Inflation surges: For that you can thank the recent jump in gas prices. The Consumer Price Index, which measures prices of a batch of common household products, rose 1.1 percent in June, the biggest one-month increase since June 1982. In the last 12 months, the CPI has risen 5 percent, the biggest year-over-year jump since 1991. Normally, this big an inflation boost might prompt the Federal Reserve to increase interest rates. But with the economy on death's door, higher interest rates would not seem to be a great idea. So things are kind of stuck. (NYT)
Would you believe... good news?: And from a bank, no less. Wells Fargo reported better-than-expected second-quarter earnings - even though net income still fell 23 percent. Gains in credit card fees and insurance revenue softened the impact of bad home loans. Wells is the first of the major banks to report earnings; JP Morgan comes tomorrow and Citigroup the day after. (Bloomberg)
But here's the bad: Delta is reporting a second-quarter loss of more than $1-billion, the result of higher fuel prices and a deteriorating economy. The results included $1.2 billion in one-time charges stemming from a goodwill write-down, employee buyouts and the closing some airport facilities (the airline is drastically cutting back on service from LAX, among other cities). Also this morning, American reported a $1.45-billion loss. (NYT)
Market bouncing around: The bad inflation news is being offset by the decent Wells Fargo news. The Dow is up more than 100 points at last check. Meanwhile, keep an eye on oil - prices a down a bit this morning, and there's a new report that says prices may have peaked. We've heard that before, but nevertheless....
Countrywide settles lending suit: Or what used to be Countrywide. The mortgage giant now in the hands of Bank of America has agreed to pay $325,000 to the Chapter 13 bankruptcy trustee in Pittsburgh to settle accusations of abusive practices in almost 300 mortgage loans. The trustee alleges that the company had lost or destroyed more than $500,000 in checks paid by homeowners in foreclosure. “The integrity of the bankruptcy process is threatened when a single creditor dishonors its obligation to provide a truthful and accurate account of the funds it has received,” Ronda Winnecour said in requesting sanctions. From the NYT:
Questionable practices by loan servicers have been under investigation by the Office of the United States Trustee, a division of the Justice Department that monitors the bankruptcy system, since October. It said then that it would move against mortgage servicing companies that file false or inaccurate claims, assess unreasonable fees or fail to account properly for loan payments after a bankruptcy has been discharged. Last March, the United States Trustee sued Countrywide over a 2005 bankruptcy filing involving John Wayne Atchley and Robin April Atchley, homeowners in Waleska, Ga. Countrywide serviced their loan and levied improper fees on the borrowers; the company also claimed that the Atchleys were behind on their mortgage on two occasions when they were current on the loan, the trustee’s suit contended.
Legislators vote for port tax: The measure would slap a $60 fee on every cargo container leaving or entering the ports. The proceeds - at least $400 million a year - would be used to ease traffic congestion and air pollution generated by the ports. That could include building roadways under or over railroad tracks to avoid long lines of idling vehicles. Similar bills have failed over the years, but Sen. Alan Lowenthal says this time will be the charm. The Assembly approved the plan and the Senate is supposed to follow. (LAT, Press-Telegram)
Nordstrom coming to Santa Monica: The high-end department store will be one of the two anchors for the refashioned Santa Monica Place mall (Macy's is the other). The mall is being converted from a traditional enclosed shopping center to an outdoor location linking to the Third Street Promenade. Much of the renovated mall will reopen by November, 2009, but Nordstrom won't open until 2010. (LAT)
Sportsman's Lodge to close: Owners of the 63-year-old restaurant, bar and banquet hall say they couldn't cut a new lease deal with developer Richard Weintraub (son of former school board member Roberta Weintraub), who bought the property last summer for $51 million. The 200-room Sportsmen's Lodge Hotel and Patio Cafe next door will remain open. From the Daily News:
The Sportsmen's Lodge Restaurant and Banquet Center has become synonymous with Valley life and development. In its early days, families learned to fish for trout from the meandering lagoons at Ventura Boulevard and Coldwater Canyon Avenue. Over the years, regulars would cut business deals, glad-hand politicians, hobnob with Hollywood stars such as Clark Gable within its woodsy watering hole or tie the knot within its sprawling banquet rooms.