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Tuesday PM December 7th, 2010

Joint panel in Houston hears testimony from Halliburton about BP oil spill in Gulf…State leaders ask Texas agencies to find another 2.5 percent savings…Credit reporting agency expects fewer credit card delinquencies and late payments…


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A technician responsible for monitoring gas levels has told federal investigators he never considered using his authority to stop work on the doomed Gulf of Mexico oil rig even though mud-moving activities in the hours before the blast made him uncomfortable. Joseph Keith, who works for a unit of Halliburton, told the joint U.S. Coast Guard-Bureau of Ocean Energy Management, Regulation and Enforcement panel that the BP well site leader and mud engineers onboard would have been in a better position to assess whether work should have stopped. An explosion aboard the Deepwater Horizon on April 20th killed 11 men and led to more than 200 million gallons of oil spewing from BP’s undersea well. The panel is nearing the final stretch in its quest to assign blame for the disaster.

The state’s top three leaders are asking Texas agencies to find savings of 2.5 percent in their current-year budgets. Governor Rick Perry, Lieutenant Governor David Dewhurst and House Speaker Joe Straus wrote to state agencies, requesting the cuts in advance of next year’s legislative session. The legislature will enact selected cuts in a “supplemental budget,” which is used to handle unexpected savings or expenses in the current spending plan. The state’s next two-year budget is expected to have a revenue shortfall of more than $20 billion. The savings are in addition to cuts already implemented in the current budget at the request of the Texas leaders earlier this year.

Employers posted a sharp increase in job openings in October, raising hopes that hiring could pick up in the coming months. The Labor Department says businesses and government advertised nearly 3.4 million jobs at the end of October, up about 12 percent from the previous month. That reverses two months of declines and is the highest total since August 2008, just before the financial crisis intensified. The number of available jobs has increased by about a million, or 44 percent, since July 2009, a month after the recession ended. But openings are still far below the 4.4 million advertised in December 2007, when the recession began.

Unemployment fell in more than half of the nation’s largest cities in October while rising in nearly a third, offering a mixed hiring picture. The Labor Department says the jobless rate dropped in 200 of the 372 largest metro areas in October compared to the previous month. It rose in 108 and remained the same in 64. That’s the fewest areas showing improvement since July. In September, unemployment fell in 321 metro areas and rose in only 31. There were positive signs: ten metro areas reported jobless rates of 15 percent or higher–eight of them in California. That’s down from 13 in September and 17 in July. And 102 areas reported unemployment of at least ten percent, down from 124 in August.

Americans are getting hit with an unwelcome surprise at the gas pump. Prices are the highest they’ve been in over two years, and could hit a national average of $3 a gallon by January. Although supplies remain plentiful and gasoline demand has diminished since September, retail gas prices are rising because oil prices are at the highest levels since October 2008. The two-week advance paused briefly Monday before benchmark oil for January delivery rose 19 cents to settle at $88.96 a barrel on the New York Mercantile Exchange. A stronger dollar kept prices in check for most of the session. Since oil and other commodities are priced in dollars, a stronger dollar makes them more expensive for buyers who use other currencies. At last check, AAA said the national average for regular gasoline was $2.95 a gallon.

Consumers are expected to get better control of their mortgage and credit-card payments next year as the economy slowly improves. Credit reporting agency Transunion predicts that delinquencies, or late payments, on the two biggest major forms of borrowing will drop sharply again in 2011, after substantial declines seen in the second half of this year. More homeowners in every state and the District of Columbia will get current on mortgage payments, according to a forecast from the Chicago company. That includes the hardest hit states of Nevada, Arizona and Florida. Transunion says that by the end of 2011, it expects just 4.98 percent of mortgages will be 60 days or more behind. The mortgage delinquency rate peaked at 7.89 percent in the fourth quarter of 2009.

Consumers with less than stellar credit are getting car loans again. A new report from credit rating agency Experian shows the percentage of loans going to subprime buyers rose eight percent in the third quarter. That was the first year over year increase since 2007. Sixty-three percent of all auto loans still went to buyers with prime credit scores of 680 or above. But that’s down from higher percentages seen during the recession. Another sign that the credit market is thawing: people are getting loans for larger amounts and for longer terms. The average amount financed for new cars rose $2,530, to $25,273, over the third quarter of last year. The lowest-tier buyers also saw a four-month increase in the average term of their loans for used cars.

Republicans control neither the House nor the Senate–and certainly not the White House. But they largely dictated the terms of President Barack Obama’s proposed tax-cut compromise. Republicans prevailed on their biggest demand: continuing the Bush tax cuts for the wealthiest Americans. That came despite Obama’s 2008 campaign promise to let them expire for households earning more than $250,000 a year. Obama acknowledged Democratic unrest over the two-year extension. But he says the concession was the only way to prevent a Congressional impasse that would cause tax cuts enacted in 2001 and 2003 to expire for all taxpayers. He says that would be “a chilling prospect” amid 9.8 percent unemployment.

Top Obama administration officials and industry leaders are discussing a new report calling for increased support to kick-start the nuclear energy industry in the U.S. The report–by the Energy Department’s Idaho National Laboratory and the Centrist-Democratic Group Third Way—urges Congress to increase money for loan guarantees for nuclear power plant construction. It says the federal government should support nuclear research and development and help export U.S. nuclear designs. And it suggests that new agencies could be enlisted, such as the Commerce and State Departments, to help the nuclear industry compete with foreign industries. Energy Secretary Steven Chu and White House energy adviser Carol Browner were among those participating in the session.

UPS is now requiring photo identification from customers shipping packages at retail locations around the world, a month after explosives made its way on to one of the company’s planes. UPS says the move is part of an ongoing review to enhance security. The directive will apply at the UPS Store, Mail Boxes Etc. locations and other authorized shipping outlets. UPS Customer Centers have required government-issued photo identification since 2005. In late October, a printer cartridge on a UPS cargo plane bound for Chicago was stopped in London after explosives were discovered. The package was later traced to a retail location in Yemen.

Texas Insurance Commissioner Mike Geeslin has approved rules that mean health, life and disability insurers will no longer have blanket authority to decide what’s covered. Monday’s decision will end provisions in most health and disability plans, called discretionary clauses, that give insurers the right to interpret policies and decide what benefits must be paid. The Dallas Morning News reports that 22 other states have similar discretionary clause bans. The rules take effect February 1st for disability policies and June 1st for health and life policies. Consumers will be able to challenge what they consider unfair denial of benefits, by complaining to state regulators or suing insurance companies. Insurers raised concerns about higher costs, more lawsuits and argued that discretionary clauses have been used for several years in Texas have no adverse effects on consumers.

The New York Times says it expects print advertising revenue to decline about four percent in the fourth quarter from a year ago, while digital ad revenue should show “healthy gains.” The Times says the expected decline in print advertising would still be an improvement from the third quarter, when print ad sales slid six percent. The newspaper says digital ad revenue is expected to grow about ten percent in the fourth quarter. It expects circulation revenue, which accounts for subscription fees and newsstand sales, to decline four to five percent.

The Texas Parks and Wildlife Department has scrapped a widely criticized proposal to swap land with a Dallas businessman, proposing instead to keep a remote West Texas tract popular with hikers and kayakers while still acquiring the private landowner’s 17,000-acre ranch. Agency spokesman Tom Harvey says the department plans to buy the Devils River Ranch for $13 million–$4 million in public funds and $9 million in private donations. The department would manage the ranch and its existing 20,000-acre Devils River State Natural Area. Environmentalists and others had opposed exchanging the public land with Rod Sanders. A public meeting is scheduled for Thursday night in Del Rio, near both large tracts of land on the Texas-Mexico border. The department will consider the proposed sale December 20th in Austin.

A Texas company plans to build an oil loading facility and pipeline in northwest North Dakota’s Williams County. Rangeland Energy of Sugar Land plans a 20-mile oil transmission line and a rail facility that spokesman Casey Nikoloric says will have a loading capacity of 60,000 barrels per day. The facilities are expected to be operating in a year. Nikoloric tells the Williston Herald that Rangeland Energy is pursuing projects in Williams County totaling more than $100 million. Western North Dakota’s oil patch continues to boom, as energy companies tap into the rich Bakken shale formation.

The government says October was the first month when no airplanes were stuck on the ground for more than three hours. It’s the first month without tarmac delays since the government started collected data in 2008. Long delays are rare in October, because it’s one of the slowest months for air travel and weather is relatively mild in most of the country. The Transportation Department says the rule that threatens huge fines for airlines with long delays is working. There were 11 delays of more than three hours in October 2009. Overall more flights were on time compared with a year ago. The on-time rate for the nation’s largest airlines was 83.8 percent in October, compared with 77.3 percent in the same month last year.

The government says it will need to check more than a billion new $100 bills because of production problems that have left unwanted creases in many of the bills. Officials of the Bureau of Engraving and Printing say that they are examining 1.1 billion of the new notes to determine how much of the currency will have to be destroyed. Darlene Anderson, a spokeswoman for the bureau, says officials believe a large proportion of the new bills will pass inspection and be placed into circulation. The currency had originally been scheduled to go into circulation on February 10th. Instead, it’s held at the bureau’s printing plants in Washington and Fort Worth. Anderson said a new date will not be set until the production problems are resolved.

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