Tuesday morning headlines

Man bites dog: We'll see how long it lasts, but the Dow is up 160 points this morning after the Federal Reserve announced that it would lend up to $200 billion of Treasury securities to help ease the strain on the credit market. The Fed will lend the money for 28 days instead of the usual overnight period. (NYT)

Spitzer weighs resignation: The WSJ and NYT report that he's likely to step down as NY governor, perhaps as early as today. Still no word on whether state or federal authorities will seek to prosecute him for his involvement in a prostitution ring. By the way, all this got started at an IRS office on Long Island where investigators found several unusual movements of cash involving the governor. From the NYT:

The investigators working out of the three-story office building, which faces Veterans Highway, typically review such reports, the officials said. But this was not typical: transactions by a governor who appeared to be trying to conceal the source, destination or purpose of the movement of thousands of dollars in cash, said the officials, who spoke on condition of anonymity. The money ended up in the bank accounts of what appeared to be shell companies, corporations that essentially had no real business. The transactions, officials said, suggested possible financial crimes — maybe bribery, political corruption, or something inappropriate involving campaign finance. Prostitution, they said, was the furthest thing from the minds of the investigators.

Countrywide loan data: Investigators are trying to figure out the reliability of documents that were supposed to verify the incomes and assets of thousands of its borrowers. They're finding that the documents often had erroneous information, which of course calls into question the viability of the loan (and of Countrywide’s financial condition). From the WSJ:

Countrywide, long the No. 1 mortgage company in the U.S. in terms of dollar value of loan originations, also was considered among the most aggressive in finding ways to make home loans to consumers whose qualifications couldn't be proved or seemed questionable, mortgage industry executives and analysts said. The Federal Bureau of Investigation has begun looking into its practices in pursuing such business, according to people close to the matter.


A criminal case in Alaska offers a look at the kinds of practices that have caught the attention of federal prosecutors during the subprime-mortgage crisis and its fallout. In that case, Kourosh Partow, a former Countrywide sales executive convicted of mortgage fraud, sought a lighter sentence on grounds that Countrywide and another subprime firm were aware that their loan documents "were fraught with inaccuracies," his lawyer alleged in a court filing. Executives at Countrywide and American Home Mortgage Investment Corp. "encouraged what could be characterized as manipulation," the filing alleges.

Judge reduces Dole damages: Los Angeles County Superior Court Judge Victoria G. Chaney wiped out most of a jury verdict that awarded millions of dollars to Nicaraguan field hands who applied pesticides to Dole Food crops and who are now sterile. The decision leaves four workers with $1.58 million, but it will undercut claims of 6,000 others who say they suffered similar injuries. Chaney found that the firm cannot be subjected to liability without fault because Dole was a user, not a marketer, of the pesticide. Also, the injuries occurred more than 30 years ago. (LAT)

NBC Universal not for sale: GE Chairman Jeff Immelt emphatically denies the perpetual rumors about some sort of deal once the Summer Olympics are over. “Should we sell NBCU? The answer is no!” Immelt writes in GE’s annual report. “I just don’t see it happening. Not before the Olympics, not after the Olympics. It doesn’t make sense.” But his wording provides some wiggle room further down the road. Besides, no CEO on the planet would rule out a sale under any and all circumstances. (NYT)

Viacom, Spielberg making nice?: CEO Philippe Dauman, who last year said that DreamWorks's departure from Paramount wouldn't be a material event for the company, says he's making efforts to befriend Steven Spielberg and expects him to remain with Viacom "in one form or another." DreamWorks isn't free to make a new deal until later in the year and is unlikely to begin negotiating until its opt-out clauses with Paramount expire in late spring. (WSJ)

More 3-D screens: Agreements have been reached with four studios — Disney, Fox, Paramount and Universal — to finance and equip as many as 10,000 screens in the U.S. and Canada during the next three years. The conversion will cost as much as $700 million. The announcement came this morning during the kickoff of ShoWest, the big movie theater conference in Las Vegas. (AP)

Vitamin maker files Chapter 11: Leiner Health Products in Carson is seeking bankruptcy protection a year after the FDA found problems at one of its manufacturing plants, prompting a product recall. Leiner, which supplies products to Costco and CVS, lists assets and debt of $500 million to $1 billion. The company stressed that it would continue its normal business operations. (LAT)

Oxy teams with Abu Dhabi: L.A.-based Occidental Petroleum will jointly fund energy production and refining projects with International Petroleum Investment Co., the latest of several deals between the energy company and the government of Abu Dhabi. International Petroleum Investment focuses on projects outside Abu Dhabi. (LAT)

Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the UCLA economic forecast, the FBI's investigation of Countrywide, and how the rich get richer. Available online or through podcast.

More by Mark Lacter:
American-US Air settlement with DOJ includes small tweak at LAX
Socal housing market going nowhere fast
Amazon keeps pushing for faster L.A. delivery
Another rugged quarter for Tribune Co. papers
How does Stanford compete with the big boys?
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Further fallout from airport shootings
Crazy opening for Twitter*
Should Twitter be valued at $18 billion?
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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
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