The world's top financial officials, shaken by the credit crisis roiling markets, discussed recommendations in Paris aimed at restoring confidence. The plan, with 65 separate recommendations, seeks to boost transparency, strengthen the role of credit rating agencies and bolster cooperation between regulatory authorities in major countries. Those proposals will be explored when finance ministers and central bank presidents from the world's seven richest industrial countries meet in Washington for discussions to be led by Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. The discussions include the top finance officials of Japan, Germany, Britain, France, Italy and Canada. They're happening ahead of the weekend meetings of the 185-nation International Monetary Fund and its sister lending institution, the World Bank.
American Airlines has canceled 595 more flights, bringing this week's total to nearly 3,100 as inspections continue on the wiring of its MD-80 jets. Fort Worth-based American announced the latest cancellations and that it expected to operate about half of its MD-80 schedule through much of the day. American says an undetermined number of flights would also be canceled Tuesday, but it hoped to complete safety inspections of all its mid-range MD-80 aircraft by tomorrow night. The mass flight cancellations will cost American airlines tens of millions of dollars, the company's chief executive said, but the carrier can withstand the losses. CEO Gerard Arpey said he takes full responsibility for the airline's failure to comply with a federal safety rule on the bundling of wires in MD-80 wheel wells. American canceled 460 flights on Tuesday, 1,094 on Wednesday, 930 on Thursday, then 595 on Friday.
Frontier Airlines will be flying under bankruptcy protection. The carrier is the fourth airline in the past two weeks to file for bankruptcy amid high fuel prices and a weak economy that has more people staying home. Unlike the others--ATA, Skybus and Aloha--it plans to continue passenger service while it reorganizes. The Denver-based carrier blames the bankruptcy decision on an unexpected move by its main credit card processor to start withholding significant proceeds from ticket sales. Frontier's CEO says the Chapter 11 filing will prevent the processor from increasing its "holdback.'' Frontier announced last month that it was coping with higher fuel costs by selling four of its planes.
Pilots who work for Frontier are agreeing with their bosses, who blame the airline's bankruptcy filing on the company's principal credit card processor. The head of the Frontier Airline Pilots Association says the decision by the processor to begin withholding a greater share of proceeds from ticket sales was a shock to the carrier. He says if had not been for First Data, "we really had our act together.'' Frontier says it will continue to operate a full schedule of flights and pay suppliers and employees as it seeks bankruptcy protection. The pilots association head says he believes the airline's 700 pilots will continue to support management. Frontier has struggled amid rising fuel prices and aggressive competition at Denver International Airport from both United and Southwest Airlines.
Gasoline prices in Texas continue their record-setting ways, reaching an average $3.28 per gallon this week. AAA Texas reported the latest average price for regular self-service gas compares to $3.21 statewide last week. The nationwide gasoline price average is about $3.36, up seven cents this week. In Houston, prices went up almost seven cents to $3.29 per gallon. Corpus Christi has the lowest average price, at $3.19. Fort Worth is on the high end of the list, with an average of $3.31 per gallon, up eight cents from one week ago. AAA Texas, in a statement, noted crude oil continues to sell above $100 per barrel, so motorists can expect prices to remain high as well. One year ago the average gasoline price in Texas, according to AAA, was $2.69 per gallon.
GE posted earnings well short of forecasts and warned about the full-year outlook, citing a difficult financial services environment. GE is a maker of jet engines, railroad locomotives, water treatment plants and owner of NBC. Weakness in the stock weighs on the market because it seldom misses forecasts and is a component of the Dow industrials average. It reported earnings from continuing operations of $4.4 billion--down eight percent from a year ago.
The steady drum beat of job losses, home foreclosures and rising energy prices has pushed consumer confidence to a new low. According to the RBC Cash Index, confidence in early April dropped to a level of 29.5 against a benchmark reading of 100. It's down from 33 in March. It's the lowest confidence mark since the index began in 2002 and marks the fourth month in a row that consumer confidence hit a new low. Worsening problems with housing and credit, plus the financial turmoil on Wall Street and sky-high fuel prices have put people in a gloomy mind-set. Last April, confidence stood at 85, based on results from the international polling firm Ipsos.
The Houston Apartment Association hosted an event called Maintenance Mania at Holiday Inn Select today on the Southwest Freeway. Over a hundred maintenance professionals attended seminars and competed in seven events for a chance to compete at a national event in Orlando later this year. Competitions include racing against the clock at changing out a garbage disposal, lockset, smoke alarm, light bulb and faucet, and identifying tools through touch.
Just-released transcripts show the Federal Reserve was worried about the threat of deflation when it decided to cut a key interest rate by a half point in November 2002. The transcripts, which were released Friday, showed that then-Federal Reserve Chairman Alan Greenspan and his colleagues were concerned about a sluggish recovery from the 2001 recession and the possibility that the country could tumble into a period of deflation, or falling prices. Greenspan, in the transcripts, said that deflation was a "pretty scary prospect.'' The transcripts of Fed discussions are only released after a lag of five years.
The number of rigs actively exploring for oil and natural gas in the United States dropped by 15 this week to 1,815. Houston-based Baker Hughes reported that of the rigs running nationwide, 1,451 were exploring for natural gas and 355 for oil. Nine were listed as miscellaneous. A year ago, the rig count stood at 1,758. Texas lost 25 rigs. Baker Hughes has tracked rig counts since 1944. The tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted several record lows in 1999, bottoming out at 488.