Hugh Hefner's Engagement Ring to Crystal Harris Revealed

By Mike Fleeman

12/11/2012 at 07:00 PM EST

The wedding's back on – though it may be a good idea to save that gift receipt.

Hugh Hefner, 86, officially confirms that he is once again engaged to Crystal Harris, 26, telling his Twitter followers, "I've given Crystal Harris a ring. I love the girl."

And to prove it, Harris posted photos of the big diamond sparkler, calling it "my beautiful ring."

Neither announced a wedding date, though sources tell PEOPLE they're planning to tie the knot at the Playboy Mansion in Los Angeles on New Year's Eve.

Whether that still happens remains to be seen.

This is the plan they had in 2011 – a wedding at the mansion – except that Harris called it off just days before the nuptials were scheduled to happen in front of 300 invited guests.

Hugh Hefner and Crystal Harris

David Livingston / Getty

The onetime Playmate of the Month then ripped Hef's bedroom skills, calling him a two-second man, to which Hefner replied, "I missed a bullet" by not marrying her.

A year later, Hefner's "runaway bunny" bounded back to him.

• Reporting by JENNIFER GARCIA

Read More..

DA investigating Texas' troubled $3B cancer agency

AUSTIN, Texas (AP) — Turmoil surrounding an unprecedented $3 billion cancer-fighting effort in Texas worsened Tuesday when its executive director offered his resignation and the state's chief public corruption prosecutor announced an investigation into the beleaguered agency.

No specific criminal allegations are driving the latest probe into the Cancer Prevention and Research Institute of Texas, said Gregg Cox, director of the Travis County district attorney's public integrity unit. But his influential office opened a case only weeks after the embattled agency disclosed that an $11 million grant to a private company bypassed review.

That award is the latest trouble in a tumultuous year for CPRIT, which controls the nation's second-largest pot of cancer research dollars. Amid the mounting problems, the agency announced Tuesday that Executive Director Bill Gimson had submitted his letter of resignation.

"Unfortunately, I have also been placed in a situation where I feel I can no longer be effective," Gimson wrote in a letter dated Monday.

Gimson said the troubles have resulted in "wasted efforts expended in low value activities" at the agency, instead of a focused fight against cancer. Gimson offered to stay on until January, and the agency's board must still approve his request to step down.

His departure would complete a remarkable house-cleaning at CPRIT in a span of just eight months. It began in May, when Dr. Alfred Gilman resigned as chief science officer in protest over a different grant that the Nobel laureate wanted approved by a panel of scientists. He warned it would be "the bomb that destroys CPRIT."

Gilman was followed by Chief Commercialization Officer Jerry Cobbs, whose resignation in November came after an internal audit showed Cobbs included an $11 million proposal in a funding slate without a required outside review of the project's merits. The lucrative grant was given to Dallas-based Peloton Therapeutics, a biomedical startup.

Gimson chalked up Peloton's award to an honest mistake and has said that, to his knowledge, no one associated with CPRIT stood to benefit financially from the company receiving the taxpayer funds. That hasn't satisfied some members of the agency's governing board, who called last week for more assurances that no one personally profited.

Cox said he has been following the agency's problems and his office received a number of concerned phone calls. His department in Austin is charged with prosecuting crimes related to government officials; his most famous cases include winning a conviction against former U.S. House Majority Leader Tom DeLay in 2010 on money laundering charges.

"We have to gather the facts and figure what, if any, crime occurred so that (the investigation) can be focused more," Cox said.

Gimson's resignation letter was dated the same day the Texas attorney general's office also announced its investigation of the agency. Cox said his department would work cooperatively with state investigators, but he made clear the probes would be separate.

Peloton's award marks the second time this year that a lucrative taxpayer-funded grant authorized by CPRIT instigated backlash and raised questions about oversight. The first involved the $20 million grant to M.D. Anderson Cancer Center in Houston that Gilman described as a thin proposal that should have first been scrutinized by an outside panel of scientific peer-reviewers, even though none was required under the agency's rules.

Dozens of the nation's top scientists agreed. They resigned en masse from the agency's peer-review panels along with Gilman. Some accused the agency of "hucksterism" and charting a politically-driven path that was putting commercial product-development above science.

The latest shake-up at CPRIT caught Gilman's successor off-guard. Dr. Margaret Kripke, who was introduced to reporters Tuesday, acknowledged that she wasn't even sure who she would be answering to now that Gimson was stepping down. She said that although she wasn't with the agency when her predecessor announced his resignation, she was aware of the concerns and allegations.

"I don't think people would resign frivolously, so there must be some substance to those concerns," Kripke said.

Kripke also acknowledged the challenge of restocking the peer-review panels after the agency's credibility was so publicly smeared by some of the country's top scientists. She said she took the job because she felt the agency's mission and potential was too important to lose.

Only the National Institutes of Health doles out more cancer research dollars than CPRIT, which has awarded more than $700 million so far.

Gov. Rick Perry told reporters in Houston on Tuesday that he wasn't previously aware of the resignation but said Gimson's decision to step down was his own.

Joining the mounting criticism of CPRIT is the woman credited with brainstorming the idea for the agency in the first place. Cathy Bonner, who served under former Texas Gov. Ann Richards, teamed with cancer survivor Lance Armstrong in selling Texas voters in 2007 on a constitutional amendment to create an unprecedented state-run effort to finance a war on disease.

Now Bonner says politics have sullied an agency that she said was built to fund research, not subsidize private companies.

"There appears to be a cover-up going on," Bonner said.

Peloton has declined comment about its award and has referred questions to CPRIT. The agency has said the company wasn't aware that its application was never scrutinized by an outside panel, as required under agency rules.

___

Follow Paul J. Weber on Twitter: www.twitter.com/pauljweber

Read More..

Big tech boosts S&P 500 to best close since election

NEW YORK (Reuters) - Stocks rose on Tuesday, led by gains in technology companies, helping the S&P 500 end at its highest level since Election Day.

A 2.2 percent gain to $541.39 in Apple's stock lifted the Nasdaq, as the largest U.S. company by market value rebounded from a week in which investors took profits before a possible tax rise next year. Prior to Tuesday's trading, Apple shares had lost 25 percent from an all-time intraday high hit in September.

Stocks pared some gains by late afternoon as more news on the "fiscal cliff" negotiations emerged. U.S. Senate Majority Leader Harry Reid said it will be difficult to reach agreement resolving the cliff tax hikes and spending cuts before Christmas.

"There's been a real explosion in anxiety over this thing. Because markets have become the way they are, you've got people just stepping back," said James Dailey, portfolio manager of TEAM Asset Strategy Fund in Harrisburg, Pennsylvania.

"There's a tremendous absence of liquidity in the market," he said.

The S&P 500 had lost 5.3 percent in the seven sessions following Election Day as investors refocused on the threat posed to the economy by the fiscal cliff, a series of automatic spending cuts and tax increases. Markets have mostly recovered those losses, but volume has been thin, suggesting investors are not betting aggressively due to the uncertainty.

The Dow Jones industrial average <.dji> was up 78.56 points, or 0.60 percent, at 13,248.44. The Standard & Poor's 500 Index <.spx> was up 9.29 points, or 0.65 percent, at 1,427.84. The Nasdaq Composite Index <.ixic> was up 35.34 points, or 1.18 percent, at 3,022.30.

Volume was roughly 6.43 billion shares traded on the NYSE, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of roughly 6.5 billion.

Other major tech stocks also rose. Texas Instruments gained 4 percent to $31.01 after bumping up its profit target late Monday. That helped other chipmakers rally, with the PHLX Semiconductor index <.sox> up 1.9 percent. Microsoft rose 1.4 percent to $27.32.

The lack of demonstrable progress in the fiscal cliff negotiations has kept investors from making aggressive bets in recent weeks.

Republican House Speaker John Boehner called on President Barack Obama to propose a counter-offer on Tuesday.

Retailers like luggage maker Tumi Holding Inc and Michael Kors Holding gained on Tuesday after a positive report from Goldman Sachs Equity Research. Tumi was up 4.7 percent to $21.92 and Michael Kors gained 2.4 percent, reaching $50.92.

By contrast, discount retailers Dollar General and Family Dollar declined. Dollar General, whose shares fell 7.8 percent to $42.94, said it sees margins under pressure in 2013. [ID:nL1E8NB0QB] Family Dollar shares dropped 8.4 percent to $64.68.

SPX Corp shares fell 9.1 percent to $62.07 and the stock was the biggest percentage decliner on the New York Stock Exchange after sources said the company is in exclusive talks to buy rival Gardner Denver , in a merger that could create an industrial machinery conglomerate with a market value over $7 billion.

The U.S. Treasury is selling its remaining stake in insurer American International Group Inc . AIG's shares were up 5.7 percent at $35.26.

The Fed began a two-day policy-setting meeting on Tuesday. The central bank is expected to announce a new round of Treasury bond purchases when the meeting ends on Wednesday to replace its "Operation Twist" stimulus, which expires at the end of the year.

Advancers outnumbered decliners on the NYSE by about 2 to 1, and on the Nasdaq by nearly 9 to 4.

(Additional reporting by Gabriel Debenedetti; Editing by Kenneth Barry and Nick Zieminski)

Read More..

Cairo faces rival protests over constitution crisis

CAIRO (Reuters) - Opponents and supporters of Egyptian President Mohamed Mursi's plans to vote on a new constitution will take to the streets in central Cairo later on Tuesday, risking more violent confrontation after last week's deadly clashes.

Leftists, liberals and other opposition groups have called for marches to the presidential palace in the afternoon to protest against the hastily arranged referendum planned for Saturday, which they say is polarizing the country.

Islamists, who dominated the body that drew up the constitution, have urged their followers to turn out "in millions" the same day in a show of support for the president and for a referendum they feel sure of winning and that critics say could put Egypt in a religious straitjacket.

Seven people were killed and hundreds wounded last week in clashes between the Islamist Muslim Brotherhood and opponents besieging Mursi's graffiti-daubed presidential palace.

The elite Republican Guard has yet to use force to keep protesters away from the palace, now ringed with tanks, barbed wire and concrete barricades, but a decree issued by Mursi late on Sunday gives the armed forces the power to arrest civilians during the referendum and until the announcement of the results.

Leftist politician Hamdeen Sabahy, one of the most prominent members of the National Salvation Front opposition coalition, said Mursi was driving a wedge between Egyptians and destroying prospects for consensus.

As well as pushing the early referendum, Mursi has angered opponents by taking sweeping temporary powers he said were necessary to secure the country's transition to stability after a popular uprising overthrew autocratic former president Hosni Mubarak 22 months ago.

"The road Mohamed Mursi is taking now does not create the possibility for national consensus," said Sabahy.

If the constitution was passed, he said: "Egypt will continue in this really charged state. It is certain that this constitution is driving us to more political polarization."

The National Salvation Front also includes Nobel Peace Prize laureate Mohamed ElBaradei and former Arab League chief Amr Moussa.

The opposition says the draft constitution fails to embrace the diversity of 83 million Egyptians, a tenth of whom are Christians, and invites Muslim clerics to influence lawmaking.

But debate over the details has largely given way to noisy street protests and megaphone politics, keeping Egypt off balance and ill equipped to deal with a looming economic crisis.

Lamia Kamel, a spokeswoman for Moussa, said the opposition factions were still discussing whether to boycott the referendum or call for a "no" vote.

"Both paths are unwelcome because they really don't want the referendum at all," she said, but predicted a clearer opposition line if the plebiscite went ahead as planned.

Mahmoud Ghozlan, the Muslim Brotherhood's spokesman, said the opposition could stage protests, but should keep the peace.

"They are free to boycott, participate or say no; they can do what they want. The important thing is that it remains in a peaceful context to preserve the country's safety and security."

The army stepped into the conflict on Saturday, telling all sides to resolve their disputes via dialogue and warning that it would not allow Egypt to enter a "dark tunnel".

The continuing disruption is also casting doubts on the government's ability to push through tough economic reforms that form part of a proposed $4.8 billion IMF loan agreement.

(Writing by Edmund Blair; Editing by Will Waterman)

Read More..

Hayden Panettiere Splits with Scotty McKnight

12/10/2012 at 07:50 PM EST

Hayden Panettiere and Scotty McKnight

Splash News Online

Is there a tear in her beer?

Nashville star Hayden Panettiere has broken up with her boyfriend of more than a year, New York Jets wide receiver Scotty McKnight, a source confirms to PEOPLE.

But the split doesn't appear to be the stuff of a sad country song. The actress, 23, is still friends with McKnight, 24, and one source tells TMZ that their pals wouldn't be surprised if they got back together.

This is Panettiere's second go at a relationship with an athlete. Before dating McKnight she was with Ukrainian boxer Wladimir Klitschko for about two years.
– Julie Jordan

Read More..

Surprise: New insurance fee in health overhaul law

WASHINGTON (AP) — Your medical plan is facing an unexpected expense, so you probably are, too. It's a new, $63-per-head fee to cushion the cost of covering people with pre-existing conditions under President Barack Obama's health care overhaul.

The charge, buried in a recent regulation, works out to tens of millions of dollars for the largest companies, employers say. Most of that is likely to be passed on to workers.

Employee benefits lawyer Chantel Sheaks calls it a "sleeper issue" with significant financial consequences, particularly for large employers.

"Especially at a time when we are facing economic uncertainty, (companies will) be hit with a multi-million dollar assessment without getting anything back for it," said Sheaks, a principal at Buck Consultants, a Xerox subsidiary.

Based on figures provided in the regulation, employer and individual health plans covering an estimated 190 million Americans could owe the per-person fee.

The Obama administration says it is a temporary assessment levied for three years starting in 2014, designed to raise $25 billion. It starts at $63 and then declines.

Most of the money will go into a fund administered by the Health and Human Services Department. It will be used to cushion health insurance companies from the initial hard-to-predict costs of covering uninsured people with medical problems. Under the law, insurers will be forbidden from turning away the sick as of Jan. 1, 2014.

The program "is intended to help millions of Americans purchase affordable health insurance, reduce unreimbursed usage of hospital and other medical facilities by the uninsured and thereby lower medical expenses and premiums for all," the Obama administration says in the regulation. An accompanying media fact sheet issued Nov. 30 referred to "contributions" without detailing the total cost and scope of the program.

Of the total pot, $5 billion will go directly to the U.S. Treasury, apparently to offset the cost of shoring up employer-sponsored coverage for early retirees.

The $25 billion fee is part of a bigger package of taxes and fees to finance Obama's expansion of coverage to the uninsured. It all comes to about $700 billion over 10 years, and includes higher Medicare taxes effective this Jan. 1 on individuals making more than $200,000 per year or couples making more than $250,000. People above those threshold amounts also face an additional 3.8 percent tax on their investment income.

But the insurance fee had been overlooked as employers focused on other costs in the law, including fines for medium and large firms that don't provide coverage.

"This kind of came out of the blue and was a surprisingly large amount," said Gretchen Young, senior vice president for health policy at the ERISA Industry Committee, a group that represents large employers on benefits issues.

Word started getting out in the spring, said Young, but hard cost estimates surfaced only recently with the new regulation. It set the per capita rate at $5.25 per month, which works out to $63 a year.

America's Health Insurance Plans, the major industry trade group for health insurers, says the fund is an important program that will help stabilize the market and mitigate cost increases for consumers as the changes in Obama's law take effect.

But employers already offering coverage to their workers don't see why they have to pony up for the stabilization fund, which mainly helps the individual insurance market. The redistribution puts the biggest companies on the hook for tens of millions of dollars.

"It just adds on to everything else that is expected to increase health care costs," said economist Paul Fronstin of the nonprofit Employee Benefit Research Institute.

The fee will be assessed on all "major medical" insurance plans, including those provided by employers and those purchased individually by consumers. Large employers will owe the fee directly. That's because major companies usually pay upfront for most of the health care costs of their employees. It may not be apparent to workers, but the insurance company they deal with is basically an agent administering the plan for their employer.

The fee will total $12 billion in 2014, $8 billion in 2015 and $5 billion in 2016. That means the per-head assessment would be smaller each year, around $40 in 2015 instead of $63.

It will phase out completely in 2017 — unless Congress, with lawmakers searching everywhere for revenue to reduce federal deficits — decides to extend it.

Read More..

Wall Street gets small lift from technology and McDonald's

NEW YORK (Reuters) - Stocks edged higher on Monday as technology shares bounced back after recent weakness and McDonald's posted strong monthly sales.

Technology stocks were led by Hewlett-Packard Co , which climbed 2.6 percent to $14.16 on rumors that activist investor Carl Icahn is building a stake in the PC maker. The stock is down 44.5 percent for the year and ranks as the Dow's worst performer. The S&P technology index <.gspt> was up 0.3 percent.

Tech also was supported by Cisco Systems , which gained 2.4 percent to $19.79 after the company presented its midterm growth strategy on Friday.

McDonald's Corp gave the Dow a jolt, gaining 1.1 percent to $89.41, as its November sales were stronger than expected and showed a bounce back from a decline in October.

There was little news Monday about the negotiations over the "fiscal cliff," a series of automatic tax hikes and spending cuts that could hurt economic growth next year. Concerns that lawmakers will not broker a deal have kept a lid on optimism in the equity market.

"There is a general sense that if a deal is struck, that we could have a further advance in the market at the end of this year as well as the first part of next year," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

A breakout to the upside on a cliff deal could take the S&P 500 back up to 1,474, just off the 2012 high for the index, said Elliot Spar, Stifel Nicolaus option market strategist in Shrewsbury, New Jersey.

The benchmark S&P 500 index has yet to see a move greater than 0.5 percent in either direction on any day in December, and hasn't moved more than 1 percent either way in any session since November 23. However, the market has regained most of the losses incurred post-election as investors refocused on the fiscal cliff.

U.S. President Barack Obama met with Republican House Speaker John Boehner on Sunday to negotiate a budget deal. A Boehner aide said Monday that talks are continuing.

The Dow Jones industrial average <.dji> rose 14.75 points, or 0.11 percent, to 13,169.88 at the close. The Standard & Poor's 500 Index <.spx> inched up just 0.48 of a point, or 0.03 percent, to 1,418.55. The Nasdaq Composite Index <.ixic> advanced 8.92 points, or 0.30 percent, to close at 2,986.96.

News out of Italy kept sentiment in check as Prime Minister Mario Monti said he would resign after the approval of the 2013 budget. The move added to uncertainty about progress being made to tackle the euro zone's debt problem and drove Italy's borrowing costs higher.

U.S.-listed shares of Nexen jumped 13.8 percent to $26.77 and the stock was the second-most actively traded on the New York Stock Exchange. On Friday, Canada approved a $15.1 billion bid by CNOOC Ltd for energy company Nexen.

The S&P materials index <.gspm> gained 0.7 percent and led the S&P 500's sector index gains as shares of mining companies rose in sync with copper and gold prices. Shares of Freeport-McMoRan gained 1.1 percent to $32.04.

Volume was roughly 5.3 billion shares traded on the NYSE, the Nasdaq and the NYSE MKT, compared with the year-to-date average daily closing volume of roughly 6.5 billion.

Advancers outnumbered decliners on the NYSE by a ratio of about 17 to 13, while on the Nasdaq, seven stocks rose for every five that fell.

(Reporting by Caroline Valetkevitch; Additional reporting by Doris Frankel in Chicago and Gabriel Debenedetti in New York; Editing by Jan Paschal)

Read More..

Egypt's opposition rejects constitutional referendum

CAIRO (Reuters) - Egypt's main opposition coalition rejected on Sunday Islamist President Mohamed Mursi's plan for a constitutional referendum this week, saying it risked dragging the country into "violent confrontation".

Mursi's decision on Saturday to retract a decree awarding himself wide powers failed to placate opponents who accused him of plunging Egypt deeper into crisis by refusing to postpone the vote on a constitution shaped by Islamists.

"We are against this process from start to finish," Hussein Abdel Ghani, spokesman of the National Salvation Front, told a news conference, calling for more street protests on Tuesday.

The Front's main leaders - Nobel peace laureate Mohamed ElBaradei, former Foreign Minister Amr Moussa and leftist Hamdeen Sabahy - did not attend the event.

Hundreds of protesters milled around Mursi's palace, despite tanks, barbed wire and other barriers installed last week after clashes between Islamists and their rivals killed seven people.

"Holding a referendum now in the absence of security reflects haste and an absence of a sense of responsibility on the part of the regime, which risks pushing the country towards violent confrontation," a statement from the Front said.

The Muslim Brotherhood, which propelled Mursi from obscurity to power, urged the opposition to accept the referendum's verdict.

Islamists say the vote will seal a democratic transition that began when a popular uprising toppled Hosni Mubarak 22 months ago after three decades of military-backed one-man rule.

Their liberal, leftist and Christian adversaries say the document being fast-tracked through could threaten freedoms and fails to embrace the diversity of Egypt's 83 million people.

"ACT OF WAR"

Mursi had given some ground on Saturday when he annulled the fiercely contested decree issued on November 22 that gave him extra powers and shielded his decisions from judicial review.

But some measures taken under the decree remain in force and the president has insisted the referendum go ahead on December 15.

Liberal opposition leader Ahmed Said earlier described the race to a referendum as an "act of war" against Egyptians.

Egypt is torn between Islamists, who were suppressed for decades, and their rivals, who fear religious conservatives want to squeeze out other voices and restrict social freedoms. Many Egyptians just crave stability and economic recovery.

Brotherhood spokesman Mahmoud Ghozlan said the scrapping of Mursi's decree had removed any reason for controversy.

"We ask others to announce their acceptance of the referendum result," he said on the group's Facebook page, asking whether the opposition would accept "the basics of democracy".

The cancellation of Mursi's decree, announced after a "national dialogue" on Saturday boycotted by almost all the president's critics, has not bridged a deep political divide.

Prime Minister Hisham Kandil, a technocrat with Islamist leanings, said the referendum was the best test of opinion.

"The people are the makers of the future as long as they have the freedom to resort to the ballot box in a democratic, free and fair vote," he said in a cabinet statement.

But opposition factions, uncertain of their ability to vote down the constitution against the Islamists' organizational muscle, want the document redrafted before any vote.

"A constitution without consensus can't go to a referendum," said Hermes Fawzi, 28, a protester outside the palace. "It's not logical that just one part of society makes the constitution."

DIALOGUE

Egypt tipped into turmoil after Mursi grabbed powers to stop any court action aimed at hindering the transition. An assembly led by the Brotherhood and other Islamists then swiftly approved the constitution it had spent six months drafting.

Opponents, including minority Christians, had already quit the assembly in dismay, saying their voices were being ignored.

After the dialogue hosted by Mursi, a spokesman announced that the president had issued a new decree whose first article "cancels the constitutional declaration" of November 22. He said the referendum could not be delayed for legal reasons.

The decree ignited more than two weeks of sometimes violent protests and counter-rallies in Egypt. Mursi's foes have chanted for his downfall. Islamists fear a plot to oust the most populous Arab nation's first freely-elected leader.

Islamists reckon they can win the referendum and, once the new constitution is in place, a parliamentary election about two months later. The Islamist-led lower house elected this year was dissolved after a few months by a court order.

Investors appeared relieved after Mursi rescinded his decree, sending Egyptian stocks 4.4 percent higher on Sunday. Markets are awaiting approval of a $4.8 billion IMF loan later this month designed to support the budget and economic reforms.

The military, which led Egypt's transition for 16 turbulent months after Mubarak fell, told feuding factions on Saturday that only dialogue could avert "catastrophe". But a military source said these remarks did not herald an army takeover.

(Additional reporting by Edmund Blair and Yasmine Saleh; editing by David Stamp)

Read More..

Smokers celebrate as Wash. legalizes marijuana

SEATTLE (AP) — The crowds of happy people lighting joints under Seattle's Space Needle early Thursday morning with nary a police officer in sight bespoke the new reality: Marijuana is legal under Washington state law.

Hundreds gathered at Seattle Center for a New Year's Eve-style countdown to 12 a.m., when the legalization measure passed by voters last month took effect. When the clock struck, they cheered and sparked up in unison.

A few dozen people gathered on a sidewalk outside the north Seattle headquarters of the annual Hempfest celebration and did the same, offering joints to reporters and blowing smoke into television news cameras.

"I feel like a kid in a candy store!" shouted Hempfest volunteer Darby Hageman. "It's all becoming real now!"

Washington and Colorado became the first states to vote to decriminalize and regulate the possession of an ounce or less of marijuana by adults over 21. Both measures call for setting up state licensing schemes for pot growers, processors and retail stores. Colorado's law is set to take effect by Jan. 5.

Technically, Washington's new marijuana law still forbids smoking pot in public, which remains punishable by a fine, like drinking in public. But pot fans wanted a party, and Seattle police weren't about to write them any tickets.

In another sweeping change for Washington, Gov. Chris Gregoire on Wednesday signed into law a measure that legalizes same-sex marriage. The state joins several others that allow gay and lesbian couples to wed.

The mood was festive in Seattle as dozens of gay and lesbian couples got in line to pick up marriage licenses at the King County auditor's office early Thursday.

King County and Thurston County announced they would open their auditors' offices shortly after midnight Wednesday to accommodate those who wanted to be among the first to get their licenses.

Kelly Middleton and her partner Amanda Dollente got in line at 4 p.m. Wednesday.

Hours later, as the line grew, volunteers distributed roses and a group of men and women serenaded the waiting line to the tune of "Chapel of Love."

Because the state has a three-day waiting period, the earliest that weddings can take place is Sunday.

In dealing with marijuana, the Seattle Police Department told its 1,300 officers on Wednesday, just before legalization took hold, that until further notice they shall not issue citations for public marijuana use.

Officers will be advising people not to smoke in public, police spokesman Jonah Spangenthal-Lee wrote on the SPD Blotter. "The police department believes that, under state law, you may responsibly get baked, order some pizzas and enjoy a 'Lord of the Rings' marathon in the privacy of your own home, if you want to."

He offered a catchy new directive referring to the film "The Big Lebowski," popular with many marijuana fans: "The Dude abides, and says 'take it inside!'"

"This is a big day because all our lives we've been living under the iron curtain of prohibition," said Hempfest director Vivian McPeak. "The whole world sees that prohibition just took a body blow."

Washington's new law decriminalizes possession of up to an ounce for those over 21, but for now selling marijuana remains illegal. I-502 gives the state a year to come up with a system of state-licensed growers, processors and retail stores, with the marijuana taxed 25 percent at each stage. Analysts have estimated that a legal pot market could bring Washington hundreds of millions of dollars a year in new tax revenue for schools, health care and basic government functions.

But marijuana remains illegal under federal law. That means federal agents can still arrest people for it, and it's banned from federal properties, including military bases and national parks.

The Justice Department has not said whether it will sue to try to block the regulatory schemes in Washington and Colorado from taking effect.

"The department's responsibility to enforce the Controlled Substances Act remains unchanged," said a statement issued Wednesday by the Seattle U.S. attorney's office. "Neither states nor the executive branch can nullify a statute passed by Congress."

The legal question is whether the establishment of a regulated marijuana market would "frustrate the purpose" of the federal pot prohibition, and many constitutional law scholars say it very likely would.

That leaves the political question of whether the administration wants to try to block the regulatory system, even though it would remain legal to possess up to an ounce of marijuana.

Alison Holcomb is the drug policy director of the American Civil Liberties Union of Washington and served as the campaign manager for New Approach Washington, which led the legalization drive. She said the voters clearly showed they're done with marijuana prohibition.

"New Approach Washington sponsors and the ACLU look forward to working with state and federal officials and to ensure the law is fully and fairly implemented," she said.

___

Johnson can be reached at https://twitter.com/GeneAPseattle

Read More..

Wall St Week Ahead: "Cliff" worries may drive tax selling

NEW YORK (Reuters) - Investors typically sell stocks to cut their losses at year end. But worries about the "fiscal cliff" - and the possibility of higher taxes in 2013 - may act as the greatest incentive to sell both winners and losers by December 31.

The $600 billion of automatic tax increases and spending cuts scheduled for the beginning of next year includes higher rates for capital gains, making tax-related selling even more appealing than usual.

Tax-related selling may be behind the weaker trend in the shares of market leader Apple , analysts said. The stock is down 20 percent for the quarter, but it's still up nearly 32 percent for the year.

Apple dropped 8.9 percent in the past week alone. For a stock that gained more than 25 percent a year for four consecutive years, the embedded capital gains suddenly look like a selling opportunity if one's tax bill is going to jump sharply just because the calendar changes.

"Tax-loss selling is always a factor (but) tax-gains selling has been a factor this year," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont.

"You have a lot of high-net-worth individuals in taxable accounts, and that could be what's affecting stocks like Apple. If you look at the stocks that people have their largest gains in, they seem to be under a little bit more pressure here than usual."

Of this year's top 20 performers in the S&P 1500 index, which includes large, small and mid-cap stocks, all but four have lost ground in the last five trading sessions.

The rush to avoid higher taxes on portfolio gains could cause additional weakness.

The S&P 500 ended the week up just 0.1 percent after another week of trading largely tied to fiscal cliff negotiation news, which has pushed the market in both directions.

A PAIN PILL FROM THE FED?

This week's Federal Reserve meeting could offer some relief if policymakers announce further plans to help the lackluster U.S. economy. The Federal Open Market Committee will meet on Tuesday and Wednesday. The policy statement is expected at about 12:30 p.m. EST on Wednesday after the conclusion of the meeting - the Fed's last one for the year.

Friday's jobs report showing non-farm payrolls added 146,000 jobs in November eased worries that superstorm Sandy had hit the labor market hard.

"After the FOMC meeting, I think it's going to be downhill from there as worries about the fiscal cliff really take center stage and prospects of a deal become less and less likely," said Mohannad Aama, managing director of Beam Capital Management LLC in New York.

"I think we are likely to see an escalation in profit-taking ahead of tax rates going up next year," he said.

MORE VOLUME AND VOLATILITY

Volume could increase as investors try to shift positions before year end, some analysts said.

While most of that would be in stocks, some of the extra trading volume could spill over into options, said J.J. Kinahan, TD Ameritrade's chief derivatives strategist.

Volatility could pick up as well, and some of that is already being seen in Apple's stock.

"The actual volatility in Apple has been very high while the market itself has been calm. I expect Apple's volatility to carry over into the market volatility," said Enis Taner, global macro editor at RiskReversal.com, an options trading firm in New York.

Shares of Apple, the largest U.S. company by market value, on Friday registered their worst week since May 2010. In another bearish sign, the stock's 50-day moving average fell to $599.52 - below its 200-day moving average at $601.38.

"There's a lot of tax-related selling happening now, and it will continue to happen. Apple is an example, even (though) there are other factors involved with Apple," Aama said.

If tax rates are going up, an investor would sell now to book gains and pay lower capital gains taxes, according to Aama. But if an investor has capital losses, then "you take losses and have them count against capital gains or regular income if you do not have any offsetting capital gains.

"In essence, higher capital gains tax rates will give your losses a higher value next year than this year as the income tax shield will be worth more in 2013. So if you have no capital gains this year, you are better off holding off on selling your losers in 2012 and waiting till 2013," he said in an email.

While investors may be selling stocks to avoid higher taxes in 2013, companies may continue to announce special and accelerated dividend payments before year end. Among the latest, Expedia announced a special dividend of 52 cents a share to be paid on December 28.

To be sure, the big sell-off in stocks following the November 6 election was likely related to tax selling, making it hard to judge how much more is to come.

Even with stocks' recent declines, the three major U.S. stock indexes are still up for the year. The Dow Jones industrial average <.dji> is up 7.7 percent for 2012 so far, while the benchmark Standard & Poor's 500 index <.spx> is up 12.8 percent and the Nasdaq Composite Index <.ixic> is up 14.3 percent for the year to date.

Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston, said there is a decent chance that the market could rally before the year ends.

"Even with little or spotty news that one would put in the positive bucket regarding the (cliff) negotiations, the market has basically hung in there, and I think it's hung in there in anticipation of something coming," he said.

(Wall St Week Ahead runs every Sunday. Questions or comments on this column can be emailed to: caroline.valetkevitch(at)thomsonreuters.com)

(Reporting by Caroline Valetkevitch; Editing by Jan Paschal; Multimedia versions of Reuters Top News are now available for:; 3000 Xtra: visit Reuters Top News; BridgeStation: view story .134; For London stock market outlook please click on <.l>; Pan-European stock market outlook <.eu>; Tokyo stock market outlook <.t>)

Read More..