Gaining ground: After yesterday's loss, the Dow is up about 12 points in early trading.
Staying put: Travel and tourism fell in 2008 for the first time since 9/11. Call it the triple whammy of canceled vacations, a stronger dollar that kept international visitors away, and businesses slashing travel budgets. From the WSJ:
As a result, the trillion-dollar industry -- a major employer in the U.S. -- is reeling, and struggling to lure people back with deep discounts and special packages. For their part, Americans are sharply scaling back vacation plans, canceling trips outright or trading down to cheaper options. "Everybody seems to be in a panic mode, afraid to spend money," said Carol Beazley, who along with her husband, Jim, runs the Beazley House, an 11-room bed and breakfast in Napa, Calif. She notes there are fewer takers for extra services at the century-old mansion, such as massages, $200 balloon rides and the Napa Valley wine train.
Southwest ignites fare war: Flights to SF are as low as $49 one way, with a 14-day advance purchase (and not including Fridays and Sundays). The other majors quickly matched the fares on most of the routes flown by Southwest. Airlines with international flights are also slashing fares. (LAT)
Ticketmaster loses big: No wonder the West Hollywood-based ticketing company wanted to merge with Live Nation: It posted a $1.07 billion fourth quarter loss, compared with net income of $51.1 million a year earlier. Most of the loss came from a $1.1 billion impairment charge stemming from its monstrous stock price decline since being spun off from IAC/InterActiveCorp last year. (AP)
IndyMac becomes OneWest: The Pasadena bank's new owners bought the bank's $20.7 billion in loans and other assets for $16 billion. The new owners hope to double in size over the next five years by acquiring other banks and opening new branches. (LAT)
Countrywide sues AIG: Where's a good punch line when you need it? The mortgage company alleges that the a unit of the insurance giant didn't cover more than $43 million in losses from failed real estate loans, even though Countrywide paid more than $342 million in premiums to insure the loans. Countrywide is now owned by Bank of America. (LAT)
"American Idol" gets sued: Three former employees allege that producer Fremantle North America forced them to work under "sweatshop" conditions and failed to pay for overtime hours. They claim they had to put in 20 hours a day, seven days a week, sometimes without meal and rest periods. From the NYT:
In January, three of the four major networks and several reality show production companies paid a $4 million settlement in two similar class actions. Those lawsuits also alleged that the companies, which produced shows like “The Bachelor” and “Trading Spouses,” violated wage and hour laws. The new lawsuit accuses Fremantle and several related companies, including American Idol Productions, Blue Orbit Productions, Kickoff Productions and Little Pond Television, of trying to disguise violations of federal labor law by paying employees for a 12-hour day and a 60-hour week. But the former employees claim that they worked much more than that and that the companies failed to keep accurate time records.
Lennar buys back Calpers land: In early 2007, the home builder sold much of its interest in LandSource Communities Development to the giant pension fund (land includes the 12,000-acre Newhall Ranch). Then the Calpers investment was pretty much wiped out when the real estate market crashed. Now, Lennar is back, ready to purchase the land on the cheap. From the WSJ:
Lennar and several hundred creditors holding $1 billion of the venture's debt would contribute "substantial" equity to the new company, according to a summary of the proposed agreement that was sent to a group of creditors Thursday and reviewed by The Wall Street Journal. It's not clear how the deal would value the land. But the price would be significantly below the land's value when a Calpers-funded venture made its investment in 2007, according to people familiar with the matter. Calpers representatives have said the pension fund believed LandSource would profit over the long term and didn't anticipate the severity of the housing downturn.
Sign of the times: The April issue of Portfolio is the slimmest Condé Nast magazine ever published: A total of 106 pages and 21 ad pages (that's barely above the 98-page minimum count needed to be able to glue the cover in place). Publisher William Li said the May issue will be fatter. From the NY Post:
Controversy is also swirling inside Condé Nast's headquarters over Portfolio Editor Joanne Lipman's selection of Sarah Palin, the Alaska governor and former vice presidential nominee, for its cover. It follows a December cover story on American Apparel boss Dov Charney, and both have been criticized as soft features at a time when the financial markets and the economy are in crisis. "It's beyond eye-rolling at this point," said one insider.