Wednesday PM April 15th, 2009
by: Ed Mayberry, April 15, 2009 9:04:35 pm
Governor Rick Perry fired up an anti-tax "tea party" with his stance against the federal government and for states' rights. Perry told the Austin crowd that officials in Washington have abandoned the country's founding principals. He says the federal government is strangling Americans with taxation and spending. During his speech to hundreds in a U.S. flag-waving crowd, there were several shouts of "secede!" Later, answering news reporters' questions, Perry suggested Texans might at some point get so fed up they would want to secede from the union. However, Perry says he sees no reason why Texas should make such a move. Perry's running for re-election against Republican rival U.S. Senator Kay Bailey Hutchison, who held a news conference in Houston to detail her efforts to extend the sales tax deduction and eliminate the marriage tax penalty in future legislation. A Houston tea party was being staged in Jones Plaza this afternoon in downtown Houston.
President Barack Obama says he's renewing his administration's commitment to a simpler tax code. The president on Wednesday defined such a code as one that rewards work and the pursuit of the American dream. Obama is seizing the opportunity on tax-filing day to promote his push for lower taxes for working people. He said that for too long taxes have been used as a wedge to scare people into supporting bad policies for working people. Obama said his administration is starting to change that. The president said the tax code as currently written is too far complicated for most Americans to understand--but just complicated enough to suit people who try to benefit unjustly from it.
American Airlines lost $375 million in the first quarter as fewer people flew during the recession than a year ago. The loss was smaller than Wall Street expected, as American caught a break with cheaper fuel. A year ago, it lost $341 million. Revenue was $4.84 billion--down from $5.7 billion a year ago. Analysts surveyed by Thomson Reuters expected of $4.73 billion. Analysts generally do not include one-time charges.
The Federal Reserve says there are some faint signs the steep plunge in economic activity that began last fall is starting to level off. The Fed's latest survey of business conditions nationwide found five of its 12 regional banks reporting a moderation in the pace of the economic decline. The Fed says several regions "saw signs that activity in some sectors was stabilizing at a low level ... (but) overall economic activity contracted further or remained weak."
Consumer prices dipped unexpectedly in March, leaving inflation over the past year falling at the fastest clip in more than a half-century. The Labor Department says consumer prices edged down 0.1 per cent last month as a drop in energy prices offset the biggest rise in tobacco prices since 1998. It was a better performance than the 0.1 per cent rise that economists had expected. The recession is expected to keep a lid on inflation as massive layoffs dampen wage pressures and weak demand keeps companies from raising product prices.
Industrial production fell for the fifth straight month in March, as companies cut output in order to clear stockpiles of goods. The Federal Reserve reports that production at the nation's factories, mines and utilities dropped a seasonally adjusted 1.5 per cent, matching February's decline and worse than the one per cent drop analysts expected. Factories and mines are increasingly idle, as the total industrial capacity utilization rate fell to 69.3 per cent from 70.3 per cent, the lowest on records dating to 1967.
Oil prices are lower as investors digest fresh economic news and word that crude stockpiles swelled with the biggest surplus in 19 years. The Energy Information Administration said crude oil inventories rose by 5.6 million barrels last week as demand for gasoline and other fuels continued to slide. That was more than twice what analysts expected, and the total now in storage is the most held since September 7th, 1990. At the pump, gas prices were flat overnight, at a national average of $2.05 a gallon, according to AAA, Wright Express and Oil price Information Service.
A sharp increase in credit-card loan losses at Capital One Financial does not bode well for other big consumer lenders. The Mastercard and Visa credit card issuer said that its U.S. and international credit card defaults rose in March. While not unexpected, the news from the McLean, Virginia-based company suggests that the deteriorating economy and sharp rise in unemployment are weighing heavily on the sector. Nearly all lenders are seeing more customers stop making monthly payments.
Bank lending to consumers and businesses for many types of loans fell in February despite the billions of dollars in government support the banks received. The Treasury Department says its latest monthly survey of lending activities at the nation's biggest banks showed nine reported increases and 12 posted declines. The median, or midpoint, for lending activity dipped 2.2 per cent in February. While the median level of activity in mortgage lending rose 35.4 per cent and home equity lines of credit grew 17.7 per cent, lending to businesses for commercial and industrial loans plunged 47 per cent.
The Obama administration has selected the first six companies to participate in a $50 billion program designed to help millions of struggling homeowners avoid foreclosure. The administration says the companies will receive a maximum of $9.9 billion. Other companies will be named in coming months. Chase Home Finance will receive up to $3.6 billion--the largest amount among the six companies. The other recipients are: Wells Fargo Bank, GMAC Mortgage, CitiMortgage, Select Portfolio Servicing and Saxon Mortgage Services.
The National Association of Home Builders says its housing market index posted its biggest one-month jump in five years in April as many homebuyers seized on lower prices and incentives. While still near historically low levels, the Washington-based trade association said the index rose five points to 14--its highest reading since October. Index readings lower than 50 indicate negative sentiment about the market. The report reflects a survey of 360 residential developers nationwide, tracking builders' perceptions of market conditions. Builders' gauge of current sales conditions, buyer traffic and expectations for sales over the next six months each increased in April.
The AARP says prices of the most popular brand-name prescription drugs are on the rise even as the economy falters. But the group's annual study also found prices of generic drugs are falling and more and more seniors are making the switch to generics, a trend the powerful senior citizens' lobby hopes to encourage. AARP also wants policy makers to focus on how to bring drug prices down as Congress prepares legislation to reshape the nation's costly health care system. The group says that prices manufacturers charged for the most widely used brand name drugs rose 8.7 per cent in 2008, higher than in years past. The general inflation rate in 2008 was 3.8 per cent.
Texas Agriculture Commissioner Todd Staples says the state's farm and ranch industries would greatly benefit if President Barack Obama lifted the decades-old Cuban trade embargo to allow open commerce between the two countries. The United States annually exports to Cuba $715 million in agriculture products and Staples says about $80 million to $90 million of that comes from Texas. The Temple Daily Telegram reports Staples said he wants Obama to expand on his recent memorandum calling for loosened travel restrictions between the two countries. He'd wants the U.S. to allow Cubans to visit more often to experience agriculture operations and he's calling for Texas-based air service direct to Cuba.
RadioShack says it's expanding its online electronics trade-in program to 4,400 company-owned stores across the country. Under the program, customers of the Fort Worth-based electronics retailer can apply the value of old products to new purchases. It says eligible electronic devices must be able to power on and include mp3 players, wireless phones, gaming systems, digital cameras and others. A valid ID is necessary for a gift card exchange.
A group of nursing homes in California and Texas will pay up to $450,000 to employees who claimed discrimination for speaking Spanish at work. A federal judge in Los Angeles has ordered Skilled Healthcare Group and several related nursing facilities to pay as many as 53 workers and offer them English classes. The decree comes after a janitor at Royalwood Care Center in Torrance, California, said he was fired in 2002 for speaking Spanish at work. The decree requires the facilities to pay $180,000 to 53 employees in California and Texas and additional money to those who take English classes. It also requires them to provide training on equal employment and diversity. Skilled Healthcare Group's subsidiaries own facilities in California, Kansas, Missouri, New Mexico, Nevada and Texas.
Valero Energy says it has closed the deal on all but one of the seven ethanol plants it's purchasing from Verasun Energy. San Antonio-based Valero submitted a successful bid of $477 million last month for Verasun. Secured lenders submitted credit bids for the remaining Verasun facilities. Verasun filed for Chapter 11 bankruptcy protection after tightening credit markets snapped the lifeline it needed to weather the swings in corn and fuel prices. Valero spokesman Bill Day says its new biorefineries in Aurora, South Dakota and Charles City, Fort Dodge and Hartley in Iowa are already operational. He says Valero's completed its purchase of Verasun's Albert City, Iowa, biorefinery and plans to have it operational in about a month. He says an idled plant in Welcome, Minnesota, will take a while to get running, and Valero has yet to finalize its purchase of a plant in Albion, Nebraska. The deal also included a development site in Reynolds, Indiana.
A Texas-based company will be closing its Meadow Gold dairy plant in Lincoln, costing about 60 people their jobs. Dean Foods spokeswoman Marguerite Copel in Dallas confirmed the closing to the Lincoln Journal Star but did not give a firm date or provide other information. She did not immediately return a call from the Associated Press. The plant produces milk and other dairy goods, bottled water and juices. Dean Foods' milk and dairy products are sold under several brand names, including Alta Dena, Berkeley Farms, Creamland, Gandy's, Garelick, Land o' Lakes, Mayfield and Purity. Dean reported net sales of $12.5 billion in 2008.
The online invitations startup Socializr will now let users manage their events from sites like Facebook, MySpace, Evite and Meetup. Socializr comes from Jonathan Abrams, who founded Friendster, one of the first social networks on the Internet. Abrams says the new feature is "useful to anyone who ever goes to any events or receives event invitations." With the launch of Event Connect, users can check all their event calendars in one place, without having to log in separately to other accounts. They simply attach those accounts to Socializr. They can also add photos from sites like Flickr from Yahoo and Picasa from Google.