OPEC says it is cutting 2.2 million barrels a day from its output to stem crude prices that have plummeted more than 70 per cent from summer highs approaching $150. An OPEC statement says the group is taking 4.2 million barrels a day off the market, compared with September levels. Members under production quotas among the 13-nation organization were officially producing a daily 29.045 million barrels in September. The 4.2-million figure thus includes more than 500,000 barrels of overproduction that OPEC said in September it would eliminate, and a formal cut of 1.5 million barrels a day that it agreed on last month. That amounts to a new reduction of 2.2 million barrels—the largest-ever OPEC cutback at one time.
The deficit in the broadest measure of American trade fell more than expected in the third quarter as a boom in exports helped offset an increase in oil imports. Analysts believe the deficit will keep falling in the months ahead as the U.S. recession lowers demand for foreign goods. The Commerce Department says the current account trade deficit fell by 3.7 per cent to $174.1 billion in the July-September quarter. That was a better showing than the $178.8 billion deficit economists expected. The current account is the broadest measure of America’s dealings with the rest of the world because it includes not only trade in merchandise and services but also investment flows. The deficit represents the amount of money the country is borrowing from foreigners.
The government is predicting virtually no growth in U.S. oil consumption between now and 2030. The Energy Information Administration attributes this trend to increases in conservation, a greater use of renewable fuels and an expected rebound in oil prices. The agency also said that overall energy use will continue to increase, but at a slower rate. Its long-range forecast projects a three per cent annual growth of renewable energy use, including solar, wind and biofuels such as ethanol. It also expects a sharp increase in sales of hybrid cars. While oil prices have fallen recently, the report says that prices will rise again as economies rebound and global demand increases.
Houston home sales in November dropped 33.7 per cent compared with the same period last year according to the Houston Association of Realtors. It’s the biggest decline since 1996 and the 15th consecutive monthly drop. Median prices dropped 7.7 per cent to $137,500. The group says inventory dropped, indicating people are holding on to their homes until the market picks up, and more sellers are being forced to lower their prices.
Borrowers taking advantage of lower rates to refinance home loans sent mortgage application volume higher last week. The Mortgage Bankers Association says its application index rose 2.9 per cent–to 841.4 from a revised 817.7 a week earlier. Interest rates have been declining in recent weeks and are expected to fall further following the Federal Reserve’s decision to cut its target interest rate to nearly zero. Refinance volume rose 6.5 per cent last week, while purchase volume fell 4.5 per cent.
Less than a month before the Texas legislature convenes for a five-month session, Governor Rick Perry warned state lawmakers to hold the line on government spending and resist any temptations to raise taxes. He made the statements while speaking before industry leaders about the “fragile” economy. Perry said he saw no need for the legislature to enact sweeping proposals to deal with the financial meltdown. He said austerity measures enacted during past legislative sessions had put the state on a prudent course already. Perry also told the group that the “worst thing we could do is raise your taxes right now.” The Republican Governor said Texas had the “strongest economy in the nation” but was feeling the effects of a global downturn. Last summer, leaders said the state would have an $11 billion budget surplus. But a few months later, much of the money has dried up as costs mount and worsening economic news starts to shrink once-robust tax returns.
Texas is part of a federal program to create high-speed passenger train service, according to a Department of Transportation statement, as reported by the Houston Business Journal. The agency will accept bids from companies to finance, design, build, operate and maintain high-speed trains in 11 corridors designed by the Federal Rail Administration. Houston would be part of the 1,022-mile Gulf Coast corridor, going through New Orleans and stretching to Alabama.
Pro Staff has been acquired by two of the company’s co-founders and its chief operating and financial officer, according to the Houston Business Journal. The Dallas-based firm has nine Houston area locations, as well as locations in four other states.
Business experts from across the political spectrum are advising President-elect Barack Obama’s transition team that an economic recovery package must cost more than $600 billion over two years. Obama’s economic team has solicited the opinions of a number of economists, including former advisers to Republican presidential candidate John McCain. The recommendations range from $400 billion in just one year to $1 trillion over two years, according to Obama officials. The Obama team has not settled on a figure. But the advice represents a far bigger infusion than Obama advisers had initially envisioned. A huge stimulus package could run into Republican opposition in Congress.
President George W. Bush tells CNN his administration is “considering all options” for helping the domestic auto industry. Bush says without prompt action, the already distressed economy could slide further into recession. One option would use part of the $700 billion financial rescue fund to provide loans to the carmakers or using money from the fund as collateral for emergency loans. But GOP conservatives are opposed to using that money to save any of the Big Three. A senior GOP Congressional aide says the White House and Treasury Department are in talks with Republican Senator Bob Corker, who’s been seeking big union concessions in exchange for rescue money. Democratic Congressman Barney Frank, meanwhile, says the government should secure veto power over the companies’ business decisions as part of any aid.
Staff at the Securities and Exchange Commission failed many times over a decade to fully investigate credible allegations of wrongdoing by money manager Bernard Madoff. That from the head of the SEC, who calls it a serious agency breakdown. SEC Chairman Christopher Cox says he is “gravely concerned by the apparent multiple failures” by staff to look into claims about Madoff’s business and to seek formal authority to investigate. Madoff was arrested last Thursday and charged with fraud last week in what is being called one of the biggest ponzi schemes on record, with investors possibly losing more than $50 billion. Cox says he’s asked the SEC’s inspector general to conduct a full review of the agency’s handling of the Madoff case. Cox says no evidence of wrongdoing by staff has surfaced yet.
A key lawmaker says Congress will investigate the alleged $50 billion ponzi scheme run by Madoff. The chairman of a House Financial Services panel, Democratic Representative Paul Kanjorski, says the scandal has further weakened already-battered investor confidence in securities markets and has raised more troubling questions about the effectiveness of the regulatory system. The Pennsylvania Congressman said he’ll convene a Congressional inquiry early next month to examine the alleged Madoff fraud and to determine why the Securities and Exchange Commission and other regulators failed to detect what he described as “these substantial evasions.”
The judge in the Madoff fraud case has set new conditions for his bail, including a curfew and ankle-monitoring bracelet for the disgraced investor. Madoff remains free on bail, with his wife and brother serving as co-signers for his bail package. A hearing had been scheduled in which Madoff was required to find two additional co-signers to vouch for him. But with the scandal swirling around Madoff, he was unable to find co-signers. So the judge modified the bail package, and gave lawyers until next Monday to come up with additional paperwork.
Investigators poring over Bernard Madoff’s books are finding the money manager falsified documents to misrepresent assets. That according to an official helping to oversee the investment advisor’s liquidation. Stephen Harbeck, chief executive of nonprofit group Securities Investor Protection Corporation, tells the Associated Press it’s “obvious that the documents that customers see don’t reflect the reality of what the brokerage firm had.” Harbeck thinks damages in the alleged $50 billion fraud might take months to determine.
The gravely ill former executive of the dismantled Russian oil giant Yukos says the $1.8 million bail for his release from jail is “cynical.” Vasily Aleksanian, who suffers from aids and tuberculosis and has almost lost his eyesight, has been jailed since 2006 on embezzlement and money-laundering charges. The 36-year old U.S.-trained lawyer said in Wednesday’s statement that the bail granted by the Moscow city court earlier this month was a “cynical derision of law and common sense.” Yukos, once Russia’s largest oil producer, was broken up and sold off in auctions ordered by the state. Criminal cases against jailed Yukos founder Mikhail Khodorkovsky and his executives are widely regarded as Kremlin revenge for Khodorkovsky’s political ambitions.
A private security official says two kidnapped foreign oil workers in Nigeria have been released. The official says a Russian and a Mexican were released late Tuesday night along with their Nigerian co-worker. The three were seized by unknown gunmen December 4th from an oil services vessel about 12 miles from the coast of Nigeria’s restive southern oil region. The security official gave no further details and spoke on condition of anonymity due to company prohibitions on dealing with the media. Nigerian military and police officials were not immediately available for comment. Foreign workers are often seized in the oil-rich delta region and its surrounding waters. Hostages are normally released unharmed after a ransom is paid.
The ExxonMobil has agreed to pay a $6.1 million penalty for failing to comply with an agreement to cut pollution from four refineries in California, Louisiana and Texas. The Justice Department announced that it demanded the fine because ExxonMobil had violated a 2005 consent agreement by not adequately controlling smokestack sulfur emissions at the refineries as it had promised to do. Assistant Attorney General Ronald Tenpas said “the department will not tolerate violation of our consent decrees.” Under that settlement, ExxonMobil in 2005 paid $7.7 million in civil penalties, and performed $6.7 million worth of environment-related community projects. The refineries are in Beaumont and Baytown; Torrance, California., and Baton Rouge, Louisiana.
Chicago Bridge & Iron has been awarded a second nuclear power contract by Westinghouse electric, according to the Houston Business Journal. The $150 million contract is for containment vessels for nuclear power plant expansion in the southeastern United States. Te first vessel is set for 2015 delivery and the second in 2018.
Conservation groups are suing the Interior Department to try to block what they call a “fire sale” of oil-and-gas drilling leases in Utah. The Bureau of Land Management has scheduled an auction Friday to sell drilling leases covering more than 100,000 acres of wild land in eastern Utah. The Natural Resources Defense Council and other groups object to leasing land that they call a cultural treasure. Actor Robert Redford, a longtime environmental activist, called the lease sale “morally criminal.” Redford, who spends six months a year in Utah, said that once the land is disturbed by trucks and oil rigs, it can never be restored to its original state.
A federal judge has dismissed an antitrust lawsuit that Louisiana’s former attorney general filed against some of the nation’s largest insurance companies after Hurricane Katrina. The suit filed last year by former Attorney General Charles Foti accused Allstate Insurance, State Farm Fire & Casualty and other insurers of conspiring to short-change policyholders after Hurricanes Katrina and Rita struck the Gulf Coast in 2005. The companies asked U.S. District Judge Jay Zainey in New Orleans to throw out the case, which Attorney General James “Buddy” Caldwell inherited from Foti. The insurers said the suit failed to present any evidence of a conspiracy among competing companies.
Hydro Green Energy has received approval from the Federal Energy Regulatory Commission to install the nation’s first commercially-operational hydrokinetic power station, according to the Houston Business Journal. The Houston renewable energy developer will utilize the Mississippi River to help power Hastings Minnesota. Electricity will be generated from moving water. One turbine will be installed this month and one in April 2009.
Marathon Oil is selling its Irish subsidiary to Star energy Group for $180 million, according to the Houston Business Journal. Marathon expects to close on the Marathon Oil Ireland Ltd. deal in early 2009.
Everyone knows cell phones are everywhere, but a federal survey also shows old-style landlines are disappearing fast. The numbers show the portion of homes with cell phones but no landlines has grown to 18 per cent, led by adults living with unrelated roommates, renters and young people. An additional 13 per cent of households have landlines but get all or nearly all calls on their cells. That means about three in ten households are essentially reachable only on their wireless phones. In the first half of 2006, only seven per cent of households were cell-only. The findings have major implications for pollsters. Researchers say people who have only cell phones have slightly different political views. But it’s more expensive to include those people in polls, because of legal restraints against using computers to call them.
The outfit that crash tests new cars to see how well they protect passengers says automakers have made “big improvements” in small cars. Joe Nolan of the Insurance Institute for Highway Safety says 11 of the 21 current small cars rated by the institute earned top scores in side protection. Two years ago, only three of 19 scored that high. Nolan says several 2009 small cars got top scores in front-end crash tests as well. Three of them–the Pontiac Vibe, Toyota Matrix, and Suzuki SX4–also got top scores in side protection. Only one vehicle tested, the 2009 Chrysler PT Cruiser, received the lowest mark of poor in side protection and rear protection. Sales of small cars have increased more than one percent this year as gas prices fluctuated.
Frost Bank’s Bellaire Financial Center staged an open house with the deaf and hard-of-hearing community to introduce its American sign Language interpretation services. The service is through real-time video conferencing. Bankers at the West Loop South location have gone through a training class to better understand the deaf and hard-of-hearing culture and have learned limited sign language.
The world economic crisis might mean fewer Christmas presents, but Pope Benedict XVI says that tough times can give back simplicity and solidarity to holiday celebrations. Benedict has expressed hope that the financial crisis will help people focus on the spiritual meaning of Christmas, when Christians worldwide mark the birth of Jesus. Benedict says the crisis can help people to rediscover what he calls “the warmth, simplicity, friendship and solidarity” contained in authentic Christmas values. The pope reflected on economic suffering during his traditional Wednesday audience with pilgrims and tourists at the Vatican.