Monday PM March 16th, 2009
by: Ed Mayberry, March 16, 2009 4:03:49 pm
The University of Texas Medical Branch has rehired more than 500 and plans to hire hundreds more. That's just months after laying off thousands of employees because of damage from Hurricane Ike. UTMB is home to the state's oldest medical school. It had rehired 415 employees as of March 3rd and is now seeking to fill another 239 positions, mostly nursing and other clinical and research jobs. Another 40 positions have been filled in the Texas Department of Criminal Justice unit, fulfilling a state contract to treat inmates. Officials said they are giving priority to the 2,450 employees who lost their jobs after the hurricane, which caused $710 million in damage to the facility in September. The layoffs came after the UT System regents authorized cutting as many as 3,800 positions in November.
Oilfield services provider Baker Hughes says it can't rule out another job reduction later this year after announcing last week it was cutting another 1,500 positions, bringing its total to 3,000 so far this year. Baker Hughes Investor Relations Director Gary Flaharty said the company will make additional adjustments as required. Flaherty says the latest job cuts began last week, representing about four per cent of the Houston-based company's global work force. Tumbling crude prices, frozen credit markets and forecasts for meager energy consumption have forced energy producers to scale back spending. That means less work for companies like Baker Hughes, which assist producers with drilling, reservoir management and other services.
The National Association of Home Builders says its market index hovered unchanged near historic lows in March as builders continue to see the economy as a major drag on their prospects for improved sales. The Washington-based trade association said the index stood at nine--one point off the all-time low hit in January. Index readings lower than 50 indicate negative sentiment about the market. The report reflects a survey of 384 residential developers nationwide, tracking builders' perceptions of market conditions. Builders' gauge of current sales conditions and expectations for sales over the next six months remained unchanged from February. But builders' assessment of buyer traffic dropped two points.
President Barack Obama is unveiling a $15 billion package to help small businesses. Speaking to small business owners in the East Room, Obama and Treasury Secretary Timothy Geithner described their plan to reduce lending fees, ease the tax burden and boost bank liquidity to get credit rolling. Obama called small businesses the heart of the American economy. He said they have created roughly 70 per cent of new jobs in the last decade. Geithner said when small businesses prosper, the nation prospers.
The Obama administration is announcing that the 21 largest banks receiving government money must report monthly on how much lending they do to small businesses. All other banks getting federal taxpayer help are being asked to report quarterly on small business loans. Even banks that are not taking government funds are being told by the administration to “make an extra effort” to increase small business lending. The announcements came as part of a broad package aimed at small business that was being unveiled by President Obama and Treasury Secretary Timothy Geithner. The package also includes reduced small-business lending fees and an increase on the guarantee to some small business administration loans.
The White House says it wants to work with lawmakers to restore a program that allows a cross-border trucking program with Mexico. Mexico has put in place tariffs on 90 U.S. products after Washington canceled a program that allowed some trucks from Mexico to operate in the U.S. White House spokesman Robert Gibbs says the administration wants to work with congress to come up with a plan that would restore that program. Lawmakers had safety concerns and other reservations and did away with the program in last week's spending bill. Gibbs says the White House is working with Senator Byron Dorgan of North Dakota to write a bill that would deal with lawmakers' concerns.
A senior OPEC official has challenged the U.S. and other industrialized countries to clean up the global economic mess that he says they have caused. OPEC Secretary General Abdullah el Badri says his organization has done its part by deciding Sunday not to cut output levels. But he says OPEC has not seen any positive results from the world's leading industrialized countries he says have created the problem. El Badri spoke a day after the Organization of the Petroleum Exporting Countries decided to maintain current production levels unchanged. On Sunday, OPEC also said it would concentrate on eliminating overproduction by some members. OPEC estimates that the world's supply of oil would be reduced by about 800,000 barrels a day, if all such overproduction was eliminated.
Interior Secretary Ken Salazar is assuring major oil company executives that the Obama administration views oil as important to the country's energy future. But Salazar, in a conference call with reporters, defended proposals to end a manufacturers' tax break for oil companies and higher royalties on oil pumped from federal waters. He said the higher taxes and royalties are simply a matter of fairness. Salazar said the taxpayer--like a private land owner—should get the maximum return from the federal government's oil and natural gas. Salazar also said he remains opposed to any development of oil in Alaska's Arctic National Wildlife Refuge, even with directional drilling from outside the refuge.
Federal Reserve Chairman Ben Bernanke says America's recession “probably” will end this year if the government succeeds in bolstering the banking system. Appearing on CBS' 60 Minutes, Bernanke seemed to express a bit more optimism this could be done. Still, Bernanke stresses the prospects for the recession ending this year and a recovery taking root next year hinge on a difficult task: getting banks to lend more freely again and getting the financial markets to work more normally. He says the government is working on a plan that he thinks will stabilize the financial system. But Bernanke says even if the recession ends this year, the unemployment rate will keep climbing past the current 8.1 per cent.
Finance officials from the Group of 20 nations have agreed on the need for a “sustained effort” to get the global economy back on track. They met outside London over the weekend in advance of next month's meeting of the G20 heads of state, including the new American president. U.S. Treasury Secretary Timothy Geithner gives the meeting a positive review, praising the collective determination to work to counter the recession. Even so, the finance chiefs from emerging nations like China, Brazil and India gave their counterparts from the U.S. and Europe an earful, calling for more “balanced” action to get the global economy moving and pressing the U.S. to fix its banking problem. Geithner promised that details on a plan to do that are on the way. A final statement from the meeting backs off on the U.S. call for more government spending but it does acknowledge the importance of efforts already in place.
Shoppers will have more information about where their food comes from under a new policy that began today. Labels on most fresh meats, along with some fruits, vegetables and other foods, will now list where the food originated. In the case of meats, some labels will list where the animal was born, raised and slaughtered. Food safety groups have long lobbied for the policy, which was enacted by Congress as part of a wide-ranging farm bill last year. It's also popular with ranchers in the northern part of the United States who compete with Canadian cattle producers. Agriculture Secretary Tom Vilsack last month asked the meat industry to go beyond the new policy, which was written by the bush administration, to be even more specific about where an animal was born, raised and slaughtered.
The government says the nation's industrial output fell for the fourth straight month in February with the factory operating rate dropping to the lowest level in more than a half-century of record keeping. The Federal Reserve reported that industrial output dropped by 1.4 per cent last month, slightly worse than the 1.2 per cent decline that economists had expected. The weakness included a 0.7 per cent fall in manufacturing output, which pushed the operating rate at the nation's factories down to 67.4 per cent of capacity last month--the lowest level on records that go back to 1948.
Even with recent rains, Texas farmers and ranchers are rapidly approaching $1 billion in losses in the past year caused by drought, according to an agriculture report. Figures from the Texas Agrilife Extension Agency show cattle producers have lost around $852 million in the last year, $569 million of that since November. The report says the losses were mostly because farmers and ranchers had to purchase feed to compensate for grazing land lost due to lack of rain. The agency says more than 60 per cent of the beef cattle in Texas are in counties listed at severe drought status or worse. Rainfall during the past week did little to change the dire need for moisture, with close to 48 per cent of Texas listed in severe to exceptional drought conditions, the newspaper reported.
A direct marketing firm has agreed to refrain from using improper tactics to obtain the personal information of senior citizens. The agreement by Prospect Pros
Houston-based Far East Energy is developing coal bed methane resources in China with Arrow Energy International of Australia, based in Singapore. Arrow is funding exploration costs up to $30 million, according to the Houston Business Journal.
Even in the worst economy since the great depression, people will stand in line for good entertainment, particularly in the so-called “live music capital of the world.” Fans are snapping up $650 four-day passes to the famed South by Southwest music festival that starts this week. That's when thousands are expected to hit the town's storied nightclubs to catch the hottest new acts. It's too soon to say how the 23rd annual SXSW will compare to last year, but hotel room bookings are up. Jazz legend and 27-time Grammy award winner Quincy Jones is opening the show and nearly 2,000 bands from 52 countries will be playing. Austin has been hit by the same economic woes that are spreading across the globe. But the college town remains an incubator for sizzling new bands and a thriving music scene that brought SXSW here nearly a quarter century ago. Austin produces about 13 per cent of all the musical performances at the festival and remains the largest single source of bands at SXSW — about 220 of the 1850 expected to show.
With the recession here, schools across Texas are providing students with thousands more subsidized meals. The Houston Chronicle reports nearly 2.7 million children qualified for free or reduced-priced lunches in December, the latest period for which data is available. The figure represents nearly a five per cent increase from the previous year. A spokeswoman for the Texas Department of Agriculture says because eligibility for the program is determined by parents losing jobs and income, it's likely the rise is related to the economic downturn. Advocates say it's critical that school employees reach out to families who recently lost jobs. Many have never been in that situation before and may be unfamiliar with the federal meal program. Pearland, Cy-Fair and Houston are among the school districts that have seen increases. The Houston district provides free breakfasts for all students and even serves meals in some classrooms.
Noble Corporation has a special shareholders meeting set for tomorrow to vote on the proposed move of its incorporation from the Cayman Islands to Switzerland. If approved, a hearing will be held March 26th in a Cayman Island court to ratify the transaction. Weatherford International is also planning to move its incorporation to Switzerland. Transocean moved from the Cayman Islands to Switzerland in December.
Six Flags president and CEO Mark Shapiro says one key debt holder is holding up negotiations for an out-of-court refinancing deal. Shapiro was speaking to investors on a quarterly conference call. He didn't name the debt holder but said it was a portfolio fund manager. The situation is increasing the New York-based theme park operator's difficulty in avoiding a Chapter 11 bankruptcy filing. Shapiro is stressing that the company's restructuring—whether in or out of court--won't affect the experience visitors have at its theme parks. The company operates the Six Flags Over Texas theme park and Six Flags Hurricane Harbor water park in Arlington, and the Six Flags Fiesta Texas theme park in San Antonio.
For the third year in a row, the Houston Zoo has received top ranking from Charity Navigator for efficient management and financial growth. The charity evaluator ranks the financial health of over 5,200 charities nationwide. The Houston Zoo, on North MacGregor, was founded in 1922, now with more than 1.5 million annual visitors.