Monday PM April 26th, 2010
by: Ed Mayberry, April 26, 2010 5:04:00 pm
Oil from a sunken drilling rig in the Gulf of Mexico is oozing slowly toward the coast, endangering sensitive marshes and beaches from Louisiana east to Florida. The Coast Guard is saying that the oil is expected to stay 30 miles off the coast for the next three days. The area is home to dolphins, sea birds, prime fishing grounds and tourist areas. Whales have been spotted near the spill but officials say they didn't appear to be in stress. Crews are trying to cut off an estimated 42,000 gallons a day, or 1,000 barrels, escaping two leaks in a drilling pipe about 5,000 feet below the surface. Transocean’s rig Deepwater Horizon exploded April 20th and sank two days later. Eleven of the 126 workers on board at the time are missing and presumed dead; the rest escaped. The cause of the explosion has not been determined and oil has been leaking ever since. Crews are using robot submarines to activate blowout preventer valves at the wellhead in hopes of stopping the leaks. The officials say that will take at least a day or more to complete. If that doesn't work, crews are also planning to drill a relief well to cut off the flow, but that could take several months. BP is responsible for the environmental clean-up efforts as the rig lease operator.
The federal government has sued a former oilfield services executive and settled another case with a drilling company over alleged bribes involving lucrative oil contracts in Venezuela. The Securities and Exchange Commission accuses Bobby Benton of concealing $384,000 in payments to Venezuelan oil officials to secure extensions of three drilling contracts from 2003-05 when he was a vice president for Houston-based Pride International. The civil lawsuit was filed in December in federal court in Houston. An attorney for Benton didn't immediately return a phone call. Another drilling company, Helmerich & Payne of Tulsa, Oklahoma, agreed in July to pay $1.38 million in fines to the Department of Justice and the SEC over claims of improper payments to customs officials in Venezuela and Argentina.
Merger talks between Continental Airlines and United Airlines have reached a roadblock according to the New York Times. The airlines reportedly disagree over the value of share prices used to calculate a stock transaction leading to a merger. However, talks continue, according to sources named in the article. Other details about the talks have emerged, such as keeping the name United for the combined airline. Congresswoman Sheila Jackson-Lee, meanwhile, is urging that the combined airline keep its headquarters in Houston, should a merger happen.
A new survey shows economists are more optimistic about growth this year as industries increasingly report better profits and add new jobs, though they still expect the recovery to remain slow. Seventy percent of those surveyed by the National Association for Business Economics believe real GDP will grow by more than two percent this year, up from 61 percent who said the same in January. Twenty-four percent are predicting real GDP will grow by more than three percent in 2010, up from 14 percent earlier this year. The NABE forecast shows fewer jobs are being shed, more are being created and more companies are making money. But rising wages and materials costs, weak pricing power and still-tight credit conditions may be curbing capital spending.
The summer job outlook for teens is a little better this year, but still pretty dim. Rick Cobb of the outplacement firm Challenger, Gray & Christmas says there's been a slight increase in summer job creation compared with last year, but that was the worst year since the 1950s. Cobb says there has been some growth in the retail sector and the hospitality and restaurant industry. However, he says teens looking for summer jobs face competition from older, more experienced workers who fell victim to massive layoffs. Tech-savvy teens may have an advantage with online job searches, but Cobb says the best way to find work is to be face-to-face with people who can hire you, or who know someone who can. He says even in good economies the best jobs are not the ones that are advertised.
Monster.com is holding a career networking event at the Westin Galleria on West Alabama beginning at ten tomorrow. Monster.com’s Keep America Working Tour features career experts and interactive resources, with tips and tools on how to approach and speak with employers. Job seekers can speak with local recruiters who will be on site.
Circulation continues to drop at U.S. newspapers. Figures released by the Audit Bureau of Circulations show average daily circulation fell 8.7 percent in the six months ended March 31st, compared with the same period a year earlier. That's not as steep a decline as the 10.6 percent drop in the last reporting period, which ran from April through September last year. Sunday circulation fell 6.5 percent. There are many reasons for the declines, including the rise of free news on the Web. Also, publishers have sought to offset losses in advertising revenue by raising newsstand and subscription prices. Some newspapers have reduced delivery to unprofitable areas.
Incidents of residential mortgage fraud increased last year, a sign that scammers are still targeting the industry despite efforts to find and report such activity. A study by the LexisNexis Mortgage Asset Research Institute showed the number of mortgage fraud reports among loans made in 2009 grew seven percent from the previous year. That's a much smaller increase than the 26 percent jump seen in 2008. The slower growth rate is being attributed to better reporting and policing for fraud activity, but there's more to it. The report also said more scammers are using technology to access information and allow them to remain anonymous by using the Internet. Among states, Florida moved into the top spot for mortgage fraud.
The average price of regular gasoline in the United States has almost stabilized. It has been virtually unchanged over a two-week period, dipping slightly to $2.85. That's according to the national Lundberg survey of fuel prices. Analyst Trilby Lundberg says the average price for a gallon of mid-grade is $2.97. Premium is at $3.09. Tulsa, Oklahoma, had the lowest average price among cities surveyed at $2.60 a gallon for regular. Honolulu was highest at $3.47.
The leaders of President Barack Obama's bipartisan Debt Commission say everything is on the table, from tax increases to spending cuts. They are preparing this week to begin meeting. The panel's republican co-chairman, former Wyoming Senator Alan Simpson, says the commission will gather reliable statistics related to the debt and then consider ways to deal with it. The Democratic co-chairman of the commission, Erskine Bowles, says tax increases will be considered even though Obama pledged during his presidential campaign not to raise taxes on a person earning less than $200,000 a year. Obama has asked the 18 members of the commission to propose a plan by December 1st. Simpson and Bowles appeared on Fox News Sunday.
Sixteen food companies have agreed to reduce salt in everything from ketchup to rice as part of a national effort to cut America's sodium consumption by 20 percent. The agreement was announced by New York City Mayor Michael Bloomberg. The participating companies include Heinz, Starbucks, Kraft and the Subway sandwich chain. A Heinz official says the company will cut sodium by 15 percent in all ketchup it sells in the U.S. by May 1st. An official for Mars says it plans to cut sodium by 25 percent from Uncle Ben's Flavored Rice products. The agreements would cut salt from 65 products and 25 restaurant meals. Bloomberg and federal officials have encouraged food companies to cut back on salt.
Many U.S. companies are finding that going green is good business. The research firm Mintel International estimates that sales of “green” products, such as organic foods and natural personal care items, have risen 15 percent since 2006. But beyond selling things, moves such as cutting lighting and heating costs and using less packaging all help both the environment and the bottom line. Many companies are letting consumers know about their efforts in a green wave of promotion during this week's 40th anniversary Earth Day observances. Many environmentalists say companies are making real strides but still have a long way to go to significantly reduce their impacts on air, water and other resources.
Officials say the Texas food stamp program is digging out of trouble after it was swamped by hurricanes, a failed privatization effort and cuts to the work force that handles claims. The most recent federal figures show Texas processed 69 percent of applications within the required 30 days in the year ending September 30th. That's 15 percent below the national average. The Dallas Morning News reports that hiring more workers and letting food banks interview applicants helped Texas cut its total of tardy, unprocessed applications to about 6,000 from a high of more than 42,000 in October. Texas Health and Human Services Commissioner Tom Suehs says including food banks in the process can't replace the need for more state funds and even more workers.
The post office is facing billions of dollars in losses and is considering a variety of ways to cut costs. Both the commission that oversees the U.S. Postal Service and the post office's inpector general are seeking comment and suggestions from the public. The post office has reduced its workforce by about 200,000 over the last few years and more cuts may be possible. Other cost-savings being considered include eliminating Saturday mail delivery, generating revenue from new products, raising rates, closing offices and restructuring mail processing centers.
Scientists and egg producers say more chickens could die if farmers move egg-laying hens from tiny cages with ten or fewer birds to open pens than can hold dozens. The Humane Society of the United States has pushed for laws banning battery cages in which birds are packed tightly together. But egg producers say that creates another problem: the White Leghorn hens that lay most of the nation's eggs are territorial and prone to pecking attacks so fierce they're called “cannibalism.” The fights increase in big groups. To reduce them, a Purdue University researcher has developed a breeding method that produces more peaceful chickens. William Muir says he believes his hens would live longer and lay more eggs because they waste less energy fighting.
The Federal Reserve has a two-day policy-setting session on tap this week. It is expected to leave rates unchanged at their current record low levels. It will also assess how the economic recovery is coming along. Also this week, the Conference Board reports on consumer confidence. That's on Tuesday. On Friday, the government releases its first estimate of first quarter economic growth. That's seen coming in above three percent.