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Boeing reportedly closing Wichita defense operations

January 4, 2012

Boeing plans to close its defense operations in Wichita, Ks., a move that will result in about 2,000 people losing their jobs, according to Bloomberg News.

Citing anonymous sources, Bloomberg said the announcement will be made to Wichita employees at a 10:30 a.m. meeting today

Boeing said in November it was studying the Wichita plant’s future, including possibly closing it, due to expectations of defense spending cuts. In June, Boeing said it was cutting about 225 jobs “to help our business reduce cost and improve productivity.”

The military modifications plant, which employs about 2,100 people, is where Boeing has been expected to complete the installation of military systems on its future 767 refueling tankers after the jets are assembled in Everett, Wash poor credit personal loans.

Bloomberg reported that a labor contract with the Machinists union would bring the tanker work to Seattle area if the company closed Wichita.

The plant currently does maintenance and modification of military and government jets, including the fleet of B-52 bombers and Air Force One.

Wichita Mayor Carl Brewer says Boeing has not returned calls from local officials. Brewer, Sedgwick County Commissioner Dave Unruh and U.S. Rep. Mike Pompeo all scheduled news conferences Wednesday to respond to any announcement from Boeing.

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South Korea

January 3, 2012

South Korea

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Exxon Mobil: $908 M awarded in Venezuela dispute

January 2, 2012

An international arbitration body has awarded Exxon Mobil Corp. nearly $908 million in a dispute with Venezuela over compensation for the nationalization of its assets, the company said Sunday.

Exxon Mobil sought arbitration after President Hugo Chavez’s government nationalized an oil project in the country in 2007.

The decision by the International Chamber of Commerce confirmed that state oil company Petroleos de Venezuela SA “does have a contractual liability to Exxon Mobil,” company spokesman Patrick McGinn said in an email. He said the award is for $907,588,000.

Venezuelan government officials did not respond to messages on Sunday seeking comment.

“The dispute is not over Venezuela’s power to expropriate assets, but rather the failure of PDVSA to comply with contractual provisions to compensate Exxon Mobil,” McGinn said.

The Irving, Texas-based oil company has not publicly released figures on how much it was seeking in compensation. McGinn said the company received the decision on Friday and was still reviewing its more than 400 pages.

Exxon Mobil still has another arbitration case pending against Venezuela before the World Bank-affiliated International Centre for Settlement of Investment Disputes, or ICSID low fee payday loans. More than a dozen other arbitration cases involving Venezuela are also pending as companies have sought billions of dollars in compensation in response to nationalizations by Chavez’s leftist government.

The Caracas-based consulting firm Ecoanalitica estimated recently, before the latest Exxon Mobil decision, that the bulk of the government’s nationalizations involved more than $33.7 billion in assets, including about $23 billion in outstanding obligations.

Venezuela has reached negotiated settlements on payments to some other companies.

Last month, Mexican cement company Cemex SAB said Venezuela agreed to pay $600 million for the 2008 takeover of the company’s operations in the country.

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In reversal, Saleh opts to stay in Yemen

January 1, 2012

Yemen’s outgoing president decided to stay in the country, reversing plans to leave, his ruling party said Saturday, in an apparent attempt to salvage his control over the regime, which has appeared to unravel in the face of internal revolts and relentless street protests.

In a sign of the fraying, the son and nephew of President Ali Abdullah Saleh launched a crackdown on suspected dissidents within the ranks of the elite security services they command, officials within the services said. The Republic Guard, led by the son, and Central Security, led by the nephew, have been the main forces used in trying to suppress the uprising against Saleh’s rule the past year.

Hundreds of thousands of Yemenis marched in the streets of Sanaa and other cities on Saturday, demanding that Saleh be put on trial for the deaths of protesters killed in the crackdown since February.

“We will not let you escape,” protesters chanted, holding up posters of the president with a noose around his neck.

Saleh signed a power transfer agreement in early November that was meant to ease him out of power after nearly 33 years of rule in hopes of calming the turmoil that has shaken this impoverished Arab nation for months. Under the accord, Saleh handed over all his authorities to his vice president and committed to step down formally once parliament grants him immunity from prosecution.

But opponents say he has tried since then to maintain his influence through loyalists in his ruling party and through the security forces commanded by his family. His People’s Congress Party retains considerable power as part of a power-sharing government with the opposition, and critics say it has worked to undermine Vice President Abed Rabbo Mansour Hadi.

Meanwhile, protests have swelled after organizers rejected the accord because of the provision granting Saleh immunity. In recent weeks, the unrest has expanded with strikes breaking out within multiple government institutions and within units of the regular military demanding the removal of Saleh loyalists.

Hundreds of men in military uniform marched on Saturday through the southern city of Taiz, a center of the uprising, calling for trials of top commanders over the killings of protesters. Some renegade units in other parts of the military have even locked their commanders out of military installations and demanded the removal of officers accused of corruption or involvement in the deadly crackdown.

Saleh’s flip-flop on leaving the country was the latest show of the mercurial way he has handled the crisis since it erupted.

Last weekend, he told reporters he would travel to the United States for a period to help bring calm to his nation. But on Saturday, he met with figures from the People’s Congress Party and decided to stay.

“It is not possible in any way, shape or form to allow the collapse of state establishments and institutions that have been built over the last 49 years,” Saleh said in a statement addressing the new threats.

He did not mention his plans to stay in Yemen. But tribal chief Sheik Mohammed al-Shayef, who is also a leading member of Saleh’s People’s Congress Party, said separately that the president had decided to remain because of the unrest, which al-Shayef blamed on the opposition and said was a violation of the power-transfer agreement.

“Dangerous developments have led to this decision” to stay, al-Shayef said. “It is in the interest of Yemen that Saleh remains in here.”

Washington has been hesitant to allow Saleh to enter the United States, wary of being seen to give refuge to a leader considered by many of his people to have blood on his hands. That may have played a major part in Saleh’s reversal. But the president likely also wants to be present to direct his loyalists and put pressure on Hadi and the unity government, said Abdel-Bari Taher, a political analyst.

“He won’t let the new government work without interruptions,” said Taher. But “eventually, things are going to get out of control. … The strikes and government concessions only mean that Saleh’s regime will eventually lose its share in power.”

The Republican Guard and Central Security forces, the best trained and armed security forces, have so far not suffered significant defections to the opposition, as have regular military units, making them a major cornerstone for Saleh’s control.

But with more frequent and serious acts of rebellion breaking out in other parts of the security services, Saleh’s son Ahmed has led an internal sweep to prevent any outbreak within the Republican Guard, said a military official. Dozens of Guard members have been arrested in recent weeks on suspicion of opposition sympathies, said the official, speaking on condition of anonymity to reveal the internal workings.

The official said Ahmed warned at a Guard meeting over the past week against “copying” the actions of others. Loyalists are searching units, barracks, and have banned the use of cell phones inside the camp, the official said.

“We will not permit copying here. Force will be the way to deal with any protest,” the official quoted Saleh’s son as saying.

A similar sweep has taken place in search of rebellious soldiers within the Central Security forces, led by Saleh’s nephew, Yahia, according to a Central Security official, who also spoke on condition of anonymity because of the secretive nature of the security measures.

Protests within government institutions and the military have forced the unity government to make significant concessions and oust Saleh loyalists.

On Saturday, the defense minister ordered the removal of a longtime Saleh confident within the armed forces, Ali al-Shater, known as one of the regime’s strongmen. Protests by subordinates accused al-Shater of corruption and using his connections with the president to illegally amass wealth.

The political turmoil this past year in Yemen has emboldened even prisoners, who attempted to escape from jail in the southern province of Dhamar, 60 miles (100 kilometers) south of Sanaa, just two weeks after they rioted to demand better treatment.

Three prisoners were shot dead and 10 others wounded during the attempted escape, a security official said. He spoke on condition of anonymity because he was not authorized to release the information.

A week earlier, employees of the national airline, Yemenia Airways, walked off their jobs demanding the dismissal of the director, Saleh’s son-in-law, charging him with plundering the company’s assets and driving it into bankruptcy. The government gave in to the demands and replaced him.

Meanwhile, Saleh’s relatives appeared to be hedging their bets. An official in the Congress Party and a port official said the a ship belonging to Saleh’s nephew and son left for the United Arab Emirates carrying rare animals, Arabian horses and antiquities that had been kept in the family’s palaces in Sanaa.

In southern Yemen Saturday, around 10,000 people displaced by months of fighting between al-Qaida-linked militants and the army attempted to march back to their homes in Abyan province but were turned back by the fighters.

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Grocery stores pull Arizona lettuce from shelves

December 31, 2011

Heads of iceberg lettuce are being removed from grocery store shelves in at least seven states after salmonella was found in an Arizona field adjacent to the grower’s property.

None of the lettuce in the markets has tested positive for salmonella but the grower alerted retailers of the test results and sought a withdrawal of the product “out of an abundance of caution.”

“There’s no evidence of contamination on any product whatsoever,” Jamie Strachan, CEO of Salinas, Calif.-based Growers Express, told The Associated Press on Friday.

Still, The Kroger Co. and its affiliated grocery chain, Smith’s Food and Drug, decided to pull the product from 200 stores in at least seven states, including Virginia, West Virginia, North Carolina, Utah, Wyoming, Idaho and Nevada, Kroger spokesman Keith Dailey said.

Dailey called it a cautionary move prompted by a notice from the grower.

Strachan stressed that none of his company’s product has tested positive for salmonella, and that crops growing in the adjacent field south of Phoenix were destroyed. He would not say who owned the tainted property.

Strachan also declined to say what other grocery store chains in the country might also have some of the lettuce the company has sought to remove from shelves easy pay day loans. He said it could be up to 1,000 heads.

“Out of an abundance of caution, we withdrew our product out of market,” Strachan said. “We’re just being cautious.”

He said the company, which also supplies product to Green Giant, hadn’t been ordered to issue any official recall, and has alerted regulatory authorities.

“We’re being very conservative, and we want to do the right thing, but we’re not being asked to do that by any health authorities,” Strachan said.

No illnesses have been reported.

California Department of Public Health spokeswoman Anita Gore said late Friday that Growers Express told both the agency and the U.S. Food and Drug Administration that the company had contacted its customers and issued a voluntary “market withdrawal”.

The FDA did not respond to requests for comment.

“They’re pulling the lettuce to be on the safe side, but there’s no official recall,” Utah Department of Agriculture and Food spokesman Larry Lewis said.

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Italy Sells 7 Billion Euros of Bonds as Yields Fall - Bloomberg

December 30, 2011

Italy auctioned 7 billion euros ($9 billion) of debt to bring the total raised this week to almost 20 billion euros, underscoring how the European Central Bank is helping the world

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Morgan Stanley to cut 580 jobs in New York

December 28, 2011

Of the 1,600 job cuts announced earlier this month by Morgan Stanley, 580 will be at its home base in New York.

The relentless tug of the dismal economy is hitting employees in the banking sector hard, and it’s no surprise that many of the job cuts are hitting the epicenter of the financial industry. Citigroup, with its headquarters a seven-minute drive up Park Ave. from Morgan Stanley in Manhattan, said recently that it would eliminate 4,500 jobs, or about 1.5 percent of its global work force of 267,000, over the next few quarters.

But jobs are being slashed by banks almost everywhere.

In September, Bank of America Corp., based in Charlotte, N.C., said it would cut 30,000 jobs over the next few years. Swiss lender UBS is downsizing its investment bank to 16,000 people from the current 18,000 as it reduces its exposure to risk.

Morgan Stanley disclosed in a filing with the Labor Department on Wednesday that the cuts will be made at four New York locations: 1221 Ave. of the Americas, 1 New York Plaza, 1585 Broadway and 750 Seventh Ave.

The investment bank said that the layoffs _ which began two weeks ago and will represent 2.6 percent of its work force _ will hit all levels of the company and would go on through the first three months of next year.

Morgan Stanley had more than 62,000 employees at September’s end.

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Dow jumps 337 points

December 27, 2011

U.S. stocks surged Tuesday as concerns about the European debt crisis eased and investors welcomed signs of strength in the U.S. housing market.

The Dow Jones industrial average () rose 337 points, or 2.9%, to end at 12,103. The S&P 500 () jumped 36 points, or 3%, to 1,241. The Nasdaq () gained 80 points, or 3.2%, to 2,604.

Investors focused on positive headlines out of Europe, including an upbeat reading on German consumer confidence and a surprisingly strong auction of Spanish debt.

Traders were also looking ahead to the results of a key lending program by the European Central Bank on Wednesday. The ECB announced a series of "non-standard" measures earlier this month designed to boost liquidity for European banks struggling to secure funding in the wholesale market.

"The market is coming to the realization that this is an important step to prevent a credit crisis and bring down yields" on government bonds, said Peter Cardillo, chief market economist at Rockwell Global Capital.

Fortune 500: Worst stocks of 2011

Analysts expect banks to borrow up to €300 billion under the first of the ECB’s three-year refinancing operations.

On Tuesday, banking stocks were among the best performers, after the sector dragged down the broader market Monday.

Bank of America (, Fortune 500) was up 4% to $5.19 a share, one day after the stock fell below $5 per share. Citigroup (, Fortune 500), Goldman Sachs (, Fortune 500), JPMorgan (, Fortune 500), Morgan Stanley (, Fortune 500) and Wells Fargo (, Fortune 500) all moved higher.

The gains came despite the release of a highly anticipated set of proposals from the Federal Reserve to strengthen regulation and oversight of the banking sector.

Meanwhile, stocks were also supported by a better-than-expected report on the U.S. housing market. The number of new homes breaking ground rose to an annual rate of 685,000 in November, with requests for building permits rising 1.8% to 681,000 compared to last year.

Analysts had expected housing starts to hit 627,000, and building permits to come in at 633,000 for November, according to consensus estimates from Briefing.com.

Trading volumes are expected to remain light as many investors have already closed their books for the year. That could make for a choppy week as low trading volumes can exaggerate swings in the market.

"We expect today’s lift to be short-lived and for markets to remain relatively quiet into the holidays," said Camilla Sutton, chief currency strategist at Scotia Capital.

Companies: After the closing bell, software giant Oracle (, Fortune 500) reported earnings and sales that missed analysts’ expectations. The stock was down 7% in extended hours.

Shares of Jefferies () rallied as much as 22% Tuesday after the company released fourth quarter profits that beat analysts’ expectations. Revenues were lighter than expected, though.

Apple (, Fortune 500) rose after the U.S. International Trade commission ruled Monday that the software in some of HTC’s Android smartphones violated one provision of an Apple patent, and that those phones would no longer be allowed into the U.S.

Dumbest Moments in Business

Google (, Fortune 500) shares rose after the company said it would acquire a portfolio of solar photovoltaic facilities with KKR (, Fortune 500). The deal brings Google’s total investment in renewable energy projects to more than $915 million.

Food producer General Mills (, Fortune 500) reported quarterly earnings of 76 cents per share, slightly missing estimates. Analysts surveyed by Thomson Reuters expected earnings of 79 cents per share.

Carnival Corporation () was under pressure after the cruise operator’s quarterly results and outlook fell short of expectations.

Late Monday, AT&T (, Fortune 500) announced it had abandoned its $39 billion bid for T-Mobile, a deal that would have created by far the nation’s largest wireless company.

Red Hat () shares fell 9% after the maker of open source software reported quarterly results late Monday that missed analysts’ estimates.

World markets: European stocks closed higher. Britain’s FTSE 100 () rose 1%, while the DAX () in Germany jumped 3.1% and France’s CAC 40 () rose 2.7%.

Asian markets ended mixed. The Shanghai Composite () lost 0.1%, while the Hang Seng () in Hong Kong ticked up 0.1% and Japan’s Nikkei () edged higher 0.5%.

Currencies and commodities: The dollar fell against the euro, the British pound and the Japanese yen.

Oil for January delivery rose $3.29 to end at $97.17 a barrel.

Gold futures for February delivery rose $20.90 to settle at $1,617.60 an ounce.

Bonds: The price on the benchmark 10-year U.S. Treasury fell, with the yield rising to 1.92% from late Monday.  

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More Americans to travel over the holidays

December 20, 2011

Despite continued worries about the economy, more Americans are expected to hit the highway this holiday season.

Travel group AAA said Wednesday it expects 91.9 million Americans — about 30% of the population — is expected to travel at least 50 miles from home during the 11-day year-end holiday season. That’s up 1.4% from a year ago and the second highest travel volume in the past ten years.

AAA defines the holiday season as Friday, Dec. 23, 2011 to Monday, Jan. 2, 2012. Peak travel volume was hit in the 2006-2007 holiday season, when 93.7 million people traveled.

"It’s a positive sign for the travel industry," said Bill Sutherland, vice president, AAA Travel Services, in a statement. "As our lives get busier, it is so important to create opportunities for the rest and rejuvenation that result from vacation travel and connecting with family and friends, especially during the holidays."

Ways to save on last-minute holiday travel

The majority — about 91% — of travelers are expecting to hit the roads by automobile, a 2 cash advance payday loan.1% increase from a year ago. That comes in face of high prices at the pump, with gas prices 29 cents higher than a year ago.

On the other hand, air travel is expected to decline slightly, in the wake of an anticipated 21% increase in holiday airfares over last year.

About 5.4 million travelers expect to fly during this year’s holiday period, a 9.7% decline from a year ago, AAA said. That makes this year’s air travel volume the seventh lowest in the past ten years.

AAA found that 59% of people expecting to travel over the holidays feel that the economy has either had no impact on their plans or that it has even improved their financial situation. The remaining 41% said they would be forced to limit their travel plans because of economic worries. 

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St. Louis needs to reboot economic development efforts

December 18, 2011

For the St. Louis economy, this year looked a lot like the previous 20 or 30, and it’s a rut we really need to get out of.

Job growth lagged the nation. Well-known local companies succumbed to takeovers, without enough new businesses to take their place. Officials argued about strategy while failing to address the region’s deep-seated problems.

Denny Coleman, the president of the St. Louis County Economic Council, has been sounding the alarm about these issues recently, ever since the council commissioned a report on the region’s economic strategy.

One headline from the report, written by consulting firm AECOM, is that within two decades, because of slow population growth, we’ll no longer be one of the 20 largest U.S. metropolitan areas. We’re currently No. 18.

That top-20 ranking automatically confers big-city status. National retail chains want to have a presence in the top 20 markets; advertisers target their messages there. Cities in the next tier are important, but they have to fight harder for attention.

Coleman believes AECOM’s warning should be a wake-up call.

“We have been living off the wealth creation from select legacy companies here for some time,” he said. “While we’ve created some new, significant wealth, the competition in other metro areas is outpacing us.”

Want to talk legacy companies? Savvis, Smurfit Stone Container, LaBarge and Rehabcare were all acquired this year. St. Louis ranks poorly on indicators of the entrepreneurial activity that can replace them with new firms.

Or should we talk jobs? Metro St. Louis officially added 7,800 jobs between October 2010 and October 2011, an increase of 0.6 percent. Howard Wall, an economist at Lindenwood University, thinks that number will be revised to show a loss of 3,900 jobs.

Either way, St. Louis is a laggard. Nationally, employment grew by 1.2 percent in the same 12 months, twice as fast as the optimistic St. Louis estimate.

“Don’t we have this conversation every year?” Wall said when I asked about the sluggish local job market.

Yes, we do. And how do St. Louis’ leaders try to break out of this rut? For one thing, they spent years pursuing the “big idea” of a hub for Chinese cargo planes, only to have the Missouri Legislature shoot down the incentives that the plan required. It’s not a good precedent.

Recently, other rifts have been exposed. Mayor Francis Slay called for the Regional Chamber and Growth Association, a private-sector group, to cede its economic development duties to a joint city-county agency.

Coleman hasn’t gone quite so far, but he does accuse the RCGA of “mission creep.” As he sees it, the RCGA should concentrate on marketing the region and recruiting companies that want to expand or relocate.

The jobs of retaining local employers, encouraging startups and improving the work force, Coleman believes, should fall to agencies in each city or county. He says he was surprised when those showed up as objectives in the RCGA’s latest strategic plan. Coleman says he’s encouraged by the appointment of Joe Reagan as the new RCGA president. The region’s economic development structure “can work, but it’s a matter of making sure you have a clear separation of responsibilities,” Coleman says.

Slay, Reagan, Coleman and others clearly have plenty to discuss. Let’s hope they quickly get beyond turf wars.

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