Oil casualties: Shrimpers, crabbers and real-estate agents

Florida's real-estate market is taking a hit. As of Thursday, BP had cut checks totaling $75,725 to start settling some of the 446 claims against it for lost income on area rental properties. BP (BP) disbursed another $5,000 to cover real-estate sales losses.

And if commercial fishermen can't fish, there's no work for those who fix their boats and distribute their catch. Thursday's report included 16 claims from marine repair businesses in Florida for lost income, with $10,000 paid out so far by BP. Seven wholesale distributors had filed claims, on which BP has paid $5,000.

Florida began its daily claims report three weeks ago, on May 13. That day, BP's payments stood at $107,000 on 543 filed claims. By this Thursday, the tally had soared to $3.9 million in payments on more than 5,000 claims.

Three other states -- Louisiana, Alabama and Mississippi -- are also hosting centers processing claims for the thousands of area residents now stuck without paychecks. But only Florida is releasing detailed records of how those claims break down by industry.

Representatives of Louisiana's oil spill command center had no information at hand on their states' income-loss claims. Mississippi had the aggregate number -- BP has paid out 3,518 claims so far totaling $4.8 million -- but more granular detail was not readily available, according to a spokeswoman at the Mississippi Department of Marine Resources. And Alabama's oil response information center said that 6,528 claims have been filed so far, but representatives there had no further details on the occupations of those filing the claims.

BP also did not have state-by-state information readily available, according to a spokesman. The company is adding thousands of new claims to its queue each day: 510 claims adjusters are staffing 22 centers across the four states.

Workers in limbo

The deluge of wage and income loss claims against BP won't slow any time soon.

As of Thursday, the National Oceanic and Atmospheric Administration had closed 37% of the federal waters in the Gulf of Mexico, a number that creeps up higher each day. While states control the handful of nautical miles closest to their coastlines, the federal government regulates the Gulf from the state lines through to international waters, which begin 200 nautical miles out. With so many fishing grounds shut down, crabbers, shrimpers, oystermen, charter-boat operators and others who rely on the sea to ply their trade are unable to work.

0:00/4:20Analyst: Oil spill could cost up to $30Bn

BP CEO Tony Hayward is promising to make good on all losses. "We will honor all legitimate claims, and our clean-up efforts will not come at any cost to taxpayers," Hayward says in a TV commercial the oil company has been running.

But paying for lost wages is not enough, some state officials say. Several Louisiana state agencies wrote a joint letter to BP last week requesting that the company set up a fund, starting with $300 million, to help the state mitigate the short- and long-term effects of the oil spill on its local economies. That includes a forecast increase in the need for public services.

"Impacted communities currently are experiencing significant increases in unemployment, and facing fewer opportunities for short- and long-term employment and the loss of industry-based economies potentially for a long period of time," the letter says.

The $40 million BP has paid so far on loss-of-income claims is sure to skyrocket, but it's still only a small piece of the Deepwater Horizon accident's ultimate costs. BP estimated this week that it has already spend $990 million on the clean-up efforts -- and the leak continues pumping an estimated 19,000 barrels of oil a day into the Gulf waters. 

First-time jobless claims fallDespite critics, prison operator CCA says times are good

High APR? Don't worry, you can still negotiate

"I think [card companies] will be just as willing now as they have been," said Nick Bourke, director of the Safe Credit Cards Project at The Pew Charitable Trusts.

In the past, most cardholders had little difficulty bartering with their bank on their annual percentage rate.

But that seemed due to change after Congress passed major new rules for the industry in February with the CARD Act.

As part of the new law, credit card companies were prevented from practices such as "double-cycle billing" and arbitrary rate increases.

Before lawmakers had even drafted a bill, the banking industry warned Congress that a new law would have dreadful consequences for both issuers and consumers.

"We are deeply concerned that these rules will result in less competition, higher consumer prices, fewer consumer choices, and reduced consumer access to credit cards," said Edward Yingling, chief executive of the American Bankers Association, said during a Congressional hearing in May 2008.

So far, a number of those predictions have come to pass.

Credit card companies started hiking rates last summer in anticipation of tougher new rules, although the industry attributed the rate increase to the risk in lending to strapped consumers who can't pay their bills.

0:00/2:05The dangers of debt consolidation

Rates have moved even higher still. As of last week, the national average for a platinum card stood at 11.31%, according to Informa Research Services. Rewards cards stood at 12.33%. Just six months ago, those rates were 10.6% and 11.8% respectively.

But Bourke pointed out that the recent increases are not nearly as severe as those enacted just before the CARD Act was signed into law.

Despite the uptick in rates, experts say issuers can't afford to be completely inflexible with customers looking for a lower rate.

For starters, Americans still can vote with their feet and move their business elsewhere if they are unhappy with the current credit card company. Estimates put the number of different types of cards available to consumers at more than 10,000, according to the payments industry trade publication The Nilson Report .

Why U.S. debt matters to you

At the same time, the steady improvement in the economy in the past year has led to some relief for banks who had been weighed down by bad loans.

Industry charge-offs, or loans a bank considers to be uncollectible, fell to 10.91% during the month of April, according to the most recent data published by Moody's. The percentage of Americans that are behind on payments has also dropped in recent months.

With banks no longer intently focused on loan troubles, credit card companies are once again looking to add customers, said Odysseas Papadimitriou, CEO of Evolution Finance, which publishes Cardhub.com, a credit card comparison site.

"With credit losses coming down, what we are seeing is increased competition between major issuers in getting new business," said Papadimitriou, a former executive with Capital One (COF, Fortune 500).

Several issuers contacted for this story, including Bank of America (BAC, Fortune 500) and Discover (DFS, Fortune 500), said they have continued to look at individual accounts to determine if they can offer customers an interest rate reduction.

"We've always been committed to helping cardmembers in need, and that is no different today," said a spokesperson for Discover.

Of course, negotiating a lower rate with a credit card company will not prove easy for everyone.

Long-standing cardholders or those with high credit limits, for example, have typically been among the most successful in winning a lower rate from their credit card company. Industry experts said that probably holds true today.

And while consumers whose credit got dinged by the recession might not fare as well, those who simply kept up with their payments may also be able to talk their way into a lower APR.

"If you are somebody who is paying your bill on time, using your card and carrying a balance, you are a great customer for a credit card company," said Bourke.

Credit card horror stories: Did your card issuer double your interest rate, shut down your credit line or tack on exorbitant fees? Tell us about it and you could be included in an upcoming story on CNNMoney.com. For the CNNMoney.com Comment Policy, click here .  

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Markets go on a Hungary strike

According to several reports, a spokesman for the new prime minister of Hungary, a member of the European Union that does not use the euro currency, said that talk of a Hungarian default is not "an exaggeration"

Those comments caused Hungary's currency, the forint, to plunge and also led to another sell-off in the euro. The euro dipped below $1.20 against the dollar, another 4-year low and an important technical milestone on what some experts think is a road to eventual dollar parity.

"The euro has been moving lower and it will continue doing so. The question now is the pace of the decline, not whether it will decline," said Vassili Serebriakov, currency strategist with Wells Fargo in New York.

So what do the latest Europe woes mean for the U.S. economy? It's not great news.

Preston Keat, director of research with political research and consulting firm Eurasia Group in London, wrote in a note Friday morning that Hungary is "not yet in a Greek situation" but it is "wobbly."

That hardly inspires confidence. So any hope that the debt crisis could be contained to the three most troubled of Southern Europe's PIIGS (Portugal, Spain and Greece -- Ireland and Italy are the other two) may have been dashed by the new fears about Hungary.

0:00/2:25Europe crisis: Wake-up call

Maybe it's time for a new acronym? PIIHGS with a slient H for Hungary? That might even be too narrow. If Hungary is in trouble, it stands to reason that other emerging markets in Central and Eastern Europe may also succumb to debt problems.

"Hungary has looked like one of the weaker Eastern European nations for a while and that says a lot since that's an area that has been underperforming for some time," Serebriakov said.

If other Eastern European nations start to wobble, the "healthier" countries in Europe may not be able to stand idly by and watch the continent fall apart.

Dan Cook, senior market analyst with IG Markets in Chicago, said there are growing worries about how much exposure big European banks have to the debt of the most troubled European countries.

So as painful as it may be, the European Union, and likely the IMF as well, might have to step in to stabilize the euro and prevent the crisis from intensifying.

Hungary in the market goulash

"The reality is that the stronger countries in the euro zone, including Germany, France and the Netherlands, are in much better shape," said John Stoltzfus, senior market strategist with Ticonderoga Securities, an institutional trading firm in New York.

"They are going to have to help their weaker brethren get through this. That means austerity programs, which will shave off growth in Europe's economy for several years," he added.

Julian Thompson, co-manager of the Threadneedle Emerging Markets fund in London, said that this may only be true to a point though. Political pressures could force Europe's more stable countries to only focus on the biggest problems in Europe.

"Hungary, to be honest, is a bit of a sideshow. Spain is more important. The Spanish property bubble hasn't been pricked yet and that's going to put more pressure on the euro for some time," said Thompson.

Keep track of the euro and other currencies

Regardless of what happens in Hungary though, one thing is clear: Europe is a mess. And continued weakness throughout Europe, at the very least, will make it tougher for the U.S. economy to recover.

It may not lead to a double-dip recession but a sluggish European economy is likely to lead to more woes for companies that do big business in Europe.

In addition to the currency hit that companies will take when they report earnings, the bigger concern is that a slowdown in consumer demand in Europe would mean a lower level of exports to Europe. And that's the last thing that the still-fragile U.S. economy needs.

Reader comment of the week. I wrote about Europe's woes earlier in the week as well. And while much of the focus has been on the precipitous plunge in the euro, one reader astutely pointed out that people need to put the euro's decline in historical context.

"I don't see why people are so alarmed by euro around $1.20, it's right in the middle of its usual historical range ($1.10-$1.30). If anything, the recent pullback is a return to normality assuming it stabilizes a bit. The spikes in the last three years are an anomaly," wrote Iikka Keränen.

- The opinions expressed in this commentary are solely those of Paul R. La Monica.  

European debt worries worldEuro not out of the woods yet

Job cuts remain at pre-recession levels

"Announced job cuts have, for all intents and purposes, returned to pre-recession levels," said John Challenger, chief executive officer of Challenger, Gray & Christmas, in a prepared statement.

Cuts in the government and non-profit sector, which accounted for 16,697 or 43% of total planned reductions in May, continued to outpace other areas of the jobs market.

Challenger attributed the trend to massive deficits brought on by plunging tax revenues and soaring costs, coupled with a reluctance to raise taxes in an election year. With limited options, state and local governments have put jobs on the chopping block.

"Unlike the private sector, which is beginning to see the fruits of recovery, the budget crisis for many states and municipalities is only getting worse," he said.

0:00/2:29'This debt will eat up jobs'

Still, the pace of job cuts continues to slow. Announced job cuts in May, though up slightly from April, were 65% lower than the same month a year ago, marking the 12th consecutive month in which job cuts came in both lower than the year-ago figure and under 100,000.

Planned layoffs announced during the first five months of 2010 totaled 258,319, down 69% from the 822,282 announced during the same period in 2009. At the current rate, job cuts for the first half of 2010 are on track to be the lowest since 2000.

Challenger said that a slowdown in downsizing is typically ahead of the summer months, but the low job cuts seen so far this spring are "particularly remarkable."

Although he doesn't expect the pace to slow further, given the still fragile state of the economic recovery,monthly job cuts could continue to fall during the summer, as businesses hold off on making dramatic staffing changes, he said.

The Challenger jobs report precedes a highly anticipated monthly jobs report from the government due Friday. The Labor Department is forecast to show a gain of 500,000 non-farm payrolls in May, according to economists surveyed by Briefing.com.

The government reported a gain of 290,000 jobs in April, the best gain in four years.  

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Is the euro crisis over or just beginning?

Some experts were pleasantly surprised by the sudden comeback. It's not as if there was a ton of good news to justify the euro rebound.

Ratings agency Fitch downgraded the credit rating of Spain late Friday. And on Monday -- a day when the U.S. financial markets were closed -- the European Central Bank warned that European banks could face a second big wave of losses through 2011 because of the debt crisis in Southern Europe.

"The euro sell-off may have run its course. The fact that we had so many negative things about Europe in the past few days and the euro is still holding above $1.22 shows that something's changed here," said Andrew Busch, global currency and public policy strategist at BMO Capital Markets in Chicago.

Still, is it too early to declare that the worst is over for the euro? After all, the issues that led to the financial woes in Greece and the other PIIGS nations mounted over a lengthy period of time.

"This crisis will last months, not days or weeks. Sovereign credit problems take a long time to resolve," said Guy LeBas, chief fixed income strategist with Janney Montgomery Scott in Philadelphia.

LeBas said he thinks that investors will continue to shun the euro in favor of dollar-denominated assets such as U.S. bonds -- despite the fact that the rush into bonds has left long-term yields relatively low. (Bond prices and rates move in opposite directions.)

He added that global investors aren't necessarily expressing a show of great confidence in the U.S. by buying bonds. It's simply a case of the dollar and Treasurys being "less worse" than the euro and bonds of European nations.

"When investors are this skittish, they are focused on return of principal not return on principal. Treasurys are the tallest midget on the block, the strongest credit in a weak world," LeBas said.

0:00/2:25Europe crisis: Wake-up call

That's not good. Continued woes for the euro could make it more difficult for the U.S. stock market to rebound following a brutal May correction. Many companies doing significant business in Europe may find their profits under pressure as a result of unfavorable exchange rates and weak demand in Europe.

With that in mind, Susquehanna Internet stock analyst Marianne Wolk wrote in a report Tuesday that she was lowering her earnings targets for Google (GOOG, Fortune 500), eBay (EBAY, Fortune 500), Priceline (PCLN) and Expedia (EXPE) as each generates a decent chunk of revenue from Europe.

"At this juncture, the euro has fallen low enough and long enough for us to predict a negative impact on earnings is highly likely," she wrote.

Cowen & Co. apparel analyst John Kernan is also worried about the euro's plunge. He wrote in a report Tuesday that a "rapid deterioration in the euro" is the biggest near-term risk for several clothing makers he just initiated coverage on: Guess? (GES), Phillips-Van Huesen (PVH) and Polo Ralph Lauren (RL, Fortune 500).

Keep track of the euro and other currencies

LeBas said he's hopeful that most U.S. companies have done enough currency hedging to protect themselves from the euro's sharp fall, but added that it's reasonable to expect weaker consumer spending in Europe now that austerity is a buzz word across much of the continent.

Still, there is some evidence that Europe's woes, while undoubtedly a setback to the U.S. economy, won't create a meltdown along the lines of 2008. The U.S. manufacturing sector, for example, continued to grow in May, in spite of the problems in Europe.

There's some skepticism about the strength of manufacturing.

"The European fiscal crisis doesn't appear to have harmed the prospects of U.S. manufacturers, at least not yet," wrote Paul Ashworth, senior U.S. economist with Capital Economics in Toronto, adding that there will likely be a bigger impact on U.S. exports in the coming months.

However, the new export orders component of the ISM Manufacturing Index released Tuesday was the highest in two decades. BMO's Busch said the encouraging manufacturing data may help convince investors that Europe won't drag the U.S. and global economy into another recession.

"In the past few weeks, the story has morphed from just a European debt crisis to fears of a global financial crisis. This is a serious European sovereign debt crisis but it doesn't look like it will derail the global recovery," Busch said.

- The opinions expressed in this commentary are solely those of Paul R. La Monica.  

Poof! Kiss confidence goodbyeEuropean debt worries world

GM, Ford sales gains outpace Toyota

GM, the No. 1 U.S. automaker reported a 17% gain in sales compared to a year ago, led by a 32% rise in sales at the four brands it still markets -- Chevrolet, Buick, GMC and Cadillac.

Sales of the brands GM shed as part of its bankruptcy filing were off 94% from a year ago, although those brands now make up less than 1% of the company's U.S. sales.

GM got a strong lift from a spike in sales to fleet customers, particularly rental car companies. Fleet sales accounted for 37% of its sales in May, up from about 31% in April.

Ford Motor (F, Fortune 500) reported a 23% rise in sales at the three brands it retains -- Ford, Lincoln and Mercury. The company is in the process of closing the sale of its Volvo brand to Chinese automaker Geely. It also got about 37% of its sales from fleet sales, but it said much of those sales were truck sales to commercial customers, rather than car sales to rental companies.

0:00/2:10GM dealer: One year later

Sales at the Ford brand rose 28% compared to a year ago, but sales at the Mercury and Lincoln brand were off 10% and 11% respectively.

There have been reports in the last week that Ford was close to shutting down the Mercury brand. George Pipas, director of sales analysis for Ford, said there was no drop-off in Mercury sales tied to the timing of those reports, and he had no comment about the speculation.

Ford's sales were good enough for it to again raise its second-quarter production target by 2%, or 15,000 vehicles, from its previous estimate, putting it at 640,000 vehicles. It also gave its first look at third-quarter production, putting it at 570,000 vehicles, which would be 16% above year-ago levels.

GM's sales easily exceeded forecasts from sales trackers Edmunds.com and TrueCar.com, while Ford topped TrueCar's forecast and was roughly in line with Edmunds' estimate.

Toyota Motor (TM) reported only a 7% rise overall, short of forecasts for a 9% gain. Its 4% gain for the Toyota brand was bolstered by a 31% increase for the luxury Lexus brand.

Toyota has been hit by recall problems this year. Comparisons for Toyota are more difficult to the year-ago period since many buyers were shunning GM and Chrysler a year ago because of the bankruptcy at those automakers at that time.

Experts are expecting a gain in industrywide U.S. sales of 11% to 18% compared to a year ago. May auto sales are also expected to be better than the April seasonally adjusted sales pace.

Other automakers are due to report results later Wednesday. 

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Manufacturing (ISM)

April's number is slightly better than expected, driven by increases in productivity, new orders and manufacturing jobs. Economists surveyed by Briefing.com were expecting a reading of 60.

"Overall, the recovery in manufacturing continues quite strong, and the signs are positive for continued growth," Norbert Ore, chairman of the ISM's survey committee, said in a release.

Of the 18 industries surveyed in the report, 17 reported growth. Apparel, non-metallic minerals and wood products were among the industries showing the strongest growth.

New orders, productivity, imports and commodity prices all rose at faster rates in April than the month before, indicating that demand for products is driving a recovery in manufacturing.

As for factory jobs, trends continue to look up. The employment component of the report grew for the fifth consecutive month, rising to 58.5 in April from 55.1 the month before.

"It affirms something we already know -- manufacturing is in a full-blown recovery," said Tim Quinlan, an economist with Wells Fargo Securities. "Now, the markets are waiting for that recovery to spread to other sectors."

The inventories part of the index shrunk slightly in April, though, to just under 50 -- the tipping point -- from 55.3 in March.

That decline is not entirely surprising, Quinlan said, as manufacturers are still taking their time to rebuild inventories after scaling back at unprecedented rates during the recession.

The ISM manufacturing index is determined by a survey of purchasing managers and reflects the number of people who say economic conditions are better, compared with those who say conditions are worse. While the index can paint a picture of broad trends, some analysts warn that because it stems from a survey, the index can be subjective. 

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