LA Biz Observed archive

Mark Lacter covered business, the economy and more here from 2006 until his death on Nov. 13, 2013.
The entire LA Biz Observed archive — more than 10,000 blog posts by Mark — remains online and available.
September 2008

Grownups vs. children

The notion that Wall Street doesn't deserve to be bailed out has to be one of the dumbest arguments to come along in some time.

Dow up 485

There's lots of chatter about some sort of rescue package making it through Congress by the end of the week.

Studios turn down SAG

The Screen Actors Guild had asked the studios and networks to resume negotiations by focusing on just three issues.

Remembering the GD

We're hearing scary - and misplaced - references to the Great Depression, especially after yesterday's House vote.

Uh-oh - stocks are up

You can almost hear the bozos who voted against the bailout say, "See, we told you - Wall Street isn't collapsing after all."

Another home price hit

L.A.-area prices fell 1.6 percent in July from a month earlier and 28.2 percent from a year earlier.

Latest from Lee Abrams

Tribune Co.'s ever-vigilant innovation chief wonders why advertorials have to be called "special advertising sections."

Oil also plunges

As the economic situation deteriorates, the demand for commodities, including oil, is expected to slow.

All about politics

Among 38 incumbents in races that are rated as a "toss-up" or a "lean" by the Swing State Project, just 8 voted for the bailout.

Dow down 770 points

It wasn't a complete meltdown, but it was close enough - and given the playground-type skirmishes we're hearing on Capitol Hill, this could be just the start of more bloody days on Wall Street. How a vocal minority in the House could successfully spearhead such a disaster - unbelievable. Question: When the value of our retirement plans goes plummeting, as they surely will, can we get to bill the bozos who voted against the bailout?...

Bailout bill fails

The Congressional leadership apparently wants to take another shot at the bill, perhaps today, perhaps later in the week. What's extraordinary is how little leveragev the House leadership had on the rank-and-file members. Apparently, all those warnings over the weekend did not outweight the negative public reaction to this. Dow down 457 points....

Dow plunges 500+ points

Bailout bill did not pass, which has Wall Street in a panic (Dow initially fell 700 points). Hold onto your seats....

Monday morning headlines

Fed injects billions into the system, local office market gets hit, new drilling in Long Beach and Variety still up for sale.

Stocks are sinking

There's still lots of concern over whether the bailout bill will turn things around.

Citigroup buys Wachovia

Here's another case of an out-of-state bank that in retrospect was too eager to expand into California.

Why bailout makes sense

Not everyone agrees with this optimistic scenario, of course. Thing is, the optimistic scenario makes sense.

Pinning blame on crisis

Go back a decade or so, with the creation of those exotic financial products that helped big-time investors skirt existing rules.

Bidding war for Wachovia

Citigroup and Wells Fargo were going after the banking giant today, in what’s being described as a “possible emergency takeover.”

Playing with numbers

You'd almost expect Hank Paulson to take out his check ledger at the Treasury Department and begin scribbling. Reality is a lot different.

Bailout deal nears

The rescue package will look a lot like what had been agreed to on Thursday – before McCain blew into town.

A deal for Wachovia?

The North Carolina banking giant has taken a huge hit with option adjustable mortgages.

NBC's mixed signals

NBC Universal CEO Jeff Zucker has a different take on the economy than his boss, GE CEO Jeff Immelt.

LAX workers cut deal

Service workers were asking for increased pay, improved medical coverage, and better training.

Credit crunch gets worse

Just to state the obvious: If banks aren't willing or able to lend much money, the economy stalls out.

KB Home takes big hit

CEO Jeff Mezger says the housing market is unlikely to improve much in the near term.

Impact of WaMu deal

As far as Socal is concerned, the fed seizure and J.P. Morgan takeover should not be that a big deal.

JP Morgan deal for WaMu

The WSJ just reported that the feds have brokered a deal for J.P. Morgan to buy deposits and branches of Washington Mutual.

Mortgage bill vetoed

Gov. Arnold Schwarzenegger said legislation to crack down on state-licensed brokers put the brokers at a competitive disadvantage.

Bailout deal reached

Fasten your seat belts - House and Senate negotiators reached general agreement on the $700 billion rescue plan.

Thursday morning headlines

WaMu seeking buyer, Valley home prices keep sinking, Countrywide has another VIP, and L.A.'s vertical mall.

Close on bailout deal

NY Sen. Charles Schumer says he hopes to have a bipartisan consensus on the rescue package sometime this afternoon.

Zell talking recession

The legendary bottom-feeder also says that the single-family housing market should bottom out next year.

McCain has no shame

Not to sound like Andrew Sullivan, but there really is nothing the McCain people won't do to deceive voters.

Doubts about bailout

Despite urgent calls by Bernanke and Paulson, more and more voices are talking about taking a time out.

Wednesday morning headlines

Markets mixed after Buffett investment, ex-Countrywide executive loses B of A job, and old Tower Records store turns into boutique.

UCLA: An ugly economy

The Anderson Forecast expects lower personal income and high unemployment.

Strange bedfellows

Goldman Sachs, which was on the verge of collapse last week, might now be interested in Pasadena-based IndyMac Bank.

WaMu caught in a wringer

Even as it struggles to stay afloat, the savings and loan has to deal with questionable loans and house flipping.

Stocks down again

The Dow has lost 533 points in two days, hardly a vote of confidence for the government's bailout plan.

Mattel and China

While the company has taken steps to tighten up its inspection process, the system is far from foolproof.

Tuesday morning headlines

More bailout talk from Bernanke and Paulson, California counties tops in home values, and Emmys telecast loses big.

Oil and gas don't mix

After 14 consecutive weeks of declines, it’s a good bet that gas prices are going up.

Stocks fall 380 points

Just too many questions and too much nervousness about the government bailout plan.

The trouble with Bratz

Valley-based Doll-maker MGA Entertainment has more on its hands than the nasty copyright infringement case with Mattel.

Oil up to $130

Wowser! The $25-a-barrel jump is the biggest one-day price jump ever, though prices seem to be pulling back a little. Oil is now becoming a safe haven and the dollar is plummeting. The Dow is down 273 points....

Markets getting ugly

In the absence of any details on the government's $700 billion bailout plan, investors are getting antsy.

LAX plans revamped

For the third time in six months there are new plans to remodel the Tom Bradley International Terminal.

About the jobless report

Besides a big drop in state and local government employment – some of it seasonal - was a continuing decline in the retail sector.

*Eli Broad and AIG

The L.A. billionaire could get involved during a meeting today of the insurance giant's other big-money investors.

Another rough week

Stocks are down in early trading as investors take in the government's bailout proposal and a bunch of other stuff.

Heading for the hills

I's not a great time to be taking a few days off, but hey, it's not as if I can do anything about the collapse of the financial markets.

It's as easy as CDS

If AIG gets done in today or tomorrow, it will be because of the company’s dangerous exposure to the credit defaults swaps market.

AIG running out of time

The effort to prop up the massive insurance company through help from JP Morgan and Goldman Sachs seems to be dead.

Making out on CNN

In case you haven't seen this, here's a little levity to break up the tension. P.S. The two guys are from the Howard Stern show....

Karatz's SEC settlement

More than $7 million isn’t chump change for Bruce Karatz – but it’s not exactly breaking his bank either.

Another rocky start

The Dow is down by more than 100 points in the early minutes of trading. Asian markets were battered.

The scene at Lehman

Clearly, it still hasn't sunk in for many of the investment bank employees. Bottles of alcohol popped up on the trading floor around noon.

Gas in L.A. vs. Chicago

As pump prices skyrocket in Chicago, Cleveland and Houston, L.A. showed a 7-cent-a-gallon decline from last week..

An ugly day

Here's a sampler of local stocks (prices may not be final, but you'll get the idea). Amgen -1.1% Cheesecake Factory -2.5% CPK -3.3% Disney -2.7% KB Home -5.8% Mattel +0.5% Napster +86% (Best Buy announced that it was buying the music service) Northrop -2.6% THQ -5.7%...

Ouch! Dow down 504

The last hour was a doozy, especially for financial issues. After today's 4.4 percent drop, the Dow is under 11,000....

Joining Merrill, BofA

It's way too soon to talk layoffs and other cost efficiencies in the L.A. area. But make no mistake: They're coming.

With an hour to go...

The Dow is down about 320 points, which is near its lows for the day. The good news is that investors didn't panic.

Last days at IndyMac

Generally well-regarded - even in the final days before the government takeover - CEO Michael Perry is given only mixed reviews.

Will AIG sell L.A. firms?

Lots of mixed signals on what insurance giant AIG intends to do with 21st Century Insurance and International Lease Finance.

Best Buy acquires Napster

The struggling L.A.-based music service is being bought for about $121 million.

Oil slips below $96

That's a $5-a-barrel drop from just last week because of falling demand - as well as early indications that Hurricane Ike spared much of the Gulf refinery operations. The big oil drop won't do much for gas prices this week in portions of South and Midwest. They've skyrocketed because of short-term supply problems. But there are no signs of price run-ups in California....

Tracking stocks

We'll be updating throughout the morning. 10:49: During a White House press briefing, Treasury Secretary Hank Paulson says "Our banking system is a safe and a sound one" and that "The American people can be very confident about their accounts." 10:15: Shares of AIG are at least stabilizing after NY Gov. David A. Paterson said the state would allow the big insurance company to lend itself $20 billion to bolster capital. AIG is still believed...

Expect bloody opening

You're looking at a few hundred points on the Dow, which is bad but not a disaster. The big question is what happens after that. "If trading opens with everyone racing for the exits, capitulation selling could finally show up," Art Cashin, director of floor operations for UBS, said in his morning notes (CNBC). That suggests a bounceback, but no one is betting the house on it....

Merrill agrees to sale

Bank of America will be buying the 94-year-old inventment bank for about $44 billion.

Bracing for the Big One

With Lehman Brothers likely to go into bankruptcy, Wall Street is preparing for a very rocky trading day.

A day like no other

NYT provides the first of what will likely be many scene-setters on Wall Street's weekend of fear. You really have to go back to the market crash of '87 to approach the feeling of anxiety being seen and heard today. And even that horrific trading day can't really compare to this because stocks quickly rebounded. That's not likely to happen this time around. Dinner parties were canceled. Weekend getaways were postponed. All of Wall Street,...

Lehman to file for bankruptcy

It'll be the largest failure of an investment bank since the collapse of Drexel Burnham Lambert 18 years ago.

Merrill talking to BofA

The move is seen as an effort to shore up what many consider the next likely investment bank victim if Lehman were to go under.

*Lehman nears liquidation

Barclays, which had emerged as the leading contender to buy all or part of the investment bank, says it couldn't reach a deal.

Register for sale?

OC investors George Argyros and Larry Higby are in preliminary discussions about buying the Register, according to a report.

What's up with WaMu?

Despite a new CEO and some encouraging financial numbers, the stock keeps dropping - and the talk has turned to a possible sale.

Never mind politics

More than 400 people were lining up this morning to get into the new Nordstrom Rack at Laguna Hills Mall.

Betting on McCain

He's now favored on the Intrade prediction market to win the presidency.

Zell's birthday bash

It doesn't appear as if the recent round of newsroom layoffs will be holding back the billionaire.

Friday morning headlines

Ike's impact on gas prices, Lehman sale might be near, Palin opposes local port fees, and Health Net reinstates customers.

Sputtering job machine

That would be the L.A.-Long Beach area, which ranks well down the list of top 200 metro areas surveyed by the Milken Institute.

Oil at $100.71

What's amazing about the recent price plunge is that it's happening in the middle of hurricane season.

Lehman looks for buyers

Over the last 24 hours CEO Dick Fuld has been putting out the word that the 158-year-old investment bank is on the block.

*Google vs. Tribune

They're still sparring over an old news story about United Airlines' filing for bankruptcy being confused for a real-time story.

Thursday morning headlines

OC salesman indicted, Council approves signage pact, court approves ports' plan, and consumer sentiment picks up.

Lehman keeps falling

The investment bank's future really seems to be in doubt, despite yesterday's announcement about selling off assets.

Mattel, MGA to play nice?

That's what a federal judge in Riverside wants from the two locally based toy companies.

Follieri pleads guilty

The onetime business partner of L.A. billionaire Ron Burkle was charged in connection with a real estate investment scheme.

Sarah Palin preps for ABC

We've just received top-secret footage of her training sessions in advance of being interviewed by ABC's Charlie Gibson.

Wednesday morning headlines

Lehman's survival strategy, AIG's signage proposal, La Jolla vs. Sioux City, Iowa, and AFTRA is moving into SAG's turf.

Resignation mystery

Wall Street is still trying to figure out why Tom Conforti suddenly stepped down as DineEquity CFO.

Tanker bidding cancelled

The decision is a victory for Boeing, which lost the initial competition to Northrop and the parent company of Airbus.

Lehman on life support

There are several reports that a prospective infusion of cash by the Korea Development Bank has collapsed.

Penny stock

The folks at 99 Cents Only Stores were pretty cute with their price increase of 0.99 cents, but not everyone is signing on.

Tuesday morning headlines

Oil closing in on $100, Gross' $1.7 billion payday, DreamWorks deal delayed, and proxy advisers back Napster.

99.99 cents only

That's the new top price at the City of Commerce-based discount chain. Is there any such a thing as 1/100 of a penny in change?

Judge OKs port plan

An injunction to prevent the ports of L.A. and Long Beach from launching their Clean Trucks Program has been denied.

*The rush to post news

Two embarrassing online slip-ups today are a reminder of how dangerous the Web can be.

*Samueli plea rejected

A federal judge ruled that a deal involving the Broadcom co-founder would "erode the public's perception of our justice system."

WaMu on probation

The nation's largest thrift will be put under special regulatory supervision following skyrocketing losses from mortgages.

Monday morning headlines:

Truckers to fight ports plan in court, studios support transition to digital, and housing proposal blasted by both sides.

Stocks jump on bailout

We'll see how long it lasts. The Dow opened up more than 340 points, but has since pulled back (at last check it was up 269). Recent rescue rallies have been "shorter in duration and weaker in intensity than the immediately prior one." blogs Barry Ritholtz at The Big Picture. Calculated Risk says that even after the bailout, the basic problem hasn’t changed: housing remains in terrible shape, with excess supply, tighter lending standards, and...

Bill Gross likes bailout

The bond market super-seer says that the government rescue plan for Fannie Mae and Freddie Mac is a "positive step."

Fan-Fred taken over

The two mortgage financing giants have been placed into government conservatorship.

New headache for Downey

Federal regulators have issued a cease-and-desist order that requires the Newport Beach-based thrift to raise capital.

Nic Cage and the IRS

The actor has agreed to pay $660,000 to settle IRS claims that he improperly deducted personal expenses.

Preview of new LAT?

Prototypes of the Chicago Tribune redesign, which will be introduced in a few weeks, are making the rounds.

Friday morning headlines

Stocks are off: The lousy jobs report wasn't exactly a surprise, but that doesn't make it any easier to digest. The Dow is down about 60 points in early trading. At least gas is cheaper: But this week's drop is markedly smaller than what we've seen in previous weeks. The Auto Club's latest survey shows that the average price of regular in L.A. is $3.852 per gallon, which is 4.5 cents less than last week....

Big unemployment jump

The U.S. jobless rate last month increased to 6.1 percent, its highest level in five years.

Wall Street gets crushed

The Dow winds up down 344 points - and for reasons that aren't entirely clear.

That darn economy

For John McCain, it's kind of a problem because he is notoriously challenged on economic matters. But wait, there's Sarah!

Sarah's a keeper

Of course, all it takes is a new revelation about moose meat or something and the odds might change in a hurry.

McCain's chief vetter

Besides being in charge of the VP search team, Arthur Culvahouse has his hands full as chairman of O’Melveny & Myers.

Thursday morning headlines

Stocks way down, lukewarm August retail sales, Mervyn's sues ex-owners, and Air Force might keep C-17 going.

Activision CEO gets ranked

Bobby Kotick of Santa Monica-based Activision makes his debut on Vanity Fair's annual ranking of the top 100 movers and shakers.

Wednesday morning headlines

Little price relief for consumers, Palin the businesswoman, Abu Dhabi in Hollywood, and LAPD scuffles with producers.

L.A.'s housing shortage

Between 1990 and 2007, L.A. County had a net gain of 1.4 million new residents, but added only 194,554 housing units.

Housing stat du jour

Here's more evidence that much of the home sales activity these days is happening under stress.

Murdoch still surprises

An excerpt of an upcoming book on the media magnate points to his malleable view of the conservative agenda – and of Fox News.

*Betting on VP withdrawal

Intrade has the chances of Sarah Palin stepping aside as the VP nominee at 12.5 percent.

Tuesday morning headlines

Hurricane fizzle brings down oil, summer movie attendance drops, Spielberg nears deal, and MGA squabbles with insurers.

Gustav breaking up

Oil prices are plunging this morning as the hurricane that everyone had been bracing for is proving to be less serious than feared just a couple of days ago. In electronic trading, crude is under $112 a barrel, down around six bucks from Sunday. That alone speaks volumes about the lessening of concern within the oil world (and these folks don’t rely on Wolf Blitzer for their information). Keep in mind that production and refining...