LA Biz Observed archive

Mark Lacter covered business, the economy and more here from 2006 until his death on Nov. 13, 2013.
The entire LA Biz Observed archive — more than 10,000 blog posts by Mark — remains online and available.
June 2009

Bias against jobless

Despite the high jobless rate many employers are targeting those still working. Their reasoning? Surviving employees are deemed the top performers.

Paramount seeks DVD partner

The studio is in advanced talks with Sony and Fox about somehow merging its home entertainment division.

Vibe shutting down

The urban-music magazine founded by Quincy Jones becomes another victim of the media recession.

In search of rat droppings

Those gas station mini-markets that sell non-packaged items - hot dogs, coffee, fountain drinks - must pass the health codes just like a restaurant

More on Madoff sentence

The over-the-top jail term seems more vindictive than purposeful. I mean, the guy is going to die in prison, no matter what. But I seem to be in the minority.

Making the 'A' list

L.A.-based Munger Tolles tops American Lawyer's annual list of best law firms - not necessarily the ones that bill the most hours or generate the most profits per partner.

Tuesday morning headlines

Drop in home prices slowing down, more charges could be pending in Madoff case, state IOUs ready to be issued, and Hong Kong Disneyland to expand.

*Sentence out of whack

Not to question in the slightest Madoff deserving life in prison, but I have to wonder what good is served by such an over-the-top sentence.

July 4th travel

Fewer folks from Socal will be getting away, but air travel is expected to be up almost 2 percent from 2008.

Madoff sentence: 150 years

''May God spare you no mercy,'' one victim of the Ponzi swindler said during this morning's sentencing hearing in NY.

Monday morning headlines

Budget stalemate continues, new talk about adjusting Prop 13, audit blasts Olvera Street operator, and Zucker unhappy with Universal performance.

Nestlé turned down FDA

Federal inspectors were not given access to records at the Danville, Va. plant that's at the center of the E. coli outbreak involving Toll House cookie dough.

Nightmare for AEG

The L.A.-based concert promoter is out tens of millions of dollars, and it's not at all clear how much of that will be covered by insurance.

Where's all the coffee?

Retailers starting to cut back on their selection of products, quite a contrast to the marketing strategies of the 80s and 90s.

Friday morning headlines

KB loses more money, Jackson's finances to be sorted out, AEG loses big time on London concerts, and C-17 gets reprieve.

Jackson's recent woes

There's a lot to sort out about the death of Michael Jackson, though one of the first questions will center on his preparations for what would have been a 50-concert series.

It's all good (again)

The Dow gains 172 points. Better-than-expected earnings at Bed, Bath and Beyond and a successful auction of Treasury notes were among the positive developments.

'Populist overreaction'

The industry's largest trade group has hired a bunch of makeover artists to come up with ways in which the financial community can be seen as wearing the white hats.

*Defending Platinum deal

Trust me, it's waaay more than you want to know, but the transaction does point to how Bev Hills-based Platinum Equity loves to bottom feed for deals.

Air fares go up

No more discounting - the average price for markets tracked on Bing Travel is $281, up from $259 three week ago.

L.A. budget deal near

City officials are close to an agreement with city unions that would cover nearly half of the $530 million deficit that L.A. faces this year.

Thursday morning headlines

New concerns about state economy, more talks to break budget deadlock, tourism becomes L.A. biggest industry, and Ruth Madoff riding the subway.

Here come the IOUs

State Controller John Chiang says he'll have to start issuing them on next week if lawmakers and the governor don't settle on a solution to the $24-billion deficit.

No change in rates

The Federal Reserve says it will keep interest rates low for "an extended period." The Fed's benchmark overnight interest rate is at virtually zero.

*Oscar field expanded

The Best Picture category will have 10 nominees instead of five. It's a dramatic change that will upend the award process and probably generate a bit more excitement.

Web-only frugality

Online newsrooms might not be the industry's salvation after all - not if one business model making the rounds gains any traction.

*Buffett sour on economy

He tells CNBC this morning that there's been little progress over the past few months, and that the economy is a "shambles."

Wednesday morning headlines

Budget gimmicks in Dems' deficit-cutting plan, Cerritos registers an extra-high cancer risk, Korean Air thinks big, and new spat over Mozilo.

Confusion on home prices

Of course confusion is what often happens just prior to an actual turnaround, so perhaps the mixed signals are really encouraging. Then again, perhaps they're not.

Netflix switches gears

The company's long-term strategizing is exactly what the LAT and the newspaper industry in general did not do in preparing for the online age.

Tuesday morning headlines

Boeing delays Dreamliner (again), onerous regulations and high taxes are pushing businesses elsewhere, more cuts at MySpace, and Madoff asks for only 12 years.

Apple too quiet on Jobs

The company has been practically silent about the CEO's condition for months - despite ongoing speculation that he was seriously ill.

SEC charges Chais

L.A. investment adviser Stanley Chais oversaw three funds that invested with Bernie Madoff - and didn't tell clients that Madoff was the one making the decisions.

Monday morning headlines

Stocks are way down, large percentage of voters not enchanted with the city, City Hall bracing for layoffs, and Ralphs pushing bargains.

Another CA downgrade

Moody's is warning that California faces a "multi-notch downgrade" if it doesn't get its financial act in order. In other words, agree on a budget.

Nestlé recalls cookie dough

Health officials linked the dough to infections from E. coli in as many as 66 people in 28 states. Glendale-based Nestlé USA is telling consumers to return the dough products.

Being under-employed

Lots of folks aren't event included in the unemployment numbers - many of them poor and little-educated. They're the ones who are most vulnerable.

Big jump in L.A. jobless

May unemployment increased to 11.6 percent in Los Angeles, a shade higher than the state's 11.5 percent level. The jobless rate is up from 10.9 percent in April.

Friday morning headlines

Jump in state unemployment, gas tops $3 a gallon, Broad takes NY co-op off the market, and new lines for iPhones.

CA just part of the pack

California isn't all that different from the other states struggling to cope with a huge revenue loss from personal income taxes. Nearly every state took a big hit.

Dining in elegance

Gulliver's Restaurant in Irvine held a "Scarf, but don't Barf" prime rib eating contest last night, and after 30 minutes the winner managed to keep down six pounds.

Welcome to Tehrangeles

The "If you've got it, flaunt it" lifestyle of Persians living in Bev Hills may seem like an old story, but a new generation of Iranian-Americans isn't so easy to categorize.

Thursday morning headlines

Governor opposes Democratic proposal, Obama financial plan gets mixed reviews, feds blamed in collapse of Downey, and new questions for OC financier Danny Pang.

Fraud on Dole detailed

A state judge laid out the false claims made against Dole by plaintiffs' attorneys as part of a case involving the company's treatment of banana plantation workers.

To hell with teamwork

With all respect to the Lakers, that's the unvarnished message behind a new book in which the notion of working with people is challenged.

Shrinking world of retail

Most vulnerable are the merchants who had been struggling well in advance of the tougher times - as well as those that were heavily in debt.

Eddie Bauer files Chapt. 11

As part of the bankruptcy filing, the company will be acquired by private-equity firm CCMP Capital Advisors, though other parties might try to make higher bids.

Real estate turnaround?

Home prices could be heading upward - and more of the action is starting to come from the $500,000-plus range, which has been practically dead for the past year or so.

Wednesday morning headlines

Socal inflation hits 59-year low, still more acrimony in Sacramento, Lockyer dismisses talk of state defaulting, and Lakers fans snap up championship junk.

Selling $1 million homes

Looking at April numbers, the inventory levels for $1 million-plus properties shot up from a year earlier, but the $750,000-$1 million bracket showed a slight decline.

Stocks get socked again

Dow falls 107 points. Maybe the hopes for an economic rebound were a bit misplaced.

Behind MySpace layoffs

The cuts had been expected, what with new management in place and the recent decision not to move into a large office complex at Playa Vista.

Dumb route for a parade

Why have the celebration along a not-so-wonderful stretch of Figueroa between Staples Center and the Coliseum?

Breaking the Bank

Tonight's "Frontline" examines the circumstances behind the Bank of America-Merrill Lynch merger and why it went so bad.

Tuesday morning headlines

Another jump in gas prices, White House wavers on helping CA, Hanmi bank gets help, and GM finds buyer for Saab.

Weak jobs outlook

The big concern continues to be a reluctance on the part of American consumers to spend at anywhere near the levels they were spending a few years ago.

Still slow at L.A. port

The basic problems remain the same: limited consumer spending in the U.S. and a severe global downturn that is impacting all traffic.

Dow down 187

Actually, that's an improvement from earlier in the day. High anxiety returns to Wall Street....

Star salaries take dip

Cut-rate offers are being made for top-grade talent - among them Scarlett Johansson, Julia Roberts and Mickey Rourke.

Monday morning headlines

Stocks sharply lower, downtown hotels take big hit, state won't meet deadline for budget plan, and Maguire sells building on the cheap.

Bankruptcy for Six Flags

The owner of Magic Mountain in Valencia has the typical problems: Too much debt ($2.4 billion) and little interest among the creditors to refinance.

Big trouble at MySpace

Two main areas of concern: that the number of active users is inflated, and that Google wants to significantly downscale its massive ad deal.

Port traffic still off

Sluggish cargo numbers for May is a reflection of how retailers view the climate for consumer spending going out the next few months.

Inflation is good!

If you want to know why we're better off now than during the Great Depression, this film is a good reminder.

Friday morning headlines

Goodbye to analog TV , plunge in videogame biz, airlines cutting more workers and flights, and new resort in Rancho Palos Verdes.

Still more gas hikes

The Auto Club's weekly survey finds that the average gallon of regular in the L.A. area is now $2.938 per gallon, up 11.3 cents from last week and 52 cents from last month.

Spielberg gets financing

It took a while, but DreamWorks has gotten verbal commitments for $325 million in financing, enough to cover at least three years of film production.

Bratz stay denied

The Ninth Circuit Court of Appeals denied a request by MGA Entertainment to halt the transfer of the popular doll to rival Mattel.

Jobless outlook not good

The latest WSJ survey of economists shows that the group, on average, is looking for U.S. unemployment to remain above 9 percent through the end of 2010.

Thurday morning headlines

Arnold takes aim at unions, lots of green jobs in CA, Honda's 50th anniversary in the U.S., and strip clubs are paring down.

Market due for fall?

Many on Wall Street have been expecting a pullback for several weeks, what with concerns over high unemployment and escalating oil prices.

Wednesday morning headlines

Good and bad signs from the housing market, Home Depot raises forecast, SAG deal ratified, and Dana Point resort nears foreclosure.

Supremes lift stay

The high court refuses to hear a challenge to the Chrysler bankruptcy settlement. That clears the way for the sale to a group led by Fiat.

Collateral damage

L.A. County runs a pretty tight financial ship, but the state budget crisis has caused S&P to cut the rating on $1.1 billion in short-term notes that the county plans to sell,

Oakland mulls bankruptcy

It's either that or two even worse options: drastic pay reductions across the board or massive layoffs, including 200 cops.

Mozilo's bills are covered

The former Countrywide CEO, who only made a few hundred million bucks in his final years at the company, will not have to shell out one penny to defend SEC charges.

Tuesday morning headlines

Banks to repay TARP money, Chrysler dealership switches to used cars, questions about development votes for Weiss district, and protest over gay event at Disney parks.

Chrysler stay a big deal?

The one-sentence order from Justice Ruth Bader Ginsburg that delays the sale of assets to Fiat could be a matter of the Supremes needing more time to review briefs.

New jump in gas prices

You're looking at roughly 15 cents a gallon, according to the government's weekly survey. That puts the average gallon of regular in the L.A. area at $2.891.

Monday morning headlines

L.A. home prices inch up, vehicle fraud on the increase, Fox Interactive abandons Playa Vista, and paperless tickets for Miley Cyrus concerts.

Mattel fined for lead paint

The El Segundo toymaker agreed to pony up $2.3 million in civil penalties for violating a federal lead paint ban that resulted in a massive recall of its Chinese-made products.

Oil tops $70

Have those nasty speculators returned? Given still-sluggish demand, there's no market-related reason why crude prices should be increasing this much this fast.

Zev rails about budget mess

L.A. County is taking a potentially huge hit from all the cutbacks being contemplated by Gov. Arnold Schwarzenegger and Supervisor Zev Yaroslavsky is ticked off about it.

Jobs ready to return

There's even talk, according to the WSJ, about the Apple CEO making an appearance at the annual software developers' conference next week in SF,

Killer cruise

C'mon, it's a Friday, end of a tough week - aren't you tempted to click on 90 seconds of the old "Love Boat" theme? And then did into a fun summer read?

Friday morning headlines

Economists not encouraged on jobs, Countrywide defendants deny wrongdoing, Penske to buy Saturn brand, and gas prices shoot up.

Big jump in jobless

May's unemployment rate shot up to 9.4 percent, which is on the high end of what analysts had been expecting, but the pace of job losses fell sharply.

*SEC charges Mozilo

As expected, the SEC filed a civil fraud lawsuit today against Countrywide Financial CEO Angelo Mozilo. A news conference is scheduled for this afternoon in Washington.

Adidas has new star

Look who is getting the last laugh in the product-promotion game. Hint: It's not Nike, which gambled big on a Kobe-LeBron matchup.

The case against Twitter

Perhaps it's not a meltdown on the order of Citizens Band radios, but only 10 percent of users account for 90 percent of all Twitter messages. That's a problem.

Less legroom?

Extra fares are extra fares - and more seats that an airline is able to jam into a plane mean fewer planes are needed to meet demand.

Thursday morning headlines

Sluggish retail sales, more layoffs at THR, high court hears arguments in Taster's Choice case, and the Palm Pre receives good notices.

Murdoch hires Chase Carey

The DirectTV CEO gets the nod as deputy chairman, president and COO of News Corp.

CA muni yields edging up

The bond market has been pretty okay with the California's budget disaster, figuring that the state would be good for its obligations. But traders may be getting antsy.

Wednesday morning headlines

Job losses slowing, SEC charges against Mozilo are near, Starbucks wins tip dispute, and proposal to restrict health insurers.

Conan's opening bit

This was way past my bedtime, but his long-distance run from NY to Universal City is now on Hulu.

L.A. tech ranks 5th

The Milken Institute's list of top technology centers cites the area's still-formidable aerospace presence, along with the growing tech-related influences in Hollywood.

'Day of reckoning'

The governor talked about the need to transform state government, though he didn't offer many specifics other than the slash-and-burn approach now being utilized.

Chinese firm buys Hummer

NYT reports that the maker of obscenely large SUVs is being purchased by Sichuan Tengzhong Heavy Industrial Machinery Company, based in Chengdu.

Tuesday morning headlines

Governor to address legislature, gas prices might be close to peaking out, Americans have been saving more, and Michael Moore on GM bankruptcy.

GM has Hummer deal

Announcement comes tomorrow, according to the WSJ, citing sources, but buyer's name will not be released.

Big jump in stocks

Right before the closing bell, the Dow was up more than 220 points, to over 8700. Boeing and United Technologies were among the manufacturers that did especially well.

GM's L.A. problem

When more Porsches are sold in the L.A. area than Buick and Pontiacs combined, well, you can see the problem.

Monday morning headlines

Chase Carey could become No. 2 at News Corp., videogame show opens in L.A., Live Nation discounts its tickets, and head of OC Register parent heading to Playboy.

GM, Citi out of DJIA

Replacing the once-powerhouse corporations on the Dow Jones Industrial Average are Travelers Cos. and Cisco Systems Inc.

GM's bankruptcy filing

Here are the basics: $82.29 billion in assets and $172.81 billion in debt. Top creditors include Wilmington Trust, which represents bondholders, and the unions.