Iran’s powerful Revolutionary Guard began military exercises Saturday in the country’s south, the latest show of force after threats to close the strategic Strait of Hormuz in retaliation for tougher Western sanctions.
Plans for new Iranian naval games in the Persian Gulf off the country’s southern coast have been in the works for weeks. State media announced new maneuvers in southern Iran involving ground forces, but it was not immediately clear whether they were part of the planned naval training missions scheduled for this month or a separate operation.
The latest military maneuvers got under way following stern warnings by Iran’s Supreme Leader, Ayatollah Ali Khamenei, about any possible U.S. or Israeli attacks against Tehran’s nuclear facilities. It also comes after Western forces boosted their naval presence in the Gulf led by the American aircraft carrier USS Abraham Lincoln.
Iran officials and lawmakers have repeatedly said that their country would close the Strait of Hormuz at the mouth of the Persian Gulf in retaliation for sanctions that affect Iran’s oil exports. They have as yet made no attempts to disrupt shipping through the waterway, the route for one-fifth of the world’s crude oil, and the U.S. and allies have said they would respond swiftly to any attempts at a blockade.
Last month, Iran’s navy wrapped up 10 days of exercises in the Gulf, but the Revolutionary Guard _ which is directly under control of the supreme leader _ represents a significantly stronger military force and controls key programs such as missile development. Iranian state media announced the new maneuvers, but gave no further details.
Khamenei, in a speech nationally broadcast on Friday, staked out a hard line after suggestions by Israel that military strikes are an increasing possibility if sanctions fail to rein in the Islamic Republic’s nuclear program.
He pledged to aid any nation or group that challenges Israel and said any military strikes would damage U.S. interests in the Middle East “10 times” more than they would hurt Iran. The comments also may signal that Tehran’s proxy forces _ led by Lebanon’s Islamic militant group Hezbollah _ could be given the green light to revive attacks on Israel as the showdown between the archfoes intensifies.
The West and its allies fear Iran could use its uranium enrichment labs _ which make nuclear fuel _ to eventually produce weapons-grade material. Iran insists it only seeks reactors for energy and medical research.
Israel has so far publicly backed the efforts by the U.S. and European Union for tougher sanctions that target Iran’s crucial oil exports. But Israeli leaders have urged even harsher measures and warn that military action remains a clear option despite Western appeals to allow time for the economic pressures and isolation to bear down on Iran payday loans with no fax.
Iran’s oil minister repeated claims that an EU oil embargo will not cripple Iran’s economy, claiming Saturday that the country already has identified new customers to replace the loss in European sales that accounted for about 18 percent of Iran’s exports.
Rostam Qassemi also reinforced Iran’s warning to Saudi Arabia and other fellow OPEC members against boosting production to offset any potential drop in Tehran’s crude exports, saying the cartel should not be used as a political weapon against a member state.
Although Israel has raised the strongest hints that it is likely to start a military campaign, Khamenei reserved some of his strongest comments for Israel’s key U.S. ally.
“A war itself will damage the U.S. 10 times” more in the region, said Khamenei.
Khamenei claimed Iran, however, could only emerge stronger. “Iran will not withdraw. Then what happens?” asked Khamenei. “In conclusion, the West’s hegemony and threats will be discredited” in the Middle East. “The hegemony of Iran will be promoted. In fact, this will be in our service.”
On Thursday, Israel’s defense minister, Ehud Barak, suggested the world is increasingly ready to consider a military strike if sanctions fail. The head of the country’s strategic affairs ministry, Vice Premier Moshe Yaalon, also suggested Iran’s main military installations are still vulnerable to airstrikes _ even as Iran starts up a new uranium enrichment facility deep in a mountainside bunker south of Tehran.
Yaalon’s comments appear to reinforce earlier suggestions by other Israel officials that the window for a possible attack is closing and Israel would need to strike by summer to inflict significant setbacks on Iran’s nuclear facilities. The officials spoke on condition of anonymity under standing guidelines.
At Ramstein Air Base in Germany, U.S. Defense Secretary Leon Panetta said sanctions remain the best approach to pressure Iran. But he told U.S. airmen Friday that Washington keeps “all options on the table and would be prepared to respond if we have to.”
Khamenei answered by repeating Iran’s declarations that it will never roll back its nuclear program, which he had earlier said was now part of the country’s “identity” and a cornerstone of its technological endeavors. On Friday, Iran said it successfully sent a small satellite into orbit in the third such launch in recent years, state media reported.
“From now on, in any place, if any nation or any group confronts the Zionist regime, we will endorse and we will help. We have no fear expressing this,” said Khamenei, using the phrase widely used by Iran’s leader to describe Israel.
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A report showing the government will run a budget deficit of more than $1 trillion for the fourth consecutive year inflamed a debate over the federal shortfall that
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The head of AT&T on Thursday suggested that the company might sell its directory business, which employs more than 500 people in St. Louis.
The company also reported a $6.68 billion loss for the December quarter, fueled largely by a $4 billion cancellation charge paid after the failure of its planned purchase of T-Mobile.
But the loss also included a non-cash charge of about $2.9 billion to reflect the falling value of its directory business, which includes the Yellow Pages phone book and its Internet incarnation.
AT&T expects earnings per share to grow by a mid-single-digit percentage in 2012, a bit lower than analysts had expected.
In a morning conference call with analysts, AT&T CEO Randall Stephenson labeled the directory business as underperforming.
“That’s one area that we’re going to obviously take a very hard look at, and while I don’t want to give any indication on M&A activity, it’s one of these areas that we’re going to have to decide, do we keep it, do we restructure it, as we move forward,” he said. M&A means mergers and acquisitions, the buying and selling of companies.
AT&T declined to give any further details on the directory business presence in St guaranteed high risk personal loans. Louis, or the company’s intentions. It also declined to say how many people the business employed locally.
However, that business employs 575 union members in St. Louis, plus management personnel, said Jim Kolve, executive vice president of Communications Workers of America Local 6300. The local workers handle sales, accounting, customer service and part of production, working on both the print director and the Internet.
AT&T’s directory business is the most profitable in the industry, said analyst Juli Niemann of Smith Moore & Co.
“This was a cash cow feeding tons into the company,” she said.
The phone company might use money from the sale to fund upgrades of its phone system and build its video business.
“They have big debt and an underfunded pension,” Niemann said. “They need the cash.”
The directory business is part of AT&T’s Advertising Solutions unit, which reported quarterly revenue of $781 million versus $926 million a year earlier.
Associated Press contributed to this report
Raw fish and cough medicine may not seem like they should occupy the same store, but a select few Walgreens now carry both.
In 2009 Walgreen Co., based in a Chicago suburb, announced it would elevate food offerings at some of its most prominent stores, in downtown Chicago, on Wall Street and elsewhere. Those stores – designed to trumpet that the century-plus-old pharmacy chain was entering new, more rarified terrain – now have sushi bars, $400 bottles of wine, cigar humidors and made-to-order smoothies.
But the company also promised it would fill more shelf space, including here in St. Louis, with cheaper, less esoteric offerings, especially in areas where low-income residents have little access to nutritious or fresh food. Walgreens plans to turn at least 500 of its 7,800 U.S. stores, most in low-income neighborhoods, into what the company is calling “food oases.”
“We found that in lower-income areas, in food deserts, that grocery stores have moved out,” said Bryan Pugh, the company’s vice president of merchandising. “It’s a very strategic initiative. Food brings the shopper in more often.”
So far the company has expanded offerings, including fresh produce, at a modest 35 stores in Chicago, Detroit, San Francisco, Oakland and Indianapolis. But it plans to expand to other cities over the next five years. The company aims to boost food offerings in some of its 110 St. Louis-area stores by 2013, Pugh said, noting that it has already rolled out new in-house food brands that are on store shelves already.
“We’re overhauling all our brands,” Pugh said.
Walgreens is not the only retailer who says it will bring fresh produce to under-served areas in St. Louis and beyond. Save-A-Lot stores have said they will open 500 stores in these neighborhoods in the five years, and Wal-Mart has made a similar commitment, saying it will open as many as 300 by 2016. But Walgreens already has a major presence in low-income urban areas, with stores already in place, making its efforts easier to execute, analysts note.
Walgreens’ move, analysts say, could help the company keep customers Walgreens is losing after the company’s split from pharmacy benefits manager Express Scripts. Walgreens stands to lose billions in sales as customers fill their prescriptions elsewhere.
“It’s really interesting timing, because Walgreens can re-establish themselves with people who can no longer fill their prescription there,” said supermarket analyst, Phil Lempert. “It’s: What can we sell them to keep them coming to our store, until they make the transition to Medicare?”
While Walgreens acknowledges that the move is strategic, it also says it has good intentions of providing fresh produce to nutrition-poor areas where fast food is usually the only source of calories. Nutritionists and critics, however, question how successful that effort could be.
“A lot of this is overblown,” said David Livingston, an analyst and supermarket industry researcher. “They already had some food items. They’re adding a few more. They’re adding a few more perishables. Are they really making a difference? I don’t think so.”
Walgreens says it will expand the space it devotes to food by 35 to 40 percent in some of its stores. But, Livingston notes, that translates to roughly 400 square feet. “That’s 20 by 20,” Livingston said. “That’s the size of my bathroom.”
Livingston and other analysts point out that grocery stores pulled out of these neighborhoods for a reason. “If there’s money to be made selling fresh produce, grocery stores would have figured it out,” he said. “I wonder what they’re thinking.”
Marjorie Sawicki, and assistant professor of nutrition and dietetics at Saint Louis University, said she believes Walgreens produce may make a small dent in nutrition-poor diets.
“Where we have food deserts, if there are fruits and vegetables, it might help, because there’s a Walgreens on every block,” Sawicki said. “If they displace items that are filled with sodium and fat, then it could have a benefit. It depends on how they emphasize the food.”
Bringing healthy food to under-served neighborhoods will require a more holistic approach, Sawicki says. “I think it’s a Band-Aid,” she said. “What we need to be looking at is creating community investment so people can access healthy food at a fair price and support the person who grew it. But that’s going to take time.”
Sawicki pointed to other efforts to bring produce to under-served areas, such as The North City Food Co-Op, as better models. Other new additions to the market landscape in St. Louis food deserts include YOURS Market, which opened in the Baden neighborhood in late 2010.
Still, Walgreens sees an opportunity.
The company did extensive research to determine which stores should sell more food. “Different stores have different trends,” Pugh said. “If I’m on a corner, near a Dominick’s, a Target and a Walmart , I’ll probably do better with beauty (products) there. I’ll look at my data by category and see if I’ve got traffic and I’m selling food. You can’t put fresh food in a store that’s not busy.”
The company’s plan, Pugh said, is not to expand the stores, but to devote more existing space to food. “We’re already in those areas,” he said. “We are the health care oasis there.”
Lempert says he believes that’s a smart strategy.
“I think it’s fascinating that for years drug chains had the lowest price for milk, that was their loss leader – what they did to get people in,” Lempert said. “Now they’ve leap-frogged milk, and said we can do this bigger and better.”
“We buy food 2.2 times a week, so if they can get more traffic in these stores, they sell more product,” Lempert added. “Supermarket sales are either flat or declining, and if you look at drug-store food sales, they’re through the roof.”
President Barack Obama is considering nominating Lawrence Summers, his former National Economic Council director, to lead the World Bank when Robert Zoellick
High unemployment has sent many Americans back to school, and they’re taking on big debt to finance their education.
Americans now owe more on in student loans, $750 billion, than on their credit cards.
Lenders are getting very worried about that. Sixty-seven percent of bank risk managers expect a rise in student loan delinquencies, according to a new survey for FICO, the credit scoring company, and the Professional Risk Managers Association. That number is 17 points higher than last summer.
You can find FICO’s press release here and the study here.
Education is usually an excellent investment — it improves your earnings for life. But it’s possible to end up worse off, not better.
Many for-profit private trade schools, the kind that advertise on afternoon TV, have online payday advance.stltoday.com/business/columns/jim-gallagher/students-should-look-at-loan-default-rates-to-judge-colleges/article_fa88b67f-51e7-5e16-b1ca-1688d2ee0a6c.html”> student loan default rates of over 20 percent. Those schools often charge outrageous tuition, and the high default rates indicate that many students are worse off for attending.
The best deals in vocational training are found at community colleges, where tuition is cheap.
Those looking for a bachelors degree should consider whether a high-tuition private university really delivers value that justifies its price. State universities are usually cheaper.
WINDING DOWN: After 58 years of selling music, Webster Records is pulling the plug.
The store at 117 West Lockwood Avenue in Webster Groves will shut its doors on Jan. 31, Bill Wondracek, a clerk, said today.
The store has mainly been reduced to selling rock ‘n’ roll CD’s to teens over the past few years, despite having a history of specializing in classical, jazz and pop music, much of it on vinyl, Wondracek added.
Jennifer Bellm has owned the shop for about five years. She was not available for comment.
Prior to that, it was owned by Dan Warner who sold it when he became part of the team that was involved in trying to revive the Switzer’s Licorice brand low rates payday advance.
Until the shop is shuttered, remaining inventory will be on sale, store manager Jim Lovins said in an email. Starting today it’s 30 percent off of retail and prices will be discounted through the month, he added.
Manufacturing in India and China improved in December, a sign the world
A long-awaited government report said design flaws and sloppy management caused a bullet train crash in July that killed 40 people and triggered a public outcry over the high cost and dangers of China’s showcase transportation system.
A former railway minister was among 54 officials found responsible for the crash, a Cabinet statement said Wednesday.
The crash report was highly anticipated by the public. Regulations required the government to release the report by Nov. 20. When that date passed, the government offered little explanation, drawing renewed criticism by state media, which have been unusually skeptical about the handling of the accident and the investigation.
The Cabinet statement cited “serious design flaws and major safety risks” and what it said were a string of errors in equipment procurement and management.
The report affirmed earlier government statements that a lightning strike caused one bullet train to stall and a sensor failure allowed a second train to keep moving on the same track and slam into it.
Among those singled out for blame was former Minister of Railways Liu Zhijun, who was the public face of efforts to build the bullet train and was detained in February amid a graft investigation. The Cabinet also cited the general manager of the company that manufactured the signal, who died of a heart attack while talking to investigators in August.
As Wall Street traders cheered positive jobs data on Thursday, they seemed to ignore layoffs and bonus cuts on their own trading floors that will hurt growth in the broader U.S. jobs market in the coming months, TrimTabs Chief Executive Charles Biderman said.
U.S. jobless claims dropped to a 3 1/2-year low last week, the Labor Department said on Thursday morning, sending major stock indexes higher. But more current indicators for jobs and wages show opposite trends, said Biderman, a Wall Street veteran who founded the investment research firm in 1990.
“The conventional wisdom on Wall Street is that the U.S. economy is picking up steam despite the turmoil in the rest of the world,” Biderman Said. “The key real-time indicators we track - wage and salary growth and online job demand - suggest Wall Street is wrong.”
In contrast to the positive jobless claims figure, a TrimTabs index showed that a rise in online job postings has slowed over the past month . The firm’s pay analysis showed that wages have fallen 1.2 percent over the past month, adjusting for taxes and inflation, a bigger drop than the 0.2 percent decline over the past three months.
Job cuts at big Wall Street banks including Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz), Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz), JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) and Bank of America-Merrill Lynch (BAC make quick cash.N: Quote, Profile, Research, Stock Buzz) will only hurt job growth further , Biderman said, while dwindling bonus pools will add pressure to wage growth.
Large U.S. banks have outlined plans to lay off nearly 40,000 employees so far this year as a result of the European sovereign debt crisis and weak economic growth, according to a Reuters tally.
Reports from compensation consultants such as Johnson Associates and Options Group suggest that Wall Street bonuses may decline as much as 30 percent to 40 percent this year. That will only hurt U.S. wage growth more in the weeks ahead, Biderman said, since bonuses are typically paid from late December through early February.
The earnings report from Jefferies Group Inc (JEF.N: Quote, Profile, Research, Stock Buzz) on Tuesday may offer clues to broader Wall Street trends. Jefferies’ fiscal year ends November 30, a month earlier than those of bigger rivals like Goldman and Morgan Stanley.
The investment bank laid off roughly 70 people in equities trading and cut overall compensation and benefits 24 percent during its fourth quarter. Chief Executive Rich Handler and a number of other senior executives also agreed to forgo bonuses for 2011.
“We recognize our shareholders had a tough year,” Handler said. “We’re shareholders and we’re getting zero bonus.”
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