Thursday August 3rd, 2006
by: Ed Mayberry, August 3, 2006 5:08:00 am
Jurors in the Houston trial of two former energy traders accused of illegally reporting fake transactions--say they're deadlocked. But U.S. District Judge Nancy Atlas today told the jury to keep trying to reach a verdict in the case of ex-Dynegy trader Michelle Valencia and former El Paso Corporation trader Greg Singleton. Both are accused of reporting fake data to industry publications in 2000 and 2001 that use the information to calculate natural gas index prices. The publications calculate price based on information supplied by traders or their companies, which in turn use those prices in trading. Such indexes are used to price billions of dollars in transactions involving natural gas and electricity in physical and financial markets each year. Companies provide trade data voluntarily, and no governmental agencies regulated how the publications handled the information. Valencia faces 23 counts of conspiracy, false reporting and wire fraud. Singleton faces eight counts of conspiracy, false reporting and wire fraud in allegations that largely overlap with those against Valencia. Valencia and Singleton are among a string of traders charged with reporting bogus data after a federal investigation and heightened scrutiny of trading practices after Enron's collapse.
More people are looking to get unemployment checks. The Labor Department says the number of new applications for jobless benefits rose by a seasonally adjusted 14,000 last week to 315,000. That's a higher level than expected, but predicting the exact level of claims on a week-to-week basis is difficult. The less volatile four-week moving average of new claims was virtually unchanged at just under 314,000. That's close to where it was a year ago. The release comes a day ahead of the monthly unemployment report from the government. Analysts expect tomorrow's report to portray a steady job market, with a modest pick-up in hiring.
A jobs index is off sharply after two months of strong growth. Online recruiter Monster says the decline in its index for July reflects a seasonal slowdown typically seen in the middle of summer. It notes the Monster employment index is still 34 points higher than it was last year. Much of the drop in July was due to lower demand for workers in the transportation and warehousing industry, along with management occupations. Online recruitment for protective service and military-related occupations was higher. Monster says online recruitment activity fell by varying degrees in eight of nine census bureau regions. The only region unchanged was the west north central area, including Minnesota, Iowa, Kansas, Nebraska, Missouri and the Dakotas.
Business activity in the non-manufacturing sector increased nationwide in July for the 40th consecutive month, according to the nation's purchasing and supply executives in the latest report from the Institute for Supply Management. Business activity, inventory sentiment and new orders increased at slower rates, but backlog of orders, employment, new export orders, imports, inventory and prices increased at faster rates.
Governor Rick Perry told small business owners in College Station that one of government's key goals is to help employers succeed. Perry has held a series of small business summits around the state. He praised legislative efforts to overhaul the workers compensation system, on lawsuit reform, investing in workforce training and the Emerging Tech Fund and Texas Enterprise Fund. Perry added that the school finance package passed by the legislature, which cuts property taxes by 33 percent, is good for small businesses.
Several workers required medical attention today after an apparent ammonia leak at a company in Houston. Houston Fire Department officials say the accident happened at a Chung's Food Products plant. A spokesman says four employees were treated for exposure, plus a firefighter suffered heat exhaustion. The workers were treated for respiratory trouble. Emergency officials say the leak has been contained.
A three-person Continental crew escaped injury today in Lexington, Kentucky, when a jet bridge malfunctioned. Officials say the jet bridge became stuck on a door hinge of a plane, which was preparing to fly to Houston. Authorities say no passengers were aboard when the bridge got caught on the 50-seat Continental regional jet as it pulled into an airport gate. Part of the plane was lifted about three feet. Airport spokeswoman Amy Caudill says it took about four hours to lower the plane to the ground. Passengers who were supposed to board the plane for Houston were rebooked on another flight.
Continental has converted 12 existing orders for Boeing 737 aircraft, scheduled for delivery in 2008, into 12 new Boeing 737-900ERs. The order is worth $900 million at list prices. Continental is the first U.S. carrier to order the extended-range twinjet that flies about 500 nautical miles farther than the existing 737-900. The 737-900ER can carry as many as 215 passengers on flights as far as 3,700 miles. The announcement does not change Continental's commitments for new Boeing 737 aircraft.
A Houston jury has awarded $206 million to two Texas construction firms in a dispute with Williams Power. The dispute concerned claims of breach of contract and fraud in connection with the design and construction of four gas processing plants. Humble-based Gulsby-Bay Plant Partners was awarded $4.3 million in actual damages and $85 million in punitive damages, and Corpus Christi-based Bay Limited was awarded $32 million in actual damages and $85 million in punitive damages.
The United Services Automobile Association, or USAA, is reducing auto insurance premiums in Harris County by an average of nine percent. The San Antonio-based company says the reductions are possible because of improvements in productivity. There are more than 47,000 USAA members living in Harris County. Premiums will change on renewal.
Houston's coffee imports are ahead by about 119 percent per month for the first six months of the year, according to the head of the group that manages the Greater Houston Coffee Association. Alistair Macnab says it's a result of being designated in 2005 as one of the four coffee exchange ports in the nation. Macnab is president of the Greater Houston Port Bureau. New Orleans, New York and Miami are the other coffee exchange ports.
Jeans, jerseys, shoes and socks are expected to be hot shopping items this weekend during the Texas sales tax holiday. Comptroller Carole Keeton Strayhorn is reminding consumers of the sales tax-free weekend--Friday, Saturday and Sunday--as schools prepare to reopen. Most clothing items and footwear under $100 are tax free during the three days to any and all shoppers. Backpacks, purses, bicycle helmets and sewing supplies are among the items that remain taxed. Strayhorn estimates shoppers will save $38.5 million in state sales taxes and $10.5 million in local sales taxes this year. A list of exempt items is available on the Web.
Mortgage interest rates are down for the second time in as many weeks on indications that inflation threats are easing. Freddie Mac reports the 30-year fixed-rate mortgage averaged 6.63 percent this week, compared with 6.72 percent last week. A year ago the 30-year loan rate averaged 5.82 percent. The average for the 15-year mortgage, often used for refinancing, is 6.27 percent--down from last week's average of 6.34 percent. Freddie Mac vice president and chief economist Frank Nothaft says the fact that second-quarter gross domestic product came in weaker means inflation is less of a threat. That, he says, "translates into lower mortgage rates.''
The Securities and Exchange Commission today announced $70 million in settlements with a Waco-based insurance company. The company was accused of targeting military personnel with a deceptive sales program. Since 2000, about 57,000 service members purchased the Horizon Life product from American-Amicable Life Insurance Company and its affiliates. The SEC complaint filed in southern California says sales agents falsely claimed the investment would make the service people millionaires. The company neither acknowledged nor denied the allegations, but will discontinue sales of Horizon Life and will terminate the "building success'' program. American-Amicable will pay the SEC $10 million, plus $60 million to regulators and other agencies in Georgia, Texas and Pennsylvania. The money will go to affected service members.
The Dallas-Fort Worth International Airport board voted today to enter the gas business. The board approved a bid from Oklahoma City-based Chesapeake Energy Corporation to drill for natural gas on the airport grounds. Under terms of the deal, Chesapeake will pay the airport a $181 million bonus upfront, then a 25 percent royalty on any gas produced on the airport grounds. The deal still requires approval by the city councils of both Dallas and Fort Worth. But Dallas mayor Laura Miller and Fort Worth Mayor Mike Moncrief both support the deal. The company plans to begin drilling in about 18 months at the airport, which sits atop the gas-rich Barnett Shale Formation.
A Chicago-based company has bought downtown Austin's tallest and flashiest office building for $188 million. The Price Equity Office Property Trust agreed to pay Atlanta-based Cousins Properties for Austin's Frost Bank Tower is a Texas record. The sale is expected to close in mid-September. The price of $354 per square foot beats the record equity set in October when it bought another Austin building for $131.7 million. That's $295 per square foot. The Frost building purchase will give equity ownership of five buildings in downtown Austin, along with four suburban properties in the Austin area. The Frost Bank Tower opened in January 2004. It contains just over 531,000 square feet. The building's glass exterior and jagged top are prominent features of the Austin skyline. The building is 87 percent leased.
Federal claims could top $1 billion against Asarco for environmental damage at 31 sites operated by the bankrupt mining and smelting company. The Justice Department met yesterday's deadline for submitting claims to an administrator appointed by a bankruptcy judge in Corpus Christi. States are seeking additional cleanup money, such as $600 million sought by Washington state. The company also faces asbestos-exposure claims from individuals, who have until September 30th to file. A lawyer for Asarco says the claims won't prevent the Arizona-based subsidiary of Grupo Mexico from eventually emerging from bankruptcy. Asarco has or has had facilities in Texas, including smelters in Amarillo and El Paso and a recycling center in Corpus Christi. The El Paso smelter is now closed. Asarco sought bankruptcy protection last August.