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Business Watch – Tuesday March 13, 2012

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Photo: Getty Images

Brent Clanton

Ford And Mercury Cars
There are new incidents of so-called runaway cars are being reported involving Ford and Mercury vehicles. No one has been hurt so far but an official investigation is on a common complaint. It is being reported that the brakes on many of the vehicles are not working properly. One car went though a red light reaching 70 miles an hour. The engine revved until the car was shut off and revved up again when it was started. Several complaints have been sent to the National Highway Traffic Safety Administration regarding the Ford Taurus model years 2001 through 2006. Although no recall has been ordered yet, an investigation covering nearly two million of the sedans, including the Mercury Sable is underway. The agency says the cruise control cable may become detached and hold the throttle open.

Red Meat Warnings
You may want to skip that burger for lunch Another, major medical study from the Harvard School of Public Health is raising warning flags about eating red meat.
ABC’s Chief Health and Medical Editor, Dr. Richard Besser, says researchers parsed the diets of 120,000 Americans and found: “Eating just one serving more of red meat a day can increase your risk of death by 12%,” Dr. Besser reported. Dr. Besser also states:”Your chances of dying of heart disease goes up by 16% and cancer by 10%.”

Yahoo Sues Facebook
Yahoo is suing Facebook for infringing on ten of its patents covering ads, privacy and social networking. Engadget Senior Associate Editor Michael Gorman says that he believes that Yahoo suing Facebook is motivated by money: “It’s likely that Yahoo is probably hoping to get, you know, some licensing agreements out of this, especially since prior to this filing of the lawsuit, I believe they had been engaged in negotiations with Facebook to license these patents,” he stated.

The former members of a congressional panel overseeing bailouts during the financial crisis are lambasting the Treasury Department for quietly granting to insurance giant American International Group, a tax break worth billions. The break accounted for 90% of the company’s profits last year.
Companies can defer losses to reduce tax burdens in future years but there are strict limits on how much of a loss can be deferred.
The panelists say the Treasury granted AIG an exemption, worth $17.7 billion in profit, after receiving the biggest bailout in the 2008 financial crisis.

United Airlines
The dust is still settling from the merger of United and Continental Airlines. United’s Chief Revenue Officer, E-VP Jim Compton in town the American Marketing Association’s Marketer of the Year awards last night says the future’s bright for the Houston-area employees of the blended airline: “United’s presence from a(n) employee-perspective is significant in Houston and we see it being significant going into the future,” says Compton.
The biggest asset the former Continental Airline brought to the table is its human capital, which serves as a network other airlines will not be able to duplicate.

Southwest Airlines
Southwest Airlines is seeking slots at Reagan Washington National Airport to offer nonstop service to Austin-Bergstrom International Airport. Southwest also wants to provide one-stop, same-plane service between Reagan National and San Diego International Airport via Austin. Recent federal legislation authorized new flights to cities beyond Reagan National’s traditional 1,250-mile service perimeter.

Pop-quiz on Pinterest
What website has reached 10 million monthly visitors, is faster than Facebook, Twitter or any other site tracked by com-score?
The answer is Pinterest, which is the latest website-de-jour for sharing things you love with everyone else. Pinterest serves as an online scrapbook of images you find on the web and is now considered one of the fastest-growing websites in history.

Gas Prices
Gas is at the highest price recorded in March; the average price of a gallon of gas now is $3.83. Oil Price Information Service Chief Oil Analyst Tom Kloza says even though the price is 26 cents over a year ago, the nation is spending less on gasoline – 50 million dollars less, per day. It’s not clear why demand is down this much. If we could chalk it up to better auto-mileage standards, we’d probably say we’ve accomplished something. But, it could be a sign of some real softness in the economy that hasn’t bubbled to the surface in some of the Washington numbers.
Kloza says prices will continue to rise…but he doesn’t believe that we will see gas as expensive at $5.00: “I still don’t think we’re going to see some of those apocalyptic, nonsensical numbers of five dollars that people are predicting.”

Oil Prices
Higher oil prices are being are felt around the world. In Asia where the effects of high gas can be felt, the price of gas could cause inflation and slow economic activity. A jump in crude earlier this month above $110/barrel is sending fuel prices higher. if oil becomes much higher, that could force central bankers to raise interest rates, sacrificing growth to tame inflation.
Back in the states, gasoline is at the highest price recorded for the month of March: The average price, which is $3.83 is up four cents over last week and 26 cents more than this time last year.
Experts say that as consumers, we are paying more for our gasoline, but spending less as a country.

Federal Reserve
The Federal Reserve meets Tuesday and the central bank is not expected to announce any new initiatives to fine-tune the economy. The Commerce Department will release on retail sales and business inventories.

Wall Street
Wall Street spent much of the day digesting uninspiring overseas data, and preparing for what’s ahead on today’s agenda.
The Dow earned 3-tenths percent to 12,959.
The S&P 500 rose two-tenths of a point to 1,371.
The Nasdaq dropped a nickel to 2,983.
Crude futures fell $1.06 to finish at $106.34/barrel.
Gold slipped by $11.70 to end at $1,699.80 per ounce.

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