Wall Street higher: The Dow is up about 40 points in early trading - despite government officials telling Bank of America that it needs an additional cushion of $34 billion (some on Wall Street had expected the number to be higher).
Job losses slow: ADP said private employers cut 491,000 jobs in April, way down from a revised 708,000 lost in March, and lower than what analysts had expected. The ADP figure comes ahead of Friday's U.S. employment report for April. (AP)
Recovery in the air?: NYT columnist Dave Leonhardt can feel it, citing the usually reliable Economic Cycle Research Institute.
"We're in the worst recession since World War II," says Lakshman Achuthan, the managing director of the Economic Cycle Research Institute. "However, the days of this recession are limited." The main reason, he says, is the economy's normal self-correcting mechanism. That mechanism, I realize, is somewhat counterintuitive. You often hear -- and we in the news media often write -- about the vicious cycle of job cuts, spending cuts and yet more job cuts. Eventually, though, the cycle always ends, and momentum reverses. How? Prices fall by enough to tempt households to spend. Businesses cut their costs, become profitable again, and begin to expand. Spending begets more spending. This is what's happening now, Mr. Achuthan argues. The stimulus plan is also making a difference, he says, and so are the government's efforts to reduce the cost of borrowing.
Subprime in Socal: Turns out that local financial services firms were even more culpable for the mortgage meltdown than first believed. From the LAT:
The big subprime lenders included Countrywide Financial Corp., Ameriquest Mortgage Co., New Century Financial Corp. and Long Beach Mortgage Co. The industry blossomed in California, in part because of the state's once-booming real estate market and also because the mortgage business was poorly regulated in the state, analysts say. "California law doesn't require licenses for individual mortgage salespeople, so it was super easy to have this kind of junk activity going on without any tough oversight or regulation," [said Bill Buzenberg, executive director of the Center for Public Integrity, a Washington-based watchdog group.]
Disney's movie woes: The Mouse House is cutting back on the number and variety of its films, relying more on branded family movies. That can be a dangerous strategy if the studio runs into a cold streak, as evidenced by the company's weak quarter. From the LAT:
Indeed, at a time when many of the studios are enjoying a feast in ticket sales at the box office, Disney is experiencing a comparative famine. The studio so far this year has ranked at the bottom of the six major Hollywood studios -- as it was in all of 2008 -- in U.S. box office share because of several misfires, including the ill-timed comedy "Confessions of a Shopaholic" and the much-hyped "Jonas Brothers: The 3D Concert Experience," starring the teeny-bopper phenomenon.
City National's payback: The Bev Hill-based bank has raised about $100 million in a stock offering that will be used to help repay the $400 million in government capital it received. Despite rising loan losses, City National remains profitable. (LAT)
Pang says he was framed: A lawyer for the OC money manager charged with investment fraud accuses the SEC of a rush to judgment to compensate for the agency's failure to catch Bernie Madoff. They also say that the allegations were based mostly on the word of a former business partner who admitted that he had improperly taken $3 million from the company, (OC Register)
Revitalizing Laurel Plaza: The City Council approved plans to overhaul the bedraggled shopping center in North Hollywood. The site is being developed by J.H. Snyder Co., with help from the Community Redevelopment Agency. (Daily News)