The former finance chief of Texas billionaire financier R. Allen Stanford’s empire has pleaded not guilty to helping to swindle investors out of $7 billion. James M. Davis pleaded not guilty today to three charges. Defense attorney David Finn says the Stanford Financial Group’s ex-chief financial officer will return to court next week to plead guilty on all charges as part of a deal with prosecutors.
“Well, you’re always hopeful that if you cooperate and assist, you’ll be rewarded for your cooperation and assistance. We’ve been cooperating for over three months.”
Sixty-year-old Davis is charged with conspiracy to commit mail, wire and securities fraud to obstruct a Securities and Exchange Commission investigation. U.S. Magistrate Calvin Botley says Davis can be released on $500,000 bond.
The latest Lundberg survey finds the national average price of gasoline fell about ten cents a gallon during the past two weeks to $2.56. Analyst Trilby Lundberg says it’s the first significant price drop since early December. The latest average price of regular gasoline is $1.55 less than the price at the same time last year, which peaked at an all-time high of $4.11. The average price for a gallon of mid-grade is now $2.69. Premium is $2.80. Wichita, Kansas, has the lowest prices. The average there is $2.26 for a gallon for regular. Honolulu has the highest prices, with an average of $3.20.
Nine months into the fiscal year, the federal deficit has topped $1 trillion for the first time ever. The imbalance is intensifying fears about higher interest rates and inflation, and already pressuring the value of the dollar. The Treasury Department says the deficit in June totaled $94.3 billion, pushing the total since the budget year started in October to nearly $1.1 trillion. The deficit has been propelled by the huge sum the government has spent to combat the recession and financial crisis, combined with a sharp decline in tax revenues. Paying for wars in Iraq and Afghanistan is also a major factor. The country’s soaring deficits are making some foreign buyers of U.S. debt nervous, and this could make them reluctant lenders down the road.
The White House’s economic advisers say jobs providing health care and helping the environment are growing more quickly than the rest of the economy. The Council of Economic Advisers predicts changes in the U.S. labor market and details where the job market will expand. Their report also outlines what training and education will help potential workers find jobs. The White House report predicts some manufacturing jobs would return, along with construction jobs, as the $787 billion economic stimulus plan kicks in.
A defiant President Barack Obama says health care overhaul will be done this year. During a Rose Garden event to introduce his pick for surgeon general, Obama brushed off doubts and Congressional delays. He said: “Don’t bet against us. We are going to make this happen.” The president warned that inaction will create a bigger crisis. The White House summoned two lawmakers critical to overhaul legislation to meet with Obama this afternoon. They are Senate Finance Committee Chairman Max Baucus and Representative Charles Rangel, chairman of the Ways and Means Committee.
The Obama administration is considering using money from the $700 billion financial bailout fund to provide further assistance to the nation’s struggling small businesses. Officials say that no plan had emerged although small business has been a subject of staff level talks in Obama’s economic team. Under one approach being examined, the government would make working capital available by having the government help underwrite loans to small businesses. One official said that the administration is trying to be careful that any money from the Troubled Asset Relief Program goes to businesses that have been hurt by the credit crisis, not simply troubled small businesses.
Non-residential construction is expected to be down 16 per cent this year and down another 12 per cent in 2010, according to the American Institute of Architects, as reported by the Houston Business Journal. Meanwhile, Grubb & Ellis reports that Houston’s office leasing market has transitioned from a landlord’s to a tenant’s market, with vacancy rates reaching their highest level in three years. Houston’s office leasing market continues its sluggish performance with over a half-million square feet of negative net absorption in the second quarter of 2009.
Workers have returned to the General Motors assembly plant in Arlington for the first time in nearly two months. The factory’s 2,400 employees are back on the assembly line, welding and bolting together Chevrolet Tahoe, GMC Yukon and Cadillac Escalade sport utility vehicles. They haven’t worked since May 18th after General Motors closed 13 North American factories for two months to slash inventory. The company filed for bankruptcy during the shutdown. Starting probably in September, a new labor contract will shift the work week to four ten-hour days. For now, regular eight-hour days will be in place. The Arlington plant is GM’s only full-size SUV factory.
An advertising forecaster says the worst is over for the U.S. ad slump but revenue growth won’t resume until 2011. Magna, a unit of the Interpublic Group of Companies, estimated that advertising revenue fell 18 per cent in the second quarter compared to a year earlier. The forecaster says ad revenue is on track to decline by 14.5 per cent this year to $161.4 billion. The figure excludes Olympics and political advertising. It says ad revenue will fall next year, but at a more moderate two per cent. Magna says revenue will resume growth in the second half of 2011, with strength seen in television, online media, outdoor advertising and direct mail.
Microsoft is giving select testers an early peek at Office 2010. But it’s still keeping Web-based versions of Word, Excel and its other go-to programs under wraps. Office 2010 is due out early next year. Microsoft is adding more ways for people to work simultaneously on documents, organize their e-mail inboxes and edit videos and photos, among other changes. Microsoft has been slow to offer programs that run online and are accessible in Web browsers. But when Office 2010 arrives, consumers will be able to go online to view and create new files for free. The company is not saying how much Office 2010 will cost. Attendees at its annual partner conference this week in New Orleans will be among the people invited to try the software.
A south Texas newspaper says it will begin charging for access to its Web site this week, warning that the days of giving content away for free are over. The Valley Morning Star announced in its online edition that Web site access would remain free for subscribers who receive the print edition seven days a week. But weekend subscribers and non-subscribers will have to pay a 75-cent daily subscription fee for the Web site. Monthly rates will also be available. The Star is owned by Freedom Communications. Publisher Tyler Patton said his paper would be the first of Freedom’s newspaper to charge, but not the last.
Wall Street will have a lot of fresh economic data to digest this week. The Labor Department reports on the producer price index for June, as well as retail sales on Tuesday. The consumer price index follows the next day, as does industrial production from the Federal Reserve. Thursday brings new jobless claims, with housing starts due from the Commerce Department on Friday.