CBO: Congress must act to avert recession The U.S. economy will probably tip back into recession next year if Congress doesn't address an impending "fiscal cliff," the Congressional Budget Office said. The nonpartisan agency said in a report that the economy would contract at an annual rate of 1.3 percent in the first half of 2013 if lawmakers allow the George W. Bush-era tax cuts to expire as scheduled and don't head off $1.2 trillion in government spending cuts set to begin taking effect in January. The economy would resume growing in the second half of next year, CBO said, at an annual rate of 2.3 percent.
CBO: Congress must act to avert recession
May 23, 2012 at 4:25AM
Consumer bureau looking into prepaid cards The new federal consumer watchdog agency is considering drafting new rules governing transparency and safety in the rapidly growing market for prepaid cards. Consumer Financial Protection Bureau Director Richard Cordray said the cards have fewer regulatory protections than bank accounts and debit cards. The agency said it will focus rule-making on three key areas: disclosure of fees and terms, liability for unauthorized transactions and niche product features, such as overdrawing an account. The agency is holding a field hearing on the cards Wednesday in North Carolina.
Blackstone to buy Motel 6 for $1.9 billion Motel 6 and Studio 6, the no-frills budget hotel chains that once offered rooms for $6 a night, are being sold by French parent Accor for $1.9 billion. Their new owner, private equity firm Blackstone Group, already owns Hilton Worldwide. Accor said it will use proceeds from the sale to slash its debt and grow its luxury Sofitel and Novotel hotels in expanding markets such as Asia, Latin America and Europe. Motel 6 has struggled recently, trying to revamp its aesthetics and amenities but still failing to perform as well as Accor's other brands.
$4.3B deal moves SAP into cloud computing SAP AG, the largest business-management software maker, agreed to buy Ariba Inc., an online trading platform for businesses, for $4.3 billion in the German company's biggest push into cloud computing. SAP will pay $45 a share for Ariba, SAP said. That's 20 percent more than Ariba's closing price Monday. The transaction will probably be completed in the third quarter, subject to approval by Ariba shareholders and regulators. Ariba, based in Sunnyvale, Calif., is the leader in cloud-based collaborative commerce applications and the second-largest cloud vendor by revenue, SAP said.
Feds looking into Chipotle's hiring practices Chipotle Mexican Grill Inc. said that federal prosecutors are investigating the company for possible criminal violations of securities laws related to its hiring practices. The Department of Homeland Security's immigration enforcement unit is already probing the company for compliance with employee work authorization laws. The company said Friday that the Securities and Exchange Commission has also issued a subpoena regarding its compliance with work authorization requirements. The company disclosed the latest probe, by the U.S. attorney for the District of Columbia, in an SEC filing Tuesday.
Fitch lowers debt-laden Japan's credit rating The credit ratings agency Fitch lowered its assessment of Japan's sovereign credit to A-plus, an investment grade just above the likes of Spain and Italy, and criticized Tokyo for not doing more to pare its growing debt. The downgrade, Fitch's first for Japan since 2001, underscores the sheer scale of the country's debt burden, as well as political and demographic challenges that have hampered efforts to tackle it. Japan's public debt will hit almost 240 percent of its gross domestic product by the end of the year, Fitch warned.
Southwest has deal with Delta to take 717s Southwest Airlines announced that it will lease all 88 of its Boeing 717 airplanes to Delta Air Lines. The Dallas-based carrier received the Boeing 717 planes as part of its acquisition of AirTran Airways and has been looking at alternatives for the aircraft type. The agreement would move the 717s over three years starting in the second half of 2013 and ending in 2015, Southwest said. Delta said it plans to use the 717s to replace 50-seat regional jets and some older DC-9 aircraft that are still in service.
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No new breakthroughs were reported Saturday in the intensive hunt for the person who shot the Minnesota health care executive in New York City. The NYPD has offered a reward of up to $10,000.
