Friday PM April 16th, 2010

President extends long-term unemployment benefits; Texas unemployment rate remains at 8.2 percent…One-month delay granted in Enron-related retrial of former Merrill Lynch executive…Energy-efficient appliances rebate program purchases begin…


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Hundreds of thousands of people who lost out on additional weeks of unemployment can reapply for long-term benefits that will run until June 2nd. President Barack Obama signed an $18 billion bill that restores unemployment benefits for people who have been out of work for months. He took the action within hours after both houses of Congress passed the measure, and shortly after returning to Washington from a day trip to Florida. Obama released a statement thanking Congress for passing the temporary extension, and calling it critical to help struggling families make ends meet. The bill, which sailed through the senate and house Thursday, also restores full Medicare payments to doctors who were threatened by a 21 percent cut. It also refloats the flood insurance program.

The Texas unemployment rate remained steady at 8.2 percent in March for the fifth consecutive month. Figures released by the Texas Workforce Commission show that the state’s latest jobless rate continues to stay well below the U.S. unemployment rate of 9.7 percent. Commission Chairman Tom Pauken says Texas has begun to experience job growth in recent months despite the challenges of this national recession. The state agency reports Texas civilian labor force grew by nearly 29,000 workers in March. The largest job gain was in the leisure and hospitality industry which added 10,300 positions. Amarillo maintained the state’s lowest unemployment rate at 5.6 percent, which isn’t seasonally adjusted. The McAllen-Edinburg-Mission area experienced the highest jobless rate at 11.6 percent.

The government says that Maryland, Virginia and Pennsylvania recorded sizable gains in employment in March and were among 33 states posting increases. In its monthly look at state job trends, the Labor Department says that Maryland led the country with a gain of 35,800 in payroll jobs. Virginia and Pennsylvania also posted increases that topped 20,000 in the month. By contrast, Michigan continued to have the nation’s highest unemployment rate at 14.1 percent, and also led the country in job losses in March with a decline of 9,500. Nevada and Florida also posted sizable job losses and were among 17 states recording job losses during the month.

A federal judge has ordered a one-month delay in the Enron-related May retrial of a former Merrill Lynch executive. U.S. District Judge Ewing Werlein, Jr., agreed to delay Robert S. Furst’s retrial to June 1st to accommodate plea negotiations. Prosecutors and defense attorneys told Werlein during a hearing that they are close to a deal that would resolve the case. Furst and two other executives were convicted in 2004 of helping push through Enron’s sham sale to Merrill Lynch of three power barges moored off the Nigerian coast in 1999. The deal was struck to make the Enron energy division’s earnings appear larger. But an appeals court threw out their fraud and conspiracy convictions in 2006 after finding fault with the prosecution’s legal theory.

The Securities and Exchange Commission knew since 1997 that R. Allen Stanford likely was operating a ponzi scheme and an agency enforcement official who helped quash investigations of his business later represented the billionaire, according to the SEC inspector general. The SEC didn’t bring charges against Stanford, alleging a $7 billion fraud, until February 2009. The SEC inspector general also says that “institutional influence” in the enforcement division was a factor in the agency’s repeated decisions not to conduct a full investigation. Complex cases like Stanford’s that couldn’t be quickly resolved were discouraged by enforcement higher-ups, the IG’s report says.

Housing construction posted a better-than-expected performance in March, rising to the highest level in 16 months, as strength in the south offset declines in the rest of the country. But economists believe the housing industry is still facing significant headwinds as it tries to recover from the steepest slump in decades. The Commerce Department says construction rose 1.6 percent to a seasonally adjusted annual rate of 626,000 last month. That was higher than the 610,000 level that economists had expected. In addition, the government revised February to show a 1.1 percent gain rather than the initially reported drop of 5.9 percent. Applications for building permits, considered a good barometer of future activity, also recorded a better-than-expected increase.

Let the buying begin for the thousands of Texans who got through to register for a rebate program that left out millions of others out of luck. Texans who registered April 7th, via overwhelmed phone lines and computer systems, have begun buying their appliances. The Texas Trade Up program involves more than $20 million in federal stimulus funds. Rebates are for consumers who buy certain energy-efficient appliances. The Texas Comptroller’s Office says 38 million web hits were recorded in the hours before the program filled up. The agency says nearly 39,000 rebate reservations were guaranteed. The purchase period ends April 25th for refrigerators, freezers, clothes washers, dishwashers and room air conditioners. For central air conditioners, hot water heaters and air-source heat pumps, the purchase period ends 60 days from the rebate reservation or wait list request date.

A Treasury Department watchdog tells a Senate panel that regulators trusted the executives of Washington Mutual to correct risks at the bank but did little to force a change–leading to the biggest U.S. bank failure. Treasury Inspector General Eric Thorson says in prepared remarks that officials from the office of thrift supervision “accepted assurances from WaMu management and its board of directors that problems would be resolved.” Thorson says “OTS did not ensure that WaMu corrected those weaknesses.” Thorson is appearing before a hearing of the permanent subcommittee on investigations. The panel is examining failures of oversight by the OTS and the Federal Deposit Insurance Corporation. That contributed to WaMu’s failure.

A June 23rd court hearing has been set in Pierre for an appeal of a state-approved air quality permit for a proposed oil refinery in southeastern South Dakota. Three groups opposed to the $10 billion oil refinery filed the appeal earlier. The Sierra Club and local groups save union county and citizens opposed to oil pollution say the permit does not address some environmental issues. The refinery near Elk Point would process 400,000 barrels of Canadian crude each day into products ranging from low-sulfur gasoline to jet fuel. It would be the first new U.S. oil refinery built since 1976. Dallas-based Hyperion says the plant would be “the most environmentally sensitive refinery in the country.”

A judge in Austin is blocking Texas regulators from publicizing some documents on two rate hikes by State Farm Insurance. District Judge Stephen Yelenosky issued a temporary order sought by State Farm, which cited competitive reasons to keep private the information on homeowners rates. The Dallas Morning News reports that the judge did not rule out changing his mind if Insurance Commissioner Mike Geeslin formally decides that the twin rate filings are “insufficient” without the documents. Company spokesman Kevin Davis says state fair appreciates Thursday’s court ruling and awaits the next steps. Department officials declined comment until seeing the judge’s written order. Texas in 2003 ordered State Farm to cut rates by 12 percent and issue refunds. The lawsuit, filed in March, is part of State Farm’s refusal. The company says its rates are fair.

Rates for long-term mortgages have dropped this week. But, on average they remain above five percent. Freddie Mac says the average rate on a 30-year fixed rate mortgage was 5.07 percent, down from 5.21 percent a week earlier. Last week’s average was the highest since mid-August. Rates had dropped to a record low of 4.71 percent in December, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ran through March, but the Fed left the door open to reviving it if the economy weakens. Low rates make mortgages less expensive for homebuyers.

For the first time Rolling Stone is inviting its readers on the long, strange trip though the magazine’s 43-year archive, putting complete digital replicas online along with the latest edition. But you’ll have to pay to see it all. As one of the few major consumer magazines now asking readers for an online fee, it’s likely to get a close look from the rest of the industry.

Southwest Airlines is dropping plans to sell travel to Canada in a partnership with WestJet. Southwest says it pulled out after the Canadian carrier asked for changes in the agreement that the two reached back in 2008. WestJet would have done all the cross-border flying, and both airlines would have sold seats on each other’s flights. Southwest doesn’t fly anywhere outside the U.S., but it says it’s still interested in serving Canada either by itself or with a partner airline.

The Associated Press has found that Southwest Airlines gave its top executive nearly $1.6 million in total compensation last year, two percent lower than the year before. The biggest chunk of CEO Gary Kelly’s compensation came in the form of a $590,000 bonus last year, up 28 percent from 2008. Kelly was paid a base salary of $441,750 last year, slightly higher than last year. The airline was one of only three domestic carriers that turned a yearly profit in 2009, continuing a streak that began in 1973. The AP’s executive pay calculation, based on a regulatory filing, aims to isolate the value the company’s board placed on the CEO’s total compensation package. The figure includes salary, bonus, incentives, perks and the estimated value of stock options and awards.

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