Wednesday PM July 8th, 2009
by: Ed Mayberry, July 8, 2009 8:07:18 pm
Vice President Joe Biden has announced a White House deal with hospitals to help pay for President Barack Obama's overhaul of health care. Biden made the announcement at the White House with hospital administrators and Health and Human Services Secretary Kathleen Sebelius. Biden said "reform is coming." Biden said the hospitals are ready to give up about $155 billion over ten years in government payments. The money could then be used to help pay for covering millions of uninsured. Despite the deal, some Democrats are rebelling over taxing generous health insurance benefits to pay for any overhaul, jeopardizing bipartisan legislation in the Senate and Obama's ambitious timetable.
NRG Energy says it has turned down Exelon's revised hostile takeover bid of $8 billion in stock because it undervalues the business. Last week Exelon, the nation's largest nuclear power company, sweetened its offer by about $1 billion. In a letter to Exelon CEO John Rowe, Princeton-based NRG said it found the new bid was not in its shareholders' best interest but said it represented a "step in the right direction." NRG said it is still open to any proposal that properly accounts for its "fundamental value and extraordinary growth prospects." Exelon, Chicago, previously said that its most recent bid was its "best and final offer."
The Texas State Securities Board has ordered Bank of America Securities and Banc of America Investment Services to pay a $3.6 million fine to the state. State Securities Commissioner Denise Voigt Crawford said the fine was imposed for misleading investors about the safety of the auction-rate securities market. Banc of America also must buy back the securities from Texas investors. The final consent order says Banc of America knew there were growing risks in the auction process but didn't tell its retail customers of the potential risks from a failed auction.
Plans for the world's largest wind far in the Texas Panhandle are being scrapped by T. Boone Pickens. He says the problem lies in getting power from Mesa Power's proposed site to a distribution system. Pickens has already ordered 687 giant wind turbines--a $2 billion investment--and may be placing them on smaller wind projects. He's looking at sites in the Midwest and Canada.
The International Monetary Fund says the global economy will perform slightly worse in 2009 than it had previously estimated, but its outlook for 2010 is brightening based on aggressive market interventions by the U.S. and other governments. The IMF expects the world economy to shrink by 1.4 per cent in 2009, slightly worse than its earlier estimate of a 1.3 per cent contraction. But it says financial conditions have improved faster than it expected when it made its last global forecast in April, largely due to government support for banks and other financial companies. The IMF boosted its estimate for global economic growth in 2010 to 2.5 per cent, up from its April projection of 1.9 per cent.
The White House says it's not quite time for industrialized nations to pull the plug on economic stimulus efforts. Economic adviser Mike Froman said that world leaders gathered at a G-8 summit in Italy will seek a balance between continuing to stimulate sluggish economies and looking for exit strategies. Froman told reporters there is still uncertainty and risk in the global economy. He also said it's important to return to fiscal sustainability, which would not include government stimulus efforts. Some G-8 leaders have urged President Barack Obama to support an end to stimulus efforts soon.
Group of eight leaders are emphasizing the need to press on with government measures to stimulate the economy--while also studying ways to wind up those strategies. That's according to a draft statement on the first day of their annual summit in l'Aquila, Italy. The leaders emphasize that the economic situation "remains uncertain" and pledge to take the necessary steps to return the global economy to strength--including stimulus--both individually and together. The group of eight brings together Britain, Canada, France, Germany, Italy, Japan, Russia and the United States.
While the group of eight meets in Italy, protesters are breaking into power stations and shedding their clothes to call attention to global warming. Dozens of activists from 18 countries scaled smokestacks and occupied four coal-fired Italian power plants. According to Greenpeace, they hung banners that called on the G-8 to take the lead in fighting climate change. Employees at two of the plants staged counter-demonstrations, and the union for Italy's energy workers condemned the protests. In Rome, activists from charity group Oxfam International put on masks of world leaders and dressed up as chefs, stirring a mock earth in a pot. On the historic Spanish steps, environmentalists stripped half-naked in front of tourists and unfurled a banner calling on leaders to "keep climate cool." Police briefly detained several people.
Some U.S. cities have dropped so-called impact fees because of the economic crisis. Those fees are charged by municipalities nationwide to pay for the additional services that come with increased development, such as schools, sewer lines and roads. Measures have been debated in Washington, Texas, New Mexico, New Hampshire, California and elsewhere. Florida made it easier for residential developers to challenge fees; Arizona lawmakers froze them for two years. Cities are increasingly realizing that they need to eliminate as many deterrents to development as possible during the economic slump, and the impact fees are among them. Average 2008 fees were $1,520 in Texas; California's average was $19,536, up 38 per cent from 2004 excluding sewer and water fees. Details are in a 185-city survey by Austin-based planning consultants Duncan associates.
The Shriners have voted to accept insurance money for the first time in their 87-year history in the hope of keeping all of its children's hospitals open. Rod Brown is chairman of the Shriners Hospital in Greenville, South Carolina. He says the group gave preliminary approval to the insurance plan at its annual meeting in San Antonio, but no decision is final until the close of the meeting on Thursday. The Shriners have always provided care free of charge, using their endowment to help whoever they can. But the endowment is now badly depleted and could force the closure of some hospitals unless the system makes changes. Ralph Semb with Shriners Hospitals for children says if nothing changes, in seven years, they'll have gone through the endowment fund. The Galveston site has been closed since Hurricane Ike hit last September. The Shriners, in an initial vote Monday, agreed to keep all 22 hospitals open.
Two industry officials say the Treasury Department will announce the names of up to ten fund investment firms participating in a government plan to wipe troubled assets from banks' books this week. The plan is meant to address the core reason for the financial meltdown, but analysts say it does little to address the fundamental weakness of the economy. The plan leverages private capital with government subsidies so investment firms can buy up soured mortgage-related assets. But since announcing the plan five months ago, the government has shelved the part of it that would help firms buy individual mortgages and other loans held by the banks. Some analysts say that means the effects of the plan will be muted.
After more than five years officially in testing mode, Google's Gmail is finally graduating from "beta." Google says the e-mail service and three other applications in the Google apps suite for businesses are now finished products in name as well as function. But that doesn't mean Google is finished improving upon them. Nor were the extra features just announced cause for dropping the label. Google concedes the move is aimed more at wooing business customers than marking any real developmental milestone. The premier edition apps suite sells for $50 per user to business customers. They get added features including offline access and 24/7 customer support. The "beta" label was scaring businesses off. Google Calendar, Google Docs and Google Talk are now out of beta mode. Google Sites and Google Video have already dropped the label.
The future of Internet radio may now be more secure. A handful of online stations have reached an agreement to head off a potentially crippling increase in copyright royalty rates. The deal comes after two years of negotiations between Webcasters and copyright holders. Popular online radio service Pandora Media of Oakland, California, which derives much of its revenue from advertising--said the new agreement will help ensure its survival. The revenue-sharing deal announced Tuesday is between SoundExchange, a nonprofit that collects royalties for recording copyright owners from digital radio services, and three smaller Webcasters.