Almost $4: The average per-gallon price of self-serve regular is $3.959, according to the Auto Club's latest survey, 4.5 cents higher than last week. Many of us, of course, have been paying more than $4 for several weeks. Meanwhile, oil is trading this morning at $133.47 a barrel, just a shade off its record high.
What about $200 oil?: If it happens - and it's at the upper end of a few forecasts - pump prices could reach $6 to $7 a gallon. By U.S. standards, that's otherworldly - and raises the obvious question: At what point does it become unprofitable for Americans to go about their day-to-day activities? "Maybe at $6 or $7 a gallon, it becomes less attractive to go to work," Eric DeGesero, executive vice president of the Fuel Merchants Association of New Jersey, tells the WSJ. "We haven't hit that point yet, but we might soon."
Consumers have already taken note, with U.S. gasoline demand down 0.6% this year compared with the same period in 2007, according to the Department of Energy. The erosion in demand is likely to accelerate if gasoline prices shoot above $6, but a radical cutback in consumption will occur only if high prices weaken the U.S. economy further and contribute to increased unemployment. In regions of the U.S. that have been particularly hard hit by weakness in the housing market and economic instability, the fall in gasoline demand has already outpaced the national average, said Ann Kohler, an energy analyst with New York investment bank Caris & Co.
Toy squabble: Next week’s long-awaited legal showdown between Mattel and MGA Entertainment over the pouty-lipped Bratz dolls gets curtain-raising treatment in the WSJ. Mattel has accused MGA of essentially stealing the idea, though the back story is not as cut-and-dried. The ex-Mattel designer who sold the Bratz concept to MGA claims that he came up with the idea during a time when he wasn't working for Mattel (though he later went back to the company). Whatever the circumstances, Mattel clearly became rattled at the Bratz success.
MGA, which is located in the San Fernando Valley, was founded in 1979 by Isaac Larian. At first, it sold cheap, hand-held videogames. Court documents indicate the company was losing money in 2000. On Sept. 1, 2000, Mr. Bryant took a day off from Mattel to meet Mr. Larian at his office. Mr. Bryant arrived with a black portfolio containing his Bratz sketches and a small model of the doll wearing a short skirt. It was a rough prototype made of doll parts. Mr. Bryant said in his deposition he had used a doll head from a Mattel waste bin and other parts of his own, and had paid a Mattel colleague to paint it. Mr. Larian said in his deposition that he expressed concern about Mattel: "I asked him if this was something that he was doing at Mattel...and he said 'No.'" He added: "I didn't want to have a lawsuit." Mr. Bryant told him it was a side project, according to the depositions of both men. About two weeks later, Mr. Larian called the designer at home and said he was interested in the project, the two men said.
Take this job and...: American Apparel CEO Dov Charney recently called CFO Ken Cieply a "complete loser," adding that "we may need to look at adding people to the financial management team who have more retail experience." Well, Cieply has resigned (company lawyers had recanted the "complete loser" line). Whoever is to blame, American Apparel does seem to have a problem with its books. During a recent conference call, analysts had questions that Charney was unable to answer. (WSJ)
Mad as hell: Sony CEO Howard Stringer has an interesting challenge to his many managers: "I'm asking you to get mad," he said at a closed-door conference in Tokyo. He also asked them to be more "energetic," "bold" and "imaginative" in running their businesses. From the WSJ:
At the management meeting, Mr. Stringer implored the audience to "not be complacent," said the people who attended the meeting. At times, he employed his trademark humor, showing a slide of a big fork sticking in the middle of a road. He told them that Sony was "at a fork in the road," in which its various units needed to step up their combined efforts further to come up with new products.
Dockworker talks on course: Shippers and the union representing West Coast longshoremen say that an agreement should be reached before the current labor pact expires July 1. No details have been offered up, though safety and job security are believed to be among the big issues. Both sides have been talking since March. (Daily Breeze)
Preying on foreclosures: A San Diego business is alleged to have persuaded hundreds of homeowners, most of whom didn't speak English, to pay $10,000 each for bogus protection from foreclosure. In a coordinated move, the state AG's office, the FBI and San Diego County prosecutors shut down Federal Land Grant Co. The scheme was promoted at weekly seminars where the sales pitch was translated into Spanish. From the LAT:
More than 400 homes were in San Diego County, with scores of others in Riverside, San Bernardino, Orange and Los Angeles counties, officials said, adding that they expected to find more victims throughout California who hadn't come forward or didn't realize they were scammed. At the heart of the alleged scheme were land grant transfers, used hundreds of years ago when the United States was still acquiring land from other countries.
Disney recalls: Excessive levels of lead paint were found in Pirates of the Caribbean sleeping bags and Tinker Bell wands. They were sold at Disney Stores nationwide from April to October of 2007. The sleeping bags have lead paint on the zipper, while the wand contains lead paint on pearl beads in flowers on the top of the toy. They were both made in China. (AP)
Magazine suit: Source Interlink Cos., which is controlled by Ron Burkle and his Yucaipa Partners, accuses Time Warner's magazine distribution arm of breach of contract - specifically, that it was selling Source's customer sales information. Suit was filed in L.A. Superior Court. Source says it found out about the alleged re-selling when it bought Guns & Ammo and other specialty titles. (NY Post)