The Associated Press reports banks expanded at a breathtaking pace over the past five years--adding more than 10,000 full-service branches. But AP reports barely one in ten were in inner city, minority neighborhoods. Nearly six branches were added every day, with bank offices racing to exclusive neighborhoods such as University Park in Dallas, Midtown West in Manhattan and Music Row in Nashville, Tennessee. Data from the Federal Deposit Insurance Corporation shows that the nation's 99,000 banks generally followed the money. Charles O'Neal with the Dallas Black Chamber of Commerce says folks are spending sleepless nights trying to figure out where to go to find a financial institution responsive to their needs. Bank officials say they are following the growth of customers to continue providing services because most people choose banks based on branch locations.
The National Association of Home Builders says its housing market index rose in August to the highest point in more than a year. The Washington-based trade association said the index rose one point to 18, a level not seen since June 2008. The reading for current sales conditions was unchanged at 16, while traffic by prospective buyers rose three points to 16. The index for expected sales over the next six months jumped four points to 30, signaling that builders think the worst of the housing slump is over. The report reflects a survey of 474 residential developers nationwide. Index readings lower than 50 indicate negative sentiment about the market. The last time it was above 50 was in April 2006.
Continental Airlines plans to join the Star Alliance on October 27th. The Houston-based airline will end its participation in SkyTeam after its last scheduled flight on October 24th. The Star Alliance was established in 1997 to offer customers a smooth travel experience on international flights involving several carriers. The Star Alliance that includes United Airlines and Lufthansa in late October. The Transportation Department approved antitrust immunity for Continental last month to work closely with its new partners in setting prices and schedules on international service. Mileage balances held by Continental's OnePass members will be unaffected by the transition.
U.S. airlines say one million fewer passengers will fly this Labor Day weekend compared to last year. The Air Transport Association of America expects 16 million passengers to travel on U.S. carriers during the holiday weekend. The group blames economic uncertainty and persistently high energy prices. Airlines have cut flights, which will keep planes at or near capacity.
Bell Helicopter has a new three-year contract with a union representing about 175 engineering workers in the Dallas-Fort Worth area. The company said the Bell Production Engineers Association ratified the contract Sunday night by a three-to-one margin. The contract includes a cumulative wage increase of 10.4 per cent over the three years of the deal, and each union member will receive a $3,000 cash ratification bonus. Last month, a union representing 2,500 manufacturing workers ended a nearly-six-week strike after members ratified a four-year contract. Bell and the United Auto Workers local 218 were finally able to reach an agreement after several failed attempts during the strike. Bell Helicopter is based in Fort Worth, and its parent company is Rhode Island-based Textron.
An Ernst & Young and Economist Intelligence Unit shows about half of oil and gas industry executives are more optimistic about the economic outlook than those in other industries. The report in the Houston Business Journal says 45 per cent say the economic downturn impacted their business more than they expected, compared to 56 per cent of respondents across all sectors. Two-thirds of respondents report an increase in the importance of restructuring their business to position their companies when business prospects improve.
Dell is working on a smart phone for China Mobile, China's biggest cell phone carrier. Rumors of a Dell phone date at least to 2007. Now Dell spokesman Matthew Parretta says the company showed a "proof of concept mobile device prototype" at an event hosted by China Mobile in Beijing. Parretta would not say when a Dell phone would be ready for use, or what operating system it might have. China Unicom, the country's second-largest wireless carrier, is in talks with Apple about selling the iPhone in China.
Congressional Democrats say the economic stimulus package is doing its job. As the Obama administration pushes its health reform package, Democrats say the benefits of the economic stimulus package that the president signed into law six months ago are becoming more evident. While many Americans are still hurting, and the stimulus didn't keep the jobless rate as low as predicted, fewer jobs were lost last month than analysts had expected. Though consumer spending remains weak, other economic reports show the economy is stabilizing and improving. And Democrats note that 2/3 of the $767 billion still has to be spent, with much of it set to go out in the next few weeks.
The Federal Reserve says most banks expect their lending to remain tight through the second half of next year, with the exception of mortgage standards, which already are loosening a bit. The Fed's latest survey of loan officers found that about 20 per cent of U.S. banks tightened their lending standards on prime home mortgages in the April-June quarter, down from around 50 per cent in the previous quarter. Meanwhile, 45 per cent of banks say they tightened standards on nontraditional mortgages, such as adjustable-rate loans with multiple payment options, down from 65 per cent in the previous survey. Getting banks hurt by the financial crisis to boost lending is critical to a sustained economic recovery.
The Treasury Department says the value of loans held by the largest banks getting government bailout support fell for a fifth consecutive month in June. The department says the average value of loan balances at the 22 largest institutions who received government support dropped 1.1 per cent following a decline of 0.2 per cent in May. The government survey did find that the amount in new loans originated rose 12.7 per cent following a 1.4 per cent increase in May. The monthly survey monitors the impact the bailout program is having on the goal of boosting loans to consumers and businesses. The banks that have received support include Citigroup and Bank of America.
The Federal Reserve is extending a program intended to spur lending to consumers and small businesses at lower rates, but will not expand the types of loans made. The Fed extended its term asset-backed securities loan facility through March 31st for most of the types of loans it makes. The program was scheduled to end on December 31st. The TALF started in March and figures prominently in efforts by the Fed and the Obama administration to ease credit, stabilize the financial system and help end the recession. Under the program, investors use the funds to buy securities backed by auto and student loans, credit cards, business equipment and loans guaranteed by the Small Business Administration.
Foreign demand for long-term U.S. financial assets rebounded in June even though China and Russia trimmed their holdings. The Treasury Department says foreigners purchased $90.7 billion more in long-term U.S. securities than they sold in June. That's a significant rebound from May when they sold $19.4 billion more than they purchased. China, the largest foreign holder of U.S. Treasury securities, trimmed its holdings to $776.4 billion in June from $801.5 billion in May. Russia reduced its holdings 3.7 per cent to $119.9 billion. But Japan, the second largest holder of U.S. Treasury securities, increased its holdings 5.1 per cent to $711.8 billion.
Bids will be accepted next month to raise Farm-to-Market Road 3005 in Galveston after Hurricane Ike-related flooding closed it. High tides were blamed for flooding the westbound evacuation route. The Galveston County Daily News reports the $3.4 million project will be funded with federal stimulus dollars. Ike swamped parts of Galveston on September 13th, 2008. The surge reached FM 3005 the day before the storm made landfall. The Texas Department of Transportation will begin accepting bids September 9th. Agency spokeswoman Karen Othon had no timetable for when the project would be finished. The upgrade will run from the San Luis Pass toll bridge to the end of Galveston's famed seawall.
Houston-based solar installation firm Acro Energy Technologies is acquiring California-based Energy Efficiency Solar in a $1.95 million deal. EE Solar installs residential and commercial solar systems. Acro Energy Technologies continues evaluating acquisition candidates, as it consolidates renewable energy companies.
P.F. Chang's China Bistro says it is teaming with consumer products company Unilever to develop frozen Asian entrees under the restaurant's brand. Terms of the licensing agreement were not disclosed. The companies will work together to develop and launch the new line of frozen entrees. A launch date has not yet been set.
The publisher of Reader's Digest, the country's most popular general interest magazine, said it will seek Chapter 11 protection from creditors amid declining circulation, an industry-wide advertising slump and large debts. Reader's Digest Association said it has reached an agreement with a majority of secured lenders to restructure its debt. Under the plan, the lenders get ownership of the company and will erase much of the $1.6 billion they have in senior secured notes. The monthly magazine, founded in 1922 as a collection of condensed articles from other publications, has been searching for a niche as the Internet upends the magazine industry's traditional business models. This year, it cut the circulation guarantee it makes to advertisers to 5.5 million from 8 million and lowered its frequency to ten annual issues from 12. The magazine was bought by the New York private equity firm Ripplewood Holdings in 2007.