Friday PM March 12th, 2010
March 12, 2010 4:03:00 pm
Retail sales posted a surprising increase in February as consumers did not let major snowstorms stop them from storming the malls. The advance, the biggest since November, provided hope that the recovery from the great recession is gaining momentum. The Commerce Department said retail sales rose 0.3 percent in February, surpassing expectations that sales would decline by 0.2 percent. The overall gain was held back by a two percent fall in auto sales, reflecting in part the recall problems at Toyota. Excluding autos, sales rose 0.8 percent, far better than the 0.1 percent rise outside of autos that economists had forecast.
Business inventories were basically flat in January even though sales rose for an eighth consecutive month. The Commerce Department said that inventories were unchanged, a weaker reading than the 0.2 percent gain that analysts had expected. Total business sales rose by 0.6 percent, a solid performance that followed an even stronger 1 percent gain in December. Economists are hoping that businesses will soon start restocking depleted store shelves on a sustained basis, a move that would give a boost to the economic recovery.
The state's environmental agency is taking steps to hold gas drilling companies more accountable in Texas. The Texas Commission on Environmental Quality says it is hiring six new inspectors for the Dallas-Fort Worth area. It's part of the two-dozen-county area atop the Barnett Shale, one of the nation's biggest natural gas fields. The agency has implemented new standardized protocols for inspection and enforcement, instead of relying on gas companies to voluntarily repair problems. The agency says it's received about 150 complaints or inspection requests from residents since December. State Senator Wendy Davis announced the measures. She says the agency doesn't know the locations of all gas drilling equipment in Texas--but is starting to compile an inventory.
Venezuela says it will favor keeping oil production quotas unchanged at an OPEC meeting next week. Venezuelan Oil Minister Rafael Ramirez told reporters that it wouldn't be prudent for the Organization of the Petroleum Exporting Countries to increase production since demand for oil hasn't completely recovered. Ramirez was quoted by the state-run Bolivarian News Agency as saying that increasing output could lead to an increase in inventories in oil-consuming countries, leading to “great instability” in crude prices. OPEC supplies about 35 percent of the world's crude. The organization is due to hold its next meeting Wednesday. It has maintained quotas unchanged since making cuts last year.
The Obama administration's mortgage relief plan has helped only about 16 percent of borrowers who signed up since its launch last year, and hundreds of thousands of homeowners are in limbo without an answer. The Treasury Department says that as of last month, about 170,000 homeowners had completed the application process and had their loan payments reduced permanently. That compares with nearly 1.1 million homeowners who have enrolled since the plan started. About 90,000 homeowners have dropped out so far, either because they failed to make payments or didn't return paperwork. The program is designed to lower borrowers' monthly payments by reducing mortgage rates to as low as two percent for five years and extending loan terms to as long as 40 years.
American Airlines says it's reviewing the newest charges from the Federal Aviation Administration concerning alleged maintenance problems. The FAA is proposing nearly $800,000 in fines against American for three incidents. In the most serious case, the regulators say American operated a plane without replacing a central air data computer. The FAA says the plane flew ten flights with a broken computer. American has 30 days to respond. The proposed fine is the latest in a series of penalties American faces for maintenance violations. An airline spokesman says American is “very proud” of its safety record.
It's being called the first big summer airfare sale. Airtran Airways cut prices, causing its bigger rivals to do the same at a time they would rather be raising them. The discount carrier's sale, which ends at midnight, covers travel from March 19th until November 16th. It doesn't include flights on Fridays and Sundays. Other carriers were forced to match prices on routes where they compete with Airtran. Those sales also expire at midnight. The head of the travel Web site Bestfares.com says it's rare to see a 200-day sale. Airlines have seasonal revenue clocks. They try to make enough money in the summer to last through the winter. It's impossible to know how much money airlines will lose by selling some of their summer seats at such cheap prices this week.
A federal court has upheld regulations that require cable TV companies to make channels they own available to satellite TV providers and other rivals on equal terms. The ruling by the U.S. Court of Appeals for the District of Columbia leaves in place the Federal Communications Commission “program access” rules. The ruling marks a setback for Cablevision Systems and Comcast, the cable companies that had challenged the rules in court. Comcast has nonetheless pledged to extend those rules to the local NBC and Telemundo stations it would control as part of its proposed combination with NBC Universal. Comcast is seeking FCC and Justice Department approval to buy a 51 percent stake in NBC Universal from General Electric.
A Republican Senator whom Barack Obama once tried to make his Secretary of Commerce will be among the members of Congress to serve on the president's Deficit Commission. Judd Gregg of New Hampshire was among a half-dozen lawmakers named by Republican Congressional leaders to serve on the 18-member panel that is supposed to help rein in ballooning federal deficits. The announcement made it clear that the lawmakers, including Senator Tom Coburn of Oklahoma, who directly challenged Obama at a recent health care summit, were selected to focus on the job of cutting spending, not raising taxes. Gregg at first agreed to join Obama's cabinet, but then reneged, saying he didn't agree with the president's stimulus spending policies.
Washington Mutual says it has resolved disputes with JPMorgan Chase and the Federal Deposit Insurance Corporation. Over some $4 billion at issue in the bank holding company's Chapter 11 bankruptcy. The government agency seized Washington Mutual's flagship bank in 2008 and sold its assets to JPMorgan for $1.9 billion. But the two banking companies and the FDIC have traded lawsuits over roughly $4 billion in disputed deposit accounts. A WaMu attorney told a judge that JPMorgan has agreed to turn over the money to Washington Mutual after deducting $172 million in tax refunds that WaMu has already received. In return, JPMorgan and the FDIC will get will get a major share of future tax refunds valued at about $5.6 billion.
The Treasury Department has received $6.56 million from the sale of warrants it held from Texas Capital Bancshares as part of the support it provided the bank during the financial crisis. The Treasury said Friday that it sold 758,000 warrants in a auction with a sales price of $8.85 per warrant. Warrants are financial instruments that allow the holder to buy stock in the future at a fixed price. The auction was the third and final auction this week and followed one last week that raised a record $1.54 billion from the sale of warrants the government had received from Bank of America.
The FBI says the amount of money swindled by Internet frauds doubled last year to about $560 million. The FBI, in partnership with a private fraud-fighting group, reports that complaints of Internet scams rose 22 percent in 2009. The most frequently reported scams were those that falsely used the FBI's name, accounting for 16 percent of the more than 300,000 complaints received last year. Authorities say another scam involved messages with a voice similar to President Barack Obama's, urging people to visit a Web site to claim a share of government stimulus cash. Visitors are charged a fee, and no money is ever received.
Attorney General Eric Holder says a hearing held by both the Justice and Agriculture Departments is the first step toward a new era of antitrust enforcement in industrial farming. Officials say the goal is to develop new policies, or take new enforcement actions, that will ensure fair competition between farmers and big agribusiness companies. The first hearing, held in Iowa, focused on the seed industry. Others will look at competition in dairy, livestock and poultry production. Secretary of Agriculture Tom Vilsack said the antitrust enforcement will help renew the rural economy, which has suffered as farmers and ranchers have been driven out of business over the last decade.
The number of rigs actively exploring for oil and natural gas in the U.S. increased by 11 this week to 1,407. Houston-based Baker Hughes said that 927 rigs were exploring for natural gas and 466 for oil. Fourteen were listed as miscellaneous. A year ago this week, the rig count stood at 1,126. Texas gained two rigs. The rig count tally peaked at 4,530 in 1981, and it fell to a record low of 488 in 1999.