Deal for 21st Century?: AIG is in advanced talks to sell the Woodland Hills-based auto insurer to Zurich Financial Services for about $2 billion. The company must unload lots of stuff in order to start repaying the government all those billions in loans. From the FT:
People close to the matter warned that negotiations between AIG and Zurich Financial could still fall apart but said the two sides had been in talks for months and a deal could be announced in the next few days. MetLife, a US insurer, was also believed to have shown an interest in the unit. Executives have said the group wanted to sell the entire US personal lines business except for AIG private clients, a small unit catering to wealthy individuals.
Stocks bounce around: A bunch of mixed economic news - better-than-expected earnings from JP Morgan but worse-than-expected housing starts. At last check the Dow was down about 40 points.
Foreclosures on the rise: One in every 58 housing units in California received a foreclosure notice in the first quarter, according to RealtyTrac. That's the third-highest foreclosure rate in the nation (Nevada and Arizona are worse) - and a 35 percent increase from the previous quarter.
Mall owner bankruptcy: The Glendale Galleria is among the hundreds of shopping centers owned by General Growth Properties, which filed for Chapter 11 protection. The filing is one of the biggest commercial real estate collapses ever and will likely result in a massive sell-off of assets. From DealBook:
What began as a crisis in residential real estate has since seeped into the commercial real estate market, as landlords of retail and office space face rising numbers of vacancies. Analysts expect many of these companies to struggle as the recession forces steep cuts in consumer spending and employment rolls.
Southwest posts loss: The airline that was once known for never posting a quarterly loss posted another one this morning - worse than analysts expected. That has prompted a cut in seating capacity and a hiring freeze. From Bloomberg:
Southwest was pushed to losses in the last two quarters of 2008 when fuel prices tumbled below the rates it had locked in with advance purchase contracts. After neutralizing almost all of those so-called hedging agreements earlier this year, Southwest said it is now rebuilding its hedge positions to protect against rising prices, and has contracts covering half its second-quarter fuel needs and 40 percent for the year.
More on Danny Pang: Turns out that the OC money manager whose escapades were chronicled in yesterday's WSJ, was overseeing unaudited investment funds, Also, the trustee assigned to keep track of investors' assets is a two-partner law office that includes one partner with ties to Pang. From the Journal:
Lawyers say the arrangements are unusual for a firm that says it manages $4 billion, and raise questions about how well investors are protected. Most investors in Mr. Pang's Private Equity Management Group Inc., or PEMGroup, are from Taiwan and Hong Kong. The Irvine, Calif., firm invests primarily in the U.S.
Gannett profit plunges: Net income fell 60 percent in the first quarter, but the numbers matched analyst expectations. Still to come are earnings results from the New York Times Co. and McClatchy Co. Tribune Co., which owns the LAT, is privately held and doesn't announce financials. (But here's a hint: They're baaaaad.) From Bloomberg:
Gannett may be the among the first to benefit once advertising sales pick up, Jason Tyler, a senior vice president at Ariel Investments LLC, the company's second-largest shareholder, said last week. The Chicago firm more than doubled its stake in Gannett during the quarter. Along with Times Co. and Hearst Corp., Gannett has said it is considering charging for subscriptions to its Web sites.
Trouble for Domino's: You might have heard about the prank film that two employees decided to post online. It shows a Domino's employee in Conover, N.C., preparing sandwiches for delivery while putting nasal mucus on the sandwiches. Well, the idiots have been charged, but that's not the end of it. From the NYT:
By Wednesday afternoon, the video had been viewed more than a million times on YouTube. References to it were in five of the 12 results on the first page of Google search for "Dominos," and discussions about Domino's had spread throughout Twitter. As Domino's is realizing, social media has the reach and speed to turn tiny incidents into marketing crises. In November, Motrin posted an ad suggesting that carrying babies in slings was a painful new fad. Unhappy mothers posted Twitter complaints about it, and bloggers followed; within days, Motrin had removed the ad and apologized.