Stocks extend losses: The Dow is off 130 points in early trading. Earnings season is almost upon us and the fourth quarter numbers are not likely to be pretty.
Obama-led optimism: Not all that much has changed, but the percentage of people who say the economy is getting worse has declined from 54 percent, just before the president took office, to 34 percent today, according to a NYT/CBS News poll. And 20 percent now think the economy is getting better, compared with 7 percent in mid-January. From the NYT:
The poll found that 70 percent of respondents were very or somewhat concerned that someone in their household would be out of work and looking for a job in the next 12 months. Forty percent said they had cut spending on luxuries, and 10 percent said they had cut back on necessities; 31 percent said they had cut both. For all that, the number of people who said they thought the country was headed in the right direction jumped from 15 percent in mid-January, just before Mr. Obama took office, to 39 percent today, while the number who said it was headed in the wrong direction dropped to 53 percent from 79 percent.
Recovery takes time: Those survey respondents might want to take a deep breath. We're in for a long, tough slog. From the NYT:
The mathematics are daunting. The shortfall is running at more than $1 trillion in annual sales and other transactions. Only once since the Great Depression has there been such a severe loss of output -- in the 1981-82 recession -- and after that downturn, it was seven years before the economy regained the lost production. Recovery from the current recession could be similarly sluggish. New occupants have to be found for empty stores. Factory owners who are hesitant to ramp up production will wait until they are sure of demand. Hiring the right people for an operation will take time. And imports, entering the country in ever greater quantities, will slow any expansion by siphoning sales from domestic producers.
Defense cuts hit Long Beach: Defense Secretary Robert Gates wants to stop plowing billions of dollars into the C-17 Globemaster, a military transport plane that Boeing makes in Long Beach (and which is only around because of parochial Congressional support). Also on the chopping block is the F-22, which has local subcontractors. From the Daily Breeze:
Gates' announcement may mean that the 5,000 jobs at the Long Beach plant (as well as its 30,000 suppliers) may be at risk, said Jack Kyser, chief economist for the Los Angeles County Economic Development Corp. "This would represent a significant hit to the local economy if this comes to fruition," Kyser said. "And you have a down economy and you lay off people and that's just going to slow down the economy."
New downtown skyscraper?: A proposed 43-story condo and retail complex will be considered by the L.A. Planning Commission this week. It's being backed by a South Korean company and would be located near the Convention Center, between Figueroa and Flower. The proposal is separate from another South Korean-backed project that's planned on the site of the Wilshire Grand. (LAT)
Reversal on oil drilling?: Santa Barbara County supervisors will reconsider last summer's surprising support of offshore drilling. Any vote would be mostly symbolic because the supes have no direct authority over offshore drilling. So why the change? From the LAT:
The board's majority has shifted from Republican to Democratic, the Obama administration has taken over in Washington, and the price of crude oil has plunged from nearly $150 a barrel last summer to about $52 a barrel on Monday. With an Interior Department hearing on offshore drilling planned next week in San Francisco, the supervisors are to consider a resolution urging a ban on new offshore drilling.
Gas prices keep climbing: An average gallon of regular in the L.A. area is $2.315, up almost six cents from last week. (EIA)
Another muni offering: State Treasurer Bill Lockyer may try to raise as much as $4 billion in taxable bonds either next week or the week of April 20. Part of the offering will be used to finance projects that don't qualify for tax-free funding, such as the stem-cell research measure that California voters approved in 2004. (LAT)
Lacter on radio: This week's business chat with KPCC's Steve Julian reviews the latest reports on CEO compensation and assesses how local companies are faring on Wall Street. Also on kpcc.org and on podcast.