Market shows life: This morning's news that Citigroup has received a $7.5 billion injection from the Abu Dhabi Investment Authority is helping prop up stocks after yesterday's big hit. At last check the Dow was up 160 points. But these days good news only gets you so far: Third-quarter home prices fell 4.5 percent from a year earlier, according to the Case-Shiller housing index. That's the biggest drop since the housing index was started in 1987. And consumer confidence is way down. (Bloomberg)
How low will they go? The LAT gets us good and worried on p1 by having a few economists predict a further 15 percent to 25 percent drop in home prices. At least there was UC Berkeley professor Kenneth Rosen suggesting that the severity of the downturn will vary by region.
Areas such as the Central Valley and the Inland Empire will be the hardest hit, he said, because these attracted a higher percentage of new buyers with shaky credit, and many of them are now defaulting on their loans. He believes values in these communities could fall by 15%. But "in areas where there is very little new housing, where it's hard to build and a lot of wealthy people live, there will be little decline or maybe none at all." So far, the monthly home sales figures appear to bear that out. Last month, for example, median home values fell 15.1% in Riverside County but only 3.8% in Los Angeles County, according to DataQuick Information Services.
Gas prices ease up: The government's latest survey shows only a one cent increase in the average price of regular in the L.A. area, to $3.37 a gallon. Meanwhile, oil prices plunged today amid concerns that a slowing economy might reduce demand for crude. OPEC might decide to boost production at a meeting next week, and that could lower prices even more. (AP)
Contract talks resume today: Nikki Finke reports that Monday's session between representatives of the Writers Guild and the major media companies went well ("It was very productive, very level-headed, and it seemed as though the producers came ready to bargain," an insider told her). There's lots of unofficial optimism that an agreement is possible - not this week but perhaps before the end of the year. More from Finke:
According to my sources, both sides spent the session recapping where they'd left off negotiations back on November 4th, which was the last time the WGA and AMPTP faced off. "So they basically went through all the proposals on the table: what they'd already agreed upon, and where they needed to go from here," an insider explained to me. "Tomorrow, they really start advancing the ball forward."
Another immigration myth: Lou Dobbs, please note: Illegal Latino immigrants do not cause a drag on the U.S. health care system because they typically don't visit emergency rooms with any more frequency than Latinos born in the United States, according to a report from the University of California's School of Public Health. "Low rates of use of health-care services by Mexican immigrants and similar trends among other Latinos do not support public concern about immigrants' overuse of the health care system," the researchers wrote. (Reuters)
Fresh & Easy protests: About 100 activists from a coalition of community groups are not happy about the new grocery chain, a unit of British retail giant Tesco, not having a union workforce. So they took their protests outside a Santa Monica hotel, where Tesco was meeting with investors. "Tesco, remember everywhere you go, we are going to be there," said Maria Elena Durazo, head of the 800,000-member Los Angeles County Federation of Labor. The coalition also has questioned Fresh & Easy's commitment to open stores in low-income neighborhoods. (LAT)
Kerkorian drops bid: The L.A. billionaire's investment company withdrew its $1.4 billion tender offer for 16 percent of Tesoro Corp., citing a stockholder-rights plan adopted by the oil refiner. In a statement this morning, Tracinda Corp. said the rights plan "inhibits value for all Tesoro shareholders by, among other things, restricting the ability of shareholders to vote, sell or acquire Tesoro shares freely without fear of triggering the draconian provisions of the rights plan." Tesero shares plunged on the news. (Bloomberg)
Warner Bros. promotion: Jeff Robinov, the studio's head of film production, becomes president of a newly created Warner Brothers Pictures Group, which will handle production, marketing and distribution. The authority to green light movies will remain in the hands of Alan F. Horn, president and COO of Warner Brothers, though Robinov will be a major player in the process. And if that name rings a bell, this is the same Jeff Robinov who supposedly declared that Warner would no longer be doing movies with women in the lead (he denies making that declaration). Robinov joined Warner Bros Pictures in 1997 from ICM as senior vp for production.
What happened to backdating? Somehow with the credit crunch and housing slowdown and thoroughly crazy stock market it's gotten lost in the shuffle. The SEC, which clearly wasn't much into the scandal from the start, is not taking any enforcement action against a bunch of Silicon Valley companies. And now comes word that Computer Sciences Corp. is off the hook. The El Segundo-based company said it's been notified that the SEC's investigation into its option-granting practices was over. Computer Sciences said it needed to restate more than a decade of results by about $59 million to account for backdated stock options. (NYT)
Universal Studios in Korea: It plans to build a $3.1 billion theme park in South Korea, its third resort in Asia (others in Osaka, Japan and a planned resort in Singapore). The complex will be located near Hwaseong, south of Seoul, and open in 2012. It'll have hotels, a golf course and a shopping mall. (Bloomberg)
Lacter on radio: This morning's biz chat with KPCC's Steve Julian cover the troubles on Wall Street, the latest on the writers strike, and the corporate payout from this season's Rose Bowl.