Monday morning headlines

B of A's big hit: The banking giant reported a 77 percent earnings drop in the first quarter, the third straight quarter that earnings fell. The results included nearly $2 billion in write-downs, which could explain why the bank is seeking to find more money from outside sources. (DealBook)

Survey shows pessimism: Nearly a third of the companies responding to a new poll believes the gross domestic product fell in the first quarter, while 70 percent are more pessimistic now than at the end of last year. But here's the telling number: Two-thirds of those questioned by the National Association of Business Economics said they paid more for raw materials during the first three months of 2008. (WSJ)

Oil dips a bit: The price of crude was over $117.40 in after-hours trading before slipping a little. At last check, the price in NY was $116.44.

Mayor to outline cuts: With a huge drop in property and sales taxes, the city of L.A.’s proposed budget is likely to include wide-ranging service reductions. Mayor Antonio Villaraigosa says he plans to increase the trash fee to $36 a month for residents, boost zoo and library fees, and possibly eliminate 767 city positions. Also taking a huge hit will be the county budget. From the Daily News:

Adding to pressure on all local government was the decision by county Assessor Rick Auerbach to launch a reassessment of properties as the housing market has plummeted. Auerbach said he plans to review the values of more than 300,000 properties purchased from July 2004 to July 2007, when prices were at their highest. The average reductions have been $66,000, saving the average homeowner $660 a year in taxes - but also reducing revenue to local government. The full impact of that loss is expected to be felt in the 2009-10 fiscal year. Jerry Nickelsburg, a senior economist at the UCLA Anderson Forecast, said the problem for local government is that the sectors it relies most on for revenue have been the hardest hit.

New premium channel: Paramount, MGM and Lionsgate will end their ties with Showtime and go at it alone, with a new channel and video-on-demand service beginning in the fall of 2009. That immediately raised questions on how Showtime - a unit of CBS - plans to fill the void. Paramount, which is a unit of Viacom, seemed to be at the center of things. Here's Nikki Finke's take:

I'd been told that the negotiations between [CBS CEO] Moonves on one side, and Viacom CEO Philippe Dauman and Paramount boss Brad Grey on the other, had not been going well in recent months. The reason was that Moonves wanted to drastically cut the price for Paramount pics, arguing that "the pay channel world isn't what it used to be" and the value of movies on pay TV has decreased while the importance of hot new scripted original series have increased. I'm told that, as the bargaining dragged on, the Paramount/Viacom camp, once optimistic that it would all work out, lost patience with Moonves' "hard line" and resented being lowballed.

Nicholas in rehab: That would be Broadcom co-founder Henry Nicholas. He checked into the Betty Ford Center last week and will spend a month in an alcohol-rehabilitation program. His attorney says the decision was prompted by the recent death of his stepfather. Nicholas is going through an acrimonious divorce and he's been identified as "a potential unindicted co-conspirator" in a federal investigation of illegal backdating of Broadcom stock options. Story was first reported by the OC Register.

Flights shifted to Van Nuys?: The plan would send about 16 private and corporate jet flights each night from Burbank to Van Nuys, which is the world's largest general aviation airport (who knew?). The idea is to provide relief for folks in and around Bob Hope Airport from 10 p.m. to 7 a.m., though the move isn't winning many supporters in and around Van Nuys. From the LAT:

"This has stirred up a little hornet's nest," said Don Schultz, who sits on the Van Nuys Airport Citizens Advisory Council. "I think it would be an unfair burden. You don't shift it from one airport to the other."

[CUT]

"They wake you up, they interrupt phone conversations, they cut off your ability to hear the television," said David Piroli, who lives in the hillside home he grew up in. "They're very loud."

Will Bloomberg buy NYT?: Don't hold your breath, but that's the chatter, at least based on a Newsweek report. The NYT Co. is under pressure from dissident shareholders to revive ad sales and unload assets. The idea was first floated in a Michael Wolff piece in the May issue of Vanity Fair.