*Economy update

This morning's terrorist scare hasn't had much impact on the financial markets. Stocks are inching up and oil prices have fallen, apparently on the belief that people might be traveling less in the coming weeks. The fairly benign reaction is a good thing considering that mortgage demand and new home sales are taking a beating. I noted the concerns by Countrywide Financial CEO Angelo Mozilo earlier this week, and now there's Robert Toll, CEO of the homebuilder Tolls Bros., tellng analysts that the slowdown will last at least six months and perhaps a lot more. New home sales are less critical in L.A. than elsewhere because there just aren't a lot of new homes being built. Still, the trendlines are definitely headed south. Another indicator: A report by Chapman University's A. Gary Anderson Center for Economic Research indicates that California employers will be doing a little less hiriing in the third quarter than in the previous three months. However, job growth remains pretty good.

*Update: A new Wall Street Journal survey shows that economists are nudging higher the probability of a recession over the next 12 months. Om average, they put the likelihood at 26 percent, up from 20 percent in June. They're also forecasting GDP growth at a sluggish 2.8 percent annual rate in the third quarter.