Tuesday PM June 24th, 2008
A massive foreclosure rescue bill has cleared a key Senate test, drawing broad support from Democrats and Republicans alike. The Senate voted 83 to 9 to speed up work on the $300 billion mortgage aid plan, putting it on track for a final vote. The wide margin of clearance on the procedural vote reflected a keen interest in both parties in claiming election-year credit for helping homeowners amid tough economic times. Still, the measure faces a veto threat from President Bush and disputes among Democrats about key details. Those challenges will probably delay any final deal until mid-July.
The Federal Reserve has begun a two-day policy-setting session but it's not expected to touch interest rates. The central bank is caught in a bind between concern about a sluggish economy and rising prices. As result, the Fed is expected to hold its benchmark rate steady at two percent when the announcement comes Wednesday. That means the prime rate for millions of consumers and businesses would stay at five percent. It applies to certain credit cards, home equity lines of credit and other loans. Some observers think inflation might force the Fed to start boosting rates later this year, possibly in August. However, many others think that's a situation the Fed would like to avoid, especially given that the housing market is still flailing and foreclosures are at record highs.
A South Korean appeals court overturned a guilty verdict against Lone Star Funds. The Dallas-based private equity group had been accused of stock manipulation in a case that's been watched closely as a gauge of the country's treatment of foreign investors. Lone Star and the head of its Korean operation, Paul Yoo, were found guilty in February for manipulating stock prices ahead of the group acquiring a stake in Korea Exchange Bank. But Judge Ko Yue-Young at the Seoul high court overturned the verdict, citing insufficient evidence. The court's ruling removes fines of $24.2 million each against Lone Star and KEB. Yoo, who had been serving a five-year prison term, was freed on a suspended sentence of two and-a-half years for other minor charges, including his refusal to testify at the national assembly.
A grand jury in Houston has indicted 11 people on charges of billing Medicaid for more than $6 million for goods never delivered to patients. The Texas attorney general's office says the May indictment involves a fraud investigation. The charges stemmed from an investigation into a medical billing service, Frazier Medical Marketing of Humble, and owners Dyain Eligha Frazier and Tajuana Krischell Frazier. An attorney for Dyain Frazier didn't immediately return a call for comment. Authorities say the Fraziers were arrested this month at a car dealership where they were trying to trade in a 2006 Bentley for a new Mercedes-Benz and cash.
Airline employees are among those paying the high cost of jet fuel. That includes the 950 United Airlines pilots the carrier plans to eliminate beginning this summer. That's on top of the already announced plan to cut 1,600 salaried positions. United told its pilots union about the cuts Monday. The Chicago-based carrier says it's still working with the unions on the reductions. A United spokeswoman says the initial furlough notices will go out in mid-July and take effect in September. She says the cuts will continue into next year.
Developers say a $1.3 billion coal-fired power plant in eastern Arkansas should be completed in two years. Houston-based Dynegy and LS Power Development of New Jersey broke ground on Plum Point energy station at Osceola in May 2006. The 665-megawatt unit would generate power for utilities in eight states from Texas to Illinois. A proposed second unit would boost the output to 1,330 megawatts. But environmentalists say the plant will be a major new source of pollution. Bruce Nilles with the Sierra Club says the plant could become one of the biggest new sources of global-warming pollution in the U.S. The plant site is north of Crittenden County and Memphis, Tennessee, in Shelby County. The two counties already violate federal standards for ozone pollution.
The 12,500 teachers of the Houston Independent School District would get a three percent pay raise--increasing the average teacher salary nearly four percent—under the $1.6 billion general fund budget that officials are proposing. The school board votes on the proposed budget on Thursday. About 10,000 of HISD's lowest-paid workers also would get $2.8 million in bonuses to help with high gasoline costs. A public hearing on the budget is set for Thursday afternoon at the Hattie Mae White Educational Support Center on West 18th.