Court rejects attempts to block Allstate’s homeowner rate increase…Government says new home construction even weaker than thought last month…Crude futures surge after Turkey’s parliament authorizes incursion into northern Iraq…
A district court judge has rejected an attempt by state regulators to block Allstate’s recent increase of homeowner rates by nearly six percent. The judge ruled this week that Allstate acted within state law on August 20th when it enacted an immediate increase in rates. The judge also granted an injunction stopping regulators from attempting to nullify the increase. The ruling did not address the amount of the increase. The Texas Department of Insurance had attempted to order Allstate to freeze the increase. But state law requires regulators to convene rate hearings to determine justification of rates. An Insurance Department spokesman says the agency will seek a hearing on the rates. He says the department still feels the increase is excessive and unjustified. Allstate maintains the increase is necessary.
The government says new home construction was even weaker than thought last month. Housing starts fell 10.2 percent last month to the slowest pace in 14 years. Applications for building permits, a gauge of future activity, also fell sharply in September, dropping by 7.3 percent. Home sales, which had set records for five straight years, have been slumping since 2006, a downturn that has intensified in recent months as mortgage lenders have tightened standards for getting loans in response to soaring defaults. Both Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson warned this week that the housing downturn was likely to persist longer than had been expected. Paulson said the slump in housing would likely “continue to adversely impact our economy, our capital markets and many homeowners for some time yet.”
Houston ranks tenth on the list of top commercial real estate markets to watch in 2008, ranking 31st in terms of risk, according to PricewaterhouseCoopers. Their 29th annual “Emerging Trends” report says the Houston area has enjoyed the recent benefits of high gasoline and heating oil prices. Houston ranks sixth for retail properties, tenth for hotel properties and 12th for apartment residential. The report says more than 600 of the nation’s leading real estate experts expect a slowdown in the nation’s real estate market next year.
The Department of Homeland Security is giving Harris County $1.4 million in security grants for area nonprofits. The grants support improved physical security measures and screening activities for select non-profits deemed at high risk of a potential terrorist attack. Criteria includes substantiated threats, symbolic value of a site, an organization’s role in response and recovery from an attack, the credibility of a threat and potential consequences.
Crude futures have surged to a new record of $89 a barrel after Turkey’s parliament authorized an incursion into northern Iraq in search of Kurdish rebels. The vote overshadowed word that crude oil and gasoline inventories rose more than expected last week. Prices may have drawn some support from a 200,000 barrel decline in inventories at the closely-watched New York Mercantile Exchange delivery terminal in Cushing, Oklahoma. Light, sweet crude for November delivery CLOSED AT $87.40 a barrel in New York after rising to a record $89 earlier.
Houston business owners will hear an assessment of the capital markets in a breakfast forum tomorrow morning at the Houstonian Hotel, hosted by Houston law firm Boyar & Miller. GulfStar Group managing director Tom Hargrove will speak on the current environment for mergers and acquisitions.
“Private equity, a lot of times, is very closely tied in with the merger and acquisition activity, because a lot of times if we’re selling companies, we may sell it them a strategic buyer. That’s a company that’s in that business or similar business who can benefit from the purchase of the company. Or the other large segment of buyers out there are what we call financial buyers who have raised a lot of capital and are looking to buy companies and grow them and ultimately either sell them or take them public to, you know, make a good return on the capital that they have invested in it.”
Hargrove works with institutional sources to raise private funds for his clients, who may want to acquire other businesses or build a plant.
“I love dealing with the companies that we deal with because most of them are entrepreneurially-driven and you get to meet a lot of very interesting and successful people and help them, you know, accomplish what one of their goals are because a sale of a business—and I’m just going to focus on that—is one of those life events. Most people will go through that one time and one time only. It can be very intense emotionally and frustrating and at the end of the time, if you’ve done a good job, the owner’s happy with the results and you’ve made a real difference in their life and at the same time you’ve gotten a chance to know them and a chance to be affiliated with business that I think really have an impact on our everyday life here in Houston.”
Other panelists include Tom Fish with CBRE/Melody speaking on real estate, Rudy Garza with G-51 Capital Management discussing venture capital and J.B. Dollison with Crutchfield Capital covering private equity.
A refinery explosion today in Montana shook nearby houses and sent a fireball into the sky–but nobody has been hurt. The accident happened at an ExxonMobil refinery in Lockwood, near Billings. Authorities believe the explosion at the Irving-based company’s refinery occurred in a processing unit after piping in a high-pressure unit leaked gases that ignited. But company officials say the exact cause had not been determined. General Manager Geoff Craft told the Billings Gazette that one was in the area at the time. The fireball shot into the sky just before dawn. Lockwood firefighters say the blaze was under control about 20 minutes later. ExxonMobil said its own firefighters were still working to completely extinguish it a few hours later.
The House has approved a four-year extension of a moratorium on state and local taxes on access to the Internet. The tax ban was first passed in 1998. It’s set to expire November 1st. The extension makes an exception for some states that approved taxes prior to the original enactment. Many lawmakers favor a permanent tax break. But one of the bill’s sponsors argued that a temporary ban is the right way to go for both political and practical reasons. North Carolina Democrat Mel Watt says the Senate has made it clear that a permanent tax moratorium would be “dead on arrival.” Watt argued that without quick action, the ban was in danger of expiring before new legislation could pass. Watt says the bill also will allow lawmakers to make changes as needed. That’s happened both times the moratorium has been extended since 1998.
Best Buy says it has pulled all analog televisions off store shelves. Flat panel and high-definition screens have taken their place. Beginning in February 2009, broadcasters plan to stop transmitting analog signals, although people with older sets can still get programming via special converter boxes, set-top box or direct satellite. The Minneapolis-based chain says it told its stores to stop selling the products at the beginning of the month. More than 60 million U.S. households currently rely on an antennas or analog cable. Cable operators are required to guarantee their customers will receive broadcast channels until February 2012. After the first of the year, the government will be making coupons that can be used to buy converter boxes. Best Buy will sell coupon-eligible converter boxes starting early next year.
Organizers of the Shell Houston Open unveiled a check for $2,206,700 from their 2007 event and other golf-related activities, as Mayor Bill White proclaimed Tuesday “Shell Houston Open—a Chance for Children Day.” The Shell Houston Open has raised almost $50 million for Houston children since 1974. The annual event benefits over 200 local charities.