The week after: The market was mostly flat this morning as Wall Street tries to stabilize after the last few weeks of volatility. It won't be easy because credit-related nervousness is still apparent. Not helping matters is that the second quarter, which generated decent but not great earnings, could prove to be the year's high point. In Hong Kong, a feng shui master was asked about where the market would go next. The master's advice, echoed by many more conventional strategists: The worst may be over but difficult times lie ahead. We can get that from CNBC. (Bloomberg, WSJ)
Countrywide layoff: No announcement so far, but the WSJ is reporting that the Calabasas-based lender has begun laying off employees involved in originating loans in a category known as Alt-A (mortgages between prime and subprime that often involve borrowers who don't document their income). No numbers were mentioned in an internal email announcing the move; Countrywide as a whole employs about 61,000 people. Earlier this month, the company said it was hiring more loan officers from rivals forced to close down. By the way, Countrywide stock is down again today by a bunch, almost 8 percent. (WSJ)
Tribune talk: Both the NYT and LAT speculate - as we did last week - on whether the Sam Zell-led deal to go private might be in trouble. The NY Times piece has a lot more meat on it, but the conclusions are pretty much the same: Zell & Co. says there's no change in plans, while some (but not all) on Wall Street are having their doubts because of a slumping stock price. Tribune still has to borrow a bunch more money to complete the deal - and take on more debt - but it would be hard for the banks involved in the deal to back out unless Tribune fails a solvency test.
Bankers and analysts say they see three possibilities for Tribune, each with potentially serious drawbacks. Proceeding with the takeover as planned, at $34 a share, would leave the company with very heavy debt — more than it can readily carry, many of the analysts say. If the deal dissolves as its stands now, half-realized, Tribune would still be deep in debt, though somewhat less so. Furthermore, it would not reap the significant tax benefits it was counting on to help make the package work. The third option would be to renegotiate the second phase of the stock purchase at a lower price, which would ease the company’s debt burden. But in the current credit market, that might mean paying much higher interest, and it could invite lawsuits by irate shareholders.
Thievery in L.A.: Here’s one to warm the cockles: One in four people in Los Angeles County knowingly bought, copied or downloaded illegal goods in the last year, according to a Gallup survey commissioned by the U.S. Chamber of Commerce. We're talking about everything from knockoff handbags to illegally copied CDs. "The study confirmed what we already knew: That the buying of these products is widespread and is viewed as a victimless crime," said Caroline Joiner, executive director of the chamber's global anti-counterfeiting and piracy initiative. (LAT)
Port alters overhaul: This is part of the years-long effort to revitalize the San Pedro waterfront and the latest revisions include more commercial space at Ports O' Call Village, construction of a 75,000-square-foot conference center, and revamping two historic warehouses for recreational use. The port released its proposal for the waterfront plan in January, but it was torn apart by residents and business leaders. Still being planned is the additional of another cruise ship terminal at the southern end of the outer harbor. (Daily Breeze)
LAUSD goes overseas: The school district is hiring 115 teachers from abroad for hard-to-fill positions in math, science and special education. Actually, it has recruited teachers from other countries for over 20 years, but this year's group is the largest. Many of the teachers are from the Philippines. (Daily Breeze)
Disney's “High School Musical 2” Would you believe that its debut on the Disney Channel Friday night was the most popular TV program of the week, cable or network, and the most watched show of any kind in basic cable history? Of course you would. The Mouse House is using its cable channel to appeal to the underserved 9-to-14 age group (they're too old for Mickey) - and it's being done through this High School Musical franchise. From the NYT:
From the moment the first “High School Musical,” a made-for-television, totally wholesome confection about a hunky jock and a cherubic straight-A girl who discover a mutual passion for performing, had its premiere in January 2006, a sequel was assured: the film made its debut to an audience of 7.8 million viewers, and generated $100 million in profits from DVD and soundtrack sales, touring concerts and ice shows, and numerous other brand extensions over the next two years. The sequel continues the characters’ adventures during a vacation at a New Mexico resort. Virginia Heffernan, a television critic for The New York Times, wrote that although the sequel had a haphazard charm, “the movie is mediocre, and should be skipped.” But she added, "I can’t wait to buy the soundtrack and do the karaoke."