Monday PM December 17th, 2007

National Oilwell Varco acquiring Grant PrideCo in $7.4 billion deal...White House pleased with concessions on spending bill...Greenspan calls for government financial help to aid mortgage crisis...

National Oilwell Varco is acquiring Grant PrideCo in a $7.4 billion deal. Shareholders of both companies and regulators must approve the merger. National Oilwell designs and makes oil and gas industry exploration and production equipment and tools. GrantPrideCo specializes in the pipes used to drill wells. The combined company will have more than 40,000 employees in 49 countries. Last month, offshore drillers Transocean and GlobalSantaFe combined.

American Airlines announced plans to recall or hire up to 250 maintenance workers. The workers will be added at overhaul bases in Fort Worth, Kansas City and Tulsa, Oklahoma, and at smaller maintenance facilities around the airline's system. Fort Worth-based American has about 82,000 employees. The carrier said the additional workers are needed to address staffing needs for 2008. The expansion will begin this month and continue through the first quarter of 2008. American has begun overhauling landing gears on its Boeing 777 and 737 fleets and on American Eagle regional jets. American will start heavy maintenance checks on engines on its Boeing 737-800 fleet. Workers have also been installing lie-flat seats and in-flight entertainment systems in business class cabins on Boeing 767-300s and First- and Business-Class cabins on Boeing 777-200s.

Some day laborers and Brownsville have reached an agreement to allow the workers to continue to seek jobs on city sidewalks. Members of the "Committee of 14th and Adams Street Workers'' filed suit earlier this month claiming Brownsville police harassed or arrested them while they were looking for work. The agreement, approved last week by U.S. District Judge Hilda Tagle, affirms the right of the laborers to continue seeking work on the sidewalks. Officers who interact with day laborers will receive training. The laborers are not to be threatened with arrest or a ticket unless officers have a specific reason to do so. Brownsville also will allow attorney Nathaniel Norton, with Texas Rio Grande Legal Aid, to review records of arrests and citations in the area.

President Bush says he hopes to sign a more than $500 billion spending bill, but only after Democrats agree to accept funding for U.S. troops in Iraq. The bill, which could pass the House late tonight, wraps together the budgets for every cabinet department except the Pentagon and is expected to pass Congress this week to allow lawmakers to head home for Christmas. The result is a defeat for Democrats, who had spent months on legislation to add $27 billion to domestic programs. The nearly 1,500-page bill has been stripped of Democratic policy riders that drew White House veto threats, such as an attempt to ease restrictions on aid to overseas family planning groups that provide abortions.

Former Federal Reserve Chairman Alan Greenspan is suggesting that a tax break or other government financial help for homeowners facing the mortgage crunch would be the best political fix for the economy. Appearing on ABC's "This Week," Greenspan did not specifically call for a tax cut. Instead, he called for the government to apply money to the severe housing market slump. Such a cash infusion would typically come through a tax break or a new government spending program. Separately, Greenspan said he was concerned about signs of a resurgence of inflation, adding that the Federal Reserve needs to do "what it has to do'' to suppress the inflation rates he sees emerging."

The Federal Reserve is taking steps to crack down on shady mortgage lending practices. New rules expected to be proposed this week would, among other things, force lenders to make sure that borrowers, especially subprime borrowers, set aside money to pay for taxes and insurance. They would also bar lenders from penalizing subprime borrowers--those with spotty credit or low incomes--who pay their loans off early. The rules would also restrict loans that don't require proof of a borrower's income. They would also curtail abuses in mortgage advertising. The plan from the Fed, which has regulatory powers over the nation's financial system, could be finalized next year.

There is a kind of pre-holiday rush of economic data, with a number of key reports due this week. They're being watched for signs whether the economy might be tipping into recession. Economists generally see that risk as on the rise. On Tuesday, the Commerce Department reports on November housing starts and building permits. Both are seen lower. Thursday, reports are due on third-quarter growth, the forward-looking Index of Leading Indicators as well as the weekly jobless claims. To wrap things up on Friday, the government reports on personal incomes and spending, as well as a gauge of inflation.

NBC says Jay Leno and Conan O'Brien will return to the air with fresh episodes starting on January 2nd. The talk show hosts have been sidelined since early November due to the Hollywood writers' strike. The network says "The Tonight Show'' and "Late Night'' will return without writers supplying jokes. NBC says the decision was similar to 1988, when Johnny Carson brought back "The Tonight Show'' two months into a writers' strike. A similar return--with writers--appears in the works for David Letterman's "Late Show." The union representing striking writers said over the weekend that it was willing to negotiate deals with individual production companies, including Letterman's Worldwide Pants. The strike left the nation without fresh late-night laughs for two months as the presidential race heated up. Jon Stewart's "The Daily Show'' on Comedy Central has also been shut down during the strike.

Faced with the indefinite suspension of negotiations, the union representing striking Hollywood writers has told its members it would try to deal directly with Hollywood studios and production companies, bypassing the umbrella organization that has been representing them. Talks broke off December 7th after the Alliance of Motion Picture and Television Producers, which represents the studios, insisted it would not bargain further unless the Writers Guild of America dropped proposals that included the authority to unionize writers on reality shows and animation projects. Both sides in the strike, which began November 5th, have said the central issue is compensation for programs, movies and other content streamed or downloaded over the Internet.

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