The Dow pulled back quite a bit from its earlier highs, but still managed to finish about 150 points on the upside, back over the 10,000 mark (10,058). Lots of chatter about what it means or doesn't mean, none of it very convincing. The pullback is not a great sign for follow-up gains.

Same old same old: A higher poverty rate than the rest of the nation, a higher percentage of working poor than the rest of the nation, a graduation rate far lower than the rest of the nation, and a still-stunning divide between millionaires (250,000) and poor people (1.4 million). Those are some of the findings from a report by the United Way of Greater Los Angeles that looks at the social and economic climate between 1999 and 2009. The full report will be available on the United Way Web site later today. From the press release:

"Findings from this report show that problems once thought confined to the poor, like excessive rent burdens, falling wages and uncertain healthcare coverage, are seeping up the income distribution," said Manuel Pastor, professor of Geography and American Studies and Ethnicity, University of Southern California. "It is of utmost importance to shore up the bottom in order to grow the middle class in Los Angeles, and we must take action now because shoring up the bottom will help secure the middle. It's not just about plugging the holes in our social safety net, as studies have shown that in regions with higher poverty, more segregation and wider income disparities cause slower overall growth. We can't leave people behind, or we'll continue to come up short in both our human capital and social consensus, both important to the County's prosperity."

The report does cite some improvement over the last 10 years in test scores and children's access to health care. Violent crime is also down (although it's down everywhere). As for the bad stuff, United Way CEO Elsie Buik says that "our institutional leaders are stepping forward and forging new approaches to these issues," which might be news to the shelters and soup kitchens around town that are struggling just to keep the lights on.

Photo: AP

San Clemente home hit the market at $4.2 million, and then, four days later, it was reduced by $1.3 million. So now it's $2.9 million. The place is not huge - 3 bedrooms, 2 baths, 2,817-square-feet - but as you can see from the picture, there's also an ocean view. OC Register notes that the home last sold in 1999 for - are you sitting down? - $450,000.

Fitch Ratings is apparently monitoring L.A.'s budget situation for a possible downgrade in the city's credit rating. Among the reasons cited: a structural deficit, an erosion of the city's reserves, and the failure to trim the workforce. Moody's has also expressed concern to city officials. This is all from a memo sent by budget official Miguel Santana to the mayor and city council members. From the LAT:

Santana's memo quoted a representative from Fitch stating Monday that there was "an amazing opportunity for the elected officials to show leadership and for a valid reason. According to the press, though, they can't seem to step up and make decisions. So if it can't be done now, then when?"

A downgrade in the credit rating would make it more expensive for the city to borrow money - and the city could be faced with borrowing lots of money.

Market takes off: So much for the doldrums. Stocks are roaring back after yesterday's 103-point tumble that took the Dow under 10,000 for the first time since last November.

Toyota details recall: It's a software glitch on the braking system of 437,000 2010 Priuses and other hybrid models. From the NYT:

[Toyota President Akio Toyoda] said Tuesday that Toyota was not a perfect company, but it had never lied to customers. "I do not see Toyota as perfect or infallible. But when we discover a defect, make defects, or receive advice from customers, we work hard to fix them and improve," he said. "We do not allow cover-ups."

Upbeat forecast: The ports of Los Angeles and Long Beach will see imports jump as much as 28 percent during the first half of 2010, according to the National Retail Federation. From the LAT:

Previous forecasts for the local ports and for the nation's busiest harbors for container cargo had been for lukewarm improvement at best for the first half of the year. But Hackett Associates, which tracks import data every month for some of the nation's biggest retailers, said that it was noticing positive signs from a number of indicators. One of those was the fact that the record number of ships that were laid up or idled for lack of work last year had begun to drop substantially.

Your tax dollars...: Despite the budget crisis, CA bureaucrats spent tens of millions of dollars for new vehicles, new furniture and off-site meetings and conferences. The governor had asked state agencies to cut costs. (LAT)

Council looks to regroup: Members will consider a 41-point program proposed by City Administrative Officer Miguel Santana that's aimed at eating into L.A.'s massive deficit. From the Daily News:

Although the City Council has put on hold a plan to eliminate some departments, Santana has proposed eliminating the Human Services Department and transferring the work of several other agencies into other departments. Council members have said they want to offer assurances to the community that programs, such as those for the disabled and involving the environment, will continue even if the departments are eliminated.

Taking on Live Nation deal: NYT editorial says the merger with Ticketmaster, just approved by regulators with minor revisions, doesn't address the problems of vertical integration, in which a few corporations can control all aspects of their industry.

The kind of consolidation embodied by Live Nation Entertainment is tremendously worrisome. Live Nation could easily shut out independent promoters -- who don't have their own venues and ticket services. This could reduce diversity in the music market. The cost savings that are supposed to flow from these mergers never seem to accrue to consumers because the mergers leave so little competition in their wake. The mechanisms of antitrust regulation are not up to this challenge.

Breathing easier: Private equity kingpin Leon Black at an industry conference in Berlin (from NYT):

"What a difference a year makes," Mr. Black, the leveraged buyout titan and founding partner of Apollo Management, said as he assessed the credit markets and the outlook for the private equity industry. "When we sat here a year ago, the world was pretty close to the precipice," he added.

Pillow will cost you: American is charging $8 on its 2-hour-plus flights for that pillow-and-blanket combo. For flights under 2 hours, pillows and blankets won't be available at all. From USA Today:

"Welcome to flying in 2010," [says Henry Harteveldt, travel industry analyst at Forrester Research]. "Other than the basic seat, the only thing you can count on to come with your fare is an oxygen mask and a seat belt." The airlines aren't to blame, he says. "The traveling public needs to realize that we've been so thirsty for low fares that this is what we've gotten for ourselves," he says.

Another dip in gas prices: Average gallon of regular in the L.A. area is $3.025, down a couple of pennies from last week, according to the government's weekly survey.

Lacter on radio: This week's business chat with KPCC's Steve Julian looks at the growing numbers of long-term unemployed and the coming battle over the C-17. Also at kpcc.org and on podcast.

NY Attorney General Andrew Cuomo has settled with two L.A. private equity firms in connection with an ongoing corruption probe. Wetherly Capital Group pays $1 million to the NY state Common Retirement Fund, and Markstone Capital, founded by one-time GOP player Elliott Broidy, will return $18 million. Whetherly also agreed to stop being a placement agent. From the LAT:

According to Cuomo's office, Wetherly was paid in excess of $1.3 million in fees for directing New York pension funds to three California private equity firms: Ares Management, Freeman Spogli & Co. and Levine Leichtman Capital Partners.

[CUT]

Broidy, beginning in November of 2002, gave more than $1 million in gifts, political contributions and other benefits "to top decision makers" as well as their friends and family members, with the intent to influence state officials to invest in a Markstone private equity fund, Cuomo's office said. In return, Markstone got a $250-million investment and earned $18 million in management fees.

Broidy has already pleaded guilty to charges he paid $1 million to New York officials to win $250 million in investment capital.

Stations have been inundating the L.A. air with news throughout the day and night (32 hours each weekday), which may or may not be the ticket to keeping local broadcast operations alive. I write about the economics of TV news in the February edition of Los Angeles magazine. Some snippets:

News generates nearly half of a station's annual revenues and usually turns a profit, especially in large markets like Los Angeles. It's cheaper to put together a newscast than it is to buy high-end syndicated talk shows--in some cases, a lot cheaper. Once the anchors, reporters, producers, helicopters, and satellite dishes are in place, the incremental expense of scheduling another 30 or 60 minutes of news is relatively low. What's newsy at 1 p.m. will probably stay newsy at 3 p.m.

KABC, just as an example, is said to be paying $240,000 a week to broadcast Oprah, at least twice as much as it would cost to produce an hour of news in that same 3 to 4 p.m. time period. The station hasn't announced what will replace the talk show when Oprah Winfrey exits in 2011, but featuring news would save around $6 million a year, probably enough to offset any ratings declines. Advertisers would likely sign on because they consider news to be quality programming and because there's little chance their commercials would be skipped over by DVR users (who records newscasts for future viewing?).

Last September the 15 highest-rated stations in the Los Angeles market were being viewed at some point of the broadcast day by 728,000 households, down from 1 million households for the same period a year earlier. KABC lost 57,000 viewers; KNBC, 29,000; and KCBS, 27,000.

The audience is not only smaller but older. The Council for Research Excellence, a Nielsen-funded organization, asked people from different age groups to chronicle how much time they spent in front of a screen, be it TV, computer, video game, or smart phone. Those in the 18- to 24-year-old bracket clocked more than eight hours a day, but they were watching live television only 41 percent of the time. Those older than 65 were watching live television 84 percent of the time.

By the way, my piece includes a couple of comments from Nancy Bauer Gonzales, who had been news director of KCBS and KCAL until she was replaced last month by Scott Diener, former head of news operations at the CBS duopoly in Dallas-Fort Worth. From what I understand, there's a lot of nervousness about cuts.

Dow loses 103 points, finishing below 10,000 for the first time since Nov. 4. Though some investors pooh-pooh these round-number milestones, they do carry psychological weight, especially at a time when the economy's prospects are so uncertain. It also affirms what many have been saying for months: that the market's huge gains have been out of touch with reality.