Monday PM May 4th, 2009
by: Ed Mayberry, May 4, 2009 9:05:56 pm
The 40th Offshore Technology Conference is underway at Reliant Center. OTC has grown to more than 70,000 attendees and 2,500 exhibitors over the last four decades, spotlighting the latest and newest technologies for the offshore oil and natural gas industry, ranging from software to massive drilling equipment. Louisiana Economic Development is showcasing companies that can help exploration companies, as Dane Revette explains.
"Yes, the offshore industry actually was invented in Louisiana in about 1947, and we drilled the first offshore wells then, and we've been improving on the process since then. We entertain foreign dignitaries and foreign speakers who come here to OTC — approximately 200 to 250 Louisiana companies that are exhibitors here at OTC."
Wayne Landry's Lafayette-based company United World Energy places drilling rigs on hovercrafts for travel over marsh land or tundra.
"I've gotten together with a couple guys in Europe. We've worked out a way to take a large, large hovercraft—we're picking up 450-ton payloads right now. We'll fly out over the marsh, set down, drill the wells, and then hover back out, and just keep flying across the area without having to rig up, rig down, rig up, rig down."
The Offshore Technology Conference continues through Thursday at Reliant Center.
The National Association of Realtors says pending U.S. home sales rose from February to March as buyers took advantage of deeply discounted prices and low interest rates. The real estate group said its seasonally adjusted index of pending sales for previously occupied homes rose 3.2 per cent to 84.6 in March. The index was 1.1 per cent above last year's levels and has risen for two straight months after hitting a record low in January. The index, which started in 2001, tracks signed contracts to purchase existing homes. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future home sales.
The Federal Reserve says a larger share of banks made it more difficult for people to obtain home mortgages over the last three months. The Fed's new quarterly survey finds about 50 per cent of U.S. banks tightened their lending standards on prime mortgages, up from about 45 per cent in the survey issued in early February. Meanwhile, 65 per cent of banks say they tightened standards on nontraditional mortgages, such as adjustable-rate loans with multiple payment options. That's up from 50 per cent in the last survey.
Construction spending was better than expected in March. The report provides hopeful signs of stabilization in the economy. The Commerce Department says construction spending increased 0.3 per cent in March, the best showing since a similar rise last September. Economists called the new data faint glimmers of hope that construction activity may be stabilizing, although at very low levels.
A bankruptcy judge has postponed his decision on whether Chrysler can begin transferring assets to a new entity partnered with Italian automaker Fiat. Judge Arthur Gonzalez delayed the issue until Tuesday afternoon because Chrysler did not file its motion until late Sunday and people with objections need more time to review the deal. A group of Chrysler's lenders have refused to wipe out most of Chrysler's debt and go along with the government's restructuring plan. A lawyer for some of the creditors, Tom Lauria, said they have not had time to review Chrysler's 300-page filing. Lauria also objected to a Chrysler motion to allow the automaker to pay taxes, and he indicated that he also would object to the payment of other costs and expenses. He said if the sale to Fiat fails to go through, any money spent would be taking away from what's left for the lenders later.
General Motors CEO Fritz Henderson says the automaker still can avoid bankruptcy but it has a lot of work left before the government's June 1st deadline. Henderson said in an interview with the Associated Press that "it's still possible" for GM to stay out of bankruptcy, and that's the company's preference. But he says GM is learning from Chrysler's bankruptcy proceedings in case it can't finish restructuring before the deadline. A key issue for GM is getting 90 per cent of its bondholders to accept a debt-exchange offer. GM is offering them a ten per cent stake in the company if they give up $27 billion in unsecured debt. Henderson says a counteroffer from bondholders that seeks a 58 per cent ownership stake is unacceptable because the government won't let gm give them more than ten per cent.
The Pentagon's top auditor criticized the performance of KBR on a $31.7 billion combat support contract. Defense contract audit agency head April Stephenson leveled her criticism in written testimony to a hearing before the Wartime Contracting Commission. She pointed to numerous instances where the Houston-based contractor failed to make sure U.S. taxpayers were getting the most for their money. Stephenson says KBR has relied heavily on subcontractors for the dining facilities, transportation, sanitation systems, and warehouses required under the contract. Yet she says audits of the contract, known as "Logcap III," reveal there often was too little documentation "to justify the reasonableness of the prices and costs billed to the government." In a statement submitted to the commission, KBR defended its handling of the contract. It says demands for services were heavy and constantly changing, especially during the early stages of the war in Iraq.
Billionaire Warren Buffett says the latest recession really shook up Americans' confidence but he sees the economic slide ending. The head of Berkshire Hathaway said that he can't predict how quickly the economy will improve. Economists say the recession began in December 2007. Buffett, interviewed on ABC's Good Morning America, said his worst business decision in 2008 was investing in ConocoPhillips when the price of oil was high. His best investment was Geico. Buffett addressed his shareholders this past weekend and defended the steps he took to help the company navigate the "financial hurricane." Berkshire reported a 2008 profit of $4.99 billion. That was down 62 per cent from the previous year, but better than many companies.
Regulators have told Wells Fargo to shore up its finances after government "stress tests" showed the bank would have trouble surviving a deeper recession. Wells Fargo is one of several banks that regulators will force to hold larger buffers to protect against possible future losses. That's according to two people familiar with the matter. Representatives from San Francisco-based Wells Fargo did not immediately respond to requests for comment. After originally being scheduled for release today, the results of the government's stress tests now are expected Thursday afternoon. The delay comes amid aggressive lobbying from banks that were told they would need to boost their capital positions.
The White House says it has no plans to ask Congress for more taxpayer money to bail out struggling banks. The government will release results of "stress tests" for the nation's 19 largest banks, providing guidance on which banks may need more government support to withstand a more severe recession. Those that can't raise additional capital may get it from a $700 billion financial rescue fund. The Obama administration has proposed seeking additional bailout money in case it is needed. Congress has opposed that unpopular idea. White House Press Secretary Robert Gibbs said he has not seen all the "stress test" results but that the administration is confident it has enough money on hand and won't ask Congress for more.
President Barack Obama wants to close tax loopholes for people and companies with operations or bank accounts overseas. Obama says that he wants to prevent U.S. companies from deferring tax payments by keeping profits in foreign companies rather than recording them at home. He also called for more transparency in bank accounts held by Americans in tax havens such as the Cayman Islands. Obama said that his plan would generate $210 billion in new taxes over ten years and :make it easier: for companies to create jobs at home. It remains to be seen how Congress feels about the plan.
Cities and counties have furloughed workers, cut staffing and now, dozens trying to make ends meet are hiring Washington lobbyists. Senate lobbying records suggest the idea seems to be spreading. The goal is to get a greater share of the money flowing out of Washington, from a record federal budget to the $787 billion economic stimulus package. Some of the communities hiring lobbyists have done so before but others are getting into the lobbying game for the first time. Lobbyists filed new registrations this quarter on behalf of major metropolitan areas including Chicago as well as scores of small towns. For instance, Baytown has hired a lobbying firm. There was some concern from city council members that such action encouraged more federal spending. City Manager Garry Brumback argued that the money was going to get spent regardless and that Baytown should get its share.