Market calms down: The Dow has been trying to recover this morning, perhaps helped along by a government report showing after-tax incomes were way up in May (no doubt influenced by those stimulus checks). Consumer spending also shot up. Also up, however, is oil, which had been trading at over $142 a barrel this morning. (AP)
Gas drops a penny: The average price of a gallon of self-serve regular in L.A. is $4.617, according to the Auto Club's latest survey. That's $1.43 more than this time last year.
KB takes hit: The L.A.-based homebuilder reported a net loss of $255.9 million, compared with a prior-year net loss of $148.7 million. KB CEO Jeff Mezger blames the numbers on "persistently poor demand for new homes" and "amplified pricing pressures." That means not enough customers. From the WSJ:
KB Home has been aggressively reducing its supply of land and stockpiling a cushion of more than $1.3 billion in cash on its balance sheet while focusing on marketing to first-time home buyers and constructing smaller, lower-cost houses to increase sales amid the downturn. While other builders are simplifying homes to shave costs, KB Home continues to tout its design studios, which offer plenty of carpet, counter and door choices.
Trouble at IndyMac: How else do you describe a company whose stock price in the last year has fallen from $31 a share to 80 cents? That's right, the Pasadena-based mortgage company is in such dire shape that Sen. Charles Schumer is asking regulators to keep an eye out to "help prevent the collapse of IndyMac or minimize the damage should such a failure occur." From the WSJ:
IndyMac had $10.4 billion of loans, or "advances," from the Federal Home Loan Bank of San Francisco at the end of the first quarter. Such loans are backed by collateral, typically mortgage loans. Sen. Schumer's letter asked the bank and finance board whether the credit and collateral terms for IndyMac "accurately reflect the associated risks." He also asked whether the San Francisco bank plans "actions to mitigate the risks of its exposure to IndyMac."
Dealmaking slows: Global mergers and acquisitions fell 35 percent in the first half of the year, with private equity plunging 66 percent (86 percent in the U.S.). It's not a huge surprise, considering how the credit crunch has frozen much of the dealmaking game. Also keep in mind that 2007 was an off-the-charts year so comparisons become problematic. (Reuters)
New Web flavors: In the words of Maxwell Smart, would you believe .perfume, .sports and .paris? New rules passed by the Internet Corporation for Assigned Names and Numbers - what passes as the Web's regulatory body - will allow any company, organization or country to apply for a top-level domain. They can even register in scripts other than Roman characters, like Chinese, Arabic and Cyrillic. But wait a sec, is this progress or just the recipe for more Web confusion? From the NYT:
Lauren Weinstein, a longtime Internet activist and co-founder of People for Internet Responsibility, an education and policy firm in Los Angeles, said he worried that the new system would create huge opportunities for shady domain name registrars, who buy and sell domain names for profit, and for others who try to exploit the address system. “The potential for mass confusion and fraud and phishing from these new domains seems to be what the primary impact will be for consumers,” Mr. Weinstein said. “I fail to see the positive for consumers in this. It’s all downside.” Icann officials said that they would move slowly to introduce the changes, and would address many concerns and unanswered questions in a public review process that could last at least a year.
New offices for Playa Vista: The tech company Belkin International will have its headquarters at the $1.2-billion office complex now being developed by Tishman Speyer and Walton Street Capital. Belkin will occupy 150,000 square feet, almost half of the space in the four-building first phase of the office campus. One LAT source valued the Belkin deal at more than $100 million. Way back when, this land was to have been the home of DreamWorks.
AIG holds onto ILFC: Translated, American International Group, which is the world's largest insurer, has decided not to sell L.A.-based International Lease Finance Corp., which is the world's largest airplane leasing company. AIG has been struggling badly - we're talking $5 billion in expected losses related to the subprime mess - so when a new CEO was brought in to turn things around the idea of selling ILFC came up. The chairman of ILFC is L.A. billionaire Steven Udvar-Hazy. (Bloomberg)
Talking about LAT property: I was on KCRW's "Which Way, L.A." last night, throwing in my two cents on Tribune possibly selling the Times complex.