Fed meets on rates: Not much action this morning on Wall Street because everybody is waiting for the Federal Reserve to make its decision on interest rates (announcement at 11:15). Most everybody expects at least a quarter-point drop, perhaps more. But almost as important as what the Fed decides will be the statement that goes along with it. Even with these and further rate cuts in 2008, it's not at all clear how quickly the U.S. economy can rebound from this year's housing and credit worries. More economists are forecasting a recession (see below post). (Bloomberg)
Sony numbers look good: The company's consumer electronics business has not been affected by the shaky economy and is on track to hit a 5 percent operating margin for the year ending March 31. That's a big deal because electronics operations account for nearly three quarters of Sony's total sales. CEO Howard Stringer warned that the U.S. economy was "dodgy" and the situation could change in the New Year, but so far, so good. (Reuters)
Millions wasted: Here's yet another slap for California's government-run workers' compensation insurance company: A new audit finds that State Fund spent more than half a billion dollars for outside marketing help that often provided minimal services. And about half that money went to organizations with direct financial ties to two former board members. Nice. From the LAT:
The report paints a picture of an obscure rogue operation with more than $22 billion in assets, little oversight, minimal public checks and balances, and indiscriminate spending with little attention until recently from top state officials such as the governor and the insurance commissioner. The quasi-governmental company has been under investigation for more than a year. Since the fall of 2006, State Fund has replaced two board members, several marketing executives, the general counsel to the board and the president. The California Highway Patrol, the state Department of Insurance and the San Francisco County district attorney's office are conducting a joint criminal investigation.
McMansions under attack: Er, isn't it a little late in the game for L.A. officials to consider a law that would limit the square-footage of new or remodeled houses? Some neighborhood activists welcome the proposal, while others complain that it doesn't go far enough. The City Council may act as early as next month - just in time for a slowdown in home building and renovation. (LAT)
War of words: So much for diplomacy. With talks broken down between the Writers Guild and the media companies, both sides are back to hating each other and not trusting each other. It'll be 2008 before things settle down and they're back at the bargaining table. From Variety:
One agent contends WGA leaders have been naive in highlighting how hardline the majors have been at the bargaining table. "Of course, studios are going to be that way," he noted. "Why do you think agents have jobs? Anyone who makes deals knows there are times when you loathe the person you're negotiating with, but you get over it and you make the deal, and if there's yelling, you send them a bottle of wine."
Billing rates increase 7.1%: Three-quarters of the U.S. law firms providing billing information to the National Law Journal charged more this year than they did in 2006, results that are sure to infuriate clients who are already ticked off at the bills they're receiving. Meanwhile, starting salaries at law firms are going up in 2008.
Pricing airports: Why do you pay 15.07 cents a mile to fly out of LAX while it's only 11.04 cents out of Long Beach (not to mention 7.29 out of Dallas Love Airport). It's all about the presence - or absence - of discount airlines (think JetBlue in L.B.). The WSJ looks at the 20 most and least expensive airports in the U.S. Cincinnati is the priciest because Delta controls 80 percent of the market.
Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the prognosis for the writers strike, the Port of L.A.'s controversial growth proposal, and maintenance/refurbishment plan for LAX.