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Thursday PM August 12th, 2010

Texas attorney general sues Obama administration over offshore drilling moratorium…Texas to resume accepting applications for Emerging Technology Fund…New applications for unemployment insurance rose last week to highest level in almost six months…

The Texas attorney general has sued the Obama administration, charging the current offshore drilling moratorium is “unjustified” and officials did not contact state officials before issuing the ban. Attorney General Greg Abbott filed the 18-page suit in federal court in Houston. The federal ban imposed July 12th halts all drilling operations in water greater than 500 feet. It’s the second offshore drilling moratorium issued by the Interior Department after a federal Louisiana judge struck down an earlier ban a week earlier. Abbott’s suit calls the current ban “an unjustified, arbitrary and capricious policy that will inflict harm upon coastal communities.” Interior Department spokeswoman Kendra Barkoff called the decision “simply common sense” and would not comment further on the specific lawsuit.

New details from the Obama administration on the $20 billion victims’ compensation fund established for the Gulf of Mexico oil spill indicates that revenue from BP’s oil and gas drilling may be used as collateral the government watchdog group Public Citizen criticized the arrangement as a conflict of interest, arguing that it gives the government a financial incentive to encourage BP to keep drilling offshore. BP already has made a $3 billion initial deposit, announced Monday. The company must pay $2 billion more this year and continue in installments of $1.25 billion, according to the trust documents released Wednesday.

The state will resume accepting applications for grants from the state’s Emerging Technology Fund on October 5th. Texas officials stopped taking applications statewide last month when the fund temporarily ran out of money. That was because of a $50 million mistake in last year’s legislative appropriation and a slower-than-expected federal reimbursement of another $50 million spent in 2008 on Hurricane Ike recovery. The legislature planned to use that reimbursement to help pay for the state grants. Now, a spokeswoman for Governor Rick Perry’s office says the federal government has reimbursed all but $1.1 million of the disaster costs. The legislature created the fund in 2005 at Perry’s urging to encourage startup companies and research in new technologies.

New applications for unemployment insurance rose last week to their highest level in almost six months, a sign that employers are still cutting their staffs. The Labor Department says first-time claims for jobless benefits edged up by 2,000 to a seasonally adjusted 484,000. Analysts had expected a drop. That’s the highest total since the week of February 20th. Initial claims have now risen in three of the last four weeks and are close to their high point for the year of 490,000, reached in late January. The four-week average, which smoothes volatility, soared by 14,250 to 473,500, also the highest since late February. The total number of people receiving benefits dropped 118,000 to 4.45 million, the department said.

A new report shows American shoppers dug in their heels in July. Excluding gasoline and autos, U.S. retail sales rose a meager 0.1 percent last month from June, according to figures released Thursday by Mastercard Advisors’ SpendingPulse, which estimates spending in all forms including cash. Excluding autos but including gasoline, sales fell 0.9 percent. The tepid month-to-month increase follows a 0.5 percent decline from May to June and a 2.1 percent drop from April to May. Compared with a year earlier, however, July sales excluding autos and gasoline rose a full percentage point. Including gasoline, the month’s sales rose still more from July 2009.

The number of U.S. homes lost to foreclosure surged in July. According to foreclosure listing firm RealtyTrac, lenders repossessed nearly 93,000 properties last month, up nine percent from June and an increase of six percent from July 2009. July makes the eighth month in a row that the pace of homes lost to foreclosure has increased on an annual basis. Meanwhile, homeowners who are falling behind on their payments are being allowed to stay in their homes longer because lenders are reluctant to add to the glut of foreclosed homes on the market. RealtyTrac says the number of properties receiving an initial default notice rose one percent last month from June, but tumbled 28 percent versus July last year. California, Florida, Illinois, Michigan and Arizona combined accounted for 50 percent of all U.S. households receiving foreclosure notices last month.

Mortgage rates sank to the lowest level in decades this week, pushed down by the Federal Reserve’s move to buy up government debt in a bid to lift the economic recovery. Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans this week was 4.44 percent, down from 4.49 percent last week. That’s the lowest since Freddie Mac began tracking rates in 1971. The average rate on the 15-year fixed loan dropped to 3.92 percent, down from 3.95 percent last week and the lowest on record. Rates have fallen since spring as investors sought the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yields.

The Senate has passed and sent to President Barack Obama a $600 million measure to help border agents and law officers stop the flow of illegal immigrants and illicit drugs across the Mexican border. Senators stressed the urgency of improving border security by coming back from their summer break for a voice vote on the measure Thursday. The House passed the bill during a special session on Tuesday. The legislation includes money to add about 1,500 border patrol, immigration and customs officials and to expand the use of unmanned surveillance drones along the southwest border.

A Congressional watchdog panel says the $700 billion U.S. bailout program launched in response to the global economic meltdown had a far greater impact overseas than other countries’ financial rescue plans did on the U.S. Billions of dollars in U.S. rescue funds wound up in big banks in France, Germany and other nations. That was probably inevitable because of the structure of the Treasury Department’s bailout program, the Congressional Oversight Panel says in a new report. The U.S. program aimed to stabilize the financial system by injecting money into as many banks as possible, including those with substantial operations overseas. Most other countries, by contrast, focused their efforts more narrowly on banks in their nations that usually lacked major U.S. operations.

General Motors says it made $1.33 billion in the second quarter, a sign of growing strength as the company prepares to sell stock to the public. It’s GM’s second straight quarterly profit. The company made $865 million in the first quarter. CEO Ed Whitacre says GM is eager to sell the stock so it can pay off $43.3 billion in government loans that were converted into a large stake in the company. No date has been set for the sale. GM has been majority-owned by the government since it left bankruptcy protection in July of 2009. Second-quarter revenue was $33.17 billion, up 5.3 percent from the first quarter on strong sales in China and U.S. sales of revamped cars and trucks. GM didn’t report second-quarter results last year because it spent part of the quarter in bankruptcy protection.

A Texas company has agreed to pay a $30,000 fine over allegations of water contamination from its fertilizer plant in Fairbury, Nebraska. The U.S. Environmental Protection Agency announced the settlement with Tetra Micronutrients. It will become final following a 40-day period for public comments. The EPA says Tetra has also installed a containment basin at the Nebraska plant to capture storm water runoff and prevent it from entering Brawner Creek, a tributary of the Little Blue River. The EPA says the runoff, discovered during a March 2009 inspection, contained cadmium, copper, lead and zinc. Those chemicals can harm wildlife and affect the quality of drinking water. The Woodlands-based Tetra produces fertilizers and feed supplements in Fairbury.

An Associated Press-Univision poll finds many English-speaking Hispanics turn frequently to Spanish-language TV and radio, drawn by a cultural connection and some concerns that English-language media portray them negatively. The poll says about four in ten Latinos who spoke mostly English spent time each day — typically several hours — checking out Spanish media. About 35 percent of mainly English-speaking Latinos also say English media portray Hispanics mostly in a negative way. That is nearly three times the percentage who say the portrayals are mostly positive. The media consumption of Hispanics is drawing attention as businesses and political groups battle for their loyalty. Hispanics now represent 16 percent of the U.S. population, a number projected to grow to about 30 percent by 2050.

Neil Young has teamed up with Tyson Foods to help feed the Gulf Coast. Tyson Foods says it will donate 100,000 pounds of chicken products to the Bay Area Food Bank as part of Young’s September concerts in the Gulf area. Young is asking fans to bring non-perishable food items to his shows to donate to the food bank. Young is also donating the proceeds from his T-shirt sales to the food bank.