Friday AM November 2nd, 2007
by: Ed Mayberry, November 2, 2007 5:11:00 am
A mortgage data company says a soaring number of U.S. homeowners struggled to make mortgage payments in the third quarter. RealtyTrac says more than 446,000 homes were targeted by some sort of foreclosure activity from July to September. That's double the number from the same period a year ago. The current figure was almost 34 percent higher than the more than 333,000 properties in foreclosure in the second quarter of this year. RealtyTrac says there was one foreclosure filing for every 196 households in the nation during the most recent quarter. All but five states reported a year-over-year increase in foreclosure filings, which include notices of default, auction sale notices or bank repossessions.
New York Attorney General Andrew Cuomo says a major real estate appraisal firm colluded with the nation's largest savings and loan companies to inflate home values, contributing to the sub-prime mess. Cuomo's lawsuit accuses a unit of First American Corporation of caving in to pressure from Washington Mutual to use a list of "proven appraisers" that he claims inflated home appraisals. The lawsuit filed in State Supreme Court in Manhattan seeks to stop the practice, recover profits and assess penalties. Cuomo says investors were hurt by buying mortgages based on inflated property values. He says consumers will feel the pain for years because they were stuck with mortgage payments based on unrealistic values for their properties--a problem made worse by falling prices across the country.
Worries about the economy might be putting a damper on consumer spending. The Commerce Department says spending rose by three-tenths of a percent in September. That's slightly lower than the four-tenths-percent increase that analysts had been expecting, and the weakest performance in three months. Economists are worried that consumers may cut back on their visits to the malls as they struggle with the housing slowdown, tighter credit and record-high oil prices. Incomes grew by four-tenths percent in September, matching the August gain. That was in line with analysts' forecasts.
The number of newly laid-off workers filing claims for unemployment benefits fell by a larger-than-expected amount last week. The Labor Department says applications for jobless benefits dropped by 6,000 to a total of 327,000. But the less volatile four-week average of claims rose by 1,750 to 327,000, a six-month high. Analysts expect the unemployment rate to rise slightly in coming months, reflecting a slowing economy. The government will release its report on September unemployment on Friday.
A closely-watched gauge finds the manufacturing sector growing at a slower pace. The Institute for Supply Management says its index stands at 50.9 for October, down a little more than a point from the previous month. The trade group says it is the lowest level of growth since March. Any reading above 50 indicates growth, while a number below that level indicates contraction.
Panama-based Willbros Group and a subsidiary have agreed to pay more than $32 million to settle a Securities and Exchange Commission and Justice Department investigation into alleged violations of the Foreign Corrupt Services Act. The investigation centered on former operations by the Houston-run company in Bolivia, Ecuador and Nigeria.
A federal judge in Louisiana has sided with Houston-based KerrMcGee Oil and Gas, now owned by Anadarko Petroleum, in a dispute over authority federal regulators have in assessing royalty payments. U.S. district Judge Patricia Minaldi ruled that the Interior Department's Minerals Management Service could not order the company to pay royalties on deepwater production in the Gulf of Mexico solely because prices rose to specific thresholds. The MMS had estimated that losing the case could cost the federal government more than $60 billion in royalty payments, although the Government Accountability Office says the agency may have overestimated the impact.
EVA Air Cargo has begun twice weekly, freighter flights from George Bush Intercontinental Airport to Taipei. This is Houston's third scheduled Asian air cargo service. The new service, utilizing Boeing 747-400 freighter aircraft, will be routed through Anchorage, Alaska. Arriving flights will include stops in Anchorage and Chicago.
Marathon Oil's board has approved a $1.9 billion expansion project that will upgrade its Detroit refinery to process heavy Canadian oil. Capacity will be increased by 15 percent. Construction, to be completed by 2010, will involve 800 workers and the plant will create 135 new jobs.
Houston-based Rowan Companies has signed some $700 million in contracts with Texas-based Keppel AmFELS for four jack-up oil and gas drilling rigs. The Super 116E class rigs will be built in Brownsville beginning in 2010. Rowan will also build two more 240-C class jack-ups at its Vicksburg, Mississippi shipyard at a cost of $400 million for delivery in 2010 and 2011.
Houston-based AEI is buying interests in Chilean-based power company Chilquinta Energia and Peru-based Luz del Sur from Public Service Enterprise Group in a $685 million deal, according to the Houston Business Journal. AEI was formerly known as Ashmore Energy International.
Houston-based Allis-Chalmers Energy has acquired Conroe-based Diamondback Oilfield Services in a $22 million deal.
The Fiesta Mart on the Katy Freeway at Blalock is closing on December 31st because of lost parking space due to freeway expansion. The freeway widening project took 40 percent of the store's parking. Houston-based Fiesta says it's looking for another location in the area. The chain has 50 stores, with 36 in the greater Houston area.
The Greater Houston Convention and Visitor Bureau welcomes five conventions, trade shows and other events to the city in December. More than 52,800 attendees will spend an estimated $51.4 million in Houston during the month. Events include the Philosophical Society of Texas, holding its 2007 annual meeting at the St. Regis Hotel and Baker Institute for Public Policy at Rice University December 7th through the 9th. The Texas Bowl is set for Reliant Stadium on December 28th.
The auto companies are reporting their October sales numbers, and one of the U.S. giants has been seeing declines. Ford says its sales fell more than nine percent last month, leaving it just behind rival Toyota. Ford has blamed its weak performance on a decision to pull back on low profit sales to rental car companies. Toyota enjoyed a gain of 4.5 percent. The Japan-based company is expected to overtake Ford as the number-two automaker in annual U.S. sales after General Motors this year. GM's sales rose 3.3 percent, marking the third straight monthly increase. An executive for the world's largest automaker says GM's market share is up a point from a year ago.
A coalition of groups is urging creation of a "do not track list,'' that would ban advertisers from tracking online movements of consumers. Similar to the do not call telephone lists, the internet proposal comes as online advertising revenues are growing rapidly, providing critical revenue to startups and Web giants such as Google and Yahoo. According to emarketer.com online ad revenue is forecast to more than double to $44 billion in 2011 from 17 billion in 2006. The groups say computer users should be notified when their Web surfing is tracked by online advertisers and Web publishers. Those promoting the idea include the Consumer Federation of America, the World Privacy Forum and the Center for Democracy and Technology. They are asking the Federal Trade Commission to consider the idea.
Blockbuster's third-quarter loss widened by 51 percent, partly on severance and lease termination costs. Now, the Dallas-based movie-rental company says it's planning job cuts to boost profitability. Blockbuster reported a loss after preferred dividends of $37.8 million. Loss from continuing operations grew 52 percent to $34.8 million. The current quarter's results included a charge of $9.6 million to cover severance and lease termination costs. Quarterly revenue dropped five percent to $1.24 billion. Consensus estimates had put sales at $1.28 billion. The company says it's implemented a plan to lower yearly overhead costs by about $45 million through job cuts and the elimination of operational redundancies. Blockbuster is also considering outsourcing some corporate functions.
MetroPCSs Communications is withdrawing its acquisition proposal for Leap Wireless International. Dallas-based MetroPCS last month publicly offered to give leap shareholders 2.75 shares for every share of Leap they own. In withdrawing, MetroPCS said it "has not been able to engage Leap in meaningful negotiations'' about a deal. Leap Wireless already rejected the unsolicited proposal in September, saying it was inadequate in multiple areas—including its lack of accounting for Leap's growth possibilities. Both MetroPCS and Leap provide discount wireless communication services, allowing customers to pay up front for airtime while not having to sign a contract. The two have few overlapping markets.
Chris Wyatt, the founder of GodTube, hustles through his cavernous fourth-floor headquarters in the Dallas suburb of Plano, searching for an available conference room. Finally settled, the nattily dressed former TV producer insists he's as surprised as anyone that the Christian imitation of YouTube was identified earlier this year by Comscore as the fastest growing site on the Web. The video-sharing site specializing in Christian content drew more than four million unique visitors last month. It maintains more than 150,000 registered users with active profiles. Plans for the future include producing entertainment programs at the site's headquarters. GodTube is among religion-based Web sites that closely copy popular secular models. MyChurch.org is similar to the social networking site MySpace. ConservaPedia is the religious right's response to the online encyclopedia Wikipedia. Similar sites target Muslim and Jewish audiences. GodTube videos includes music, comedy and heated theological debates. Two of the most viewed include a corny rap remake called "Baby Got Book'' and the four-year-old daughter of Brian Mosley of Allen, reciting Psalm 23 from memory. GodTube reviews every video uploaded and rejects those with objectionable content. Members of other religions are invited to participate on the Web site, but they cannot proselytize. Atheists are welcome, too, and they may share their point of view, "as long as it's done respectfully."
The owner of a 13-acre Texas town called Albert decided to sell it this year. Then a friend mentioned to Bobby Cave that he might want to try the online auction eBay. Now, with the click of a mouse--and at least $2.5 million--Albert could be yours. Cave says he's spent hundreds of thousands of dollars to clean up and restore the area about 20 miles southeast of Fredericksburg. The 47-year-old Austin man says he's ready to move on to his next venture. Albert, which used to have a post office, dates back to the late 1800s and is in unincorporated part of Gillespie County. No on permanently lives in Albert. But the icehouse that Cave created from the frame of the old general store is open on weekends.