Tuesday PM February 16th, 2010
by: Ed Mayberry, February 16, 2010 10:02:00 pm
Toyota says it plans to idle production at assembly plants in Texas and Kentucky while it grapples with massive recalls in the United States. Toyota spokesman Mike Goss says a plant in San Antonio, has scheduled production breaks for the weeks of March 15th and April 12th. Goss says a plant in Georgetown, Kentucky, has scheduled a non-production day on February 26th and may not produce vehicles on three more days in March and April. He says Toyota is adjusting production so it does not build up too much inventory for dealers. Toyota has recalled 8.5 million vehicles around the world to address problems with gas pedals, floor mats and brakes. Toyota says its workers will be retained and will receive additional training.
The Transportation Department is formally demanding documents related to Toyota's massive recalls in the United States to find out if the automaker conducted three of its recalls in a timely manner. The legal documents delivered to Toyota demand that the company tell the government when and how Toyota learned of the safety defects in millions of vehicles.
Houston oil and natural gas driller Pride International has set aside over $56 million for fines connected with alleged bribery in Venezuela and Mexico, according to the Houston Chronicle. Pride says that's an estimate for an anticipated settlement with the Department of Justice and Securities and Exchange Commission. The company admitted to payments of less than $1 million to extend drilling contracts in Venezuela and obtain customs clearance for a rig and to move staff through immigration in Mexico.
January sales of single-family homes across the greater Houston area slid 12.3 percent compared to the same month last year, according to the Houston Association of Realtors. But homes priced from $500,000 showed dramatic gains. The January single-family median price is at $144,500, which is 11.9 percent higher than a year ago. The average price appreciated for the fourth straight month, reaching $194,154—up 18.4 percent compared to January 2009. That's the highest January reading in Houston history. HAR credits first-time homebuyer tax credits and expanded credit for existing homeowners.
The National Association of Home Builders says its housing market index rose two points in February, a sign that low interest rates and federal tax credits for buyers boosted confidence in consumer demand for new homes. The builders group says the index reached 17 in February, after falling for two consecutive months. The increase shows builders are feeling better about their prospects as evidence emerges that the job market may be improving. But challenges still exist, such as a high number of foreclosures and a lack of financing for new projects. The index reflects a survey of 528 residential developers across the U.S. index readings below 50 indicate negative sentiment about the market. The last time it was above 50 was in April 2006.
A new report says the percentage of homeowners late with mortgage payments hit another record during the last three months of 2009, and the pace at which they fell behind took a turn for the worse. The credit reporting agency Transunion said 6.89 percent of mortgage payments were 60 or more days past due in the fourth quarter of 2009. That's up from 4.58 percent in the final three months of 2008. The old record delinquency rate was 6.25 percent in the third quarter of 2009. The latest report marked the 12th consecutive quarter--equal to three full years--that delinquency rates have risen from the previous year. More worrisome was that the quarter-to-quarter trend veered higher after declining in each of the previous three quarters.
Homelessness in rural and suburban America is straining shelters this winter as the economy founders and joblessness hovers near double digits. Greg Blass, the commissioner of social services in Suffolk County on eastern Long Island, New York, says his agency is seeing many families who've never sought government help before, along with more requests for food stamps, heating assistance and Medicaid. The federal government is again counting the nation's homeless. By many accounts, the suburban numbers continue to rise. Last year, the U.S. Department of Housing and Urban Development's annual survey found overall homelessness numbers steady, but the percentage of rural or suburban homelessness rose from 23 percent to 32 percent.
Three large companies have left the U.S. Climate Action Partnership, a coalition of more than two dozen companies and environmental groups lobbying Congress to pass a bill combatting climate change. Oil companies ConocoPhillips and BP America, as well as Caterpillar, said Tuesday they were not renewing their memberships in the group. The defections were widely seen as a blow to Congressional efforts to cap U.S. emissions of pollution-causing gases blamed for global warming. ConocoPhillips Chairman Jim Mulva said Congress has unfairly penalized domestic oil refineries and ignored natural gas companies. The climate coalition includes some of the country's biggest electric utilities and oil companies, as well as five environmental groups.
President Barack Obama is making roughly $8 billion in federal loan guarantees available to help build the first U.S. nuclear power plant in three decades. Discussing a plant envisioned for Burke County, Georgia, Obama told a union audience that the initiative will create thousands of construction jobs and 800 permanent jobs. He called it "only the beginning" of efforts to develop "safe, clean" energy-efficient technologies. Obama has been arguing that the country must develop cleaner energy technologies and modernize the means by which it powers itself. At the same time, he has said that policymakers must not conclude they have to choose between a cleaner environment and sufficient energy supplies to meet demand.
An electric utility says all power has been restored following a snowstorm that affected more than 500,000 Texas customers. Oncor has all customers back on line. Oncor says crews late Monday completed restoring power to the Dallas-Fort Worth area after last week's snow that that brought down trees and dragged along power lines. Oncor says some customers could have spotty outages in the coming weeks "until weakened and damaged limbs or trees are removed." The winter weather included a record 12.5 inches of snow in the Dallas area by last Friday. Oncor operates the largest distribution and transmission system in Texas, delivering electricity to more than three million homes and businesses.
A new audit finds that the Census Bureau wasted millions of dollars in preparation for its 2010 U.S. population count, including thousands of temporary employees who picked up $300 checks without performing work and others who overbilled for travel costs. Federal investigators caution the excessive charges could multiply once the $15 billion headcount begins in earnest next month unless the agency imposes tighter spending controls, according to excerpts of a forthcoming audit obtained by the Associated Press. On a positive note, investigators backed the Census Bureau's decision to spend $133 million on its advertising campaign, saying it was appropriate to boost public awareness. The spending included a $2.5 million super bowl spot that some Republicans had criticized as wasteful.
A Texas energy company convicted of illegally storing hazardous mercury in a rundown rhode island building has asked a federal appeals court to throw out an $18 million penalty. A federal judge in October fined Southern Union $6 million and ordered it to pay an additional $12 million for storing the mercury without a permit in a neglected warehouse in Pawtucket. The mercury was exposed to the public in 2004 after vandals broke into the building and dumped containers of the hazardous liquid at a nearby apartment complex. Southern Union says in papers filed with the 1st U.S. Circuit Court of Appeals that the fine was "grossly excessive" and far higher than the punishment it says is handed out for much more egregious behavior. The penalty was stayed while the company appealed.
Victims of the global fraud allegedly run by fallen financier R. Allen Stanford have filed a class-action lawsuit against the eastern Caribbean central bank, five regional financial institutions and the government of Antigua and Barbuda. The filing falls on the one-year anniversary of the start of the U.S. Securities and Exchange Commission's enforcement action against Stanford and top management of his former tropical empire in Antigua. Attorney Peter D. Morgenstern says it was filed in U.S. District Court in Dallas. Stanford is accused of masterminding a $7 billion ponzi scheme and promising inflated returns to some 28,000 investors. Stanford--who became Antigua's largest private employer--denies the allegations.
The government says that foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion. The reductions in holdings, if they continue, could force the government to make higher interest payments at a time that it is running record federal deficits. The Treasury Department reported that foreign holdings of U.S. Treasury securities fell by $53 billion in December, surpassing the previous record of a $44.5 billion drop in April 2009. The big drop in China's holdings meant that it lost the top spot in terms of foreign ownership of U.S. treasuries, dropping to second place behind Japan.
The availability of high-speed Internet access continues to grow. Still, about 40 percent of Americans do not have broadband at home. That comes from new Commerce Department statistics that underscore the challenges facing policymakers trying to bring affordable high-speed Internet connections to all Americans. The Commerce and Agriculture Departments are handing out $7.2 billion in stimulus funding for broadband. Also, next month the Federal Communications Commission is due to deliver a broadband plan to Congress. Lack of broadband availability is just one challenge for Washington, because even in places where broadband is available, not everyone subscribes. Thirty-eight percent of households without broadband say they don't need it or want it.
The nation's top telecommunications regulator says he wants 100 million U.S. households to have access to have ultra-high-speed Internet connections by 2020. Speaking in Washington, Federal Communications Commission chairman Julius Genachowski said those connections should be 100 megabits per second, several times faster than most home connections now. He also wants the U.S. to establish test-bed networks to experiment with even higher broadband speeds. Both proposals will be part of a national broadband plan that the FCC will deliver to Congress next month. The plan was mandated by last year's economic stimulus bill.Earnings
Whole Foods Market says stronger sales helped send its first-quarter profit soaring. The strong quarter prompted the natural and organic grocer to raise its earnings and revenue outlook for the year. Whole Foods says it earned $49.7 million for the quarter. That's up from $27.8 million that it earned in the same quarter last year. Sales for the company grew seven percent to $2.64 billion as Whole Foods used better prices to draw more shoppers. Whole Foods is based in Austin.