The crisis in US housing market has compelled, the high-profile luxury builder, WCI Communities to undertake major policy changes. WCI plans to file for Chapter 11 protection under the US Bankruptcy Code as well as replace it top management personnel. These measures come after the builder was unable to get additional financing to tide over huge loans.

Under Chapter 11, WCI plans to restructure its massive debts which at present amount to $1.8 billion. The company will also be replacing its CEO Jerry Starkey with David Fry. Company chairman Carl Icahn revealed that the filing became unavoidable when some holders of WCI’s $125 million convertible notes rejected the exchange offer and instead demanded to be paid in cash by August 5, this year.

WCI is known for building luxury housing communities in Florida for wealthy and retired buyers who flock to the balmy state from New York and Washington D.C. the builder was forced to file for bankruptcy as the housing boom, particularly in Florida, crashed due to speculative building and easy availability of money. The future seems shaky for WCI which though will continue to operate under Chapter 11 for now. Whether or not it will recover from bankruptcy will depend upon market conditions as well as upon the flexibility of the lenders.

-Kalyani Mookherji

In a recent announcement, Australian media baron Rupert Murdoch unveiled plans to launch as many as six new regional television channels in India. The broad scale of expansion undertaken by Murdoch is to tap the vast market for electronic media in the rapidly developing country which is also the third-largest country in Asia. The recent media boom in India has seen newspapers, television channels and magazines making their debut at an unprecedented rate.

Murdoch told reporters that he plans to invest around $100 million in the launch of the new television channels which will take place over a period of one year. He however declined reports that he has any immediate plans of investing in the country’s print media. For quite some time now, Indian legislators have been debating over the pros and cons of allowing foreign investment in the nation’s print media which is at present restricted to 26 percent.

Rupert Murdoch’s News Corp already has a sizeable presence in India’s electronic media through its wholly-owned subsidiary, the Star network. Star operates around fourteen television channels in India which cover news, entertainment and sports. On his visit to India, Murdoch met the Prime Minister in national capital New Delhi and later spoke to business as well as media tycoons in the financial capital of the country, Mumbai.

-Kalyani Mookherji

A new government report confirms what the average person on the street has been experiencing for some time now. Rising inflation has led to the highest price rises in United States since 1981. This in turn has brought down spending by consumers who are being compelled to restrict their household budget.

A report brought out by the US Commerce Department revealed that in June 2008, inflation inched northward by 0.8 percent which was the highest increase since the 1.0 percent rise recorded in February 1981. Soaring prices of food, gasoline and other necessities brought down inflation-adjusted spending by 0.2 percent in June 2008. This Tuesday the Federal Reserve is scheduled to decide on prevailing interest rates which many experts feel will remain unchanged. However, high inflationary conditions will render all options difficult.

Even as the US economy continues to battle the twin demons of economic slow down and rising inflation, some manufacturing sectors reported increase in orders. A separate economic report states that factory orders in June rose by 1.7 percent which surpassed industry expectations. The rise in orders was mainly driven by heavy demand for military equipment, steel and higher cash value of orders for refined petroleum goods.

-Kalyani Mookherji

On Monday, the US government granted a two-year extension to a test program which will allow long haul trucks from Mexico full access to American highways. The move from the Bush administration comes despite objections raised in the Congress and pending legislation to shut down the program.

The truck program has been initiated under the North American Free Trade Agreement which seeks to relax border restrictions for free movement of goods across countries. Traditionally trucks from Mexico have been unloading their goods at the US border from where they are transported to the markets by American trucking companies.

The pilot program which was kicked off last year gave limited numbers of Mexican trucks permission to ply US highways for one year. Conversely American trucks were also allowed in Mexico. According to U.S and Mexican government officials, till July 2008 around 27 Mexican carriers with 107 trucks as well as 10 American carriers with 55 trucks have taken part in the program without any untoward incident.

The truck program has been vehemently opposed by some unions as well as by certain highway safety and consumer groups. The continuation of the program has also not gone down well with some members of the Congress who intend to pass a bill closing down the program as soon as the Congress recess gets over.

-Kalyani Mookherji

Psychiatric patients in the United States are increasingly being put on medications instead of receiving in-depth psychotherapy. A report which studied the shift was published in the Archives of General Psychiatry. The main factors which are responsible for a wider dependence on drugs rather than talk therapy are said to be reimbursement policies of health insurance plans as well as a new generation of psychotropic drugs which have relatively lesser side-effects.

The study revealed that in 1996-’97, around 44.4% of patients in the US underwent psychotherapy but this number fell to 28.4% in 2004-’05. again the percentage of psychiatrists who claimed to provide psychotherapy to all their patients fell from19.6% in 1996-‘97 to just 10.8% in 2004-’05. Keeping in with the results of earlier studies, researchers discovered that the patients from the wealthier group, who personally paid for their own therapy, were likely to receive this line of treatment.

The study which covered 14,108 psychiatric office visits over a ten year period drew its data from the National Ambulatory Medical Survey. The results pointed out that medical insurance reimbursement polices clearly favored repeated medication appointments of short durations over longer psychotherapy sessions. Another reason for the growing dependence on drugs was the aggressive marketing of anti-depressants or prescription drugs both to psychiatrists and patients.

-Kalyani Mookherji

One of the largest apparel chains in the US, Steve & Barry’s LLC is reported to have finalized its purchase by a unit of the investment firm, Bay Harbor Management. The latter plans to buy the retail chain for $163 million, most of which would go repaying around 100,000 creditors. Steve & Barry’s has assets worth $500 million to $1 billion but has accumulated debts of similar proportions.

The Bay Harbor Management unit plans to keep the apparel chain as a going concern and intends to buy leases of certain Steve & Barry’s stores from its 276 retail outlets. The new owner would acquire all intellectual property rights of the chain including celebrity and brand licenses besides acquiring all the merchandize from the stores it plans to purchase.

Steve & Barry’s is famous for its mid-range apparel and has lines designed by several celebrities like actress Sarah Jessica-Parker, tennis player Venus Williams as well as basketball player Stephon Marbury. On July 9, this year, the privately-owned chain with 63 of its affiliates sought the protection of Bankruptcy court at Manhattan. The company cited high costs, restricted consumer spending as well as unfavorable credit markets as reasons for its failure to repay debts.

-Kalyani Mookherji

Evacuation orders were passed on some oil and gas rigs in the Gulf of Mexico as the tropical storm, Edouard headed for Texas. However latest updates suggest that the storm has already weakened and was not expected to cause a huge damage to the offshore facilities at Galveston, which is the largest petroleum port in the United States.

Speculation that most of the Texas oil facilities would be spared significant damage brought down crude prices for September delivery to $121.41 a barrel. This fall of 3 percent or $3.69 at the New York Stock Exchange was the largest since May 6, this year.

A spokesperson at the US Interior Department notified that six rigs and twenty-three production platforms in the Gulf of Mexico had been asked to evacuate. Some of the companies which have started removing its non-essential workers are Marathon Oil Corp, Anadarko Petroleum Corp and McMoran Exploration Co. the oil import terminal at Louisiana as well as the Houston Ship Channel have been shut down as precautionary measures against the approaching storm.

The National Hurricane Center in Miami issued an advisory saying that on August 4, 7 p.m Houston time, sustained wind speed of Edouard had come down to 45 mph from the earlier speed of 50mph. as yet, the system was 205 miles east to southeast of Galveston and was moving in a westerly direction at about 7 mph.

-Kalyani Mookherji.

Fast Food restaurants in the US are once again under scrutiny for offering kids’ meals which have higher-than-required level of calories. Public health agencies and parents’ groups have long blamed the fast food industry for exposing children and young adults to unhealthy food choices in a country where a dangerously-high percentage of kids are reported to be overweight.

On Monday, the Center for Science in the Public Interest released a report which studied the menus of kids’ meals at thirteen popular restaurants like KFC, Sonic, Taco Bell, Chick a fill and Jack in the Box. More than 90 % of the meals examined were found to contain twice the recommended levels of fats and calories. While a four to eight-year old needs around 430 calories per meal, 93% of the 1474 menus studied exceeded the 430-calorie mark.

Among all the fast food restaurants studied, the Center rated Subway the best for offering nutritious choices. It found that only a third of its Fresh Fit for Kids meals contained more than 430 calories. However the findings by CSPI was not accepted by many popular fast food companies like KFC, McDonald’s and Burger King Corp who claimed that they do offer kids’ meals which contain less than 430 calories.

-Kalyani Mookherji