The British are coming — in defense of BP

December 7, 2013

The British government took the unusual step of filing a brief in a Texas federal court in support of BP in its quest to get the EPA to lift a ban on the British oil giant’s ability to bid for federal contracts, including leases on offshore drilling prospects in the Gulf of Mexico. ¶ Tension has quietly escalated between the U.S. and British governments over the punishment for the huge oil spill triggered by a blowout on BP’s Macondo well in the gulf. Eleven people died in the fire that broke out on the Deepwater Horizon drilling rig April 20, 2010. ¶ The company’s continuing travails affect British jobs and pension funds. ¶ After tens of billions of dollars in payments, BP is still fighting legal battles over Clean Water Act fines and settlements with individuals and businesses in the gulf region.

Business

Detroit was granted unprecedented powers by a federal bankruptcy judge to shed billions of dollars in debt, including the ability to slash city employee pensions despite a state constitutional provision protecting them. The approval of the nation’s largest-ever municipal filing clears the way for Detroit’s emergency manager to reorganize the city’s estimated $18 billion in debt.

Hilton Worldwide is increasing the size of its public offering, with plans to raise as much as $2.4 billion when it goes public. That figure is nearly double Hilton’s original plan to raise up to $1.25 billion. Shares of the McLean-based hotel company are expected to be priced between $18 and $21 each, according to documents filed with the SEC.

The Illinois legislature approved a landmark bill to rescue the nation’s worst-funded public-employee retirement system.

Bank of America said it will pay Freddie Mac $404 million to settle remaining claims over soured home loans that the bank sold to the mortgage giant. The agreement resolves all requests to buy back defective mortgages sold to Freddie from Jan. 1, 2000, to Dec. 31, 2009.

Fifth Third Bancorp, a large Midwest regional bank, agreed to pay $6.5 million to settle SEC charges that it accounted improperly for troubled commercial real estate loans during the 2008 financial crisis, reducing its reported loss.

Cognizant Technology Solutions will hire at least 10,000 people in the United States over three years, the information technology outsourcing services firm said. The company has 166,000 workers, most of them in India. About 30,000 are U.S.-based.

Dow Chemical plans to separate chlorine-related assets including its epoxy business for possible sale as the company focuses on higher-margin activities. The assets account for as much as $5 billion of annual sales and include plants at 11 sites in the United States, Europe, Asia and South America.

Microsoft shares fell 2.4 percent Thursday, to $38, after Ford chief executive Alan Mulally said there was “no change in my plan” to stay with the automaker through the end of next year, dampening some investors’ hopes that he would take the top job at the software giant soon. Chief executive Steve Ballmer is to retire by August.

JPMorgan Chase said that about 465,000 users of UCard, a prepaid cash card, may have had their personal information compromised. The card is used in corporate or government prepaid benefit programs, such as food stamps, jobless benefits or tax refunds.

23andMe, the Google-backed genetics company, will no longer provide personalized health analyses to consumers based on their DNA samples in an effort to comply with a federal safety warning. 23andMe halted its advertising for the kit and said it would only provide ancestry information and raw health data.

Unilever, the consumer products giant, will cut the number of products it sells by 30 percent by the end of 2014 to become more efficient and navigate a global economic slowdown that it says it was slow to confront. It will cut 2,000 jobs in a plan to save $683 million next year.

J.C. Penney disclosed in a regulatory filing that it had received a letter from the SEC in October requesting information on the struggling retailer’s liquidity, cash position and debt and equity financing, as well as its common-stock offering announced in September.

The American Civil Liberties Union sued the Federal Housing Finance Agency, asking it to disclose efforts to stop municipalities from using eminent domain to bail out underwater homeowners and to make its dealings with the financial industry more transparent.

McDonald’s and other fast-food chains were urged by Democratic members of Congress to raise wages for store workers. “Too many hard-working families are being forced to depend on poverty-level wages,” 53 members of Congress wrote in a letter to chief executives at McDonald’s, Burger King Worldwide, Wendy’s, Yum Brands and Domino’s Pizza.

‘Native advertising,’ online ads designed to blend in with a Web site’s content, may be illegal in some instances, the Federal Trade Commission warned. “By presenting ads that resemble editorial content, an advertiser risks implying, deceptively, that the information comes from a non-biased source,” FTC Chairwoman Edith Ramirez said.

Deals

Microsoft’s $7.3 billion deal to buy Nokia’s mobile phone business was approved by U.S. antitrust regulators. The next step will be approval in Europe.

Apple bought Topsy Labs in a deal that will provide the iPhone maker with more insights about the chatter on Twitter. Topsy combs through the stream of conversations on Twitter to identify trends and people influencing the opinions of others. The acquisition price wasn’t disclosed.

Economy

The U.S. economy grew at a 3.6 percent annual rate in the third quarter, the government said, much better than the 2.8 percent estimated. The pace of growth is unlikely to last, analysts said.

The Fed Beige Book survey found that the U.S. economy held steady during the 16-day partial government shutdown, growing moderately in most regions from October through late November. The Fed said seven of its 12 banking districts described growth as moderate.

The average 30-year fixed-rate mortgage spiked to 4.46 last week, up from 4.29 percent. It was 3.34 percent a year ago. The 15-year fixed-rate average jumped to 3.47 percent.

U.S. service sector firms grew in November at the weakest pace since June, evidence that cautious spending by consumers and businesses may be slowing growth.

Washington

Congressional negotiators, with the holiday recess fast approaching, were closing in on an agreement to avoid another government shutdown. But they faced a last-minute outcry from House Democrats demanding to extend federal jobless benefits as part of any deal. Lawmakers and senior aides in both parties said they were optimistic about the prospects for a modest agreement that would restore about $45 billion to agency budgets in the current fiscal year and about $20 billion in fiscal 2015. To cover that cost — and to put another small dent in the federal deficit — negotiators are considering a range of policies, including cutting retirement benefits for federal workers, reducing payments to hospitals that treat the uninsured and increasing security fees for airline travelers.

The Commodity Futures Trading Commission was sued by three Wall Street trade groups who claimed its policy governing overseas trades is confusing, lacks coordination with other regulatory agencies and impedes banks’ derivatives trading. The CFTC failed to conduct a cost-benefit analysis and follow other requirements of rulemaking in crafting regulations under Dodd-Frank rules, according to the suit, filed by the Securities Industry and Financial Markets Association, the International Swaps and Derivatives Association and the Institute of International Bankers.

Transitions

Nelson Mandela, the former political prisoner who became the first president of a post-apartheid South Africa and whose heroic life and towering moral stature made him one of history’s most influential statesmen, died at 95.

— From news services and staff reports

7%
U.S. unemployment rate

The national jobless rate dropped in November to its lowest level in five years. The decline reflected a pickup in hiring rather than a shrinking labor force. The economy added 203,000 jobs, adding to several months of solid gains and raising hopes that the recovery is finally ready for takeoff. An estimated 455,000 people joined the job market in November.

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