Wednesday PM March 10th, 2010
by: Ed Mayberry, March 10, 2010 9:03:00 pm
The government says unemployment rose in 30 states in January, evidence that jobs remain scarce in most regions of the country. The data is somewhat better than December, when 43 states reported higher unemployment rates, but worse than November, when rates fell in most states. Still, five states reported record-high joblessness in January. they are California, at 12.5 percent; South Carolina, 12.6 percent; Florida, 11.9 percent; North Carolina, 11.1 percent; and Georgia, 10.4 percent. Michigan's unemployment rate is still the nation's highest, at 14.3 percent. Thirty-one states added jobs in January, up from only 11 in the previous month. But the job gains weren't enough, in many cases, to lower the unemployment rate.
Businesses trimmed inventories at the wholesale level again in January even though sales rose for a tenth consecutive month. The dip in inventories underscored that businesses remain cautious about restocking their depleted shelves. The Commerce Department said that inventories at the wholesale level were reduced 0.2 percent in January following a one percent drop in December. Sales were up a solid 1.3 percent, the best showing since a 3.6 percent rise in November. Economists are hoping that the steady gains in sales will soon prompt a sustained rebound in inventory restocking. That would trigger increased factory production and provide support for the fledgling recovery.
A study says there's a plausible connection between a series of earthquakes in North Texas and natural gas drilling. The dozen or so minor quakes were reported in a few Dallas suburbs from the fall of 2008 through last spring. The largest was a 3.3-magnitude quake, and no major injuries or damage were reported. The Southern Methodist University and University of Texas study says 11 more quakes occurred that were too small for anyone to notice. The first quakes occurred after natural gas drilling began near Dallas-Fort Worth International Airport--and none have been reported since that well stopped operating last fall. The study doesn't include information about last summer's series of quakes in Cleburne, about 50 miles southwest of Dallas.
Gasoline refiners at CERAWeek predict continued reduced refining capacity, in response to the weak economy and decreasing demand. CERAWeek is the energy industry conference hosted by HIS Cambridge Energy Research Associates at the Hilton Americas. The refining industry expects refining margins to improve only slightly this year. Margins are the difference between the cost of crude oil and the prices paid for refined products. One refiner says another two million barrels of refining capacity per day will have be trimmed to reach acceptable margins.
OPEC has raised its projections for oil demand growth this year by 100,000 barrels per day, but stresses that gains could be eroded if the U.S. government scales back on stimulus efforts before the country's economy fully recovers. The Organization of the Petroleum Exporting Countries said in a report that world oil demand was projected to climb to almost 900,000 barrels per day, or 100,000 barrels a day more than its February projection. But the 12-member group that supplies about 35 percent of the world's crude cautioned that the recovery was tied to that of the global economy. It warned that demand growth could falter should governments scale back on stimulus efforts too quickly. OPEC is scheduled to meet March 17th.
The New Orleans coroner says a Houston energy executive drowned in the Mississippi River, and apparently hit his forehead as he fell from a steamboat dock. Dr. Frank Minyard said that the autopsy of 54-year-old Douglas Schantz found a lesion on his forehead as well as evidence of drowning. Minyard says he expects results of blood tests in two to three weeks, showing how much Schantz drank before leaving a Bourbon Street bar about 2 a.m. Friday. From the bar, Schantz wandered over to the Steamboat Natchez dock, climbed over a guard rail and fell from a slender ledge while walking toward the gangplank. Schantz was president of Sequent Energy Management. He came to New Oorleans to give Tulane University's Energy Institute $25,000 from the company.
The Senate has passed legislation to give months of continued jobless checks to people who have been out of work for more than half a year and help the unemployed pay for health insurance. The jobless aid accompanies a host of other provisions that would prevent doctors from absorbing cuts to Medicare payments and help financially strapped states cope with spiraling Medicaid bills. The 62-36 vote sends the measure into talks with the House, which passed companion legislation last year but is wary about some senate provisions included to defray its impact on the deficit. The bill also extends a variety of tax breaks for businesses and individuals that are popular with senators in both parties.
The government ran up the largest monthly deficit in history in February, keeping the flood of red ink on track to top last year's record for the full year. The Treasury Department said that the February deficit totaled $220.9 billion--14 percent higher than the previous record set in February of last year. The deficit through the first five months of this budget year totals $651.6 billion--10.5 percent higher than a year ago.
Texas collected $1.6 billion in sales tax revenue in February—down 8.8 percent compared to the same month a year ago. That's an improvement over eight straight months of double-digit declines. Comptroller Susan Combs says sales tax revenue continues to be down in retail, oil and gas production and construction. Combs will deliver $404.4 million in March sales tax payments to cities, counties, transit systems and special purpose taxing districts. State sales tax revenue for February and the March payments to local governments reflect sales that occurred in January.
The head of the Health and Human Services Department is sketching out a stark choice for the nation's insurers: oppose reform and eventually lose customers, or work with the Obama administration to improve the legislation. Secretary Kathleen Sebelius told health insurers that if overhaul fails, premiums will continue to rise and employers will cancel coverage. She said the industry may make money in the short term, but it won't work for Americans and it eventually won't help insurers. Sebelius urged the insurers to help create a sustainable market where all Americans could buy coverage. She said they should spend the millions that might go to attack ads on reducing the cost of premiums. The White House released excerpts of her speech.
House Democratic leaders have announced that they will ban the much-criticized practice of using annual spending bills to direct pet projects to for-profit companies that often return the favor with campaign contributions. The announcement comes as their GOP rivals are weighing giving up so-called earmarks altogether in an election-year appeal to voters frustrated with Washington's spending. House Appropriations Committee Chairman David Obey says the step will mean 1,000 fewer earmarks. The step comes after the Ethics Committee investigated seven members of a Pentagon spending panel for rewarding earmarks to companies whose executives and hired lobbyists showered them with campaign cash. The panel found no linkage and absolved the lawmakers.
Schlumberger has acquired Houston-based seismic software provider Nexus Geosciences. The company has developed proprietary technologies for fast imaging and modeling, enabling oil and gas companies to rapidly rebuild, update and validate their velocity models.
EU regulators say British Airways, American Airlines and the Spanish airline Iberia are offering to give away take-off and landing slots at London and New York airports to soothe European Union antitrust concerns. The European Commission said it is asking other airlines whether the offer to free up slots at London Heathrow, London Gatwick and New York's John F. Kennnedy airports would allow rivals to start routes from those airports to New York, Boston, Dallas-Fort Worth and Miami. If rivals are supportive, regulators say they would move to make the three airlines' offer legally binding and drop an antitrust case that could have racked up millions of euros in fines for the companies.
Private equity group Lone Star Funds is renewing efforts to sell off its majority stake in a South Korean bank. The Dallas-based lender's prospective deal has long been hampered by legal and political constraints. The buyout fund took over Korea Exchange Bank, one of the country's five biggest lenders, in late 2003 by purchasing the stake for about $1.2 billion. Lone Star, however, has been unable to unload the bank amid various legal and regulatory uncertainties related to allegations of shady dealings involving the acquisition of then troubled institution. A South Korean appeals court in late December cleared a former finance ministry official and a former KEB chief of charges they helped Lone Star buy KEB for a bargain price in 2003 by conspiring to understate the lender's value. Prosecutors, however, appealed the ruling, which is now pending at the Supreme Court.
The House has passed a bill that would allow taxpayers to write off charitable donations to Chile earthquake relief efforts when they file their 2009 taxes this spring. Under current law, donors would have to wait until next year, when they file their 2010 returns, to claim the deductions. The House bill would allow donations made by April 15th to be deducted on 2009 returns. The House passed the bill on a voice vote, with no opposition. It now goes to the Senate. Congress passed a similar bill for donations to Haiti quake victims made before the end of February. The bill would extend the deadline for Haiti donations until April 15th as well.
The Treasury Department has received $15.39 million from the sale of warrants it received from Washington Federal as part of the support it provided from the government's $700 billion bailout program. The Treasury said that it sold 1.71 million warrants in an auction that took place the previous day. Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price. The auction for the Seattle-based bank followed one held last week in which the government raised a record $1.54 billion from the sale of warrants received from Bank of America.