Tuesday PM September 15th, 2009
by: Ed Mayberry, September 15, 2009 4:09:32 pm
A federal judge has appointed a public defender to represent jailed Texas billionaire financier R. Allen Stanford. That's after Stanford's previous attorney indicated he no longer wanted to defend Stanford against charges that he bilked investors out of $7 billion. During a court hearing, Stanford's attorney, Dick DeGuerin, said he still wanted to withdraw. He says he has no assurances that he'll be paid. Stanford wants to be represented by Washington-based attorney Robert Luskin, who represents former White House political adviser Karl Rove. But Luskin also wants assurances that he'll be paid. After Stanford said he didn't know if he had funds to hire an attorney, U.S. District Judge David Hittner appointed the Federal Public Defender's Office in Houston to represent him.
Stanford spent $500,000 lobbying to gain U.S. approval for Cuba to participate in his 2008 International Cricket Tournament. According to Stanford's lobbyists--the Treasury Department turned him down. The federal agency declined comment to the Associated Press. Interviews and documents obtained by AP show that Stanford, a huge cricket aficionado, lobbied the Treasury and Sate Departments to approve his plan last year. Stanford pointed to Cuba's participation in the World Baseball Classic as a precedent. Stanford, who remains in custody in Texas, pleaded not guilty in June to charges of swindling investors out of $7 billion as part of an investment scam. A lobbying report shows that Stanford's now-defunct company, Stanford Financial Group, paid the Ben Barnes Group of Austin about $500,000 over six months. The funding was for “matters related to the International Cricket Tournament” and for “economic development in the Caribbean, specifically the Virgin Islands.”' the firm is headed by former Texas Lieutenant Governor Ben Barnes.
Blockbuster is planning to close as many as 960 stores by the end of next year. That would shrink the video rental chain by more than 20 per cent as it struggles against stiff competition from Netflix and Redbox. The store closures disclosed in documents shows Blockbuster is having to cut much deeper than it anticipated to save money and keep its lenders happy. Blockbuster now expects to close between 810 and 960 of its U.S. stores through 2010, up from its the 380 to 425 stores that normally would be closed. If Blockbuster hits the high end of the new target for store closures, it will represent 22 per cent of its 4,356 U.S. stores. The Dallas-based company has closed 276 stores so far this year.
Dell will pay $4 million in restitution and penalties more than a year after a New York court found the company engaged in false and deceptive advertising of its promotional credit financing and warranties. New York Attorney General Andrew Cuomo says some consumers paid for things they didn't get, including warranties that cost them an extra $99 to $250. Dell didn't admit to any wrongdoing in a settlement with the state. Cuomo says Dell must clearly disclose that most customers don't qualify for free financing or “next day” repair service. Customers can apply for refunds through www.nyagdell.com. It's unclear how many are affected. A spokesman for Round Rock-based Dell says the company is glad to resolve the matter.
Single-family home sales in the Houston market are 10.1 per cent lower than the same month last year, according to the Houston Association of Realtors. Sales were boosted by seasonal summer home buying, including an influx of first-time buyers taking advantage of the federal government’s soon-to-expire $8,000 tax credit. HAR chair Vicki Fullerton says Houston still fares better than other markets, such as Phoenix.
“Ninety per cent of all of the closed sales were either foreclosures or short sales, and in Las Vegas, Nevada, about 85 per cent, which is 8.5 out of every ten closings were short sales or foreclosures. So when you look at our market at 16 per cent foreclosures, we’re doing very well, considering what’s going on nationally.”
The August median price for a single-family home is at $160,880—the third-highest level in 2009. Total dollar volume for properties sold was $1 billion, compared to $1.2 billion last year.
Federal Reserve Chairman Ben Bernanke says the worst recession since the 1930s is probably over. Bernanke says the economy is probably growing now, but it won't be sufficient to prevent the unemployment rate, now at a 26-year high of 9.7 percent, from rising. In responding to questions at the Brookings Institution, Bernanke says “the recession is very likely over at this point.” The Fed boss also says he is confident that Congress will enact a revamp of the nation's financial rule book to prevent future crisis from happening. Bernanke says: “i feel quite confident that a comprehensive reform will be forthcoming.” President Barack Obama urged Congress on Monday to enact legislation this year.
President Barack Obama is claiming credit for the signs of improvement in the economy. Speaking to autoworkers at a General Motors plant in northeast Ohio, Obama said his administration had no choice but to intervene to prevent the collapse of GM and Chrysler. He says GM has retooled and is now back on a path to being a solid business, in part thank to its work force. Obama is also crediting the cash for clunkers program, which offered drivers up to $4,500 to buy more fuel-efficient vehicles. Standing near a production line where the compact Chevy Cobalt is produced, the president noted that 150 workers returned to their jobs yesterday and more than a thousand would be back in the next couple weeks. The president spent the day speaking to friendly groups of autoworkers and union members, trying to assure them that the economy is coming back.
The Obama administration is unveiling plans to require higher efficiency standards for cars and trucks and tougher rules on vehicle greenhouse gas emissions. Transportation Secretary Ray LaHood and EPA administrator Lisa Jackson are calling for the auto industry's fleet of new vehicles to average 35.5 miles per gallon by 2016. The plan follows up on President Barack Obama's announcement in may that the government regulations would link emissions and fuel economy standards. The Obama administration estimated earlier this year the requirements would cost up to $1,300 per new vehicle by 2016 but take just three years to pay off the investment and save about $2,800 over the life of the vehicle through better gas mileage.
For the first time in nearly 30 years, the Environmental Protection Agency plans to strengthen standards for water pollution from coal-fired power plants. The agency said that equipment required to reduce air pollution has increased the harmful contaminants in water discharged by power plants. It also said that existing regulations are not enough to protect water quality and wildlife. In a study completed earlier this year, the EPA found that only a fraction of the nation's power plants were using the necessary technologies to remove pollutants before they are released into waterways. The announcement comes a day after three environmental groups threatened to sue the EPA for failing to update its regulations, first put in place in 1982.
President Barack Obama says the success of organized labor and the American middle class are essential to the future prosperity of the country. In a rousing speech to the AFL-CIO convention, Obama told the labor federation that the revitalization of the U.S. economy depends on better lives for working class Americans. Unions across the country played a big role in Obama's presidential election victory last November over Republican John McCain.
Treasury Secretary Timothy Geithner says President Barack Obama is determined to keep his campaign promise not to increase income taxes on the middle classes. Asked how an increase can be avoided at a time of surging deficits, Geithner repeated Obama's pledge not to raise taxes for people making under $250,000 a year. On ABC's Good Morning America, the secretary said Obama is “very committed” to the no-middle-class tax increase pledge. Geithner also said things are better now, but no recovery will be under way until jobs become more plentiful. Still, he said the country has come a long way, saying “we really were on the verge of a full-scale run” on banks a year ago.
Researchers say the cost of employer-sponsored health insurance is rising modestly again this year but bigger increases may lie over the horizon. The average annual premium for employer-sponsored family health coverage rose five per cent in 2009 to more than $13,000, mirroring last year's increase. Single coverage costs were nearly $5,000 per person. Experts say the possibility of health care reform and an increase in high deductible plans may be helping to contain premium growth. But Kaiser Family Foundation CEO Drew Altman says premium increases have historically rebounded after slowing for a few years. Kaiser and the Health Research and Educational Trust reported on the growth this morning.
A state official says a five-year, $50 million federal grant will assist employees of small businesses in purchasing health insurance. The new executive commissioner of the Texas Health and Human Services Commission, Tom Suehs, said in a statement that the project will stretch “limited taxpayer dollars to insure more Texans.” The state will contribute 20 per cent in matching funds. Workers earning up to 300 per cent of the federal poverty level, which is about $66,000 for a family of four, would be eligible for the money. Three programs are scheduled to start in the next year or so and their participants will be eligible for the health insurance purchases. The programs are Healthy Texas, TexHealth Coalition and Community First Health Plan.<,/p>
A new report finds consumers' confidence about their health care continues to decline after August's contentious disputes. The health care consumer confidence index is compiled by the Robert Wood Johnson Foundation, a philanthropic organization that supports health care reform. It uses people's responses to a series of questions to determine an overall score. The decline in confidence was greatest among seniors eligible for Medicare and young adults aged 18-34. That suggests President Barack Obama's proposed health care overhaul is raising alarm bells for both the old and the relatively young. Overall, Americans' confidence in insurance coverage, affordability and access dropped 1.1 points in August, a smaller decline than in July; among seniors, the drop was 3.6 points; among young adults, it was 5.5 points.
An airline trade group expects the industry to lose $11 billion worldwide in 2009, with losses continuing into next year. The International Air Transport Association had been expecting a smaller loss of $9 billion this year. But airlines lost $6 billion in the first half alone. The trade group says it's starting to see the beginnings of an economic recovery, especially in Asia. That's putting more travelers and freight back on airplanes. But passengers are paying less to travel than they used to, and oil prices have risen. The air transport group says those factors are more than offsetting economic growth. The group estimates losses next year of $3.8 billion. It doesn't expect airline profits until 2011 at the earliest.
Retail sales jumped in August, spurred by widespread gains beyond the increases of autos and gasoline that economists expected. The report is a sign that consumers may be less cautious about spending as the economy recovers. The Commerce Department says retail sales rose a seasonally adjusted 2.7 per cent last month, after falling 0.2 per cent in July. That beat analysts' expectations of a two per cent increase, according to a survey by Thomson Reuters. Excluding autos, sales rose 1.1 per cent, ahead of an expected 0.4 per cent jump. Excluding autos and gas, sales rose 0.6 per cent. Sales rose at auto dealers due mainly to government's popular cash for clunkers program and at gas stations. Electronics and appliance stores, department stores, and sporting goods stores also posted gains.
The government says inflation at the wholesale level shot up at double the expected rate in August as gasoline prices soared by the largest amount in a decade. The increase wasn't seen as a signal that inflation was in danger of becoming a problem, however, given the economy's continued weakness. The Labor Department says that wholesale prices rose by 1.7 per cent in August, sharply higher than the 0.8 per cent rise economists had forecast. Wholesale prices had fallen by 0.9 per cent in July. Both months were heavily impacted by energy prices. Excluding volatile energy and food costs, core inflation posted a more modest 0.2 per cent increase, close to the 0.1 per cent advance economists had expected.
Businesses slashed their inventories for the 11th straight month in July, but sales posted a second consecutive gain, providing hope that companies soon will switch from trimming stockpiles to increasing their orders. The Commerce Department says inventories dipped one per cent in July, slightly more than the 0.9 per cent cut that economists expected. The drop continued a string of declines that began in August 2008. Sales rose 0.1 per cent in July after a 1.1 per cent increase in June, the first back-to-back gains in a year.
A job fair is set for midday tomorrow at the Workforce Solutions Alief location on Bissonnet at Dairy Ashford. State Representative Kristi Thibaut says a number of major employers will be on hand, including schools, hospitals, banks, grocery stores, Comcast, Best Buy, Office Team and other employers.
Flanked by a cow named Betty--and six of his Senate colleagues--Senator Bernie Sanders is calling for the House to pass an amendment increasing price supports to dairy farmers. The Vermont Independent made his pitch in a park adjacent to the Capitol, posing with his colleagues and the cow. He spoke in favor of an amendment to provide $350 million in support to dairy farmers. Sanders and Senators Amy Klobuchar of Minnesota, Charles Schumer of New York, Patrick Leahy of Vermont, Bob Casey of Pennsylvania, Jeanne Shaheen of New Hampshire and Tom Udall of New Mexico stood with members of the National Farmers Union. The Senators said dairy farmers are suffering through one of the worst periods in recent history. Sanders says the agriculture industry will suffer if dairy farms continue to collapse.
Texas farmers and ranchers with livestock grazing losses due to drought or fire can seek federal help. The U.S. Department of Agriculture says producers may begin applying for benefits under the livestock forage disaster program. Agriculture Secretary Tom Vilsack announced that applications would be accepted related to qualifying losses since 2008. The money comes from the Agricultural Disaster Relief Trust Fund. The forage disaster program, for drought, involves losses on land that is native or improved pastureland with permanent vegetative cover or a crop planted specifically for grazing. Other rules apply.
The average price of a hotel room dropped 17 per cent in the first six months of 2009 over last year, according to a hotels.com hotel price index. The drop in the average was driven by drops on all continents. In North America, prices were down 17 per cent. Prices in Europe fell 16 per cent. The index tracks prices paid by customers of 78,000 hotels at 13,000 locations around the world. Hotels.com has been tracking the index since January 2004. Hotels.com is part of Expedia.