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.
December 2008

Read 'em and weep

There were a few fortunate shareholders of locally based companies, but overall it was a terrible year to own stocks.

Good riddance to 2008

The Dow started the year at 13,338. It finishes at 8776. Not that it much matters but the index gained 108 points in the final day of trading.

Countdown to recovery

There are certain guideposts that can be useful in monitoring when and how the economic turnaround takes place.

Ignorance was not bliss

Those cursed What's In, What's Out lists that come out this time of year should definitely include economic forecasts as being on the outs.

Holdup on IndyMac deal

Fannie Mae is supposedly delaying the sale of the failed Pasadena bank, according to a posted report.

Wednesday highlights

Madoff assets to be revealed, Viacom and Time Warner in cable dispute, involuntary bankruptcy for Ezri Namvar, and SAG revolt building.

More Madoff victims

Kevin Bacon and his wife Kyra Sedgwick got slammed, big time, as did former Salomon Brothers economist Henry Kaufman.

New murmurs about Jobs

The Web site Gizmodo got Apple watchers into a dither this afternoon by reporting that the CEO is in rapidly declining health.

GM credit loosens up

The automaker's financing company, having just received federal help, will modify its criteria so that more folks can take out auto loans.

About those 70% markdowns

Clothing makers aren't thrilled about some of their merchandise being discounted so heavily this holiday season.

*Tuesday highlights

L.A. home prices take dip (but other cities fare worse), gas prices inch up, very little consumer confidence, and Tribune's legal bills.

Ben Stein wasn't fooled

The economist/lawyer/columnist/actor says he was approached two years ago about investing with Madoff. He passed.

Madoff to plead insanity?

Gossip centers on the alleged scamster having some sort of mental break or perhaps a multiple personality disorder.

Monday highlights

Anything went at WaMu, still waiting for IndyMac sale, Hollywood has strong holiday, and Madonna is tops in 2008.

New day, same sales

The problem with taking so much off on merchandise before Christmas is that there's not much more to cut after Christmas.

Report: IndyMac has buyer

The apparent winner is a private equity firm founded by two former partners from Goldman Sachs.

A little Christmas cheer

Out of the credit markets arose a crisis to scare, All awakened with panic to the fall of a behemoth named Bear...

On those phantom profits

Those were the gains that investors thought they had made with Madoff - except that they were never real. Sound familiar?

Suicide hotlines get busy

People are feeling helpless because of the economic crisis - and hopeless about things getting better any time soon.

Wednesday morning headlines

Last gasp for retailers, deal for IndyMac is imminent, Silverton gets snookered, Madoff losses less than first thought.

Dov Charney flames out

Portfolio sold only 19,000 newsstand copies of its November issue, which featured on its cover the CEO of L.A.-based American Apparel.

*Madoff player found dead

A hedge fund manager who invested with the alleged scamster was found dead at his Madison Avenue office in an apparent suicide.

MGM under the gun

A lot is riding on the Tom Cruise thriller "Valkyrie" - specifically, how much UA parent MGM can generate at the box office.

L.A. worst housing market?

Fortune magazine says prices are projected to fall almost 25 percent in 2009. That's worse than Stockton, Riverside and Bakersfield.

Tuesday morning headlines

SAG delays strike authorization vote, LAX logjam loosening up, Madoff lieutenant questioned, and SFV home prices edge higher.

Fed inquiry on IndyMac

Why was a capital infusion to the Pasadena-based lender listed as having been received before March 31 - even though it wasn't?

Retailers in survival mode

Small business owners are really having a tough time just making it into 2009 because they can't compete with the big chains on price.

*Nightmare warning on budget

Controller John Chiang says that if a budget deal isn't worked out, the state will run out of cash in about two months.

Gas prices go up

The nickel-a-gallon increase breaks a weekly streak that goes back to June 16, but at least one consumer group is crying foul.

*Think you've lost money?

Sumner Redstone took by far the biggest hit among media moguls, but plenty of other stock holdings went poof.

How retailers stack up

Holiday sales are a big deal, but perhaps more important are balance sheets - specifically, is there enough money to pay off vendors?

Monday morning headlines

Toyota will lose money, retailers getting desperate for sales, new businesses take a dip, and more stars opposing strike authorization.

More clarity on Madoff

Is it possible that all these fund managers and investors were in the dark about what the alleged swindler was doing? Not likely.

New names at Tiger tourney

Sitting in front of the tube watching golf can actually tell you a thing or two about changing fates of the business world.

Roubini doubtful on depression

Everybody's favorite doomsdayer, Nouriel Roubini, says the more likely scenario is a severe recession that will bottom out in about a year.

Murdoch doesn't get it

Says biographer Michael Wolff: "He doesn't believe in Web news, doesn't understand Web news, couldn't care less about Web news."

Snowstorm delaying flights

On the Friday before Christmas, airlines report a bunch of delays coming into LAX. Departures seem to be doing better.

L.A. unemployment hits 8.9%

The state and local numbers are not great, of course, but they’re not a surprise. Look for 10 percent-plus in 2009.

It's a miserable life

George Bailey might have been better off if his bucolic (and quite boring) town of Bedford Falls really turned into the very cool Pottersville.

Marc Dreier's L.A. side

The lawyer's rapid expansion into L.A. just a couple of years ago has gotten little attention. Too bad – it’s a pretty good yarn.

Friday morning headlines

Gas prices trickle upward (for now), fewer travelers for the holidays, retailers desperate this weekend, and port expansion approved.

Bad deal Hall of Fame

How smart was it of Silicon Valley's Macrovision to buy Gemstar-TV Guide International for $2.8 billion? Not very.

Trump: It's all about greed

Donald Trump calls Madoff a "sleazebag," "total crook," and "a Svengali for rich people." He also doesn't think the guy acted alone.

Oil under $37

The combination of slumping global demand and swelling U.S. inventories are offsetting the impact of OPEC agreeing to cut output.

More Madoff fallout

A local non-profit losing $700,000 might get lost in the shuffle of a pressing news day, but to that group it will mean major retrenchment.

Lampoon CEO resigns

Daniel Laikin is one of several National Lampoon executives to be accused of stock manipulation.

Thursday morning headlines

Plans to raze Century Plaza, more folks leaving California, Live Nation scrambles for U2 cash, and DreamWorks deal could be in trouble.

Calpers has new CEO

Anne Stausboll gets the unenviable job of turning around the nation's largest public pension fund.

Mrs. Madoff's role?

The SEC apparently is finding evidence that she might have helped track payments (also, her name is on a bunch of transactions).

Project freeze

A state board this morning shut off $3.8 billion in financing to dozens of infrastructure projects because the available money is drying up.

About those pay cuts

A CEO taking a $300,000 pay cut sounds like a nice gesture, but the guy made more than $12 million last year. Who is he kidding?

Madoff victim speaks up

Alexandra Penney is an artist, best-selling author, former editor of Self magazine - and now one of the many investors who got snookered.

Wednesday morning headlines

Wall Street can't sustain a rally, more local angles on Madoff, hotel workers sue, and Fox adds spice to SAG drama.

Here's to meritocracy!

Practicing journalism is a little like playing the ponies: Everyone thinks they're an expert. Except that they're not.

L.A.'s troubled properties

You're looking at $11 billion worth of trouble, which isn't as bad as NY ($12 billion), but worse than Vegas ($6 billion).

Fed giving it away

How else do you describe the Federal Reserve setting its target for the overnight federal funds rate to a range of 0 to 0.25 percent?

L.A. home sales slow down

Only a 12.7 percent increase in November from a year earlier, which is substantially slower than the big sales jumps of recent months.

Tuesday morning headlines

SAG rancor builds, more Madoff victims revealed, Best Buy making big cuts, and feds go after National Lampoon CEO.

72 cents to go!

The average price of regular in the L.A. area is $1.72, down about a dime from last week (and almost $3 from earlier in the year).

When the revolution comes...

Flaunting wealth is definitely out these days - but that doesn't mean the rich have stopped spending.

From the legal desk

Pellicano is sentenced to 15 years, Mattel agrees to pay $12 million to settle lead claims, and former KB executive pleads guilty.

Tough times for restaurants?

Generally yes, but it really depends on the restaurant – and getting into the top spots around town can still be a challenge.

Yet another scam

This one involves a guy named John Rogers, who persuaded some of California's richest investors to give him big money for a startup.

Monday morning headlines

Commercial real estate in slump, L.A. is tough place to do business, Singleton explains himself (sort of), and SAG meets in NY tonight.

Madoff losses spread

Mort Zuckerman, the foundation of Elie Wiesel, and a charity of Steven Spielberg all stand to lose some serious money.

Papers chop home delivery

Print editions of the Detroit News and Free Press will be available only on newsstands four days a week.

Who did Bernie swindle?

That would be Bernie Madoff, who has been charged in connection with a decades-long Ponzi scheme.

Broad's idea for Detroit

The L.A. billionaire/philanthropist (and Michigan native) says the answer is not a bailout but a restructuring.

L.A. bankruptcies up

November saw 2,145 consumer and business filings, which is a 79 percent increase from a year earlier.

Friday morning headlines

TARP may come to the car companies' rescue, Mervyns' space being filled, gas keeps falling, and Bratz maker appeals.

KB Toys to liquidate

The 86-year-old toy retailer has filed for bankruptcy and plans to close its stores in the next few weeks.

*Auto bailout dying

The next question is whether the White House will consider some sort of emergency measure to prevent a bankruptcy filing.

Relief by mid-year?

On average, economists surveyed by the WSJ expect the recession to be over in June 2009.

So-so foreclosure month

One in every 296 L.A. County households was in foreclosure last month, a 69 percent increase from a year earlier.

Thursday morning headlines

Wall Street watching car bailout bill, November foreclosures up 6%, SAG vote set for January, and Arena football in trouble.

UCLA sees rough 2009

The Anderson Forecast sees the beginnings of a recovery in the fourth quarter of 2009 - except you might not feel much relief.

Zell's game plan

The Tribune CEO tells CNBC that the Chapter 11 filing gives the company time "to really focus on what I call broader issues."

Court OKs Tribune filing

A Delaware bankruptcy court approved interim bankruptcy financing so the company can pay its employees and vendors.

Mortgages not worth saving

For lenders, whether it’s a bank or the federal government, the process is like doubling down on a shaky bet.

Down month at L.A. port

November shipments at the Port of L.A. were off 10.4 percent, yet another monthly decline in what's turned out to be an awful year.

No losses from ESOP

Retirement benefits are largely unaffected by Tribune's Chapter 11 filing, though it's not known how much is left in the pension plans.

Wednesday morning headlines

Forecaster sees some hope in 2009, DirecTV holding up, cost-cutting at Port of L.A., and no more "perfect storm" excuses.

Dealmakers are glum

Almost 40 percent of California mergers and acquisition crowd expect the buyout climate to be worse in six months than it is now.

How low can it go?

Would you believe gas at $1 a gallon? We're not there yet, but some forecasters consider it a possibility.

The audacity of Zell

The Tribune CEO told the WSJ that he expects to keep the company intact, but would consider selling assets at the right price.

Leno gets 10 p.m. show

Looks like NBC has figured out a way of holding onto Jay while still bringing in Conan O'Brien at 11:30.

Kinsley event

Michael Kinsley, former editorial page editor of the LAT and regular contributor to Time magazine, will be in conversation with yours truly on Tuesday morning, Dec. 9, at Café Pinot (700 West Fifth Street, next to the Los Angeles Public Library). This is part of the LAPL's Aloud Business Forum series. Kinsley has edited a provocative new book called, "Creative Capitalism: A Conversation with Bill Gates, Warren Buffett, and Other Economic Leaders." With 40 contributors,...

Remember Mark Willes?

The former Times Mirror CEO is among the 30 largest unsecured creditors in the Tribune bankruptcy filing.

But what about my stock?

The employee stock-ownership plan holds 100 percent of the company's common equity. So happens to folks in that plan?

Zell explains filing

In a memo to company employees, the Tribune CEO spins the bankruptcy filing as a positive move.

**Why Tribune filed

The parent company of the LAT and KTLA has nearly $13 billion in debt and $7.6 billion in assets, according to a court filing.

Tribune files Chapter 11

The LAT reports that Tribune wants to restructure payments to banks and other creditors. Directors approved the filing this morning. The Chicago-based company about $300 million cash on hand. That's enough to make a $70-million payment due today, but apparently lenders were unwilling to initiate a broader restructuring....

Monday morning headlines

Grim ad forecasts for 2009, big layoffs at Yahoo, Christie Hefner steps down, and SAG Town Hall meeting tonight.

*Tribune prepares bankruptcy

WSJ reports that a filing could come as soon as this week. No word on what might be behind the move.

Brentwood bizguy in trouble

Ezri Namvar and his L.A. investment company, Namco Capital Group, face at least 17 lawsuits involving non-payments to his investors.

They want to do what?

In case you've lost track, the government is considering a plan that would encourage banks to lend at 4.5 percent.

Kinsley + free tickets!

The former editorial page editor of the LAT and contributor to Time magazine will be in conversation with yours truly on Tuesday.

Huh? Dow up 260?

It makes no sense that stocks take off on the day that saw the worst employment report since at least 1974. Still, there are reasons.

Friday morning headlines

California delinquencies on the rise, Bratz CEO wants to talk to Mattel, toymakers settle lead lawsuit, and gas prices still sinking.

*Nov. job loss: 533,000

That's way more than most anyone had expected and is the worst monthly loss since December of 1974.

Ugly, ugly, ugly

Look for a loss of 350,000 payroll jobs in November, which would be the worst monthly drop since May 1980.

Sick spending is over

More and more stories are focusing on how even the ultra-rich have put the brakes on spending - at least pointless, obnoxious spending.

Thursday morning headlines

Terrible November for retailers, bearish housing bets, new questions about L.A.'s Palmdale land, and the Golden Globes live on.

Mattel's improbable win

Valley-based MGA has lost custody of those pouty and still-popular Bratz dolls. But this isn't the end of it.

Car woes get scarier

Ford CEO Alan Mulally says that he has become more concerned about the viability of GM and Chrysler.

Hollywood accounting

Louisiana's experience with movie and TV production shows why runaway production worries are a little overdone.

Luxury in hard times

Being reminded of folks leading gold-plated lives doesn’t go down well at a time when so many others are trying to save their houses.

*OC Virgin store to close

It’s the only Virgin Megastore in OC and one of four in California (the others being in Hollywood, SF and Ontario).

Wednesday morning headlines

New tensions at SAG, airlines cut capacity, investors sue Paramount, and satellite loss means no new local jobs.

The Polanski case

The documentary “Roman Polanski: Wanted and Desired” is being cited in the director's request to dismiss the molestation case against him.

Meltdown was avoidable

A mythology has taken hold about the financial disaster: That only a select group of economists and money managers saw it coming.

Bev Hills measure passes

By a margin of 129 votes, developer Beny Alagem will be able to build two luxury condo towers and a Waldorf-Astoria hotel at the site of the Beverly Hilton. Final vote on Measure H was 7,972 to 7,843. You may recall that the Bev Hills City Council approved the $500 million project by a 3-2 vote, but opponents gathered enough signatures to place the referendum on the Nov. 4 ballot. I haven't read much about...

Overturn MySpace verdict?

That's the hope among some lawyer/pundits who are up in arms over last week's misdemeanor convictions against Lori Drew.

*Auto sales up close

In the L.A. area, October registrations fell almost 40 percent, with the domestic automakers faring a lot worse than the Japanese.

More big newspaper cuts

Closings, consolidations, layoffs, and the elimination of print editions on certain days of the week are the grim prospects for 2009.

Tuesday morning headlines

More loan delinquencies expected, another Dov Charney lawsuit, and Blockbuster to sell concert tickets.

The end of Wall Street

A little-known analyst turned hedge fund manager named Steve Eisman figured out what would happen to the mortgage business.

Latest gas price: $1.98

You have to go back almost four years to find local gas prices this low. It's mostly good news, of course, but there are some wrinkles.

Dow plunges 675

It was bad from the opening bell and just got worse as a bunch of pretty awful economic reports came out.

Flight from hell

Think you had trouble getting home yesterday? Passengers on board TACA International #670 could probably top you.

Housing blogger 'Tanta' dies

Her real name was Doris Dungey, and she was an influential and often acerbic chronicler of the mortgage collapse.

Recession now official

The official arbiter has declared that the nation's economic contraction began a year ago - in December 2007.

Monday morning headlines

Stocks way down in early trading, more fireworks on Hollywood labor front, and Johnson & Johnson buys Mentor.