Financial Freedom. Best business news.

Indian industrial production unexpectedly contracted in March as weaker domestic demand and sliding exports hurt the economy, undermining the central bank

Defying expectations, Congress has reached the homestretch on a major overhaul of federal transportation programs that is critical if the nation is to avoid steep cutbacks in highway and transit aid.

The bill is driven partly by election-year politics. Both Congress and President Barack Obama have made transportation infrastructure investment the centerpiece of their jobs agendas. But the political imperative for passing a bill has been complicated by House Republicans’ insistence on including a mandate for federal approval of the Keystone XL oil pipeline. The White House has threatened to veto the measure if it retains the Keystone provision.

And there are other points of disagreement between the GOP-controlled House and Democratic-controlled Senate, including how to pay for transportation programs and how much leverage the federal government should have over how states spend their aid money. Transportation Secretary Ray LaHood has said it’s unlikely Congress will pass a final bill until after the November elections.

Despite LaHood’s pessimism, lawmakers and transportation lobbyists said they believe prospects are improving for passage of a final bill by June 30, when the government’s authority to spend highway trust fund money expires. The fund, which pays for roads and transit, is forecast to go broke sometime next year.

A House-Senate conference committee is scheduled to begin formal negotiations May 8.

It has taken Congress years to get this far. Work on a transportation overhaul began before the last long-term transportation bill expired in 2009. The Senate finally passed a $109 billion bill with broad bipartisan support in March. The bill would give states more flexibility in how they spend federal money, step up the pace of road construction by shortening environmental reviews and impose a wide array of new safety regulations.

House Republicans, after failing to corral enough votes to pass their own plan, recently passed a placeholder bill that allows them to begin negotiations with the Senate. That bill included the Keystone provision, as well as provisions limiting the public’s ability to challenge transportation projects on environmental grounds and taking away the Environmental Protection Agency’s power to regulate toxic coal ash.

“I feel like people are worn out on this issue and would like to get something done,” said Jeff Shoaf, a lobbyist with the Associated General Contractors of America, a trade association for the construction industry. “I think the prospects are good.”

Winning approval of the Keystone provision, which would give federal regulators no choice but to approve a pipeline to transport oil from Canada’s tar sands, appears to be House Speaker John Boehner’s top priority, lawmakers and transportation lobbyists said instant payday loan.

Republicans portray Obama’s delay in the pipeline as a contributor to high gasoline prices. “Boehner wants to push Keystone as hard as he can because he sees it as a political winner,” said Joshua Schank, president and CEO of the Eno Center for Transportation, a nonprofit foundation dedicated to improving transportation.

Senate Democratic conferees on the bill appear to have enough votes to block inclusion of the Keystone provision in the final product. Sen. Jay Rockefeller, D-W.Va., one of four Senate committee chairmen responsible for a portion of the bill, has announced he’ll oppose Keystone and other House environmental provisions.

An open question is whether House Republicans will balk on an overall transportation bill if they can’t get Keystone. Similarly, despite their public statements, it’s unclear whether Senate Democrats would be willing to sacrifice the bill in order to block a Keystone provision, and whether Obama would follow through on his veto threat, especially if the Keystone language were softened in negotiations.

The president painted a bleak picture of America’s infrastructure in a speech Monday to union workers in the construction industry, saying U.S. highways are clogged, railroads are no longer the fastest in the world and airports are congested. A transportation construction bill would boost employment and the economy, but “the House Republicans are refusing to pass a bipartisan bill that could guarantee work for millions of construction workers,” Obama said, referring to the Senate bill.

“Instead of making the investments we need to get ahead, they’re willing to let us all fall further behind,” he said.

The transportation bill “is incredibly important to the president,” said Ed Wytkind, president of the transportation trades department of the AFL-CIO.

Both sides ultimately must decide whether they want an issue to be used as a campaign weapon or an accomplishment they can tout to voters.

Dave Bauer, a lobbyist for the American Road and Transportation Builders Association, cautioned against reading too much into what congressional conferees say at this point.

“Before they even get to a conference table, some seem to be trying to make this all about Keystone, and it’s not,” he said.

Source

Giving Iran another chance at diplomacy, deeply skeptical Obama administration officials return to nuclear negotiations this weekend looking for quick progress _ or at least enough hope to hold off urgent calls from Israel for military action.

The U.S. and other world powers are stopping short of saying the gathering in Istanbul is a make-or-break situation. But as they sit down with Iranian officials for the first time in more than a year to press yet again for an agreement on Tehran’s disputed nuclear program, American officials say the window for a diplomatic breakthrough is closing. And in the event the talks fail completely, all U.S. options remain on the table.

Speaking Thursday after hosting foreign ministers from the Group of Eight leading industrialized nations, Secretary of State Hillary Rodham Clinton urged Iran to prove to the world its claim that its uranium enrichment activity is for peaceful purposes. The U.S. and many other countries fear Tehran is trying to produce an atomic bomb and have challenged Iran’s Ayatollah Ali Khamenei to substantiate his edict that weapons of mass destruction violate Islamic law.

“We’re looking for concrete results,” Clinton told reporters. “They assert that their program is purely peaceful. They point to a fatwa that the supreme leader has issued against the pursuit of nuclear weapons. We want them to demonstrate clearly in the actions they propose that they have truly abandoned any nuclear weapons ambition.”

The ball is clearly in Iran’s court. Mounting U.S. and European measures are crippling the Iranian economy, with the rial depreciating dramatically under the weight of restrictions on petroleum exports and efforts to cut off Iranian banks from the world financial system. U.S. and European sanctions will get more severe this summer.

Ahead of the talks, chief Iranian nuclear negotiator Saeed Jalili vowed to present new initiatives, without specifying what they might be. Iranian officials have suggested scaling back on uranium enrichment while continuing to make nuclear fuel. It’s unlikely such an offer would satisfy the demands of the U.S. and its fellow negotiators _ Britain, China, France, Germany and Russia _ but may illustrate enough of a compromise to justify follow-up talks over the next several weeks.

Iran has been skilled at using negotiations to stall for time. It has reneged repeatedly on understandings reached behind closed doors over eight years of talks, initially with European mediators and later expanded to include the United States and the other permanent members of the U.N. Security Council. All the while, Tehran has intensified its uranium enrichment program.

Israel wants tougher action. The Jewish state sees a nuclear-armed Iran as the greatest threat to its existence and has made a point of reminding the world that it sees the threat more urgently than others and that it is prepared to strike Iranian nuclear facilities with or without international support. Israeli military officials believe they’d have to strike by summer to be effective business card templates.

The United States can afford to be a little more patient. But it is dealing with its own clock counting down the time left for diplomacy. The fact that President Barack Obama, too, has committed to preventing Iran from obtaining a nuclear weapon _ and not simply containing Iran should it acquire one _ means the U.S. might similarly be compelled to act. Adding to the tension is an election season in which Obama’s Republican rivals accuse him of being soft on Iran and weak on defending Israel.

Obama has underlined the need to give time for diplomacy alongside sanctions and fired back at his critics for “beating the drums of war.” But the president also will need some signs of a possible breakthrough to show Israeli Prime Minister Benjamin Netanyahu if he is to fundamentally change the Israeli calculus. And unless the Iranians break from the mold set at previous gatherings, he will be hard pressed to do so.

Speaking earlier this month in Istanbul, Clinton said Iran could demonstrate its seriousness in a number of ways. She suggested that Iran end its production of highly enriched uranium, which at 20 percent can more easily be transformed into bomb-making material. She also urged Tehran to ship out its existing stockpile of this uranium to another country and open up its facilities to “constant inspections and verifications.”

The most feasible model for a deal may involve an arrangement Iran agreed to in Geneva in 2009, and then quickly walked away from. It involved the Islamic republic shipping out its highly enriched uranium in exchange for nuclear fuel rods. Although Western officials see the contours of such an agreement as still viable, they say it must be updated to represent more than two years of continued Iranian enrichment. Another compromise could see Iran suspend its higher enrichment if the West holds off on some sanctions.

Failure of the process raises the possibility of a military attack that could lead to severe repercussions in the region and around the world. Even if it is the U.S. that chooses to intervene, Iran’s retaliation could come through attacks on Saudi oil infrastructure, attempts to block the strategic strait of Hormuz, or proxy terrorist activity against U.S. allies such as Israel or in instable states such as Lebanon. Conflict also could drive up oil prices beyond their $100-plus per barrel level today and raise gasoline costs worldwide.

For that reason, the U.S. and its European partners are prepared to show some _ but not much _ patience if they can create a framework for progress. It’s an approach that aims to avoid the all-or-nothing stakes of previous meetings that have consistently left world powers with nothing. But they’ll have to get to something quickly.

Source

It will soon be easier for small companies to raise money just like behemoths on Wall Street.

More access to fundraising, new investors and fewer regulatory burdens are all part of the Jumpstart Our Business Startups bill, which President Obama signed into law Thursday.

The JOBS Act, which received bipartisan congressional support, provides small businesses that need capital with many options that were previously out of reach. The provisions are aimed at helping fast-growing operations like biotech and tech companies, but mom and pop shops may benefit as well.

The Securities and Exchange Commission has several months to pass regulations fully implementing the law.

For startups or entrepreneurs in need of initial funds to launch an idea, the law redefines crowdfunding.

8 crowdfunding sites to watch

Previously, platforms like Indiegogo or Kickstarter offered companies a way to raise money from everyday folks. But contributors couldn’t buy shares in a company itself and take part in its profits and losses.

The new law allows a company to use crowdfunding for seeking actual investors. It can raise up to $1 million this way. To protect investors, those with a net worth of less than $100,000 may now invest 5% of their yearly income or $2,000, whichever is higher. Wealthier types can invest up to 10% of their income.

"There’s more reason for an investor to give them money," said Matthew Kaplan, a capital markets lawyer in New York. "They’ll get a piece of the upside."

Crowdfunding helped San Francisco clothing and accessories company Solz raise thousands in donations in the past. CEO Brad Carrick expects the new law will open up the possibility to sell small shares of his company for $1,000 to $10,000.

"When you pull these people together, you can get a mini-angel investment round," said Carrick, referring to venture capital that plays a crucial role in funding startups.

Several parts of the law are also aimed at helping a well-established small business more easily find accredited investors, those with a net worth of $1 million excluding the value of their primary residence. The law lifts a ban on advertising to the general public about investment opportunities, no longer forcing companies to hire brokers.

"That’s huge. When you’re talking about a small business with 30 employees, you don’t have time to establish those connections to bring in chunks of money," said Molly Brogan, spokeswoman for the National Small Business Association, which lobbied for the law’s passage.

Meanwhile, critics such as the AARP, a lobbying group for seniors, oppose lifting the advertising ban, worried it will lure in unprepared investors and lead to fraud.

Does JOBS Act = New banks?

Finally, for companies in later growth stages, the law eases the process for publicly selling stock.

Having 500 investors or raising $5 million previously forced a company to register with the SEC — a costly endeavor. Filling out stacks of legal forms and undergoing independent accounting audits can cost hundreds of thousands of dollars. The law loosens requirements for most companies by raising several thresholds.

A company with $10 million in assets will now have to register with the SEC when its number of investors reaches 2,000, including 500 who don’t meet the "accredited" wealth requirement. And companies with less than $1 billion in annual revenue can enter a five-year phase-in plan with the SEC.

Kaplan said that will let small companies on their way up retain the strength they need to survive the trip.

"It enables you to gestate longer," Kaplan said. "History is littered with examples of startups that went public and crashed and burned, because they didn’t have time to develop processes or market presence to sustain themselves as a public company."

That provision is welcomed by Boulder, Colo., software developer Rally Software, which has spent more than $1 million in accounting fees since 2010 to maintain the option of going public. The CEO of the 300-employee company, Tim Miller, said the JOBS Act would make the process less expensive. 

Source

U.K. Chancellor of the Exchequer George Osborne will need to claw back about 5 billion pounds ($8 billion) a year, largely from the wealthy, to fund giveaways he

In March, Sherry Hunt and a co-worker were called into a meeting at CitiMortgage’s big operations base in O’Fallon, Mo.

A high company executive awaited her there.

“It’s your asses if these defects don’t improve,” Hunt recalled being told by her “boss’s boss’s boss.”

Hunt didn’t create the “defects” in mortgage applications. It was her job to find them — red flags for bad loans. She felt the executive wanted her to stop doing her job and let the bank make bad loans that would be guaranteed by the federal government.

“The message was clear to me,” Hunt recalled. “I was threatened.”

Her experience provides a telling window into the inner-workings of mortgage misconduct that continued to occur even after the global financial system nearly collapsed due to the industry’s shady dealings with subprime loans and mortgage-backed securities.

Hunt, rather than cave to pressure, filed a “whistleblower” lawsuit against CitiMortgage and its Citigroup parent, claiming the mortgage lender deliberately ignored fraud and errors in government-insured mortgage programs. The U.S. Department of Justice then joined the suit.

Earlier this month, Citigroup admitted that it approved Federal Housing Administration mortgages that failed to meet government guidelines. It agreed to settle the suit for $158 million, the amount government expects to lose on FHA mortgages it claims Citi should never have made.

Hunt filed suit under the federal False Claims Act, which lets whistleblowers share in the payout if their suits succeed. Her take, minus legal fees, will be $31 million.

“I didn’t do it for the money,” said Hunt in an interview last week with her and her lawyer, Finley Gibbs.

As she tells it, Hunt tried hard to persuade Citi management to root out fraud. She complained weekly in memos, and finally took her case to human resources. When all that failed, and the pressure to bend kept building, she went to a lawyer.

In an emailed statement, Citi said it settled “so we could put these issues behind us and focus on serving our clients. We take our quality assurance processes seriously and have pro-actively undertaken process improvements.”

The bank declined to respond to specific allegations. A spokesman also would not say if Citi had removed or reassigned executives because of the case, or describe other changes it made to satisfy the government.

Now that it’s over, Hunt thinks CitiMortgage will finally reform. But it’s not clear if she’ll be there to see it; she’s now negotiating whether she remains an employee with the company.

INSPECTING LOANS

Hunt lives on a “hobby farm” in Silex with her retired husband, Jonathan. They grow alfalfa and vegetables. She is reticent about her private life. She declined to say how many children she has, for instance, or describe her upbringing. She wouldn’t say what she might do with so much money.

Her entire working life — 37 years — has been spent in the behind-the-scenes paper-shuffle of mortgage processing.

Citigroup, the nation’s third largest bank, is a giant in the mortgage business. It made 30,000 FHA loans since 2004, totaling more than $4.8 billion. About 30 percent have defaulted, according to the government.

Like many big lenders, Citi can make government-backed loans — putting taxpayers on the hook for defaults — without sending applications to the FHA for review. But it has to abide by strict guidelines and set up separate quality control departments, independent of the bank’s other operations, to flag suspicious applications.

That was Hunt’s job at CitiMortgage. She had started in the mortgage business in 1975 at age 18 as a lowly processor, then climbed the ladder into management. By 2008, she supervised nine workers in the quality control department. They scrutinized one out of every 10 mortgage applications.

They caught “over a thousand” applications with problems, according to Gibbs, her lawyer. Some were obvious fraud – such as numbers whited-out on a W-2 wage form faxless payday loans. Others may have been goofs, such as missing documents or wrong calculations.

The cases were passed on to a fraud unit, which verified that about half really were attempts to cheat, says Hunt. Such cases were supposed to be reported quickly to the Department of Housing and Urban Development, which overseas the FHA. But the government wasn’t hearing of the problems.

At first, Hunt didn’t blame the Citi system. “The sheer volume of referrals was overwhelming,” she thought.

More than 1,000 cases referred by Hunt’s unit were backed up in the fraud unit in 2009, according to the government. More than 80 percent were loans that had defaulted shortly after they were made, which the government calls an indicator of fraud. Eventually, Citi simply erased those records from its files, the government charged.

Then Hunt suspected something more sinister, a “pattern of behavior,” she said. “As I found things against the HUD rules and reported them to management, nothing happened, even after more follow-ups.”

According to the government, Citi’s misbehavior started in 2004, when it took the quality control function away from an outside contractor and moved it in house. It continued until mid-2011. That was more than two years after CitiGroup nearly failed over problems that included massive investments in bad mortgages. The government bailed out the bank to the tune of $45 billion.

BULLYING

Hunt wasn’t alone in her worries. According to the government’s suit, Michael Watts, the director of quality control, complained repeatedly to company officials charged with controlling risk. He warned that employees had “marching orders” to fight quality control decisions.

At one large staff meeting, managers praised loan processors for “beating back” the quality control team and getting them to withdraw complaints, she said. The quality control team was standing there listening. “Someone was allowing them to bully us,” Hunt said.

In June of last year, Hunt wrote a memo complaining about pressure from Jeffrey Polkinghorne, Citi’s director of “front-end” risk. “We also have Polkinghorne telling us it is our asses . . . if the quality does not improve,” she wrote, according to the federal complaint.

At that point, Hunt could have shut up and started overlooking problems. Instead, she complained to CitiMortgage human resources department. There were meetings. Five months later, nothing had changed.

That’s when she decided to blow the whistle outside Citi.

Part of the decision was self interest — she wanted to separate herself from an illegal activity. Hunt also felt an obligation to keep the mortgage industry honest. The FHA had certified her to handle its mortgages. “I uphold their standard,” she said.

She talked with her husband about the costs of standing up, about everything they could lose. Her career. Their home.

She talked to Gibbs, a lawyer from Columbia, Mo., who she knew. Gibbs knew about the federal false claims act, although he had never handled such a case. He filed suit in August.

Then Hunt went back to work. “I kept a low profile. It wouldn’t serve a purpose for me to go blasting this all over the place,” she said.

False Claims Act suits are filed under seal, and they remain sealed until the government decides whether to participate. For the first few weeks, Citigroup didn’t know it was being sued.

The Justice Department got interested and took up the case. It began negotiating with Citgroup. The law forbids employers from retaliating against whistleblowers, and Hunt said she felt no blowback at work.

“I don’t believe much of this filtered down to the O’Fallon office,” she said. “I was comforted in my mind that nobody I was passing in the hallways knew.”

Source

One of the biggest suppliers of oil to the United States may shut off the spigot this weekend, pushing crude and gasoline prices higher for Americans.

Nigeria, which supplies 8 percent of U.S. oil imports, could see production halted if striking workers walk off the job Sunday. Workers are demanding the return of a vital government fuel subsidy that has kept gasoline prices low in that impoverished and restive nation of 160 million people.

It’s unclear how much of Nigeria’s production would be affected. At worst, the country’s 20,000 unionized oil workers could take as much as 2.4 million barrels of daily crude production off the market, striking at the heart of Nigeria’s oil-dependent economy.

Even if strikers are only partially successful, fears of tightened global supplies could raise oil prices by $5-$10 per barrel on futures markets next week. Gasoline prices would follow, rising by as much as 10 cents per gallon and forcing U.S. drivers to spend an additional $36 million a day at the pump.

Gasoline now costs $3.39 per gallon (89 cents a liter) after rising 11 cents since the start of the year. Experts predict the national average could rise as high as $4.25 per gallon ($1.12 a liter) in 2012.

The Nigerian government already has offered a smaller, temporary fuel subsidy and will meet with union leaders on Saturday. The strike could be called off but protesters have promised to halt production if they don’t get the full, $8 billion subsidy restored.

Disruptions would have a long-term impact on Nigeria’s economy. Union president Babatunde Ogun said it could take six months to a year to restart oil fields once they’re shut down.

“If everything comes to a standstill, the government will budge,” Ogun told reporters this week in Lagos.

The threat to shut off oil production is the latest move by protesters after a week of violent, anti-government clashes throughout the country. The strike began Monday to challenge President Goodluck Jonathan’s decision to abandon the fuel subsidy.

“It’s going to be a showdown this weekend,” in Nigeria, Oppenheimer & Co. analyst Fadel Gheit said. “You can only hope that cooler heads will prevail.”

It’s hard to predict how effective a national oil worker strike would be.

Oil production facilities are usually automated, allowing them to pump oil out of the ground without anyone at the platform. But if something breaks, if the pressure in the well fluctuates, or if other problems occur that cause an automatic system shutdown, there wouldn’t be anyone there to get production running again.

It’s likely oil companies operating in the region _Royal Dutch Shell, Exxon Mobil Corp., Chevron Corp., Total SA and Eni S.P.A. _ would simply shutter their platforms and wait for political tensions to subside, Gheit said. Oil companies could still export oil from storage terminals on the coast; that is, if union workers at the terminals stay on the job.

The price of oil already has swung up and down this year because of supply concerns in another oil-rich part of the world, the Persian Gulf. Iran, the world’s third-largest crude exporter, is sparring with the U.S. and Europe over its nuclear program.

While Iranian imports are banned in the U.S. because of long-standing tensions, the country supplies 2.2 million barrels per day to the rest of the world, including Europe. Meanwhile, Libya is quickly restarting oil fields that were shut down during the anti-government uprising last year. It has about 1 million barrels per day back online, and it expects to increase production to pre-rebellion levels of 1.6 million barrels per day by mid-year.

Oil prices fell by $2.86 this week to end at $98.70 per barrel in New York. Prices dropped as Europe delayed a decision to ban Iranian imports. But they could snap back up given the variety of geopolitical problems affecting world supplies, including the threat of a Nigerian oil worker strike.

The U.S. government expects the price of oil to average $100.25 per barrel this year.

Michael Lynch, president of Strategic Energy & Economic Research, said oil could jump by $5-$10 per barrel if the strike begins Sunday. Nigeria ranks behind Canada, Saudi Arabia, Mexico and Venezuela in oil exports to the U.S. It produces a valuable crude variety that is easier and cheaper to turn into gasoline than others.

Investors, who have been numbed from years of political unrest in Nigeria that included sabotage, thievery, environmental protests and other operating problems, may wait to see how the government works with the union. Nigerian oil always seems to be under a perpetual threat of some kind, Lynch said.

“Though this time seems more serious,” he said.

Nigerians have been upset for years as international oil production damaged the environment with little apparent domestic benefits. One of the only visible perks was the fuel subsidy. Removing it forced gasoline prices to jump overnight from $1.70 per gallon to at least $3.50 per gallon _ a crippling increase for a nation where most people live on less than $2 a day.

The government still seems determined to have its way, Barclays analyst Helima Croft said, but an oil field strike would be a game changer. If workers can shut down oil production, it’s only a matter of time before declining oil revenues will force the government to cave, she said.

“Any disruptions in either oil production or exports would severely constrain government activities and its ability to meet its obligations,” Croft said.

Eighty percent of the country’s revenue comes from oil.

Source

When investors look at the change in McDonald’s share price last year, they can think only one thing: "I’m lovin’ it."

The fast food giant was the best performer on the Dow Jones industrial average () in 2011, up 31%. That was enough to beat out Warren Buffett’s newest favorite, IBM (, Fortune 500), No. 2 among the blue chip winners.

At the other end of the spectrum was Bank of America (, Fortune 500), which suffered a 58% plunge to lows not seen since 2009. That slump gave it an easy win over Alcoa (, Fortune 500), whose shares lost 44%, in the competition for dubious distinction of ‘biggest loser.’

But those troubled giants were the exception among Dow stocks in 2011.

Overall, the index rose 5.5% in 2011, outpacing the performance of not just the S&P 500 (), down only 0.003%, but also the tech-heavy Nasdaq () and the broader Wilshire 5000 (), which finished the year lower.

And of the 30 Dow components, 18 finished in positive territory for the year.

Fortune 500: Worst performers of 2011

McDonald’s (, Fortune 500) has been helped by strong sales both domestically and globally. Shares hit an all-time high of $100.82 this week before settling back a bit to close Friday at $100.33.

Meanwhile, No. 2 IBM had already achieved its run up by the time Buffett disclosed in November that Berkshire Hathaway (, Fortune 500) had purchased a 5% stake in the company. Its shares are down slightly since then but still managed a 25% gain for the year.

Buffett didn’t do as well when he threw Bank of America a $5 billion lifeline, buying preferred shares of the troubled bank in a deal announced in August. Since then, the bank’s stock has continued to slide, putting the investment in the red, even with the $300 million in annual dividends that Berkshire will pocket.

Bank of America has also been shrinking, announcing plans to shed 30,000 employees and close branches, and losing its title of the nation’s largest bank to rival JPMorgan Chase (, Fortune 500) in the third quarter. It was also forced to reverse course and drop a $5-a-month debit card fee after strong customer backlash.

In comparison to Bank of America’s high profile problems, aluminum maker Alcoa’s stock suffered a relatively quiet slide, as concerns about a looming recession in Europe and a possible slowdown in Chinese production hammered pricing and profits.

The company’s third-quarter earnings miss added to its disappointing share performance. 

Source

Four Yemeni soldiers and two al-Qaida-linked militants were killed in clashes in the country’s south, military and medical officials said Sunday.

The fighting took place overnight outside the city of Zinjibar, the capital of Abyan province that Islamic militants seized earlier this year, a military official said. A medical official said six soldiers were wounded in the fighting.

Both officials spoke on condition of anonymity because they are not authorized to talk to the media.

Al-Qaida-linked militants have overrun swaths of territory in Abyan, taking advantage of a security vacuum that has developed as a result of Yemen’s ongoing political unrest amid nine months of massive protests demanding the ouster of President Ali Abdullah Saleh.

Fighting with the militants has continued as Yemen tries to emerge from its crisis. Saleh is due to step down by the end of the month in return for immunity from prosecution under a deal he signed last month. Under the U.S.- and Saudi-backed deal, a national unity government has already been formed, bringing in opposition parties.

Vice President Abed Rabbo Mansour Hadi has also formed a military committee joining both pro-regime forces and military units that defected to the opposition. On Saturday, the committee had succeeded in removing fighters, weapons and equipment of both sides from two main streets of the capital, Sanaa. But armed pockets of the rival forces could still be seen in side streets nearby.

The U.N. secretary-general’s envoy to Yemen, Jamal bin Omar, told reporters before he left Yemen Saturday that the military committee should end its work next Saturday in separating the rival sides, which at times engaged in heavy battles in the capital.

Gen. Ali Mohsen al-Ahmar, the commander of the First Armored Division who defected and joined the protesters in March, expressed his backing for the military committee after meeting Sunday with ambassadors supervising enforcement of the deal.

Source

Shoppers spent more with Discover cards as the holiday shopping season began, helping lift the credit card company’s fiscal fourth quarter profit 46 percent.

Discover Financial Services said Thursday that sales volume on its namesake cards rose 8 percent to $25.03 billion in the quarter. The total number of transactions Discover’s networks processed rose 5 percent.

At the same time, customer payment habits improved, and rates of late payments and defaults fell. That enabled the company to release some of its reserves set aside to cover unpaid balances, which also helped improve results.

Reflecting a broader trend across the credit card industry, the Riverwoods, Ill.-based company said the number of customers paying off their card balances each month increased.

Keefe, Bruyette and Woods analyst Sanjay Sakhrani noted that economic shakeout of the last few years has left credit cards in the hands of more affluent consumers who are better able to pay their bills in full each month, while those with lower credit scores and presumably less ability to pay are now less likely to use credit.

For the three months ended Nov. 30, Discover posted net income available to common shareholders of $508 million, or 95 cents per share, compared with $347 million, or 64 cents per share in the year-ago period.

The number of outstanding shares dropped 3 percent, which has the effect of boosting per-share results.

Revenue rose 13 percent to $1.81 billion from $1.6 billion last year.

Analysts, on average, were expecting earnings of 89 cents per share on $1.81 billion in revenue, according to a survey by FactSet.

Growth in the company’s private student loan and direct banking businesses provided added boosts during the quarter. During the period, Discover purchased an additional $2.4 billion in student loans.

Analyst Chris Brendler of Stifel Nicolaus said called the results “impressive,” and pointed to the growth in student loans and also private loans made by Discover Bank as positive. “It was a good quarter,” he said.

Discover said the results enabled it to raise its dividend by 67 percent to 10 cents from 6 cents. The dividend is payable Jan. 19 to shareholders of record as of Dec. 29.

In morning trading, Discover shares slipped 22 cents, to $23.60. The stock has traded between $17.86 and $27.92 in the past 52 weeks, and closed Wednesday up about 30 percent since the start of the year.

Source