Car dealers have until 7 p.m. to wrap up their cash for clunkers deals. The popular government program ends today, although some car dealers have already put the brakes on their participation. The nation’s largest auto dealership chain AutoNation ended its involvement three days early to make sure it had enough time to report its sales on the government Web site. The company estimates the government owes it $45 million. Dealers increased their staff over the weekend for $3 billion program’s final days. Some reported traffic at show rooms surged Friday after the government announced the program’s end date. Cash for clunkers, which offers an up to $4,500 rebate for swapping a gas guzzler out for a new, more fuel efficient car, has helped prop up sagging auto sales.
There are complaints from dealers who haven’t been reimbursed, but Transportation Secretary Ray LaHood is calling the government’s cash for clunkers program an unprecedented success. Speaking with reporters in Norristown, Pennsylvania, LaHood noted that as many as 800,000 mostly fuel-efficient vehicles will have been sold by the time the reimbursement program ends tonight. Transportation officials said as of early today, dealers had submitted 625,000 vouchers worth more than $2.5 billion.
Auto dealers will get more time to submit their cash for clunkers deals to the government for repayment after the Department of Transportation extended the deadline for filing claims. Dealers will now have until noon Tuesday to file the paperwork they need to get repaid for the cash for clunkers credits of up to $4,500. The Transportation Department says the extension is due to an overwhelming demand on the computer system set up to handle the claims. The Web site was shut down temporarily this afternoon because of the overload.
The Texas Employee Confidence Index dipped two points in July, according to the latest Spherion Employment Report, as reported by the Houston Business Journal. The monthly report attributes the drop to 51.9 points to mixed emotions toward the economy. Forty-seven per cent of Texas workers believe the economy is getting weaker, but that’s nine points higher than in June. Seventy-six per cent are confident of their job security.
Unemployed Texans might want to consider working for their local and state governments. A new Rockefeller Institute study says employment in those sectors has risen two per cent. Meanwhile, Texas has lost three per cent of its private sector jobs since the recession began in December 2007. University of Texas economist Michael Brandl says government employment is much less cyclical than private sector employment. Across the country, state and local governments added about 110,000 jobs while the U.S. lost 6.9 million private sector jobs.
With the economy perking up, experts are debating how the Federal Reserve should start raising interest rates. Many economists think it may be another year before the Fed starts lifting the rate from its all-time low of virtually zero. But monetary policy expert Carl Walsh says once the central bank starts down that path it should act aggressively. At the annual fed conference in Jackson, Wyoming, the University of California, Santa Cruz, professor said a gradual increase won’t do. Walsh says consumers, businesses and investors must feel more confident that prices won’t spiral higher in the future. The president of the European Central Bank, however, favors a “steady-handed” approach. He says it would be “the most effective antidote to the threat of price stability.”
Millions of older people face shrinking social security checks next year. The trustees who oversee social security are projecting there won’t be a cost of living adjustment for the next two years. That hasn’t happened since automatic increases were adopted in 1975. Cost of living adjustments are pegged to inflation, which has been negative this year, largely because energy prices are below 2008 levels. But advocates say senior citizens still face higher prices because they spend a disproportionate amount of their income on health care, where costs rise faster than inflation. Many also have suffered from declining home values and shrinking stock portfolios just as they are relying on those assets for income. By law, social security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from social security payments, are scheduled to go up slightly.
Analysts say Wall Street’s latest idea for getting out from under the bad debt and risky mortgages that have clogged financial markets resembles what got banks in trouble in the first place. Banks have begun tiptoeing toward a possible solution in which the really good bonds get bundled with some not-quite-so-good bonds and the package gets an AAA rating–the safest investment you can buy. Arizona State University economics professor Herbert Kaufman says “there is a little bit of déjà vu in this.” But Kaufman says that unlike during the real estate boom, investors in these new bonds know what they’re buying. Other experts also say it makes sense. The risk is, if the housing market slips even more, even the AAA-rated investments may not prove safe. The deal also relies on the same rating agencies which misread the risk the last time.
The Port Commission of the Port of Houston Authority will consider a distribution program for $2.85 million in Diesel Emission Reduction Act funds to replace, repower and retrofit cargo-handling equipment used by the Port of Houston maritime industry at its Tuesday meeting. The port authority submitted its own grant application, as well as applications on behalf of local private maritime businesses totaling $14.58 million to assist ocean-going vessels in port switching to cleaner fuels.
A Bellaire woman could be required to repay more than $3 million over a bogus international investment scheme. The U.S. Attorney’s office in Houston says 33-year-old Melissa Marie Ramon pleaded guilty to wire fraud. Sentencing is November 30th. Ramon faces up to 20 years in prison, a fine of up to $250,000 and possible restitution of nearly $3.1 million. Prosecutors say Ramon, in custody since June 15th, solicited funds for what she called Paris-based Jaxtrece, but the investment group did not exist. She sought investors from August 2004 through March 2007. Ramon, who never attended college, claimed to have an advanced degree from Rice University. Investigators say Ramon spent the illegally obtained investment funds on homes in the Houston area and Wyoming, plus on vacations.
New York utility regulators likely will not decide the fate of Entergy’s plan to spin off its wholesale nuclear power generators into a separate company until at least early in 2010. New Orleans-based Entergy had hoped for a decision in November on whether it put six nuclear reactors under a separate publicly traded company known as Enexus Energy. But administrative law judges for the New York Public Service Commission have proposed a schedule under which regulators would make a final decision in January. Still to be determined by regulators is whether the new company will have the financial capability to properly run three of the units located in New York.
Silt and debris left behind by Hurricane Ike could lead to a ban on some oyster harvesting in Galveston Bay to allow for recovery. The Texas Parks and Wildlife Commission is expected to vote Thursday on a staff recommendation to close the East Bay’s public oyster reefs. The shutdown, to allow the ecologically sensitive area to recover, could last until November 2011. The Houston Chronicle reported that about 80 per cent of the oysters in the easternmost part of the bay system were smothered by silt and other debris after Ike hit on September 13th, 2008. The TPWD Coastal Fisheries Ddivision plans rehabilitation projects, including putting hard materials, such as oyster shells and limestone, into areas so juvenile oysters can attach and grow.
Continental Airlines is starting three daily non-stop service from Houston Intercontinental Airport to Washington Dulles International beginning November 1st. That’s days after Continental joins the Star Alliance on October 27th. Continental is celebrating its 75th anniversary this year.
The Houston Association of Realtors is now the largest local realtor board in the United States, surpassing the Long Island Board of Realtors by 118 realtors. HAR has a membership of 23,354.
With growing evidence that the economy is on the mend, investors will have a number of reports to monitor this week. The Conference Board releases consumer confidence tomorrow. Also due, the S&P/Case-Shiller home price index. Wednesday, the Commerce Department releases durable goods for July, along with new home sales. A revised look at second-quarter growth is set for release Thursday, followed by personal income and spending for July on Friday.