Friday PM October 10th, 2008
by: Ed Mayberry, October 10, 2008 10:10:22 pm
President Bush says the government's financial rescue plan is aggressive enough and big enough to work, but anxiety about the markets is feeding on itself and making that hard to see. Speaking from the White House Rose Garden, Bush tried to reassure Americans, saying the U.S. is "a prosperous nation with immense resources and a wide range of tools" at its disposal. Noting that the major western economies are working together to thaw frozen credit markets and end a global panic, he expressed confidence that the financial crisis would be solved. But, he added, the steps being taken now will take time to fully kick in. Among the actions Bush cited was the possibility that the treasury could buy shares of banks, injecting them with capital and spurring lending. Bush plans to meet with finance ministers and central bankers from the G7 industrial nations Saturday. He says cooperation among those nations sends "an unmistakable signal" that everyone is "in this together" and the world will "come through this together." have reopened—the first two to do so following Hurricane Ike. The 40-acre Kemah Boardwalk, with themed restaurants, hotel, amusement rides and retail shops was developed by Landry's Restaurants president and CEO Tilman Fertitta.
President Bush's top advisers on financial markets are pledging to continue working to correct the mistakes that have led to more than a year of severe market turmoil. The president's working group on financial markets, which includes Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, issued a report that says while many reforms have been implemented, more needs to be done. Paulson says the group has been working to reduce the likelihood that past mistakes will be repeated.
Retail gasoline prices keep plummeting across Texas as crude oil prices fall on world markets. The weekly AAA Texas survey finds regular-grade self-serve gasoline averaging $3.28 per gallon statewide. That's 22 cents lower than last week and about 12 cents less than the national average. Crude oil on the spot market has fallen from a record $147.27 per barrel on July 11th to between $87 and $90 now. The global economic crisis has slashed demand, and Gulf refineries are back to normal production levels after disruptions by Hurricane Ike. The state's costliest gasoline is in El Paso, where regular fell 12 cents from last week to $3.47 per gallon. The cheapest is in Corpus Christi, where it fell 35 cents from last week to $3.05 per gallon.
Boeing and other aerospace companies are holding a recruitment event through Sunday to hire Hispanic college engineering students. Boeing Chief Technology Officer John Tracy says even in a time when the economy is in crisis, college students still have great opportunities.
"The long-term prospect for careers in engineering and science are just spectacular in our country. There's a tremendous shortage of engineers and scientists that we see over the next couple of decades, and so events like this, where we can tap into highly enthusiastic, passionate young people and encourage them to pursue these well-paying careers that also make the world a better place, is something that we're really interested in doing."
This speed-recruiting event, which is part of the Hispanic Engineer National Achievement Awards conference, continues through the weekend at the George Brown Convention Center and Hilton Americas Hotel.
Federal antitrust regulators say they have cleared Wells Fargo's $11.7 billion acquisition of Wachovia. The rapid approval comes a day after Citigroup walked away from its own efforts to buy Charlotte, N.C.-based Wachovia. Wells Fargo said that it would proceed with the purchase. The Federal Trade Commission included the deal on a list of transactions that received an "early termination" of their antitrust reviews. Early termination refers to the completion of a review by the FTC or Justice Department before the end of a 30-day period required under antitrust law.
A contract worker died after being pinned against a railing by a backhoe at a work site related to BP'S Texas City refinery. The worker was an employee of Gaia Environmental, who was working on BP's environmental land farm a mile south of the refinery. The land farm receives non-hazardous biological materials from the facility's wastewater treatment plant. The materials bio degrade from sun and bacteria exposure.
Transocean plans to move its executive offices and CEO to Geneva because of Switzerland's tax structure and location. Transocean would be moving its place of incorporation from the Cayman Islands to Geneva late this year or in early 2009. Houston's office will remain the largest.
Kemah Boardwalk's Saltgrass Steak House and STRONG>Babin's Seafood House
Hurricane Ike victims whose homes remain uninhabitable can stay in hotels or motels paid for by the federal government until the first of November. The Federal Emergency Management Agency announced says the program was scheduled to end Tuesday, the one-month anniversary of Ike's landfall in Texas. Those whose homes have been deemed uninhabitable by FEMA inspectors or whose inspections have not been done qualify for the program. FEMA spokesman Richard Scorzas says more than 7,000 households displaced by Ike remain registered with FEMA. The agency says a longer-term rental housing program will follow the hotel plan.
The board that sets standards for corporate accounting has made some changes for how banks value assets in the distressed market. The change by the Financial Accounting Standards Board provides some flexibility in applying "fair value" accounting where there is no market for a security, which is the case now involving banks' mortgage-backed assets. When an active market for a security doesn't exist, companies will be allowed to use their managers' estimates of value, taking into account expected future cash flows and risk discount rates. The move could help banks boost their balance sheets. The board expects the new guidance to take effect Saturday.
The U.S. trade deficit edged down slightly in August, reflecting a drop in foreign oil from record levels. But the politically sensitive deficit with China increased as imports from that country hit an all-time high. The Commerce Department says the trade deficit declined by 3.5 per cent in August to $59.1 billion. The deficit is expected to shrink even further in coming months as a severe economic slump in the U.S. depresses demand for oil and other imported goods. America's foreign oil bill declined to $43.7 billion in August, down a record $7.3 billion from the all-time high of $51 billion in July. The drop reflected both lower shipments and oil prices.
The planned layoffs in the Dallas school district has begun with the cutting of 150 non-contract employees and the elimination of 100 vacant positions. Layoffs of nearly 1,100 employees in the district, which faces an $84 million budget shortfall, will continue at the end of next week when 550 teachers plus administrators and other employees will lose their jobs. More than 400 of the lost jobs are expected to include teachers in the core subject areas of math, science, social studies and English. An additional 500 employees — such as teacher aides, hall monitors and clerks — will also lose their jobs. The staff cuts are expected to save about $30 million, with an additional $38 million coming from budget cuts in other areas. But that still leaves the district about $15 million short, and administrators have not yet said how they plan to cover the gap. The Dallas school district is the nation's 12th largest, with more than 160,000 students.
Ford CEO Alan Mulally says the company is focused on managing its cash and putting its restructuring plans in place as it tries to weather the credit crisis and stock market decline. Mulally said in an interview with the Associated Press that he is not worried about bankruptcy or a takeover with Ford's stock price hovering around $2 per share. Be also says the company is not in danger of running out of cash because it has taken out a large line of credit and has other ways it could raise money through debt or equity to maintain cash flow. Ford is trying to shift its factories from trucks and sport utility vehicles to smaller, more fuel efficient cars. The company plans to bring over several small car models from Europe, but those won't arrive until 2010.
Amtrak has set another ridership record, with 28.7 million people taking its trains last year. That's an 11 per cent increase over the 25.8 million passengers that the national passenger railroad carried in fiscal year 2007. Total ticket revenue for the year that ended September 30th reached $1.7 billion, a 14 per cent increase over the $1.5 billion taken in the previous year. Amtrak, long criticized for its reliance on government subsidies, has been enjoying a resurgence. The railroad has posted six years of ridership and revenue growth and recently has benefited from high gas and airline prices. Earlier this month, Congress passed a bill authorizing $13 billion in funding for Amtrak over five years. President Bush is expected to sign the legislation.
Canada's finance minister says the government is buying up to $25 billion Canadian in mortgages ($21 billion U.S.) from the country's banks in an effort to maintain the availability of credit. Finance Minister Jim Flaherty said the action will help consumers, homebuyers and businesses in Canada get loans. Flaherty says Canada's banks are sound, well-capitalized and less leveraged than their international peers. He says the program does not involve troubled assets, but high-quality assets that are already backed by a government guarantee.
Spain's government says a €30 billion fund ($41 billion) it will use to buy assets from banks starved for liquidity will not cost taxpayers a cent. Deputy Prime Minister Maria Teresa Fernandez de la Vega says this is so because the government will buy only quality assets and be able to resell them once financial markets settle down and the economy rebounds. She spoke after the cabinet approved creation of the fund and also raised Spain's bank deposit guarantee limit from €20,000 ($27,000) to €50,000 ($68,000) in a bid to shore up confidence.