10 Billion Gallons
The Bush administration proposed modest increases in fuel efficiency standards for light trucks and SUVs that will give a competitive boost to struggling domestic makers General Motors and Ford. Energy savings would be modest: 10 billion gallons of gas -- the rough equivalent of 25 days of consumption -- spread over nearly two decades. The rules are meant to preempt more stringent requirements passed by California, which several others states had threatened to adopt. Hummers and other large trucks would remain unregulated.
Touching All the Bases
The independent panel reviewing military base closures backed Pentagon plans to close Walter Reed Army Medical Center and move its services to the Navy's medical campus in Bethesda and to Fort Belvoir in Virginia. The commission also favored transferring 20,000 civilian employees from leased offices in Northern Virginia to military bases in the Washington region. The panel spared South Dakota's Ellsworth Air Force Base and the submarine base in New London, but not Fort McPherson in Atlanta or Fort Monroe in Hampton, Va.
Maytag officially accepted a $1.7 billion buyout offer from larger rival Whirlpool after a private investment group decided to drop out of the bidding. With as much as half of the U.S. appliance market, the companies still face a tough antitrust review. Executives predicted the merger will result in significant efficiencies, even while they continue to maintain both brand names. Regulators, however, will require proof that enough competition will remain to force the merged company to pass those savings on to consumers.
The SEC's Kmart Special
Two Kmart officials were hit with civil charges accusing them of filing correct quarterly figures but misleading investors about what they meant. The Securities and Exchange Commission said Kmart should have fully disclosed a cash crunch in 2001 caused by the purchase of excess inventory -- one that forced it to delay payments to vendors and eventually led to a bankruptcy filing. While Kmart's filings clearly showed a 56 percent increase in accounts receivable, the SEC said the company should have explained its causes and likely consequences.
Real Estate Fixation
Having learned their lesson from the Internet bubble, the media are now fixated on the real estate bubble and when it is going to burst. The latest news: New-home sales surged last month, while existing-home sales fell slightly from all-time highs, and inventories of unsold homes are on the upswing. Even Alan Greenspan, a longtime bubble skeptic, acknowledged in a speech at the Fed's annual Jackson Hole, Wyo., retreat that asset prices have become a more important factor in economic conditions than he and his colleagues had previously thought.