Foreign exchanges that trade U.S. oil will soon find themselves facing stricter limits on their activities as concerns continue to grow about the role of speculation in rising fuel prices. The Commodity Futures Trading Commission says it will require the ICE Futures Europe Exchange to adopt the same position limits used in the U.S. for trading West Texas intermediary crude oil contracts. Foreign officials also will share daily trading data with U.S. authorities and report violations when they uncover them. Previously the groups shared data on a weekly basis. Lawmakers are increasingly blaming speculation by index funds and other large investors for artificially boosting the prices of oil, corn and other commodities.
Eleven Senators are calling on the Bush administration to file a complaint with the World Trade Organization against eight members of the OPEC cartel who, the lawmakers say, are violating trade rules by colluding to hold down global oil supplies. The eight OPEC members, that also belong to the WTO, are Angola, Ecuador, Nigeria, Saudi Arabia, Venezuela, Kuwait, Qatar and the United Arab Emirates. The ten Democrats and one independent maintain “the very existence of OPEC” violates the Gatt Trade Agreement that prohibits nations from setting quotas or imposing other restrictions on exports. Despite the current surge in oil prices and growing global demand, OPEC members as a group have refused to boost production. They argue market speculation and the declining value of the dollar have caused the high prices.
Venezuela’s state oil company plans to increase crude production by eight percent this year, to more than 3.4 million barrels per day. Venezuela is the fifth largest supplier of oil to the United States.
Congressional investigators have granted Boeing’s protest of a $35 billion Air Force tanker contract awarded to Northrop Grumman and Airbus parent European Aeronautic Defence and Space. The Government Accountability Office decision is not binding, but it puts pressure on the Air Force to re-examine the contract and could help Boeing capture part or all of the award. The was confirmed by the offices of Senators Patty Murray of Washington and Pat Roberts of Kansas. The decision also gives ammunition to Boeing supporters in Congress seeking to block funding for the deal or force a new competition. The contract for 179 aerial refueling tankers is the first of three deals worth up to $100 billion to replace the Air Force’s entire tanker fleet.
Major bank economists say home prices have yet to hit bottom and, in fact, still have a long way to go before they do. The ten economists, including some from Wells Fargo Bank and JPMorgan Chase, say U.S. home prices are only about halfway through their decline and most of the further erosion should occur this year. They also cite the negative overall tone of the economy, with consumer spending curbed, spiking fuel and food prices, tight credit and relatively high unemployment. The group expects the economy will experience what it calls an “unprecedented” type of recession–the first one without a significant quarterly decline in the gross domestic product. That indicates that factors other than GDP, such as income and employment levels, are important shapers of recession. The economists are forecasting “sluggish growth, picking up moderately next year.”
A spike in interest rates to their highest level in 11 months sent mortgage applications tumbling last week. The Mortgage Bankers Association’s weekly survey finds application volume was down by nearly nine percent, keeping it near lows unseen since 2002. Refinance applications made up about 37 percent of all applications–the lowest level all year. The volume of refinance applications plunged 15 percent, while purchase activity was off more than four percent. The average rate for traditional, 30-year fixed-rate mortgages rose to 6.57 percent during the week, from 6.24 percent the previous week. Rates are at their highest level since the week of July 20th, 2007, when they hit 6.59 percent.
Electronic Data Systems said its shareholders will vote July 31st on its proposed sale to Hewlett-Packard. The $13.2 billion deal was announced last month. The special shareholders meeting will be held at EDS headquarters in Plano. Silicon valley-based hp is offering $25 per share for the technology services provider in an all-cash deal. That’s a 33 percent premium to EDS shares before news of the deal leaked. HP sees EDS as a way to become a bigger player in technology services. That’s a broad category that includes running computer data centers and helping government agencies and companies run complex software programs. EDS has also gotten into the business of running back-office functions for other companies. EDS and HP have said they expect the deal to close during the second half of this year. HP says it expects EDS to begin boosting its earnings in its fiscal year ending in October 2010. HP had indicated it would make significant layoffs to eliminate overlapping jobs.
Despite the weakening labor market, the investment plans and sales expectations of corporate CEOs is holding steady. The Business Roundtable CEO Economic Outlook Index declined five points, to 74.5, in the second quarter. The index reflects sales, capital expenditures and employment figures for the next six months. Still, the survey finds most leaders of America’s top companies expect sales and capital expenditures to either increase or remain unchanged. At the same time, though, more look for a drop in future employment. On overall U.S. economic growth, CEOs estimate that GDP growth will be 1.3 percent, down from the 1.5 percent assumed in the last quarter. for its Wednesday editions that the economic downturn is cyclical. She says an upswing will happen and the city should be prepared for long-term growth. In 2007, the San Antonio airport topped eight million passengers and through March of this year had 4.8 percent more traffic than a year ago. Terminal B is set to open in two years. Also, work is wrapping up this month on a 2,800-space parking garage., A&W, and Long John Silver. The companies behind those restaurant chains have begun restocking tomatoes after the government identified crops that are not linked to the salmonella scare. None of the 277 salmonella cases reported is connected with any of the restaurants. Burger King, which also briefly stopped using tomatoes, began restocking its restaurants with them last week. But McDonald’s is holding off until it can get enough safe tomatoes for its entire chain.
President Bush vetoed a $290 billion farm bill for a second time, sending it back to Congress after a printing error threatened the delivery of U.S. food aid abroad. Most of the bill was enacted in May, when both the House and Senate easily overrode Bush’s first veto of the legislation. But 34 pages of the bill that would extend foreign aid programs were mistakenly missing from the parchment copy Congress sent the White House, so that section has not yet become law. To ensure that the aid continues amid a global hunger crisis–and to prevent future legal challenges–Congress and Bush are again passing, vetoing and enacting the entire bill to provide farm subsidies, food stamps and other nutrition programs over the next five years.
The San Antonio International Airport is planning to begin work on an eight-gate $134 million passenger terminal. Officials say Terminal B will replace the aging Terminal 2 at the airport and make way for another terminal to house five to 11 more passenger gates. During the groundbreaking on the project, city officials said that the additional gates, which would bring the airport’s total to 35, will be needed eventually. City Manager Sheryl Sculley told the San Antonio Express-News
Continental Airlines is watching how the $15 fee on a first checked bag works at other airlines before deciding whether to ask passengers to pay up. Chairman and Chief Executive Lawrence Kellner says the fee can raise a lot of money but might cause delays in boarding the plane. American Airlines was the first major carrier to charge a fee for checking one bag, and United Airlines and US Airways have followed. Kellner said at an investor conference that he is studying whether passengers prefer airlines that don’t charge the fee. “I also think there are operational impacts on a first-bag fee where you will have some delays,” he said. “My general view is if those people need a product, how do we put that in an all-inclusive fare?”
The head of the Senate Banking Committee says he didn’t realize he was getting reportedly cut-rate mortgages from Countrywide Financial in 2003. Senator Chris Dodd of Connecticut confirms he was told that he was being put in a “VIP section.” But Dodd says there was “no red flag” to him that he was getting special treatment. Fellow Democratic Senator Kent Conrad of North Dakota says he, too, had no reason to believe he was getting a “sweetheart deal.” Dodd says he doesn’t plan to give up the loans. Conrad has refinanced his other Countrywide mortgage through a different company, and says he’ll reimburse Countrywide the money he saved through his VIP discount if it’s found he violated gift rules.
Food manufacturers promised Mexico’s government to freeze prices on more than 150 food products to help families cope with rising costs. President Felipe Calderon says prices for such goods as cooking oil, flour, canned tuna, fruit juices, coffee, ketchup and canned tomatoes will remain fixed until December 31st. The Mexican leader has blamed high food costs on rising global energy prices, soaring food demand in China and India and the use of corn for ethanol production. Food prices, especially rice, have reached historic highs almost everywhere in the world. Calderon has already taken several steps to fight high prices. He eliminated import barriers on wheat, corn and rice in May. He won agreement from rice farmers to sell their crop at ten percent below international market prices. Last year, he imposed price caps on tortillas, Mexico’s staple food. He also announced small monthly cash subsidies to 26 million poor Mexicans–about a quarter of the population. The cash payments of about $12 a month are expected to cost about $433 million.
Federal regulators report that revenue at the nation’s Indian casinos grew five percent in 2007. That’s slower than in years past but still enough to outpace the 1.8 percent growth rate at Nevada casinos amid a sluggish economy. Figures from the national Indian gaming commission, obtained Wednesday by the Associated Press, show that Indian casinos took in $26 billion in gambling revenue in 2007, up from $25.1 billion in 2006. Nevada casinos took in $12.85 billion in gambling revenues last year.
You can now get tomato again with that burger at Wendy’s. The same is true for items at Taco Bell, KFC,