Stocks edge lower: No big corporate or economic developments to give investors an excuse to buy or sell. Dow is down about 10 points in early trading.
Explaining market surge: Some analysts say the gains of the last few months are less about the economy's strength and more about the government being able to avert total disaster. But what now? From the WSJ:
To keep rising in the future, the market needs a sign of real economic recovery, and that requires a surge in consumer spending, business investment and home buying. That is what is in doubt, and one word explains why: debt. Despite an uptick in consumer saving, debt levels have only barely begun to come down. Even after the recession ends, economists expect the gradual reduction of the nation's massive consumer debt to take years. In the meantime, they are warning that the economic-growth surge expected for the second half of this year could be followed by slower growth and a softer stock market in 2010.
Maguire set to default: The L.A.-based office-building owner plans to hand over control of seven buildings to creditors. Most of the properties are in OC. Also, the company reported a second-quarter loss of $375.7 million, compared with a prior-year loss of $105.9 million. From the WSJ:
Maguire's problems are an example of the mounting pain among owners and lenders to office buildings, stores, hotels and other commercial real estate that is causing concern among banks and regulators that the sector may drag down a hoped-for economic recovery just as it is getting started. Initially, a dearth of financing caused the distress. But Maguire's problems show that falling rents and rising vacancies are causing landlords to run out of cash.
Drop in July home sales: A brief inventory shortfall in L.A. County led to a whopping 33 percent decline from June and 11 percent from July 2008, according to HomeData, which prepared numbers for the Business Journal. The median price rose 4 percent from June, to $332,000, but was still off 21 percent since the same time last year.
New snag for budget: Interest groups representing state programs taking the biggest hits are going to court to challenge the massive cuts. So far, they're having considerable success, much of it stemming from earlier state mandates. From the LAT:
In the last few months alone, the courts added more than a billion dollars to the state's deficit by declaring illegal reductions in healthcare services, redevelopment agency funds and transportation spending. Another ruling threatens to deprive California of all its federal stimulus money if the state does not rescind a cut to the salaries of home healthcare workers.
GM on eBay: California car buyers will be able to haggle over the online auction service in a test program that runs until Sept. 8. About 225 Chevrolet, Buick, GMC and Pontiac dealers will participate through gm.ebay.com. From the FT:
Vehicles will be offered using eBay Motors' traditional formats, such as "Buy it Now", where customers agree to pay an advertised price, as well as a "Best Offer" option, under which buyers indicate the price they are willing to pay and then negotiate online with the dealer.
Trouble at Hotel Bel-Air: The current labor contract just happens to expire on the day the hotel fires most of its staff and closes for an 18-month renovation project. So the union representing employees wants some sort of new deal. (LAT)
Court upholds LAX fee hike: Airlines that rent space at Terminals 1 and 3 complained that the extra costs were discriminatory compared to fees at other terminals. But an appeals court disagreed, standing by an earlier decision from the Transportation Department. (AP)
So much for reviews: Paramount didn't let critics view "G.I. Joe" in advance and all that the movie did in its opening weekend was $100 million worldwide ($56 million domestic). (Variety)