Economists say the victory of Barack Obama makes a new economic stimulus package more likely. They say concerns about the budget deficit will probably take a back seat, at least for now. A new package could be as large as $150 billion. The U.S. Chamber of Commerce called on the current Congress to approve a stimulus measure this year. During the Campaign, Obama supported a $50 billion stimulus that included money for infrastructure spending. There would also be grants to state and local governments to prevent cuts in health, education and other services. Six out of ten voters who were surveyed said the economy is the most important issue facing the country.
The government will sell $55 billion in bonds next week as part of a massive borrowing to pay for its financial rescue programs. The Treasury Department says it is bringing back its three-year notes to help cover the increased borrowing needs, and will auction $25 billion of them on Monday. The government also will offer $20 billion in ten-year notes next Wednesday, and $10 billion in 29 ¾-year bonds on Thursday. The government plans to borrow a record $550 billion in the last three months of the year to help pay for the various financial rescue packages put into effect in response to the global crisis.
The Federal Reserve, still battling a severe credit crisis, says it will pay a higher interest rate to commercial banks on their reserves. The Fed said it was altering the formulas it was using both for reserves the banks are required to keep on deposit at the Fed, and on excess reserves that banks choose to leave at the Fed. The changes will provide slightly higher returns to banks for these funds, providing a boost to their earnings.,/P>
A snapshot of the nation’s services sector is giving a similar signal to one covering manufacturing earlier this week. It indicates contraction last month. The Institute for Supply Management says its October services index fell nearly six points to 44.4. That is a weaker-than-expected showing. A number below 50 indicates contraction. A measure of prices paid had the largest one-month decline since the index began in 1997. On Monday, the ISM’s manufacturing index posted its worst reading since September 1982.
The Texas Business Leaders Confidence Index from the University of Texas at Austin and Compass Bank indicates expectations for the Texas economy increased 2.2 points to 47.8, just below the index’s expansion/contraction threshold of 50. Texas business owners see consumer demand as relatively healthy, despite the economic turmoil. The quarterly survey was completed during the first two weeks of September, prior to Hurricane Ike.
Houston-area home starts fell 29 per cent in the past three months, according to MetroStudy. Home starts in all price ranges fell, with entry-level homes hit the hardest. Homes below $175,000 fell 39 per cent in the year ending in September. Homes prices above $500,000 fell five per cent in the third quarter.
Four people are being honored as the 2008 inductees into the Texas Business Hall of Fame tomorrow night in Dallas. Cullen/Frost Bankers Chairman and CEO Dick Evans, Myers Financial Chairman and President Mike Myers, Texas State Bank founder, Chairman and CEO Glen Roney and University of Texas Southwestern Medical Center President Dr. Kern Wildenthal are being honored. The Texas Business Hall of Fame Foundation is a non-profit organization of 75 directors from throughout the state, recognizing the accomplishments of Texas business leaders.
Houston has its own Houston’s Greatest Award to be presented tomorrow night at the Hobby Center by the Greater Houston Partnership. The winner of the “People’s Choice Award” recognizing one company from each size category will also be announced at the event. The Lifetime Achievement Award winner is Reverend Dr. William Lawson. Jarrett Reid Whitaker, principal of Port Houston Elementary, is being recognized as the Emerging Leader Award winner.
Oil prices have slipped below $66 a barrel and gasoline prices are continuing to slide. Prices fell despite a rally in Asian stock markets after the U.S. presidential election was settled. Oil prices surged above $70 a barrel for the first time in nearly two weeks Tuesday, mirroring global stock markets that strengthened in the U.S., Asia and Europe. The Energy Department reports that U.S. crude inventories were stable after rising in the previous five weeks, while gasoline stockpiles rose unexpectedly. Auto club AAA says the national average for unleaded regular gasoline has dropped to nearly $2.37 a gallon.
The head of the company that owns most of Chrysler says the country needs an economic stimulus package and must make sure the domestic auto industry doesn’t fail. Cerberus Capital Management Chairman John Snow said Wednesday that president-elect Barack Obama and his treasury secretary need a bipartisan plan to counter the worst economic downturn in about 50 years. Snow says the auto industry is a vital part of the economy. He said on the CNBC cable channel that the industry’s collapse would be devastating to a new president. Cerberus is in talks with General Motors about GM acquiring Chrysler. GM is seeking federal aid for the deal.
Women professors make $9,000 less annually on average than their male colleagues at the University of Texas at Austin. That’s according to a report prepared by a 22-member UT task force. The Austin American-Statesman reports UT President William Powers, Jr., praised the report for “identifying issues we must address to support the professional growth of our faculty.” Provost Steven Leslie, who established the Gender Equity Task Force, said steps would begin immediately to address the report’s recommendations, which include developing a five- to ten-year plan to reduce or eliminate gender inequities in hiring, promotion, salaries and governance. UT Professor of Molecular Genetics and Microbiology Shelley Payne says there’s a perception among the administrators that women are simply not as good as men. The report noted shortcomings in everything from promotion opportunities to the overall campus climate for women faculty members.
Delta Air Lines, the world’s biggest carrier, says it will impose a $15 fee to check a first bag, becoming the last of the six legacy airlines to impose such a fee. It also said Wednesday it is cutting certain other fees as it aligns its policies with those of Northwest Airlines, which it acquired last week. Atlanta-based Delta says that effective immediately, for traffic on or after December 5th, customers flying within the U.S. will be charged $15 for the first checked bag and $25 for the second checked bag when traveling domestically, consistent with Northwest’s existing policies. Delta also says it is eliminating Skymiles and Worldperks award ticket surcharges, reducing reservation sales direct ticketing charges and eliminating curbside check-in administrative fees.
CenterPoint Energy says third-quarter profits rose 49 per cent. Net income climbed to $136 million from $91 million a year earlier. Profit from power transmission and distribution rose 3.1 per cent to $202 million with the addition of more than 42,000 customers making up for the loss of sales caused by Hurricane Ike.
Transocean says third-quarter profit rose 14 per cent as record crude prices increased demand for deepwater rigs. Net income rose to $1.11 million from $973 million a year earlier—it’s ninth straight increase in quarterly earnings.
Whole Foods Market has seen its profit plunge in the fourth quarter because of costs related to its acquisition of Wild Oats Markets. The company said that its net income fell to $1.5 million, compared with $33.9 million in the same quarter of last year. The Austin-based natural grocer said the Wild Oats acquisition costs accounted for a hit of $25.4 million to net income for the quarter. Sales increased to $1.79 billion from $1.74 billion for the quarter ended September 28th. The company also announced a $425 million investment in Whole Foods through the sale of preferred stock to Green Equity Investors, an affiliate of Leonard Green & Partners.