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Borrowing by Consumers Rose in June, Fed Reports

August 7, 2013 by

Consumers increased their borrowing by $13.8 billion in June from May, to a seasonally adjusted $2.85 trillion, the Federal Reserve said on Wednesday in its monthly report on consumer credit.

The category that includes credit card use dropped $2.7 billion in June. That followed a gain of $6.4 billion in May. Still, overall credit card debt remained 16.5 percent below its July 2008 peak.

Borrowing for autos and student loans rose $16.5 billion in June. These gains have lifted overall consumer credit to record levels in all but one month since June 2011.

And since January 2011, the measure of student and auto loans has risen $312.6 billion. During that same two-and-a-half-year period, credit card debt rose only $16 billion.

The Fed’s report does not separate student loans and auto loans. But the Federal Reserve Bank of New York tracks consumer credit on a quarterly basis and its reports show that student loan debt has been the biggest driver of borrowing since the recession officially ended in June 2009, partly because many unemployed Americans have returned to college.

More credit card borrowing could bolster consumer spending, which accounts for about 70 percent of economic activity. But many consumers have been hesitant to run up high-interest debt.

The economy grew at a lackluster annual rate of 1.4 percent in the first six months of this year. Many economists forecast that growth will accelerate to a rate of around 2.5 percent in the second half of this year, as the impact of higher Social Security taxes and spending cuts begins to fade. Hiring gains are also expected to increase consumer income, supporting more spending.

The Fed’s report excludes mortgages, home equity loans and other loans related to real estate.

Article source: http://www.nytimes.com/2013/08/08/business/economy/consumer-credit-rose-in-june-as-americans-borrowed-more-for-cars-and-college.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

Earnings at Shell and Exxon Fall Sharply in 2nd Quarter

August 1, 2013 by

Shell’s second-quarter income, adjusted for one-time items, was $4.6 billion, compared with $5.7 billion in the same period a year earlier. Analysts had expected the company to earn $5.8 billion. “This is one of the worst set of Shell results that we can remember,” analysts from Bernstein wrote in a note.

Shell’s shares were down 4.7 percent in trading in London.

Exxon Mobil reported second-quarter earnings of $6.9 billion, down 57 percent from the same period in 2012. The company said that earnings, excluding divestments and other one-time charges, were down 19 percent for the quarter. The company’s shares were down 5.7 percent in trading in New York.

Exxon Mobil said that its results were hurt by lower margins and reduced volumes at its refineries. Production was down 1.9 percent year-on-year for the quarter and 2.7 percent for the half year. Capital and operating expenses were also up 10 percent, to $10.2 billion, for the quarter. Still, “Exxon Mobil’s second-quarter results reflect continued strong operational performance,” its chief executive, Rex W. Tillerson, said in a statement.

Shell’s chief executive, Peter Voser, told reporters that the situation in Nigeria, where Shell normally obtains close to 9 percent of its world production, was worsening. The country has long been a mainstay for Shell, but production there has been dogged by political and environmental issues.

Problems in Nigeria during the quarter had lowered production by about 100,000 barrels a day, or around 40 percent, and had cost the company $250 million, Shell said. Nigerian output was hit not only by the usual sabotage aimed at stealing oil from pipelines, but also by a legal dispute between the Nigerian maritime authorities and a liquefied natural gas facility in which Shell is a partner. In the most serious episode, the maritime authorities kept L.N.G. tankers from landing at the plant from late June to mid-July until they received a large payment from the operators.

Mr. Voser said oil theft and disruptions to gas supply were causing widespread environmental damage and could cost the Nigerian government up to $12 billion a year. “We will play our part, but these are problems Shell cannot solve alone,” he said, adding that the company was reviewing its Nigeria operations.

Shell also said it was reviewing its exploration and production portfolio in North America, where it has been losing money. The exercise, the company said, will lead to divestments and a focus on fewer projects.

Over the last five years, the company has invested heavily in shale gas and oil properties, building a $28 billion portfolio. Based on drilling and exploration results in recent months, Shell is writing off about $2 billion after taxes in the shale oil areas after taking previous write-downs on shale gas acreage. The write-downs drop the book value of the portfolio to about $24 billion.

Mr. Voser said that the write-downs represented a low proportion of the North American shale portfolio, but that they reflected continued problems in the Americas, an important area for Shell. Bernstein estimated that Shell lost $4.54 for every barrel it produced in the Americas, the location of almost one-quarter of its output.

Shell’s overall production was down 1 percent to just over three million barrels a day. Its output for the quarter was slightly less than that of its rival BP, if the company’s share of almost 20 percent of output from Rosneft, the Russian state-controlled oil company, is included.

Mr. Voser will step down as chief executive in 2014. Shell announced last month that he would be succeeded by Ben van Beurden, who has led Shell’s large marketing and refining business since January. Mr. Voser said that for the next few months he would continue to run the company while Mr. van Beurden focused on marketing and refining.

Article source: http://www.nytimes.com/2013/08/02/business/global/shell-reports-disappointing-earnings-in-second-quarter.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Federal Push for ‘Cloud’ Technology Faces Skepticism

August 22, 2011 by Leave a Comment

But even as Mr. Kundra returns to academia after a two-and-a-half-year run, his vision for a leaner and more Internet-centric future for government is being met with caution by at least a few of the technology chiefs at the federal agencies that now have to carry it out.

That is because Mr. Kundra’s vision hinges on “cloud computing,” in which an agency’s computer programs (like e-mail) and data (like e-mail messages) are stored by private contractors and delivered to government employees as services over the Internet.

Contractors like Amazon, Google and Lockheed Martin market their cloud services as a way for private companies and government agencies to avoid having to build and manage costly new data centers as they add computing capabilities.

The selling point, in addition to lower costs, is greater flexibility, because agencies can change the size of a project without having to add or subtract from their computing infrastructure.

“Just as the Internet has led to the creation of new business models unfathomable 20 years ago, cloud computing will disrupt and reshape entire industries in unforeseen ways,” Mr. Kundra wrote in an e-mail.

Such high praise for new Internet technologies may be common in Silicon Valley, but it is rare in the federal government, where concerns about security are paramount.

Attacks from abroad this spring and summer on government systems and contractors have heightened concerns over security in defense and intelligence systems. In July, the Pentagon said it had suffered its largest breach, in which hackers obtained 24,000 confidential files. Defense officials said they suspected a foreign government’s intelligence operation could have been behind the attack.

Surveys of chief information officers of federal agencies, conducted by various research companies, show an elevated degree of concern about security when asked about cloud computing. But the agencies must comply with Mr. Kundra’s “Cloud First” policy, which encourages the use of cloud services for new projects and requires them to move at least three existing projects to the cloud by next summer.

Some agencies, especially those that deal with less confidential information, have been quick to adopt the model. In the first six months of Mr. Kundra’s policy, the Agriculture Department has moved about 46,000 employee accounts and is in the process of adding 120,000. The cloud can help speed along technology projects, said Chris Smith, the agency’s information chief.

But other departments, especially defense and state, are proceeding more slowly. Teri Takai, the chief information officer for the Defense Department, said her agency’s use of cloud computing would be limited for the near future to keep confidential data within the military’s advanced security systems.

“With the increasing frequency and sophistication of cyberattacks on defense systems, we are concerned with any new approaches that can introduce new risks,” Ms. Takai wrote in an e-mail.

The Pentagon, with its global reach and hundreds of thousands of users, could benefit from the anytime-anywhere capabilities of cloud computing. Ms. Takai’s twist on Mr. Kundra’s vision is the concept of “Mission-Oriented Resilient Clouds,” a security-minded approach that the Pentagon is developing for use in military operations.

“When done with the proper considerations and planning, cloud computing will be a very effective and efficient tool,” Ms. Takai said.

The State Department is moving ahead only with low-risk projects, like a Web site for its Office of the Historian, which offers public information about the history of American diplomacy, the agency’s chief information officer, Susan Swart, said.

Article source: http://feeds.nytimes.com/click.phdo?i=3c39344431b057b8d898c73b88e9e912

Filed Under: Business News Tagged With: , ,