CBO warns of U.S. falling off 'fiscal cliff'
A new government study says that allowing Bush-era tax cuts to expire and a scheduled round of automatic spending cuts to take effect would probably throw the economy into a recession. The Congressional Budget Office report says that the economy would shrink by 1.3% in the first half of next year if the government is allowed to fall off this "fiscal cliff" on Jan. 1—and that the higher tax rates and more than $100 billion in automatic cuts to the Pentagon and domestic agencies are kept in place. There's common agreement that lawmakers will act either late this year or early next year to head off the dramatic shift in the government's financial situation. But if they were left in place, CBO says, it would wring hundreds of billions of dollars from the budget deficit that would "represent an additional drag on the weak economic expansion." Should the economy contract by 1.3% in the first half of 2013, as CBO predicts, it would meet the traditional definition of a recession, which is when the economy shrinks for two consecutive quarters. The economy would rebound at a 2.3% growth rate in the second half of the year, however, under CBO projections. The CBO study came as Capitol Hill is hopelessly gridlocked over spending and taxes in advance of the fall elections. The White House and top Democrats, like Senate Majority Leader Harry Reid of Nevada, say they will refuse to act on the expiring tax cuts and automatic spending cuts unless Republicans show greater flexibility on raising taxes. Check out an overview of the CBO report and access it in its entirety at the CBO website here.
Technip CEO says Shaw buy means new U.S. opportunities
Technip, a Paris-based engineering and project management company for the energy industry with 30,000 workers worldwide, expects to pursue new opportunities in the U.S. market with its purchase of The Shaw Group's refining and petrochemical process technology, its CEO tells The Houston Chronicle. Technip announced Monday its plans to purchase The Shaw Group's Stone & Webster process technologies—which make up a significant portion of Shaw's Energy & Chemicals unit—for $300 million. About 1,200 employees of Baton Rouge-based Shaw Group will transfer to Technip, including 500 in Houston. "This acquisition gives us both a set of technology and know-how that can be applied for present and future opportunities in the U.S. market," CEO Thierry Pilenko says. "At Technip, we are always trying to improve or expand our portfolio of technology." Stone & Webster draws revenue from technology licensing, process design engineering, early-stage and front-end engineering and equipment supply, according to a Technip news release on the acquisition. "The idea is that [now] we have some technology that is complementary to ours, and we plan to offer that portfolio to our clients, either in refining or petrochemicals," Pilenko says. The petrochemical industry is enjoying a boom because of low prices for natural gas, which provides both fuel and feedstock for plants that manufacture the building blocks for plastics and other products. Pilenko predicts a smooth integration for the new acquisition, saying that the engineering background of both companies will make for a compatible culture.
Legislature OKs coastal master plan
A $50 billion, 50-year proposal aimed at stopping coastal land loss in Louisiana has passed the state Legislature. The Senate voted 94-0 Tuesday in favor of the 2012 coastal master plan. By law, the state has to update it every five years. Funding for the plan remains uncertain, but the plan envisions getting $50 billion from a variety of sources, including offshore oil and natural gas drilling royalties, federal environmental programs, and a portion of what BP may be forced to pay in fines and ecosystem restoration for the 2010 oil spill. The plan envisions creating up to 800 square miles of land over the next five decades and foresees an end to land loss in about 30 years if enacted. Local and national conservation groups cheered the Legislature's unanimous approval of the plan. "The $50 billion necessary to achieve the state's vision of restoration is far from guaranteed, but it is vital for securing our future. Now more than ever, Louisiana is truly unified in addressing the coastal issues moving forward," reads a joint statement from the Coalition to Restore Coastal Louisiana, Environmental Defense Fund, Lake Pontchartrain Basin Foundation, National Audubon Society and National Wildlife Federation.
Shrimp mislabeling blamed on La. seafood processing company
A Tangipahoa Parish seafood processing company and an Illinois-based seafood distributor on Tuesday were charged in federal court in New Orleans with mislabeling shrimp caught in Mexico as U.S. shrimp and commercially selling more than $100,000 worth of it in interstate commerce, The Times-Picayune reports. Between Nov. 15, 2007, and Dec. 4, 2008, Worldwide Shrimp Co. of Highland Park, Ill., allegedly sent the shrimp of Mexican origin to Doran Sea-Pak of 136 E. Railroad Ave., Independence. Doran Sea-Pak processed and packaged it, falsely affixing the U.S. labels of origin, according to court filings. Worldwide Shrimp Co. allegedly instructed Doran Sea-Pak to label the shrimp as caught in the United States, although Doran Sea-Pak officials knew the shrimp were from Mexico, according to the court filings. Doran Sea-Pak then would send the shrimp back to Worldwide Shrimp Co. or to other entities to which Worldwide Shrimp Co. had arranged to sell it, according to court records. Worldwide Shrimp Co. sold shrimp throughout the United States under one of four brand names: Shrimp King, Texas Supreme, Black Diamond and Campeche Queen. If convicted of the felonies, each company faces a maximum fine of $500,000. The U.S. Department of Commerce and the National Oceanic and Atmospheric Administration investigated the case.
SEC trials rise 50% as execs increasingly fight suits
The U.S. Securities and Exchange Commission, long known for settling enforcement actions without having to prove its case in court, is struggling to cope with a surge in the number of executives and companies willing to go to trial to defend themselves. The SEC's office in Washington is actively litigating about 90 cases—up more than 50% in the past year—Matthew Martens, the SEC's chief litigation counsel, tells Bloomberg. At the same time, Martens' trial unit staff has stayed relatively flat at about 36. He recently added three more lawyers to his group and is looking to hire more. Martens says it's critical that his unit present a credible threat. "At the end of the day, if we can't win cases, then people don't settle. That's the reality," he says. The wave of litigation has two main sources: more complex cases stemming from the 2008 financial crisis and a related increase in lawsuits filed against individual executives. The collapse of the housing market and resulting financial turmoil involved complex securities for which there was little legal precedent. In addition, the agency has brought more financial crisis lawsuits against executives—more than 50 so far—and individuals are often inclined to fight claims that could damage or end their careers. Those cases, which have required years of investigation, are central to the agency's effort to restore its reputation after being battered for more than three years by lawmakers, judges and investors who claimed it hasn't been tough enough in holding Wall Street to account. Read the complete story here.
ICANN resumes taking bids for new Internet suffixes
The organization overseeing a major expansion of Internet addresses has reopened its system for letting companies and organizations submit proposals. The Web-based system had been shut down since April 12 because of a software glitch that exposed some private data. At the time of closure, the system was supposed to reopen within four business days, but it took longer to fix the problem and to notify affected applicants. Up to 1,000 domain name suffixes—the ".com" part of an Internet address—could be added each year in the most sweeping change to the domain name system since its creation in the 1980s. The Internet Corporation for Assigned Names and Numbers, or ICANN, has extended the deadline for submitting proposals to May 30. Each application costs $185,000.
News roundup: Evacuation lifted, U.S. 190 reopened in Port Allen … Portico opens on Coursey … Customer service avatars to make debut at NYC area airports
Down the road: The mandatory evacuation for residents in a one-mile radius around the Air Liquide Specialty Chemicals plant in Port Allen has been lifted, and U.S. 190 has been reopened. State police say the road reopened and the evacuation was lifted just before 8:15 this morning. Although emergency officials are still cleaning up the wreckage left behind from Monday's chemical plant fire, Trooper Stephen Hammons says it's safe for residents to go back home and for motorists to travel near the site.
At the door: Portico restaurant and bar has opened its doors at 11777 Coursey Blvd, near the intersection of South Sherwood Forest Boulevard, in the space formerly occupied by Calendar's restaurant. Owners Stephen Walker and Kenny O'Neil—who both graduated from LSU and thereafter lived in Baton Rouge in the 1990s—opened the first Portico in Monroe in 2006 and added a Ruston location in 2009. The former Calendar's building has been completely renovated. "The soul of Portico is in the etceteras: outdoor dining, live music, and a top-notch wine, beer and specialty drink menu," reads a release announcing the Monday opening of the Baton Rouge location. Check out the Portico website here for more details and the full menu.
Impersonal attendants: She smiles, answers questions and can guide you to the nearest restroom or to your connecting flight. But don't try and shake her hand. That's because "she" is an avatar, the latest high-tech venture at New York's three major airports. The Port Authority of New York and New Jersey unveiled the device at Newark Liberty and La Guardia airports. Those two, along with JFK Airport, will be the first airports in North America to get an avatar this summer. The Port Authority is renting them for about $180,000 for six months. They cost about $250,000 each. More than 100 million travelers pass through the three airports annually, according to the Port Authority.
Today's poll question: Whom are you most excited to see perform at Bayou Country Superfest this weekend?