- The Washington Times - Tuesday, November 10, 2009

FEDERAL RESERVE

GMAC flunks bank stress test

The Federal Reserve said Monday that GMAC Inc. is the only one of 19 stress-tested banks that needs more capital to withstand losses if the economy softens.

GMAC, a crucial player in the U.S. auto industry, has been unable to raise the $11.5 billion regulators said it needed after stress test results were announced in May. The Fed says the finance company is expected to close the gap with more money from the $700 billion financial bailout.

GMAC, already the recipient of $12.5 billion in taxpayer infusions, is negotiating with regulators over how much more it will receive.

The Detroit-based lender expects to meet its additional capital requirements under the stress test program, and is in “active dialogue” with Treasury about its next round of bailout money, said GMAC spokeswoman Gina Proia. Those funds will be used to fulfill the stress test requirement “and not to resolve any new matter related to our business,” she added.

GMAC provides wholesale financing to many General Motors Co. and Chrysler Group LLC dealerships to pay for the vehicles on their lots. The company also operates a mortgage lending unit - Residential Capital - which has been pummeled by the housing market downturn. It runs an insurance unit and an online banking unit called Ally Bank.

JUDICIAL NOMINEES

Senate tips Richmond court to Democrats

The Senate has confirmed U.S. District Judge Andre Davis to join the federal appeals court based in Richmond.

Monday’s vote tips the once conservative court in favor of Democratic appointees and is a key step in President Obama’s effort to remake the federal judiciary.

The Fourth U.S. Circuit Court of Appeals now has six judges nominated by Democratic presidents, compared with five nominated by Republicans.

The vote was 72-16 to elevate the Baltimore judge, whose nomination has been pending before the Senate since June. Democrats have accused Republicans of stalling a vote on Judge Davis and other judges.

Judge Davis is the sixth of Mr. Obama’s judicial nominees to be confirmed.

CONNECTICUT

Governor decides not to run again

HARTFORD, Conn. | An emotional Republican Gov. M. Jodi Rell announced Monday that she will not run for re-election next year, stepping away from the job after a difficult budget battle with Democrats and an ever-darkening state economic crisis.

“I want to thank the people of Connecticut for the honor of serving as their governor,” Mrs. Rell said, her voice breaking. “I want to thank them for their support and understanding, for their prayers and their returned love.”

Saying there was no single reason for her decision, Mrs. Rell said the state’s budget crisis will require her full attention for the remainder of her term.

“It’s not going to be a pretty year,” Mrs. Rell said. “That’s why I need to focus right now, my attention on getting our budget in balance and dealing with the legislature.”

Mrs. Rell, 63, said her health and her husband’s health are fine.

Mrs. Rell has been Connecticut’s governor since 2004, when former Gov. John Rowland resigned in a corruption probe. She was elected to her own term in 2006, becoming the first Republican woman elected the state’s chief executive.

DIPLOMACY

U.S. near decision on North Korea talks

The United States will announce in the next several days whether it will start direct talks with North Korea amid signs Pyongyang may be ready to return to broader nuclear disarmament negotiations, a U.S. official said Monday.

“We’ll have an announcement soon, next one to two days, regarding our decision whether to accept North Korea’s invitation for bilateral talks,” a senior administration official said, speaking on the condition of anonymity.

The announcement is expected as President Obama heads for an official visit to Japan, Singapore, China and South Korea this week, during which the North Korean nuclear impasse is expected to be discussed.

North Korea, which conducted its second nuclear test in May, last week called for direct talks with the United States, the strongest sign so far that the secretive state may be ready to return to broader talks involving six nations that it abandoned in December.

STATE DEPARTMENT

Passport snoop pleads guilty

A veteran State Department worker pleaded guilty Monday to illegally viewing passport files of celebrities, the eighth current or former employee of the agency to admit to snooping.

Susan Holloman, 58, of Washington, pleaded guilty before U.S. Magistrate Judge Alan Kay to one count of unauthorized computer access. Sentencing was scheduled for Jan. 21.

Ms. Holloman admitted that between Feb. 13 and Dec. 5, 2007, she repeatedly viewed the passport applications of 70 celebrities - actors, professional athletes, musicians and other people identified in the news media - and their families.

The names of the celebrities were not released.

Since November 1980, Ms. Holloman worked full time for the State Department as a file assistant in the Bureau of Consular Affairs and had access to official State Department databases, prosecutors said.

The application files include a photograph of the applicant as well as date and place of birth, current address, telephone numbers, parent information, spouse’s name and emergency contact information.

These confidential files are protected by the Privacy Act of 1974, and access by State Department employees is strictly limited to official government duties.

Four of the previous seven defendants were sentenced to a year’s probation, while the others have not yet been sentenced.

FORECAST

Fewer travelers expected for holiday

An airline industry trade group predicts that passenger traffic over the Thanksgiving holiday will drop 4 percent from last year.

The Air Transport Association made the forecast Monday despite deep discounting by airlines over the past several months.

“It is increasingly apparent that the economic head winds facing the airlines and their customers are anything but behind us,” said James C. May, the group’s president and chief executive. He said the unemployment rate jumping above 10 percent last month has affected consumer buying decisions.

U.S. airlines have struggled this year with declining traffic during the recession. They cut fares for the peak summer vacation season and have eliminated many unprofitable flights to save money.

With fewer flights, planes are likely to be full over Thanksgiving, the trade group said. It called the capacity reductions the deepest since 1942.

ENERGY

Gas prices fall from 2009 high

After hitting a high for 2009 last week, U.S. retail gasoline prices fell, the Energy Department said Monday, as a drop in crude oil prices pushed fuel costs lower.

The national price for regular unleaded gasoline declined 2.8 cents over the past week to $2.67 a gallon, but was still up 44 cents from a year ago, the department’s Energy Information Administration (EIA) said in its weekly survey of service stations.

In its weekly price survey, the EIA found the West Coast had the most expensive gasoline at $2.91 a gallon, down 0.3 cent. By city, Los Angeles had the highest price at $3.02, down almost a penny.

The Gulf Coast states had the lowest regional price at $2.53 a gallon, down 3.5 cents. Houston had the cheapest city pump price at $2.48, down 2.3 cents.

From wire dispatches and staff reports


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