Tuesday PM September 1st, 2009
by: Ed Mayberry, September 1, 2009 9:09:46 pm
A lawyer for Texas billionaire R. Allen Stanford says his client has had a medical procedure that allows doctors to diagnose and treat certain heart conditions. Criminal defense attorney Dick DeGuerin told the Houston Chronicle he did not know the results of the heart catheterization test that was done Monday. Judy Rodriguez is a health supervisor at Conroe Regional Medical Center and declined to release information on Stanford to the Associated Press. DeGuerin has said Stanford fell ill while in federal custody and was taken to that Houston area hospital Thursday after having a high pulse rate. The illness caused Stanford to miss a court date in the trial that accuses him of orchestrating a $7 billion fraud. He has denied the allegations.
In a sharp improvement, the largest U.S. metropolitan areas were evenly split in July between those where unemployment rates rose from June and those where rates fell. In June, by contrast, 90 per cent of the 380 metro areas saw their jobless rates rise from the previous month. An Associated Press analysis of Labor Department data found that unemployment rates fell in 168 metro areas and rose in 168 others. No change was recorded in the remaining 44 areas. The figures aren't adjusted for seasonal trends, such as the hiring and firing of farm workers, so they tend to be volatile. And some of the drops were too small to indicate larger trends.
The Federal Reserve Bank of Dallas predicts job losses in Texas will bottom out this quarter and begin gradual improvement, according to the Houston Chronicle. It forecasts a mild rebound in job growth next year of one to 1.5 per cent.
Following the lead of his two immediate predecessors, President Barack Obama has told Congress that he's reducing pay increases for federal workers next year from 2.4 to 2 per cent. Obama says the national unemployment rate and the size of the federal payroll demand it. Obama says the full increase mandated by statute would cost the government $22.6 billion next year. He has budgeted only for a two per cent increase, at a cost to taxpayers of nearly $20 billion. Obama also says he'll decide by the end of November on whether to reduce locality pay--extra stipends designed to help federal workers in high-cost living areas. Obama says he's invoking powers to put in place his own pay plan in times of a national emergency or serious economic conditions affecting the nation. Former President George W. Bush used the authority previously, as did President Bill Clinton before him.
Ford says its U.S. sales rose 21 per cent in August over last year, fueled by the government's cash for clunkers program. Ford, Lincoln and Mercury dealers in the Houston region report a sales increase, as Mitchell Dale with McRee Ford in Dickinson explains.
"In the Houston region, we experienced a five per cent increase in retail sales year-over-year."
Ed: "How much did that federal program help, that ‘cash for clunkers'?"
"Well, I tell you, Ed, it helped in two different ways. The cash for clunkers program certainly stimulated additional sales. At our dealership, we sold 68. Could've done more, but we're limited with the availability of the most fuel-efficient models, the Focus, the Fusion and then our small SUV, the Escape. About 50 per cent of our sales for the month were non-clunker trade-ins."
A person familiar with the matter says Chrysler posted a 15 per cent drop in U.S. sales in August due to shortages of some smaller vehicles. August sales of new vehicles fell to 93,222 from 110,235 during the same month last year. They rose five per cent from July of 2009. The popular cash for clunkers program lowered supplies of fuel-efficient vehicles like the Dodge Caliber, the Chrysler Sebring and the Jeep Patriot. Going into August, five of Chrysler's most efficient vehicles were already at low inventory levels. Chrysler is also boosting production by 50,000 vehicles through the end of the year.
The U.S. manufacturing sector grew in August after shrinking for 18 straight months. The Institute for Supply Management, a trade group of purchasing executives, says its manufacturing index rose to 52.9 in August, from 48.9 in July. It's the first reading above 50, which indicates expansion, since January 2008. It's also the highest since June 2007. Analysts polled by Thomson Reuters expected a reading of 50.5. The index, which includes new orders, production, employment, inventories, prices and more, is based on a survey of the Tempe, Arizona-based group's members.
President Barack Obama says the promising report on the state of U.S. manufacturing is a sign that the hurting economy is moving in the right direction. The U.S. manufacturing sector grew in August for the first time in 19 months. Said the president: "It's a sign that we're on the path to economic recovery. There is no doubt that we have a long way to go.'' Obama said the steps the government have taken to help the economy rebound are working.
Pending U.S. home sales rose more than expected in July to the highest level in more than two years as first-time buyers rushed to take advantage of a tax credit that expires this fall. The National Association of Realtors says its seasonally adjusted index of sales contracts signed in July for previously occupied homes rose 3.2 per cent to 97.6. It was the sixth straight increase and 12 per cent above the same month last year. Economists surveyed by Thomson Reuters expected the index would edge up to 96.5. Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of how sales completed this month and next will turn out.
The government says construction spending edged down slightly in July as weakness in nonresidential building and government projects offset the best showing for home building in ten months. The Commerce Department said that construction spending dipped 0.2 per cent in July, worse than the flat reading that economists had expected. The drop followed a small 0.1 per cent rise in June. The July decline occurred even though construction of homes and apartments rose by 2.3 per cent in July. It was the best showing since last Sseptember and further evidence that the nation's long housing slump may finally be bottoming out.
Baseline Oil & Gas said it's filed for Chapter 11 bankruptcy protection after securing agreements with some creditors. The Houston-based energy producer blamed turmoil in the economy and global credit markets for the filing in federal bankruptcy court in Houston. The company says that as of June 30th it had liabilities of $138.6 million and assets of $2.96 million. The company says it'll continue to operate through the court process and will seek confirmation of its reorganization plan. Under a so-called prepackaged bankruptcy plan, a company negotiates with major lenders prior to filing for protection. The company's plan calls for $5 million of new capital to be provided as exit financing.
American Airlines is cutting 921 flight attendant jobs as it deals with a downturn in traffic and lower revenue. The airline said that the cuts will take effect October 1st. American, the nation's second-largest airline, says 228 employees will be furloughed--laid off but with rehiring rights--and the company put 244 more on leave for two months. Another 449 took voluntary options such as leave. The company says it planned to cut 1,200 flight attendant jobs but was able to reduce the number by adjusting staffing requirements for the winter. The airline said in June that it would cut jobs as it reduced flights to meet lower travel demand.
Southwest Airlines will temporarily halt flights on three routes early next year as it deals with a decline in air traffic and tries to bend its schedule to fit seasonal demand. The airline published a new schedule that covers flights from next January 9th to March 12th. The airline says it will cut one flight per day on 92 routes and increase service on 42 routes, usually also by one trip per day. Southwest also will suspend service between Albuquerque, New Mexico, and Portland, Oregon; and between Manchester, New Hampshire, and Phoenix, with flights resuming in February. Flights between Kansas City and Seattle will stop in January and resume in May, the airline says. It will add nonstop service from St. Louis to Boston and Milwaukee.
The Gulf Breeze Apartments on 21st Street in Galveston will get a makeover. The Galveston Housing Authority's Board of Commissioners last night approved moving forward with a $1.3 million modernization plan. Construction by Bay Commercial Construction and Courtney Harper & Partners begins next month on the 199-unit complex. Upgrades include new air conditioning units, flooring, cabinetry, kitchen appliances and fixtures.
Houston Community College Southwest has dedicated its new Stafford Campus Learning Hub with a ribbon-cutting ceremony. The 120,000-square-foot addition is on Cash Road in Stafford. That campus has grown to more than 70 acres, serving nearly twice the enrollment of others in the system. The hub provides 35 new classrooms and labs for 3,300 students.
Credit cards and predatory lending for mortgages are now among the top ten consumer complaints to state Attorneys General offices. Debt collection tops the list, followed by auto sales and home repair/construction, based on an annual survey by the National Association of Attorneys General. Consumers are reporting unauthorized charges and inaccurate late fees on credit and debit cards. Phony debt reduction services and foreclosure scams are also reported.
Hart Energy Consulting's International Fuel Quality Center says Sweden has the best ranking of the top 100 countries based on sulfur limits in on-road diesel, followed by Germany and Japan. The executive director of the center says it shows the tremendous movement being made globally toward zero sulfur fuels. IFQC expects the reductions to spread beyond on-road fuels to non-road fuels in the near future, including marine and jet fuel. All EU countries ranked in the top ten. The U.S. ranks 54th on the list.
The head of the Securities and Exchange Commission has put U.S. investment firms on notice to avoid using bonuses and other inducements to recruit brokers that could encourage them to generate high sales volumes and act against customers' interests. SEC Chairman Mary Schapiro, in an open letter to the CEOs of U.S. firms, noted recent news reports that some brokerages were using "enhanced compensation arrangements" to lure brokers. The arrangements, including big upfront bonuses and increased commissions for selling securities, "may carry with them enhanced risks to customers," Schapiro wrote.
The Federal Reserve says it has named four financial firms to help investors tap a government program intended to spark lending at cheaper rates to consumers and businesses. The Federal Reserve Bank of New York says the companies are: CastleOak Securities, Loop Capital, Wells Fargo Securities and Williams Capital Group. The term-asset-backed securities loan facility, or TALF, started in March and figures prominently in efforts by the Fed and the Obama administration to ease credit, stabilize the financial system and help end the recession.
eBay says it has reached a deal to sell most of its stake in Skype in a deal it says values the online telecommunications service at $2.75 billion. San Jose, California-based eBay says it will get $1.9 billion in cash and a $125 million note from the buyer. An investment group led by the private equity firm Silver Lake including Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board will take a 65 per cent stake in the company. eBay will retain a 35 per cent stake. It expects the deal to close in the fourth quarter of this year.