The United Nations is forecasting a fragile and uneven economic recovery in 2010, with a global growth rate of 2.4 per cent. In its annual economic forecast, the UN said the world economic situation has been improving since the second quarter of 2009, after the worst recession since World War II. It said equity markets have been rebounding, international trade and industrial production have been recovering, and risk premiums on lending have been falling. The UN said the economic revival has been driven in no small part by the effects of the massive stimulus measures injected into the economy since late 2008. The report said developing countries, especially those in Asia, are expected to show the strongest recovery this year.
Billionaire investor Warren Buffett says he's still not sure when the economy will recover, but he expects the rebound to be slow because American consumers remain uneasy. Buffett said that he thinks the key to economic recovery will be getting money back into most people's pockets. He says the government's first stimulus plan didn't do that very well. Buffett says the economic hangover the country is experiencing now is directly proportional to the size of the financial binge in previous years. Buffett spoke to the Associated Press before shareholders in his company, Berkshire Hathaway, met to approve a 50-for-1 split of the company's Class B shares.
The House has passed a bill allowing taxpayers to write off donations to Haiti earthquake relief efforts when they file their 2009 taxes this spring. Under current law, donors would have to wait until they file their 2010 returns next year to take the deductions. The bill would allow donations made by the end of February to be deducted from 2009 returns. Last week's quake killed an estimated 200,000 people in Haiti. The bill passed the on a voice vote, with no opposition. The Senate is expected to vote on the measure soon.
Senate Democrats have proposed permitting the federal government to borrow an additional $1.9 trillion to pay its bills. That would permit the national debt to reach $14.3 trillion. The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. The record increase in the so-called debt limit is required because the budget deficit has spiraled out of control in the wake of a recession that cut tax revenues, the Wall Street bailout, and increased spending by the Democratic-controlled Congress. Congress has never failed to increase the borrowing limit, but it will take 60 votes to pass the legislation under an agreement by top Senate leaders.
Inflation pressures at the wholesale level eased in December as a drop in energy prices offset a big jump in food costs. The Labor Department said Wednesday that wholesale prices edged up 0.2 per cent last month, much slower than the 1.8 per cent surge in November. Energy prices, which had been up for two months, fell in December. The price performance at the wholesale level combined with last week's benign reading on consumer prices supported the view that inflation is not a problem. That gives the Federal Reserve room to keep interest rates low to boost the country out of a deep recession.
Construction of new homes dipped unexpectedly last month as bad weather hit much of the country. Applications for future projects, however, soared in a sign the industry is ramping up after a debilitating bust. The Commerce Department says construction of new homes and apartments fell four per cent in December to a seasonally adjusted annual rate of 557,000 from an upwardly revised 580,000 in November. The results were lower than the 580,000 forecast by economists surveyed by Thomson Reuters. Applications for new building permits, a gauge of future activity, rose 11 per cent to an annual rate of 653,000, a far stronger showing than economists had predicted and the highest level of activity since October 2008.
Housing experts say the market recovery should continue this year as the economy improves, but high unemployment at least through 2011 will slow the turnaround. A panel of economists delivered their forecast at the International Builders' Show in Las Vegas. National Association of Home Builders chief economist David Crowe says he expects home sales will weaken some after a homebuyer tax credit expires in April, but ultimately be up modestly for the year. He also forecasts unemployment to peak at 10.2 per cent before falling to around eight per cent by the end of 2011. Freddie Mac chief economist Frank Nothaft expects home prices to decline three per cent this year. His forecast calls for mortgage rates to remain below six per cent this year.
Chase opens its Chase Homeownership Center in Houston tomorrow morning on Fuqua. The mortgage servicer will provide face-to-face help for homeowners struggling with their mortgage payments, including help on understanding their options and assembling needed documents for loan modifications. Staffers will also reach out through hundreds of community foreclosure prevention fairs and through non-profit counselors. Chase approved more than 568,000 new trial modifications last year under the U.S. Making Home Affordable program and through Fannie Mae, Freddie Mac, VA and FHA programs. Chase services about 10.3 million loans, including about eight million loans for investors.
IDev Technologies formally opens its new manufacturing facility in Webster on Medical Center Boulevard tomorrow. The 48,000-square-foot plant will produce arterial stents that help patients avoid amputation and other lower extremity damage from arterial blockages in diabetes and other conditions. Christopher Owens is IDev's CEO and president."The problem with making a stint for this application is that if you want more strength for a tube, you have to leave metal in and you reduce the flexibility. If you want more flexibility, you take metal out, and you reduce the strength. We don't have any of those issues, which makes our particular product very, gives it a very high resistance to fracture, and gives it incredible radial strength, which is a perfect combination for this type of application. The overall peripheral artery disease market is about a $2.6 billion market. IDev can participate in close to $1 billion worth of business in this particular market, and the market today is growing between eight and 14 per cent."
Peripheral artery disease of the lower extremities affects eight to 12 million people in the U.S., according to the American Heart Association.
A study from Rice University's Jones Graduate School of Business indicates companies are better off promoting someone from within the company rather than hiring from the outside, when appointing a new CEO for strategic changes. The study tracked the tenure and performance history of 193 CEOs in the industrial sector between 1993 and 1998. Researchers found that there's very little difference between performances of CEOs promoted from within a company in early years, but in later years, internally-promoted CEOs outperformed externally-hired ones.
A new study measuring the health and vitality of the nation's arts industry paints a grim picture. The first national arts index shows steady growth in the number of arts organizations since 1998 is now overwhelming current funding. The study by the group Americans for the Arts shows the nation's artists and arts businesses fell into their biggest slump in more than a decade in 2008. It looks at 76 indicators, including music royalties, Broadway ticket sales, museum visits, philanthropy and the number of college art majors. The study found the number of nonprofit arts groups grew from 73,000 to 104,000 since 1998. But one out of three failed to break even on their budgets in the best years.
A coalition of Alaska natives has combined forces with some of the heaviest hitters in the environmental community to challenge a plan by Shell to drill for oil off northwest Alaska. The legal challenge to Shell's approved drilling plan for the Chukchi Sea was filed in the 9th Circuit Court of Appeals. The groups say the plan approved by the Minerals Management Service does not comply with federal environmental laws. And they say the plan was approved without evaluating the potential impact of a major oil spill in the Chukchi Sea. The MMS has approved a Shell drilling plan for up to three exploratory wells in the Chukchi next summer.
The president and CEO of the Federal Reserve Bank of New York says the U.S. must keep an independent central bank. In a speech before the partnership for New York City, William Dudley expressed concern about Congressional efforts to broaden oversight of the Federal Reserve and rein in the central bank's powers. He says proposals to audit the Fed's monetary policies, for example, would create larger problems for the economy. "Politicized central banks generally do not have enviable records with regard to inflation, economic growth or currency stability," he said. Past presidents of the New York Fed, such as Paul Volcker have gone on to hold the top position at the Federal Reserve.
Federal Reserve Chairman Ben Bernanke has taken the unusual step of asking Congress' investigative arm to conduct a "full review" of the Fed's role bailing out AIG. The Fed chief's move is aimed at defusing criticism of the government's $182 billion rescue of the insurance giant. The bailout sparked public outrage and demands in congress for more information. That was after it was revealed that millions in bonuses would go to employees in the AIG division most responsible for the company's need for a bailout. The House Committee on Oversight and Government Reform is probing the bailout. Lawmakers want to know more about billions in payments AIG made to Goldman Sachs and other Wall Street firms that did business with the insurer. Some lawmakers want to know why those firms were fully paid and why concessions weren't demanded.
Chrysler is recalling 24,177 vehicles because of a defect that could result in brake failure. The recall includes 2010 models of the Chrysler Sebring, Dodge Avenger, Dodge Nitro, Jeep Commander, Jeep Grand Cherokee and Jeep Liberty and 2009 and 2010 models of the Dodge Ram pickup. The National Highway Traffic Safety Administration announced the recall. Owners will be notified starting this month. Chrysler will replace the faulty clip on the brake booster input rod for free.
In-person property tax, auto registration and veterans assistance is being offered by the Harris County Tax Assessor-Collector this evening at Grayson/Baldree Community Center on Corpus Christi in the Cloverleaf area of Precinct 2. Leo Vasquez will describe the operations of the office and answer questions.
The New York Times says it will charge readers for full access to its Web site starting in 2011. The move is aimed at drawing more revenue online, hoping to avoid driving away advertisers desiring the largest possible audience. The potential pitfalls have made most other major newspapers hesitant to take a similar step. But after months of deliberation, the Times says it will use a so-called metered system, allowing free access to a certain number of articles and then charging users for additional content. The Times did not disclose how many articles will be available for free and what it will charge to read more. Subscribers to the printed version of the Times would still have free access to the Web site.
Amazon.com says it's offering authors and publishers a bigger cut of sales on its kindle e-reader--with strings attached aimed at keeping prices customers pay low. Starting in June, it will offer royalties on book sales of 70 per cent after delivery costs. With those costs equaling less than six cents per book, Amazon says authors will be able to earn $6.25 per copy on a book selling for $8.99, rather than the old rate of $3.15. Seattle-based Amazon.com is setting several criteria for the new rate. List prices must be between $2.99 and $9.99, and at least 20 per cent below the lowest price of the physical edition of the book. It also has to sell for the same price, or less than it does with competing book sellers.
American Airlines is joining Continental, Delta, United and US Airways in announcing price increases to their check baggage fees. American is raising fees to $25 for the first checked bag and $35 for the second. Prices go into effect February 1st.
American ended 2009 with a loss and 2010 could have a rocky start if the carrier loses a key partner in the Asian market. The parent of American says it lost $344 million in the fourth quarter as traffic fell and many business travelers stayed home or bought cheaper tickets. Now that the fourth-quarter accounting is done, investors will be turning their attention to Japan, where American and parent AMR Corporation are scrambling to hold on to a valuable partnership with Japan Airlines. JAL filed for bankruptcy protection on Tuesday, and reports in the Japanese press say the airline wants to dump American and form a partnership with Delta Air Lines.