Monday PM July 20th, 2009

Attorneys for Texas financier R. Allen Stanford have appealed a federal judge's decision to deny him bond while awaiting trial on charges that he swindled investors out of $7 billion. Stanford's attorneys filed an appeal with the 5th U.S. Circuit Court of Appeals in New Orleans. They asked the court to overturn an order by U.S. District Judge David Hittner that revoked his $500,000 bond after the judge concluded the financier was a serious flight risk. Stanford's appeal says Hittner made his decision based on misleading and inaccurate statements from prosecutors. Stanford holds dual citizenship with the U.S. and Antigua and prosecutors say he has access to millions of dollars. Stanford and four executives of his now defunct Houston-based Stanford Financial Group

A lawsuit seeking class-action status for hundreds of Latin American investors claims that a London-based insurance broker falsely gave assurances about investments offered by financier R. Allen Stanford. The lawsuit seeking unspecified damages was filed in Miami federal court against Willis Group Holdings and its U.S. subsidiary. It claims that from 2005 to 2008, Willis provided letters that Stanford's operations were fully insured and had been independently audited. The lawsuit claims neither was true. Stanford is accused in a 21-count federal indictment of operating a $7 billion ponzi scheme that swindled investors, many from Latin America. Willis officials did not immediately respond to an e-mail requesting comment.


A private-sector forecast of U.S. economic activity rose more than expected in June, the third straight monthly increase. The New York-based Conference Board says its index of leading economic indicators rose 0.7 per cent last month. Wall Street analysts polled by Thomson Reuters expected a gain of 0.4 per cent. A rise in building permits and stock prices, and fewer people filing first-time jobless benefit claims, boosted last month's results. The group also says activity in the six-month period through June rose two per cent. Conference Board economist Ken Goldstein says if these conditions continue, "expect a slow recovery this autumn."


Texas agriculture officials estimate drought crop and livestock losses at $3.6 billion, and without ample rains the year's final tally could top the record set in 2006. Crops and rangeland are scorched from lack of rainfall and record triple-digit temperatures throughout parts of Texas. Central and southern parts of the state are in the two worst stages of drought. Officials said in a news release that if dry conditions persist losses could surpass the $4.1 billion in agriculture losses three years ago. Total crop losses this year are estimated at $2.6 billion and livestock, another $974 million since November 2008.


A refinery fire in Corpus Christi left one worker hurt. Citgo spokesman Larry Elizondo says the fire started in the hydrogen fluoride alkylation unit. The cause of the blaze is sought. Elizondo says the worker injured Sunday morning was transported to a Corpus Christi hospital, then transferred to a burn unit in San Antonio. His name was not released. No details were available on his condition. Citgo said it planned to release a statement later. Meanwhile, a four-member investigative team from the U.S. Chemical Safety Board has been dispatched to the scene.


The watchdog overseeing the federal government financial bailout says the government's maximum exposure to financial institutions since 2007 could total nearly $24 trillion, or about $80,000 for every American. The whopping amount compiled by the Inspector General for the $700 billion Troubled Asset Relief Program takes into account about 50 initiatives and programs set up by the Bush and Obama administrations as well as by the Federal Reserve. Many of the programs are backed by collateral and the $23.7 trillion represents the gross--not net--exposure that the government could face. No one has suggested that the full amount, in fact, will be used.

The government's main watchdog over the federal financial bailout says the Treasury Department has repeatedly failed to adopt recommendations aimed at making the $700 billion program more accountable and transparent. Neil Barofsky, the inspector general for the Troubled Asset Relief Program, says in a report to Congress that Treasury's inaction means taxpayers have not been told what the financial institutions that have received assistance are doing with the money. Barofsky's conclusion is contained in testimony he is prepared to give Tuesday to the House Oversight and Government Reform Committee.


Republican Party Chairman Michael Steele is calling President Barack Obama's plan to overhaul the health care system socialism. In remarks at the National Press Club, Steele says the president and several Democratic lawmakers are part of a "cabal" that wants to implement government-run health care. He says the president is conducting a risky experiment that will hurt the economy and force millions to drop their current coverage. He calls it a "colossal, closed health care system where Washington decides." Obama has repeatedly said he does not favor a government-run health care system. Legislation that has gotten bogged down along its path through the House envisions private insurance companies selling coverage in competition with the government. The GOP is planning television ads attacking the president's proposal, showing children who presumably would be burdened as adult taxpayers with the cost of the health care overhaul.

President Barack Obama says it is time for the country to take action on his proposed health care overhaul because "we've talked this problem to death." Obama said that out-of-pocket costs for Americans are spiraling while health insurance companies have reaped record profits. He also said families are spending more for less care. Obama visited a children's hospital Monday and spoke with doctors and nurses about the shortcomings of the health care system. He said they are forced to work in a system that favors drug companies and insurance companies, not care. Obama said the need for change is urgent and indisputable. He says those who oppose him want to preserve the status quo. He says changing the system is more important than politics or his personal reputation.


The IRS inspector general says the agency does a poor job overseeing paid tax preparers used by more than half the nation's taxpayers. Inspector General J. Russell George said in a report that the agency doesn't even know how many paid tax preparers exist, making it impossible to ensure they adhere to professional standards. The IRS has acknowledged problems overseeing tax preparers, announcing in June that it intends to propose new rules by the end of the year. The rules could include licensing and training requirements. The IG report said paid preparers should be required to use unique ID numbers when filing returns, so the IRS can better track those with problems. Currently, preparers can use one of several numbers to identify themselves on returns.


The Department of Defense is awarding FMC Technologies the 2009 Secretary of Defense Employer Support Freedom Award. FMC Technologies is the only Texas firm receiving the award this year. It's the highest recognition given by the U.S. government to employers for support of their employees who serve in the National Guard and Reserve.


Earnings

Halliburton says its second-quarter profit tumbled 48 per cent as sluggish exploration and production activity, particularly in North America, crimped results. The oilfield services company, which has corporate headquarters in Houston and Dubai, said its net income for the April-June period fell to $262 million. That compared with $504 million a year ago. Revenue fell 22 per cent to $3.5 billion. One-time items aside, Halliburton said earnings amounted to $274 million. Analysts polled by Thomson Reuters were expecting revenue of $3.43 billion. Halliburton kicked off the earnings period for the oil and gas sector. Most forecasts predict significantly lower year-over-year results for producers and service companies.


 

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