Stocks edge higher: Another batch of decent earnings results is doing the trick. Dow is up about 60 points in early trading.
Latest from Bernanke: The Fed Chairman says that the economy is showing "tentative signs of stabilization," but not to the point where monetary policy is likely tighten up anytime soon. That suggests little or no boost in interest rates. From Bloomberg:
Bernanke said dangers remain, and didn't indicate that a sustained recovery has yet taken hold. He said that financial markets remain "stressed," and household spending is an "important" risk to the outlook because of continued job losses and declines in home values. He also said that record budget deficits may begin to pose a threat to the recovery.
Selling the budget deal: Various briefings and caucuses are planned over the next few days that will lay out details of the agreement. Expect plenty of lobbying from the interest groups (teachers, county government, etc.), and don't be surprised to see litigation if the package gets through. (LAT)
Not the final answer: The deal does manage to close CA's $26 billion shortfall, but the state could easily face additional deficits later this year and into 2010. The basic problem remains the same: California is too dependent on unpredictable revenue sources. From Dan Walters:
The volatility of California's tax revenue - booming one year, plummeting the next - plagues the state budget. The volatility, born of the state's reliance on personal income taxes from a relative handful of high-income Californians, is the underlying factor in revising the current state budget to close a whopping deficit.
Another drop in gas prices: An average gallon of regular in the L.A. area is $2.854, down about a nickel from last week, according to the government survey. (EIA)
Lennar buys into Newhall: First, the homebuilder sells a portion of the huge Newhall Ranch development to Calpers for $1 billion. Now, it's buying back a 15 percent stake of the development at a substantial discount. From the LAT:
CalPERS spokeswoman Pat Macht said the fund had decided to pull its stake in the development because "we've changed our overall real estate strategy to focus less on housing and more on commercial and international properties." CalPERS wants to put its money into properties that create an income stream from rents rather than into land "that takes a long time to produce income," she said.
Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the CA budget deal, the latest on foreclosures, and scamsters who prey on homeowners in trouble. Also on kpcc.org and on podcast.