The world economy is seen shrinking this year for the first time in six decades. The International Monetary Fund projects a 1.3 per cent drop in the forecast just released. The new forecast of a decline in global economic activity for 2009 is much weaker than the 0.5 per cent growth the IMF had estimated in January. It’s expected to take longer than previously thought to stabilize world financial markets and get credit flowing freely again to consumers and businesses. Doing so will be necessary to lift the U.S., and the global economy, out of recession. The report comes in advance of Friday’s meetings between the United States and other major economic powers, and weekend sessions of the IMF and World Bank. The talks will seek to flesh out the commitments made at a G-20 leaders summit in London last month, when President Barack Obama and the others pledged to boost financial support for the IMF and other international lending institutions by $1.1 trillion.
Treasury Secretary Timothy Geithner says the United States bears a substantial share of responsibility for the global economic crisis that could cost the world up to $4 trillion in lost output this year alone. His remarks were made to the Economic Club of Washington. Following his speech, Geithner avoided directly answering a question about the chances the government will be able to recoup the $182 billion in support it has provided to troubled insurance giant American International Group. Geithner called AIG an “extraordinary challenge,” but said that the government-installed managers were working hard to “`help improve the odds that the taxpayer is repaid.”
Continental says it lost $136 million in the first quarter as air travel fell and business travelers bought cheaper tickets. The Houston-based carrier joined a long list of airlines that lost money in the first quarter. Revenue fell to $3 billion from $3.57 billion a year ago. Traffic in the first quarter fell 11.2 per cent from a year ago, and planes were not as full even though Continental cut flights.
Apache Corporation is cutting six per cent of its global work force, according to Reuters. That amounts to about 200 jobs. The Houston-based independent oil and gas company cites lagging oil and gas prices. No details were given about how much the Houston work force would be impacted.
The Houston Association of Realtors says declines in the sales and pricing of homes continue in the Houston area, but to a lesser extent. HAR board chair Vicki Fullerton says are several factors.
“I think it’s absorption rate. I think we’re getting some of the foreclosures and some of the short-sales out of the way, and we’re seeing buyer confidence improving. I think the $8,000 tax credit for first-time buyers and for those who haven’t owned property in three years has helped. I think historic interest rates lows, four-and-a-half per cent—I can’t even remember the last time that occurred. And people are just feeling a little more comfortable about getting into the market.”
The average price of a single family home is at $193,880—the highest it’s been since last September. The March median price is at $145,000—the figure at which half of the homes sold for more and half sold for less. That fell 4.4 per cent year-over-year, but still attained its highest level so far in 2009.
A coalition of sportsmen and environmental groups is challenging the Bureau of Land Management’s quarterly oil and natural gas lease sale on Earth Day. The BLM is offering parcels in Texas, Oklahoma, Kansas and New Mexico and the groups say the agency is failing to address concerns about global warming. The protest is the latest in a series of challenges filed by environmentalists over the past year that target the agency’s response to greenhouse gas emissions and global warming. The coalition accuses BLM of not considering the cumulative impacts of emissions from oil and gas development before deciding whether to lease parcels.
The Interior Department has issued long-awaited regulations governing offshore renewable energy development from wind turbines and ocean currents. The framework outlines how leases will be issued. It also establishes revenue sharing with coastal states. The states near wind projects will receive 27.5 per cent of the royalties generated from the electricity production. Interior Secretary Ken Salazar said in an interview with the Associated Press that applications for dozens of proposed offshore wind projects are expected to be received in the coming months. He said the rules will allow them to move forward. Salazar said the first electricity production from offshore is likely to be in two or three years, probably in the central Atlantic.
Federal data show crude oil inventories rose more than forecast last week, while gasoline inventories jumped despite expectations for a dip. The Energy Department’s Energy Information Administration says crude inventories rose by 1.1 per cent. That’s 17.2 per cent above year-ago levels and the highest inventory level since September 1990. Analysts surveyed by Platts had expected a rise of three million barrels. Gasoline inventories rose by 0.4 per cent. That’s one per cent above year-ago levels. Analysts expected stockpiles of the motor fuel to fall by 860,000 barrels. Demand for gasoline over the four weeks ended April 17th was 0.4 of a percentage point lower than a year earlier. At the same time, U.S. refineries ran at 83.4 per cent of total capacity on average. That’s a three per cent increase from the prior week. Analysts expected capacity to rise 1.05 percentage points to 81.45 per cent.
Negotiations between the banking industry and Senate Democrats on a mortgage relief plan appeared to stall after a trade association representing credit unions said it could not endorse the proposal. The National Association of Federal Credit Unions said in a letter to Illinois Senators Dick Durbin that it still had questions about Democrats’ plans to allow cash-strapped homeowners to modify their mortgages through bankruptcy proceedings. Durbin, the number two Democrat in the Senate, had been hoping to win industry support before a Senate vote on the matter, which is expected in the next couple of weeks.
A group of Texas research facilities has indicated they will sue the Department of Homeland Security over its selection of a Kansas site for a planned $450 million biodefense laboratory. The Texas group filed notice in federal court in Washington indicating their intention to sue. They contend the Kansas site should not have been selected because of the danger of tornadoes in the region. The lab will research foot-and-mouth disease, African swine fever, Japanese encephalitis, Rift Valley fever and the Hendra and Nipah viruses. Kansas officials were quick to react to the Texas group’s claims, saying the site was chosen by experts and provides an opportunity for the best research on threats to the nation’s food supply.
The Texas Gulf Coast Industrial Job Expo is set for Thursday at the Knights of Columbus Hall at Highway 6 and County Road 146 in Alvin. Hiring managers and recruiters from numerous companies will be on hand in the afternoon.
Congress is looking into plans by cable TV operators to roll out targeted advertising amid concerns that they will infringe on consumer privacy. The House subcommittee on Communications, Technology and the Internet will hold a hearing Thursday morning that will look at new uses for digital set-top boxes. Cable TV companies have plans to use set-top boxes to collect data and direct ads more targeted to individual household preferences. Consumer advocacy groups are wary of such plans. Canoe Ventures, a consortium comprised of the nation’s six largest cable operators, is expected to roll out targeted and interactive ads nationally this year. Several operators also are individually testing or rolling out targeted ads, including Philadelphia-based Comcast.
AT&T says its earnings fell 9.7 per cent in the first quarter due to economic pressures and spending on iPhone subsidies. The profit matches Wall Street estimates. The country’s largest telecommunications provider said it earned $3.126 billion in the first three months of 2009. That’s down from $3.461 billion a year earlier. AT&T says revenue fell 0.6 per cent to $30.6 billion.AT&T is shutting down its CallVantage Internet-based phone service. AT&T is making the disclosure in letters to subscribers this week. The announcement follows a similar one earlier this year by Verizon. The phone companies are moving away from a technology that held promise in the early years of the decade, but has been overshadowed by wireless service and phone service from cable companies. CallVantage customers got a small adapter that allowed them to place calls by connecting a phone to a broadband Internet line. They paid monthly fees of $20 to $30 for unlimited domestic calling. Dallas-based AT&T isn’t saying how many subscribers CallVantage has.