Another bad day for stocks: Just the usual gloomy news about banks being in trouble (the CEO of Dubai International Capital, a major Citigroup shareholder, said that the bank will need more money). After a couple of hours, the Dow is down about 140 points.
Deal on appraisals: Fannie Mae and Freddie Mac will only buy mortgages from lenders that use independent appraisers. The agreement with NY AG Andrew Cuomo is expected to force large lenders like Countrywide Financial to sell off their appraisal businesses. Regulators have been raising questions about the independence of appraisers who often feel pressured to value a home at prices that match or exceed loan amounts. From the NYT:
Under the new rules, lenders who want to sell loans to Fannie Mae or Freddie Mac will not be allowed to use in-house appraisers to do the first evaluation on a home. They will also be forbidden from using appraisals by a subsidiary or an affiliated company. Mortgage brokers and real estate agents involved will also be prevented from picking appraisers. For a company like Countrywide, that would mean it would no longer be able to use its LandSafe subsidiary to do appraisals for its home loan business if it wanted to sell loans to Fannie Mae or Freddie Mac. Title companies like First American would also have to divest their appraisal divisions if they wanted to continue working for lenders that sold loans to the mortgage agencies.
Film shoots delayed: There's a pretty good chance the Screen Actors Guild won't go out on strike, but producers are still being stymied by insurance companies that won't cover independent movies not completed by mid-June (the contract expires June 30). The crunch has caused many producers to postpone some projects and scramble to finish others. From the LAT:
"Whether or not a strike happens, for our purposes it's happening," said James Stern, producer of the Bob Dylan biography movie, "I'm Not There." "It's a big deal." Although the well-financed major studios don't need completion bonds for movies, they are indirectly affected because their specialty labels rely heavily on independently produced movies that are the mainstay of film festivals and Hollywood's annual awards season. Nonetheless, even the major studios have been hedging their bets. They have been contingency planning for an actors strike since the fall, rearranging their 2009 film release schedule so that most films would complete production by mid-June.
Lawyers sue Regan: They say she did not reimburse them for fees and cut them out of her settlement payment from News Corp. The lawyers represented Regan in a lawsuit related to her dismissal from HarperCollins, which is owned by News Corp. The suit was settled confidentially out of court in January. Now, Dreier LLP and Redniss and Associates LLC are accusing Regan of not paying $42,560 in fees. The law firms are also suing Bertram Fields, the lawyer Regan hired to settle the lawsuit. "Unless they dismiss that complaint," Fields told the NY Post, "Iím going to sue them for malicious prosecution." (Reuters)
LAX contract approved: The Airport Commission approved a one-year, $25-million contract for DMJM Aviation Inc. to manage preparations for expansion and modernization. The main focus will be new gates west of Tom Bradley International Terminal to accommodate super-jumbo jets. Airport managers said that LAX "suffers from the combined afflictions of physical decay and design inadequacy." (LAT)
All business class: Singapore Airlines is announcing plans to add daily business-class-only flights from LAX to Singapore, beginning in September. The round-trip fare is expected to be about $8,000. At a time when global economic growth is slowing, airline analysts were uncertain about the potential demand, though Singapore tends to be a trend-setter. From the LAT:
Singapore Airlines executives said that at the same time, demand from corporate travelers remained robust, particularly from those in the finance, technology and oil industries. The nonstop flight from LAX to Singapore is highly popular among travelers on oil-related business who are connecting through LAX from Houston. "Most days we have a wait list" for business-class seats," said James Boyd, spokesman for Singapore Airlines. "There is simply more demand than supply in both LAX and Newark."
Funding to clean ports: The state has awarded $550 million for clean-air initiatives tied to moving freight. The funding will be used to help speed up replacement of dirty diesel trucks, old cargo-handling equipment and polluting locomotives. It comes from Proposition 1B bond money, approved by voters in November 2006. (Press-Telegram)
Pink slips at CW: More than 25 people were let go, including Kim Fleary, the executive VP of comedy development, and senior VP of comedy Steve Veisel. Lower ratings, blamed in part on the writers strike, were blamed for the cuts. The CW has struggled with comedies (the exception being "Everybody Hates Chris"). Drama is now getting more attention. (Variety)
Lacter on radio: It's pledge week at KPCC, so the Tuesday business chat got moved this morning. I spoke with Kari Moran about the local employment picture and the recent newspaper layoffs. The segment is available at KPCC.org.