Finance Blog number 1

General Mills Inc.’s fiscal first-quarter net income fell 14 percent, but its adjusted results beat Wall Street’s expectations as revenue climbed on higher prices, solid demand and new products.

The Minneapolis-based food maker also reaffirmed its full-year adjusted earnings outlook.

The maker of Cheerios cereal and Haagen-Dazs ice cream said Wednesday that its net income fell to $405.6 million, or 61 cents per share, for the period ended Aug. 28, down from $473.6 million, or 70 cents per share, a year earlier.

Excluding the effects of a reduction in the market valuation of commodities positions, adjusted earnings came to 64 cents per share.

That topped the 62 cents per share that analysts surveyed by FactSet predicted.

Revenue rose 9 percent to $3.85 billion from $3.53 billion, beating Wall Street’s forecast of $3.81 billion.

The period included one month of results for Yoplait, which the company acquired a controlling stake in during the quarter.

General Mills announced in May that it would pay $1.15 billion to acquire a controlling interest in the yogurt company from a French investment firm and dairy group.

General Mills said the Yoplait deal added 3 percentage points to its revenue increase.

Aside from Yoplait, Chairman and CEO Ken Powell said in a statement that increased prices, resilient consumer demand for existing products and a good early response to new products that debuted in the quarter all contributed to its revenue performance.

Revenue for the company’s U.S. retail division increased 3 percent to $2.51 billion.

Cereal sales edged up 1 percent, helped by brands such as Chex and Cinnamon Toast Crunch. New products included Cinnamon Burst Cheerios, Cocoa Puffs Brownie Crunch and Fiber One 80 calorie cereal also added to results.

At the snacks unit, sales rose 17 percent, driven by Nature Valley and Fiber One snack bars. Sales for the baking products division increased 5 percent, while Pillsbury segment sales gained 4 percent.

The Small Planet Foods division reported a 13 percent sales increase, helped by Cascadian Farm cereal and Larabar.

Results were disappointing for the meals unit, which posted a 4 percent sales decline due to lower shipment volumes for dinner mixes, canned vegetables and soup. Yoplait sales fell 3 percent.

General Mills’ overseas performance was strong, with revenue up 30 percent to $856 million. The results were propelled by strength in Europe, which reported a 36 percent gains. This was followed by a 15 percent gain for the Asia/Pacific region and a 12 percent increase for Latin America. Canada posted an 8 percent increase.

Bakeries and foodservice segment revenue rose 13 percent to $481 million, with sales to bakeries and national restaurants up 18 percent.

Powell predicts General Mills’ earnings will rise over the next nine months. The company maintains that hits fiscal 2012 adjusted earnings will come in between $2.59 and $2.61 per share.

Analysts expect earnings of $2.61 per share for the year.

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A person briefed on the new contract between General Motors and the United Auto Workers union says it will increase the company’s fixed costs by only a small amount.

The tentative agreement on the four-year deal was reached late Friday. It includes a $5,000 signing bonus and the possibility of sweeter profit-sharing checks for GM’s 48,500 factory workers. Most of them aren’t like to get any pay raises.

The person says that because recurring costs were contained, GM still will be able to break even in a depressed U.S. auto sales market of around 10.5 million vehicles. The person did not want to be identified because the terms of the deal haven’t been released to union members.

Members will vote on the pact in the next week or so.

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The stock market went back into a lull Friday as investors waited for the next signals on the economy _ and whether it’s headed for another recession.

The major indexes were fluctuating in a narrow range after Thursday’s 419-point plunge in the Dow Jones industrial average. But that doesn’t mean investors are finished selling. There was little economic news Friday to influence trading. Thursday’s plunge followed a stream of disappointing economic news that added to the belief in the market that the economy is falling into a recession.

The most notable news Friday came from JPMorgan Chase & Co. The bank joined other financial firms and cut its forecast for economic growth during the fourth quarter. It’s now predicting growth of 1 percent, down from an earlier forecast of 2.5 percent.

The Dow fell 42 points or 0.4 percent, to 10,947 at 12:20 p.m. in New York. The Standard & Poor’s 500 index fell 1, or 0.1 percent, to 1,139. The Nasdaq composite index rose 5, or 0.2 percent, to 2,386.

The Dow’s drop was largely due to Hewlett-Packard Co., which fell 21 percent. The company said Thursday that it will close its mobile business, sell or spin off its PC business and pay $10 billion for a business software company.

Investors weren’t, for the moment, seeking the safety of U.S. Treasurys. The yield on the benchmark 10-year Treasury note rose to 2.08 percent from late Thursday’s 2.06 percent. It fell below 2 percent Thursday for the first time as heavy demand sent its price sharply higher.

Overseas stock markets had larger drops than in the U.S. European banking stocks fell near two-and-a-half-year lows, dragged down by rumors about banks’ potential losses on bonds issued by heavily-indebted governments. The selling in the U.S. has come in part because of fears that U.S. banks would be hurt if European countries default on their debt. Another concern: weakening European economies will hurt growth in the U fast cash advance.S.

Earlier Friday, Asian shares fell sharply, with major indexes in China and Japan losing more than 2.5 percent. However, some of those losses reflected selling in response to the drop in the U.S. Thursday.

As the selling continued overseas, gold rose as high as $1,881 an ounce. Oil prices fell as traders feared a global slowdown that would cut demand for crude.

The word “recession” remains the focus of the markets.

JPMorgan analyst Michael Feroli said Friday that business sentiment, household wealth and global growth all look worse than just a few weeks earlier. That will keep economic growth nearly flat in the first quarter of 2012, he said.

On Thursday, economists with Morgan Stanley said that the U.S. and Europe are “dangerously close to recession,” adding, “it won’t take much in the form of additional shocks to tip the balance.”

Stocks also fell Thursday on news of another drop in home sales, weaker manufacturing in the mid-Atlantic states and a jump in inflation at the consumer level to its highest level since March. There also was bad news on the job market: an increase in the number of people who applied for unemployment benefits.

Thursday’s numbers joined a series of reports pointing to a slowing economy. The government reported on July 29 that growth in the first half was much weaker than expected _ and that the economy barely grew in the first quarter. Since then, the combination of disappointing numbers in the U.S. and worries about Europe’s debt problems have set off waves of selling.

The Dow is down 13.6 percent since stocks began falling on July 21. That has drained billions from American’s retirement savings and other investment accounts. And the stock market’s drop can itself help move the country toward recession.

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The outer bands of Tropical Storm Gert are approaching Bermuda with the storm’s center expected to pass just east of the wealthy British archipelago.

A tropical storm warning is in effect for Bermuda and people there have been installing storm shutters and hauling boats onto beaches in preparation.

Gert’s maximum sustained winds early Monday are near 45 mph (75 kph) with some strengthening forecast during the next day or so.

The U no fax payday loans.S. National Hurricane Center in Miami says large swells generated by Gert are approaching Bermuda and are likely to cause life-threatening surfs and rip current conditions.

The storm is centered about 130 miles (210 kilometers) southeast of Bermuda and moving north-northwest near 12 mph (19 kph).

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President Barack Obama says people are frustrated by the partisanship that has gridlocked Washington and he wants them to tell lawmakers they must compromise for the sake of the country.

The president used his weekly radio and Internet address Saturday to try to position himself on the side of the public and against a Congress with abysmal approval ratings after the bitter fight over increasing the nation’s borrowing limit.

Obama’s approval ratings aren’t so good either. But the president clearly sees a need to direct the public’s anger toward Congress or risk being the target himself as the 2012 campaign revs up.

“You’ve got a right to be frustrated,” the president said. “I am. Because you deserve better. I don’t think it’s too much for you to expect that the people you send to this town start delivering.”

“Members of Congress are at home in their districts right now. And if you agree with me _ whether you’re a Democrat or a Republican or not much of a fan of either _ let them know.”

The president listed several initiatives he’s pushing, including trade deals, improvements to the patent system and extension of a cut in the tax that workers pay to fund Social Security no faxing payday loans.

“These are all things we can do right now. So let’s do them,” said Obama, who will repeat his economic message during a three-day Midwestern bus tour beginning Monday.

Republicans used their weekly address to criticize Obama on the economy, particularly government regulations that Sen. Pat Toomey, R-Pa., said burdened businesses and discouraged them from expanding and hiring.

“Clearly, the policies of this administration are not working,” said Toomey, one of the lawmakers newly appointed to the congressional panel that’s supposed to develop recommendations to cut the debt. “So, what went wrong? Well, a big part of the problem has been job-killing regulations.”

Toomey said that America can still thrive, “but first, government has to get out of the way.”

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Today, answers to some of your questions:

Q: I will soon have to begin repaying my student loans for undergraduate and graduate degrees. Because the total is about $82,000, I fear that I will never be able to pay it off. The statements I have received in the mail recommend I pay $900 per month. I love my job at a young Web company, but I don’t make much, and there is no chance I can pay $900 a month. Is there anything I can do?

A. If you have federal loans, you can make use of new government rules that give people a break on student loan payments they cannot afford.

Under the relatively new “income-based repayment” plan, you get relief if the regular payments you would have to make over 10 years will exceed about 15 percent of your discretionary income. That’s calculated based on a formula related to the U.S. poverty line. Besides income, the calculation involves the size of your family.

Simply put, most borrowers will be required to pay less than 10 percent of their adjusted gross income, said Finaid.org publisher Mark Kantrowitz.

For a quick assessment, typically, if you owe more on your loans than you earn annually, you are a likely candidate for some relief. For married couples, both spouses can be eligible, depending on income. And the income requirements apply to Stafford, PLUS and consolidated federal student loans.

To see how you stand, try this calculator: http://www.tinyurl.com/l3ktdx.

Based on the calculator, if you are single and earning $70,000 a year, you would be expected to pay $670 a month.

Of course, you don’t escape your obligations indefinitely. If you are getting relief and not paying all your interest each month, it gets tacked on to the end of the loan.

Thus, you might end up paying off your loan for longer than the 10 years. But if after 25 years you still have not paid off all you owe, the government will forgive what’s left. Also, if you happen to take a public service government job, you can get your loan forgiven.

For more information, visit http://www.tinyurl.com/mjvuue.

Keep in mind that this program applies to federal student loans, not to private loans that you may get from a bank or other lender. So for people who have not yet finished college, this is one reason, before borrowing, to carefully consider who is giving you your loans and the rules that apply.

Also, it is wise to consider your likely salary before taking on significant debt. Look up your profession at Salary.com.

It’s painful to finish college and wonder how you will pay your loans. And paying interest for more than 10 years is expensive, even if your monthly payments are manageable.

To see if you might qualify for relief after graduating, call your lender and ask about the options for alternative payment plans, Kantrowitz said.

If your lender doesn’t offer any options based on your income, Kantrowitz said, you can go through a process called “consolidation.”

Make sure you use the government’s “direct loan program.” This means you combine all your old student loans into a new federal loan, and once your loans are consolidated in the government program, you can then qualify for the income-based repayment plan.

For information on consolidation, see http://loanconsolidation.ed.gov.

Q. Is our money safe in the bank if the government can’t pay its debt?

A. You are one of many people who have asked me this, and it is sad that Americans find themselves worrying again

In a stunning retreat, Rupert Murdoch’s News Corp. media empire dropped its bid Wednesday to take over full control of British Sky Broadcasting amid a political and legal firestorm over phone hacking at one of its British newspapers.

Murdoch was forced to step back from the biggest battle of his career over a lucrative prize, accepting that he could not win government acceptance of the takeover as Britain’s major political parties had united against it.

“It has become clear that it is too difficult to progress in this climate,” News Corp. deputy chairman and president Chase Carey said in a brief statement to the London Stock Exchange.

Shares in BSkyB dived 4 percent lower after the announcement.

Hours earlier, Prime Minister David Cameron announced he was putting a senior judge in charge of an inquiry into phone hacking and alleged bribery by a tabloid newspaper, and vowed to investigate an allegation that a U.K. reporter may have sought the phone numbers of 9/11 victims in a quest for sensational scoops.

“There is a firestorm, if you like, that is engulfing parts of the media, parts of the police, and indeed our political system’s ability to respond,” Cameron said in the House of Commons. He said the focus must now be on the victims, and make sure that the guilty are prosecuted.

The hacking and police bribery scandal also claimed another victim. News International, the British unit of News Corp., said its legal director, Tom Crone, had left the company. Crone had led an internal inquiry that concluded only two people at the News of the World tabloid had been involved in phone hacking _ a stance that collapsed as numerous revelations tumbled out this year.

“This is a victory for people up and down this country who have been appalled by the revelations of the phone hacking scandal and the failure of News International to take responsibility,” said Labour Party leader Ed Miliband, who had mobilized an all-party agreement to vote on a motion urging Murdoch to back off.

“People thought it was beyond belief that Mr. Murdoch could continue with his takeover after these revelations,” Miliband said.

Outrage has grown and Murdoch’s News Corp.’s share price has fallen since a report last week that his News of the World tabloid hacked into the phone of teenage murder victim Milly Dowler in 2002 and may have impeded a police investigation into her disappearance. That was followed by claims of intrusion into private records by Murdoch’s other U.K. papers, The Sun and The Sunday Times.

Murdoch shut down the 168-year-old News of the World on Sunday and came to London to direct the company’s efforts to get on top of its problems.

Dowler’s family was meeting with Cameron at 10 Downing Street later Wednesday.

Police have arrested eight people so far in their investigation, including Cameron’s former communications director Andy Coulson, a former editor of News of the World. No one has been charged.

Cameron appointed Lord Justice Brian Leveson to lead the inquiry, which will be able to compel witnesses _ including government figures _ to give evidence under oath.

Leveson will first investigate the culture, practices and ethics of the press, its relationship with police and the failure of the current system of self-regulation. That inquiry is expected to last up to one year. Only then will the inquiry focus shift to what went wrong at the News of the World and other papers, Cameron said.

The suggestion that 9/11 victims may have been targeted surfaced Monday in the Mirror, a British competitor of The Sun. It quoted an anonymous source as saying an unidentified American investigator had rejected approaches from unidentified journalists who showed a particular interest in British victims of the terror attacks. It cited no evidence that any phone had actually been hacked.

In Washington, Sen. Jay Rockefeller, a Democrat from West Virginia, urged an investigation into whether Murdoch’s News Corp. had violated U.S. law because of the British paper’s activities.

If there was any hacking of phones belonging to 9/11 victims or other Americans, “the consequences will be severe,” said Rockefeller, chairman of the Senate Committee on Commerce, Science and Transportation.

Murdoch had hoped to gain control of the 61 percent of BSkyB shares that his News Corp. doesn’t yet own, but the bid was delayed for several months even before he withdrew while the British government’s Competition Commission reviewed monopoly concerns.

A report Wednesday in The Wall Street Journal, which is part of News Corp., said Murdoch has met with advisers over recent weeks to discuss possible options including the sale of the remaining British newspapers _ The Sun, The Times and The Sunday Times.

The Journal, citing unidentified people familiar with the situation, said there didn’t appear to be any buyers given the poor economics of the newspaper division.

Still, a defiant mood was evident at one News International paper, The Sun tabloid, which slapped the headline “Brown Wrong” across its front page in response to claims by former Prime Minister Gordon Brown that the paper had obtained confidential medical records of his younger son.

Brown accused Murdoch’s papers, including The Sun and The Sunday Times, of obtaining his confidential bank accounts, tax records and even health information about his son, Fraser, who suffers from cystic fibrosis, using fraudulent, criminal means. But, the newspaper insisted it learned of the boy’s ailment from the father of another child with the same condition, and that it contacted the Browns, who consented to the story.

“We are not aware of Mr. Brown, nor any of his colleagues to whom we spoke, making any complaint about it at the time,” The Sun said.

Murdoch’s News International responded to his accusations by asking Brown for any information that would help to investigate them.

London Mayor Boris Johnson said Wednesday that he had been informed that his telephone had been hacked, but he decided not to take legal action.

“Quite frankly, why on earth should I go through some court case in which it would have inevitably involved going over all the pathetic so-called revelations that the News of the World had dug up?” Johnson said.

“Why should I, when the police had made it clear to me when they had abundant evidence?” he added.

Police in the U.K. are pursuing two investigations of News International, one on phone hacking and the other on allegations that the News of the World bribed police officers for information.

Hugh Orde, president of the Association of Chief Police Officers, urged News International to come clean about any such payments.

“Let’s not play around with legal games here: If they have names, dates, times, places, payments to officers, we would like to see them so that we can lock these officers up and throw away the key,” Orde told the British Broadcasting radio.

Police officials have indicated the bribery investigations involve about half a dozen officers.

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New Zealand’s dollar reached its highest level since exchange-rate controls ended in 1985 after a report showed the nation’s trade surplus widened by almost twice economists’ estimates to a record in April.

The so-called kiwi has risen 8.8 percent against the greenback since Feb. 25, the second-best performer among 16 major counterparts, as Asian demand drove up prices for New Zealand’s milk, lumber and meat exports. Australia’s dollar touched a three-month low against its New Zealand counterpart amid signs the bigger nation’s economy is cooling.

“Resilience of the kiwi has been very impressive,” said Mitul Kotecha, Hong Kong-based head of global foreign-exchange strategy at Credit Agricole CIB, a unit of France’s second- biggest bank. “The numbers today from New Zealand are obviously helping out as the trade data was far stronger than the market had expected.”

The kiwi rose to as high as 82.19 U.S. cents before trading at 81.78 cents as of 3:41 p.m. in Sydney. It closed at 81.92 U.S. cents in New York on May 27. The previous record of 82.14 U.S. cents was established in February 2008.

Australia’s dollar was at $1.0684 from $1.0706 on May 27 in New York, after earlier rising to $1.0737, the highest since May 11. The currency was at NZ$1.3066 from NZ$1.3058 after touching NZ$1.3019, the weakest level since Feb. 2. The Aussie fell to 86.30 yen from 86.49 yen.

Commodities Driving Surplus

The New Zealand dollar’s gain makes its exports more expensive, hampering the nation’s economic recovery from two earthquakes in the South Island city of Christchurch that killed more than 180 people and caused an estimated NZ$15 billion in reconstruction costs. Prime Minister John Key told reporters in Wellington today that the kiwi was trading at “unsustainable levels” for non-commodity exporters.

The exchange rate was “more bearable” for the commodity sector because of high export prices, he said.

Exports outpaced imports by NZ$1.11 billion ($908 million) from a revised NZ$578 million surplus in March, Statistics New Zealand said today in Wellington. The median estimate in a Bloomberg News survey of economists was for a NZ$600 million surplus.

Prices of New Zealand’s commodity exports gained for an eighth month to a record in April, according to an index calculated by ANZ National Bank Ltd. Exports to China, New Zealand’s second-biggest export market after Australia, surged 42 percent to NZ$5.39 billion in the year ended March 31, government figures showed.

‘Rising Incomes’

“Rising incomes in the Asian region will generate a long- run demand for agricultural commodities, with the New Zealand economy better placed than most” as a supplier, Richard Grace, chief currency strategist and head of international economics at Commonwealth Bank of Australia, wrote in a note to clients May 27. “These developments will be reflected in a higher New Zealand dollar.”

The Aussie halted its two-day gain against the greenback as the statistics bureau in Sydney said that gross operating profits at companies declined 2 percent in the first quarter from the previous three months, when they dropped a revised 1.7 percent.

Weaker GDP

Australia’s Treasurer Wayne Swan said before a government report on gross domestic product this week that natural disasters in the nation probably cut more than 1 percentage point from economic growth in the first quarter.

Swan’s latest estimate was higher than one he made in April that put damage to GDP in the first quarter at 0.75 percentage point. The median estimate in a Bloomberg News survey of economists is for a 0.3 percent contraction from the final three months of 2010.

Gains in New Zealand’s dollar were limited as its 10-day relative strength index versus the U.S. dollar rose to 70.23, above the level of 70 that suggests an asset’s price has risen too fast and is poised to reverse course.

“The kiwi’s recent rise was rapid,” said Takuya Kawabata, a researcher in Tokyo at Gaitame.com Research Institute Ltd., a unit of Japan’s largest currency margin company. “It’s not surprising to see some correction.”

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Inflation in Germany, Europe’s largest economy, unexpectedly eased in May after oil prices dropped from a 2 1/2-year high.

The harmonized inflation rate fell to 2.4 percent from 2.7 percent in April, the Federal Statistics Office in Wiesbaden said today. Economists had expected inflation to hold at the highest level since September 2008, the median of 17 forecasts in a Bloomberg News survey showed. On the month, consumer prices declined 0.2 percent.

Oil prices have dropped 11 percent this month after breaching $114 a barrel in April, leaving households with more money to spend. European Central Bank officials have signaled they are ready to raise borrowing costs further to curb price pressures after increasing the benchmark interest rate to 1.25 percent last month, even as peripheral nations such as Greece, Portugal and Ireland remain mired in a sovereign-debt crisis.

“Today’s German inflation numbers are just a temporary breather,” said Carsten Brzeski, an economist at ING Group in Brussels. “Obviously, with these inflation numbers, the ECB won’t hastily rush to a June hike. The German data is also not soft enough to put the ECB off from another hike in July.”

On a non-harmonized basis, inflation slowed to 2.3 percent in May from 2.4 percent and prices were unchanged on the month, the statistics office said.

Price Mandate

VCI, the main association of German chemical companies, on May 17 raised its forecast for production, sales and prices this year in the industry, on increasing global demand personal loan for poor credit.

“We have to avoid commodity-price increases becoming entrenched in longer-term inflation expectations, which could have second-round effects on wages and prices,” ECB President Jean-Claude Trichet said yesterday. “We are carefully monitoring the situation and we stand ready to do whatever is necessary to fulfill our mandate.”

Euro-area inflation probably remained at 2.8 percent this month, according to the median of 27 forecasts in a Bloomberg survey. The European Union’s statistics office in Luxembourg will publish the data on May 31. Economists in a separate survey forecast the ECB will raise its main lending rate to 1.75 percent by the end of the year.

The German economy grew 1.5 percent in the first quarter as companies boosted spending to meet increased export demand and construction rebounded from a slump in the previous three months. The government predicts growth of 2.6 percent this year after a record 3.6 percent expansion in 2010.

At the same time, countries from Greece to Portugal are struggling to grow amid a debt crisis that’s shaking the foundations of the single currency. The euro area will grow 1.6 percent this year after expanding 1.8 percent in 2010, the European Commission forecast this month.

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The head of a committee tasked with rooting out Iraqis with ties to Saddam Hussein’s deposed regime and who was once arrested for alleged ties to Shiite militias was shot to death late Thursday in Baghdad, officials said.

Ali al-Lami was a divisive figure in Iraqi politics who had close ties to neighboring Iran’s Shiite Muslim government and was known for the vigor with which he tried to root out Saddam-era loyalists from all levels of Iraqi government. He also ran afoul of the U.S. after he was implicated in a bombing that killed Americans.

His role last year in trying to oust hundreds of Sunni candidates from running in the parliamentary election due to alleged ties to the Saddam regime fueled criticism that Iraqi Shiites, backed by Iran, were trying to sideline Sunnis from power and threatened to re-ignite sectarian tensions.

Now he has become the latest victim of an assassination campaign across Baghdad and Iraq that has resulted in the deaths of tens of Iraqi political and governmental figures.

The top military spokesman for Baghdad, Maj. Gen. Qassim al-Moussawi, said gunmen opened fire and killed al-Lami as he was driving in his car in eastern Baghdad. His driver also died in the shooting, said two police officers.

Al-Lami racked up a long list of political enemies during his years on the Iraqi political scene. He was long suspected of having ties to Iran and Lebanon’s Hezbollah. He headed the Accountability and Justice Committee responsible tasked with vetting people trying to get government jobs or take political office for ties to Saddam Hussein’s Baath Party, which ruled Iraq for decades.

During last year’s parliamentary election, the committee tried to bar hundreds of candidates from taking part. Most were from the Sunni-backed Iraqiya bloc, which went on to win the most seats in the election.

The top American military commander in Iraq at the time, Gen. Ray Odierno, said al-Lami and Ahmed Chalabi, also a committee member, were influenced by Iran and had attended meetings of the Shiite regime there.

One of the committee’s targets was Saleh al-Mutlaq, who later became the deputy prime minister as part of lengthy negotiations to come up with a new government headed by Shiite Prime Minister Nouri al-Maliki.

Speaking from Jordan, al-Mutlaq said he was shocked and saddened by al-Lami’s death.

“He is a human being, and he’s an Iraqi. I know him personally,” al-Mutlaq said, adding, “He was directed by the Iranian regime. He took orders.”

The deputy prime minister said it was too early to tell who was responsible for his death, but said: “Thousands of people are living in very bad conditions because they were hurt by this organization,” referring to the Accountability and Justice Committee.

For supporters and close friends of al-Lami, it was immediately clear who killed him. A spokesman for Chalabi said al-Lami was likely killed by Baath Party loyalists angry at his campaign against them.

“My first suspect would be the Baath party,” said Entifadh Qanbar. “I’m very sure that the Baathists hold a very huge grudge against him. … He got so many threats.”

Al-Lami was arrested by U.S. and Iraqi forces in 2008 for suspected ties to Iranian-backed Shiite militias, and was accused by U.S. officials at the time of being involved in a bombing that killed eight people, including two American soldiers and two State Department employees.

His arrest reinforced suspicions about Tehran’s influence within the Shiite-led Iraqi government.

Al-Lami’s death came on the same day that followers of anti-American cleric Muqtada al-Sadr staged a huge rally designed as a dramatic show of strength against any move to allow American forces to stay in Iraq past their Dec. 31 deadline.

Under an agreement between Washington and Baghdad, the 46,000 troops still in Iraq must leave by Dec. 31. Iraq’s widespread instability and still struggling security forces have led U.S. and Iraqi leaders to reconsider the deadline for the sake of the country’s security.

U.S. officials have been pushing Iraq to decide whether it wants some American forces to remain, and al-Maliki has said he’ll discuss it with the country’s main political blocs.

But the throngs on the street in Sadr City, a slum in eastern Baghdad that is an al-Sadr stronghold, was a stark warning to al-Maliki about what he risks if U.S. forces stay longer.

Tens of thousands of Shiite militiamen belonging to al-Sadr’s Mahdi Army militia and other supporters marched through the streets. Although unarmed, their matching T-shirts and caps and marching in unison evoked the spirit of a military parade rather than a political rally.

“I am asking for the withdrawal of the occupation. I am ready to fight from this moment. I am ready to sacrifice. I am ready for death,” said one marcher, 42-year-old Hussein Abu Lika.

The militia members waved Iraqi flags and shouted, “No, no, America!”

U.S., Israeli and British flags were painted on the pavement to be stomped on by the marching protesters, and Iraqi military helicopters buzzed overhead while soldiers stood guard.

Al-Sadr is one of the few, maybe only, Iraqi political leaders able to raise such a large crowd. Many of them are impoverished Shiites from southern Iraq and Baghdad who are drawn to his anti-American, nationalist rhetoric and his family’s deep roots in Iraqi political and religious life.

But to many Iraqis, al-Sadr and his Mahdi Army are little more than thugs blamed for some of the worst of the sectarian attacks during the insurgency.

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