Return to Home Page Web Hosting donated by Xmission
Return to Home Page Web Hosting donated by Xmission
Xmission is UMA's preferred internet provider
August 2008 Edition
Visit Holland and Hart -- Click here
EVENTS CONTRIBUTIONS NEEDED FOR CRANDALL CANYON MEMORIAL MONUMENT The Crandall Canyon Memorial Monument in Huntington City, that has been sculptured and created by Karen Templeton, is well on the way to completion. However, they are short of funding for the landscaping around the monument and would appreciate any contributions. There are 6 Eagle Scout projects connected to the landscaping, and so much of the manual labor is donated. The costs for the cement pathways and sprinkling material are high. also sod and rock are needed to make this area beautiful. Please contribute whatever you can. Make contribution checks payable to Crandall Canyon Monument and send to Mayor Hilary Gordon, P.O.126, Huntington City, Utah 84528
MINERS' HEALTH EDUCATION PROGRAM
RIO TINTO SHEDDING ASSETS TO REPEL HOSTILE TAKEOVER Carlyle Group, TPG Inc. and Apollo Management LP may bid for Rio Tinto Group Plc's aeronautics and automotive unit as the mining company tries to sell assets and repel BHP Billiton Ltd.'s hostile takeover offer. Rio Tinto, which owns the Kennecott operations in Utah, reportedly is seeking offers for Alcan Engineered Products, which it values at $6 billion. The company supplies customized alloys for aircraft such as Airbus SAS's A380. Rio Tinto, the world's third-largest mining company, said in November it may sell as much as $30 billion of assets in an attempt to rebuff BHP Billiton's $139 billion offer and reduce the $45 billion debt it raised to buy Canadian aluminum maker Alcan Inc. in August 2007. Rio Tinto rejected a sweetened offer from BHP in February, saying it undervalued the company.
RIO TINTO CONSIDERS LISTING COAL ASSETS ON NYSE Rio Tinto PLC is considering listing its North American coal assets on the New York Stock Exchange as Cloud Peak Energy Inc. Anglo-Australian Rio Tinto, which is fending off a takeover approach from fellow miner BHP Billiton Ltd., filed plans with the U.S. Securities and Exchange Commission for an initial public offering worth up to $1 billion. The company noted that the total offering price was estimated solely to calculate its registration fee and may change. Rio Tinto added that it is still deciding whether to pursue a listing or a different form of divestment. A final decision would be made ''once these options have been more fully explored,'' it said in a statement. The SEC filing did not reveal the number of shares the company planned to sell or their expected price.
NORWEST CORPORATION ANNOUNCES MANAGEMENT APPOINTMENTS The Norwest Corporation Board of Directors is pleased to announce the appointment of Joe Aiello to the new position of Managing Director, Craig Acott to President of Norwest in Canada, and Richard Dawson and Steve Cameron to Senior Vice President. These appointments were effective June 1, 2008 and follow the election of Robert Evans as Chairman of the Board of Directors during the February 2008 Director's meeting. Mr. Evans also serves as the President of Norwest's US-based mining consultancy group. As Managing Director, Mr. Aiello will report to the Board and have overall responsibility for Norwest's operations. The implementation of the Managing Director role is seen as an important step in continuing to build on Norwest's historical success by enhancing corporate integration, providing additional focus on strategic initiatives, and meeting the challenges associated with the next phase of Norwest's growth. The presidents of Norwest's four business units (Salt Lake City, Denver, Golden, and Calgary/Vancouver) report to Mr. Aiello. Norwest's staff of over 250 professionals provides specialty consulting services to energy and mining companies, financial institutions, electric power producers, legal firms, and government agencies. The company serves a worldwide client base through offices in the U.S. and Canada. For more information please contact Mr. Robert Evans (President and Chairman of the Board) at (801) 539-0044, or visit www.norwestcorp.com.
U.S. TO GROW GRAYER, MORE DIVERSE The nation's population will look dramatically different by mid-century, becoming more racially and ethnically diverse and a good deal older as it increases from about 302 million to 439 million by 2050, according to projections released today by the U.S. Census Bureau. The findings are in line with recent analyses published by independent demographers, but they are the first such official Census Bureau projections in years. Minorities, about one-third of the U.S. population, are expected to become a majority by 2042 and be 54 percent of U.S. residents by 2050. The shift will happen sooner among children, 44 percent of whom are minority. By 2023, more than half are expected to be minority, and by 2050, the proportion will be 62 percent. The largest share of children, 39 percent, is projected to be Hispanic, followed by non-Hispanic whites (38 percent), African Americans (11 percent) and Asians (6 percent). Hispanics, including immigrants and their descendants as well as U.S.-born residents whose American roots stretch back generations, are expected to account for the most growth among minorities. That population is expected to nearly triple by 2050, growing from about one in six residents to one in three. The black and Asian populations are each expected to increase about 60 percent, with the black share rising from 14 to 15 percent by 2050 and the Asian share jumping from 5 to 9 percent. The number of people who identify themselves as being from two or more races is also expected to grow, more than tripling to 16.2 million, or 4 percent of the population. By contrast, the non-Hispanic, single-race white population is expected to grow by less than 2 percent, reducing its share of the overall population from 66 to 46 percent. That group is projected to decline in the 2030s and 2040s, as more members die than are born in or move to the United States. However, the 65-and-older population is expected to remain mostly white because of the number of whites born during the post-World War II baby boom. By 2030, all boomers will be 65 or older; by 2050, that age group will have more than doubled and will account for more than one in five residents, compared with one in eight today. Similarly, the 85-and-older population is expected to more than triple, accounting for about 4 percent of U.S. residents in 2050, compared with fewer than 2 percent today. The percentage of the population that is of working age will drop from 63 to 57 percent. As is the case with children, the working-age population is projected to become majority-minority before 2050. By mid-century, it is expected to be 30 percent Hispanic, 15 percent black and nearly 10 percent Asian. William H. Frey, a researcher with the Brookings Institution, said the demographic changes could presage equally profound political cleavages. "Politically, whites will be much more interested in issues like health care and pensions," he said. "At the same time, the growing minority population -- Hispanics, especially -- will be concerned about more youthful issues, like schools." Other analysts focused on the potential environmental and quality-of-life effects of the projected population increases and the degree to which immigration might affect them. "What this population rise means to me is anywhere from 40 to 80 million more cars on the road, 35 to 40 million more houses built," said Steven Camarota, a researcher at the Center for Immigration Studies, which favors stricter limits on immigration. "As a consequence of federal immigration policy, we're going to be a significantly more densely settled country," Camarota said, "and it's important to recognize that this is a choice we're making. This is not the weather that we have no control over. This is something we can change, so it's worth asking ourselves if this is something we want."
UTAH TO BE 20% MINORITY BY 2010 Utah is lagging the United States as a whole in minority representation, though a third of the state's growth since 2000 has come from minorities, according to Utah Population Estimates Committee data. Utah is expected to be 20 percent minority by 2010 when the nation will be 36 percent minority, according to figures provided by University of Utah demographer Pam Perlich. Salt Lake County is expected to be 30 percent minority by 2010. A Census Bureau report released today said minority groups will add up to a majority of Americans by 2042, but it did not make such projections for Utah nor other states. Two-thirds of Utah's minorities are Latinos, a group whose numbers swelled by 105,000 to reach 306,500 between 2000 and 2007, according to a Census Bureau report released last week. Utah's foreign-born population exceeded 210,000 by 2006, according to Perlich and the committee, and 75,000 to 100,000 of those are undocumented immigrants. Utah's population is about 2.6 million.
HUNTSMAN NAMES A DOZEN UTAHNS TO HELP MANAGE GREAT SALT LAKE ANTELOPE ISLAND - The Great Salt Lake produces metal to strengthen our bicycles and cars. Its waters produce food for farm-grown shrimp and salt for kitchen tables. Sometimes it magnifies the storms behind the "Greatest Snow on Earth." It offers meals and rest to millions of migrating birds. It provides duck hunters a playground for their pastime each fall and has gawk-appeal for observers as far away as space. And, with all of these forces pulling on it, the lake is being "piece-mealed to death," says Utah Gov. Jon Huntsman Jr. Huntsman announced a new panel to help decide how to manage the lake for future generations. The 12-person Great Salt Lake Advisory Council is due to report to Huntsman by the year's end. "Whatever happens [with the lake] needs to be carefully analyzed," said the Republican governor. "We have an amazing resource in the Great Salt Lake that offers a very diverse set of opportunities for our citizens," he said. "This Great Salt Lake Council is a unique collection of people who now need to chart a course for how to best utilize all the features of the lake." The governor announced the long-sought panel during the first stop in his weeklong rural road tour of Utah. He also planned a tour of a Great Salt Lake mineral mining operation and dairy farms in Box Elder County. As he announced the panel, sought for years by the lake's fans, nine of the 12 council members stood behind him. They represent such organizations as the Nature Conservancy, the Salt Lake City planning office, the South Davis County sewer district, the brine-shrimp industry and Kaysville Mayor Neka Roundy. "It's an icon," said Roundy. "It's on everyone's map. It's ours." She told stories of wanting, as a child, to float in it and noted that her father once swam it from Black Rock on the south shore to Antelope Island. For all of the intrigue it inspires, the lake has seen little management. The Utah Water Quality Board is just now considering the first water-quality standard for the lake, a limit on the amount of selenium permitted in the lake's southwest bay. Conservationists have criticized plans for oil drilling near the earthwork sculpture Spiral Jetty in the north. State Sen. Dan Eastman is one of two lawmakers on the panel. "We're just going to take an inventory of what we have here," said the Bountiful Republican. "The question is, what value do we have here? We might be surprised with what we find out."
FINANCIAL CRISIS, INFLATION Federal Reserve Chairman Ben Bernanke said the financial crisis that has pounded the country -- coupled with higher inflation -- is taking a toll on the economy and poses a major challenge to Fed policymakers as they try to restore stability. "Although we have seen some improved functioning in some markets, the financial storm that reached gale force" around this time last year "has not yet subsided, and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment," Bernanke said in a speech to a high-profile economics conference here. Although Bernanke welcomed the recent drops in prices for oil and other commodities, and believes inflation will moderate this year and next, the Fed chief said the inflation outlook remains highly uncertain. The Fed, he said, would monitor the situation closely and will "act as necessary" to make sure that inflation doesn't get out of hand. The current financial and economic environment is one of the most challenging to Fed policymakers "in memory," he acknowledged.
BHP BID FOR RIO TINTO CONCERNS AUSTRALIA BHP is seeking approval from regulators across the globe for the megadeal, which has drawn vocal opposition from steelmakers, which fear it could result in higher prices for their key input of iron ore. Australian analysts said that, despite the issues raised by the Australian Competition and Consumer Commission, they don't believe the regulator would ultimately interfere in the deal and European Commission approval looms as a much more serious barrier. The Australian commission said it would rule on the merger by Oct. 1 and will accept comments on BHP's bid until Sept. 5. The regulator said its inquiries indicated concerns for global seaborne supply of the steelmaking raw material and that a combination of both companies would increase global prices as well as the prices paid by steelmakers in Australia. A BHP Billiton spokeswoman said the company has noted the commission's concerns. Rio Tinto wouldn't comment specifically on the report, but a spokesman said the company is cooperating with regulators. The regulator said that long lead times and high costs associated with bringing new mines by competitors into production, as well as practical limits for steelmakers to alter raw-material needs, constrain steel producers from "The ACCC's market inquiries indicated that the proposed acquisition may raise competition concerns in relation to the global seaborne supply of iron-ore lump and iron-ore fines," the regulator said. The ACCC had deferred its decision on the all-share takeover earlier this month, awaiting further information from BHP. The iron-ore market, where Rio Tinto and BHP are market leaders after Brazil's Cia. Vale do Rio Doce, has been the focus of pricing-power concerns since BHP formally launched its bid. A merger would also create a significant player in the metallurgical and thermal coal market. But, given greater diversification in this sector, the ACCC said "the merged firm is unlikely to have the ability and incentive to profitably withhold coal capacity." BHP Chief Executive Marius Kloppers has said that it will take until year end for the miner to secure approval for the megadeal from regulators across the globe and that European Union, U.S. and Australian approvals are key. The miner already has qualified approval from U.S. regulators. Europe is seen as the biggest hurdle, with the European Commission moving to a more detailed second phase of assessment and due to report back by Dec. 9.
CATERPILLAR INC. Chief Executive Officer Jim Owens forecast that the world's largest maker of backhoes and excavators will top its earlier sales projection of $50 billion this year. Owens spoke at a news conference in Beijing to announce plans to expand production in China. Caterpillar plans to spend $100 million to triple production capacity of wheel loaders at its Shandong SEM Machinery Co. unit in northern China.
AT UTAH MINING ASSOCIATION I wish to thank everyone for participating and making the UMA 93rd Annual Convention a great success! It was a great opportunity to spend time with industry colleagues, catch up on the latest happenings in the industry, be appraised of the emerging issues, and to see old friends. Our attendance was at a record level of 361 and our sponsorships were at the highest level ever. (See sponsorships shown below.) The Grand Summit Hotel did a superb job, the weather was beautiful – not only for the Convention but for the Golf Tournament the next day at the Homestead – the general session speakers, technical session speakers and moderators all were outstanding. If for some unexplained reason you missed this year's convention, be sure to make next year's, which is scheduled for August 20-21, 2009, at the Grand Summit Hotel in Park City. So, if you don't want to miss the premier Utah mining event of 2009 mark you calendar's now for UMA's 94th Annual Convention. 93RD ANNUAL CONVENTION AND GOLF TOURNAMENT SPONSORS PLATINUM SPONSOR SILVER SPONSOR BRONZE SPONSOR Convention Event Sponsors Arnold Machinery Company Golf Tournament Event Sponsors American Mining Insurance Golf Hole Sponsors American Equipment
WORKPLACE DEATHS AT HISTORIC LOW IN 2007 The number of workers killed on the job annually dropped to a historic low in 2007, the Bureau of Labor Statistics announced, although the number of fatalities in Utah rose, mostly because of one big disaster. The number of worker deaths nationally dropped to 5,488 last year - the fewest since the Bureau of Labor Statistics began keeping track in 1992. That's down 6 percent from the 5,840 deaths reported in 2006. Still, the government found significant increases in some types of fatal injuries: a record number of workers died from falls and the number of workplace homicides increased 13 percent. In Utah last year, there were 78 fatalities from on-the-job accidents, compared with 60 in 2006, according to Bureau of Labor Statistics numbers (which differ slightly from other agencies because of varying criteria used in compiling the data). However, the increase can be attributed primarily to eight more highway fatalities - 30 in 2006 versus 38 in 2007 - and the nine miners who were killed as a result of the Crandall Canyon coal mine disaster. The nation's most dangerous jobs, according to the Bureau of Labor Statistics: Fishermen and related fishing workers (with a rate of 111.8 fatal injuries per 100,000 workers), logging workers (86.4), aircraft pilots and flight engineers (66.7) and structural iron and steel workers (45.5). Construction continued to have the most deaths of any private sector industry, with 1,178 in 2007. The overall U.S. rate was 3.7 fatal injuries for every 100,000 workers, the lowest annual rate ever reported by the fatality census. ''This is continued evidence that the initiatives and programs to protect workers' safety and health, designed by and implemented in this administration, are indeed working,'' Labor Secretary Elaine Chao said. The number of fatal falls on the job rose to a record 835 in 2007, even though the number of deadly falls from roofs decreased. In Utah last year, there were three fatal falls versus seven in 2006. Workplace homicides also increased 13 percent, to 610, in 2007 after officials recorded an all-time low in 2006. Although the construction industry had led the nation's private sector for five years in a row in workplace fatalities, the number of deaths in that industry dropped from 1,239 in 2006 to 1,178 in 2007, a 5 percent decrease. The 2007 numbers show that there were 10.3 fatal work injuries for every 100,000 construction workers. The construction industry has had several deadly crane accidents this year, including one in Houston this month that killed four workers and injured seven. Crane-related deaths have also occurred in New York, Miami and Las Vegas. The numbers are preliminary, with a final report on 2007 due next year.
MAGNA - Expert wanted: Someone with the engineering know-how to figure out whether Kennecott's mine-waste impoundment near Magna could rupture during a major earthquake and endanger homes. The Salt Lake County Tailings Impoundment Committee will seek bids for an independent investigator as early as September to answer that question. Reports surfaced earlier this year that the copper giant, in the late 1980s, concealed warnings that the waste impoundment could fail during a major temblor and send a muddy slurry into Magna's nearby Green Meadows Estates subdivision. The county's tailings committee convened Wednesday to set parameters for picking a consultant, including provisions to disqualify any applicant with too close of ties to Kennecott. "The community needs to know that we are beyond reproach in the selection process," committee member Dave Nicponski said. What the committee didn't discuss was a potentially conflicting mission that member Lex Watterson plugged, and other panelists agreed with, in June: That the committee focus both on safety and on improving Magna's image. "We should always be thinking, 'We're here to reframe, in a positive and accurate way, people's . . . image of the community,' " Watterson told colleagues then. Watterson insisted Wednesday that his comments weren't about skewing the tailings study nor soft-pedaling its results - concerns raised by ethics experts. They were about getting the facts to settle any misconceptions about his community. "Our whole mission is for the perception of safety and the actual safety to be one and the same," Watterson said. "In 1988, [the impoundment] was perceived as safe, but it was less than so. In 2008, it may be safe, but it is perceived as not safe. We want perception to match reality, period." With a $250,000 Kennecott donation to pay for its investigation, the tailings panel likely will seeks bids in early September. While the committee won't immediately eliminate applicants who have worked for Kennecott, members said those connections - which must be disclosed - could serve as a "tiebreaker" between evenly matched engineers. "Our goal is who is going to do the best job," committee member Steve Prokopis said. "Our goal isn't to choose the person with the least connections to Kennecott." By the end of October, the committee hopes to have a consultant chosen and a one-year investigation under way into the stability of the tailings pile.
Return to Top of Page COAL PLANT SUES TO Attorneys for Sevier Power Company have sued Sevier County officials to get a citizens' initiative kicked off the ballot. They also seek an expedited decision as ballots have to go to print by mid-September. "I feel confident the judge will rule in our favor," says Fred Finlinson, a Saratoga Springs attorney representing Sevier Power. Finlinson notes that the proposed coal-fired power plant falls under the county's planned unit development (PUD) ordinance, not the conditional-use permit (CUP) section of county law. Last spring, more than 1,500 voters signed petitions provided by Elaine Bonavita's Right To Vote (RTV) committee, specifically targeting Sevier County's conditional use ordinance as it relates to coal-fired power plants. Known as Proposition 1, the measure would require voter approval before the county can issue conditional-use permits for such facilities. It would also revoke any permits already approved for pending power-plant construction. "That becomes fairly critical," Finlinson, a former state senator, adds, ''because the conditional use in Sevier County simply doesn't apply to any commercial or industrial development.'' In early July, Sevier County commissioners allowed the initiative over the hotly contested power plant to advance to the ballot - then switched labels and began referring to Sevier Power's CUP request as a PUD. The switch in terminology means the ballot measure no longer applies, says Finlinson. "This is a conditional-use permit they're seeking. Whether you call it a pig, horse or cow, it is what it is," asserts Jeff Owens, a land-use attorney with the Salt Lake City-based firm of Strong and Hanni. Owens intends to argue that a recently passed state law, SB53, restricting local initiatives is unconstitutional, a legal battle he said he is eager to fight. "Our suspicions that they were trying to skirt our initiative are confirmed, and I don't think that will sit well with the people of Sevier County." . ENERGY
BALANCED APPROACH NEEDED TO SOLVE ENERGY CRISIS I read with interest Pete Ashdown's recent op-ed ("A new Apollo project needed to solve the energy crisis," Opinion, Aug. 3) in which he conjured up President Jimmy Carter's energy policies and called for an energy solution on par with "the Manhattan and Apollo projects." A careful review of President Carter's policies and an understanding of energy markets would have improved Pete's op-ed considerably. Ashdown inquired what my colleagues and I had done on energy "from 2001 to 2007, when [the Republican] party controlled Congress and the White House." Interesting question. Perhaps Pete merely overlooked the following facts. Between 2001 and 2005, I introduced six energy bills: the CLEAR Act promoting hybrids and alternative fuels; a bill promoting natural-gas production; a bill promoting natural-gas infrastructure; a bill promoting wind, solar and geothermal energy; a bill promoting new refining capacity; and the Oil Shale and Tar Sands Development Act. Each was passed into law in the Energy Policy Act of 2005 by the Republican-controlled Congress. Ashdown castigated me for "declaring all this country needs is a second dance with costly oil shale." Problem is, I never declared that. I've sought a balanced approach. Pete should check his history. Jimmy Carter did support a Manhattan Project on energy, telling Americans, "You know we can do it. We have the natural resources. We have more oil in our shale alone than several Saudi Arabias." That's right, Carter's Manhattan Project was based on oil shale. He would have succeeded, because even then we had the technology, but the Saudis responded by flooding the oil markets, bringing oil down to $10 a barrel. Today, the Saudis cannot flood the market, technology is dramatically improved, environmental laws are better, we are 70 percent dependent on foreign oil instead of the 30 percent under Carter and the price per barrel is above $100. Other elements of Carter's energy policies, such as constraints on imported oil and the windfall profits tax, both supported by Ashdown, failed because we can't wish away concrete marketplace rules. Here's a little tutorial on energy. First, global supply and demand determine oil prices. President Carter understood what Ashdown does not: Constraining oil imports would lead to disaster unless combined with aggressive increases in domestic production. Second, our government relies completely on our oil companies to invest in exploration, pipelines and refineries. All U.S. oil companies combined represent only 6 percent of the global oil industry. To supply America's energy, they compete with oil giants owned by foreign governments. Third, the American Petroleum Institute says oil company profits average 7.4 percent of the price of a gallon of gas, but state and federal governments get 13 percent of the price per gallon in fuel taxes. That's right, government income from oil taxes dwarfs oil company profits and none of it is applied to increasing oil supplies. Whoops, did the Democrats forget to tell you that? Also, did they mention that consumers would pay for their windfall tax proposal, which would lead to less supply and higher prices? What we need is a balanced solution - more domestic supply plus incentives to spur innovation to reduce demand.
PARADOX VALLEY URANIUM PLAN HAS SOME WORRIED Cattleman George Glasier sees the next nuclear era amid the blood-orange mesas of the Paradox Valley, the same western range lands that hold a darker legacy from the last rush to pull uranium from the ground. Residents of this valley near the Four Corners region are getting an unimpeded view of the second uranium rush. Many are worried. Glasier, the one-time mining executive-turned-rancher, wants to build a uranium mill on cattle grazing land near his spread. It would be the country's first in decades. The land is not far from the toxic uranium mines, now mostly abandoned, that serve as a reminder of an industry born of the Cold War. As the third global energy shock begins to drastically alter national economies, a potential shift in U.S. energy policy has moved to the forefront of the upcoming presidential election. Barack Obama and John McCain are crossing the country, with Obama blasting Republican energy policies and McCain advocating a large expansion of nuclear power. McCain last week became the first presidential candidate in recent memory to tour a nuclear plant. His energy proposals include building 45 nuclear power plants by 2030. Glasier also believes the time to return to nuclear power is now and thinks Paradox Valley, about 300 miles southeast of Salt Lake City, is well placed to reap the rewards. But the nation's turn toward nuclear energy is worrisome to many, and in particular in Paradox Valley, it is the plan drafted by Glasier's Energy Fuels Inc. The company has two mines that are close to being fully permitted, five parcels with existing but closed mines, about 45,000 acres yet to be explored plus the 1,000-acre Paradox Valley mill site. All of its properties are in Utah, Colorado, and Arizona. The proposed uranium mill would cost as much as $150 million to build, money that Glasier is still trying to raise. The company hopes to begin construction by 2010. Plenty of opposition has sprung up to the plan. Anna Cotter, 72, moved to the area in 1955 when the uranium industry was booming. Her husband sold mining machinery and her relatives worked the mines. But the valley has changed since then, she said. ''I personally don't want that going on again.'' Glasier's mill would process uranium ore into yellowcake and ship it to a conversion plant in Metropolis, Ill. Industry officials say new technology such as enclosed radioactive waste containers has made processing safer than in the past. But the plan drafted by Glasier's Energy Fuels Inc. has not convinced everyone. The people of Paradox Valley have seen nearby communities saddled for years with radioactive contamination. Uranium miners have suffered from lung cancer, pulmonary fibrosis and pneumoconiosis, a lung disease from inhaling dust. The same fight is brewing across the country as residents and environmental groups try to block new mines and processing facilities for the nuclear industry. From the 1940s through the Cold War, miners using Geiger counters staked out claims in areas with large uranium reserves, such as Ticaboo; Uravan, Colo.; and Grants, N.M. There was little to no government oversight of mines or mills, said Glasier, who spent 14 years working for a large U.S. uranium producer. When the Berlin Wall fell, uranium from weapons stockpiles flooded the market and prices plummeted from $40 a pound in the late 1970s to less than $10 a pound in 2002. The Three Mile Island reactor accident in 1979 and the 1986 Chernobyl disaster brought the nuclear industry to a standstill. Only one conventional uranium mill remains in operation today, near Blanding. There has since been a resurgence of support for nuclear power and a 15 percent increase in the world's known recoverable uranium resources, according to the World Nuclear Association. Australia has the biggest supply of known recoverable uranium resources, about 23 percent. Russia has 10 percent and the United States has 6 percent. About 90 percent of the uranium needed for U.S. power plants is imported, much of it from Russia, Glasier said. The first application since 1988 for a uranium processing facility was filed in October with the Nuclear Regulatory Commission. Since then, the NRC has received 27 applications for facilities in Wyoming, Nebraska, South Dakota, Arizona and New Mexico. Utah, Colorado and Texas have their own oversight agencies. Conventional uranium mining removes ore that is transported to a mill, much like Glasier's proposed operation. In the other form of mining, workers inject a mixture such as oxygen blended with sodium carbonate into the ore body. The uranium is dissolved into the mixture which is pumped to the surface. In meetings to sell his plan, residents have vented their fears and sometimes their anger on Glasier. As momentum builds in the nuclear industry, so does the pushback. Groups are fighting plans to expand uranium mining, and last week environmental groups filed a federal lawsuit claiming that a program clearing the way for uranium mines in western Colorado is illegal.
HATCH AIDE TOUTS OIL SHALE PARK CITY - An aide to Sen. Orrin Hatch used the friendly confines of the Utah Mining Association's annual convention Thursday to extol oil shale development and to dismiss global warming concerns. "Humans really aren't affecting the environment in any significant way," said J.J. Brown, a Hatch aide on natural resources issues, contending the Earth's emergence from a minor ice age is responsible for rising global temperatures, not emissions from industrialized societies. "The conclusion that humans are causing global warming is bunk." He also said that oil shale reserves in Utah, Colorado and Wyoming are the panacea for the country's energy needs and would have far less impact than other solutions advanced by Democrats who have adopted the anti-energy policies of environmental extremists. "They're anti-human activity, anti-coal, anti-oil . . . They don't want anyone on the land. They don't want humans to progress," said Brown, adding he was being "pretty conservative" in his characterization of environmentalists. Ethanol is not the solution, he argued, contending it requires far more water than oil shale, disturbs much more wildlife habitat and, through soil disturbance, releases far more greenhouse gases into the atmosphere. While lambasting Democrats for stalling offshore oil drilling and oil shale development, which he contends could produce 1.6 trillion barrels of oil, Brown said Republicans squandered an opportunity to set the country on the right energy course when they controlled both the White House and Congress in the early years of President Bush's administration. "The Republicans took the majority the American public gave them and threw it down the toilet," he told more than 350 people attending the convention at The Canyons Resort. In a videotape, Gov. Jon Huntsman Jr. praised the 93-year-old Utah Mining Association and its members for their contributions to the state's economy. A backbone of Utah's economy since the 1860s, mining accounted for half of the state's $8 billion in exports last year, Huntsman said, predicting the industry's influence will continue as more clean coal and carbon capture technologies are developed. The association presented its lifetime service award to Vernal Mortensen, longtime coal company official whose family founded the Southern Utah Fuel Co. Its Sufco mine outside of Salina is one of the state's leading producers. Distinguished service awards were given to retiring state Sen. Mike Dmitrich of Price and University of Utah mining engineering professor M. Kim McCarter. Huntington Mayor Hilary Gordon and Price Mayor Joe Piccolo also received awards for their handling of last August's Crandall Canyon mine disaster in which nine miners died.
BUSINESS LEADERS: MAKE RENEWABLE ENERGY CHEAPER LAS VEGAS: Representatives from Google Inc. and General Electric Co. said Tuesday that widespread use of renewable energy in United States would be possible ? if it were cheaper. Renewable energy options will remain "boutique" industries unless their costs are cut to make them competitive with coal and other widely used power sources, said Dan Reicher, director for climate change and energy initiatives at Google.org, the company's philanthropic arm. Reicher spoke to a group of politicians and energy experts at the National Clean Energy Summit in Las Vegas. The meeting's attendees said they hope to develop a national energy agenda to take to the Democratic and Republican parties at their upcoming conventions. "There's a whole set of factors that go into the ultimate cost of energy," Reicher said after announcing a plan for Google to invest more than $10 million to develop "enhanced geothermal systems" technology to generate energy from rocks deep below the earth's surface. Google's project replicates traditional geothermal systems deep below the Earth's surface by circulating water through hot rock and running the steam through a turbine that generates electricity. Google said its goal was to produce one gigawatt of renewable energy capacity ? enough to power a major city. "These are all high-capital-costs projects," Reicher said. One by one, speakers at the meeting touted the benefits of various energy-related initiatives, including how large-scale solar power could generate thousands of jobs and why wind power could lessen America's dependence on foreign oil. Extending tax credits, establishing caps on carbon emissions and modernizing the nation's electricity grid were also ideas that speakers said would be crucial to building a "green" economy. General Electric chief executive Jeff Immelt did not attend, but said in a video presentation that the government and the business community need to move forward. "The technology exists, the time is now," he said. "We need a call to action ? not a call to go to another conference." Former President Bill Clinton laid out a 10-point plan Monday that included expanded research for carbon dioxide storage and accelerating a shift toward plug-in hybrid electric cars. Texas oil baron T. Boone Pickens also presented his plan to develop wind energy to generate 20 percent of the nation's electricity, then use natural gas to power cars until hydrogen or plug-in electric cars become widely available. "I don't see many people from my party," said Pickens, a Republican. "I'm making new friends, and that's good."
HUNTSMAN CALLS FOR BOLD LEADERSHIP IN ENERGY Gov. Jon Huntsman Jr. said that there is a "dire need for leadership" to wean the country off its oil addiction. "The call to action for all of us must be crystal clear. . . . We have the brainpower but we lack the political leadership to get it done today," Huntsman said, speaking at a regional clean energy conference in Las Vegas organized by Senate Majority Leader Harry Reid, D-Nev. "We must do better, we must think bigger, we must be bolder," Huntsman said. The governor touted the state's efforts to make the government more efficient, including the new four-day workweek. He boasted of his creation of a Blue Ribbon Advisory Council on Climate Change and the state's decision to adopt a renewable energy portfolio, and to join the Western Climate Initiative and climate registry, which tracks the state's emissions. And he discussed his initiative as chairman of the Western Governors Association to draft a national energy policy that could be delivered to the next president. He said the success of that policy hinges on affordability and its ability to promote energy independence and reduce emissions. He said the country is at a "crossroads in human history," where the technology is available to move away from oil dependence. "Oil, once a reliable and stable source of power, has become today a source of instability and conflict," he said. "If done right, this issue alone will assure our economic, competitive, clean and secure future."
HATCH, BISHOP PUSH FOR TAPPING OIL SHALE IN WEST U.S. Sen. Orrin Hatch used his summer break Wednesday to continue his attack on Democrats for failing to pass a comprehensive energy bill that would speed up oil-shale development in Colorado, Utah and Wyoming. ''By ignoring our own resources, we are causing the demise of our own nation's greatness, while funding the rise of our international competitors, many of whom are not friendly to our interests,'' Hatch told state lawmakers in a rare appearance before a legislative committee. Republicans across the country are using public outrage over high gas prices and Congress' summer recess to put pressure on Democrats to lift a ban on offshore drilling, end a moratorium on commercial oil-shale development on federal land and develop more nuclear power. Hatch was joined at the Capitol on Wednesday by fellow Utah Republican Rep. Rob Bishop. Despite the legislative committee's chairman, Rep. Roger Barrus, R-Centerville, saying that Hatch and Bishop were there to answer questions about what challenges they face in shaping energy policy, the hearing was little more than a pep rally for oil-shale development. The House Republican Caucus later moved unanimously to send a letter to Gov. Jon Huntsman Jr., urging him to take the position that the state wants to tap its natural resources on public lands, particularly oil shale, for energy sources as soon as possible.
BLM PLAN FOR MOAB Moab means many things to many Americans - Arches, Canyonlands, uranium, bicycles on the Slickrock Trail, four-wheeling, oil and gas wells, the Colorado River. So when the largest local landlord, the U.S. Bureau of Land Management, tries to balance competing uses on 1.8 million of these extraordinary acres, it can't please everyone. Finding that balance is what the BLM's Moab Field Office has tried to do in its new Resource Management Plan. We find that while it has made significant progress toward environmental protection, it could and should have done more. Take off-highway vehicle use, for example. By one measure, the BLM's final proposal takes a huge stride toward protecting these fragile desert lands from being ground to dust. Compared to the current plan, created in 1985, it reduces the number of acres open to cross-country travel from 620,000 to 1,866. It would reduce the miles of designated routes from about 6,200 to about 3,700. That sounds good. But even granting that the planning area is a huge chunk of real estate - it covers all of Grand County and the northern third of San Juan County - 3,700 miles is about 15 times the official highway mileage from Salt Lake City to Moab in designated OHV routes. That's a bunch too much. Consider oil and gas leasing. The proposed plan would decrease production only slightly from the current plan, and would barely change projected state royalties and the number of wells. There would be big increases, however, in the numbers of acres on which drilling techniques which have a smaller environmental impact would be required. Sadly, given the Bush administration's drill-at-any-cost philosophy, the BLM proposal is about the best that could be hoped for. Then there's the perennial elephant in the Utah public lands debate, wilderness. The proposal identifies three areas comprising about 48,000 acres that would be managed to protect and maintain wilderness characteristics. By comparison, a more environmentally friendly alternative the BLM considered, but rejected, included 33 areas comprising 266,000 acres. This illustrates how the BLM's view of balance clearly is not skewed toward wilderness, when, given rapid development in Utah and concern about the planet's declining health, it should be.
COURT REJECTS SUWA APPEAL ON WILDERNESS DEAL For the second time, a federal appeals court has rejected a conservation organization's attempts to challenge a 2003 backroom deal limiting wilderness in Utah. The 10th U.S. Circuit Court of Appeals ruled that the Southern Utah Wilderness Alliance must wait until it can cite U.S. Bureau of Land Management actions that show the agency is behaving illegally. At issue is the "no more wilderness" deal signed by former Utah Gov. Mike Leavitt and former Interior Secretary Gale Norton that froze the state's wilderness study areas at 3.2 million acres. The Leavitt-Norton settlement sought to end a lawsuit the state filed in 1996 challenging wilderness areas inventoried after 1991, the final year of the Wilderness Study Area survey ordered by Congress. The agreement, concluded without public knowledge or participation, removed from consideration nearly 6 million acres of potential wilderness inventoried during the Clinton administration. SUWA and 10 other conservation organizations in New Mexico, Arizona, Colorado, Nevada and California argued that allowing the Leavitt-Norton deal to stand would mean future harm to wilderness-quality lands because the BLM likely would allow oil and gas development and motorized travel in the inventoried areas. If that happened, they alleged, the lands could end up too damaged to gain wilderness designation. The 10th Circuit said that argument was too abstract to uphold.
FEDS' RAIL CHOICE CLEARS WAY FOR MOAB URANIUN MILL TAILINGS CLEANUP Moab-area residents applauded the U.S. Energy Department's decision to have rail cars - rather than trucks - haul away the massive Atlas tailings pile. But the news also dashed hopes that cleaning up the tailings will be done earlier than the 2028 completion date that the Energy Department projects. Moab Mayor Dave Sakrison said the announcement cheered the community nonetheless. Now the uranium-processing waste will begin moving as soon as next spring from the edge of the Colorado River to a new disposal site 30 miles north at Crescent Junction. "It's about time a decision was made," he said, "and now it's time to get to work." The tailings are left over from a Cold War-era uranium boom, when the legendary Charlie Steen built the mill to turn southeastern Utah ore into concentrated yellowcake uranium. The Energy Department took over the chore of cleaning up the tailings from the defunct Atlas Corp. seven years ago, about three years after the company declared bankruptcy. The agency already has extracted 487,000 pounds of ammonia and 2,100 pounds of uranium from the 130-acre pile, which many people worry might be washed into the Colorado, a source of drinking water for 50 million people. The estimated cleanup cost is $723 million to $951 million. "We believe our decision will be most protective of the community over the long term," said James Rispoli, assistant energy secretary for environmental management, in a news release. Last year, EnergySolutions Inc. of Salt Lake City won a 4-year, $98 million contract to start moving the 16 million tons of tailings to a newly constructed landfill at Crescent Junction. EnergySolutions spokesman Mark Walker said: "We're prepared and ready to move forward with it." The Energy Department had spent months looking at the safety, timing and cost of trucking the waste from Moab to Crescent Junction on two-lane U.S. 191. But the cost of upgrading the highway to handle the trucks was pegged at $100 million. And using trucks would have added 139 trips a day on a road heavily used by tourists visiting Moab and Arches National Park, the entrance to which is across the road from the tailings pile. By rail, there will be one shipment a day, with 17 cars carrying 68 containers for the first three years. The number of cars would double in 2012 to 136 containers a day. The tailings will be dried, packed into hard-topped containers and delivered to the mesa top north of Potash Road. There, they will be picked up at an old rail spur. U.S. Rep. Jim Matheson said he has lost confidence in the Energy Department to meet the congressional mandate to move the tailings by 2019. He said he hopes a new administration in January will be more responsive. "Everyone in Utah wants to get this done," the 2nd District Democrat said. Moab resident and real estate broker Julianne Fitzgerald said she was pleased about the decision to use the railroad spur but also disappointed about the later completion date. "If we're going to do it," she said, "let's get it done."
KENNECOTT SITES TO DROP FROM EPA LIST Kennecott Utah Copper Corp. still has decades of cleanup to do, but it now looks like a large area in the southwest portion of the Salt Lake Valley won't be put on a federal list of sites that are considered to be the most polluted in the country. Kennecott officials said Monday they expect the Environmental Protection Agency next week to announce that several areas collectively known as the Kennecott South Zone will be taken off an EPA list of proposed Superfund sites. The South Zone site impacts communities like West Jordan, South Jordan, Riverton, Herriman and Copperton. "It's a pretty big thing for all of us," Kennecott President Andrew Harding said during a meeting Monday with the Deseret News editorial board. Being formally listed as a Superfund site is generally viewed as a stigma because contamination in such an area is so bad that the feds decide to step in and take on authority over cleanup efforts. Contaminants include lead, arsenic and selenium, which if exposed to at high enough levels over a long period have been linked to certain types of cancer, high blood pressure and gastrointestinal disorders. Since about 1991 Rio Tinto, which owns Kennecott, has spent about $400 million on cleaning up mining waste that predates Kennecott's involvement in mining the Oquirrhs in the early 1900s. Over 25 million tons of mining waste have been removed from the surface in the South Zone. In 1994 the EPA put Kennecott's South Zone and a North Zone, a site near Magna, on a list of proposed Superfund sites. In 1995 Kennecott, EPA and the state struck a cleanup agreement that has kept the sites from being formally listed as Superfund sites. Within the next few years Kennecott hopes the North Zone will also be off the list of proposed sites. "It allows you to concentrate on moving forward with plans for the future," Harding said about shedding even a proposed Superfund label. Those plans include huge residential developments on the west side of the Salt Lake Valley as Rio Tinto in Utah transitions away from its historic marker as mining giant. But there are still sulfates and heavy metals in groundwater on the west side that Kennecott is cleaning up. "It's going to be a decades long process," said Kelly Payne, principal advisor over closure and remediation for Kennecott. To that end, the company entered into a consent decree in U.S. District Court this past spring that legally holds them to a promise, which includes financial assurances, that Kennecott will continue spending millions more cleaning up the groundwater. Payne said the decree was the final step in getting the EPA to remove the South Zone from the list of proposed sites. The EPA, he noted, along with the state will retain oversight on continued cleanup efforts. After being sued by the state in 1986 and settling in 1995, Kennecott has also funded construction and operation of a reverse osmosis plant near Copperton with plans for another plant to be running by 2010 that will combined provide drinking water to about 7,000 homes. While being proposed as a Superfund site may not have impacted residential property values, Payne said more "sophisticated" buyers or developers in the commercial market may now take "less pause" in building in communities within the South Zone now that it will no longer be associated with the words Superfund site. "It certainly hasn't stopped development," Payne said. "Maybe it scares some people away - I haven't heard anything." Rio Tinto's long-term plan for a "West Bench" vision is to develop over half of about 95,000 acres it owns on the west side of the Salt Lake Valley into "sustainable" developments, or walkable communities like Rio Tinto's current Daybreak development. About 40,000 acres will be left as open space. As for its mining operations, Kennecott plans on operating its gigantic open pit mine until about 2036. By 2012 Kennecott expects a study to be complete on whether underground mining for copper will be the world's second largest mining company's next operation in the Oquirrh Mountains. PANEL REPORTS ECONOMIC CONFIDENCE IS PLUNGING Business and consumer confidence plunged in the 15 countries using the euro in July, hitting the lowest level in more than five years, the European Commission. Confidence among consumers and in the construction, industry, retail and services sectors fell to 89.5 in July, the lowest level since March 2003 and the sharpest month-to-month slip since the Sept. 11 terror attacks, according to an E.U. economic sentiment survey. Italy and Britain saw sharp drops in confidence with France, Germany and the Netherlands also more downbeat about the future. The European economy is slowing as soaring fuel and food prices slam the brakes on growth, and amid tight borrowing conditions triggered by the global credit crisis and a slowdown in major trading partners, Britain and the United States.
STATE RANKED NO. 2 IN SURVEY Utah's economy may be slipping along with the rest of the nation, but that hasn't prevented the state from being consistently ranked as one of the best places to do business. A new survey by Michael Hicks, director of Ball State University's Bureau of Business Research, ranked Utah the second best state in the country for manufacturing. Two other recent surveys, conducted by Forbes.com and CNBC, placed Utah in the top five states for its business climate. "When it comes to a state having a favorable climate for manufacturing, there are a couple of things that really seem to matter - a favorable tax structure and educational opportunities that include the availability of community and technical colleges," Hicks said. In the Ball State survey, Utah was second behind Missouri but above Florida, Alabama, South Dakota and Indiana. The top six states all received "A" rankings in the survey for their performances in 20 categories that included property taxes, sales taxes, unemployment insurance, corporate taxes, crime and the percentage of population who are college graduates. Thomas Bingham, president of the Utah Manufacturers Association, said the state has a lot going for it, especially when it comes to attracting new businesses. "One thing that really has helped is that the state now comes to the table offering [competitive] economic incentives to attract new business," he said. Currently there are about 6,000 manufacturers operating in the state and employing approximately 120,000 workers. Although the state has seen good growth in its manufacturing for roughly the past five years, Utah now appears to be approaching a period of low or no growth in the number of jobs available in the sector, said Mark Knold, chief labor market economist for the Utah Department of Workforce Services. Knold pointed out the growth in manufacturing jobs in June was a scant 0.7 percent compared with 1.2 percent the month earlier. "Once our economy gets back to a stronger footing we should see the number of manufacturing sector jobs growing again." Earlier this week, Forbes.com for the second year in a row ranked Utah as the second-best state for business, behind only Virginia, which has held the top ranking for the past three years. Utah finished ahead of Washington, North Carolina and Georgia. Three weeks ago, Utah finished third in CNBC's list of "America's Top States for Business." It finished behind Texas and Virginia.
UNEMPLOYMENT 4-YEAR HIGH WASHINGTON - Stores, factories and other businesses large and small showed workers the door last month, sending unemployment to its highest rate in four years and adding to the evidence an economic recovery remains far off. Employers clamped down on hiring and cut 51,000 jobs in July, the Labor Department said Friday. The economy has shed jobs each month this year - 463,000 in all. The unemployment rate rose to 5.7 percent, up from 5.5 percent in June. ''This is a truly recessionary employment report,'' wrote Harm Bandholz, an economist for UniCredit Markets. ''The details are rather ugly.'' The jobs report contributed to another day of grim news for the economy. General Motors reported a staggering quarterly loss of more than $15 billion and said its sales fell by more than a quarter from last year. The Commerce Department said spending on construction projects around the country dropped 0.4 percent in June as cutbacks in homebuilding eclipsed gains in commercial construction. And manufacturers' business was flat in July. The Institute for Supply Management's reading of activity from the producers of cars, airplanes, appliances and other goods hit 50, down from 50.2 in June. A reading above 50 signals growth. Job losses in July were the heaviest in industries hard hit by the slow housing market, the clampdown on credit and the shaky financial sector. Manufacturers cut 35,000 jobs, construction companies 22,000 and retailers 17,000. ''The good news is there's been no acceleration in the official data,'' Robert Barbera, the chief economist of ITG, an economic research company. ''The bad news is there's nothing about the data that suggests improvement anytime soon.'' Temporary help firms, also viewed as a barometer of demand for future hiring, eliminated 29,000 jobs. Those losses swamped job gains elsewhere, including in the government, education and health care. It's not news to B.B. Hooks, 40, who was laid off in May from her job as a teacher in Washington, D.C. She says she has applied online for hundreds of jobs in the communications and public relations fields, with no luck. She applies for jobs online to save on gasoline, but it's more difficult to talk to potential employers face-to-face, and she has to register at each company's Web site. ''I must have a trillion different passwords for a trillion different Web sites,'' she said. More pink slips are expected. Analysts predict a half-million more jobs could disappear over the rest of this year and say unemployment could climb to 6.5 percent by the middle of next year. With the employment situation deteriorating, there's growing worry that consumers will cut back on spending later this year, further hurting the economy. ''People will absolutely shut off the spending spigots given the soured jobs market,'' predicted Richard Yamarone, economist at Argus Research. ''The economic environment is in crummy shape.'' The latest figures on Utah employment showed that employment grew 0.9 percent in June over the same month last year. In May, job growth was estimated at 1.3 percent. Utah's unemployment rate was 3.2 percent in June, up from 2.7 percent a year ago.
FED LEAVES INTEREST RATE UNCHANGED - FOR NOW WASHINGTON - Confronted by problems at every turn - rising unemployment, shaky growth, credit troubles and creeping inflation - the Federal Reserve left an important interest rate unchanged, taking a gamble that for now the best move was no move at all. The next direction for rates probably is up but that's not likely until next year. Fed Chairman Ben Bernanke and all but one of his central bank colleagues agreed to leave its key rate alone at 2 percent for the second straight meeting. In turn, the prime lending rate for millions of consumers and businesses remained at 5 percent. The prime rate applies to certain credit cards, home equity lines of credit and other lines. ''Although downside risks to growth remain, the upside risks to inflation are also of significant concern,'' the Fed said. Policymakers are faced with dueling problems - weak economic growth and advancing inflation. To treat one, risks aggravating the other. The Fed decision was welcome news to Wall Street, where thanks to falling oil prices and relief that the Fed's assessment of the economy and inflation wasn't worse, stocks put in their best showing in months. The Dow Jones industrials closed up 331.62 points, its biggest one-day point gain since April 1, when it kicked off the second quarter with a 400-point rally. Many economists believe the Fed will leave rates where they are at its next meeting on Sept. 16 and through the rest of this year. This would give the fragile economy and crippled housing market more time to heal. The Fed may start boosting rates, now at four-year lows, early next year, economists predict. Heightened concerns about inflation forced the Fed in June to halt a nearly yearlong series of rate reductions to shore up the wobbly economy. The campaign was one of the most aggressive in decades, with the Fed slashing its key rate by 3.25 percentage points with the hope that lower rates would spur consumers and businesses to buy and invest more. A number of forces have blunted the Fed's reductions, however. Consumers are finding it harder to get credit to finance big-ticket purchases as banks have tightened up standards. Even armed with the government's tax rebates of up to $600 a person, Americans have turned more cautious in the face of high energy and food prices. Oil prices, which marched to a record high above $147 a barrel last month, have calmed, giving the Fed more leeway to hold rates steady. Oil sank as low as $118 a barrel Tuesday. One Fed member - Richard Fisher, president of the Federal Reserve Bank of Dallas - wanted to raise rates Tuesday. Fisher, who has a reputation for being extra vigilant on inflation, was the sole opposition vote. It was the fifth time this year that he dissented. COMMODITIES BOOM MAY HAVE NEW YORK - The commodities boom that just weeks ago looked unstoppable may have finally burned itself out. Sudden plunges in the price of everything from crude to copper and cotton suggest commodities soared too high, too fast - and analysts expect even steeper declines in the months ahead as the U.S. economic slowdown spreads overseas and saps demand for energy, construction supplies and consumer goods. Though commodities could swing higher again if the U.S. economy bounces back or world oil supplies suddenly become scarce, experts say neither scenario appears likely for several months or longer. ''The downward pace still has a way to go,'' said Edward Meir, senior commodities analyst at MF Global in New York. ''People are now coming around to the fact that growth is slowing, both in the U.S. and overseas, so demand for commodities will decline.'' Highlighting the spiral, the Jefferies-Reuters CRB index, a global commodities benchmark, plunged 10 percent in July, its biggest monthly drop since 1980, when the U.S. was in a recession. ''There was a commodities bubble and it has burst,'' said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com. The stark change in sentiment marks a stunning turnaround for the once-sizzling commodities sector, which only months ago seemed on a relentless march higher amid a global scramble for natural resources and a weak dollar that made them cheaper to overseas buyers. No longer. In a sign of just how much the euphoria has faded, investors who thronged futures markets earlier this year seeking juicy, double-digit returns now can't sell gold, silver and cocoa futures fast enough. Gold, for example, is now selling for $864 an ounce - down from a record of $1,038.60 an ounce on March 17 - and lately has been falling $10 or more a day. ''Everybody is scrambling to get out of the ship before the guy next to them,'' said Nathan Golz, a commodities researcher at Wachovia Securities in St. Louis. ''It's amazing how fast commodities have become the last place people want to have their money.''
PRODUCTIVITY GROWTH SLOWED IN SPRING WASHINGTON - The efficiency of America's workers grew at a slightly slower pace in the spring as companies sought to produce more with leaner work forces. Workers' compensation growth slowed, too. The Labor Department reported Friday that productivity - the amount an employee produces for every hour on the job - grew at an annual rate of 2.2 percent during the April-to-June quarter. That was down from a 2.6 percent growth rate logged in the first three months of this year. Economists were forecasting productivity to pick up slightly to a 2.7 percent pace. Meanwhile, growth in compensation - wages and benefits - also slowed as companies were less generous amid troubles in the economy and uncertainty about their own prospects. Unit labor costs slipped to a 1.3 percent pace in the second quarter, from a 2.5 percent growth rate in the first quarter. Unit labor costs is a measure of how much companies pay workers for every unit of output they produce. Economists look to this barometer for clues about inflation. The showing on compensation matched economists' expectations. The economy grew at a 1.9 percent pace in the second quarter, up from a 0.9 percent growth rate in the first three months of this year. The economy's growth rate reflects the value of all goods produced in the United States. During the second quarter - as has happened all year- employers cut jobs. Nearly a half million jobs have disappeared during the first seven months of the year. Companies have been trimming their payrolls and trying to satisfy customer demand with fewer workers as they cope with fallout from the housing and credit debacles, along with high prices for fuel and other raw materials. Confronted by problems at every turn - shaky growth, rising unemployment and gyrating food and energy prices, the Federal Reserve earlier this week decided to hold a key interest rate steady. The central bank can't afford to lower the rate anymore because it could worsen inflation. On the other hand, boosting rates too soon would hinder the economy and the already crippled housing market.
OUTLOOK FOR FUTURE PROSPECTS LOWEST IN THE PAST TWO YEARS Optimism among Utah business leaders about prospects for their companies is at the lowest point in the two-year history of Zions Bank's quarterly economic forecast, the Salt Lake City-based bank said Monday. The level of positive feelings measured 6.45 on a scale of 1 to 10 during the second quarter, according Zions' latest forecast. Just 30 percent of Utah executives surveyed predicted that their companies' financial health would be better in the third quarter, down from a high of 51 percent in the first quarter of last year and the third quarter of 2006. Driving the increased pessimism are gasoline prices and inflation, according to research firm Dan Jones & Associates, which conducted the survey. The cost of employee health insurance was another concern. On a scale of 1 to 7, gasoline prices were ranked a pessimistic 6.32. Inflation measured 5.54, followed closely by employee health insurance cost, at 5.42.
PRICE TAG EXPECTED TO RISE ANOTHER 10% IN NEXT YEAR Health care costs are expected to rise more than 10 percent into next year, according to a survey of insurers by Aon Consulting Worldwide. But that increase is the smallest Aon has seen in six years. Experts say it shows that efforts to tame costs, such as employee wellness or disease management programs, may be paying off. ''There's a variety of tactics that employers have been employing over the last three to six years that has had an impact on the market,'' said study director Bill Sharon, an Aon Consulting senior vice president. Aon Consulting surveyed about 70 health insurers around the country. It found that actuaries expect costs to rise an average of 10.6 percent during 12-month rating periods starting this year between April and September. That represents a slight drop from last year's forecast of 10.9 percent and a bigger fall from 2002, when health care costs were expected to rise by more than 16 percent.
UTAH SAGGING JOB GROWTH: NATION'S PRIDE NO MORE A downturn in home sales in Utah has led to job losses in a host of related businesses, such as builders, title and mortgage companies and real estate brokerages. The woes of that one industry sector have pushed down the state's job-growth rate to an anemic 0.6 percent in the year that ended in July, translating into an overall gain of only 7,300 jobs in the state over the one-year period, according to a report released Tuesday by the Utah Department of Workforce Services. That rate, the lowest in about five years, is well down from a growth peak of 5.4 percent and a lofty gain of 54,000 jobs in the year that ended June 2006. Utah's job-creation rate, among the best in the country at one point, is closing in on the U.S. average of negative 0.1 percent. But relatively few people outside the home-sale industry are feeling the pain at this point. In Sandy, for example, home remodeler Doug Swensen said he initially wasn't sure how the downturn would affect his business. But so far so good, he said Tuesday while working in Holladay on yet another kitchen and basement renovation. "If people can't sell, they are staying and remodeling. We're still really busy." Workforce Services chief economist Mark Knold said Swensen's busy schedule illustrates just how home-sale-centric Utah's economic slowdown really is. "Construction is really the only major problem right now." Construction-industry employment in Utah is down nearly 12 percent, or 12,800 positions, a significant drop considering that commercial construction is still going strong. Two industry sectors - information and financial activities - are off only slightly. All others posting healthy gains. Job losses in the construction industry have pushed Utah's unemployment rate higher. Utah's jobless rate in June was up slightly, to 3.5 percent, which translated into 48,900 Utahns who were looking for work. That's up from an unemployment rate of 2.7 percent in July 2007, when 37,000 people were considered out of work. The national unemployment rate is still much higher, at 5.7 percent. The downturn in residential real estate markets in Utah and elsewhere stems in great part from tighter lending standards put in place in the wake of the nation's subprime lending crisis. The restrictions have made it harder for potential buyers to qualify for a home loan. On another front, after years of home-price run-ups, homeownership is out of reach of many families. Fewer buyers means fewer sales of existing and new homes. Utah's home-sale downturn began in earnest last summer, about two years after most surrounding states. As a result, those states are deeper into housing-related problems, with hard-pressed sellers in Arizona, California and Nevada forced to slash asking prices to get their properties sold. But most economists say that's exactly what's needed to clear bloated inventories and set the stage for a real estate recovery. Concessions of that magnitude haven't happened in Utah - yet. "Utah is in its first year of denial," Knold said, adding that many homeowners are still reluctant to drop their selling prices. Some have let properties languish on the market, while others have taken homes off the market or are trying to offer leases until the market rebounds. But by next spring, Knold believes a number of sellers who have held out will have no choice but to lower prices. Already, some builders are cutting prices to generate sales. "Housing prices have to come down," Knold insists, adding that when they come down enough, it could spur buying that would put Utah's construction industry - and overall job growth - back on the right track.
U.S. TRADE DEFICIT AT LOWEST The U.S. trade deficit has gone on a diet, helped by strong exports of farm products and manufactured goods and by Americans spending less as the economy limps along. The deficit for June fell by 4.1 percent to $56.8 billion. That's the lowest level in three months and a surprise to economists who had expected an increase reflecting a big surge in oil prices during the month. The better-than-expected June performance left analysts revising up their estimates for overall economic growth in the April-June quarter to as much as 3 percent. That would be more than a full percentage point higher than the 1.9 percent initial estimate for GDP growth. Wall Street was unimpressed, with stocks taking a tumble as gloomy news from JPMorgan Chase & Co. and other financial firms raised new anxieties about the continuing impact of a severe credit crisis on the economy. The Dow Jones industrial average fell 139.88 points.
MOST COMPANIES IN U.S. AVOID Two-thirds of U.S. corporations paid no federal income taxes between 1998 and 2005, according to a new report from Congress. The study by the Government Accountability Office said about 68 percent of foreign companies doing business in the U.S. avoided corporate taxes over the same period. Collectively, the companies reported trillions of dollars in sales, according to GAO's estimate. ''It's shameful that so many corporations make big profits and pay nothing to support our country,'' said Sen. Byron Dorgan, D-N.D., who asked for the GAO study with Sen. Carl Levin, D-Mich. An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called ''S'' corporations pay taxes under individual tax codes. ''Half of all business income in the United States now ends up going through the individual tax code,'' Edwards said. The GAO study did not investigate why corporations were not paying federal income taxes or corporate taxes and it did not identify any corporations by name. It said companies may escape paying such taxes due to operating losses or because of tax credits. More than 38,000 foreign corporations had no tax liability in 2005 and 1.2 million U.S. companies, or 66.7 percent of them, paid no income tax, the GAO said. Combined, the companies had $2.5 trillion in sales. About 25 percent of large U.S. corporations - those with at least $250 million in assets or $50 million in receipts - did not pay corporate taxes. The GAO said it analyzed data from the Internal Revenue Service, examining samples of corporate returns for the years 1998 through 2005. For 2005, for example, it reviewed 110,003 tax returns from among more than 1.2 million corporations doing business in the U.S. Dorgan and Levin have complained about companies abusing transfer prices - amounts charged on transactions between companies in a group, such as a parent and subsidiary. In some cases, multinational companies can manipulate transfer prices to shift income from higher to lower tax jurisdictions, cutting their tax liabilities. The GAO did not suggest which companies might be doing this. ''It's time for the big corporations to pay their fair share,'' Dorgan said. 2009 METALS PRICING OUTLOOK: TIGHT SUPPLIES FUEL SUPERCYCLE COSTS Metals prices overall now are in the seventh year of a bull-pricing phase, a so-called supercycle, that actually started in 2002. Since then, nonferrous metals traded on the London Metals Exchange (LME) have increased in price by more than 300%. What caused this super cycle in nonferrous? The lack of investment in sufficient new mining, smelting and processing capacity in the 1990s. This has made nonferrous metals supply insufficient to meet the demand surge this decade from Brazil, Russia, India, China and such developing nations as Thailand and South Africa. Supply-side issues have distinguished several nonferrous metals markets so far in 2008. "Fundamentals are proving, as they always do, to be the best predictor of price dynamics in the diverse commodity markets," says analyst Gayle Berry at Barclays Capital Research in London. "Although there are some tentative signs of a slowing in global commodity demand, the overall picture is a robust one with strength in China and other developing regions more than offsetting weakness in North America and Europe." The key is that supply isn't matching that demand for some metals. Commodity bulls see higher metals prices as the key to solving the long-term supply-and-demand imbalance. When prices go high enough, consumption will fall, they say, and production will increase. But, in the short-term, pricing will depend on which force prevails for traded metals-inflation fears or physical demand for metal. Recessionary worries have hit only a few industrial metals lately as supply has outpaced demand. And all are coating or plating metals-zinc, tin and nickel. Since 2002, prices of steel in all shapes and grades have increased by almost 170%. Prices of the commodity carbon steels have seen growth volatility caused by the unpredictability of scrap, iron ore and energy costs; the availability or lack of mills products; and erratic demand trends within the various metals and ores. Patricia M. Mohr, vice president of economics and the commodity markets specialist for Scotiabank Group in Toronto, tells Purchasing in an interview that "tight global supplies, rapidly growing demand from steel producers outside North America and Europe, especially China and emerging Asian nations, and strong business investment in basic processing industries account for the strengthening of iron ore prices." And, since iron ore suppliers have been consolidating, she says the current rate of inflation, at 97% so far this year, will continue for some time. Charles Bradford, president of metals consultant Bradford Research/Soleil Securities in New York, says vertical integration suddenly is becoming important for steelmakers because of the rising costs of such key raw materials as coking coal, iron ore and scrap. Indeed, a new investment arena has been scrap steel, where demand has been so strong- and with it, prices. So, several large scrap companies in the U.S. have been bought by electric furnace steelmakers to ensure present and future supply. That's because the steel scrap market is volatile, with prices up above $785/metric ton for the premium grades this year, which is almost $300 higher than last year's highs. Speaking to Purchasing, CPO John Campi of Chrysler says "we have to adjust our purchasing and adapt our manufacturing to a new reality, which is that metals prices are elevated and will stay that way for some time." He agrees with Leo Torres, CPO at Ford de Mexico, that "purchasing can't fight with our suppliers over prices; instead, purchasing has to lead the corporation's improvements in buying the best and most competitive metal and metal parts." The global copper cathode market is expected to remain tight and support higher copper prices because of a severe shortage in concentrates, the smelter feedstock, caused by weaker mine output so far this year, according to commodities researcher Nicholas Snowdon at Barclays Capital Research in London. He projects that world inventories at midyear account for less than three weeks worth of world consumption. "Our balance projections suggest a very tightly balanced market," he says, "So prices are likely to be especially sensitive to fluctuations in Chinese demand and imports." His research shows that recent mine supply has not kept up with demand growth because of labor strikes, lower ore grades and energy shortages. So, he forecasts that global copper mine production will grow by only 350,000 metric tons this year while consumption will grow by nearly 750,000 metric tons-supported by "healthy increases" in Latin America, the Middle East, China and other parts of Asia. However, while copper production is up about 25,000 metric tons this year in Chile, the world's largest source, output in Indonesia is down nearly 90,000 metric tons. So, the Barclays Capital analyst says that "refined copper production is continuing to expand steadily, but only at the cost of rapidly depleting concentrate stocks and soaring use of secondary materials." The high cost of production and the lack of new mining/smelting projects in the pipeline have long been discussed as factors supporting nickel's dramatic LME price drop over the past year. But, a new Deutsche Bank quarterly commodities report suggests that the substitution threat from nickel pig iron, especially in Asia, was "a main driver of the nickel price crash" from $16.88/lb in 2007 to $12.38 at mid-2008. Stronger second-half demand from Chinese specialty steel mills and lack of new smelted nickel production are expected to support an annual average of $13.40 this year, according to the bank's report. But the price outlooks for 2009 range from $14-15 for the bulls who see a pickup in 2009 global stainless steelmaking to $11-12 from the bears. They aren't convinced that a global economy pickup will occur until 2010 so next year's stainless steelmaking will stay pretty stable and there could be some new supply "to fill a persistent supply deficit," says the Deutsche Bank report. The Santa Rita nickel project in Brazil, said to become the third-largest open pit nickel mine in the world, will be producing halfway through 2009, says the owner, Australian producer Mirabela. However, production isn't scheduled until 2010 for the Kennecott Eagle $300 million nickel mine in Michigan, and BHP Billiton's $4 billion nickel project on Gag Island off the western tip of Papua New Guinea still is in early development. The tin market is being buffeted by supply woes ranging from unexpected purchasing from LME stockpiles to dramatically reduced supply from Indonesia to China's return to being a net tin importer. Several analysts' reports all conclude that the tin supply chain will remain problematic through 2009-unless there is substantial new world supply from Indonesia or China. Some background: Indonesian authorities clamped down on operations of unlicensed independent smelters in October 2006, which led to shutdowns. That was followed by even-stricter regulations on operations and reduced authorized exports by smelters and regulations on the procurement of tin concentrate. Meanwhile, China turned into a refined tin and alloys importer last August and has grown imports while reducing exports. A Barclays Capital report says "tightness in concentrate, off 10% year-on-year through April, high domestic prices for tin metal and a new, steep export tax all have reduced export attractiveness for Chinese producers."
FORECLOSURES, BANK SEIZURES RISE SHARPLY Banks repossessed almost three times as many U.S. homes in July than a year earlier and the number of properties at risk of foreclosure jumped 55 percent as falling prices made it harder to sell or refinance. Bank seizures rose 184 percent to 77,295, the steepest increase since reporting began in January 2005, RealtyTrac Inc., an Irvine, Calif.-based seller of foreclosure data, said Thursday in a statement. More than 272,000 properties, or one in 464 U.S. households, got a default notice, were warned of a pending auction or foreclosed on. ''It's getting worse,'' Rick Sharga, RealtyTrac's executive vice president for marketing, said in an interview. ''The number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen.'' Nevada, California and Florida had the highest rates. Total foreclosure filings rose 8 percent from the previous month to 272,171, just shy of the record 273,001 set in May, said RealtyTrac, which has a database of more than 1.5 million properties. Through July, 775,244 properties were owned by banks, compared with about 445,000 for all of 2007 and about 224,000 in 2006, Sharga said. Foreclosures are depressing home prices, contributing to job losses and weakening consumption as fewer people borrow against the value of their home, New York-based analysts at Lehman Brothers Holdings Inc. said Aug. 7. U.S. home prices fell 15.8 percent in May, the most since at least 2001, according to the S&P/Case-Shiller home-price index. One-third of home sellers in the second quarter lost money, Zillow.com, a Seattle-based provider of home valuations, reported this week. Bank seizures, known as real estate-owned or REO properties, are the ''fastest-growing segment of foreclosure activity,'' James Saccacio, chief executive officer of RealtyATrac, said in the statement. The REO properties in the company's database represent about 17 percent of the inventory of existing homes reported in June by the National Association of Realtors, he said. Default notices in July increased 53 percent from a year earlier and auction notices rose 11 percent, RealtyTrac said. The June total of 252,363 reflected an ''artificial depression'' due to new state laws designed to help homeowners avoid foreclosure, Sharga said. New York, California, Massachusetts, Colorado and Maryland are among the states that have imposed temporary foreclosure moratoriums or delayed proceedings by as many as 150 days. Those laws will ''likely delay the inevitable that most of those properties go into foreclosure,'' Sharga said. National legislation is designed to help up to 400,000 homeowners refinance their adjustable-rate mortgages into fixed-rate loans. That bill, backed by the Federal Housing Administration, may help borrowers who take advantage of the state relief, Sharga said. Almost one-third of homeowners who bought in the past five years owe more on their mortgages than their houses are worth, Zillow reported. Foreclosures could put 8.4 percent of total U.S. homeowners, or 12.7 percent of homeowners with mortgages, out of their homes, according to New York-based analysts at Credit Suisse. About 53 percent of subprime borrowers, those with poor or incomplete credit histories, will have negative equity in their homes this year, and that percentage will rise to 63 percent next year, the analysts said in an April 23 report. Nevada had the highest foreclosure rate for the 19th consecutive month. One in every 106 households was in some stage of foreclosure in July, and bank seizures rose almost fivefold from a year earlier. Filings rose 15 percent from June and 97 percent from July 2007, according to RealtyTrac. California had the second-highest rate, with one filing for every 182 households. Bank repossessions rose more than fivefold from a year earlier. Filings increased 5 percent from June and rose 85 percent from July 2007, RealtyTrac said. Florida had the third-highest rate, one filing for every 186 households, while bank repossessions rose almost eightfold. Filings rose 14 percent from June and 139 percent from July 2007. Arizona had the fourth-highest rate, followed by Ohio, Georgia, Michigan, Colorado, Utah and Virginia, RealtyTrac said. California led with the most total filings, followed by Florida, Ohio, Arizona, Michigan, Texas, Georgia, Nevada, Illinois and New York. New York had the 30th highest rate, one in 1,282 households. New Jersey had the 19th highest rate, one in every 751 households. For the first time since April, Stockton, Calif., didn't have the highest metropolitan area foreclosure rate, a sign that ''it may have finally found its point of saturation,'' Sharga said. Cape Coral-Fort Myers, Fla., had the highest rate of the 230 metro areas surveyed, one filing for every 64 households, more than seven times the national average.
INDUSTRIAL OUTPUT PICKS UP IN JULY WASHINGTON - Industrial output rose in July at a slightly better pace than expected as a further rebound in the auto industry offset a big plunge in output at the nation's utilities. The Federal Reserve reported Friday that industrial production edged up 0.2 percent last month. That was half the pace of the 0.4 percent gain in June, but it did surpass analysts' expectations for flat production in July. The increase reflected a 0.4 percent gain in output at manufacturing plants. Motor vehicles and parts showed the biggest increase in manufacturing, advancing for a third straight month. These gains were not seen as signaling a sustained rebound, however, given the problems facing the auto industry this year. Instead, the rebound in auto activity was viewed as a temporary improvement because a strike ended at parts supplier American Axle. Even with the recent gains, production at auto plants remained 10.4 percent below where it was a year ago as automakers struggle with slumping demand due to the weak economy and the big spike in gasoline prices, which has hurt sales of their once-popular sport utility vehicles. The modest increases in June and July production had followed three straight monthly declines. The manufacturing sector has been battered by the prolonged slump in housing and the multiple problems in the auto industry. Many economists viewed the slight strength in the past two months as temporary given what's ailing the broader economy. Other analysts noted the industries that did well in July were for the most part connected to exports, which have been booming this year as declines in the dollar boosted the competitiveness of U.S. products in foreign markets.
GOLD'S DECLINE CONTINUES, DROPPING BELOW $800 Prices for the precious metal - which touched $1,000 an ounce for the first time in March - have plunged in recent weeks, and Friday tumbled below $800 for the first time since late last year. It has been a sharp reversal for a bellwether of the commodities boom that only months ago seemed poised to soar to uncharted heights. ''All of a sudden, it seems like the bottom fell out,'' commented David Beahm, a vice president at New Orleans-based gold dealer Blanchard and Co., who nonetheless believes the metal's decline is overblown and that prices will go up again later this year. Gold has slashed more than $100 off its prices since Aug. 1. Gold's drop to $792.10 an ounce Friday came as the dollar surged again. WORLD'S BIGGEST MINER REPORTS RECORD YEARLY PROFIT BHP Billiton, which is in the midst of a hostile takeover bid of Rio Tinto Ltd. (owner of the Kennecott operations in Utah), is reaping the rewards from the rapid urbanization of China and other developing nations that has been driving up demand for commodities and their prices for the past seven years. Net profit for the year ended June 30 climbed 14.7 percent to $15.39 billion, from $13.42 billion in the previous year, it said. The result was in line with analysts' forecasts and underpinned by increased production and higher prices for oil, copper, iron ore, coal and manganese.
117 BANKS IN TROUBLE IN Q2 AS PROFITS DROP WASHINGTON - The number of troubled U.S. banks leaped to the highest level in about five years and bank profits plunged by 86 percent in the second quarter, as slumps in the housing and credit markets continued. Federal Deposit Insurance Corp. data released show 117 banks and thrifts were considered to be in trouble in the second quarter, up from 90 in the prior quarter and the biggest tally since mid-2003. The FDIC - without naming any institutions to avoid a run by depositors - also said that federally insured banks and savings institutions earned $5 billion in the April-June period, down from $36.8 billion a year earlier. The roughly 8,500 banks and thrifts also set aside a record $50.2 billion to cover losses from soured mortgages and other loans in the second quarter. ''Quite frankly, the results were pretty dismal,'' FDIC Chairman Sheila Bair said at a news conference, but they were not surprising given the housing slump, a worsening economy, and disruptions in financial and credit markets. The majority of U.S. banks ''will be able to weather'' the economic and housing storms, with 98 percent of them still holding adequate capital by the regulators' standards, Bair said. Total assets of troubled banks jumped from $26 billion to $78 billion in the second quarter, the FDIC said, with $32 billion of the increase coming from IndyMac Bank, which failed in July - the biggest regulated thrift to fail in the United States. ''More banks will come on the [troubled] list as credit problems worsen,'' Bair said. ''Assets of problem institutions also will continue to rise.'' Nine FDIC-insured banks have failed so far this year, compared with three in all of 2007. More banks are in danger of collapsing this year, Bair and other FDIC officials said, and they expect turbulence in the banking industry to continue well into next year. IndyMac's failure and others in the quarter reduced the federal deposit insurance fund from $53 billion to $45 billion. Bair said the agency will raise insurance premiums paid by banks and thrifts to replenish its reserve fund and bolster depositors' confidence. The $50.2 billion set aside to cover loan losses in the April-June period was four times the $11.4 billion the banking industry salted away a year earlier. Nearly a third of the industry's net operating revenue went into building up reserves against losses in the latest quarter, according to the FDIC. Except for the fourth quarter of 2007, the earnings reported Tuesday were the lowest for the banking industry since the final quarter of 1991, the agency said. Concern has been growing over the solvency of some banks amid the housing slump and the steep slide in the mortgage market. The pressures of tighter credit, tumbling home prices and rising foreclosures have been battering banks of all sizes nationwide. The FDIC has been keeping an especially close eye on banks and thrifts with high levels of exposure to the riskiest borrowers and markets, agency officials say, including subprime mortgages and construction loans in overbuilt areas. Another area of potential concern is banks' holdings of preferred stock of troubled mortgage giants Fannie Mae and Freddie Mac. A government rescue of the companies, whose share prices have rebounded a bit this week after plummeting recently as they struggle with billions of dollars in losses from bad mortgages, could be costly for scores of banks that hold billions in their preferred shares.
GDP SPRANG UP 3.3%IN THE SPRING WASHINGTON' — The economy pulled out of a dangerous rough patch in the spring, thanks largely to strong exports, but the rebound isn't expected to last. Economic slowdowns overseas could make exports tail off just as Americans are hunkering down after the impact of rebate checks wanes, plunging the country into another rut later this year. "There will be heavy sledding for the US. economy during the next couple of quarters," predicted Lynn Reeser, chief economist at Bank of America's Investment Strategies Group. Gross domestic product, orGDP, grew at a 3.3 percent annual rate in the April-June quarter, its fastest pace in nearly a year, the Commerce Department reported Thursday. The revised reading was much better than the government's initial estimate of a 1,9 percent pace and exceeded economists' expectations for a 2.7 percent growth rate. The rebound followed two quarters, The economy actually shrank in the final three months of 2007 and barely budged in the first quarter at a minuscule 0.9 percent pace. The 3.3 percent growth in the spring was the best performance since the third quarter of last year, when the economy was chugging at a brisk 4.8 percent pace. White House press secretary Dana Perino said the numbers demonstrated the economy's resilience in the face of many challenges. But she added: "No one is doing a victory dance." Others agreed that the growth pickup wasn't a sign of better days ahead. Analysts predict the second quarter will represent the high point for economic activity this year. It's "the last hurrah for this economic cycle," said Martin Regalia, chief economist for the U.S. Chamber of Commerce. Federal Reserve Chairman Ben Bernanke has warned the economy will be weak through the rest of 2008. Economists believe growth will slow in the July-September quarter to a pace of around 1.5 percent, and will turn even weaker in the fourth quarter. Same, including Regalia, think the economy might jolt into reverse yet again. GDP measures the value of all goods and services produced within the U.S. and is the best barometer of the country's economic health. On Wall Street, the GDP report lifted stocks. Dow Jones industrials jumped 212.67 points to close at 11,715.18.
Return to Top of Page 2008 2008
4-6 Nevada Mining Association Convention, Harveys Resort. For more info.: visit www.nevadamining.org
2-4 Power Gen International 2008, Orlando, Florida. For more info. visit: http://pgi08.events.pennnet.com/fl//index.cfm
| |
