Wednesday AM June 25th, 2008
Standard & Poor's/Case-Shiller home price index of 20 cities fell by 15.3 percent in April versus last year. That marks the largest drop since its inception in 2000 and the first time all 20 metro areas posted annual declines. Prices nationwide are at levels not seen since August 2004. The narrower ten-city index declined 16.3 percent in April--its biggest drop in its more than two-decade history.
An industry group says U.S. consumer confidence fell unexpectedly sharply in June, sinking to the fifth-lowest level ever. The report Tuesday also said the group's reading of consumers' expectations hit an all-time low. The Conference Board's consumer confidence index fell to 50.4 this month, down from 58.1 in May. The reading is far lower than economists expected; the consensus estimate of economists surveyed by Thomson/IFR was 56.5. The Conference Board's Lynn Franco says the reading suggests "the economy remains stuck in low gear."
The Texas Workforce Commission has been notified of the pending loss of about 1,300 jobs. Two companies in North Texas say they'll close facilities and lay off more than 800 workers. Affiliated Computer Services runs back-office operations for companies and government agencies. ACS said in a filing this week with the commission that it will close a facility and eliminate about 450 jobs. The Dallas-based company said the terminations would occur around September 1st. Cwork Wireless plans to eliminate 355 employees in mid- to late-August as it shutters a plant in Fort Worth. Two businesses in Howard County plan cutbacks. Startek USA in Big Spring plans to cut 212 jobs. Big Spring Manufactured Homes plans to eliminate 140 jobs. The commission also says Dillard's, the department store chain, plans to eliminate 126 jobs in Texas.
Congressional Democrats want to tighten regulations on large investors that they blame for propping up oil prices. A House subcommittee discussed oil market speculation at a hearing this week. Democrats rolled out a number of suggested remedies for the oil market, including higher margin requirements for investors. The acting head of the Commodity Futures Trading Commission warns higher margin requirements could drive traders out of the U.S. markets. But Washington state Democrat Jay Inslee says "even a small reduction in oil prices" would have a "titanic effect." Many Republicans, oil analysts and regulators say high oil prices are a reflection of other factors including the falling dollar, Middle East unrest and more demand from Asia. Texas Republican Joe Barton is among those who are blaming insufficient supply for the skyrocketing prices and calling for more production of oil, natural gas and coal.
Customers on two American Airlines flights will be able to test in-flight Internet access--beginning today. Fort Worth-based American says broader service is expected to begin in the next couple weeks. Airlines are facing record high fuel prices as they look to entertainment and information services as ways to make a few more bucks per passenger. American plans to charge $9.95 to $12.95 for Internet service, depending on flight length. The test with technology partner Aircell will begin on one flight from New York's Kennedy Airport to Los Angeles, and another going back to New York. Internet service on those two test flights will be free. American will begin charging for Internet service soon on its Boeing 767-200 jets that fly from New York to Los Angeles, San Francisco and Miami.
Kelson Transmission has filed an independent economic analysis with the state's Public Utility Commission for a proposed transmission line, according to the Houston Business Journal. The 95-mile, 345-kilovolt line from plants in East Texas will service the Houston area. It will parallel existing pipeline and utility right-of-way corridors for most of the way. With PUC approval, the Canal-to-Deweyville transmission project will be complete by 2011.
The IRS is raising the automobile mileage rate that businesses and others can claim. The agency says the drain that high gas prices are having on people's finances are behind the change. The IRS says the optional standard rate to calculate deductible operating costs for business vehicles will go from 50.5 cents a mile to 58.5 cents for the last six months of this year. The tax agency says the rate for computing deductible medical or moving expenses is also changing. It's going from 19 cents to 27 cents a mile for the final six months of the year. Congress would have to enact legislation to change the rate for providing services for charitable organizations, so that will stay at 14 cents a mile.
Dow Chemical is again raising prices to offset rising costs in energy and raw materials. The comprehensive price hike next month will be as much as 25 percent, following June 1st increases of up to 20 percent. Dow is adding a freight surcharge for North American customers of $300 per shipment by truck and $600 per shipment by rail starting August 1st. The company plans to temporarily idle or cut production at a number of its plants. Dow makes ingredients used in paints, textiles, glass, packaging and cars. It makes everything from the propylene glycols used in antifreeze, coolants, solvents, cosmetics and pharmaceuticals, as well as products used in detergents, wastewater- treatment and disposable diapers.
U.S. cattle producers facing skyrocketing costs and stagnant domestic demand say they need overseas markets like South Korea. The U.S. last week reached an agreement with South Korea that allows American beef from cattle younger than 30 months to be sent to the Asian country. An April agreement that permitted beef from older cattle stirred thousands of Koreans to protest--forcing officials to renegotiate the trade pact. South Korea used to be America's third-largest export customer with $815 million in sales. But South Korea reacted to the first U.S. case of mad cow disease by banning its beef in 2003. The president of the Texas and Southwestern Cattle Raisers Association says they're going to have to depend on those export markets to get through these tough times. John Means of Van Horn also says about 96 percent of those who eat U.S. beef--live outside of the country. Texas is the nation's leading cattle-raising state.
The cities of Oklahoma City and Tulsa are among 44 entities that could be forced to pay the more than $30 million cost of cleaning up a hazardous waste site. A lawsuit by the state and federal governments says the 44 parties all arranged to dispose of contaminated oil at the Double Eagle Superfund site near downtown Oklahoma City. The lawsuit says the site was cleared in 1998 and 1999 at a cost of $31.7 million and the companies and cities are liable for the bill. Among the companies named in the lawsuit are Fort Worth-based American Airlines, Bell Helicopter, ConocoPhillips, Goodyear Tire and Rubber, Bridgestone-Firestone, Halliburton, UPS and Wal-Mart.
A wrecking ball is knocking down three towering storage silos damaged in a February explosion at the Imperial Sugar refinery near Savannah that killed 13 people. Crews with heavy equipment were ripping down piles of concrete chunks Tuesday. The demolition began over the weekend and will continue through next week. Sugar dust beneath the 100-foot silos ignited like gunpowder to cause the February 7th explosion. Dozens of people were injured. Imperial Sugar CEO John Sheptor has said the company plans to build new silos along with rebuilding the refinery's packaging area by the spring of 2009. The company is based in Sugar Land. The federal Occupational Safety and Health Administration is still investigating the blast.
Charter Communications is dropping plans to track the Web use of some high-speed Internet subscribers, citing concerns raised by its customers. In May, Charter announced a pilot program in four markets, including Fort Worth, aimed at producing enough information for advertisers to target online ads for individual customers based on their viewing habits. But Charter officials say that some customers have raised concerns, so the company has decided not to move forward with the pilot program. The plan drew criticism from some privacy advocates and from two members of Congress who wrote to charter CEO Neil Smit last month, urging him to reconsider. Besides Fort Worth, the pilot markets were San Luis Obispo, California; Oxford, Massachusetts; and Newtown, Connecticut. The trial used technology from Nebuad, a Redwood City, California, online advertising company.
The number of millionaires around the globe is growing larger--and the rich are getting decidedly richer. The World Wealth Report shows the number of people around the globe with at least $1 million in assets has jumped by 6 percent to 10.1 million. That means an additional 600,000 people became millionaires even as global economic woes spread in the second half of last year. The survey also finds the combined wealth of world millionaires has grown by more than nine percent to $40.7 trillion. The group's average wealth has passed the $4 million mark for the first time. And that doesn't include their primary homes. The group represents just 0.15 percent of the world's population of 6.7 billion. The World Wealth Report is compiled by Merrill Lynch and consulting firm, CapGemini Group.
A closely watched index shows U.S. housing prices dropped in April at the fastest rate ever, with prices tumbling to levels not seen in nearly four years. The