Stocks sinking: The Dow is down more than 100 points in early trading. All the usual reasons.
Citigroup cuts 53,000 jobs: The headcount is being reduced by 20 percent from a peak of 375,000 at the end of 2007. Citi had already announced in October that it was eliminating about 22,000 jobs from those levels. (AP)
Gloomy outlook: The GDP will decline in the fourth quarter by 2.6 percent and then by 1.3 percent in the first three months of 2009, according to a survey by the National Association of Business Economists. Those revised estimates are considerably bleaker than when the last survey was taken just a month ago. (AP)
Japan in recession: The world’s second-largest economy has been hurt by weak export growth. It's the first time since 2001 that the economy has contracted for two consecutive quarters. From the NYT:
Until now, Japan has stood apart from most other developed nations because its banks were relatively unscathed by the financial crisis. But Monday’s data showed that America’s woes reached Japan via its exports, as Americans spend less on Japanese cars, televisions and machine tools. Japan is particularly affected by these swings in the United States, the world’s largest economy, because it has been largely dependent on sales abroad for growth.
Another Grand Avenue delay?: Related Cos. is unlikely to break ground on the $2.7 billion Grand Avenue project in February, according to the Business Journal. The big developer, which has already missed several start dates, would have to pay $250,000 for every month construction is not begun.
Related has had trouble securing a construction loan for the 3.6 million-square-foot mixed-use development near Walt Disney Concert Hall. And with the credit markets still locked down it appears unlikely that the loan can be secured in time. "February would be a push under the best of circumstances. Nobody is even talking to people about making loans right now,” said Bill Witte, president of Related of California. “I think the fact that we and many others are waiting for the capital markets to clear up is not a surprise to anybody.”
Success story: The Business Journal's fastest growing private business is Coding Source, which converts X-rays and other medical procedures into insurance codes so doctors and hospitals can get paid. The company had revenues last year of $18.5 million and a three-year growth rate of 417 percent.
Getting into the hotel biz: Hollywood nightclub entrepreneur Sam Nazarian gives it a try with the SLS Hotel in Bev Hills (formerly the Hotel Nikko and later Le Meridien). Nazarian said the SLS is a long-term family investment and that his strategy during these tough times is to provide luxury at a cheaper price point. (LAT)
Lots of luck: The luxury hotel business is fading fast - so much so that LaSalle Hotel Properties has told its management companies (among them Starwood Hotels & Resorts) to cut their work forces by 20 percent. LaSalle has seen a much steeper-than-expected fall in revenue per available room. From the WSJ:
[Patrick Scholes, of Friedman Billings Ramsey] said LaSalle faces increased pressure because it has a larger portion of luxury and so-called upper-upscale hotels, which have seen the largest drops in reservations, particularly from corporate spending. "I call that the 'AIG effect,' " said Mr. Scholes, referring to the now infamous retreat on which American International Group Inc. spent $443,000 just days after receiving an $85 billion federal bailout. "A lot of other corporations have said, 'Uh-oh, we better cancel our bookings because we don't want to look like AIG.' "
New look for LAX: Airport officials unveil the designs for a revamped Tom Bradley International Terminal. Fentress Architects, which designed Denver International, is doing the work. As part of the makeover, announced today at a press conference, the old concourse areas will be demolished to make way for two new concourses on either side of the terminal. There's also more space for shops and restaurants. From the Daily Breeze:
LAX's capital improvement project comes at a time when the recession has forced other airports nationwide to scale back, postpone or cancel similar projects. To get the airlines to agree to foot the massive bill, LAX must keep construction costs down and mend relations that have frayed due to protracted negotiations over disputed rental rates, according to Frank Clark, executive director of LAXTEC, the agency that represents the international airlines housed in the Bradley terminal.