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Wednesday PM December 22nd, 2010

Holiday shopping helps retail revenue climb by 5.5 percent during last weekend before Christmas…Nigeria withdraws charges against company and executives after $35 million settlement…Most roads in Central Texas Toll Way System producing more revenue than originally projected…



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Holiday shoppers are racing to the end of the season at a more feverish pace this year, with retail revenue up 5.5 percent during the last weekend before Christmas. The figure, released by ShopperTrak, is a drastic improvement from a year ago, when revenue dropped 6.2 percent during the period. The final shopping weekend last year was marred by a big East Coast snowstorm. ShopperTrak reported shoppers spent $18.83 billion for December 17th-19th. The number of shoppers rose three percent over the weekend before Christmas last year. The final days leading up to Christmas are important for retailers, as the holiday season is traditionally when they do the bulk of their business. Improved spending is also a sign that the economy may be regaining its footing.

The economy grew at a moderate pace last summer, reflecting stronger spending by businesses to replenish stockpiles. More recent barometers suggest the economy is gaining momentum in the final months of the year. The government says gross domestic product increased at a 2.6 percent annual rate in the July-September quarter. That’s up from the 2.5 percent pace estimated a month ago. While businesses spent more to build inventories, consumers ended up spending a bit less. Many analysts, however, predict the economy strengthened in the October-December quarter. They think the economy is growing at a 3.5 percent pace or better because consumers are spending more freely again.

Halliburton says that Nigeria has withdrawn charges against Halliburton and executives including former U.S. Vice President Dick Cheney after a $35 million settlement. Halliburton said in a statement that it had agreed to pay $35 million to the Nigerian government over “allegations of improper payments to government officials in Nigeria.” The oil services firm said that Nigeria had agreed to desist from taking further legal action against Halliburton, former subsidiary KBR and executives. In February 2009, KBR pleaded guilty in U.S. federal court to authorizing and paying bribes from 1995 to 2004 for contracts in Nigeria. Cheney was named as he led Halliburton during a period when bribes totaling as much as $180 million were allegedly paid.

KBR is acquiring Elgin National Industries subsidiary Robert & Schaefer in a $280 million deal. Roberts & Schaefer provides engineering, procurement and construction services for bulk material handling and processing systems.

Sales of previously owned homes edged up in November, the third increase in four months after a dismal summer for home-buying. The National Association of Realtors says people bought previously owned homes at a seasonally adjusted annual rate of 4.68 million units last month, a gain of 5.6 percent from October. The increases follow the worst summer for home sales in more than a decade. Even with the gains, sales were about ten percent below the 5.2 million sales pace that analysts consider a healthy pace for housing. The national median price for a home sold in November was $170,600.

The number of people falling out of the Obama administration’s main foreclosure relief program grew in November, As more at-risk homeowners failed to lock in lower monthly payments. The Treasury Department says about 774,000 homeowners have dropped out as of last month. That’s about 54 percent of the more than 1.4 million people who applied. And it’s up from October, when approximately 756,000 had fallen out. The program is intended to help those at risk of foreclosure by lowering their monthly payments. Borrowers start with lower payments on a trial basis. The program has struggled to convert them into permanent loan modifications. Another 505,000 homeowners have secured lower payments permanently. That’s about 35 percent of the number who enrolled on a trial basis, the same as October’s reading.

Properties posted for foreclosure in Harris County total 4,719 so far this month—nearly reaching the October 1987 record of 4,773, according to Foreclosure Information and Listing Service. It’s a 14.9 percent increase from December of last year. A posting for foreclosure occurs when a property in default is scheduled for sale at a monthly foreclosure auction. A foreclosure occurs when the lien holder assumes ownership of a property in default.

The number of people applying for a mortgage fell last week as higher rates discouraged borrowing. The Mortgage Bankers Association says its overall mortgage application index decreased 18.6 percent from the previous week. The refinance index dropped 24.6 percent, marking the sixth decline in a row. The purchase index slipped 2.5 percent last week. Rates on fixed mortgages continued to edge up last week, remaining at the highest levels in six months. They are rising because Treasury yields have been increasing on rosier economic data and expectations that tax cuts will spur growth and spark higher inflation. Mortgage rates tend to track those yields. Rates had been hitting decade lows almost every week since spring as investors, worried about the economy, sought less risky Treasury bonds.

Most roads that are part of the Central Texas Toll Way System are producing more revenue than originally projected four years into the project. The Austin American-Statesman reported on the 78-miles of toll ways in suburban Austin. A 2009 Texas Department of Transportation count on traffic on Texas 45 North near the toll way’s joining with Interstate 35 is close to 100,000 vehicles a day. Figures show $66.2 million was generated in the 2009-10 fiscal year by the three financially intertwined roads of the Texas Department of Transportation’s Central Texas Turnpike Project, including Texas 130, Texas 45 North and Loop 1. The figure is $6.5 million more than official estimates given to bond investors in 2002, before construction began. TXDOT estimates toll rates average 12 cents per mile.

Katz’s Deli in Austin is closing after 31 years. Marc Katz has been mired in U.S. Bankruptcy Court since July. He says the West Sixth Street delicatessen will shut down on January 2nd, according to the Austin American-Statesman. The parent company filed for bankruptcy in 2004 becauase of heavy debt payments to a lender and to Katz’ son Barry, who runs a separate restaurant in Houston. A second bankruptcy case was filed this year.

The government has upgraded its investigation into Ford Windstar minivans amid additional concerns over corrosion in the vehicles. The National Highway Traffic Safety Administration says in a posting on its website that it has begun an engineering analysis of about 550,000 Windstars from the 1999-2003 model years. Ford has recalled more than 600,000 of the minivans in the U.S. and Canada since August to address rear axles that can corrode and break. The U.S. recall is limited to 22 cold weather states where road salt is used during the winter. The government says it has received 346 complaints of corrosion and breaking of the front sub-frame, which carries the engine, transaxle, steering rack and front suspension. NHTSA says it is trying to learn more about the alleged defect.

All Houston area post offices will be open on Christmas Eve and New Year’s Eve, but most will have shortened retail lobby hours and close at noon. Revised hours are posted at each facility. Information about specific post offices can be found online at Mail should be deposited in collection boxes before noon for early pickup on December 24th and December 31st. Post offices will be closed on Christmas Day and New Year’s Day, reopening on the following Monday.