For the fourth-straight week, gas price averages remained relatively flat, although different areas saw different price movement, according to the Automobile Club of Southern California’s Weekend Gas Watch.
According to the Auto Club, the average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $3.113 per gallon, which is eight-tenths of a cent less than last week, six cents higher than last month, and 24 cents higher than last year.
On the Central Coast, the average price is $3.185, up one-tenth of a cent from last week, six cents higher than a month ago, and 23 cents above last year.
In the Inland Empire, the average per gallon price is $3 payday loan online.096, which is nine-tenths of a cent lower than last week, five cents higher than last month, and 23 cents more than last year.
"While the broader U.S. economic picture remains muddled, the past week showed a large crude oil inventory draw down which some analysts see as a hopeful sign for the economy. We’ll have to see if gas prices are affected in the coming weeks," Auto Club Spokesperson Jeffrey Spring said in a statement.
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Salt River Project is cutting back on incentives planned for home solar installations in the wake of increased demand, and will begin instituting those changes after Friday.
SRP will lower its incentives from $2.70 per installed watt of solar power to $2.15 per installed watt.
The state’s second largest utility had been scheduled to lower the amount to $2.55 May 1 but, has been inundated with applications, said Lori Singleton, manager of environmental initiatives for SRP. “Due to the overwhelming response of the program, we’ve decided to lower the rates more this year,” he said.
SRP officials made the decision to lower the incentives Thursday afternoon and were contacting installers to inform them that applications had to be in by 5 p.m. Friday in order to qualify for the current incentive rate.
SRP was hit with 211 applications for incentives in March, more than double any previous month since last June, right before the utility dropped the amount for the first time.
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Electrical Components International Inc., a manufacturer of wire harnesses for appliances, sought bankruptcy protection with a plan to reduce debt by about 50 percent.
The Creve Coeur-based company listed assets of about $363.6 million and debt of about $435.7 million in Chapter 11 documents filed Tuesday in U.S. Bankruptcy Court in Wilmington, Del. The company is owned by San Francisco-based private-equity firm Francisco Partners LP.
Electrical Components makes wire harnesses, bundles of wires or cables fitted with connectors or plugs that deliver electricity throughout appliances.
David J. Webster, chief executive of Electrical Components, said in court filings that the company had had financial difficulties since late 2007 because of the downturn in the housing market.
The company had taken cost-cutting measures including plant shutdowns and consolidations and layoffs, but "the downturn continued to reduce sales at unprecedented levels and consequently reduce earnings," Webster said.
Under a proposal the company worked out with creditors before bankruptcy, lenders with the highest level of repayment — owed a principal of about $261.4 million — would get 54.7 percent of the new common stock in the reorganized company and a $145 million term loan. Some of the lenders elected to receive $10.4 million in cash rather than stock.
Investors have agreed to buy the remaining 45.3 percent of the new stock.
Lenders with a secondary priority of repayment, owed a principal of $60 million, would share $10 million. Unsecured creditors wouldn’t be affected, and would be paid what they’re owed as it is due.
The company said it was the largest supplier of wire harnesses to the North American white goods market, a term used for large home appliances. The company generated $460 million in sales for the year ended Dec. 31.
Electrical Components International was formed in 2006 when Clayton-based Viasystems Group Inc. sold its wire harness business to Francisco Partners for about $320 million.
The Viasystems wire harness business was renamed Electrical Components International and operated as a stand-alone company under Electrical Components International Holdings, a subsidiary of Francisco Partners.
Robert Kelly of the Post-Dispatch contributed.
The U.K. government should aim to balance its budget two years earlier than currently planned to calm investor concerns the country could lose its top-notch credit rating, the Confederation for British Industry said.
The budget deficit should be eradicated by March 2016, the London-based employers’ group said in proposals submitted to Chancellor of the Exchequer Alistair Darling before his budget this month. This should be achieved through spending cuts and reforms to public services rather than tax increases, it said.
“There is a need to restore macro-economic stability and that depends on getting current levels of government borrowing down,” CBI Director General Richard Lambert told a press conference in London on March 4. “The government is not ambitious enough on that front. It hasn’t set out its spending plans in enough detail. The 2017 date is too far away.”
With an election due by June, the debate over how to tame a deficit equal to Greece’s has taken center stage as some investors and the opposition Conservatives warn Britain’s credit rating is at risk.
Prime Minister Gordon Brown has pledged to halve the gap, set to exceed 12 percent of economic output this year, by March 2014 and says Conservative plans to begin spending cuts this year risk plunging the economy into a “double-dip recession.”
“The economy is still in a very fragile shape,” Lambert said. While the CBI is not proposing “any silver bullets in the short-term,” the process of cutting the deficit “should get under way seriously in 2011.”
Poll Outlook
Polls suggest Britain may be heading for its first minority government since 1974, sparking concern that efforts to cut the deficit may be compromised.
“The scale of our budget deficit and the likely tightening we are going to need does look a lot more serious than in any other G-7 country,” Lambert says. “We are confident that the U.K.’s credit rating is sustainable. The big picture is to get credibility.”
A survey showed that 86 percent of U.K. business leaders said that current levels of public spending needed to be reduced, while 72 percent said cuts should start this year, the Institute of Directors said in a separate e-mailed report today. The lobby group, which questioned 1,500 people between Feb. 26 and March 4, also found that 71 percent said the deficit was a top priority of a new government in its first 100 days.
Australia’s central bank said economic growth will continue to accelerate this year even if policy makers are forced to raise the benchmark interest rate by another three quarters of a percentage point.
The economy will be growing at an annual pace of 3.25 percent in the three months through December 2010, up from 2 percent last quarter, the bank said today in Sydney. Officials based their forecast on an assumption that the overnight cash rate target will climb to 4.5 percent this year, in line with market estimates.
Reserve Bank Governor Glenn Stevens unexpectedly kept borrowing costs unchanged this week, saying information about the impact of the bank’s record three increases last quarter “is still limited.” A report this week showed retail sales unexpectedly fell in December for the first time in five months and stock markets tumbled today amid increasing concern that the global recovery may falter.
“They are uncertain and waiting for more information,” said Su-Lin Ong, senior economist at RBC Capital Markets Ltd. in Sydney. “It looks like they need greater justification to tighten further. They need to see a broadening in global growth.”
The Australian dollar traded at 86.57 U.S. cents at 12:37 p.m. in Sydney from 86.90 cents before the statement was released. The two-year government bond yield fell 4 basis points to 4.05 percent. A basis point is 0.01 percentage point.
Stocks Fall
Australia’s S&P/ASX 200 Index dropped 2.8 percent to 4,493.40 at 12:05 p.m. in Sydney, setting the benchmark gauge on course for its lowest close in five months.
While interest rates are “no longer at exceptionally low levels,” it is “likely” that borrowing costs will be increased further over time to ensure inflation stays within Stevens’s target range of between 2 percent and 3 percent, the bank said in its quarterly monetary policy statement.
Stevens became the first central banker in the world to raise borrowing costs three times last year after Australia’s economy skirted the global recession, helped by A$20 billion ($17 billion) in cash handouts to consumers from Prime Minister Kevin Rudd and another A$22 billion in spending on roads, railways and schools.
U.S., Europe
By contrast, officials in the U.S., the U.K. and Europe have kept their benchmark lending rates at historic lows, partly on concern that recoveries in their economies will be hampered by high unemployment and weak consumer sentiment.
Australia’s economy will expand 2.5 percent in the June quarter of 2010 from a year earlier, and 3.5 percent in the year through June 30, 2011. Three months ago, the bank predicted growth rates of 2.25 percent and 3.25 percent respectively.
Core inflation will cool this year to an annual pace of 2.5 percent from 3.25 percent, before accelerating again to 2.75 percent in 2011.
The bank said those forecasts are based on the “technical assumption” of an increase in the cash rate, “with the assumed path broadly consistent with market expectations as the statement was finalized.”
Money market yields continue to reflect expectations for “further tightening, though at a slightly slower pace” than anticipated three months ago. “The cash rate is expected to reach around 4.5 percent by the end of the year,” today’s statement said.
“They’re being a little more specific and open about” their assumptions about future interest rates, said David de Garis, a senior economist at National Australia Bank Ltd. in Sydney. “They were probably always assuming something similar to the market.”
Rate Bets
Traders are betting there is only an 18 percent chance of a quarter-point increase in the overnight cash rate target when policy makers meet on March 2, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 12:33 p.m.
Today’s forecasts “represent a modest upward revision” to figures released in November, “with recent data suggesting that the economy starts the current upswing in activity with somewhat less spare capacity than earlier thought likely,” today’s statement said.
“It now looks likely that the unemployment rate has peaked at around 5.75 percent, a much better outcome than thought likely early last year,” when the government forecast the jobless rate would peak at 8.5 percent this year.
Australia’s unemployment rate dropped in December to an eight-month low of 5.5 percent after employers added 135,700 jobs between September and the end of 2009, the biggest four- month surge in hiring in more than three years.
Energy Demand
Increased demand for workers is being stoked by a surge in investment by companies such as Chevron Corp., which is expanding its Gorgon liquefied natural gas venture in Western Australia to meeting rising demand from Asia for energy.
“Mining investment is expected to increase further from its already very high level,” today’s statement said. Exports of resources will “grow strongly, reflecting capacity increases resulting from the high level of mining investment over recent years.
“However, growth outside of the mining sector is expected to be only modest, reflecting the reallocation of productive resources within the economy.”
This is partly due to the surge in Australia’s currency, “which has reduced the international competitiveness of import- competing and exporting sectors, including the manufacturing and tourism sectors,” the bank said.
Household Spending
While increased hiring and an annual 13.6 percent surge in house prices last quarter have helped stoke consumer confidence, which jumped in January by the most in six months, “households are still taking a more cautious approach to their spending than was the case a few years ago,” today’s statement said.
One risk to today’s forecasts is whether the nation’s recent economic performance was prompted by a “bring-forward” of spending by consumers and businesses amid last year’s earlier interest-rate cuts and government spending, the bank said.
“If so, underlying growth would be soft into 2010 as the effects of the temporary stimulus fade,” the bank said. This may be offset by “the improvement in the outlook in the resources sector” which is “clearly not due to temporary policy factors.”
There are also questions about the durability of recent growth in the world’s largest economies, which have been boosted by temporary fiscal measures and the restocking of inventories by companies, today’s statement said.
“For a sustained recovery to take hold, a substantially stronger pick-up in private demand than has been evident to date will be required,” the bank said. “Many of these countries also face very significant fiscal challenges that will need to be addressed over time.”
Retail sales jumped 1.3% in November, according to the Commerce Department, well more than the expected increase.
Economists had expected retail sales to rise 0.6% from October, according to a consensus of forecasts compiled by Briefing.com.
The seasonally adjusted November increase represents $352.1 billion worth of monthly sales. This is slightly less than the October increase, when retail sales jumped 1.4% month-to-month.
Automobile sales had little to do with November’s gains. Without including autos, retail sales rose 1.2% last month.
A consensus of economists had projected ex-auto sales to rise 0.4% in November, compared to October, when ex-auto sales notched up 0.2%.
The year-to-year increase was more dramatic No teletrak payday loan. November retail sales jumped 1.9%, compared to the same month in 2008.
November sales included Black Friday, the post-Thanksgiving shopping spree that is generally one of the hottest days of the year for retail. But this year’s Black Friday disappointed retailers, with sales rising an anemic 0.5%, falling short of Thomson Reuters’ forecast of a 2.1% rise.
Also today, at 9:55 a.m. ET, the University of Michigan will release its preliminary consumer sentiment index for November. The November index is expected to rise to 68.8, according to a Briefing.com consensus, from the prior month’s index of 67.4.
Rupert Murdoch, head of media giant News Corp, met LG Electronics Inc executives in the South Korean capital on Wednesday, and was due to discuss news and movie content with Samsung Electronics Co Ltd, according to sources and local media.
News Corp may be on the lookout for opportunities in the fast-changing South Korean media sector, where deregulation will open the door for major newspapers to expand into broadcasting, media reports have said.
LG Electronics confirmed that Murdoch, whose media empire includes The Wall Street Journal and Fox television, met executives including CEO Nam Yong to discuss “business matters.”
“We have no specific plans,” Nam told Reuters when asked what the talks had been about.
Murdoch was due later to meet Lee Jae-yong, son of former Samsung group chairman Lee Kun-hee, and Choi Gee-sung, head of digital media at Samsung, said an industry source, who asked not to be named.
Yonhap News earlier reported Murdoch and Samsung officials were expected to discuss selling news and movie content in South Korea through Samsung’s broadband TVs.
Murdoch was previously in Japan for talks with several corporate and political leaders, including Prime Minister Yukio Hatoyama, according to a source familiar with the matter but who was not authorized to talk to the media.
Murdoch said in August he was unhappy with Amazon.com’s control of relationships with newspaper subscribers for its Kindle electronic reader, and might seek a better deal with rival e-reader maker Sony Corp.
A spokesman for Samsung declined to confirm any plans related to News Corp. Sony officials would not confirm whether company executives met the media mogul.
A Dow Jones spokesman declined to provide details of Murdoch’s Asian schedule, but said “Mr. Murdoch is stopping in South Korea for a very brief, private visit en route to Beijing.”
Murdoch will also visit the Panmunjom truce village in the Demilitarised Zone (DMZ) on Thursday, a military official in Seoul said.
He is due to leave South Korea late on Thursday and head to China, where he will attend a media summit in Beijing later this week.
(Additional reporting by Kim Yeon-hee, Lee Chang-ho and Jon Herskovitz in SEOUL, editing by Jonathan Thatcher and Ian Geoghegan)
Insurer American International Group Inc’s once-desperate financial state has started to stabilize, a government agency said on Monday, as an influential lawmaker said he would look at easing the terms of the insurer’s federal bailout once more.
AIG’s shares shot up, rising more than 16 percent in afternoon trade to $46.44.
AIG, the recipient of billions of dollars in government support, started to show signs of stabilizing in mid-2009, as financial markets improved, congressional investigators said in a report on the status of the government’s assistance to the company.
The insurer was rescued by the government in September 2008, after losing bets that it made on the U.S. housing market threatened to drive the firm into bankruptcy.
Rep. Edolphus Towns, a Democrat who chairs the Government Reform Committee, told staff to take a look at a proposal from former AIG Chief Executive Officer Hank Greenberg that could make it easier for the insurer to repay federal obligations, a committee spokeswoman told Reuters on Monday.
The proposal would cut the government stake in AIG from the current 80 percent and trim interest rates on AIG’s government loan. It also would extend the term of the loan, giving the company more time to repay, the spokeswoman said.
However, it is still unclear whether U.S. taxpayers would ever be repaid fully, or whether AIG could pull off the restructuring of its business, according to the report compiled by the Government Accountability Office (GAO), the investigative arm of Congress.
The GAO said the U allstate insurance.S. government remains exposed to risks, including credit risk and investment risk, which could result in the Federal Reserve and Treasury not being repaid in full. (The GAO’s full report is available here)
Towns’ spokeswoman said the congressman has not yet spoken with the U.S. Treasury Department or the Federal Reserve about Greenberg’s proposal.
A NEW START?
AIG’s total bailout package, already rewritten three times since September 2008, has swelled to as much as $182.5 billion. The rescue includes the government’s purchase of toxic assets to relieve the insurer of billions of dollars in liabilities, and a funding facility that the insurer has yet to draw in full.
AIG currently owes about $80 billion in federal loans.
To repay its debts, AIG has tried to sell off assets; but so far it has raised net proceeds of only $4 billion, hampered by tight credit markets and buyers looking for bargains.
The possibility of a fourth revision to AIG’s bailout appeared to spark the rally in AIG’s stock on Monday, said Jon Najarian, co-founder of optionmaster.com.
He said the bullish sentiment appeared to be driven by retail investors and day traders, with triple the normal volume taking bets that the shares could trade as high as $65 by next month.
Najarian said there were no signs that big institutions were involved in the surge in activity in the shares on Monday.
The board of General Motors Co GM.UL began meeting in Detroit on Tuesday as the German government stepped up pressure on the automaker to clarify its long-term plans for its European Opel operations.
The board meeting coincided with a warning that the cost of keeping Opel could run $1.45 billion higher than an “overly optimistic” projection prepared by GM in June GM, which emerged from bankruptcy under U.S. government ownership in July, has been in intensive negotiations with two bidders to sell control of Opel and its British affiliate, Vauxhall, since May.
But last month the newly appointed GM board declined to endorse a plan to sell the operations to a group led by Canadian auto-parts group Magna International that has the backing of Germany’s government.
Instead, the 13-member board asked GM management led by Chief Executive Fritz Henderson to return with more information on two alternatives to the Magna deal.
Specifically, the board asked for renewed consideration of a sale to Brussels-listed RHJ International or a third option that would see GM keep Opel by raising the billions of dollars needed for its restructuring, sources familiar with the deliberations have said.
In a report presented to the GM board, adviser KPMG said that GM would face “an additional cash need of up to $6.1 billion” to keep Opel.
GM had previously estimated that it would need $4 payday loans with no fax.65 billion in cash to keep Opel and repay a roughly $2 billion bridge loan from the German government, the report said.
A copy of the report was obtained by Reuters.
KPMG had no comment. A GM spokeswoman could not be reached for comment.
With some 25,000 German jobs directly at stake and an election looming at month end, the slow progress toward a resolution of the Opel situation has been met with mounting frustration by German government officials.
“‘We are keeping Opel’ is not a strategy yet,” German Deputy Economy Minister Jochen Homann said on the sidelines of an energy conference in Munich on Tuesday.
GM’s board of directors began a two-day meeting on Tuesday to discuss Opel, which ranks as the second-largest brand behind only Chevrolet for the still-struggling automaker.
Berlin wants a decision ahead of the Frankfurt car show starting next week, where Opel will unveil the latest version of its most important model, the Astra compact.
MAGNA CONCERNS LOOM
GM consented in May to a Magna deal but gradually retreated from that position after emerging on July 10 from a fast-track bankruptcy funded and sponsored by the U.S. Treasury.
Legislation to reform the U.S. Securities and Exchange Commission and prevent another Madoff-style fraud from escaping notice will be offered by U.S. Senator Charles Schumer, he said in a statement on Thursday.
Citing a recent report that showed the SEC “botched numerous opportunities to uncover financier Bernie Madoff’s years-long fraud,” the New York Democrat said in the statement that he will present the bill at a news conference.
(Reporting by Kevin Drawbaugh; Editing by James Dalgleish)
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