Quiet day: In advance of the three-day weekend, that might mean a volatile session. So far, the Dow is down 20 points in early trading,
Forget about aid: The White House made clear that a federal bailout of California is not in the cards. From the LAT:
"Look, we're going to examine what we can do. What we need to do, however, is to treat states fairly and that means uniformly," David Axelrod, senior advisor to the president, said in an interview. "Whatever we do for one state, there will be other states who also will want to do that. And there's a limit to what the government can do." Axelrod indicated that federal intervention on California's behalf would set a dangerous precedent.
Cities dumped on: As you might imagine, Gov. Arnold Schwarznegger's plan to borrow $2 billion from municipal governments over the next fiscal year is not going down well. A 2004 law lets the state demand loans of 8 percent of property-tax revenue. From the WSJ:
The governor's proposal of borrowing from local governments must still be approved by the legislature. If it does so, municipalities are worried the state won't be able to repay the loans, given the state's fiscal plight. "They're hijacking our dollars," said Don Knabe, chairman of Los Angeles County Board of Supervisors. "They don't have money to pay us back. It's a joke." Los Angeles County could lose the use of up to $500 million for the next fiscal year, Mr. Knabe said. That would add to the county's projected $300 million shortfall in its $23.5 billion budget, of which supervisors can control $3.5 billion. That could mean cuts to services like parks and libraries.
Costlier fill-up: The average price of regular in the L.A. area is $2.573 per gallon, according to the Auto Club, which is 12 cents more than last week. Meanwhile, the price of oil has been edging higher on the expectation that an end to the recession will mean greater demand.
Warner wants Midway: A $33-million bid has been submitted to buy Midway Games, creator of the Mortal Kombat, Wheelman and Spy Hunter video game franchises. More bidders are likely to emerge. From the LAT:
The company's erstwhile majority owner, Sumner Redstone, last year sold Midway for $100,000 to a little known Massachusetts investor named Mark Thomas. The sale triggered large payment requirements on its long-term loans, including a $30-million payment to Thomas, that Midway was unable to make, pushing the company into bankruptcy. Creditors earlier this month sued Redstone, Thomas and five board members, claiming that the sale was "fraudulent" because it was conducted solely to create a $700-million tax write-off for Redstone to the detriment of shareholders.
Wanna buy Playboy?: It's being shopped around for $300 million, the NY Post's Keith Kelly reports. The market cap is only about $100 million, but Hugh Hefner still controls about 70 percent of the voting stock and he wants a hefty premium.
Forever 21 leases more space: The L.A.-based retailer will buy three former Gottschalks stores and take over as many as 14 leases from the bankrupt department store chain. Among them are locations in Riverside, Bakersfield and Hemet. (LAT)
SAG members duke it out: A group of 600 actors met Thursday night to go over the proposed contract with the networks and studios, just a few weeks before ratification votes are counted. The session was closed to the press, though there apparently was a lot of theatrics on both sides. (Variety)
Stanley Chais can afford defense:- The one-time philanthropist with close ties to Bernie Madoff says he is financially capable of hiring an attorney, according to a trustee who is liquidating Madoff's money management firm. Another trustee claims that Chais received more than $1 billion as an insider at the firm used by Madoff to operate a $65 billion Ponzi scheme. (Bloomberg)