An industry trade group says sales of previously-owned homes are expected to drop 8.6 percent this year. The National Association of Realtors is looking for sales to post a modest rebound in 2008. The forecast comes as delinquencies among borrowers with weak, or sub-prime, credit have risen dramatically over the past year, and other loans are harder to get as well. The group's senior economist says mortgage market disruptions are dampening the outlook, particularly for August and September. The NAR also expects prices for existing homes to slip 1.7 percent this year and then rebound 2.2 percent in 2008.
Mortgage financers Fannie Mae and Freddie Mac are implementing new federal guidelines regarding the purchase of risky sub-prime loans. They were directed to do so by no later than September 13th by the Office of Federal Housing Enterprise Oversight. Fannie Mae says it will purchase tens of billions of dollars in sub-prime loans over the next several years, and Freddie Mac will buy $20 billion of these loans.
Federal Reserve Chairman Ben Bernanke, speaking in Germany, says the U.S. and other countries need to work to fix a skewed pattern of trade and investment around the globe. He says the result would be more economic stability. Bernanke's Berlin speech comes a week before the Fed is to meet on the question of the future direction of interest rates. There's growing speculation the Central Bank will cut rates, in the face of the ailing housing market, credit crunch and last Friday's weaker-than-expected jobs report. In his remarks, released in Washington, Bernanke makes no direct reference to the interest rate issue, which investors are monitoring closely. So-called "global imbalances'' occur when countries such as the U.S. run up bloated trade deficits, while others, like China and oil-producing nations, produce big trade surpluses.
The Texas Business-Cycle Index from the Federal Reserve Bank of Dallas shows Houston growing at an annualized rate of 8.1 percent—the highest pace since November 2006. Factors behind the growth include the energy sector and job gains. The Fed says recent tightening of credit to sub-prime borrowers has dampened demand for homes costing less than $150,000, but Houston's high-end housing market remain strong.
OPEC has agreed to boost crude oil output by 500,000 barrels a day at its Vienna meeting. The move, confirmed by a spokesman for OPEC, is said to be intended to calm markets worried that supplies could become tight by year-end. OPEC says the increase would be based on the cartel's current production. That means it would be adding oil to the market. OPEC Secretary-General Abdalla Salem el-Badri told reporters the move was based in part on the effects of the crisis in the U.S. sub-prime mortgage market, where defaults have prompted lenders to tighten loan requirements. The move by the 12-nation group comes as a surprise. Ahead of the meeting, key members of the group had said they were satisfied that crude supplies were ample.
The Dallas office of the U.S. Bureau of Labor Statistics says there were 486 fatal occupational injuries in Texas in 2006, down from 495 the previous year. Highway crashes remain the leading cause of on-the-job deaths in Texas and in the nation. Auto mishaps account for 26 percent of all worker fatalities in Texas. Men account for 94 percent of all work-related deaths in Texas, but 29 women were fatally injured on the job. Among women, the leading cause of death is assaults and violent acts.
The U.S. trade deficit declined slightly in July. The government says record exports of farm goods, autos and other products offset a big jump in foreign oil prices. But the deficit with China hit the second-highest level ever, despite a string of high-profile recalls of Chinese-made goods. The Commerce Department says the trade deficit edged down 0.3 percent in July to $59.2 billion. It leaves the deficit for the entire year running at an annual rate of $711 billion.
A Mexican truck headed home from North Carolina while the U.S. Senate is considering whether to allow more rigs to travel to America's interior. The Senate is slated to vote on whether to end funding for a program allowing Mexican trucks to travel beyond commercial zones at the border. The program allows up to 100 Mexican carriers to send trucks on U.S. roadways for delivery and pickup of cargo. None can carry hazardous material or haul cargo between U.S. points. The proposed funding halt is part of a larger bill paying for transportation and housing programs. Also, concerns were raised after a truck carrying ammonium nitrate to a mine in western Mexico blew up this week after colliding with another vehicle--killing at least 34 people. The vehicles crashed on a highway near Piedras Negras, Mexico.
Health insurance premiums paid by workers and their employers went up an average of more than six percent this year. A new survey from the Kaiser Family Foundation finds that rate is outpacing inflation and pay increases and taking a bigger chunk out of families' budgets. Premiums for employer-sponsored health insurance for the average family topped $12,000--with employees picking up about one-fourth of that cost. The increase in premiums slowed for a fourth straight year. The group says insurance costs probably will rise again next year. Many of the more than 3,000 companies surveyed said they planned to make significant changes to their health plans and benefits, and nearly half said they were very or somewhat likely to raise premiums. Since 2001, the cost of premiums has gone up 78 percent, far outpacing a 19 percent increase in wages and 17 percent jump in inflation.
Companies may be investing more in IT security infrastructure, but they're lagging in implementing security and privacy policies, according to the 5th annual Global State of Information Security Survey from PricewaterhouseCoopers, as reported by the Houston Business Journal. Only a third of the survey respondents reported keeping accurate inventory of user data or where it is stored, and only a fourth kept inventory of all third parties using customer data. Some 78 percent of energy companies say they do not keep an inventory of all third parties using their data.
Houston-based woman-owned Naknan has joined with Boeing to participate in the U.S. Army's Mentor-Prot?g? Program, according to the Houston Business Journal. Naknan has developed software used by NASA's Space Flight Web site, the European Space Agency and the German Space Agency for sharing information among dissimilar programs.
Houston-based GlobalSantaFe has ordered a $740 million ultra-deepwater exploration and development drillship from Hyundai Heavy Industries for delivery by September 2010. The drillship, capable of drilling in water depths up to 10,000 feet and upgradable to 12,000 feet, will be constructed in Ulsan, Korea. GlobalSantaFe is in a pending merger with Houston-based offshore drilling contractor Transocean.
Groups opposed to the construction of two wind farms in south Texas say they'll appeal a judge's rejection of their bid to intervene in a case before the Public Utility Commission. The Coastal Habitat Alliance had requested a public hearing into American Electric Power's pending application to build a 21-mile, high-voltage transmission line to serve the projects. The group's members include the King Ranch, American Bird Conservancy and the Lower Laguna Madre Foundation. They argue the wind farms planned for Kenedy Ranch property will threaten migratory birds that flock to the area. An administrative law judge ruled Friday that the group hadn't shown that its members would be affected, because the project won't cross their land. The coalition says it will appeal to the commission.
Houston-based Gexa Energy slashed the cost of its wind energy power plan to consumers by as much as 14 percent. The price cut makes Gexa's clean energy plan for CenterPoint customers the cheapest on the Power to Choose Web site.
Continental Airlines announced it's contributed $50 million to its defined-benefit pension plans. Houston-based Continental says that brings the payments this year to $261 million. The airline expects to contribute more than $325 million to pension plans this year, nearly double its minimum funding requirement of $187 million. Continental and Fort Worth-based American Airlines have maintained their traditional defined-benefit pension plans. Many other carriers eliminated those pensions, including through bankruptcy filings, after the travel downturn and 2001 terrorist attacks.
Houston-based Schlumberger is acquiring InnerLogix, with offices in Houston and Stavanger, Norway. The firm has developed a data quality technology and process for the exploration and production industry.
A Texas company has been awarded a contract to manage the design and construction of a coal-fired power plant planned for the Navajo nation. Tribal President Joe Shirley, Jr., announced the selection on Friday of Irving-based Fluor Corporation in Window Rock, Arizona. His chief of staff, Patrick Sandoval, worked for the company before returning to the Navajo nation. The proposed 1,500-megawatt Desert Rock Energy Project is a joint venture between Houston-based Sithe Global Power and the Navajo nation's Dine Power Authority. Supporters say the $3 billion project in San Juan County, New Mexico, would be one of the cleanest in the country and would bring jobs and tax revenue to the tribe. Critics say it would harm the environment and the health of residents in the Four Corners area.
China is promising not to ship more lead-tainted toys to the U.S. Beijing has signed an agreement to prohibit the use of the toxic paint on toys exported to the U.S. The agreement was unveiled during the second joint U.S.-China Summit on Consumer Safety. The reputation of Chinese exports has been battered by recalls of millions of toys decorated in tainted paint. In the pact, Beijing pledged to increase inspections of its exports and take other steps to ensure products meet U.S. standards. Lead paint has been banned on toys made in the U.S. since 1978. Still, China reiterated its stance that people should not "over-propagandize'' the problem. The country maintains that most Chinese exports are safe.
An advisory commission to the President says the flow of products imported into the U.S. each year is so vast that simply increasing inspections would not adequately improve safety. Instead, the panel says the government should do more to ensure products are safe before they reach the nation's borders. In July, President Bush established a working group to study import safety in response to growing concerns about a spate of recalls from China. In its first report to the president, the group says that the government should focus its efforts on prevention. However, the report provided no specifics on what additional resources would be needed. Recommendations on spending and whether agencies will need more regulatory authority will occur in the next 60 days.
There will be no change to the traditional pint of beer in a British or Irish pub, thanks to a ruling by the European Union. The EU's executive body says Britain and Ireland can keep using some of their old imperial measurements rather than switching over to the metric system like the rest of the continent. Britain and Ireland officially use metric but still have some exceptions. Pubs serve beer and cider in pint glasses, road signs show miles instead of kilometers, and milk still comes in pint bottles. The EU decided in 1999 to phase out imperial measurements, but it changed its mind after fierce opposition. An EU official says keeping imperial measures honors the two countries' traditions and could also be good for trade with the United States, which uses similar measurements.