Thursday PM December 9th, 2010
by: Ed Mayberry, December 9, 2010 9:12:00 pm
Applications for unemployment benefits dropped last week to the second-lowest level this year, evidence that companies are cutting fewer jobs. The Labor Department says first-time claims for jobless aid fell by 17,000 to a seasonally-adjusted 421,000 in the week ending December 4th. Wall Street analysts had expected a smaller decline. The four-week average of claims, a less volatile measure, dropped for the fifth straight week to 427,500. That's the lowest since August 2008, just before the financial crisis intensified with the collapse of Lehman Brothers. Claims have fallen steadily in the past two months, raising hopes that companies will soon accelerate hiring. Applications dropped to 410,000 two weeks ago, their lowest point in more than two years.
Business inventories at the wholesale level rose for the 10th straight month in October while sales were up by the largest amount in seven months. The Commerce Department says wholesale inventories rose 1.9 percent in October, a much larger gain than many economists were expecting, while sales jumped 2.2 percent, the biggest increase since March. The strong gains in both inventories and sales were encouraging signs that manufacturers will continue to see demand boosted by business efforts to restock depleted store shelves. Inventory rebuilding has been a key factor supporting the economy's efforts to recover from the 2007-2009 recession.
House legislation to freeze the budgets of most cabinet departments and fund the war in Afghanistan faces uncertain prospects as the Senate takes up the measure. The House narrowly passed the budget deal last night in a 212-206 vote. As it stands now, the bill will cap the annual operating budgets of federal agencies at the $1.2 trillion approved for the recently finished budget year. It marks a cut of more than three percent, $46 billion, from President Barack Obama's request. The measure, opposed by Republicans, conservative Democrats and some anti-war lawmakers, includes $159 billion to prosecute the wars in Afghanistan and Iraq next year and deals a blow to Obama's efforts to close the U.S. military prison in Guantanamo Bay, Cuba.
More than 40,000 estates worth $1 million to $10 million would be expected to escape inheritance taxes next year under the deal struck by Republicans and President Barack Obama. The package would leave only about 3,500 of the largest estates subject to federal taxes next year. It's a boon for the wealthy that many House Democrats say they can't accept. House Speaker Nancy Pelosi calls the lower estate tax “a bridge too far,” while others in her caucus say it's a giveaway to the rich that would do little to create jobs. Many Republicans want to eliminate the estate tax altogether, calling it a “death tax’ that makes it hard for parents to transfer small businesses to their children. The package Obama negotiated would set the top rate at 35 percent and exempt the first $5 million of an individual's estate. Couples could exempt $10 million.
House and Senate Republicans have thwarted Democratic efforts to award $250 checks to social security recipients facing a second consecutive year without a cost-of-living increase. President Barack Obama and Democrats have urged approval of the one-time payment, saying seniors barely getting by on their social security checks face undue hardships without the COLA increase. But most Republicans contended that the nation couldn't afford the estimated $14 billion cost of the payment, and that the COLA freezes in 2010 and 2011 come after seniors received a significant boost in 2009. The measure was brought up under a fast-track procedure in the House that required a two-thirds majority for passage. The 254-153 vote in favor of the bill fell short of that.
Dozens of House lawmakers oppose a government proposal to put letter grades on the window stickers of new cars and trucks to rate a vehicle's fuel efficiency. Fifty-three House members say in a letter that the proposal is “biased in favor of certain types of vehicles” and only electric cars and plug-in electric vehicles can earn an A or A+. The Obama administration said in August it was considering adding grades ranging from A+ for the most fuel-efficient to D for the least to the stickers that provide information on new vehicles in dealer lots. The lawmakers support an alternative that would maintain the current label's focus on the miles per gallon rating.
The Texas prison director is briefing the State Prison Board about financial concerns facing the state's prison system as part of the overall Texas budget shortfall expected to top $20 billion. Executive Director Brad Livingston spoke before the Texas Department of Criminal Justice Board meeting in Austin, addressing “fiscal challenges” and the legislative session that begins next month. The task got harder this week. Top elected state officials asked agencies to plan for 2.5 percent cuts in the current budget atop reductions already imposed. The nation's second-largest prison system is asking for $6.55 billion in the upcoming 2012-13 budget and has been told to trim that by five percent. The agency has sought exemptions in the past and may do so again.
The Texas Public Utility Commission has approved a $190 million wind energy transmission line route planned near Amarillo. The three-member commission unanimously approved the plan by Sharyland Utilities. That will loop west and north of Amarillo. Critics of the 91-mile route raised environmental and residential concerns. The project will involve electric transmission towers about 125 feet high and spaced 1,000 feet apart. The Amarillo Globe-News reports that the PUC approval includes some latitude for landowners to negotiate small changes if there are savings, such as using single poles instead of towers. Rancher William Seewald says it still means there will be “a huge swath of destroyed grassland and endangered creeks and streams.” Sharyland spokeswoman Jeanne Phillips says construction should begin in the spring and take about 18 months.
The House has passed legislation that would provide $7 billion in new loan guarantees for nuclear power plant construction. The money was approved as part of a $1.2 trillion spending bill that passed the House last night. The $7 billion in loan guarantees is just a fraction of the $36 billion that President Barack Obama requested earlier this year. But Steve Kerekes, a spokesman for the Nuclear Energy Institute trade group, says the $7 billion “works in the short term.” In February, the Obama administration awarded $8 billion in loan guarantees for Southern to build a pair of reactors in Burke County, Georgia.
An international watchdog says people believe corruption has worsened over the past three years according to its worldwide public opinion survey. Transparency International says that its survey of more than 91,000 people in 86 countries and territories shows a quarter say they paid bribes to institutions--the police being the most frequent recipient. According to the survey more than 20 countries report significantly more bribery than when asked in 2006. Views on corruption trends are most negative in North America and Europe where 73 percent and 67 percent respectively think corruption has increased over the past three years. But only five percent in EU and North American countries report paying bribes while more than 50 percent in Sub-Saharan Africa say they have.
Federal regulators will explore whether they can do more to protect consumers from losing their television signals. At issue are disputes over the fees that subscription-video providers pay broadcasters for their programming. The announcement by the Federal Communications Commission comes on the heels of a high-profile spat between Cablevision Systems and News Corporation's Fox Network. That impasse left three million Cablevision subscribers in the New York area without Fox programming for 15 days after the broadcaster pulled its signal in October. Cablevision had called on the FCC to prohibit Fox from withholding its signal and to require binding arbitration. But the agency remained on the sidelines during the dispute. FCC Chairman Julius Genachowski argued that under existing law, the commission had very limited authority to get involved in what were essentially private business negotiations. Genachowski said Congress should consider changing that.
St. Luke’s Episcopal Health System has opened its sixth hospital in this area at The Vintage on Chasewood Park, off State Highway 249 between FM 1960 and Louetta. The 106-bed facility full-service hospital will serve northwest Houston with five operating rooms and 14 labor, delivery, recovery and postpartum suites.
A $865,000 Texas Enterprise Fund investment is helping Jyoti Americas build a high-voltage transmission tower manufacturing plant in Conroe, creating 157 jobs. The tower is used to transmit alternative, renewable electricity to consumers.
Dell says it is near a deal to buy data storage provider Compellent Technologies for about $876 million. The acquisition would extend a recent string of deals in the data storage industry. Tech firms are positioning themselves to help big companies and government agencies deal with ever increasing amounts of digital information. Dell, based in Round Rock, says it has a tentative agreement to buy Compellent Technologies for $27.50 per share. That's an 18.2 percent discount to Compellent's closing share price Wednesday of $33.65, suggesting investors had been anticipating a takeover offer at a much higher price. Compellent is based in Eden Prairie, Minnesota.
The government says mortgage lender PrimeLending has agreed to pay $2 million to resolve allegations of discriminating against African-American borrowers by charging them higher interest rates on home loans than white customers with similar financial situations. The Justice Department announced the settlement with Dallas-based PrimeLending, which has offices in 32 states and is owned by Texas bank PlainsCapital Bank. The department's civil rights division says that the discrimination occurred from 2006 to 2009 as PrimeLending was rapidly expanding its lending but didn't have monitoring to ensure compliance with fair lending laws. In addition to paying the $2 million to people hurt by the alleged violations, the government says PrimeLending agreed to put loan rate policies and monitoring in place to prevent future discrimination.
Rates on fixed mortgages rose for the fourth straight week this week, hitting 4.61 percent. The surge could slow refinancings and further hamper the housing market. The average rate on a 30-year fixed loan increased sharply from last week's rate and is well above the 4.17 percent rate hit a month ago--the lowest level on records dating back to 1971. The average rate on a 15-year fixed loan rose to 3.96 percent. Rates hit 3.57 percent last month--the lowest level since 1991. Rates are rising after plummeting for seven months. Investors are selling Treasury bond in anticipation of an extension of tax cuts and unemployment benefits that could boost the economy. That is raising the yield on Treasury bonds. Mortgage rates tend to track those yields.
Texas Comptroller Susan Combs says November sales tax revenue totaled $1.84 billion—up 8.7 percent compared to the same month in 2009. Texas cities will receive $290.9 million—up four percent compared to the same month last year. November state sales tax collections and December sales tax allocations to local governments represent sales that occurred in October.
The Texas Film Commission has denied state incentives to motion picture director Robert Rodriguez's film satire Machete. The commission, which is based in Governor Rick Perry's office, said in a letter last week that it was denying funding based on a state law provision that allows for denial of incentives if the film “portrays Texas or Texans in a negative fashion.” Conservatives blasted the film, which stars Robert de Niro. The conservatives contend the film endorses Mexican immigrant revenge killing and would spark racial violence, even though the story of a Mexican assassin out for revenge was widely considered to be satire. The film was released in September. The Texas law allowing for film incentives was passed to encourage movie makers to film in Texas.
Nevada authorities say a worker was killed while working on a section of the Ruby Pipeline that will carry natural gas from Wyoming to Oregon. The Elko County Sheriff's Office says 61-year-old Charles Kuhn, of Dresden, Ohio, died Tuesday north of Elko. A sheriff's sergeant says Kuhn was working on a section of pipe next to the trench when it started to roll. He was knocked into the trench, and the pipe fell on top of him. Houston-based El Paso Corporation is building the 680-mile pipeline but Kuhn was employed by contractor Precision Pipeline of Eau Claire, Wisconsin. The pipeline will run from Opal, Wyoming, cross northern Utah and northern Nevada and end at Malin, Oregon. The Occupational Safety and Health Administration will investigate.
Fisheries experts say that--because the Gulf of Mexico oil spill kept anglers from getting offshore this year--they're unlikely to hit the limit set to let greater amberjack recover from overfishing. The Louisiana Department of Wildlife and Fisheries says that means recreational fishing for greater amberjack can continue through the rest of the year. The 2011 season will start January 1st. Before the Macondo well blew wild April 20th, the National Oceanic and Atmospheric Administration expected the Gulf-wide quota of 1.2 million pounds to be hit in late August. The annual recreational quota is set at nearly 1.4 million pounds. However, NOAA reduced this year's because the 2009 catch went over. Commercial fishing for greater amberjack was closed October 28th.
Experts are watching to see if Texas is heading for another drought. State climatologist John Nielsen-Gammon, professor of Atmospheric Sciences at Texas A&M, says continuing dry weather is likely to persist at least into the spring. Tropical Storm Hermine drenched Central Texas in September. Since then large swaths of Texas have received less than ten percent of normal rainfall levels. Dry conditions have led at least 80 Texas counties to enact burn bans.