New General Assembly to face many old issues

SPRINGFIELD—

— A new Illinois General Assembly was inaugurated Wednesday, but lingering beyond the flowers, family and speeches was a host of unfinished business.

The old Legislature adjourned Tuesday without fixing the state's broken public pension system. Also left unresolved were the divisive issues of same-sex marriage, gun regulation and gambling expansion. It'll be a while before such problems are tackled — the part-time lawmakers are scheduled to go home for a few weeks before returning to the Capitol.

In the House, Speaker Michael Madigan remains in charge, as he has for all but two of the past 30 years. In the Senate, President John Cullerton starts his fifth year running the show. Both Chicago Democrats now wield veto-proof majorities after many voters throughout the state opted against the Republican alternative in November legislative races.

That new Democratic power brings added pressure to perform was not lost on Cullerton, who said his party's 40-19 advantage over the GOP is the largest in the nation and in state history.

"I know a lot of you are thinking, 'This is great. We've got 40 members. I don't have to take any tough votes,'" Cullerton told his Democrats in a decorated Senate chamber as family members were entertained by a rendition of the 1960s tune "Feeling Good."

"But if everybody thought like that, we wouldn't get anything done, would we?" he said.

Madigan, the longest-serving speaker in state history, told House members that key issues remain "terribly contentious, terribly divisive."

"We have to call upon our inner resolves to dedicate ourselves to the solution of these problems, working cooperatively with the other members of the House of Representatives and the Senate," said Madigan, who leads a 71-47 Democratic majority.

Still, Madigan gave a grave assessment of the poorly funded pensions, saying he would "emphasize the absolutely serious nature of the fiscal condition."

In the waning days of the legislative session that concluded Tuesday, Madigan made what he said was a good-faith effort to spur pension talks by lifting a demand that suburban and downstate teacher retirement costs be shifted from the state to local school districts. That's now back on the table for Madigan, who called it a "free lunch."

"Serious, serious problem, and if we're serious about solving the problem, that must be addressed," Madigan said.

The cost-shift provision is adamantly opposed by Republicans and some suburban Democrats who maintain that it will lead to local property tax increases.

After failing to come up with a pension solution before the clock ran out this week, Cullerton said that Senate Bill 1, legislation often symbolizing the top agenda item, would be a pension measure combining aspects of unresolved Senate-passed and House-sponsored plans.

"The finances of our pension system have to be addressed in a fair and constitutional manner. The issue has lingered for generations and threatens to doom future generations if something isn't done," Cullerton said.

"We are on the verge of our state budget being turned into a financial plan that funds pension benefits, not essential services. Our investments in higher, elementary and secondary education and human services are increasingly crowded out — some might say, squeezed — by our pension costs," Cullerton said in a nod to Democratic Gov. Pat Quinn, whose grass-roots pension reform movement used a cartoon mascot, Squeezy, the Pension Python.

Though Cullerton cast a vote for Senate Republican leader Christine Radogno of Lemont for Senate president, as she did for him in a symbolic display of bipartisanship, Radogno said "many people in Illinois really don't have a lot of confidence in us and hopefully we can turn that around."

"We have to come to grips with some of the very real problems that we have," she said. "The underlying pillar that will allow us to begin to address them is solving the pension problem."

House Republican leader Tom Cross of Oswego called for "incredibly bold ideas and incredibly bold solutions."

"We're facing challenges in the state that we probably haven't seen as a General Assembly since the Great Depression," Cross said.

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Analysis: Modi's Gujarat growth model might not work across India

SURAT, India (Reuters) - Turning a single Indian state with a long tradition of entrepreneurship and a solid political majority into an investor-friendly economic powerhouse is one thing.

Replicating that experience across a diverse country of 1.2 billion would be a tougher prospect for Narendra Modi, whose leadership of booming Gujarat state has led to his being touted as a potential candidate to become India's next prime minister.

While Modi wins praise even from critics for cutting red tape and making government more responsive and predictable, many ingredients for Gujarat's run of growth were in place well before he took office in 2001.

"It is like an icing on cake sort of thing. You have a nice cake and Modi has done a lot of good icing," said Rakesh Chaudhary, director of Pratibha Group, a textile manufacturer in Palsana on the outskirts of the Gujarat city of Surat.

Industry in Gujarat is helped by a long coastline and plenty of barren land that is easy to turn over to factory use.

The power that comes from a long-standing and heavy majority for his Bharatiya Janata Party (BJP) in the state also gives Modi an advantage that he would not enjoy on a national stage marked by fractious coalition politics.

Despite a controversial past - Modi is accused by critics of not doing enough to stop or of even quietly encouraging religious riots in 2002 that saw as many as 2,000 killed, most of them Muslims - he has established a reputation as an economic reformer in part by building on the strengths of Gujarat and marketing them heavily.

Modi's marketing savvy, aided by the Washington lobbying and public affairs firm APCO Worldwide, will be on display at the biennial "Vibrant Gujarat Summit" that begins on Friday.

Initiated by Modi in 2003 to attract investment after the violence and an earthquake in 2001, the event is attended by thousands of corporate officials who pledge billions in investment, although in reality only a fraction has seen the light of day. Of 12.4 trillion rupees ($225 billion) in investment proposed at the 2009 event, just 8.5 percent had been spent as of November 2011, according to state government data.

"Under Modi's regime, there has been significant improvement in infrastructure growth, significant improvement in industrialization, as well as agriculture," said Jahangir Aziz, senior Asia economist at JPMorgan. "But what has been overplayed is initial conditions were actually pretty decent in Gujarat."

HIGHER OFFICE?

The stocky Modi, who favors traditional Indian attire and a clipped white beard, plays down any prime ministerial ambitions.

But his popularity in Gujarat - the BJP won 115 of the state assembly's 182 seats in a December election - has fuelled speculation that he could lead his Hindu nationalist party in 2014 against India's ruling Congress party, which has been beset by corruption scandals and overseen a sharp economic slowdown.

"His economic record in Gujarat is obviously something which matters a lot to the middle classes. That, coupled with strong leadership," said Swapan Dasgupta, an analyst with links to the BJP who expects Modi to be the party standard-bearer in 2014.

Critics say that while Modi has indeed encouraged investment and helped bring reliable electricity and law and order, double-digit growth has not been shared broadly enough. In the five years through March 2010, some states - including Tamil Nadu and Karnataka - did better at bringing down poverty levels.

"Big business people get a lot from the government and scheduled caste people (minorities) get a lot, but people like us who are in between get nothing," said Bhupendra Thakkar, 50, who earns 6,000 rupees ($109) a month selling fruit near Surat's decrepit railway station.

FRIEND OF BUSINESS

Modi lured Tata Motors to the state in 2008 after the company's plans to build a factory for its low-cost Nano car were thwarted by farmers in West Bengal.

Ford Motor Co and Maruti Suzuki are also building plants in the western state - high profile investments that carry the added benefit of acting as marketing tools.

In the seven years through March 2011, Gujarat's economy grew an annual 10.08 percent at constant prices, against 6.45 percent in the eight years through March 2002 (Modi took office in October 2001), which was still ahead of the all-India average of 6.16 percent. A handful of states, including Maharashtra and Tamil Nadu, clocked bigger gains over the same recent period.

By comparison, policy gridlock at the national level has contributed to a drop-off in corporate investment, putting India on track to record its slowest annual growth rate in a decade.

Accustomed to getting his way, Modi, 62, could struggle to negotiate the coalition politics that have become the norm at the national level and have hindered attempts at reform by Prime Minister Manmohan Singh's Congress-led administration.

"Policymaking has benefited from the fact that the BJP has had absolute majority in the state legislature - an advantage it certainly will not enjoy in the federal parliament," said Anjalika Bardalai, an analyst with the Eurasia Group in London.

Modi has also been able to leverage the business acumen of Gujaratis, a group that has long been known for trading and entrepreneurship and includes a prosperous global diaspora as well as billionaires such as Adani Group chief Gautam Adani and Mukesh Ambani, who controls Reliance Industries, India's most valuable company.

"Modi might not be as successful as he has been here because the business mentality is unique to Gujarat," said Chandrakant Sanghavi, chairman of Sanghavi Exports International, a diamond trader and processor. "It could be prevalent in other states but the ratio may be less." ($1 = 55.0700 Indian rupees)

(Editing by John Chalmers and Alex Richardson)

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Global shares buoyed by Alcoa earnings, dollar gains on yen

LONDON (Reuters) - World shares staged a modest recovery from two days of losses on Wednesday after aluminum giant Alcoa opened the U.S. earnings season with an optimistic outlook for world demand.

However, with European and British central banks due to hold policy meetings on Thursday, the same day Spain will test demand for its debt and China releases its latest trade data, investors were in a cautious mood.

Alcoa, the largest aluminum producer in the United States, rose 1.3 percent in after-hours trade after it reported a fourth-quarter profit in line with Wall Street expectations and revenues that beat forecasts.

The results lifted Asian stock markets and pushed Europe's FTSE Eurofirst 300 index <.fteu3> up around 0.2 percent in early trade, leaving the MSCI world equity index <.miwd00000pus> up 0.1 percent. London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> were flat to 0.2 percent higher.

U.S. stock futures were up 0.15 percent, suggesting a firmer start on Wall Street. <.l><.eu><.n/>

Corporate profits are expected to be higher than the third quarter's lackluster results, but analysts' estimates are down sharply from where they were in October.

"Expectations are quite low going into the earnings season as we saw a lot of downward guidance in the past few months. There is potential for an upside surprise to come through," said Robert Parkes, equity strategist at HSBC Securities.

SOVEREIGN DEBT TEST

In European fixed income markets German Bund prices dipped slightly as investors prepared for the government's auction of 5 billion euros' worth of new five-year bonds following successful debt sales in Austria, the Netherlands and Ireland on Tuesday.

Investors were also looking ahead to Spanish and Italian bond auctions on Thursday for the new year's first test of market appetite for peripheral euro zone debt.

The Spanish auction could also provide clues on the timing of a much anticipated request by Madrid for fresh financial aid from the ECB. [ID:nL5E9C46KK]

The dollar meanwhile climbed against the yen, moving back towards a 2-1/2 year high hit last week, on expectations of a much bolder monetary easing from the Bank of Japan at its next meeting later this month.

The U.S. currency was up 0.7 percent at 87.61 yen, above a near one-week low of 86.82 hit earlier in Tokyo.

"No one is going to want to be short yen going into the BOJ meeting," said Derek Halpenny, European head of FX research at Bank of Tokyo-Mitsubishi.

Sources familiar with the BOJ's thinking told Reuters the central bank was likely to adopt a 2 percent inflation target at the meeting, double its current goal, and issue a statement with the government pledging to pursue bold monetary easing steps.

The BOJ will also consider easing monetary policy again this month, probably through a further increase in its 101 trillion yen ($1.2 trillion) asset buying and lending programme, the sources said.

The euro held steady against the dollar at $1.3080, with most analysts forecasting the European Central Bank will keep interest rates on hold on Thursday, though some believe rates will be cut later this year.

CHINA DEMAND EYED

Brent crude oil slipped around 0.3 percent to below $112 per barrel as the market awaited the latest trade data from China, the world's biggest energy consumer, due on Thursday.

"What we're seeing in the oil markets is the cautious sentiment playing up ahead of some key economic events this week," said Ker Chung Yang, senior investment analyst at Phillips Futures in Singapore.

However, iron ore jumped to its highest since October 2011, stretching a rally that has lifted prices by more than a third since December as China replenished stockpiles and as supply in the spot market remained limited.

Iron ore, a raw material used to make steel, has now risen 83 percent since falling to below $87 in September.

(Additional reporting by Nia Williams and Atul Prakash; Editing by Will Waterman)

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Judgment day for Bonds, Clemens, Sosa at Hall

NEW YORK (AP) — Judgment day has arrived for Barry Bonds, Roger Clemens and Sammy Sosa to find out their Hall of Fame fates.

With the cloud of steroids shrouding many candidacies, baseball writers may fail for the only the second time in more than four decades to elect anyone to the Hall.

About 600 people are eligible to vote in the BBWAA election, all members of the organization for 10 consecutive years at any point. Results were to be announced at 2 p.m. EST Wednesday, with the focus on first-time eligibles that include Bonds, baseball's only seven-time Most Valuable Player, and Clemens, the only seven-time Cy Young Award winner.

Since 1965, the only years the writers didn't elect a candidate were when Yogi Berra topped the 1971 vote by appearing on 67 percent of the ballots cast and when Phil Niekro headed the 1996 ballot at 68 percent. Both were chosen the following years when they achieved the 75 percent necessary for election.

"It really would be a shame, especially since the other people going in this year are not among the living, which will make for a rather strange ceremony," said the San Francisco Chronicle's Susan Slusser, president of the Baseball Writers' Association of America.

Three inductees were chosen last month by the 16-member panel considering individuals from the era before integration in 1946: Yankees owner Jacob Ruppert, umpire Hank O'Day and barehanded catcher Deacon White. They will be enshrined during a ceremony at Cooperstown on July 28.

Also on the ballot for the first time are Sosa and Mike Piazza, power hitters whose statistics have been questioned because of the Steroids Era, and Craig Biggio, 20th on the career list with 3,060 hits — all for the Houston Astros. Curt Schilling, 11-2 with a 2.23 ERA in postseason play, is another ballot rookie.

The Hall was prepared to hold a news conference Thursday with any electees. Or to not have one.

Biggio wasn't sure whether the controversy over this year's ballot would keep all candidates out.

"All I know is that for this organization I did everything they ever asked me to do and I'm proud about it, so hopefully, the writers feel strongly, they liked what they saw, and we'll see what happens," Biggio said on Nov. 28, the day the ballot was announced.

Jane Forbes Clark, the Hall's chairman, said last year she was not troubled by voters weighing how to evaluate players in the era of performance-enhancing drugs.

"I think the museum is very comfortable with the decisions that the baseball writers make," she said. "And so it's not a bad debate by any means."

Bonds has denied knowingly using performance-enhancing drugs and was convicted of one count of obstruction of justice for giving an evasive answer in 2003 to a grand jury investigating PEDs. Clemens was acquitted of perjury charges stemming from congressional testimony during which he denied using PEDs.

Sosa, who finished with 609 home runs, was among those who tested positive in MLB's 2003 anonymous survey, The New York Times reported in 2009. He told a congressional committee in 2005 that he never took illegal performance-enhancing drugs.

The BBWAA election rules say "voting shall be based upon the player's record, playing ability, integrity, sportsmanship, character, and contributions to the team(s) on which the player played."

"Steroid or HGH use is cheating, plain and simple," ESPN.com's Wallace Matthews wrote. "And by definition, cheaters lack integrity, sportsmanship and character. Strike one, strike two, strike three."

Several holdovers from last year remain on the 37-player ballot, with top candidates including Jack Morris (67 percent), Jeff Bagwell (56 percent), Lee Smith (51 percent) and Tim Raines (49 percent).

When The Associated Press surveyed 112 eligible voters in late November, Bonds received 45 percent support among voters who expressed an opinion, Clemens 43 percent and Sosa 18 percent. The Baseball Think Factory website compiled votes by writers who made their opinions public and with 159 ballots had everyone falling short. Biggio was at 69 percent, followed by Morris (63), Bagwell (61), Raines (61), Piazza (60), Bonds (43) and Clemens (43).

Morris finished second last year when Barry Larkin was elected and is in his 14th and next-to-last year of eligibility. He could become the player with the highest-percentage of the vote who is not in the Hall, a mark currently held by Gil Hodges at 63 percent in 1983.

Several players who fell just short in the BBWAA balloting later were elected by either the Veterans Committee or Old-Timers' Committee: Nellie Fox (74.7 percent on the 1985 BBWAA ballot), Jim Bunning (74.2 percent in 1988), Orlando Cepeda (73.6 percent in 1994) and Frank Chance (72.5 percent in 1945).

Ace of three World Series winners, Morris finished with 254 victories and was the winningest pitcher of the 1980s. His 3.90 ERA, however, is higher than that of any Hall of Famer. Morris will be joined on next year's ballot by Greg Maddux and Tom Glavine, both 300-game winners.

If no one is elected this year, there could be a logjam in 2014. Voters may select up to 10 players.

The only certainty is the Hall is pleased with the writers' process.

"While the BBWAA does the actual voting, it only does so at the request of the Hall of Fame," said the Los Angeles Times' Bill Shaikin, the organization's past president. "If the Hall of Fame is troubled, certainly the Hall could make alternate arrangements."

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2012 was hottest year on record in U.S., climate agency says

CHICAGO (Reuters) – The year 2012 was the warmest on record for the contiguous United States, beating the previous record by a full degree in temperature, a government climate agency said on Tuesday.

Scientists at the National Oceanic and Atmospheric Administration said the average temperature in 2012 in the contiguous United States was 55.3 degrees Fahrenheit (12.94 degrees Celsius), 3.2 degrees above the average recorded during the 20th century and 1.0 degree above 1998, until now the hottest on record. The contiguous United States excludes Alaska and Hawaii.

The agency also confirmed what many farmers in the nation’s midsection and many residents of the western part of the country already knew: 2012 was drier than average.

The year was 15th driest year on record, it said. At the peak of the heat in July 2012, 61 percent of the country was in drought, NOAA said, including the nation’s breadbasket of the Midwest, as well as the Southwest and Mountain West, where wildfires charred 9.2 million acres.

The agency’s U.S. Climate Extremes Index, which tracks volatility in temperature and precipitation as well as the number of tropical cyclones making landfall, was twice as active as normal in 2012, the agency said. Only 1998 had more extreme weather, NOAA said.

There were 11 weather-related disasters in the continental United States during 2012, with losses topping $ 1 billion, including Hurricanes Sandy and Isaac and a series of tornadoes in the Great Plains, Texas and the Ohio Valley, it said.

Among the other findings released on Tuesday:

* Every state in the contiguous U.S. experienced above-average annual temperatures in 2012. Nineteen had a record warm year and an additional 26 had one of their 10 warmest.

* Spring started off with the warmest March on record, followed by the fourth-warmest April and the second-warmest May. The season’s temperature was 5.2 degrees Fahrenheit above average, making it the warmest spring on record, surpassing the previous record by 2.0 degrees, the agency said.

* The above-average temperatures during the spring continued into summer. The heat peaked in July with an average temperature of 76.9 degrees Fahrenheit (24.94 degrees Celsius), 3.6 degrees above average, making it the hottest month ever observed in the continental United States.

* An estimated 99.1 million people – nearly one-third of the nation’s population – experienced 10 or more days during the summer when temperatures exceeded 100 degrees Fahrenheit, the agency said.

* There were fewer-than-average tornadoes in 2012. Although the season got off to a busy start with large outbreaks in March and April, May and June – typically the most active months of the year – there were fewer than half the normal number of tornados. The final tornado count for 2012 was less than 1,000, NOAA said, the smallest number since 2002.

* While Hawaii and Alaska were outside the area where the hottest weather hit last year, NOAA said those two states had unusual weather of their own during the year. Alaska was cooler and slightly wetter than average during 2012, the agency said. In Hawaii, drought conditions spread during the year, with 63.3 percent of the state experiencing drought by the end of the year.

(Reporting by James B. Kelleher; Editing by Greg McCune and Tim Dobbyn)

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Case of Wall Street greed gone too far

Goldman Sachs CEO Lloyd Blankfein was one of the executives whose stock award was accelerated to beat higher tax rate.

STORY HIGHLIGHTS

• Goldman Sachs granted $65 million in stock to execs before new tax rates began


• Susan Antilla says the firm's CEO had endorsed higher rates, called for entitlement cuts


• She says Goldman benefits from the implicit promise that U.S. will bail it out


• Antilla: It was unseemly for Goldman to rush the payments to shield execs from new rates

Editor's note: Susan Antilla is a columnist at Bloomberg View and a contributor to TheStreet.com. She has written about finance for more than 30 years. She is author of "Tales From the Boom-Boom Room: The Landmark Legal Battles That Exposed Wall Street's Shocking Culture of Sexual Harassment." Follow her on Twitter @antillaview.

(CNN) -- Nobody likes to pay taxes, so can you blame the good folks at Goldman Sachs & Co. for doing what they could to avoid the higher rates that kicked in on January 1?

While the rest of us were donning our party clothes on New Year's Eve, the legal worker bees at Goldman were pushing the send button on 10 regulatory filings to the Securities and Exchange Commission.

By the time the ball dropped in Times Square, regulators had been notified that $65 million in Goldman stock had been granted a month early, helping a cluster of powerful multimillionaire executives trim their tax tab.

Among the 10 who shared that $65 million, Chief Executive Officer Lloyd Blankfein, Chief Operating Officer Gary Cohn and Chief Financial Officer David Viniar wound up with $8.4 million apiece in Goldman stock.

Susan Antilla

Blankfein's compensation in 2011 was $16.2 million. Cohn and Viniar that year made $15.8 million. Even Gordon Gekko would be impressed to see that bosses making that much money were able to catch a tax break for a couple hundred thousand.

The 10 executives who skirted 2013's higher rates were not the only Goldmanites who benefited from the "accelerated" vesting. Michael DuVally, a Goldman spokesman, acknowledged there was "a group larger than" the 10 but declined to say how many. DuVally would not comment on who made the decision to grant the shares early.

The shrewd Goldman move is hardly unique among rich business executives or even 99 percenters of more modest means. It was no secret that higher taxes were coming this year, and taxpayers of all shapes and sizes did what they could to ensure that "tax events" would occur in 2012.

Even environmental activist and Nobel Prize winner Al Gore tried, albeit without success, to unload his Current TV to Al Jazeera before the new year dawned.

What makes the Goldman move distasteful is that it wasn't even two months ago that CEO Blankfein was mouthing off in a Wall Street Journal op-ed that he endorsed tax increases "especially for the wealthiest" -- along with a plug to cut entitlements to all you freeloaders out there.

If you're pushing the position that the rich should pay more to help fix the deficit, it doesn't quite follow to employ a tax dodge, says Dennis Kelleher, president of the Washington-based public interest group Better Markets Inc.

"Goldman's quickie year-end tax shenanigans deprived the government of what it otherwise would get," he says. "So they either cause the debt to go up, or cause others to pay more by the taxes they are avoiding."

DuVally, the Goldman spokesman, declined to comment when I asked whether it was inconsistent for Goldman to make a move for its executives to avoid taxes after Blankfein endorsed increases for the wealthy.

I've got to hand it to Goldman. The firm is a master of the "have-your-cake-and-eat-it-too" brand of politics and public relations. One minute, Goldman is cranking out press releases about its devotion to women entrepreneurs in its philanthropic "10,000 women" program. The next, it is announcing its annual list of new partners that includes a paltry 10 women but 60 men.

Goldman was a victim on the defensive when Greg Smith, a former employee, wrote a New York Times op-ed on March 14, blasting the firm for having "morally bankrupt people" who needed to be weeded out. You could almost feel sorry for poor Goldman, which shipped out a memo reminding employees that their estimable employer had been named one of the best places to work in the United Kingdom only weeks before the London-based Smith's "Why I Am Leaving Goldman Sachs" essay.

By the time Smith published a book seven months later, the firm had turned ruthless revenge-seeker, even sharing parts of Smith's self-evaluations with the media. A "best place to work?" Really? Careful what you say in the press -- and in your HR file -- if you get your paycheck from a Goldman-style operation.

The brouhaha over Smith's op-ed and book stirred up debate of the "What did you expect of an investment bank operating in capitalistic society?" type.

Fair enough. Banks are not in the philanthropy business -- even if they spend as much time as Goldman does talking about its good deeds and famous "business principles." ("Our clients always come first" is famously No. 1 on the list.)

At Goldman and other "too big to fail" banks, though, employees walk through the doors each morning knowing that the rest of us will be forced to bail them out again should another crisis ensue. We taxpayers provide the insurance policy that they enjoy without ever sending us premiums. In October of 2008, Goldman got $10 billion in taxpayer money from the Troubled Asset Relief Program, which it ultimately paid back.

Blankfein, like other bank CEOs, would later make the case that Goldman wasn't "relying on" that government help.

But leaf through the tomes of some of the regulators who lived through the crisis, and you start to wonder whether our tax-dodging heroes might be out of jobs today if the public hadn't fronted a bailout.

From "Bull by the Horns," by former Federal Deposit Insurance Corp. chairman Sheila Bair: Goldman and Morgan Stanley were "teetering on the edge" in the fall of 2008.

From "Bailout: An Inside Account of how Washington Abandoned Main Street While Rescuing Wall Street," by Neil Barofsky, former special inspector general to oversee the Troubled Assets Relief Program: Federal Reserve chairman Ben Bernanke "confided that he believed that Goldman Sachs would have been the next to go" after Morgan Stanley.

We need to change the conversation here.

Goldman and its too-big-to-fail brethren are banks that accepted welfare and are in debt to U.S. taxpayers for averting disaster. This hasn't been about hard-nosed capitalism since those first TARP wire transfers made their way into Goldman Sachs' coffers.

As for the bank's recent tax-reduction maneuver, it's another reminder that Goldman's management is either clueless about how bad it looks or doesn't care. Sometimes bad PR is a just a cost of doing business.

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The opinions expressed in this commentary are solely those of Susan Antilla.

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1 dead, 1 wounded in front of Old Town convenience store

One man was shot to death and another seriously wounded in the Old Town neighborhood this evening, among at least four people shot since this afternoon in the city, authorities said.

A man, age 31, was shot and a man, age 20, was shot in the back in an attack about 6:15 p.m. in the 1300 block of North Sedgwick Street.

The 31-year-old was taken to Advocate Illinois Masonic Medical Center, where he was declared dead, said Chicago Police News Affairs Officer Daniel O'Brien, citing preliminary information. He was at least the second shooting victim to die today in Chicago.

The other victim was taken to Northwestern Memorial Hospital in serious-to-critical condition, said Chicago Fire Department spokesman Chief Joe Roccasalva.

The shooting took place in front of a convenience store, police said.

Neighbors said one man was shot inside the store, the other outside. They reported hearing as many as 10 gunshots and later saw one man being taken away in a neck brace, the other being revived by paramedics.

Family members said the man who was killed grew up in the neighborhood and in the Cabrini-Green public housing complex nearby, and recently had a child. Before heading to the hospital, family members huddled in the street near the shop, crying.

The convenience store is a typical neighborhood shop, selling basic food and household items as well as cell phones. Uniformed officers and detectives were inside with store employees this evening as other officers canvassed the area.

Neighbors said they are angered by what they say seems to be an increase in crime in the area.

“You can’t even go to the store without getting shot and killed,” said Chante Morris, 30, who lives nearby.

Another shooting wounded a 21-year-old man about 90 minutes after the homicide. A 21-year-old was shot in the 600 block of East 51st Street about 7 p.m., Chicago Police News Affairs Officer Ron Gaines said. He was taken to John H. Stroger Jr. Hospital in fair condition with wounds to his right forearm and hip, Gaines said.

Earlier, two people were shot and seriously wounded, apparently in the parking lot of a small strip mall on the Southwest Side this afternoon, authorities said.

The shooting took place just after 4 p.m. near 65th Street and Western Avenue, said Chicago Police News Affairs Officer Daniel O'Brien. Photos from the scene showed police checking the pavement of a strip mall on the southwest corner of 65th and Western for shell casings following the shooting.

Two men were wounded in the shooting and both were in serious condition, said Chicago Fire Department spokesman Chief Joe Roccasalva. One was taken to Advocate Christ Medical Center in Oak Lawn for treatment, the other to John H. Stroger Jr. Hospital, he said.

On the scene, a 20-year-old man was shot in the leg was considered in serious condition, and the other man, age 19, shot in the leg, was considered in good condition, O'Brien said. The older of the two was taken to John H. Stroger Jr. Hospital of Cook County and the younger to Advocate Christ Medical Center.

chicagobreaking@tribune.com

Twitter: @ChicagoBreaking

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Exhausted Egyptians count cost of political turmoil

ZAGAZIG, Egypt (Reuters) - These days, craftsmen, shopkeepers and other inhabitants of the Egyptian Delta town of Zagazig are often too busy making ends meet to ponder why life seems to be getting harder every day.

But when, exhausted, they finally come home and sit down to their evening meal, conversations inevitably turn to growing hardship and the frightening prospect of cuts in food subsidies as the economy slides further into crisis.

With their patience already stretched after years of upheaval, Egyptians - from the capital Cairo to smaller towns like Zagazig - appear to be nearing the point where discontent could explode into a new wave of unrest.

"There is no security. There is nothing," said Soheir Abdel Moneim, a retired school teacher, as she hurried through an open-air market in Zagazig in search of vegetables she could afford.

"The pound is falling. Everything is more expensive. Is there anything that has not become more expensive?" she asked with a shrug, as traders on bicycles loaded with their wares dodged through the chaos of the market.

Nearby, a torn poster of President Mohamed Mursi beams from the wall of a crumbling brick house, with the words "Liars! Liars!" scrawled over his face.

The mood of growing nervousness is bad news for Mursi, who faces a parliamentary election in coming months, and a new round of political feuding that could pitch Egypt back into civil strife.

Egypt's economy, once strong and popular among investors, has been in tatters since the revolt of 2011 that ousted Hosni Mubarak and shook the country to its foundations.

Disagreements over a new national constitution late last year triggered violent protests, dealing another blow to the economy and eroding trust in Mursi's government.

A country where cuts in food subsidies have caused riots in the past now faces the risk of further upheaval as Mursi prepares to impose austerity measures in order to obtain a desperately needed $4.8 billion loan from the International Monetary Fund.

In Zagazig, people worry about the future.

Farouk Sarhan, the 74-year-old manager of a shop selling women's clothes, said sales were already down by almost 50 percent from just a few weeks ago.

"No one is selling or buying. I had more activity last year," he said, stubbing out a cigarette with a deep sigh in his tiny store lined with mannequins of veiled women.

"Customers are not buying as much as before because of the economic situation."

The price of fresh food often goes up in winter but shoppers in the Zagazig market said recent increases had been steep, with tomatoes and cauliflower about 50 percent dearer than at the start of the year.

WHAT NEXT?

Egypt has been on the ropes since investors and tourists fled after the revolt, when people rose up to demand their freedom and also an end to economic policies they said simply lined the pockets of the rich.

On the economic front, the picture remains grim, although Qatar's decision to lend Egypt another $2 billion has offered some respite.

Foreign reserves are dwindling and the pound has been hitting new lows daily. Food and raw materials from abroad have become more expensive, hurting businesses and families in a desert nation which relies on imports to feed itself.

As in other parts of Egypt, people in Zagazig see complex economic trends in terms of the daily hardships they must endure, and it is Mursi's government and his Muslim Brotherhood allies who get the blame.

"Mursi doesn't feel our grievances," said Emad, a man in his late 30s who sells traditional Egyptian clothes by the side of a dusty street. He said he had been forced to raise prices to cover rising costs, upsetting his customers.

Pointing to one of the black embroidered gowns, Emad said: "We used to sell this for 35 pounds ($5.40). Now it's 45 pounds. We didn't raise the prices. Traders did.

"Very few people are buying. I used to sell 50 pieces a day, and now I sell 15 or 20. Today I still haven't sold anything."

Reliable opinion polls are unavailable in Egypt and it is hard to gauge how widespread people's views are. But in Zagazig, most of those interviewed by Reuters echoed Emad's feelings.

Economists worry that continued turmoil could prompt people and businesses to convert their savings into dollars en masse - a risky process known as dollarisation which has caused trouble in many emerging market crises before.

But in Zagazig, people laughed at the idea, saying only the rich could afford to buy foreign currency. "Dollars?" asked Nabil, a local trader, as others burst into laughter. "Give me some dollars! Of course we don't have any!"

SUPPORT FOR MURSI

But some were prepared to give Mursi a chance.

In the nearby village of al-Adwa, where the future president grew up in the family of a local farmer, brick walls and fences were plastered with posters of Mursi.

A crowd of farmers standing by the side of a dirt track cutting through the village shook their fists and shouted "Mursi! Mursi!" when asked about their political views.

But even in Adwa, where Mursi appeared to enjoy rock-solid support, locals said sudden increase in taxes or abrupt cuts to fuel or food subsidies would cost him dearly.

"If that happens that would be the worst thing. What am I going to do as a farmer?" said Said Youssef, his hands black from working the land. "Where are we going to get the money?"

Another man, Aly Saber, 65, said fertilizer prices had gone up by 50 Egyptian pounds in the past year alone, making his business less profitable.

"Things are tough here in the rural areas," he said as others nodded in agreement. "Everything is becoming more expensive."

Mohamed Gamal, the 42-year-old owner of a tiny shop selling kitchen appliances, said business was so bad that he would sometimes go for days without a single customer.

"I import goods all the time. Prices have gone up by 10-40 percent since the revolution. It's gone up even more in recent weeks," said Gamal, who, Like Mursi, grew up in Adwa.

He said his neighbors were suspicious about why he had to keep raising his prices.

"People just don't believe me," he said, hunched over his desk, cigarette smoke swirling above stacks of unsold trays, cups and ironing boards. "They are not convinced why things are getting more expensive. I buy them, and they stack up."

($1 = 6.4809 Egyptian pounds)

(Writing by Maria Golovnina; Editing by Giles Elgood)

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Stock index futures signal lower Wall Street open

LONDON (Reuters) - U.S. stock index futures pointed to a slightly lower Wall Street open on Tuesday, with futures for the S&P 500, the Dow Jones and the Nasdaq 100 down 0.1 to 0.3 percent.

Alcoa and Monsanto are two of the first large companies to report quarterly results as the earnings season begins. Wall Street expects both the companies to show improved profit from a year ago.

ICSC/Goldman Sachs release chain store sales for the week ended January 5 at 1245 GMT. In the previous week, sales rose 0.6 percent.

Samsung Electronics said it likely earned a quarterly profit of $8.3 billion as it sold close to 500 handsets a minute and as demand picked up for the flat screens it makes for mobile devices, including those for rival Apple Inc products.

Redbook releases its Retail Sales Index of department and chain store sales for January at 1355 GMT. In the previous month, sales rose 0.1 percent.

Sears Holdings Corp said late on Monday Chief Executive Louis D'Ambrosio will step down for family health reasons after the U.S. retailer reported a 1.8 percent decline in quarter-to-date sales at stores open at least a year.

National Federation of Independent Business releases small business optimism index for December at 1230 GMT. In the previous month, the index read 87.5.

The FTSEurofirst 300 <.fteu3> index of top European shares turned flat in morning session on Tuesday after opening lower, with gains in telecom stocks offsetting declines in financial and mining shares.

U.S. stocks lost ground on Monday, as investors drew back from recent gains that lifted the S&P 500 to a five-year high, in anticipation of sluggish growth in corporate profits.

The Dow Jones industrial average <.dji> dropped 50.92 points, or 0.38 percent, to 13,384.29. The Standard & Poor's 500 Index <.spx> fell 4.58 points, or 0.31 percent, to 1,461.89. The Nasdaq Composite Index <.ixic> lost 2.84 points, or 0.09 percent, to 3,098.81.

(Reporting by Atul Prakash; Editing by Alistair Lyon)

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'Bama bashes Notre Dame 42-14 in BCS title game

MIAMI GARDENS, Fla. (AP) — Barely taking time to celebrate their latest national championship, Nick Saban and the Alabama Crimson Tide are ready to get back to work.

That's how they make it look so easy.

In what must be an increasingly frustrating scene for the rest of college football, another season ended with Saban and his players frolicking in the middle of a confetti-strewn field. Eddie Lacy ran all over Notre Dame, AJ McCarron turned in another dazzling performance through the air, and the Tide defense shut down the Fighting Irish until it was no longer in doubt.

The result was a 42-14 blowout in the BCS title game Monday night, not only making Alabama a back-to-back champion, but a full-fledged dynasty with three crowns in four years.

This one was especially satisfying to Saban.

"People talk about how the most difficult thing is to win your first championship," he said. "Really, the most difficult one to win is the next one, because there's always a feeling of entitlement."

Rest assured, that feeling won't last long in Tuscaloosa.

While Saban insisted he was "happy as hell" and "has never been prouder of a group of young men," it was hard to tell. He was already talking about reporting to the office Wednesday morning and getting started on next season.

"One of these days, when I'm sitting on the side of the hill watching the stream go by, I'll probably figure it out even more," Saban said. "But what about next year's team? You've got to think about that, too."

So, in short order, he'll be talking with underclassmen about entering the NFL draft, making sure everyone goes back to class on schedule, and getting started on that next depth chart.

"The Process," as he calls it, never stops.

"We're going to enjoy it for 24 hours or so," Saban said.

No. 2 Alabama quieted the top-ranked Irish on the very first drive — so much for waking up the echoes — and could've started the celebration at halftime, heading to the locker room with a commanding 28-0 lead.

The Tide (13-1) pushed it out to 35-0 midway through the third quarter on the third of McCarron's four touchdown passes, a 34-yarder to Amari Cooper with a defender nowhere in sight.

At that point, Alabama was on a 69-0 blitz in national title games, having scored the last 13 points in its 2010 triumph over Texas and blanked LSU 21-0 for last year's BCS crown.

When Everett Golson finally scored for Notre Dame (12-1) with about 4 minutes remaining in the third, it snapped a scoreless stretch of nearly two full games — 108 minutes and 7 seconds — by the Tide.

"It was just a complete game by the offense, defense and special teams," said Alabama linebacker C.J. Mosley, the defensive MVP with eight tackles, one of them behind the line.

Despite the dazzling numbers by McCarron — 20 of 28 for 264 yards — he was denied a second straight offensive MVP award in the title game. That went to Lacy, who finished with 140 yards rushing on 20 carries and scored two TDs. Not a bad finish for the junior, who surely helped his status in the NFL draft should he decide to turn pro.

Lacy also was MVP of the Southeastern Conference championship game, rushing for a career-best 181 yards in the thrilling victory over Georgia that gave Alabama a chance to repeat as champion.

The Tide will have some big holes to fill, no matter who decides to leave school early, with offensive tackle D.J. Fluker and cornerback Dee Milliner also pondering their draft prospects. There's not a lot of seniors on the roster, but All-America linemen Barrett Jones and Chance Warmack and safety Robert Lester are among those who definitely won't be back.

But Alabama had some huge holes to fill a year ago, too, with five players drafted in the first 35 picks.

That worked out just fine.

The Crimson Tide wrapped up its ninth Associated Press national title, breaking a tie with Notre Dame for the most by any school and gaining a measure of redemption for a bitter loss to the Irish almost four decades ago: the epic 1973 Sugar Bowl in which Ara Parseghian's team edged Bear Bryant's powerhouse 24-23.

"The process is ongoing," said Saban, tightlipped as ever and showing little emotion after the fourth BCS national title of his coaching career. "We have a 24-hour rule around here. We enjoy everything for 24 hours."

Notre Dame went from unranked in the preseason to the top spot in the rankings by the end of the regular season, winning two games in overtime and three other times by seven points or less.

But the long wait for a championship — the Irish haven't finished No. 1 since 1988 — will have to wait at least one more year.

"They just did what Alabama does," moaned Manti Te'o, Notre Dame's star linebacker and Heisman Trophy finalist, trying to digest an embarrassing loss in his final college game.

Golson will be back.

He completed his first season as the starter by going 21 of 36 for 270 yards, with a touchdown and an interception. But the young quarterback got no help from the running game, which was held to 32 yards — 170 below its season average.

"We've got to get physically stronger, continue close the gap there," said Brian Kelly, the Irish's third-year coach. "Just overall, we need to see what it looks like. Our guys clearly know what it looks like now — a championship football team. That's back-to-back national champions. That's what it looks like. That's what you measure yourself against there. It's pretty clear across the board what we have to do."

Kelly vowed this was only beginning, insisting the bar has been raised in South Bend no matter what the outcome.

"We made incredible strides to get to this point," he said. "Now it's pretty clear what we've got to do to get over the top."

Alabama is already there but still longing for more, not content even after the second-biggest rout of the BCS era that began in 1999. The only title game that was more of a blowout was USC's 55-19 victory over Oklahoma in the 2005 Orange Bowl, a title that was later vacated because of NCAA violations.

You could almost hear television sets around the country flipping to other channels as Alabama poured it on, a hugely anticipated matchup between two of the nation's most storied programs reduced to a laugher when the Tide scored on its first three possessions.

"We're going for it next year again," said offensive tackle Cyrus Kouandijo, only a sophomore and already the owner of two rings. "And again. And again. And again. I love to win. That's why I came here."

___

Follow Paul Newberry on Twitter at www.twitter.com/pnewberry1963

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