Monday morning headlines

Overseas markets plunge: U.S. exchanges are closed for the MLK holiday, but trading in most Asian markets has been grim. The major indexes in Hong Kong, Shanghai and India are down by more than 5 percent during the day, while those in South Korea and Australia fell by nearly 3 percent. The deteriorating U.S. economy is worrying folks, of course, and what's really nervous-making is that even the economic stimulus proposal couldn't lift the Dow into plus territory. From the NYT:

“There’s something approaching panic in the market,” Holger Schmieding, the chief European economist at Bank of America in London said by telephone. “There’s been a reassessment in the market of the U.S. economic outlook, with most people now thinking that there will be a recession,” and investors are starting to reconsider the idea that the rest of the world “will remain aloof from U.S. problems.”

Measuring possible recession: The WSJ suggests that this downturn could be worse than the relatively short and mild one we saw in 2001. It's the combination of heavy debt, high energy and food prices, and a weakening job market that could put a crimp on consumer spending. Rather than look to 2001 for guidance, a better guide might be 1991, when the housing market took it on the chin. But some consider the current housing slowdown and resulting financial crisis to be more severe. It's not all gloom and doom: the Federal Reserve seems ready to keep cutting rates and the lower dollar is boosting exports big time.

Companies, at least those outside of the banking and housing sectors, might also take some of the sting out of a recession. Their finances are in far better shape now than they were in 2001, and credit so far is still widely available. As they repaired their balance sheets in the wake of the 2001 recession, companies were also slower to hire than in past economic expansions. That may mean they won't be able to cut jobs as deeply, says Goldman Sachs economist Jan Hatzius.

Keeping the lid on O'Shea: The decision to replace the LAT editor was made more than a week ago when O'Shea balked at the cuts being demanded by Times Publisher David Hiller. Times ME John Arthur said that senior editors were well aware of the discord between O'Shea and Hiller. The apparent breaking point was Hiller wanting to keep this year's newsroom budget at $120 million. O'Shea supposedly argued that this year's coverage of the political campaigns and the Olympics required a budget increase. Still seems like there's more to this story. (LAT, Chicago Tribune)

Informal talks begin: Writers Guild leaders aren't saying much about the Directors Guild agreement with the media companies and whether it offers enough new media sugar for them to sign a deal and end the strike. Nonetheless, the WGA's Patric Verrone, David Young and John Bowman are expected to sit down this week with Disney CEO Robert Iger and News Corp. President Peter Chernin, the first time both sides have met since early December. Writer blogs have been pretty circumspect about the DGA contract, so don't expect a super-quick agreement. (Variety)

HBO goes online: The free service, which allows access to 400 hours of movies and original programming each month, will be made available only to people already subscribing to HBO. Unlike the major networks, which stream video, HBO’s programming must be watched through a separate computer application that downloads shows to the hard drive (seems like way too much hassle). Also, the program is available initially only on Windows PCs. (NYT)

Unsafe at any speed: The independent truckers who load and unload at the Ports of Los Angeles and Long Beach often work in a shadowy economy that includes discount mechanics, body workers, welders and junkyards - legal and otherwise. Profit margins are thin (truckers get paid by the load), so cutting corners is the name of the game. Get a load of this opening in the LAT:

Miguel had more reason than usual to be anxious as he drove his aging big rig out of the Port of Los Angeles' bustling China Shipping Terminal. By his own admission, his 24-year-old truck was dangerously overloaded. The suspension was shot, the tires nearly bald. Over his CB radio, other drivers barked warnings that the California Highway Patrol had set up several checkpoints nearby. "I'm worried," said Miguel, a 47-year-old independent operator who requested anonymity to avoid trouble with the law.

[CUT]

On the morning Miguel warily watched for the CHP, he had contracted to haul a 40-foot trailer to Rancho Cucamonga. The 80-mile haul, one of two such trips he planned to make that day, would gross him $320. But the emergency repairs needed on the truck -- it has 3 million miles on it, the equivalent of about six round trips to the moon -- would have to wait. Miguel couldn't even afford to visit a lot just outside the gates of the China Shipping Terminal where truckers can get tread carved into their balding tires by llanteros, or "tire men," before getting on the 110 or 710 freeways.