Archive for April, 2010

Kan. groups sponsor dueling rallies over taxes (AP)

Wednesday, April 28th, 2010 | Finance News

TOPEKA, Kan. – Rival rallies for and against raising taxes drew hundreds of people to the Statehouse as legislators returned Wednesday to tackle Kansas' budget problems.

About 600 disabled residents and advocates gathered on the south side of the Capitol to show their support for social services and their willingness to accept higher taxes to protect them. Some tied blue ribbons to a chain-link fence around a construction zone for the building's renovation.

Hours later, about 300 people had their own rally against raising taxes, some of them members of the tea party movement energizing conservative Republicans. They were joined by GOP legislators who are resisting Democratic Gov. Mark Parkinson's push to raise taxes to prevent budget cuts.

Parkinson and the Republican-controlled Legislature must close a projected $510 million gap between anticipated revenues and existing spending commitments for the fiscal year beginning July 1. Parkinson has promised to veto any plan that includes deep spending cuts.

The Legislature returned Wednesday from its annual spring break for its 76th day in session, out of 90 scheduled. The Senate Ways and Means Committee revised a $13 billion-plus spending plan and was expected to tackle tax issues Thursday.

"They're not listening to the people, and that's why I'm here," said Pam Rathbun, a Topeka resident who came to the anti-tax rally with her daughter. "They need to quit spending if they don't have the money."

Advocates for the disabled argue that legislators must protect the needy and vulnerable. InterHab Inc., a network of groups providing services, sponsored the rally for the disabled, ending a monthlong "Walk a Mile in My Shoes" relay across the state outside the Capitol.

"They will be made visible — because of you — for our legislators," the group's executive director, Tom Laing, told the crowd.

Parkinson has insisted a responsible budget requires raising taxes, and even some Republicans agree, particularly in the Senate. The spending plan fashioned by its Ways and Means Committee would require up to $501 million in tax increases.

Senators have floated a wide variety of ideas, including Parkinson's proposals to increase sales and tobacco taxes. Senate Minority Leader Anthony Hensley, a Topeka Democrat, is working on a proposal to raise $38 million by increasing income taxes for individuals and families earning more than $200,000 a year.

Advocates for the disabled are backing the idea of higher taxes because they'd like to restore cuts made in the past year to social services. They'd also like to start whittling down a waiting list for in-home services.

Harold Bettis of Hays said increasing taxes is better than additional cuts in services for the disabled. Bettis is a staff member at Developmental Services of Northwest Kansas, and he said some of the nine clients who traveled with him to Topeka have lost state funding for services this year.

"There's a possibility that some people could end up on the street," Bettis said during the InterHab event.

The rally against tax increases was organized by the state chapter of the anti-tax group Americans for Prosperity. Some participants said the state should consider selling some of its assets to generate revenues before raising taxes.

The House Appropriations Committee has endorsed a budget plan that doesn't include an increase in state taxes. It cuts aid to public schools by $86 million, but conservative GOP leaders believe schools can offset that loss by raising local property taxes or by tapping reserve funds. The plan also assumes the state will receive new federal money.

Many Republican legislators argue that increasing taxes will hurt working families and slow any economic recovery.

"We're still in the business of looking at responsible options that would prevent a tax increase," said House Speaker Mike O'Neal, a Hutchinson Republican.


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Visa Q2 beats expectations (Reuters)

Wednesday, April 28th, 2010 | Finance News

NEW YORK (Reuters) –
Visa Inc (V.N) reported a 33 percent increase in second quarter earnings, better than Wall Street expected, as consumer spending rebounded and management said it was increasingly optimistic about the economy.

The world's largest credit and debit card network boosted its 2010 revenue forecast on Wednesday and said that, besides Europe, "the world is traveling again."

Shares of Visa slipped 1.3 percent after hours, with one analyst attributing that to investors that have come to expect the company to beat expectations by even wider margins.

The company credited higher-than-expected growth in payments volume for the results. Payment volume growth for credit and debit cards rose 8 percent to $769 billion in the quarter ended December from a year earlier, boosting revenue in the latest quarter.

Visa "is increasingly optimistic that the worst of the recession is behind us," Joseph Saunders, its chief executive, said on a conference call with analysts and media.

"We remain watchful of the longer term sustainability of growth in the world economy," he said, adding: "I'm not betting on a continued recovery that just goes through the roof."

The company also intends to resume its share buybacks this fiscal year, "as conditions warrant," Saunders said.

Visa and its main rival, MasterCard Inc (MA.N), do not lend at all and have not suffered from credit losses affecting banks in the past two years. But their revenue growth was affected by the cutback in consumer spending during the recession.

The San Francisco-based company earned $713 million, or 96 cents per share, in its fiscal second quarter ended March 31. That compares with net income of $536 million, or 71 cents a share, a year earlier. Analysts on average expected Visa to earn 91 cents a share, according to Thomson Reuters I/B/E/S.

Revenue jumped 19 percent to $1.96 billion, better than expected.

"Expectations were high and the Street probably wanted more, but the way we see it is this is good enough," said Mayan Tandon, analyst at Signal Hill. "The trends are clearly positive, and if the recovery continues to take shape then Visa is in a good position to continue to beat expectations."

Visa also issued a slightly bolder forecast. It now expects annual net revenue growth at the high end of the 11 percent to 15 percent range it provided in February.

The company receives fees whenever consumers use one of its credit or debit cards. As consumers increasingly pay with plastic instead of cash or checks, the company's revenue rises.

But the opportunity for large revenue gains is relatively limited in the United States, where most consumers already use credit and debit cards. Like most of its competitors, Visa is increasingly hoping that emerging markets and new payment technologies will boost future business.

Revenue gains came in part from increased transactions, especially on debit cards, where payment volume for the quarter ended in December rose 17 percent on a constant basis from a year earlier. Credit card volume meanwhile rose 4 percent.

Visa CFO Byron Pollitt said the recent volcano in Iceland, which grounded northern European air travel, amounted to a three-day "blip", adding "it was a non-event" for revenues.

The growth in international payment volumes in the March and December quarters outpaced the comparable growth in U.S. volumes.

"Clearly, discretionary spending is coming back globally, and that's what's driving the uptick in credit volumes," said Tandon.

Visa's new payment technologies business should be boosted by its $2 billion acquisition of online payments company CyberSource Corp (CYBS.O), a deal announced last week that is set to close by the end of September. The acquisition will eat up about half of Visa's cash.

Visa's revenue gains came in part from increased transaction volumes, which it said were "higher than expected".

The company's shares fell 1.3 percent to $92.43 after the close of markets, when the results were posted. Its shares have doubled over the past year and have risen about 6.4 percent since the beginning of the year.

(Reporting by Maria Aspan, additional reporting by Jonathan Spicer; Editing by Robert MacMillan, Steve Orlofsky and Carol Bishopric)


Crews try setting fire to oil leaking in Gulf (AP)

Wednesday, April 28th, 2010 | Finance News

OVER THE GULF OF MEXICO – It's a hellish scene: Giant sheets of flame racing across the Gulf of Mexico as thick, black smoke billows high into the sky.

This, though, is no Hollywood action movie. It's the real-life plan to be deployed just 20 miles from the Gulf Coast in a last-ditch effort to burn up an oil spill before it could wash ashore and wreak environmental havoc.

Crews late Wednesday afternoon started a test burn to see how the technique was working. Rig operator BP PLC had planned to continue the oil fires after the test, but as night fell, no more were lit. The burns were not expected to be done at night, and the Coast Guard said crews could resume work Thursday morning if the weather cooperated.

Crews planned to use hand-held flares to set fire to sections of the massive spill. Crews turned to the plan after failing to stop a 1,000-barrel-a-day leak at the spot where a deepwater oil platform exploded and sank.

A 500-foot boom was to be used to corral several thousand gallons of the thickest oil on the surface, which will then be towed to a more remote area, set on fire, and allowed to burn for about an hour.

About 42,000 gallons of oil a day are leaking into the Gulf from the blown-out well drilled by the Deepwater Horizon oil rig. Eleven workers are missing and presumed dead. The cause of the explosion has not been determined.

Greg Pollock, head of the oil spill division of the Texas General Land Office, which is providing equipment for crews in the Gulf, said he is not aware of a similar burn ever being done off the U.S. coast. The last time crews with his agency used fire booms to burn oil was a 1995 spill on the San Jacinto River.

"When you can get oil ignited, it is an absolutely effective way of getting rid of a huge percentage of the oil," he said. "I can't overstate how important it is to get the oil off the surface of the water."

The oil has the consistency of thick roofing tar.

When the flames go out, Pollock said, the material that is left resembles a hardened ball of tar that can be removed from the water with nets or skimmers.

"I would say there is little threat to the environment because it won't coat an animal, and because all the volatiles have been consumed if it gets on a shore it can be simply picked up," he said.

Authorities also said they expect minimal impact on sea turtles and marine mammals in the burn area.

A graphic posted by the Coast Guard and the industry task force fighting the slick showed it covering an area about 100 miles long and 45 miles across at its widest point.

"It's premature to say this is catastrophic. I will say this is very serious," said Coast Guard Rear Adm. Mary Landry.

From the air, the thickest parts of the spill resembled rust-colored tentacles of various thickness. The air was thick with the acrid smell of petroleum.

Amid several of the thicker streaks, four gray whales could be seen swimming in the oil. It was not clear if the whales were in danger.

More than two dozen vessels moved about in the heart of the slick pulling oil-sopping booms.

Earlier Wednesday, Louisiana State Wildlife and Fisheries Secretary Robert Barham told lawmakers that federal government projections show a "high probability" oil could reach the Pass a Loutre wildlife area Friday night, Breton Sound on Saturday and the Chandeleur Islands on Sunday.

As the task force worked far offshore, local officials prepared for the worst in case the oil reaches land.

In Plaquemines Parish, a sliver of Louisiana that juts into the Gulf and is home to Pass a Loutre, officials hoped to deploy a fleet of volunteers in fishing boats to spread booms that could block oil from entering inlets.

"We've got oystermen and shrimpers who know this water better than anyone," said Plaquemines Paris President Billy Nungesser. "Hopefully the Coast Guard will embrace the idea."

But there was anxiety that the Gulf Coast was not prepared for the onslaught of oil.

"Our ability to deal with this would be like us having a foot of snow falling in Biloxi tomorrow," said Vincent Creel, a spokesman for the city government in Biloxi, Miss. "We don't have snow plows, and we're not equipped to deal with this."

The parish's emergency manager planned to meet in Houma on Thursday with a Coast Guard official to discuss whether volunteers can help, Nungesser said.

"We don't want to just sit by and hope this (oil) doesn't come ashore," Nungesser said.

The decision to burn some of the oil came after crews operating submersible robots failed to activate a shut-off device that would halt the flow of oil on the sea bottom 5,000 feet below.

BP says work will begin as early as Thursday to drill a relief well to relieve pressure at the blowout site, but that could take months.

Another option is a dome-like device to cover oil rising to the surface and pump it to container vessels, but that will take two weeks to put in place, BP said.

Winds and currents in the Gulf have helped crews in recent days as they try to contain the leak. The immediate threat to sandy beaches in coastal Alabama and Mississippi has eased. But the spill has moved steadily toward the mouth of the Mississippi River and the wetland areas east of the river, home to hundreds of species of wildlife and near some rich oyster grounds.

The cost of the disaster continues to rise and could easily top $1 billion.

Industry officials say replacing the Deepwater Horizon, owned by Transocean Ltd. and operated by BP, would cost up to $700 million. BP has said its costs for containing the spill are running at $6 million a day. The company said it will spend $100 million to drill the relief well. The Coast Guard has not yet reported its expenses.


Associated Press writers Janet McConnaughey, Michael Kunzelman in New Orleans, Melinda Deslatte in Baton Rouge and Holbrook Mohr in Jackson, Miss., contributed to this report.