Archive for June 12th, 2010

12
Jun
10

U.S. gives BP 48 hours to improve oil spill containment plans

NEWS
U.S. gives BP 48 hours to improve oil spill containment plans

Saturday, June 12, 2010

••• The U.S. Coast Guard has expressed concern that BP’s current plans to contain the Gulf of Mexico oil spill do not go far enough and has ordered it to improve them within 48 hours.

U.S. Coast Guard Rear Admiral James Watson told BP Chief Operating Officer Doug Suttles in a letter that BP must do more, given new U.S. government data this week that suggests the flow is as much as double previous estimates.

‘Because those estimates have now been revised and estimate a substantially higher flow of oil from the Macado 252 well, it is clear that additional capacity is urgently needed,’ said the letter dated June 11 and released on Saturday.
‘I am concerned that your current plans do not provide for maximum mobilisation of resources to provide the needed collection capacity consistent with revised flow estimates,’ Watson said.

‘I am also concerned that your plan does not go far enough to mobilise redundant resources in the event of an equipment failure with one of the vessels or some other unforeseen problem,’ he added.

‘BP must identify in the next 48 hours additional leak containment capacity that could be operationalised and expedited to avoid the continued discharge of oil.’
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12
Jun
10

Pilots strike at Spirit Airlines, flights canceled

NEWS
Pilots strike at Spirit Airlines, flights canceled

Saturday, June 12, 2010

NEWS••• The privately held Spirit Airlines Inc. canceled all flights Saturday when its pilots went on strike as mediated contract talks failed to reach an agreement.

The strike at the Florida-based discount airline is the first strike at a U.S. passenger carrier in nearly five years, and the company said it would give affected customers a credit for the full amount of the flight plus 100 dollars of flight credit. The carrier offers flights in the United States, Latin America and the Caribbean.

The company’s 430 pilots are represented by the Air Line Pilots Association (ALPA). Talks between the union and the company revolve mainly around pay, benefits and scheduling, but differences could not be bridged.
Although Spirit carries less than 1 percent of U.S. air-passenger traffic, about 6.1 million passengers last year, the strike could have implications throughout the airline industry. Airline unions across the country are watching the dispute closely as many are in contract negotiations or getting ready to begin talks.

The U.S. airline industry is better off now than in the past several years of restructuring, and unions are eager to regain pay and benefits lost during that period. Reports indicated low labor costs had helped Spirit to maintain profitability.
» Check your flight information here: Spirit Airlines
• Source(s): Spirit Airlines, Inc.
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12
Jun
10

BP Woes Spill into Markets

NEWS
BP Woes Spill into Markets

Saturday, June 12, 2010

BP shares rallied on Friday on bargain-hunting after recent sharp losses.

The gains came as British Prime Minister David Cameron threw his support behind a ‘financially strong’ BP in talks with its chairman, Carl-Henric Svanberg, while voicing frustration over the oil spill, his office said.

At the close of trade, the company’s share price soared 7.22 percent to 391.9 pence on London’s FTSE 100 shares index, which was 0.61 percent higher.

Despite the gains, the British oil giant’s share price has plunged by as much as 49 per cent, wiping tens of billions of dollars off its market value since the BP-operated Deepwater Horizon rig sank on April 22.

The accident, following a explosion that killed 11 people two days earlier, sparked an enormous oil spill from a leaking well head on the sea bed.

The disaster has seen huge amounts of oil wash up on the U.S. Gulf coastline, threatening precious wildlife and local communities, and provoking the wrath of U.S. President Barack Obama, who has demanded BP scrap its shareholder dividend.

‘We are considering all options on the dividend. But no decision has been made,’ BP chief executive Tony Hayward said on Friday.

The group is preparing to defer the payment of its next dividend, according to the BBC and The Times newspaper.

The Times, which cited people familiar with the situation, reported that the money would be held in an escrow account, held by a third party, until its liabilities from the disaster become clear.

The BBC said it understood BP was planning to suspend the dividend, with BP directors due to meet on Monday to discuss the payments.

The meeting ‘will be about when to suspend the payments, how long to suspend the payments, and what to do with the billions of dollars that would be saved and not paid to shareholders,’ BBC business editor Robert Peston said.

A BP spokesman declined to comment on the stories, but stressed that the company was considering all its options.

The company’s share price was meanwhile boosted after U.S. bank Goldman Sachs issued an upbeat outlook for embattled BP.

‘BP shares now have as much upside potential as the rest of the European integrated oil sector,’ Goldman said in a research note.

The stock had plunged on Thursday, striking a low of 330 pence, as investors fretted about the financial impact of the oil spill and the possible loss of the group’s shareholder dividend.

CMC Markets analyst James Hughes described Friday’s gains as an ‘inevitable bounce after the moves of the last few days’ but warned that the share price has further to fall.

Cameron will discuss BP’s handling of the Gulf of Mexico oil spill with Obama over the weekend amid fears of an anti-British backlash in the United States.

BP chairman Svanberg has been summoned to meet Obama at the White House next week, as several US media reported the Swede was being lined up as a ‘fall guy’ for the disaster.

Cameron, who is visiting Afghanistan and the United Arab Emirates, had a ‘constructive’ telephone conversation with Svanberg, a Downing Street spokesman said.

‘The prime minister explained that he was frustrated and concerned about the environmental damage caused by the leak but made clear his view that BP is an economically important company in the UK, US and other countries,’ he said.

Cameron said: ‘It is in everyone’s interests that BP continues to be a financially strong and stable company.’

Svanberg met with finance minister George Osborne and other senior officials in Downing Street on Friday.

After the talks, the Swede told ITN television: ‘I think we have done everything we can to try to fill the well, and we have said we would do everything expected from us in cleaning up the beach, taking care of all the claims and learn from this incident and make deepsea drilling an even safer place.’
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12
Jun
10

Weekly Address: Fair Pay for Doctors

NEWS
Weekly Address: Fair Pay for Doctors
President Obama Calls on Senate Republicans to Allow a Vote to Protect Medicare Reimbursements

Saturday, June 12, 2010

In this week’s address, President Barack Obama called on Senate Republicans to stop blocking a vote to prevent a 21 percent pay cut for doctors who see Medicare patients – a pay cut that will hurt America’s seniors and their doctors. Since 2003, Congress, under Republican and Democratic leadership, has deferred these cuts in Medicare reimbursements from going into effect. The President is committed to finding a responsible, long term solution to this problem, but it is not acceptable to punish America’s seniors or the physicians who treat them. If Congress does not act, then doctors will start receiving lower Medicare reimbursements next week, which could lead to seniors losing their doctors.

More than a decade ago, Congress set up a formula that governs how doctors get paid by the Medicare program. The intent was to slow the growth of Medicare costs, but the result was a formula that has proposed cutting payments for America’s doctors year after year after year. These are cuts that would not only jeopardize our physicians’ pay, but our seniors’ health care.

Since 2003, Congress has acted to prevent these pay cuts from going into effect. These votes were largely bipartisan, and they succeeded when Democrats ran Congress and when Republicans ran Congress – which was most of the time.

This year, a majority of Congress is willing to prevent a pay cut of 21% – a pay cut that would undoubtedly force some doctors to stop seeing Medicare patients altogether. But this time, some Senate Republicans may even block a vote on this issue. After years of voting to defer these cuts, the other party is now willing to walk away from the needs of our doctors and our seniors.

Now, I realize that simply kicking these cuts down the road another year is not a long-term solution to this problem. For years, I have said that a system where doctors are left to wonder if they’ll get fairly reimbursed makes absolutely no sense. And I am committed to permanently reforming this Medicare formula in a way that balances fiscal responsibility with the responsibility we have to doctors and seniors. In addition, we’re already taking significant steps to slow the growth of Medicare costs through health insurance reform – not by targeting doctors and seniors, but by eliminating 50% of the waste, fraud, and abuse in the system by 2012. This not only strengthens Medicare, it saves taxpayer dollars.

I’m absolutely willing to take the difficult steps necessary to lower the cost of Medicare and put our budget on a more fiscally sustainable path. But I’m not willing to do that by punishing hard-working physicians or the millions of Americans who count on Medicare. That’s just wrong. And that’s why in the short-term, Congress must act to prevent this pay cut to doctors.

If they don’t act, doctors will see a 21% cut in their Medicare payments this week. This week, doctors will start receiving these lower reimbursements from the Medicare program. That could lead them to stop participating in the Medicare program. And that could lead seniors to lose their doctors.

We cannot allow this to happen. We have to fix this problem so that our doctors can get paid for the life-saving services they provide and keep their doors open. We have to fix this problem to keep the promise of Medicare for our seniors so that they get the health care they deserve. So I urge Republicans in the Senate to at least allow a majority of Senators and Congressmen to stop this pay cut. I urge them to stand with America’s seniors and America’s doctors.

Thanks.

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• Source(s): The White House
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12
Jun
10

Goldman Sachs Crime watch – SEC Launches 2nd Major Investigation

NEWS
Goldman Sachs Crime watch – SEC Launches 2nd Major Investigation

Saturday, June 12, 2010

US securities regulators are hunting for fresh dirt on Goldman Sachs Group, hoping to bolster their lawsuit against the bank and perhaps force it to settle on terms more to the regulators’ liking.

Two months ago the Securities and Exchange Commission charged Wall Street’s most powerful bank with civil fraud in connection with a subprime mortgage-linked security.

The case hinges on whether Goldman misled investors when it marketed Abacus 2007, a mortgage-linked security that turned toxic during the mortgage crisis.

Now, the SEC is also looking at other collateralized debt obligations that turned toxic, including Hudson Mezzanine Funding, a source familiar with the investigation said on Thursday.

“You put a number of things together and then it becomes harder to defend against all of them,” said Annemarie McAvoy, a Fordham University School of Law professor and a former federal prosecutor

“So you finally cry uncle and say, ‘Fine, I’ll settle.'”

The expanding investigation of Goldman’s CDOs comes as federal prosecutors probe some of the complex mortgage-linked transactions that Wall Street firms cobbled together and which helped spark the worst financial crisis in decades.

Even the Financial Industry Regulatory Authority is getting into the act.

Reuters has learned the securities industry’s self-regulatory agency recently began its own investigation into whether Wall Street banks violated customary sales practices in hawking CDOs to institutional investors.

A document reviewed by Reuters reveals FINRA is looking into potential improprieties in the structuring of the deals and the relationship between the CDO underwriters and mortgage lenders.

Former Goldman customers also are putting pressure on the bank and its chief executive, Lloyd Blankfein.

Reuters previously reported that SEC lawyers had looked at the $1 billion Timberwolf deal before filing the Abacus lawsuit in April.

The SEC’s interest in the $2 billion Hudson CDO was first reported by the Financial Times.

U.S. Senator Carl Levin, during a hearing in April of the Senate’s Permanent Subcommittee on Investigations, raised Abacus, Timberwolf and Hudson while questioning a cast of past and present Goldman employees, including Blankfein.

In a Senate floor speech in May introducing legislation to curb conflicts of interest in Wall Street deals, Levin zeroed in on Hudson Mezzanine 2006-1.

“When Goldman first sold the securities to its clients, more than 70 percent of Hudson Mezzanine had AAA ratings,” he said. “But … within 18 months Hudson was downgraded to junk status, and Goldman cashed in at the expense of its clients.”

The Hudson deal closed in November 2006 and went into liquidation in May 2008.

The myriad investigations, coupled with the Timberwolf litigation, could create a tipping point at which Blankfein and other Goldman executives decide they have no choice but to reach some sort of comprehensive settlement, according to legal experts.

“Will there be more stuff? At this point, it certainly wouldn’t surprise me,” said White.

At the least, the SEC could be looking to bolster its Abacus case, which some saw as weak. SEC commissioners voted to bring the lawsuit in a split decision.

Fordham’s McAvoy said the SEC’s strategy could be to strengthen the initial case by adding new material from other deals.

“A lot of folks don’t think the initial case is as strong as the SEC made it out to be,” McAvoy said.

Goldman shares are down more than 25 percent since the SEC filed its lawsuit on April 16. The shares were off 2.4 percent to $133.49 in Thursday morning trading.
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12
Jun
10

Arkansas flash floods kill at least 16 people

NEWS
Arkansas flash floods kill at least 16 people

Saturday, June 12, 2010

Earth

••• A flash flood in a valley campground in the U.S. state of Arkansas has left 20 known dead and an estimated 36 people missing as of Friday afternoon, hours after a 24-hour rainfall caused creeks, streams and rivers to rise from 3 feet to about 20 feet, covering campgrounds, low-lying roads, vehicles and sleeping campers.

“It was like a big wall of water that came through,” said Jesse Lowery, whose family owns Lowery’s Camp Albert Pike leasing office for campsites and cabins.

No one was killed or among the missing from his campgrounds, he said, but his site sits next to government-controlled land used for forestry and public camp sites. As of Friday afternoon, search operations were continuing by the Arkansas State Police, the U.S. Forest Service and other agencies from the air and ground in efforts to locate and rescue stranded survivors.

“We’re in southwest Arkansas, up here in the mountains, and everybody – state police, forest service, fish and game – everybody is throwing everything they can at this,” Lowrey said.

According to the National Weather Service’s Weather Forecast Office web site, 24-hour rainfall during June 10 and ending at 7 am June 11 caused flash flooding at the thickly timbered Albert Pike Recreation Area in Montgomery County, Arkansas, with reported fatalities, missing people and rescues of water-stranded campers.

“There are several small creeks and streams that run through the campground, including the Little Missouri River. These tributaries rose rapidly during the event due to at least six inches of rain in just a few hours. The Little Missouri River, which runs through the area, climbed almost 20 feet in just a few hours,” read an alert posted Friday on the National Weather Service’s site.

Bill Sadler, Arkansas State Police spokesman, was unavailable for comment Friday, but earlier stated on CNN that the state police were actively involved in the search.

“The search will continue,” Sadler said. “There may be people alive that we haven’t gotten to.”

Sadler described the area as a thickly wooded, making visibility of the grounds from the air difficult. The remote location of the campgrounds, situated in a valley between mountain peaks, also contributed to the difficulty of getting searchers into the area.

“We can’t get enough people in there,” he said.

Sadler estimated that the waters had risen high enough to reach a 23-foot mark in the campgrounds within the space of a few hours.

Lowrey’s Camp Albert Pike web site, http://www.campalbertpike.com, extols the tranquil, natural beauty of the area and challenges for canoe enthusiasts on the nearby Little Missouri river. The area occasionally reveals arrowheads and other evidence of early inhabitants, the Caddo Native Americans and, in the 1850s, homesteading settlers.

The campgrounds were named for Civil War Confederate Gen. Albert Pike, who had traveled through the area and is best known for his books he wrote about Free Masons.

Governor of U.S. state of Arkansas Mike Beebe on Friday said the flood that killed at least 16 people was one of the worst disasters he has seen as governor.

“It’s devastating,” Beebe said as he visited a church where family members of deceased and missing campers are gathered in prayer.

“You’ve got family that have lost children and grandchildren. A man’s lost his dad and they can’t find his mom,” he said, flanked by members of his staff, the Arkansas National Guard and Arkansas State Police.

“It’s heartbreaking, it’s heart-wrenching when you see the personal loss to the families themselves, it’s pretty tragic,” Beebe said as he visited the disaster area.

At least 16 people are confirmed dead after flash floods washed away a camp site in Montgomery and Pike counties, some 75 miles west of Little Rock, on Friday morning.
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12
Jun
10

David Cameron tells BP chief of oil spill ‘frustration’

NEWS
David Cameron tells BP chief of oil spill ‘frustration’

Thursday, June 10, 2010

••• David Cameron has told BP’s chairman he is ‘frustrated and concerned’ about the Gulf oil spill, but said it is ‘in everyone’s interests’ for BP to remain ‘financially strong and stable’.

His conversation with Carl-Henric Svanberg comes as the Prime Minister is facing calls to challenge Barack Obama over his comments on BP which have been described as ‘anti-British’.

Mr. Cameron is due to speak to Mr. Obama by telephone on Saturday at 04:00 pm BST (11:00 am EDT).

Speaking about Mr. Cameron and Mr. Svanberg’s discussion, a Downing Street spokesman said the Prime Minister ‘made clear his view that BP is an economically important company in the U.K., U.S. and other countries’.

He added: ‘Mr. Svanberg made clear that BP will continue to do all that it can to stop the oil spill, clean up the damage and meet all legitimate claims for compensation.

‘The Prime Minister said that he would raise the issue – and discuss these points – in his call with President Obama tomorrow.’

Meanwhile, BP chief executive Tony Hayward has told Sky’s City editor Mark Kleinman that he welcomes the ‘very strong’ support from both the political and business community.
He added: ‘The best outcome is to keep BP strong and whole and working well so we can use our financial muscle to deal with this.

‘We have taken responsibility for the spill, committed enormous resources and we will stop the leak, clean up the oil and remediate the environmental impact. I am confident the company has the resources to do that.’

The U.S. President has been accused of using increasingly aggressive language towards the oil firm, which has had billions wiped off its share value over the spill in the Gulf of Mexico.

Former CBI director general Lord Digby Jones, who was a trade minister in the last government, said the Prime Minister should make it clear the problem is not just a British one.

He told Sky News: ‘I would like David Cameron to say to the President of the US, ‘look this is an international problem’.

‘This isn’t a British problem, BP is an international company, it employs more people in America than Britain and 40% of its dividend income goes to American pension funds.

‘It’s an American company that built this, it’s an American company that operated this.

‘Is BP to blame, yes, but will you stop calling this a British problem.’
London Mayor Boris Johnson had already demanded an end to the ‘beating up’ of the oil firm, urging the American administration to avoid ‘name calling’ and ‘buck passing’.

And in an open letter the chairman of insurance giant RSA, John Napier, warned Mr. Obama’s criticism was ‘unstatesmanlike’ and lacked ‘balance’.

The threat of a transatlantic row comes as new calculations from the U.S. Geological Survey found that up to 40,000 barrels have been pumping into the sea every day since the Deepwater Horizon rig exploded in April, double the amount originally estimated.

BP lost 7% of its value on Thursday as it was hit by heavy falls in the U.S. and concerns that US officials were threatening to seek a ban on dividend payouts crucial to British pension fund investments.

On Friday, the shares pulled out of their nosedive and rose by 8%.

It is claimed BP will seek a deal with the White House that could see the investor payouts held in ‘escrow’ – or deferred – until the group’s clean-up liabilities are clearer.

Or it could propose scrapping the dividend for one quarter or paying it in shares rather than cash, according to reports.

BP has not confirmed whether it will pay future dividends, saying recently this would be discussed by the board next month.

It is due to make the next payout on June 22 and announce the subsequent dividend on July 27.
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• Source(s): Sky News / British Sky Broadcasting Ltd. (BSkyB) / News Corp.
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