includes two 16-hour days of screenings on big screens at The Hayes in Cardiff and Castle Square in Swansea.

The films and footage, similar to those being shown being at Trafalgar Square in London, include live information, video, and news about the Olympics.

Flashmob

It also includes the chance for audiences to take part in the interactive game Swim Wenlock Swim, with motion sensor cameras comparing the results between cities taking part.

Meanwhile, Cadw's own Power of the Flame Cultural Olympiad initiative, Cauldrons and Furnaces, is formally launched at Ucheldre Centre in Holyhead at 14:30 BST.

The programme, in partnership with the Arts Council of Wales, includes a variety of events including storytelling, community art workshops, dance, music and creative craft activities.

Three north Wales castles - Flint, Harlech and Caernarfon - are staging events on Saturday.

At 15:00, Flint hosts a work by young dancers from the county. Harlech has a flashmob staged by 20 local primary and secondary school pupils.

Caernarfon has a kaleidoscope art exhibition, from 11:00 to 15:00, created by pupils at six local schools.

A flashmob is also being held in Flint High Street, at noon and 13:00.

'Inspire and engage'

Cadw's cauldrons and furnaces theme is picked up on Sunday at St David's Bishop's Palace, Pembrokeshire.

A tour between 11:00 and 14:00 tells visitors about the secrets of the building and of saints.

Heritage Minister Huw Lewis said: "As the excitement around next year's Olympic Games continues to build, we are delighted to welcome back the Open Weekend Cauldrons and Furnaces programme as part of Wales' cultural contribution to the Olympiad celebrations.

"The series of events and activities aim to inspire and engage with the children and young people of Wales, not only demonstrating what can be achieved creatively, but also deliver a lasting legacy of inspirational work of the people of Wales beyond the Olympics