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Friday PM December 18th, 2009

Former El Paso traders sentenced for false data reporting…Texas unemployment drops to eight per cent…Report says foreclosures will continue to plague housing market…


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Three former El Paso Corporation traders are going to prison over their efforts to manipulate the price of natural gas by reporting false data. A federal judge in Houston sentenced 50-year-old James Brooks, 47-year-old Wesley C. Walton and 50-year-old James Patrick Phillips. Brooks, sentenced to 14 years in prison, was convicted in February 2008 of one count of conspiracy, 22 counts of false reporting and 22 counts of wire fraud. Walton was convicted of one count of conspiracy, 11 counts of false reporting and 11 counts of wire fraud. Phillips was convicted of one count of conspiracy, 10 counts of false reporting and ten counts of wire fraud. Walton and Phillips must serve 135-month terms. Prosecutors say the false data was submitted to industry publications, going back to 2000.

Retailers in the northeast are bracing for a snowstorm making its way up the east coast set to hit during the last weekend of holiday shopping. The Saturday before Christmas is often the busiest shopping day of the year. The National Weather Service is warning the storm could bring snow to much of the region. Washington, D.C. could get ten to 16 inches of snow, and the New York region five to ten inches. Experts say retailers already facing restrained shoppers could lose some sales they won’t get back. But Mike Niemira, chief economist at International Council for Shopping Centers, says a storm would put a dent in weekend sales in one region but might not be enough to hurt total holiday sales.

The state unemployment rate dropped to eight per cent in November, the first decrease in Texas in 16 months. The Texas Workforce Commission said the jobless rate fell from 8.3 per cent in October. The last monthly decrease came in June 2008, when the rate fell to 4.4 per cent from 4.5 per cent the previous month. Texas added 17,300 nonagricultural jobs in November for a total of 70,000 jobs over two months. The state’s jobless rate is still tracking well below the national average of ten per cent. Workforce Commission Chairman Tom Pauken says job growth and a dip in the unemployment rate are positive signs for the Texas economy.

Reversing earlier gains, more states lost jobs than added them in November. The Labor Department report suggests that hiring is sporadic nationwide. Unemployment rates dropped in 36 states and the District of Columbia. That trend appeared to reflect more people leaving the work force. Unemployed people who stop looking for jobs out of frustration aren’t counted in the labor force. Some 19 states added jobs in November, down from 28 in October. thirty-one states and the District of Columbia suffered a net loss of jobs. The states that reported the largest jobs gains were Texas, Ohio, Georgia, Arizona and Iowa.

A new report illustrates the trouble that foreclosures will continue to present for the housing market. Real estate firm First American Corelogic says about 1.7 million homeowners were on the verge of foreclosure in the fall. A looming “shadow inventory” of homes to be put up for sale in the coming years will weigh on prices. The firm says that is up from 1.1 million a year earlier and is likely to rise through the middle of next year or even after that. First American says the foreclosure backlog is already equal to nearly half the 3.8 million unsold new and existing homes currently on the market. Other reports have come up with larger estimates. First American assumes that fewer delinquent borrowers—only about one-third—will wind up losing their homes. It also estimates that nearly 30 per cent of bank-owned properties have already been listed for sale.

Hackers briefly blocked access to the Internet messaging service Twitter, steering traffic to another Web site where a group reportedly calling itself the “Iranian Cyber Army” claimed responsibility. Users trying to reach Twitter early Friday were redirected to a Web page that CNN reported had a picture of a green flag and a message that said, “this site has been hacked by the Iranian Cyber Army.” There was no evidence the hackers are actually linked to Iran. Web sites like Twitter and Facebook helped bring attention to the Iranian opposition during the country’s crackdown after its June elections, with users posting minute-by-minute updates and amateur video. Twitter later Friday posted a message on its blog that said its domain name systems’ records “were temporarily compromised but have now been fixed.” The site says it will update with more details “once we’ve investigated more fully.”

Talk about your rollercoaster ride. There have been plenty of ups and downs this year for the amusement park industry. The latest, Ohio-based Cedar Fair will sell its 11 amusement parks and seven water parks to a private equity firm, Apollo Global Management, for about $635 million. Apollo also will assume about $1.7 billion in debt. Earlier this year, Six Flags filed for bankruptcy protection and Anheuser-Busch sold its Seaworld and Busch Gardens parks to a private equity firm. Attendance and revenues at many big parks have flattened out in recent years, with the decline accelerating this year.

About 447,000 Dorel baby car seat carriers are being recalled after dozens of reports of the child restraint handle coming loose. There have been at least three injuries to babies, including bumps, bruises and a head injury. Dorel Juvenile Group, of Columbus, Indiana, has received 77 reports of the child restraint handle fully or partially coming off the products. The recall involves Safety 1st, Cosco, Eddie Bauer and Disney branded infant car seat carriers with certain model numbers. They were sold at department and juvenile product stores nationwide from January 2008 through this month. The recall was announced by the Consumer Product Safety Commission, National Highway Traffic Safety Administration and Dorel Juvenile Group.

Makers of toys and other children’s products have won a reprieve from federal regulators trying to implement legislation Congress passed more than a year ago after a holiday season marred by scores of lead-tainted toy recalls. The Consumer Product Safety Commission voted to delay for another year—until February 2011—the certification and independent third-party testing rules on the amount of lead allowed in children’s products. Those rules were set to kick-in last February but have been delayed twice. Manufacturers and importers still must test their products to make sure they’re safe and meet federal limits on lead. But the commission’s decision late Thursday means they won’t have to produce compliance certificates and perform third-party testing for now, though many are already doing so at retailers’ requests. Even so, the commission’s action was aimed at giving businesses more time to comply with the many additional requirements spelled out in the 2008 product safety law.

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