Tuesday PM October 20th, 2009
by: Ed Mayberry, October 20, 2009 8:10:25 pm
An appeals court has ruled a former Enron executive should be acquitted of all the charges he faced related to financial fraud at the one-time energy giant. The 5th U.S. Circuit Court of Appeals in New Orleans said it would not revisit the case of F. Scott Yeager, a former executive at Enron's failed broadband venture. In it's ruling, the appeals court sent the case back to a federal court in Houston and ordered it to enter acquittals on all counts Yeager faced. The ruling comes after the Supreme Court in June threw out a lower court ruling that would have allowed a retrial on charges for which a jury could not reach a verdict at Yeager's 2005 trial.
The Houston Association of Realtors says September sales of single-family homes rose 32 per cent compared to the same month a year ago. But figures from September 2008 were down because of Hurricane Ike disruptions. Sales of homes were slower because of a backup of properties needing repairs, while some businesses were temporarily down. An influx of first-time buyers have been taking advantage of the federal government's $8,000 tax credit that expires at midnight, November 30th. Vicki Fullerton is HAR chair and broker at RE/MAX of The Woodlands and Spring."Ike wasn't just a three or a four-week period. It really impacted our final fourth quarter. And so I think that these numbers are going to be really reflective of maybe a better October and November. The confidence level in Houston has increased, as evidenced by the number of transactions, the volume in the field and the activity out there. Houston is doing really well right now. I'm pleased with those numbers."
The median price of a home edged up 0.2 per cent to $156,200. The average price of a single-family home dipped 1.6 per cent last month to $205,925.
Construction of new homes edged up slightly in September, helped by a rebound in single-family construction. However, in a worrisome sign for the future, applications for building permits fell by the largest amount in five months. The Commerce Department says construction of new homes and apartments rose 0.5 per cent in September to a seasonally adjusted annual rate of 590,000 units. That was a weaker showing than the 610,000-building rate that economists had been forecasting. New applications for building permits, considered a good sign of future activity, fell by 1.2 per cent in September, the biggest decline since a 2.5 per cent drop last April. That underscored worries that the fledgling housing revival could be derailed by continued soaring unemployment and the expiration on November 30th of the government's $8,000 tax credit for first time home buyers.
Secretary of the Interior Ken Salazar has requested an investigation into last-minute changes the Bush administration made to speed up oil-shale development in the Rocky Mountains. Salazar says he's asking his department's inspector general, Mary Kendall, to look into the changes. Salazar says that in the final days of the Bush administration, the Interior Department locked in a bargain royalty rate on 30,000 acres of existing oil-shale leases for oil companies. Salazar says the changes were made January 15th without any public notice. In addition, Salazar said he was opening a second, more environmentally sensitive round of oil-shale leasing for Colorado, Utah and Wyoming.
State insurance regulators have rejected a request from the Texas Windstorm Insurance Association to increase rates by ten per cent. The state-backed insurer, which insures thousands of policyholders who can't find coverage in the private market, must seek approval before it can boost rates five per cent or more. The Houston Chronicle reports that the insurer had asked permission to increase rates for homeowners and businesses. Jim Oliver, executive director of the association, says board members will discuss requesting a different rate change during a meeting scheduled for December. The insurer had 228,000 policyholders as of September 30th.
The nation's wind industry is continuing to open new wind farms with the help of nearly $1 billion in federal stimulus grant money. The American Wind Energy Association reported that developers installed 1,649 megawatts of wind power capacity—enough to serve the equivalent of 480,000 average households--in the third quarter. That's about 18.7 per cent more than a year earlier. The trade group says turbine production from July to September was less than 50 per cent of what it was a year ago because of excess supply. The association says it expects the industry to add about 6,000 megawatts of additional wind-generated capacity this year, down from the 8,358 megawatts installed in 2008.
Wholesale prices dropped unexpectedly in September due to lower energy costs, as inflation remains in check amid signs of a broad economic recovery. The Labor Department says the producer price index fell 0.6 per cent last month. Wall Street economists expected a flat reading. The drop comes after a steep rise in August. In the 12 months ending in September, the index dropped 4.8 per cent, more than analysts expected and the 10th straight month of annual declines. Excluding volatile food and energy costs, the core index fell 0.1 per cent in September. In the year ending last month, the core rose 1.8 per cent.
Shoppertrak, a Chicago-based research firm, is forecasting that total holiday sales will rise 1.6 per cent compared with a year ago, which would reverse last year's steep decline. The research firm also predicts a 4.2 per cent in foot traffic compared to a year ago. Last year, holiday sales fell 5.9 per cent while foot traffic dropped 15.4 per cent, according to Shoppertrak estimates. The research firm tracks customer traffic at more than 45,000 stores. The holiday sales estimate is a bit rosier than other forecasts offered over the past few weeks, which have been at best no better than unchanged from last year's debacle. The holiday 2008 season saw the biggest sales decline in at least several decades.
The average price of public colleges rose 6.5 per cent this fall to slightly more than $7,000. The figures were released in a comprehensive annual study released by the nonprofit organization The College Board. The estimated price that students actually pay after financial aid was about $1,600 at public four-year colleges. But that was still higher than last year as financial aid failed to keep up with tuition increases that colleges blame mostly on state budget cuts. Tuition at community colleges also rose. But after counting financial aid, community colleges are still essentially free to the average student. At private colleges, prices rose 4.4 per cent to over $26,000--though the average bill after aid was under $12,000.
U.S. medical school enrollment is up for the 11th consecutive year as colleges seek to meet a growing demand for physicians. First-year enrollment climbed two per cent over 2008, and now totals nearly 18,400 students. The number of applicants remained mostly stable at around 42,000. Four new medical schools opened their doors this year; several others expanded class size. That's according to an Association of American Medical Colleges report. The number of black and Asian enrollees climbed slightly while Hispanic first-year students remained mostly unchanged. Whites still make up about 70 per cent of first-year students. The group's president says residency training slots need to increase to accommodate more medical school students.
The Houston Symphony says single-ticket sales for the three classical performances of the fall 2009-2010 season have exceeded the sales of the last two seasons. The symphony has eight more months of performances this season totaling almost 100 individual concerts. Symphony management attributes the increased numbers to new ticket packages, more targeting marketing and communication campaigns, collaborations with the arts community and intriguing musical presentations.
State historical markers outside the headquarters of Lufkin Industries tell how the company started repairing sawmill equipment at the turn of the 20th century and grew to make many of the pumps dotting the world's oil fields. But a different history has been written in a class-action lawsuit winding to a close. More than a thousand of the company's current and former black employees stand to divvy up $5.5 million in back pay and interest as compensation for what a federal judge in June called the company's unlawful discrimination in awarding promotions. While each worker will get a relatively modest sum, those who brought the lawsuit see the award as validation of their struggle for equality in a region often associated with racial turmoil.
Federal regulators are likely to offer a limited emergency extension of a rescue program that guarantees hundreds of billions of dollars in U.S. banks' debt. The board of the Federal Deposit Insurance Corporation is expected to vote to provide the six-month extension in some cases of the temporary program, which ends October 31st. Established a year ago at the height of the financial crisis, the program was intended to help thaw the freeze in bank-to-bank lending. The FDIC has provided insurance for loans between banks, guaranteeing the new debt in the event of payment default by the issuing bank. To qualify for the special extension, banks will have to show they are unable to issue debt without government backing due to circumstances beyond their control.