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.
October 2008

*Arnold as Energy Secretary?

Being governor is probably becoming a drag – and with so many budget shortfalls on the horizon, it won't get any easier.

Cheap eats

More fast food chains are pushing specials - and with the plunge in third quarter consumer spending, they're getting plenty of customers.

Drug war escalates

CVS is getting into the discount prescription game by offering 90-day supplies of more than 400 generic medications for $9.99.

McCain odds improve

Intrade gives him a 17.4 percent chance of winning the election, which is sharply up from earlier in the week.

Friday morning headlines

Gas now under $3 a gallon, L.A. drops Palmdale airport, FDIC can't find IndyMac borrowers, and "CNBC effect" impacts book sales.

Redstone's assurances

He called the recent sale of his CBS and Viacom stock "highly unusual" and said it would not happen again.

'Do you know who I am?'

Courtenay Semel, daughter of former Yahoo CEO Terry Semel, allegedly tried that line on a security guard at Caesars Palace.

Paperfish closes

L.A. foodies know it as Joachim Splichal's effort at a seafood concept and a Westside location, but it just didn't work.

Lots of layoffs

Financial services, publishing, automaking, technology, retail - times are tough and getting tougher.

Drilling down on GDP

The 6.4 percent rate of decline on non-durable goods, stuff like clothing and food, was the biggest since 1950.

Thursday morning headlines

Market higher despite GDP news, Candy firm defaults on Bev Hills property, and federal commission doesn't like port plan.

Recession here we come

The GDP contracts in the third quarter as consumers cut back on their spending by the largest amount in 28 years.

Driving goes up

Old habits die hard, especially when the price of gasoline falls by $1.50 a gallon.

Mortgage guarantees?

A plan being considered would have the lender agree to reduce monthly payments based on a homeowners' ability to pay.

*Palin and English

With most politicians, there is usually a subject and verb somewhere in the picture. Not so with the governor of Alaska.

Register lays off 110

About 30 of them in the newsroom. It's the Register's fourth round of layoffs this year.

Kal's mortgage matches

The hugely successful mortgage broker specializes in young folks - 24-to-38-year-olds - who like to have a good time.

Wednesday morning headlines

Wall Street expecting rate cut, new Dubai airline making splash, and Geffen leaves DreamWorks Animation.

Big leads in Ohio, Fla.

In the latest LAT/Bloomberg poll, Obama has a 49%-40% edge over McCain in Ohio and a 50%-43% lead in Florida.

Climb, baby, climb!

Am I crazy or is Wall Street beginning to resemble a Fellini movie? How else do you explain today's 890-point jump?

Stocks go looney - again

The Dow was up almost 900 points, with most of the action occuring in the last hour.

Concern about Inland Empire

So what happens to communities in Riverside and San Bernardino that have been at the center of the foreclosure mess?

Let's cool the luxury

Executives are being advised not to stay at the Four Seasons, Ritz-Carlton and Mandarin Oriental, where room rates easily run $500 a night.

Tuesday morning headlines

L.A. home prices still falling, L.A. gas prices still plummeting, more local banks want help, and efforts to unionize Fresh & Easy.

What about online?

With print revenues still driving more than 85 percent of the business, the transition to the Web is happening too fast.

Another late plunge

If you happened to have stepped away at 12:30, you might be surprised to know that the Dow fell more than 200 points.

Register takes big hit

The paper reported a 15 percent plunge in average daily circulation, to 236,270.

Monday morning headlines

Some relief expected next summer, City National gets infused, LAT circulation drops 5 percent, and fewer passengers at LAX.

Calpers unloads stocks

Yes, it's come down to this: The nation's largest public pension fund needs cash.

Apple fighting Prop 8

The company is contributing $100,000 to defeat the ballot measure that would define marriage as only between a man and a woman.

Davos as Animal House

"We let it get out of control," says the head of the organization that puts on the annual conference in Switzerland.

Dow down 312

Well, it could have been worse. But there's always Monday....

MTA facing big bill?

Here is another unexpected consequence of having a knotted up financial network that's in the process of unraveling.

Sarah vs. Ellen?

There's talk in Hollywood circles - to what extent is unclear - that the VP candidate would be a strong candidate to host a talk show.

Friday morning headlines

Gas under $3, big layoffs at Chrysler, home sales jump in SFV, and developers opposing Santa Monica cap.

*Brace yourself

The real question is whether anyone starts buying after the early bloodshed.

Tough times for Kerkorian

The Bev Hills billionaire has not only lost several hundred million dollars in Ford, but a big chunk in MGM Mirage.

Polling for dummies

The Investor's Business Daily tracking poll has McCain within one point of Obama. But look closer at the numbers.

Greenspan plays Claude Rains

The former Fed chairman was “shocked, shocked” to find that gambling was taking place in the financial markets.

How secure is NYT?

Declining revenue, deeper-than-expected cuts - the numbers look so bad that the company is in danger of defaulting on its debt.

Foreclosures dip, but...

The explanation seems to be a new law that requires lenders to contact borrowers at least 30 days prior to a notice of default.

Thursday morning headlines

Foreclosures are trimmed, lottery sales down, Redstone says he's not selling CBS or Viacom, and actors talks to resume.

Market holding up

Well, so far. The Dow is actually up a bit after 30 minutes of trading - despite all kinds of reasons for it to keep falling (larger-than-expected increase in jobless claims, a plunge in Asian markets, etc)....

Is Calpers in trouble?

Like most any investor, the nation's largest public pension fund has taken it on the chin. The question is how much?

*Stocks are plunging

Dow down more than 600 points. *Make that 514 points. From the NYT: Improvements in the credit markets — including the third straight day of declines in bank borrowing rates — did little to placate stock investors who are eying the corporate consequences of an economy that many economists believe is already in a recession. Earnings reports have been weak this week, and many companies have warned about lower sales and a bleak outlook for...

More doom and gloom

Super-bear and man-about-town Nouriel Roubini is back on the air, scaring the bejesus out of everybody.

Another deal from hell

Much of Wachovia's $24 billion third quarter loss is tied to pay-option mortgages that were inherited through the purchase of Golden West.

Wednesday morning headlines

Redstone files for divorce, Boeing loses satellite case, FDIC to lease space in OC, and California maintains its A-plus rating.

Stocks back down

Fears about the credit crunch have morphed into fears about weak earnings and a prolonged recession.

Another bubble bursts

The Republican National Committee has spent more than $150,000 to clothe and accessorize Sarah Palin.

Tale of two markets

While Socal saw a 65 percent jump in home sales last month, sales of non-foreclosed homes fell from year-ago levels.

Dance the blues away

Try this out after cracking open your latest brokerage statement. Trust me - you'll feel better.

Dow down 231

The upward slog will not be easy, especially given the not-so-hot earnings that are being reported.

At last, some relief

Yeah, the Dow is still down more than 5,000 points from its high, but at least traders are back to discussing earnings results.

Kerkorian's Ford folly

The Bev Hills billionaire is still a billionaire, but he's also taken huge hits at MGM Mirage and Delta Petroleum.

Obama's rich donors

Both he and McCain have taken advantage of several loopholes in the campaign finance laws to score big money.

Tuesday morning headlines

Wall Street shows stability (for now), Kerkorian pulls out of Ford, Icahn buys into Lions Gate, and pump prices keep dropping.

Credit gets better

There's clearly improvement, which helps explain why the Dow is up more the 300 points.

Karatz is back

There had been speculation about what the former CEO of KB Home might do after his legal troubles were resolved.

Sales up, prices down

September's housing numbers continue the pattern we've seen in L.A. County for some months now.

Monday morning headlines

Credit markets are thawing, SAG wants federal mediator, NBC Universal to make cuts, and Disney Hall turns five.

A380 arrives Monday

Qantas begins using the Airbus monster for its service between L.A. and Melbourne.

Schumer donor eyed IndyMac

Considering how the Democrats are so fervently tying big bad business with the GOP... well, you see the problem.

*Squeeze on Sumner

On a day that has seen bleakness most everywhere, it's hard not to find fascination over news that Sumner Redstone is in trouble.

Big layoffs at Zillow

The popular real estate Web site has a lot of eyeballs and VC funding. But revenues are not yet covering expenses.

Mervyns to liquidate

After a close-out sale during the holiday season, the Hayward-based department store chain will wind down operations.

Credit loosening up

One closely watched indicator shows more willingness of banks to lend to other banks.

Banks: Just say no

Rather than lend, many banks, especially the healthier ones, would prefer to use government money as a cushion.

L.A. jobless rate eases

The September unemployment rate was 7.8 percent, which is a tad lower than the 7.9 percent rate in August.

Another L.A. project on hold

Plans for a 45-story luxury condo tower at Santa Monica Boulevard and South Moreno Drive have been shelved.

Friday morning headlines

Gas prices drop for the 17th straight week, office vacancies are rising (and rents are falling), and Buffett still bullish.

How Stone financed 'W'

Producer Bill Block thought Oliver Stone’s treatment of Bush’s rise to power would appeal to middle America.

More takers for IOU sale

There's just a lot of interest among investors, who are having a hard time knowing where to put their money.

No more AP in LAT?

Tribune Co. says it will drop the Associated Press, though it has two years to work out a deal.

Thursday morning headlines

More red ink at Merrill and Citi, California gets needed cash, traffic falls at ports, and new plan for California Adventure.

*Dow falls 734

So much for the hope that the market had hit bottom earlier in the week.

Forecast anyone?

Given the accuracy of 2008's economic forecasts you might wonder whether it's worth the effort.

Bev Hills switcheroo

It's almost unfair to dredge up the bullish scenarios that developers had been offering a year ago. Almost.

Credit still tight

There has been a little loosening in some of the widely-watched indexes, but it's like comparing a 99-degree day with a 103-degree day.

Wednesday morning headlines

Stocks sinking on bad economic news, more regulation is considered key, gas prices keep falling, and new idea for Bev Hills project.

An offer they didn't refuse

Godfather Hank Paulson lays out a plan to inject $250 billion into the banking system - and the terms are non-negotiable.

CEO takes bath

We're starting to get an idea of how many millions have been lost in the stock market by big-shot chief executives.

*Obama up by 14

It's a 53-39 percent edge, according to the CBS/NYT poll, just out this afternoon.

Pick your pundit

Be happy, be hopeful - there is no shortage of opinion on whether the bank bailout will work.

Looking for a 4.5% return?

The state treasurer's office took orders for more than a third of the $4 billion worth of notes being sold this week.

More $$ for Grand Avenue

A Korean firm will invest $100 million for the first phase of the long-delaed downtown project.

Tuesday morning headlines

California starts selling short-term notes, Dodgers team up with the William Morris agency, and Redstone could be vulnerable.

Spielberg back at Universal

After cutting the cord at Paramount, the refashioned DreamWorks studio has a seven-year distribution deal.

Dow up 948 points

That's an 11 percent jump on the day....

The real story at Downey

Downey Savings & Loan has been in a world of hurt for some months now, but the backstory is not what you might expect.

Only 5,000 points to go!

The Dow climbs over 9000. The all-time high is 14,164.53....

Ignorant and proud

In a single paragraph, Variety's Peter Bart manages to blow off almost 4 million people and an economy of around $400 billion.

New home price dip

That's what happens when much of the sales activity involves foreclosed properties (roughly a third of all sales in the county).

Cause for caution

The Dow is up sharply in early trading, but there's a lot of skepticism about whether the rally will last.

Big morning ahead

European exhanges are up 4-6 percent, following Asia's big advances.

Obama's predictions

More than two months ago, he warned about how the other side would respond - too risky, funny name, not patriotic enough.

Gut-wrenching session

The AP leads this way: Wall Street seesawed Friday, with the Dow Jones industrials dropping nearly 700 points in the early going and fluctuating wildly in the last hour while investors looked for bargains after eight straight days of massive losses. The Dow still headed for its worst week ever as investors still worried about credit markets that remain near paralysis. The Dow finishes the day off 128 points....

More cheap eats

Three-pound pasta dishes? Restaurant chains push food that’s cheap and plentiful.

Volker offers comfort

The former Fed chairman says that the means are now available to turn the economic tide.

Credit crisis up close

If you want to know why the credit crisis is such a big deal, visit the offices of a NY broker-dealer that can't get banks to loan money.

Fame being discounted

The offering price of a monster home in Agoura that was used in the ABC series "The Bachelor" has been sliced by 33 percent.

Stocks fading again

Today's action apparently is being impacted by today's auction involving credit default swaps.

Hang out at gas stations

It's about the only place where you'll find some good news.

Trying to fight back

Should a plunge of more than 700 points, followed by the recovery of all those losses - in the space of 30 minutes - indicate that we're near the bottom?...

Takes your breath away

I just checked out a couple of dozen local stocks to see just how bad the damage has been since the first of the year. In a word, BAD.

What we don't know...

Everybody says they're for transparency, but they're really not. It was the lack of transparency that helped get us into this fine mess.

California crunch eases

Gov. Arnold Schwarzenegger says that recent actions by the feds "appear to be improving liquidity" in the state.

Enough already!!!!

Another 600+ points on the Dow? There's no rational explanation for what we're seeing, other than hysteria.

Grim economic outlook

What's amazing about these sentiments is how different they are from early September.

Thursday morning headlines

Stocks still flounder, California still looking for help, more CEOs taking a hike, and Tribune, MediaNews look at Union-Tribune.

Zell vague on debt

Here's how the Tribune CEO put it: "I think that anything is possibly true, and until something happens nothing is true."

About McCain's plan

I've been struggling to figure out how McCain's rescue plan for indebted borrowers would differ from the package that Congress passed.

Another 189 points

After see-sawing throughout the session, losses really piled up in the closing minutes of trading.

SNL update

A parody in Saturday's show that took aim at former Golden West executives Herb and Marion Sandler has been cleansed and reposted.

Wednesday morning headlines

Stocks keep slip-sliding, many L.A. homeowners are drowning in debt, weak September retail sales, and Hollywood gets back to work.

Market turnaround?

Incredibly, stocks opened sharply lower in the opening minutes of trading, despite a big cut in interest rates.

Making sense of it all

"This American Life" has another terrific radio hour on all the stuff you're reading about but still might not understand.

Down another 500

Maybe one day you can tell your grandchildren about the days when it stood at 14,000.

*Censoring NBC clip?

There's a lot of Web chatter about why a "Saturday Night Live" skit has been removed from, Hulu and YouTube.

Tuesday morning headlines

Markets mixed despite new Fed effort, watching out for speculators, L.A. gas prices fall again, and trouble at House of Blues.

Stocks recover a bit

The Dow finishes the day down about 369 points, more than 400 points better than where the index stood a couple of hours ago.

Money tied to murders

The suspect in a murder-suicide in Porter Ranch over the weekend was apparently having financial problems.

No one's talking rally

What's breathtaking about today's collapse is how little talk there's been about a turnaround.

Dow down 800

Just no buyers out there....

Monday morning headlines

Stocks plummet, B of A cuts deal involving Countrywide mortgages, feds seek compromise on Wachovia, and SAG and AFTRA cooperate.

*Markets take big hit

The Dow is already down 261 points in the first few minutes of trading. That is on top of the drubbing taken today in the European and Asian markets. There is simply no place to hide. (AP) *Make that 320 points. The Dow is now under 10,000 for the first time in four years....

Hollywood divorce court

Paramount and DreamWorks announced a separation agreement this afternoon that pretty much wraps up their nasty relationship.

Sign of the Times

A reader notes that Sunday's LAT Calendar section had only three staff-written pieces. Everything else looks like it was farmed out....

Is this a crisis?

Former NYT reporter David Cay Johnston takes exception to that word being used to describe this, er, major problem.

Forever 21 + Mervyn's?

The L.A.-based retailer is going after most of the stores in the department store chain, now in bankruptcy protection.

Tribune bonds hold up

Despite what's happening in the credit markets, the company doesn't face any imminent problems in paring down debt.

Will bailout help state?

Gov. Arnold Schwarzenegger's warning about the state possibly needing a loan came up during this morning's House debate,

House passes rescue

Not even close. The Dow is up 212 points. Final vote: 263-171....

House about to vote

Pelosi is speaking. Fasten your seat belts....

Why stocks are up

Much of the uptick is based on cautious optimism that the House will pass the bailout package.

Buddy, can you spare $7b?

If nothing else, the prospect of California having to be bailed out by the feds helps explain how serious the credit crisis has become.

How bad is jobs report?

The Labor Department's payroll survey showed a loss of 159,000 jobs - 59,000 more than had been expected.

*Flip-flopping on Wachovia

Unlike the now-scrapped agreement with Citigroup, this one does not require government assistance.

Scary credit news

The task is to determine how serious a blockage there is, where it’s coming from, and how long before the situation gets out hand.

Heparin still shows up

Hundreds of patients are still receiving the anti-clotting drug, months after the recall alerts went out.

Stocks take beating

The Dow fell 350 points - and that's the day after the Senate passed the rescue plan.

Buffett offering comfort

He tells Charlie Rose that the economy is going through a Pearl Harbor-type crisis. But he also expresses support for the rescue plan.

How the crisis unfolded

What's becoming clear is how spooked the financial markets had become after a money market fund had “broken the buck.”

Latest from Intrade

The online prediction market gives Obama a 66.2 percent chance of winning the election.

Thursday morning headlines

More worries on Wall Street, new worries in Sacramento, easing L.A. congestion, and SAG might take strike authorization vote.

*Talk about inflation

Funny how that bailout package just kept getting bigger and bigger and bigger.

No one's in charge

Isn't there some Talmudic loophole that allows really important people to stay on the job when the future of the country is at stake?

Gov vetoes port bill

This is the measure that would have imposed a $30 fee on cargo containers moving through the ports of L.A. and Long Beach.

Hedge fund turmoil

It's another example of how unregulated businesses lacking in most any kind of oversight can create a disaster.

Never mind bailout

Today's worry on Wall Street is not the rescue plan, which seems to have undergone a 180-degree revival in less than 48 hours, but the overall economy. A key manufacturing index fell in September to a seven-year low (well below what analysts had expected). From AP: The Institute for Supply Management's (ISM) manufacturing index fell to 43.5 in September, down from the August reading of 49.9. Economists were expecting a reading of 49.5, according to...

Wednesday morning headlines

New day for ports, SAG moves toward strike vote, TV ratings sluggish in first week, and restaurant chains must post calories.