Thursday PM October 22nd, 2009
by: Ed Mayberry, October 22, 2009 8:10:30 pm
Retail gasoline prices in Texas have gone up by 14 cents a gallon since last week. AAA Texas reported that the average price per gallon at the pump was $2.47. Prices increased 13 cents nationally to $2.62. The increase was the state's highest since an 18-cent bump in May 2008. Houston and Galveston had the lowest price at $2.43 a gallon, up 17 cents in Galveston and 16 cents in Houston. El Paso continues to have the most expensive gas at $2.51, up ten cents in the last week. The auto club cites energy experts who believe the increase is due to traders buying and storing petroleum products in anticipation of an economic recovery.
A private forecast of economic activity rose for the sixth straight month in September, a sign the economy will keep growing next year. The Conference Board's index of leading economic indicators rose one per cent last month after a 0.4 per cent gain in August. Wall Street economists expected an increase of 0.8 per cent last month, according to a survey by Thomson Reuters. Economists expect the economy grew about three per cent in the third quarter after falling for a record four straight quarters. But many wonder if that pace can continue in the current quarter and next year as unemployment rises and consumers remain hesitant to spend. The Conference Board index's six-month growth rate through September was the strongest since 1983, but joblessness was weighing on the recovery.
The number of newly laid-off workers filing claims for jobless benefits rose more than expected last week, after falling in five of the past six weeks. There is little sign that employers are willing to hire, even as the economy shows signs of recovering. The Labor Department says new jobless claims rose to a seasonally adjusted 531,000 last week, from an upwardly revised 520,000 the previous week. Wall Street economists had expected only a slight increase, according to Thomson Reuters. The number of people continuing to claim benefits dropped for the fifth straight week to 5.9 million, from just over 6 million the previous week.
A government index shows home prices dipped slightly in August from the previous month, but remained above a low point reached in May. The Federal Housing Finance Agency says prices fell 0.3 per cent in August from July. The agency's index, based on loans owned or guaranteed by Fannie Mae and Freddie Mac, is 3.6 per cent below last year's levels and 10.7 per cent off its peak in April 2007. The index declined less than other housing market measurements during the housing bust because it excludes the most expensive homes and some of the risky loans that have fallen into foreclosure.
A house panel is looking into concerns of fraud among those taking advantage of the first-time homebuyer tax credit. The program has been central to the Obama administration's effort to get the housing market back on track. The Ways and Means Subcommittee hearing comes as Congress considers whether to extend, and possibly expand, a stimulus act provision that allows qualified first-time homebuyers a tax credit of up to $8,000. That benefit is scheduled to expire at the end of November. The committee is to examine past instances of abuse and consider ways to improve the program that has attracted more than a million homebuyers. The Internal Revenue Service has opened 107,000 examinations of questionable claims and identified 167 criminal schemes involving the tax credit.
The House Financial Services Committee has voted to speed up the enactment of tough new credit card rules from mid-February of next year to December 1st of this year. President Barack Obama has already signed legislation that would impose strict new rules on lenders, including limits on when and how banks hike rates. Most of the rules will take effect in mid-February, a date set by Congress to give banks time to prepare for the changes. But Democrats say lenders have abused the grace period by hiking rates ahead of time. The panel agreed to exempt lenders with fewer than two million credit cards in circulation. The measure still faces scrutiny by the full House and the Senate.
The House Financial Services Committee has voted to create a federal agency devoted to protecting consumers from predatory lending, abusive overdraft fees and unfair rate hikes. Democrats are hailing the 39-29 vote as a win for the average American. It's a major step forward in enacting President Barack Obama's plan to tighten the rules governing Wall Street. The legislation has been the target of an aggressive multimillion-dollar lobbying campaign by the financial industry, which contends that the agency would have dangerously broad reach. The vote indicates that democrats were willing to shrug off those concerns and are likely to pass the bill on the floor by the end of the year.
Federal regulators have taken an important step toward prohibiting broadband providers from favoring or discriminating against certain kinds of Internet traffic. Despite the concerns of telecommunications companies and the agency's two Republicans, the Federal Communications Commission voted to begin writing so-called "network neutrality" regulations. Proponents say the rules would prevent phone and cable companies from abusing their control over the market for broadband access. FCC Chairman Julius Genachowski says regulations are needed to ensure that broadband subscribers can access all legal web sites and services, including Internet calling applications and video sites that compete with the broadband companies' core businesses. Next up for the FCC is to actually craft the rules, with a vote on whether to adopt them expected to come by next summer, after public hearings.
Houston biotech firm LaserGen is receiving an award from the Texas Emerging Technology Fund. The $250,000 pre-see commercialization award was announced by Governor Rick Perry during the Gulf Coast Innovation Conference & Showcase at the Hilton Americas, where the Houston Technology Center hosted 80 area companies that presented their latest technologies.
A top White House economist says spending from the $787 billion economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year. Christina Romer, the chair of President Barack Obama's council of Economic Advisers, said that the $194 billion already spent gave a jolt to the economy that contributed to growth in the second and third quarters of the year. She told a Congressional panel that by the middle of next year, the impact of the stimulus will level off. Romer said spending so far has saved or created 600,000 to 1.5 million jobs but warned that unemployment will remain high, above 9.5 per cent, through the end of 2010.
The Federal Reserve is proposing for the first time to police banks' pay policies to ensure they don't encourage employees to take reckless gambles like those that contributed to the financial crisis. Unlike a Treasury plan to slash pay at certain companies that were bailed out with large sums of taxpayer money, the Fed proposal would cover thousands of banks, including many that never received a bailout. The Fed would not actually set compensation. Instead, the central bank would review--and could veto--pay policies that could cause too much risk-taking by executives, traders or loan officers.
The Texas Treasury lost $19.5 million through an investment in the ponzi scheme run by convicted financial swindler Bernard Madoff. The Houston Chronicle reports that the money was part of a $224.5 million investment the Texas Treasury Safekeeping Trust had with a Texas-based hedge fund called Austin Capital Safe Harbor. Austin Capital closed in May due to losses it suffered in one of Madoff's scam investment funds. R.J. deSilva, a spokesman for State Comptroller Susan Combs, said the $19.5 million was written off last December after Austin Capital notified the state the money had been lost when Madoff's ponzi scheme collapsed.
Microsoft's newest version of Windows has arrived. Windows 7 is available on new computers, and as an upgrade for some older PCs. Microsoft hopes people like Windows 7 more than its predecessor, Vista, which tended to be slow and didn't work well with existing programs and devices. Windows 7 promises to boot up faster and cut down on the clicks needed to get common tasks done. Microsoft has also updated the look of Windows and added features to help people keep track of open programs or folders. The launch of Windows 7 comes as computer makers and retailers such as Best Buy are cutting prices for PCs to try to goose holiday-quarter sales.
Federal officials have lifted a ban on commercial citrus shipments from Florida to the ten other states and U.S. territories that grow the crops. The U.S. Department of Agriculture lifted the ban three years after it quarantined Florida oranges and grapefruits because of crop pests and diseases. Research now shows fresh fruit which has been disinfected isn't at risk of spreading canker, a bacterial disease that blemishes fruit but is harmless to humans. Florida has also been besieged by greening, a bacteria that sours fruit and gradually kills trees. A quarantine still stands on the shipment of trees, stems and leaves to prevent its spread. The ban covered Texas and four other states--California, Arizona, Louisiana, Hawaii--and five outlying island territories.
The maker of Huggies diapers and Kleenex tissues is reporting that its profit jumped 41 per cent in the second quarter because of higher prices on its products and lower commodity and energy costs. A stabilizing economy also led Dallas-based Kimberly-Clark to raise its outlook for revenue and earnings. Kimberly-Clark earned $582 million. That compares with $413 million a year ago. The company saw lower prices for raw materials like wood pulp and plastic resins. That helped it navigate a two per cent revenue decline to $4.91 billion. Analysts polled by Thomson Reuters expected $4.87 billion in sales.