Tuesday PM April 20th, 2010
by: Ed Mayberry, April 20, 2010 9:04:00 pm
The state of Texas is investing $750,000 through the Texas Enterprise Fund in Kohl's for the creation of a customer operations center in San Antonio. Kohl's says it is committed to creating 150 jobs through the TEF investment, but anticipates generating more than 1,000 jobs and $18 million in capital investment. The new facility will provide e-commerce, credit analysis and collections functions for the department store chain.
A federal judge has scheduled a September hearing to determine if Texas financier R. Allen Stanford and three executives have to pay for their legal battle against charges of running a $7 billion ponzi scheme. Attorneys representing Stanford and the executives are being paid through an insurance policy. But the insurer says the policy doesn't pay on charges of money laundering, which Stanford and others are accused of doing. Last month, an appeals court ruled the insurer must continue paying the legal fees until a lower court determines if money laundering was committed. Stanford and his associates are accused of bilking clients through Stanford's bank on the Caribbean island of Antigua.
It was a crane boom that apparently snapped and fell yesterday, crushing and killing a man who was working on a $7 billion refinery expansion project in Port Arthur. Authorities declined to identify the man. The Beaumont Enterprise reported on the death. Federal investigators from the Occupational Safety and Health Administration are investigating the cause of the accident at the Motiva refinery. Motiva is doubling its crude oil processing capacity to 600,000 barrels. The project is expected to be completed in 2012.
The Community College of Qatar has selected Houston Community College to develop the community college model for the Qatari government. HCC will develop a curriculum and institute a fully operational community college by the fall of 2010. HCC will also initially provide staff and faculty while the Qatari college is in development.
The world's banks could be spared billions in losses thanks to a global economy that is recovering from the financial meltdown more quickly than initially expected. The International Monetary Fund is forecasting that global bank losses from the financial crisis will total $2.28 trillion, a drop of $533 billion from an estimate made last October. The IMF says that its forecast for losses just for U.S. banks had dropped to $885 billion, down from an estimate of $1.03 trillion made in October. The international lending agency attributes the improvements in part to a faster-than-expected rebound in the global economy. But the IMF warns that risks still remain, especially in the area of government debt.
A government watchdog is warning that recent changes to the Obama administration's mortgage assistance program may make it more vulnerable to fraud. The changes are intended to make it easier for struggling homeowners to avoid foreclosure. But the special inspector general for the Troubled Asset Relief Program, or TARP, says the administration needs to do more to warn the public about potential fraud. Neil Barofsky is also calling for additional safeguards to prevent abuse. Last month, the Treasury Department revised the $75 billion mortgage assistance program it first rolled out last year. It is intended to prevent three to four million home foreclosures by encouraging mortgage lenders to lower monthly payments. So far only about 170,000 homeowners have qualified for mortgage modifications.
Senator Chuck Schumer says a new tax on banks should be included in financial regulations that could come up for a vote in the Senate as soon as this week. President Obama has proposed a tax on bank liabilities that would raise an estimated $90 billion over the next decade. Schumer calls the proposal "a commonsense way to make sure the taxpayers are repaid." The idea of new tax on banks is gaining support among Congressional Democrats who want to use the tax to help recoup money from the Wall Street bailout. The banking industry argues that much of that money is already being repaid, in some cases, at a profit to taxpayers.
The head of the Federal Deposit Insurance Corporation says the U.S. needs better lending standards to avoid a recurrence of the 2008 financial crisis. FDIC Chairwoman Sheila Bair spoke to an audience at the University of Kansas' Robert J. Dole Institute of Politics. Bair said she would like banks to require more evidence that a borrower is ready for homeownership and can repay the debt. Loans should be made only if borrowers have a portion of their own money at risk, too. She also defended financial reforms under consideration in Congress, saying they're a start toward restoring the U.S. banking system's values. That legislation intends to address weaknesses in the financial system that led to the crisis.
A lawmaker says the collapse of Lehman Brothers cost 40 municipalities nationwide around $1.7 billion and devastated local services in a county she represents. Representative Anna Eshoo of California told House lawmakers that San Mateo County lost $155 million as a result of the Wall Street firm's meltdown in September 2008. She says county officials were "not rolling the dice to optimize their dollars. They invested in the safest, most conservative instruments." Lehman's collapse was the biggest corporate bankruptcy in U.S. history. It threw global financial markets into crisis. The hearing will examine what led to the collapse of Lehman and will probe a bankruptcy examiner's report that the firm masked $50 billion in debt.
Amtrak and transportation officials from Oklahoma and Texas have started a yearlong test to see whether beef-based biodiesel can efficiently run the Heartland Flyer passenger train between Oklahoma City and Fort Worth. Texas cattle are supplying 20 percent of the fuel for the 3,200-horsepower engine, and the rest is regular number two diesel. In ceremonies at the Sante Fe station in downtown Oklahoma City, government and railroad officials announced the test as part of this week's earth day events. After a year, Amtrak will inspect the engine and collect exhaust data. Other tests will be performed throughout the year. The train stops at Oklahoma City, Norman, Purcell, Pauls Valley and Ardmore in Oklahoma and at Gainesville and Fort Worth in Texas.
MidSouth Bank, fresh off a $40 million stock offering, has formed a mergers and acquisitions team to pursue acquisitions in Louisiana and Texas. The Advocate reports the Lafayette-based company is targeting Federal Deposit Insurance Corporation-assisted acquisitions of failing institutions, as well as banks seeking to divest noncore operations. Lorraine Miller has joined the company as senior vice president and director of mergers and acquisitions. The bank says the new division will work closely with Chief Financial Officer Jim McLemore to complete the transactions.