President Bush praises economy; Congress considers help for homeowners with adjustable-rate mortgages…Offshore companies continue evacuations in advance of forming storm system…Wisconsin students protest Halliburton’s presence at job fair…
President Bush says despite “some unsettling times” in the housing and credit markets, the economy is basically in good shape. But says “the fundamentals of our nation’s economy are strong.” At a White House news conference, Bush noted that inflation is down, markets are steady, unemployment is relatively low, exports are up and corporate profits “seem to be strong.” He says there’s “no question there are some unsettling times in the housing markets,” but he doesn’t see that spreading to the broader economy. Some economists have raised the prospect that the housing slump could lead to a recession. Asked if he’s concerned that the nation is nearing a recession, Bush said, “you need to talk to an economist.”
More help could be on the way for people who have adjustable-rate mortgages. Treasury Secretary Henry Paulson is signaling the Bush administration would consider letting Fannie Mae and Freddie Mac to temporarily buy, bundle and sell as securities, jumbo loans exceeding $417,000. The idea is portrayed as a way to pump money into the beleaguered home mortgage market. A person familiar with testimony Paulson gave to a Congressional committee says he wants that action tied to passage of legislation to tighten federal oversight over the two government-created mortgage giants.
Federal Reserve Chairman Ben Bernanke tells Congress the credit crisis has created “significant market stress.” He’s offering fresh assurances that regulators will take steps to curb fallout related to the mortgage mess. Bernanke spoke to a House panel, two days after the central bank cut benchmark interest rates by a half point. He says “global financial losses have far exceeded even the most pessimistic estimates” of the credit losses on the loans. Bernanke promises lawmakers that the Fed will take steps to crack down on abusive or bad lending practices.
Offshore companies have been evacuating facilities in the eastern and east-central Gulf of Mexico in preparation for what could be the next big storm. The National Hurricane Center said the storm off the southwest coast of Florida is moving northwest and could reach the central Gulf early Friday and develop into a tropical system. Chevron, ConocoPhillips and BP have been removing non-essential personnel, but will not suspend oil and natural gas production until the storm’s path can be better predicted. Anadarko Petroleum removed about 175 workers on Wednesday. Drilling contractors Transocean and Noble removed 300 workers from two contracted drilling rigs. Diamond Offshore is evacuating seven rigs near Louisiana’s coast, and may evacuate others on Friday. Shell Oil continued evacuations from drilling rigs and production platforms on Wednesday, bringing another 600 to shore. Just under 400 workers remained to be transported by the end of today, and their platforms will shut-in. ExxonMobil is monitoring the storm’s path before evacuating. The Gulf contains about 4,000 offshore rigs and platforms. Just over one-quarter of the Gulf of Mexico’s daily oil production has been closed off–due to weather. The Minerals Management Service says personnel have been evacuated from five of the 834 staffed production platforms in the Gulf. Three of the 89 drilling rigs had been evacuated. Hurricanes Katrina and Rita destroyed more than 100 floating facilities and shut in 92 percent of oil output and 83 percent of natural gas production.
A couple hundred students jammed into a University of Wisconsin-Madison building to protest Halliburton’s recruiting at a job fair. The protesters sat in front of the company’s booth, blocking access to its four recruiters, for about an hour and a-half. Then the students left. The campus antiwar network is accusing Houston-based Halliburton, whose former subsidiary had large contracts to aid the U.S. military in Iraq, of profiting from war. Halliburton is looking for entry-level employees as part of its plan to add 13,000 workers this year. A company spokeswoman has called its critics uninformed since Halliburton and its former subsidiary, KBR, separated earlier this year. KBR has won billions of dollars in contracts from the U.S. government to help the military in war zones.
Four men charged in a bid-rigging scheme to win $79 million in contracts from the U.S. Army Medical Command have reached plea deals. Those deals call for five-to-seven-year prison terms for Bill Strout, his son Will Strout, “Nacho” Torres and Johnnie Flores. Prosecutors say the men exploited laws giving minority-owned and small disadvantaged businesses preference for computer and technology contracts for army hospitals. The prosecutors say the men made almost $4 million in the process. The four are expected to enter pleas to bribery or bribery-related charges September 28th or later in San Antonio federal courts. Bill Strout was a contracting officer at Fort Sam Houston, while Torres was a private contract employee assigned to the Medical Command based at Fort Sam Houston. Flores heads Sphinx Consultants & Associates.