Stocks open higher: Traders might be looking at the slower pace of job losses rather than the jump in the unemployment rate. Dow is up about 75 points in early trading.
More on unemployment: To say that the economy only lost 345,000 jobs in May seems a little weird, but considering the 600,000+ losses for the last several months the decline was striking. Still, economists are not encouraged about the outlook through at least the end of the year. From the NYT:
Economists said the milder pace of job losses indicated that the economy was gradually leveling off as government stimulus money trickled out and businesses reined in their budgets and payrolls. "Things are still getting worse, but the pace of decline has slowed down," said David Wyss, chief economist at Standard & Poor's. "Over all, it's not quite as dire as it looked in the first quarter."
Some economists, anticipating an additional two million job losses nationwide, say the job market will be a disaster zone even after the economy starts to heal. After months of sharp economic contraction and falling profits, many employers will be reluctant to expand their work forces to meet the first increases in orders and sales.
Denials in Countrywide case: Responding to yesterday's SEC complaint, lawyers for former Countrywide CEO Angelo Mozilo and two other company executives denied that their clients did anything wrong. They say that the emails cited by the feds were taken out of context and said the suit was a political response to outrage over the government's failure to prevent the mortgage meltdown. (LAT)
Angelo another Bernie Ebbers?: The FT's John Gapper compares the Countrywide CEO with the former CEO of WorldCom, who was sentenced in 2005 to 25 years in prison (though please note that Mozilo has not been charged with criminal activity). From gapperblog:
The sentence that most struck me in the SEC's suit comes right at the end: "Plaintiff hereby demands trial by jury". The SEC clearly thinks a California jury is not going to be particularly sympathetic, and I have a feeling that it is correct.
GM sells Saturn: Penske Automotive Group, one of the world's largest auto dealership chains (including several in Socal), is the buyer. Saturn, which was part of GM's bankruptcy, had drawn 16 bidders. From the WSJ:
GM's deal will allow Mr. Penske, who runs the Penske Automotive Group chain of dealers, to take over the brands, trademarks, service and parts and distribution operations related to the brand. In addition, Mr. Penske will strike deals with various auto makers, including GM and Renault SA, allowing him to buy vehicles from those auto makers to fill out the Saturn vehicle portfolio.
Disney, Hearst NBC in talks: The idea would be to create a group comprising the 10 cable channels the three companies own jointly, including A&E, Lifetime and History. The new joint venture would be expected to eventually buy out NBC Universal. (Broadcasting & Cable)
Gas prices shoot up: For the first time in a year, the Auto Club's weekly gas survey shows a double-digit increase. The average price of self-serve regular in the L.A. area is $2.825 per gallon, which is 16.2 cents more than last week. Socal gas prices have now increased 55 percent since January.
Port budget approved: Harbor commissioners sign off on a $20.1 million budget reduction for the Port of L.A., based on expectations of a further decline in cargo traffic. The port is looking at a 6.3 percent drop in operating revenue. (Daily Breeze)