May 3, 2007

About Lord Browne’s Early Resignation from BP

Filed under: Business Moves — Tom @ 6:19 am

Browne’s premature resignation from BP is a very lucky break for the “Corporate Social Responsibility” (CSR) movement.

History will probably forget that Browne moved up his planned retirement to the end of June 2007 as a result of safety missteps and other problems at BP that many, including myself, believe were an indirect but very real result of his apparent obsession with pleasing enviros and CSR crusaders.

Now that personal scandal (and perhaps much worse) has caused him to resign even earlier, the originally announced resignation, and its reasons, will likely go down the memory hole.

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Selected Previous Posts:
- Feb. 13 — From the ‘It’s Not Easy Being Green’ Department
- Jan. 17, 2007 — This Would Explain Why Browne Is Stepping Down Early
- Sept. 14, 2006 — BP CEO Lord John Browne Should Resign, Says Group

This Looks Like a Really Bad Idea

The practice of people “renting” their credit history (HT The Big Picture via Techdirt) to someone whose own score needs a boost is apparently growing:

….. federal and state authorities fear that some borrowers are turning to a fast-growing business on the Internet: companies that claim to boost credit scores by transplanting the credit DNA of people with excellent payment histories into the credit files of people with subpar histories — ostensibly without breaking any law.

The companies claim to raise FICO credit scores by 50 to 250 points by adding low-scoring borrowers as “authorized users” on the credit card accounts of people with FICO scores well in excess of 700. The positive payment information from such cardholders then flows into the files of the persons with subpar credit.

Federal law permits authorized users to be added to credit card accounts. Typically the users are relatives or friends of the primary cardholder. For example, a parent might add a son or daughter onto a Visa card in order to provide access to credit for the child or for use in emergencies.

Federal law, however, does not limit the number or prescribe the type of authorized users permitted on any single account. Nor does it prohibit the rental or sale of authorized user designations. Exploiting that loophole, numerous companies have popped up on the Internet offering to buy and rent out the credit card “trade lines” or accounts of credit card holders with high limits combined with perfect payment histories.

Big bucks — and a strong potential for fraud on mortgage applications — are involved.

So, I would think, is big financial exposure to identity theft (or outright) that could dwarf whatever income might be “earned” by the people with the high credit scores.

This deserves more scrutiny, so, as they say, “developing….”

This Supports the Likelihood of Upward 1Q07 GDP Revisions

Filed under: Economy,Taxes & Government — Tom @ 6:09 am

From CNNmoney.com:

New orders at U.S. factories rose a greater-than-expected 3.1 percent in March on a rise in civilian aircraft orders, a Commerce Department report showed on Wednesday.

Analysts polled by Reuters were expecting factory orders to rise 2.1 percent. February orders were revised to show a 1.4 percent gain.

The CNN report didn’t note, but the Wall Street Journal did (requires subscription), that the original February estimate was plus 1.0%.

The February improvement should have driven higher production and output in March, and the March result indicates strength going into the second quarter.

May 10 Is ‘Hug a Liberal Economist’ Day: April Federal Receipts Update

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 6:04 am

Monday’s post on this topic projected a record-setting $362 billion in fedral receipts for the month of April.

Later that day, Brian Wesbury predicted $390 billion.

I looked at the Daily Treasury Statements for April 27 and April 30 and have updated the chart I did Monday to reflect actual activity for those two days:

April07FedReceiptsAt050207

So my revised prediction for April, assuming all other receipts come in at the same level as last year, is $367 billion, and my revised estimated increase compared to last year is 16.5% instead of Monday’s 14.9%.

We won’t know the final collections number until Thursday, May 10 at 2PM. But we do know that it will break all records for single-month collections.

That explains why rest of May 10 has been designated “Hug a Liberal Economist Day.” They’ll need to be consoled as the greatest proof to date of the validity of supply-side economics enters the history books.

Already, the improved situation with the federal deficit is having an impact. I’ll theorize that the Associated Press’s Martin Crutsinger, who seems to have made it a point over the past couple of years to downplay good economic news as it occurs, might have felt quite a bit of pain as he wrote this (HT NewsBusters commenter dscott):

With budget deficits improving, the government said Wednesday it is discontinuing sales of three-year Treasury notes.

The Treasury Department said the last auction of three-year notes will occur next week as part of the regular series of quarterly debt auctions used to help finance the $8.8 trillion federal government debt.

….. Analysts believe that this year’s budget deficit could drop as low as $200 billion, compared to a deficit in the 2006 budget year, which ended on Sept. 30, of $247.7 billion. That figure represented a four-year low for the deficit.

Hey Martin: I predicted $177 billion in October of last year, and I’m pretty convinced that I blew it — on the high side. Now I think $150 billion is eminently doable. Brian Wesbury believes it will be $115 billion. Find those “analysts,” Martin — the person furthest from the actual result buys lunch.

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UPDATE: In terms of the deficit, the wild card in all of this is spending. Last April’s spending level of $196.2 billion was very low in comparison to other months before and since. If the April surplus ends up greater than $166.4 billion (this would allow for up to $223 billion in spending if Wesbury’s $390 billion in receipts is the correct call), the deficit for the first seven months fiscal 2007 (about $92 billion) will have fallen by more than half from the $184.1 billion deficit that occurred during the first seven months of fiscal 2006.

Positivity: Dog saves 5 kids from pit bulls

Filed under: Positivity — Tom @ 5:59 am

From Wellington, New Zealand — if this one doesn’t get to you, you’d better check to see if you still have a pulse:

2/05/2007 11:05 – (SA)

Wellington – A plucky foot-high Jack Russell terrier named George saved five New Zealand children from two marauding pit bull terriers, but was so severely mauled in the fight he had to be destroyed, his owner said on Wednesday.

George was playing with the group of children as they returned home from buying sweets at a neighbourhood shop in the small North Island town of Manaia last Sunday when the two pit bulls appeared and lunged toward them, his owner Allan Gay said.

“George was brave – he took them on and he’s not even a foot high,” Gay told The Associated Press. “He jumped in on them, he tried to keep them off.

“If it wasn’t for George, those kids would have copped it.”

One of the children, Richard Rosewarne, 11, was quoted in the Taranaki Daily News on Wednesday as saying George fought with the pit bulls to keep them off his four-year-old brother, Darryl.

“George tried to protect us by barking and rushing at them, but they started to bite him – one on the head and the other on the back,” Rosewarne said. “We ran off crying and some people saw what was happening and rescued George.”

But George, aged nine, was so badly mauled that a veterinarian had to put him down, Gay said.

“The two pit bulls ripped the skin from his throat and chest and down his back,” he said, adding the tough little terrier also “had a bad heart condition”.

Gay said the pit bulls’ owner had surrendered the pair to dog control officers, and demanded they be destroyed, claiming they had launched unprovoked attacks previously.

South Taranaki District Council official Graham Young said the two dogs had been impounded, and likely would be destroyed because of the attack.