Michigan’s $385-billion defense contracting industry — the 10th-largest in the country — likely will be spared a direct hit when the newly formed Joint Selection Committee on Deficit Reduction begins targeting potential cuts in the federal budget in September, said key federal lawmakers.
Cuts will come first to U.S. bases abroad, said U.S. Sen. Carl Levin, D-Mich., who chairs the Senate Armed Services Committee. The last to be cut will be research and development of weapons and other equipment aimed at the post-Afghan war military. And R&D is one of the biggest items Michigan sells to the defense industry, especially with the Army’s key research and development arms located here.
“The focus is going to be on a new ground combat vehicle with new technologies on it, and that’s where our great strength is,” Levin said.
Defense, homeland security and related businesses comprise one of the few growth areas in Michigan’s economy.
“There’s always going to be a percent of the budget spent on defense and homeland security,” said U.S. Rep. Candice Miller, a Harrison Township Republican. “It’s not as though border security is going to go away. If anything, we are going to continue to ratchet it up.”
Monthly Archives: August 2011
Metro Detroit home prices were down 6.6% annually through June, as the region continues to struggle in its position as America’s weakest market, according to the S&P/Case-Shiller indices.
Yet, prices gained a seasonal boost, rising 2.2% in June as compared to May data for the metro area, according to the data released today.
While the rest of the country returned to 2003 home pricing levels, metro Detroit and Las Vegas are the only two major metropolitan areas where prices were at pre-2000 levels.
The seasonal rise should “wear off in the fall” and prices will likely drop again as demand wanes, said Patrick Newport, U.S. economist with IHS Global Insight.
Newport said in a statement that seasonally adjusted prices were down in 11 cities.
“Detroit, where prices have dropped nearly 50% since peaking in late 2005, remains, by far, the weakest market,” he said. “Detroit avoided a big run-up in housing prices during the boom years, but was hit hard by the recession.”
TRIPOLI, Libya – Libyan rebels pledged Tuesday to launch an assault within days on Muammar Qaddafi’s hometown, the ousted strongman’s last major bastion of support.
The rebels and NATO said that Qaddafi loyalists were negotiating the fate of Sirte, a heavily militarized city some 250 miles east of the capital, Tripoli.
Mustafa Abdel Jalil, the head of the rebels’ National Transitional Council, said that negotiations with forces in Sirte would end Saturday after the Muslim holiday of Eid al-Fitr, when the rebels would “act decisively and militarily.”
We can’t wait more than that,” he told reporters in the eastern city of Benghazi. “We seek and support any efforts to enter these places peacefully. At the end, it might be decided militarily. I hope it will not be the case.”
Col. Roland Lavoie, a NATO spokesman, said it’s possible Sirte might surrender without a fight.
Acting ATF Director Kenneth Melson has been reassigned to a lesser post in the Justice Department and the U.S. attorney for Arizona was also pushed out Tuesday as fallout from Operation Fast and Furious reached new heights.
Melson’s step down from his role as head of the Bureau of Alcohol, Tobacco, Firearms and Explosives to the position of senior adviser on forensic science in the Department of Justice’s Office of Legal Programs is effective by close of business Tuesday, administration officials announced. U.S. Attorney for the District of Minnesota B. Todd Jones will replace Melson.
U.S. Attorney for Arizona Dennis Burke, one of the officials closely tied to Fast and Furious, is also a casualty in a shakeup tied to the botched gun-running program. Burke was on the hot seat last week with congressional investigators and, according to several sources, got physically sick during questioning and could not finish his session.
The purge of those responsible for the firearms trafficking scandal continued as new documents reveal a deeper involvement of federal agencies beyond ATF.
In Phoenix, Assistant U.S. Attorney Emory Hurley, who oversaw Fast and Furious on a day-to-day basis, was reassigned from the criminal to civil division. Also in Phoenix, three out of the four whistleblowers involved in the case have been reassigned to new positions outside Arizona. Two are headed to Florida, one to South Carolina.
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8 ANX 13.19
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13 COCO 11.76
14 CRYP 11.63
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16 JVA 10.88
17 PHM 10.17
18 BCRX 9.65
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20 AEZS 9.52
21 EEE 9.47
22 CXM 9.45
23 LONG 9.38
24 Z 8.96
25 GENE 8.91
26 RITT 8.79
27 IPSU 8.63
28 CTFO 8.45
29 DGLY 8.42
30 CIIC 8.05
31 MOBI 7.73
32 VALV 7.73
33 OCLR 7.67
34 TUDO 7.66
35 LPS 7.54
36 LEI 7.49
37 FRO 7.45
38 SUNH 7.44
39 KBH 7.27
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41 MOVE 7.19
42 SUTR 7.19
43 PERY 7.13
44 DCTH 7.05
45 III 6.97
46 EK 6.91
47 THLD 6.90
48 WH 6.64
49 CLSN 6.63
50 TMS 6.58
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11 PGNX -7.01
12 VDSI -6.85
13 DZZ -6.70
14 OSBC -6.62
15 PNSN -6.61
16 PCRX -6.60
17 TNCC -6.54
18 MOSY -6.53
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20 CLMS -6.49
21 RDCM -6.33
22 WEBM -6.25
23 NTSP -6.24
24 NWK -6.23
25 MNTG -6.20
26 EMKR -6.11
27 FSII -6.09
28 SJF -6.08
29 SVN -6.03
30 MILL -6.03
31 CSUN -6.01
32 HHGP -5.95
33 TECUA -5.94
34 PRSC -5.87
35 INVE -5.85
36 WINN -5.79
37 SPMD -5.77
38 AZPN -5.74
39 EDAP -5.65
40 OINK -5.63
41 CEDC -5.61
42 STSA -5.50
43 CT -5.49
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Here we go again:Comments »
Cameco (TSX: CCO.TO – News) (NYSE: CCJ – News) today announced that it has commenced its offer to acquire all of the outstanding shares of Hathor Exploration Ltd. (TSX: HAT.TO – News) for cash consideration of $3.75 per share in a transaction which values the fully diluted share capital of Hathor at approximately $520 million(1) (the “Offer”).
Treasuries rose before a report that economists said will show U.S. residential real-estate prices dropped. Bill Gross, who runs the world’s largest bond fund, said it was a mistake to cut his Treasury holdings.
U.S. government debt has returned 2.58 percent in August, the most since December 2008, Bank of America Merrill Lynch data show. Pacific Investment Management Co.’s Gross said in a Financial Times interview that it had been a “mistake to bet so heavily against the price of U.S. government debt.” Treasuries slid yesterday after Federal Reserve Chairman Ben S. Bernanke said last week the economy isn’t weak enough to warrant immediate stimulus.
“Watching the data continues to confirm this dip is going to lead to at least a quarter of negative growth,” said Peter Chatwell, a fixed-income strategist at Credit Agricole Corporate & Investment Bank in London. “Then I think the market will be happy to assume that some further stimulus from the Fed does indeed come its way, and that will be bond supportive, particularly the long end.”
Benchmark 10-year yield dropped four basis points to 2.22 percent at 10:29 a.m. in London, according to Bloomberg Bond Trader prices. The 2.125 percent note maturing in August 2021 rose 3/8, or $3.75 per $1,000 face amount, to 99 6/32.
The rate has fallen 57 basis points, or 0.57 percentage point, since July 29.
WASHINGTON (AP) — Spring buying pushed home prices up for a third straight month in most major U.S. cities in June. But the housing market remains shaky, and further price declines are expected this year.
The Standard & Poor’s/Case-Shiller home-price index shows prices increased in June from May in 19 of the 20 cities tracked. A separate figure shows prices rose 3.6 percent in the April-June quarter from the previous quarter. Those numbers aren’t adjusted for seasonal factors.
Over the past 12 months, home prices have declined in all 20 cities after adjusting for seasonal factors.
Chicago, Minneapolis Washington and Boston posted the biggest monthly increases. Metro areas hit hardest by the housing crisis, including Las Vegas and Phoenix, reported small seasonal increases.
In the Catskills, state and local officials had, by Monday afternoon, carried out 191 rescues since the storm began, often plucking people from cars or homes as water rose. State officials confirmed six people had died in connection with the storm: five drowned and one was electrocuted.
FTSE +145, DAX +36, CAC +26Comments »
The Securities and Exchange Commission sued two Florida men, claiming that they had defrauded teachers and retirees in a $22 million Ponzi scheme by posing as a private equity fund while enriching themselves.
The two, James D. Risher and Daniel Sebastian, fraudulently lured more than 100 investors with promises of annual returns of as much as 124 percent, the S.E.C. said Monday in a lawsuit filed in United States District Court in Florida. Mr. Risher, who spent 11 of the last 21 years in jail, used customers’ funds on jewelry, gifts and real estate in North Carolina and Florida, the S.E.C. said.
“Risher, who masqueraded as a highly successful equity trader, teamed up with Sebastian to tout sophisticated trading strategies they claimed would generate substantial profits,” Eric Bustillo, head of the S.E.C.’s regional office in Miami, said in a statement. “Instead, Risher and Sebastian used investors’ life savings and retirement nest eggs to line their own pockets.”
Mr. Sebastian attracted clients from his previous job as an insurance broker, persuading at least one investor to liquidate an annuity and invest the proceeds in the fund, according to the S.E.C. The two men paid themselves millions of dollars in fees and sent customers false account statements, the S.E.C. said.
Burton Wiand, Mr. Sebastian’s lawyer, said in a telephone interview that his client had been “deceived” by Mr. Risher and voluntarily reported the scheme to the S.E.C. and criminal authorities once it became evident to him. Mr. Sebastian has since cooperated with government officials as well as lawyers representing former clients, Mr. Wiand said.
Mr. Risher was indicted on related criminal charges June 29. A phone call to Adam Allen, a public defender who has represented Mr. Risher in the criminal matter, was not immediately returned.Comments »
European Central Bank President Jean-Claude Trichet said the bank is reviewing its assessment of inflation risks after growth in the 17-nation euro area slowed.
“Risks to the medium-term outlook for price developments are under study in the context of the ECB staff projections that will be released early September,” Trichet told the European Parliament’s economic committee in Brussels today. The comment contrasts with Trichet’s last policy statement on Aug. 4, when he said risks to the inflation outlook were “on the upside.”
A switch in the ECB’s language on price risks may herald a change in its policy stance. The central bank, which has raised its benchmark interest rate twice this year to 1.5 percent, is unlikely to increase it again until 2013, Citigroup Inc. economists said last week.
“The ECB is preparing the ground for no further rate increases,” said Alexander Krueger, head of capital market analysis at Bankhaus Lampe KG in Dusseldorf. “Against the background of the sovereign debt crisis and an easing of the inflation situation, I can’t imagine them raising rates.”
Euro-area growth slowed to 0.2 percent in the second quarter from 0.8 percent in the first — with the German economy almost grinding to a halt — as Europe’s debt crisis roiled financial markets and weighed on confidence.
European Union Economic and Monetary Affairs Commissioner Olli Rehn, speaking to the same parliamentary panel today, indicated the EU may lower its growth forecasts when it issues new projections on Sept. 15, saying it is “seriously concerned” about financial turbulence spilling over into the broader economy.
“All in all, the short-term growth prospects have somewhat worsened compared to our spring forecast,” he said. In May, the EU projected gross domestic product would grow 1.6 percent in the euro area this year and 1.8 percent in 2012.
“Inflationary risks, which were already low before this summer’s turmoil, now seem irrelevant,” said Marie Diron, an economist at Oxford Economics in London. “In this context, the ECB needs to make it clear that the outlook has changed and that it is adjusting policy accordingly.”
German inflation slowed more than economists forecast in August, with the rate dropping to 2.4 percent from 2.6 percent, a report showed today.
Trichet said euro-area inflation, currently at 2.5 percent, will stay above the ECB’s 2 percent ceiling “for some months” and policy makers are determined to ensure that price expectations remain contained.
ECB council member Ewald Nowotny said in an interview published Aug. 27 that he sees no upward pressure on inflation expectations.
In June, the ECB forecast inflation would average 2.6 percent this year and 1.7 percent in 2012. It predicted economic growth would slow to 1.7 percent next year from 1.9 percent in 2011. The central bank updates its projections every three months.
“Looking ahead, we continue to see the euro-area economy growing at a modest pace in a context of overall relatively sound economic fundamentals for the euro area as a whole,” Trichet said. “At the same time, not least because of the recently re-emerged tensions in financial markets, uncertainty remains particularly high.”
Trichet defended the ECB’s purchases of government bonds on the secondary market, saying they are aimed at restoring the transmission of monetary policy and are not a substitute for fiscal discipline.
The ECB was forced to start buying Italian and Spanish securities on Aug. 8 after politicians failed to convince investors they could contain the region’s debt crisis.
The bank said today it settled 6.65 billion euros ($9.7 billion) of purchases in the week through Aug. 26, down from 14.3 billion euros in the previous week and a record 22 billion euros the week before that.Comments »
The case was related to transactions among Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the CEO position, under the stipulation that the annuities would be returned to him if he worked a 4.25-year term. The company didn’t survive that long, and it filed for bankruptcy protection in December 2001.
The IRS contested the Lays’ contention that the annuities were sold to Enron, according to the Tax Court decision by Judge Joseph Goeke. In 2009, the IRS filed a notice of tax deficiency for $3.9 million, arguing that the Lays should have reported the $10 million as income in 2001. Instead, they reported that they sold the annuities to Enron at their cost basis for no gain.
Goeke said in the decision that the agency’s position was incorrect and ruled for Linda Lay and for Kenneth Lay’s estate. The transactions, he wrote, were legitimate, and neither of the Lays nor the estate received any distributions or death benefit from the annuity.
“The benefits and risks of ownership of the annuity contracts were transferred to Enron in the annuities transaction,” he wrote. “The Lays, therefore, properly reported the transaction on their federal income tax return as a sale of the two annuity contracts.”
Lay, who died in 2006 at age 64, was convicted in May 2006 by a federal jury in Houston. He and the company’s former CEO, Jeffrey Skilling, were found guilty of deceiving shareholders about Enron’s financial condition by hiding debt and losses in a series of off balance-sheet entities.
More than 5,000 jobs and $1 billion in employee retirement funds were wiped out when the world’s largest energy trader plunged into bankruptcy in December 2001, following revelations of widespread accounting fraud.
Lay’s convictions were later thrown out because he didn’t have a chance to appeal the cases before he died.
Enron’s creditors, the government, Lay’s estate and Linda Lay have been involved in a variety of lawsuits since the company’s demise.Comments »
Bill Gross, the manager of the world’s largest bond fund, feels like “crying in his beer” for having bet so heavily against U.S. government-related debt earlier this year, the Financial Times reported on Monday.
Showing a more bearish view on the U.S. economy, Gross said PIMCO had initially dumped all of its U.S. debt holdings in March as he expected economic growth to be higher, resulting in inflation down the road.Comments »