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Thursday PM July 15th, 2010

More corporations than BP could be held liable for Gulf oil spill…New applications for unemployment benefits fall sharply…More than one million American households likely to lose homes to foreclosure this year, according to report…


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Attorney General Eric Holder has indicated that corporations other than BP could be held liable eventually for the devastating oil spill in the Gulf of Mexico. Holder spoke at a news conference at Dauphin Island on the Alabama coast after a meeting with attorneys general from the Gulf states. He said they are looking at all the corporations that were involved in the spill, which began gushing after an explosion at the rig April 20th. Holder also said a task force was being formed to assess the process for dispensing money from the $20 billion escrow fund established by BP. He said the company has been cooperative so far in creating the fund and paying claims, but the administration wants to be certain that cooperation continues.

A House panel has approved legislation that would overhaul the government agency responsible for regulating offshore drilling. The bill would divide the agency into three parts: one for leasing and permitting; another for inspections and investigations; and a third to collect revenue. It also seeks to clamp down on the revolving door between government and industry by adding a two-year ban on offshore drilling regulators taking jobs with certain companies. The House Natural Resources Committee passed the bill 27-21, with most Democrats supporting it and all Republicans opposed. Committee Chairman Nick Rahall, a West Virginia Democrat, says the oil spill demonstrates that “there is very little room for error” when it comes to oil rig safety.

BP says it will buy a biofuels business in California from Verenium for $98.3 million. BP, which is struggling to contain a devastating oil spill in the Gulf of Mexico, says it is acquiring Verenium’s business in cellulosic biofuels–fuels made from grasses, canes, softwoods and other biomass. Verenium, based in Cambridge, Massachusetts, will retain its commercial enzyme business, including its biofuels enzymes products. BP is acquiring Verenium’s pilot plant in Jennings, Louisiana, and research and development facility in San Diego.

New applications for unemployment benefits fell sharply last week as General Motors and other manufacturers skipped their usual summer shutdowns. The Labor Department says that new claims dropped by 29,000 to 429,000, the lowest level since August 2008. A Labor Department analyst says the decline resulted from fewer layoffs by manufacturing companies than usual this time of year. General Motors said last month that it would forgo its customary two-week summer factory closings, which it uses to retool plants for new car models. That usually causes a spike in temporary layoffs and jobless claims in early July. Other manufacturers also reported fewer temporary layoffs than expected, the analyst added.

Janet Yellen, the president’s pick to be the second-highest ranking official at the Federal Reserve, is telling Congress that invigorating the recovery and reducing unemployment is a “high priority.” Yellen, president of the Federal Reserve Bank of San Francisco, makes the comments in prepared remarks to the Senate Banking Committee. The panel is considering Yellen’s nomination along with President Barack Obama’s nominees for two other positions on the Fed. As vice chairwoman, Yellen’s duties would include helping build support for policy positions staked out by Fed Chairman Ben Bernanke, who began a second term in February.

Wholesale prices fell for a third consecutive month as another drop in energy costs and the biggest plunge in food costs in eight years banished inflation in June. The Labor Department says wholesale prices dropped 0.5 percent last month, following declines of 0.1 percent in April and 0.3 percent in May. Core inflation, which excludes food and energy, posted a modest 0.1 percent increase. Economists believe the weak recovery from a deep recession will keep inflation under wraps over the next year, giving the Federal Reserve the leeway to keep interest rates low in an effort to battle weak growth and high unemployment.

The House has voted to overhaul the debt-ridden federal program that provides flood insurance to more than five million homeowners and businesses located in flood-prone areas. The National Flood Insurance Program, an arm of FEMA, has for more than four decades offered affordable flood insurance to people in more than 20,000 communities that participate in efforts to reduce flood damage. But Congress has not updated the program since 1994, and in the ensuing years it has been saddled with billions in losses as a result of Hurricane Katrina and population growth in areas at risk of flooding. The bill takes such steps as permitting an increase in premiums, deductibles and coverage and phasing out subsidies for vacation homes and for people living in areas repeatedly hit by floods. It now goes to the Senate.

A sweeping overhaul of the nation’s financial regulations stands on the verge of reaching President Barack Obama’s desk after a year of partisan struggles and delicate cross-party courtships that promised more and delivered less. Democratic Senator Chris Dodd negotiated several provisions with key Republicans such as Richard Shelby and Bob Corker. But neither intends to vote for the bill. For a president hungry for good news, passage of the bill would be a welcome achievement. Republicans have cast the bill as a vast government overreach.

More than one million American households are likely to lose their homes to foreclosure this year, as lenders work their way through a huge backlog of borrowers who have fallen behind on their loans. Nearly 528,000 homes were taken over by lenders in the first six months of the year, a rate that is on track to eclipse the more than 900,000 homes repossessed in 2009. The foreclosure update is based on data released by RealtyTrac, a foreclosure listing service. Rick Sharga, a senior vice president at RealtyTrac, said such a foreclosure pace would “be unprecedented.” Sharga says that by way of comparison, lenders have historically taken over about 100,000 homes a year. The surge in home repossessions reflects the dynamic of a foreclosure crisis that has shown signs of leveling off in recent months, but remains a crippling drag on the housing market.

Mortgage rates were unchanged this week at the lowest point in decades, but it hasn’t been enough to jump-start the housing market. Government-sponsored mortgage buyer Freddie Mac says the average rate for 30-year fixed loans this week was 4.57 percent. That’s the same as a week earlier and the lowest since Freddie Mac began tracking rates in 1971. Rates have fallen since the spring. Investors, concerned with the European debt crisis, have poured money into the safety of Treasury bonds. Treasury yields have fallen and so have mortgage rates, which tend to track yields on U.S. debt. However, low rates have yet to fuel home sales and have sparked only a modest increase in refinancing activity.

U.S. District Judge Mary Lou Robinson will consider approving the settlement of a lawsuit against property owners in the Bushland area following a fiery natural gas pipeline explosion. The Amarillo Globe-News reports that settlement of the lawsuit filed by with Houston-based El Paso Natural Gas would allow completion of a rerouted pipeline. A November 5th pipeline blast damaged some homes in Bushland, located 15 miles west of Amarillo, and left three people hurt. Riley and Sharon Holmes had declined the company’s offer to buy their land for an easement. Court records show the family said damage to their property values extended beyond the five and-a-half acres where the pipeline would be rerouted. Settlement terms were not made public in Wednesday’s filing.

Officials say a Texas oil refining company has agreed to pay $4 million in penalties and clean up dozens of former Clark gas station sites throughout Ohio. The Ohio Offices of the Attorney General and Commerce Director says that Premcor Refining Group of San Antonio was accused of illegally releasing petroleum from 55 underground storage tanks in 26 counties. Officials say it is the largest settlement regarding underground storage tank enforcement in state history. The company has agreed to clean up the 55 sites and pay an additional $3,000 to each county. A lawyer for the company said that she would refer a request for comment to a company spokesman.

Dallas City Manager Mary Suhm says efforts to balance the municipal budget will mean about 500 layoffs this year. Suhm, during an appearance before a service club, said she has reduced the expected gap between revenue and expenses from a high of $130 million, to just under $19 million. Suhm next month is expected to present a roughly $2 billion operating budget to the city council. The Dallas Morning News reports that the cutbacks are expected to include city services, plus delaying the buying of new police and firefighting equipment. Sales tax revenue also could be on the rise. Suhm declined to say which Dallas workers might lose their jobs. The city currently has 12,875 employees.

Paying to park is now the norm six days a week in downtown Galveston. Crews have begun installing high-tech replacement parking meters needed after 2008’s Hurricane Ike swamped parts of the island city. The electronic, stainless steel meters will be operated by Ampco System Parking using a wireless network. Alicia Cahill says paying to park begins immediately, with the first meters that were installed Wednesday. Cahill says the entire downtown parking meter system should be installed and active within a month. Drivers will be allowed to pay the $1.25 per hour fee with cash or credit cards. The meters also allow people to pay by using their cell phones. Parking will be free on Sundays in downtown Galveston.

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