Tuesday PM September 21st, 2010
by: Ed Mayberry, September 21, 2010 9:09:00 pm
Home construction increased last month and applications for building permits also grew. But the gains were driven mainly by apartment and condominium construction, not the much larger single-family homes sector. The Commerce Department says construction of new homes and apartments rose 10.5 percent in August from the previous month to a seasonally adjusted annual rate of 598,000. That's the highest level since April. Pulling the figures up was a 32 percent monthly increase in the condominium and apartment market, a small portion of the market. Single-family homes, which represented about 73 percent of the market in August, grew more than four percent. Housing starts are up 25 percent from their bottom in April 2009, but they remain 74 percent below their peak in January 2006. single-family housing starts are up 11 percent from their low point in January 2009, but down 78 percent from their peak in January 2006.
GMAC Mortgage says it has halted certain evictions and sales of foreclosed homes as it corrects “a potential issue” in its foreclosure process. The action highlights what is becoming a larger problem for lenders and servicers that may have illegally driven homeowners out of their houses. The issue is threatening to clog up an already overloaded foreclosure process. Foreclosure listing firm RealtyTrac has reported that lenders took back more homes in august than in any month since the start of the U.S. mortgage crisis. GMAC did not identify the specific internal issue that prompted the moratorium in its statement, but it has been linked to lawsuits this year surrounding the alleged falsification of a key foreclosure document. The Florida attorney general is investigating three law firms for allegedly providing fraudulent affidavits that identify who holds the original mortgage note in foreclosure cases. In Florida and in other states, this document allows lenders to bypass a costly trial and proceed with a foreclosure.
The woman President Barack Obama has installed to set up a new Consumer Protection Agency says she won't back down in the face of business resistance. Elizabeth Warren tells CBS's The Early Show she “never really wanted a job here,” but now that Obama has turned to her to organize the new agency, she's ready to take it on. Warren says Obama told her not to worry about job titles, but to “start pushing back” against companies fighting new regulations aimed at protecting borrowers. She adds, “that's exactly what I intend to do, and I intend to do it as hard as I can.” Obama stopped short of nominating Warren to head the agency, avoiding a likely Senate filibuster. Instead, he appointed her to create the new consumer protection body.
Warren and Treasury Secretary Timothy Geithner said that the administration was committed to implementing, as soon as possible, ways to simply mortgage disclosure forms. The goal is to make sure that consumers get understandable information so that they can make the best choices when picking a mortgage.
There have been far fewer applicants than expected for money from a $100 million fund BP set up to help deepwater rig workers after a federal moratorium on drilling prompted by the massive oil spill. With nine days left to apply, a spokesman for the charity running the program told the Associated Press that only 356 people have come forward. Up to 9,000 people had been expected to seek grants of $3,000 to $30,000. The charity says it turns out that many rig workers are being kept on the job by their employers, despite the moratorium. With so much money left over, the charity plans to offer a second round of grants--this time to workers who support deepwater rigs, such as people on supply boats. A recent federal report claimed the moratorium has not increased unemployment in the region.
The administrator of the fund for victims of the Gulf of Mexico oil disaster says he will waive a requirement that wages earned by spill cleanup workers be subtracted from their claims of lost revenue. Attorney Kenneth Feinberg, who is doling out the $20 billion fund that BP set up, made the key concession. He says no wages paid by BP to the workers will be subtracted. Feinberg says it will help fishermen who have been working on spill response while they couldn't fish. The Gulf Coast claims facility has received more than 68,000 claims since taking over from BP in August, and has paid more than $240 million. An April 20th rig explosion killed 11 workers, triggering the spill from the well that eventually spewed out more than 200 million gallons of oil.
BP says it will join a group of the world's largest oil companies who are working together to improve response to spills. BP's announcement came just two days after its blown-out Gulf well was officially declared dead. On April 20th, an explosion aboard the oil rig Deepwater Horizon killed 11 workers and triggered the spill that caused 206 million gallons of crude to spew from the well. BP says it will provide the team of oil companies underwater well containment equipment, expertise and experience. ExxonMobil is operating the program, called the marine well containment system. It includes other oil giants, such as Chevron, ConocoPhillips and Shell.
The Federal Reserve is offering a dim view of the economy and signaling that it's prepared to provide new relief if necessary to support the recovery. At the end of its meeting, the last before the November 2nd elections, the Fed held off on taking any bold new steps to rejuvenate the economy and drive down near double-digit unemployment. Instead, the Fed is taking a wait-and-see approach to see if the economy can heal on its own. The meeting comes as voters are focused on the economy and the jobs crisis. Polls show they are inclined to punish Democrats in Washington for a sluggish recovery.
Medicare says premiums for seniors enrolled in popular private health insurance plans will dip by one percent on average next year. That will bring the average monthly premium to about $35, a roughly 50-cent cut, Medicare officials said. The fate of so-called Medicare advantage plans has been a source of concern because the new health care law cuts payments to private insurance companies. However, significant reductions are still a couple of years away. The Obama administration says the program is strong and expected to remain so. About 11 million seniors--one-fourth of beneficiaries—are signed up in the plans, and Medicare projects enrollment to increase by five percent in 2011.
Senators are making another push at requiring utilities to use more renewable energy such as wind, solar and geothermal. The Senate Energy Committee chairman, New Mexico Democrat Jeff Bingaman, and other Senators are now hoping to pass a bill that would mandate utilities get 15 percent of their energy from such sources by 2021. The move comes after an Associated Press story last week that efforts for such a mandate, known as a renewable electricity standard, had stalled in the Senate. Nevada Democrat Senate Majority Leader Harry Reid did not include the mandate in his energy bill despite a big lobbying push by environmental groups, renewable energy providers, more than half the nation's governors and even some utilities.
MetroPCS Communications, a regional cell phone company that mainly caters to low-income customers, has become the first U.S. carrier to use a new network technology that provides faster data access and is expected to become the industry standard. MetroPCS, which has 7.6 million subscribers, has turned on long term evolution, or LTE, service in Las Vegas. It's ahead of Verizon Wireless, which has 92 million subscribers and is the major carrier furthest along in its LTE plans. MetroPCS, which is based in Richardson, is selling a Samsung touch screen phone for $299 for the service.
A Texas-based chemical company will pay $800,000 to the federal government and the state of Kentucky under an agreement to settle accusations of environmental violations at a western Kentucky plant. Under a consent decree submitted to U.S. District Judge Thomas B. Russell, Westlake Vinyls doesn't admit any wrongdoing or liability but the Houston-based company agreed to take corrective action. Federal and Kentucky environmental officials said in court filings that the company, which has a plant in Calvert City, had violated laws governing clean air and water. Westlake makes PVC pipe, vinyls and resins used in bottles, appliance parts, residential siding, credit cards and flexible pipe.
The U.S. Court of Appeals in New Orleans has revived the Securities and Exchange Commission's insider-trading lawsuit against Dallas Mavericks owner Mark Cuban. The SEC accuses the Dallas billionaire owner of selling his shares in the Internet search engine company Mamma.com in 2004, avoiding a $750,000 loss after receiving confidential information about the company. U.S. District Judge Sidney A. Fitzwater dismissed the lawsuit in July 2009, ruling that Cuban never agreed he could not act on his confidential information. The appeals court, however, says it was “plausible” Cuban knew he was not to sell his shares. Cuban says that he’s disappointed in the ruling and maintains he did not violate any civil laws.
The Port of Galveston will undergo nearly $11 million in renovations to help prepare for the 2011 arrival of Carnival Magic, the cruise line's newest and largest vessel. The port board of trustees has awarded a $7.4 million contract to Houston-based Webber to expand waiting areas, add restrooms and move the embarking screening area from the terminal's second floor to the first floor. The Galveston County Daily News reports that the board also approved an agreement with Trelleborg, Sweden-based FMT to install a new gangway by August 31st. The cost limit is $3.5 million. Port Director Steve Cernak says a cruise ship the size of the Magic, which displaces 130,000 tons and carries 3,960 passengers, requires a larger gangway. Departures are expected from Galveston in November 2011.
The global airline industry has rebounded faster than expected this year but faces a slowdown next year. The International Air Transport Association said airline industry profits will likely jump this year to $8.9 billion on revenue of $560 billion, more than the group's previous forecast in June of $2.5 billion on sales of $545. Asia will lead growth this year and Europe will remain the only region to lose money, the IATA said. Global airline profit will fall to $5.3 billion next year, the group said.
A new survey suggests that consumers are as happy as they've ever been with their computers. And people with Apple computers are the most satisfied. The American Customer Satisfaction Index looks consumer sentiments on home electronics. In the computer category, Apple scored the highest for the seventh straight year, earning 86 points out of 100. That's three more points than the year before and Apple's highest score yet. Apple sold 3.5 million Mac computers in the most recent quarter. That's a 33 percent increase from a year earlier. Dell and Hewlett-Packard each scored 77 points, and their scores were higher than 12 months prior. Compaq scored 74 points, which was unchanged from the previous year. A category that lumps together smaller computer makers such as Sony and Toshiba scored 77 points, rising three points from the year before.