Wednesday PM January 5th, 2011
by: Ed Mayberry, January 5, 2011 4:01:00 pm
Workers with the U.S. Coast Guard and the Texas General Land Office are using pitchforks to pierce chunks of animal fat that spilled into the Houston Ship Channel, shutting down a section of the waterway. Coast Guard spokesman Richard Brahm says a three-quarter mile section of the channel remains closed after Tuesday's spill. But no ship traffic has been delayed because the 15,000-gallon spill happened at the end of the channel. The mess was created after an onshore storage tank owned by agricultural company Jacob Sterns and Sons leaked 250,000 gallons of animal fat. About 15,000 gallons seeped into the channel through a storm drain. Brahm says the fat solidified as soon as it hit the water. He says the cause of the leak is being investigated.
Payroll processor ADP says employers added 297,000 jobs last month. And Challenger, Gray & Christmas says downsizing activity in 2010 fell to its lowest level since 1997. Employers announced plans to eliminate 529,973 positions last year—the lowest monthly job-cut total since 2000, and 59 percent fewer than in 2009.
New figures show Americans spent more on clothes, shoes, luxury goods and electronics in December than a year earlier. The figures released by Mastercard Advisors' SpendingPulse show shoppers extended momentum that had been building since August. They treated themselves to new clothes and shoes while shopping for gifts during the most important period of the year for retailers. The data include spending in all forms including cash. Jewelry sales sparkled and online sales soared. Even home furnishings and furniture--pummeled by the housing-market slump--eked out a small increase for the most recent five-week period. Spending in many key nonessential areas other than clothing remains below pre-recession levels. But analysts predict holiday spending rose faster than in any year since 2006.
Strong consumer demand pushed a key measure of the economy's service sector last month to its highest level in more than four years. The Institute for Supply Management, a trade group of purchasing executives, says its index of service sector activity rose to 57.1 in December, up from 55 the previous month. Any reading above 50 indicates growth. The increase marks the 12th straight month of expansion for the sector, which employs 80 percent of the work force. It includes industries from health care to retail to financial services. The index is at its highest point since May 2006. The index plummeted to 37.2 in November 2008, at the height of the financial crisis. The sector contracted for all but two months in 2009, then began expanding last year.
A government watchdog says the Internal Revenue Service is tormenting struggling taxpayers in the midst of a slumping economy by increasing the number of liens the agency has filed against people who owe back taxes. The IRS filed nearly 1.1 million liens in the budget year that ended in September, a 14 percent jump over the previous year. National taxpayer advocate Nina E. Olson says the liens punish taxpayers and often hurt their ability to pay back taxes. The IRS responded that liens are not filed until taxpayers are given numerous opportunities to pay their tax bills, or sign up for payment plans. IRS spokeswoman Michelle Eldridge said the agency has taken numerous steps to help taxpayers facing financial problems, including increased flexibility in installment agreements and other collection efforts.
Two former Dynegy executives are forming a Houston-based energy marketing firm called Twin Eagle Resource Management, according to Reuters. Chuck Watson and Griff Jones are receiving backing from Chesapeake Energy. Twin Eagle is acquiring some wholesale power contracts and personnel from Fulcrum Power Services, also founded by former Dynegy executives. Watson left Dynegy in 2002 following Enron’s demise and the collapse of power trading.
The presidential panel investigating the BP oil well blowout says that a series of risky decisions that saved time and money caused the disaster--and the incident could happen again without significant reforms. That conclusion is the final word on what led to the massive Gulf oil spill from the seven-member panel appointed by President Barack Obama to investigate it. In a 48-page excerpt obtained by the Associated Press, the commission says that the largest offshore oil spill in history can be explained by a single failure--industry management. Personnel working for the three main companies--BP, Halliburton and Transocean--did not adequately consider how decisions would increase risk. If they had, the blowout would have been prevented, the commission says.
A federal appeals court has temporarily blocked the Environmental Protection Agency from taking over greenhouse gas permits in Texas. The U.S. Court of Appeals for the District of Columbia issued the stay, pending further action by the court. Texas Attorney General Greg Abbott had asked the federal appeals court in Washington to block the EPA from taking over greenhouse gas permits starting Sunday until the court could review the case. The appeals court noted that order issuing the stay “should not be construed in any way as a ruling on the merits” of Abbott's motion. Earlier last week, the U.S. Court of Appeals for the Fifth Circuit had declined to issue a stay that would delay the EPA's plans as Texas' lawsuit against the federal agency moved forward.
Another travel company is jumping into the fight with American Airlines over ticketing information. Sabre Holdings says it is moving to end its agreement with American, and will make American fares harder to see in its displays. Sabre runs a computer system that allows travel agents to see flight and fare information. Sabre also said it is removing discounts it previously gave to American. Sabre says the move does not affect its online booking site, Travelocity. American pulled its flight listings from Orbitz last month when the two companies couldn't agree on a new contract. Online booking site Expedia dropped American flight listings over the weekend.
A new University of Houston Hobby Center for Public Policy study on the Texas Lottery finds that participation in all games is down from the previous year—a decline that began in 1995. The Texas Lottery is projected to have revenue of $2.84 billion for 2010, compared to ticket sales in 2009 of $3.72 billion. Players in 2010 spent fewer dollars on average each month, from $45.21 a month in 2009 to $38.92 in 2010. Mega Millions saw a nearly 13 percent decrease in participation. Houston saw a decline of eight percent in all games. The most popular games are Lotto Texas and scratch-off tickets. Most players are married and homeowners, and most--as in past years--were women.
Automakers are spending more money on glitzy, state-of-the-art exhibits at the North American International Auto Show in Detroit. That's something organizers of the annual event believe is a good sign for the economically embattled city and region--and the industry. Auto show co-chair and General Motors dealership owner Bill Perkins says that many of the displays being erected this week at Cobo Center are larger than in past years. Perkins says the market is starting to come back and it's a competitive environment. Porsche, which missed the last three shows, will be there this time. The show begins next Monday and runs through January 23rd. It opens to the public January 15th. Cobo has gotten a $3 million upgrade after organizers complained about the aging convention center.
A new automotive survey byConsumer Reports shows that Ford has gained ground on Toyota among consumer perceptions. Toyota scored 147 points in the 2011 car brand perception survey, giving it a slight advantage over Ford with 144 points. But the magazine said the Dearborn, Michigan, company had made strides in safety, quality and value, three key parts of the survey. Toyota has struggled with a series of high-profile recalls and held a substantial lead over Ford and Honda in a similar survey last year. Toyota and Ford were followed by Honda, General Motors' Chevrolet brand and BMW. The magazine surveyed consumers based on their perception of each brand in categories such as safety, quality, value, performance, design/style, technology/innovation and environmentally friendly/green.
A research group says the global market for tablet computers such as the iPad will almost triple by the end of 2014. Yankee Group expects tablet sales to rise to $46 billion in 2014 from $16 billion in 2010. The researchers say tablet sales are rising faster than high-definition TV sets, handheld gaming consoles or even mp3 players. Apple's iPad, the main player in today's tablet market, costs $499 to $829 depending on the configuration. According to the forecast, the average tablet price tag will be $237 in 2015. Yankee Group issued the forecast the day before the official start of the International Consumer Electronics Show in Las Vegas. Tablets are an especially hot item at this year's trade show.
AT&T says it is on track to start rolling out its 4th-generation wireless network technology in the second half of this year. CEO Ralph de la Vega updated the company's plan, speaking at a developer summit in Las Vegas ahead of the annual International CES. AT&T's speedier network uses LTE, or Long Term Evolution, technology. That is the standard technology behind 4G networks. De la Vega also said AT&T has mostly finished its rollout of HSPA+, an upgraded 3G network that AT&T considers part of its 4G network because it offers similar speeds. AT&T, which previously said it planned to roll out LTE in 2011, expects the new network to be largely finished by the end of 2013.
LG Electronics says it will sell a new type of 3-D TV this year, one that uses the light, cheap glasses used in 3-D theaters rather than the bulky, heavy ones used with the 3-D TVs introduced last year. LG is the first major TV maker to announce new products a day ahead of the opening of the consumer electronics trade show in Las Vegas. Other TV makers are also expected to announce 3-D sets that work with so-called “passive” glasses. The Korean company will sell 47-inch and 65-inch flat panels, at prices that are as yet undisclosed. Each will include four pairs of glasses, and extras will cost less than $20. Current 3-D sets usually include one or two pairs of glasses, but some don't include any.
More than 50 Texas counties were under “severe” drought by the end of December, according to the U.S. Drought Monitor. Most of the state’s other 254 counties were experiencing “moderate” conditions. “Severe” drought means that crop and pasture losses are likely, water shortages are common and water-use restrictions are likely to be imposed. “Moderate” drought means there will be some damage to crops and pastures. Streams, reservoirs and well water levels will be low. Burn bans have been in effect for many areas. Dry grass along roadways continues to pose a high risk of roadside fires. In Central Texas, recent rains stimulated the growth of winter grains, but crops still need significant moisture.