Retail gasoline prices fall in Texas for 12th straight week…KBR accused of using federal rules to hide details on contract performance…National Association for Business Economics: demand for goods and services grew at slower rate during third quarter…
Retail gasoline prices have fallen across the state for the 12th week in a row. The AAA Texas gas price survey released today shows the retail price of regular, self-serve gasoline average $2.08 per gallon. That’s two cents less than last week and 46 cents less than last year. The national average is $2.20 per gallon–also two cents less than last week. Houston’s average is down about two cents a gallon to $2.01. Auto club spokeswoman Rose Rougeau says whether fuel prices at the pump continue to fall depends on winter weather and market forces. She notes that crude oil prices rose above $60 per barrel this week after a weekly federal report showed a decrease in inventories. But she says the decrease was mostly blamed on a three-day weather-related shutdown of the Louisiana offshore oil port. The cheapest gasoline in Texas was again found in Corpus Christi, where retail prices averaged a few points below $2 a gallon. That’s down two cents from last week. The most expensive gas was in the Austin-San Marcos area, where it averaged $2.18 per gallon–down three cents.
The Halliburton subsidiary that provides food, shelter and other logistics to U.S. troops in Iraq and Afghanistan used federal rules to hide details on its contract performance. That’s according to a report issued today by the Special Inspector General for Iraq Reconstruction. The report says Houston-based Halliburton’s KBR Services routinely marked all information it was giving the government as proprietary, whether it actually was or not, including such normally releasable data as labor rates. The government promises not to disclose proprietary data so a company’s most valuable information is not divulged to its competitors. Halliburton spokeswoman Cathy Mann says it’s appropriate to mark data as proprietary since the current contract is being reviewed and may be divided between several contractors. She says proprietary markings have been used on a majority of the data for at least the last decade. The company will work with the military on matters outlined in the interim report as the final audit is completed. The Iraq reconstruction audits have routinely found significant problems with contracting and rebuilding in Iraq.
The Federal Reserve has ended its special supervisory scrutiny of J.P. Morgan Chase and its involvement with Enron, according to Reuters. The Fed in July 2003 instructed J.P. Morgan Chase to strengthen risk-management controls following a review of transactions with Enron. Chase CEO Jamie Dimon, in a recent trip to Houston, talked about the energy trading business that Chase is building.
“We’ve been in the trading businesses for a long, long time, so this isn’t a new business to us. We have extensive controls in place. Now, you’ve probably heard that with Enron, too. You have to independently verify prices. That tells you did every trade settle, was every trade real, was every trade booked, was every trade tracked, was every trade, now you’ve seen a lot of people have problems with that, so we feel very comfortable with all of that. I read the book Conspiracy of Fools on my vacation. I mean there was such crookedness and lying publicly and internally and outrageous accounting and balance sheet and off-balance sheet that everyone was spinning. Well, if the boss can go out and spin, so, you know, if our people heard me going out and spinning, then they probably would think it’s okay to spin me!”
Chase paid $135 million in fines to the U.S. Securities and Exchange Commission to settle allegations about its role in Enron’s downfall, neither admitting nor denying guilt.
Reynolds and Reynolds has closed a $3 billion merger with Houston-based Universal Computer Systems and taken the company private for the first time since 1960. The Kettering, Ohio, company supplies business forms and computer software to auto dealers. The company will still market its products under the Reynolds name and will keep its headquarters in the Dayton, Ohio, suburb. Reynolds’ shareholders, who approved the merger earlier this week, receive $40 in cash for each share of their stock. The new company has a combined 6,700 employees in the United States and abroad.
Tenet Healthcare said it’s agreed to sell a San Diego hospital accused of paying kickbacks to doctors for patient referrals. Dallas-based Tenet says a subsidiary will sell 306-bed Alvarado Hospital Medical Center to Los Angeles-based Plymouth Health. Tenet expects pre-tax proceeds of $36.5 million. Tenet has announced plans in May to sell Alvarado. It was part of a deal with federal prosecutors in San Diego to pay $21 million to settle kickback charges. The settlement came after two juries failed to reach verdicts in criminal trials. Tenet’s been selling hospitals in a restructuring move. Plymouth Health is a physician-owned company formed by the family of two doctors–Pejman and Pedram Salimpour–who also own a physician-services company called Carenex Health Services.
Business executives say demand for their goods and services continued to grow during the third quarter–but at a slower rate. And according to the survey conducted by the National Association for Business Economics, the execs saw price and wage pressures cool as well. As they looked ahead, more than two-thirds of those asked now expect growth of inflation-adjusted gross domestic product to be at an annual rate of between two and three percent for the second half of this year and a higher share than before expect even slower growth. Even with the report of slower than expected economic growth during the third quarter, the execs are not expecting a further slowdown in the economy. The number of those expecting their firms will hire or raise prices in the near future was lower than in the last survey. But the execs generally expect capital-spending growth, which rebounded in the third quarter, will remain strong over the coming year.
Twelve Texas counties were declared disaster areas by the federal government because of drought losses, high temperatures or both this year. The designation means eligible farmers in those counties and several others nearby can apply for low-interest agricultural department loans. The USDA made the designations earlier in the week, but corrected them today. The counties are Crockett, Dallas, Gonzales, Henderson, Irion, Kaufman, Nueces, Parker, Reagan, Rockwall, Upton and Van Zandt. The nearby counties where farmers also are eligible are: Anderson, Aransas, Bastrop, Caldwell, Cherokee, Collin, Crane, De Witt, Denton, Ector, Fayette, Freestone, Glassock, Guadalupe, Hood, Hunt, Jim Wells, Johnson, Karnes, Kleberg, Lavaca, Midland, Navarro, Palo Pinto, Pecos, San Patricio, Schleicher, Smith, Sutton, Tarrant, Terrell, Tom Green, Val Verde, Wilson, Wise and Wood. Farmers have eight months to apply for loans. Information can be obtained at USDA service centers.