Stocks open lower: After a three-day break, the Dow is down about 100 points in early trading.
GM bankruptcy getting closer?: The Treasury Department is directing the automaker to be ready to file by June 1, the NYT reports. Bankruptcy would be a likely option if GM is unable to get bondholders to exchange roughly $28 billion in debt into equity. There is also the United Automobile Workers to deal with.
Warning on banks: William Black, former deputy director of the FDIC during the S&L crisis of the 1980s, isn't too confident about the people trying to get us out of the financial crisis. (He identified the infamous Keating Five, a group of U.S. senators who tried to quash his attempt to close Charles Keating's Lincoln Savings & Loan). From Barron's:
We have failed bankers giving advice to failed regulators on how to deal with failed assets. How can it result in anything but failure? If they are going to get any truthful investigation, the Democrats picked the wrong financial team. Tim Geithner, the current Secretary of the Treasury, and Larry Summers, chairman of the National Economic Council, were important architects of the problems. Geithner especially represents a failed regulator, having presided over the bailouts of major New York banks.
Skepticism on office tower: Not everyone is convinced there is a market for a 60-floor highrise that has been proposed by Korean Air and developer Jim Thomas. From the Downtown News:
There is already a lot of available high-end, or Class A, office space in Downtown, said Greg Tuszynski, an associate vice president at the real estate firm Colliers International, who specializes in tenant representation. As examples, he pointed to the 270,000 square feet at the U.S. Bank Tower formerly occupied by the law firm Latham & Watkins; 140,000 square feet at 601 S. Figueroa St. that once housed Bank of the West and Sanwa Bank; and 116,000 square feet at 707 Wilshire Blvd., formerly occupied by the insurance brokerage Aon, which moved to another space in the same building. "The type of high-quality tenant that would lease space like that already has other options available in some of the best buildings Downtown," said Tuszynski. "I think the development is kind of a stretch."
Oprah gets new digs: The media mogul's new television channel, to be launched in 2010 on what is now the Discovery Health Channel, has leased the old Variety space at 5700 Wilshire Blvd. (Business Journal)
Newspaper numbers: Gannett reports earnings on Thursday, the first of what are expected to be very ugly results for publicly held newspaper companies. Declines in print revenues accelerated late last year and so far 2009 is looking even worse. (WSJ) By the way, today's NYT business section had four features and a column on the newspaper business.