Wednesday PM December 8th, 2010
by: Ed Mayberry, December 8, 2010 3:12:00 pm
RealtyTrac says the U.S. is still on pace to see more than three million households receive some sort of foreclosure notice this year. That would set yet another record from last year's all-time high of 2.8 million. Spokesman Rick Sharga says unemployment remains stubbornly high and there's likely to be one new foreclosure action for every six to ten jobs that are lost. That said, realtor Carol Greco of Long & Foster Realtors in the greater Washington area, says there are some tremendous opportunities out there for prospective home buyers. She also foresees little movement in home values in either direction.
Applications for mortgages slipped last week, as a drop in refinance activity offset a gain in purchase applications. The Mortgage Bankers Association says overall applications for loans fell 0.9 percent from the previous week. Refinance applications slid 1.4 percent the fourth straight week, while purchase applications rose 1.8 percent from the previous week. Rates on both 30-year and 15-year mortgages increased during the week. Mortgage rates have been at or near their lowest levels in decades since spring as investors put money into safer Treasury bonds. That has lowered their yields, which mortgage rates tend to track.
The government reports that job openings are at their highest level in two years. And a private-sector survey predicts the next few months will be the best time for hiring since the financial crisis erupted. Analysts say job openings are a good indication of the hiring picture ahead because it can take up to three months to fill most jobs. The Labor Department says businesses and government advertised nearly 3.4 million jobs at the end of October, up about 12 percent from the previous month. Separately, a survey by Manpower suggests businesses are ready to pick up the pace. Manpower's U.S. hiring index rose to nine percent for the January-March quarter of 2011, from five percent in the October-December quarter of 2010. That's the highest in two years, but still far below the 20 percent that the index averaged from 2003 to 2007.
Jobless insurance rates in Texas will increase by about $5 per worker in 2011 for companies paying the minimum state unemployment tax. The Texas Workforce Commission says an employer paying the standard minimum tax will pay about $70.20 per employee next year. That compares to $64.80 in tax per employee during 2010. The money is used for the Texas Unemployment Compensation Trust Fund. The fund provides unemployment insurance for Texas workers who lose their jobs through no fault of their own.
Consumer borrowing rose in October by the largest amount in more than two years, led by a big rise in the category that includes student loans. The Federal Reserve says consumer credit rose at an annual rate of $3.4 billion in October, it's largest increase since July 2008. Consumer credit was also up in September. The strength in both the recent months is being heavily influenced by a recently enacted law that makes the government the primary lender to students. Even so, they were the first back-to-back monthly gains since mid-2008. Consumer credit had fallen for 19 straight months before the rise in September.
A BP vice president has told a federal investigative panel that workers on the doomed Gulf of Mexico oil rig were distracted by multiple activities going on simultaneously and didn't try to shut the well until 49 minutes after gas particles began flowing in. Steve Robinson, who led the team that questioned the well site leaders as part of BP's internal probe, said at hearings in Houston that the actions were late. He said that by the time the crew reacted, the hydrocarbons were already in the riser. He says they couldn't be contained, only diverted. An explosion occurred just minutes later, killing 11 workers and leading to more than 200 million gallons of oil spewing from BP's well a mile beneath the sea.
The head of the federal agency that regulates offshore oil drilling says the government is not trying to slow the permitting of drilling and denies the existence of what some in the industry call a “de facto moratorium” on drilling. Michael Bromwich, head of the Bureau of Ocean Energy, Management and Regulation, told a gathering of petroleum industry lawyers in New Orleans that the agency is working to issue permits under new safety regulations. He said new guidance to help the industry comply with the regulations could be issued later this week.
A new report says the Obama administration should sharply increase the number of offshore drilling inspectors, conduct more surprise inspections and stiffen penalties on companies found to violate federal rules on drilling. The report by the Interior Department's acting inspector general echoes a report issued in September by a safety oversight board convened by Interior Secretary Ken Salazar. A copy of the new report was obtained by the Associated Press. Salazar has said he hopes to hire hundreds of new inspectors to supplement the 60 or so now responsible for about 3,500 drilling rigs and platforms in the Gulf of Mexico. The drilling agency, formerly known as the Minerals Management Service, was renamed and reorganized after the BP spill.
Democrats controlling the House are promising to freeze the budgets of most cabinet departments in a massive measure wrapping Congress' unfinished annual spending bills into a single, catchall measure. The 423-page bill, unveiled overnight, would cap agency operating budgets passed each year by Congress at the $1.2 trillion level of the budget year that ended September 30th. That's about four percent less than the amount requested by President Barack Obama. There are many exceptions to the freeze. Health care programs for veterans and the military would get a boost, as would the Pell Grant Education Program for low-income college students. The bill also would provide $159 billion to fund the wars in Afghanistan and Iraq. Senate Democrats are working on a different approach.
From the reactions of many Congressional Democrats, President Barack Obama still has work to do to sell the tax package he has negotiated with Republicans. Some House Democrats are unhappy that Obama has agreed to extend expiring tax cuts to high earners and to impose a lower estate tax on wealthy heirs. In return, Democrats would get extended jobless benefits for people out of work for long stretches. Workers would also see their share of social security payroll taxes cut by nearly a third for the coming year. But if Democrats kill the package, it would mark a stunning defeat for Obama--and a huge political bet that voters will blame Republicans as much as Democrats if higher taxes kick in on January 1st.
The parent of American Airlines says business travel is still picking up and the company feels good about its revenue-making power heading into next year. The chief financial officer of AMR Corporation adds that fares are rising, especially on international flights. CFO Bella Goren told an investors conference that the company is wary about higher fuel prices. Fuel and labor costs are the two biggest expenses for airlines. Goren says AMR is encouraged that there seem to be fewer fare sales, and she says American's passenger revenue per mile in the fourth quarter should come in about seven percent higher than a year ago. She says advanced bookings are even or a bit stronger than at this time last year.
A driller is denying federal allegations that it contaminated an aquifer with its drilling in the North Texas Barnett Shale. The U.S. Environmental Protection Agency ordered Range Resources to provide clean drinking water to some Parker County residents within 48 hours. The EPA accused the Fort Worth-based company of contaminating the aquifer on which the rural residents west of Fort Worth depend for fresh water. Range Resources spokesman Matt Pitzarella says the company's tests show that the methane found in the water “has absolutely no connection” to nearby Range Resources Drilling. He says the tests “confirm that it's an entirely different gas than is found in the Barnett (Shale).''
Fort Worth has put the brakes on a proposed $88 million streetcar line. The Fort Worth City Council voted last night to drop plans for a feasibility study. Mayor Mike Moncrief cited funding concerns in voting with the majority in the 5-3 decision against the final phase of the three-part review. A vote to proceed with the study would have paved the way for the city to accept a $25 million federal grant, with some matching funds involved. The proposed line would have consisted of three cars making a six mile round-trip from north Fort Worth, through downtown and to the city's south area.
National egg sales have bounced back since last summer's big recall thanks to consumer reliance on eggs and an industry campaign. Cindy McGarrigle, of the American Egg Board, says the trade group quickly started an ad campaign and other efforts to combat news of the salmonella-related recall. But many egg buyers, such as chef Justin Arbogast of Champaign, Illinois, say they never stopped buying. They needed eggs for many of the foods they make. Agricultural economist Ben Jackson, of IHS Global Insight, says the rebound of egg sales isn't a big surprise. Sales of other recalled products, such as lettuce and spinach, have returned to normal, too. Consumers such as Mary Bailey of Champaign, Illinois, say they remain concerned and intend to switch to organic eggs for good.
The majority of this country's pets can expect something under the Christmas tree this year. An Associated Press-petside.com poll conducted by GFK Roper Public Affairs and Corporate Communications shows that 53 percent of all pet owners will get their animals a present this year. Dogs will fare better than cats--56 percent of all dogs can expect something, but only 48 percent of all cats. The poll shows women who own pets are more generous (56 percent) than men (49 percent). The overall poll numbers are just a percentage point higher than 2009 figures but in 2008, 43 percent of pet owners said their animals would get a gift. The results suggest the increase seen in last year's poll was sustained as the economy continued its slow recovery.