It's a "slowdown,'' not a recession. That's how President Bush sees the current state of the U.S. economy. He was asked about it in New Orleans, where he's been meeting with the leaders of Mexico and Canada. Bush also said he's "obviously concerned'' for American consumers. And he said rising gasoline prices are "like a tax on our working people.'' He'd been asked whether that might eat-away at the potential positive impact of the $168 billion economic stimulus package. Bush didn't specifically answer that question.
A Democratic bill aimed at helping homeowners who are struggling with their mortgages is making its way through the House. Under the plan, homeowners facing foreclosure would be able to get cheaper, government-backed loans. But first, lenders would have to agree to wipe out part of their debt. And the borrowers would have to show they can afford the new mortgage. They also would have to agree to share any future profits on the home with the government. The plan would be a massive expansion of the Federal Housing Administration, the depression-era mortgage insurer. The Bush administration is backing the same concept. Alabama Representative Spencer Bachus, the senior Republican on the Financial Services Committee, is introducing a much narrower housing rescue bill than the $300 billion program Democrats are pushing. The GOP bill expands a Bush administration program that allows some struggling homeowners to refinance into more affordable government-backed mortgages. It reaches fewer homeowners than the overhaul by Massachusetts Democrat Barney Frank, the House Financial Services chairman. Frank's bill is aimed at heading off as many as a million foreclosures. Frank wants a committee vote Thursday on his bill, which is expected to move through the House in early May. A similar bill is taking shape in the Senate.
The Federal Reserve has provided a total of $360 billion in short-term loans to squeezed banks since December to help them overcome credit problems. The central bank has announced the results of its most recent auction where commercial banks bid to get a slice of another $50 billion in the short-term loans. It's part of an ongoing effort by the Fed to help ease the credit crunch, which erupted last August, intensified in December and January and took another turn for the worst in March with the sudden crash of Bear Stearns, the nation's fifth-largest investment house. The mighty blows of the housing, credit and financial crises threaten to push the country into a deep recession.
British Prime Minister Gordon Brown says rising food prices pose as great a threat to world prosperity as the global credit crunch. And he's warning that spiraling prices could reverse any progress being made to ease poverty in developing countries. Brown's warning comes in a statement released just ahead of his meeting in London with the executive director of the World Food Program. He calls for urgent action to stimulate food production and a review of the impact that the production of biofuels is having on global agriculture. Brown fears the use of agricultural land to produce biofuels meant to reverse global warming are driving up food prices. Rising prices have led to sometimes violent protests across the Caribbean, Africa and Asia.
Alaska has rejected Irving-based ExxonMobil's plan to pump natural gas from the North Slope. Alaska Natural Resources Commissioner Tom Irwin says the plan would have involved assessment and design work without any actual commitment to pump gas. ExxonMobil's partners in the project are Chevron, BP and ConocoPhillips.
A man accused of conspiring with a Kuwaiti businessman to defraud the U.S. military called a former associate to get advice on how to handle a $1 million kickback. That's what the associate testified. Stephen Seamans, a former defense contract manager for KBR who was himself convicted of rigging contracts, told a federal court in Illinois that that Jeff Alex Mazon told him the $1 million was a loan to start a McDonald's franchise. Prosecutors say Mazon conspired to inflate a military contract by $4.8 million and got $1 million as a reward for inflating the subcontract for Ali Hijazi's company. The $5.5 million contract, known as "Contract 39,'' was for fuel services at Camp Arifjan in Kuwait. Mazon and Hijazi face four counts each of major fraud and six counts each of wire fraud. Hijazi lives in Kuwait and has not been taken into custody. Seamans served a year and a day in federal prison for getting kickbacks. Houston-based KBR is not named in the indictment.
Missouri University has hired a professor for its Kenneth Lay Chair in Economics. The college of Arts and Sciences has named Joseph Haslag to the position. MU alumnus Ken Lay donated Enron stock in 1999 to fund the chair, which MU sold for $1.1 million. MU faculty members have spoken out against the university's ties with Lay. Professor Emeritus Rex Campbell says he still thinks filling the chair position could be damaging to MU's reputation. Enron's bankruptcy and collapse caused the loss of more than 4,000 jobs and $2.1 billion in pension plans.
A new Indian film called "Sarkar Raj," which means "Absolute Ruler," is loosely based on the controversy around an Enron power plant built in India's western state of Maharashtra a decade ago. The film hits screens on June 6th. The film's director says the movie has no reference point and was a completely original script, but the trailers show a striking similarity between the role of the film's leading actress and that of Rebecca Mark, a former Enron executive who pushed the $2.9 billion Dabhol power plant project. Aishwarya Rai-Bachchan says she represents a power company in the film that wants to set up a power project. Enron closed the plant in 2001 after its lone client, the Maharashtra State Electricity Board, fell behind on payments. Enron filed for bankruptcy in December 2001 in an accounting scandal.
The nation's top communications regulator says his agency has all the power it needs to keep Internet service providers from discriminating against some Web surfers. Kevin Martin, who chairs the Federal Communications Commission, told a Senate panel that new legislation isn't necessary. His testimony came at a time when the issue of "network neutrality'' has heated up. That's the principle that people should be able to go where they choose on the Internet without interference from network owners. Comcast has admitted that it sometimes delayed file-sharing traffic for subscribers, as a way to keep Web traffic flowing. Two Senators have proposed legislation that would force those who control Internet service to treat all traffic equally.
AT&T says its first-quarter earnings rose 22 percent as its Wireless division saw continued strong growth and the Enterprise Services division reversed a declining trend. The country's largest telecommunications company said it earned $3.46 billion in the quarter, compared with $2.85 billion a year ago. Revenue rose 6.1 percent to $30.7 billion. The earnings per share and revenue figures matched the average expectation of analysts polled by Thomson Financial.
Texas Instruments first-quarter profit and sales were almost exactly what Wall Street expected, but the company's comments about a weak market for chips used in high-end mobile phones sent its shares lower. Company executives said chip inventories had grown too large and might take six to nine months to work down, partly by trimming production. And they set second-quarter profit and revenue targets that were below analysts' forecasts, blaming weaker demand for chips used in wireless devices, especially high-end mobile phones. A TI vice president said the slowdown had nothing to do with Nokia's decision to begin using other chip suppliers, and analysts agreed, because rival semiconductor makers have run into delays producing chips for Nokia. One analyst said he wasn't surprised the company's second-quarter goals didn't appease Wall Street. Just a month ago, the company was forced to lower its forecast for the first quarter.
Kimberly-Clark says its profit fell three percent in its first quarter due mainly to charges and higher costs. Kimberly-Clark says net income dipped to $440.9 million from $452 million, or in the prior year quarter. Excluding charges, the company earned $1.08 per share. Its share count fell year-over-year as well. Thomson Financial says analysts expected profit of $1.07 per share. The Dallas-based consumer products maker says revenue grew about ten percent to $4.81 billion from $4.39 billion. Analysts expected $4.75 billion. The cost of products sold rose 11 percent.
Houston-based Saint Arnold's Brewing Company picked up gold and silver awards at the 2008 Brewers Association World Beer Cup. The seventh bi-annual competition—with 91 beer categories--awarded medals to brewers from 21 countries in a contest involving 644 brewers from 58 countries and 45 U.S. states. Saint Arnold's Divine Reserve N. 4, a Wee Heavy—a single-batch beer—won gold in the Strong Scotch Ale category. Saint Arnold Elissa IPA won a silver medal in the International pale Ale category. Saint Arnold Divine Reserve No. 6, an American Barleywine, will be the next in the small batch series of beers from the brewery, hitting stores in June.
A Vermont brewery is planning to power its operations using methane gas from cow manure. In an Earth Day announcment, the Long-Trail Brewing Company says it plans to sign a contract to become the largest commercial customer of central Vermont public service's "cow-power'' program. In it, the power company works with farmers to install electricity generating equipment that uses methane gas that's given off by the manure. Customers pay a four-cent-per-kilowatt-hour premium for the so-called cow power. The premium helps farmers pay for the equipment. The brewing company says enrolling in cow power is part of its Eco Brew program that includes the use of heat recovery, bio-diesel, recycling and water conservation. It says it also sends eight tons of mash--a byproduct of the brewing process--to local farms every day. Farmers use it to feed their cows.