Monthly Archives: January 2015

Gas Prices May Have Reached Rock Bottom

The price of gasoline has been falling, falling and falling some more over the past several months, finally reaching its lowest price since April, 2009. The latest price dive, 13.3 cents during the last two weeks, may be the end of the slide, according to a survey by Lundberg released on Sunday.

The average price for a gallon of gas clocked in at $2.07 in the survey from January 23. This recent drop in prices brings the cost of gasoline down by at least $1.24 compared to the same period one year ago. The decline is the result of crude oil price drops from their high point last June.

Trilby Lundberg, the survey’s publisher, took note that the recent drop in prices was a less steep fall than it has been in past time periods. In addition, the price many wholesale buyers of gasoline went up in the past week and a half, pointing to the possibility that gas prices have hit the basement.

“The street price crash is either coming to an end or is already at its bottom,” Lundberg said, adding that the market would need to see another large slide in the price of crude to reverse the gains in wholesale prices.

Obama’s State of the Union Calling for Middle Class Tax Breaks

President Obama

President Obama

President Obama will be delivering the yearly State of the Union Address on Tuesday night not only to Americans, but to a Congress controlled by Republicans in both houses.

Nevertheless, Obama has been signaling that he intends to introduce the idea of increasing taxes on the wealthiest Americans in order to pay for tax cuts for the nation’s middle class. Obama would like to see an increase in capital gains tax on the highest tax bracket earners, and ending tax breaks on inheritances.

It does not seem likely that the Senate and House of Representatives, both controlled by Republican majorities for the first time since Obama took office, will be amenable to increased taxes on the wealthy. The most likely scenario is that, except for Obama’s liberal Democratic base of supporters, most lawmakers will simply ignore the suggestion of tax hikes for the rich.

White House senior adviser Dan Pfeiffer said Sunday on CBS’s “Face the Nation” that the president did not expect the lawmakers to agree with the Obama on everything.

“Are they going to agree on everything? Absolutely not. I think we should have a debate in this country between middle class economics and trickle-down economics and see if we can come to an agreement on the things we do agree on,” Pfeiffer said.

2014 Was a Great Year for Business Travel

Business travel a growth industry

Business travel a growth industry

The Global Business Travel Association (GBTA) released its summary of business travel statistics for 2014 this week, and the news is good.  Business travel reached record levels, with about 484.4 million trips made creating some $292.2 billion in spending.

The summary, which takes the past trends and projects them into the future, predicts that 2015 will bring another record-producing year of business travel. The report, called the “GBTA BTI Outlook-United States 2015” is forecasting growth of about 6.2 percent this coming year. That translates to travel spending of about $310.2 billion and a trip volume to grow by 1.7 percent, to 490.4 million trips.

“2014 was a stabilizing year for US business travel, with continuous, sustained growth, despite a plethora of external issues internationally that have weighted down economies in Europe, Russia, and Asia,” said Michael W. McCormick, GBTA Executive Director and COO.

In contrast to individual business travel, group trips slightly declined in 2014. This coming year group trips are expected to do better, however.

According to the GBTA report, “Group trip volume will likely finish down 2.2 percent year-over-year, stabilizing after extraordinary growth in 2013. Group spend-per-trip, however, is on pace to rise to $715 in 2014, up from $660 in 2013. Both volume and spending are expected to rise in 2015 by 1.5 percent and 6.7 percent, respectively.”

New Risk Manager Phelan Appointed by Treasury

Deputy Treasury Secretary, Sarah Bloom Raskin

Deputy Treasury Secretary, Sarah Bloom Raskin

The new position of chief risk officer created by the US Treasury Department will be filled by Kenneth Phelan. Phelan, who is 55 years old, has held similar roles for the Royal Bank of Scotland Group Plc and at Fannie Mae soon after the last US financial crisis.

The newly created Office of Risk Management, to be headed by Phelan, will work hand in hand with the Office of management and Budget at the White House. Together the two departments will advise other federal agencies which have the potential to affect the fiscal and debt-management operations of the Treasury Department.

Phelan has already been at the Treasury since November. His tenure at RBS Americas as the chief risk officer commenced in 2011.  Prior to that he led risk management at Fannie Mae from 2009 until he joined RBS in 2011.

According to a memo issued by the Treasury Department and dated to September 2013, the department decided to hire a chief risk officer to “provide permanent financial risk-management expertise.” The Treasury has taken on the responsibility of bailing out other federal agencies, such as Fannie Mae and Freddie Mac, using taxpayer money.

Phelan will take his orders from the Deputy Treasury Secretary, Sarah Bloom Raskin.