Stocks taking off: The market continues its up-and-down ways, with Ford earnings and a better-than-expected manufacturing report starting to make up for Friday's losses. Dow is up 125 points in early trading.
Stashing cash: Why is it so hard to find a job? WSJ says companies are holding more cash -- and a greater percentage of assets in cash -- than at any time in the past 40 years. Actually, it's not as bad as it might sound:
Large cash balances are both a curse for the economy and a potential blessing. Hoarding means companies are spending and investing less, damping economic growth. But that leaves them with more cash to deploy as the economy improves, giving them a freer hand to acquire, and to restart hiring and capital spending.
Encouraging news: Manufacturing sector grew in October for the third straight month - and faster than expected, according to a widely followed index. (Reuters)
Good times at Ford: Well, better anyway. The only U.S. automaker not to receive a government bailout reported third-quarter net income of nearly $1 billion - much of that helped by the Cash for Clunkers program. They're sounding upbeat about 2011. (AP)
Nonprofit riches: Quite a story in the LAT about the owners of a nonprofit making more $7 million in salary and deferred compensation over the last five years - much of that through the help of taxpayer dollars. Company provides vocational help for the disabled
The Dawsons made their millions while navigating the murky boundaries of nonprofit law. By definition, nonprofit companies exist for the public good. Federal law says that executive pay must be "reasonable" -- a vague standard that regulators and watchdogs say essentially allows nonprofits to set their own limits. While the state is slashing the budget for the developmentally disabled, it places no ceiling on how much executives like the Dawsons can earn. In addition to their pay, they collect more than $700,000 a year for renting properties to SVS, including a San Francisco condominium for their own use.
Banks go after celebs: Nicolas Cage, Toni Braxton and Janice Dickinson are being sued by local banks for falling behind on loan payments. From the Business Journal:
In August 2007, Cage opened an unsecured, revolving line of credit with East West that was set to mature a year later. As the loan was coming due, Cage asked for a three-month extension and then, in December, he renegotiated the terms to extend the maturity date until 2011, the bank claims in an Oct. 2 lawsuit filed in Los Angeles Superior Court. Shortly thereafter, according to the filing, Cage stopped making payments on the loan. East West is seeking full repayment of the loan, which has an outstanding balance of more than $1.9 million.
Local bank seized: California National Bank becomes the fourth bank failure in L.A. this year. The feds transferred the operations to U.S. Bank, which assumes all $6.2 billion of Cal National's deposits and essentially all of its assets - plus nearly 70 Socal branches. (Business Journal)
Creditors sign off on bankruptcy: CIT's prepackaged filing will allow it to emerge from court protection by the end of the year under the ownership of creditors. They're supporting a reorganization plan. From the NYT:
CIT is aiming to limit the damage inflicted on the scores of retailers and other companies that depend on the specialized financing it provides. It is the dominant provider of factoring, in which a company sells the debt it is owed to a company like CIT at a discount.
Condo sales OK'd: A bankruptcy court judge is allowing downtown developer Sonny Astani to close escrow on 77 units of his multi-phased Concerto Project that had been held up by a bankruptcy filing. Much of the complex is unfinished. (Downtown News)
DVR watching: Here's a head scratcher: Nielsen says that almost half of viewers 18 to 49 are watching the commercials during their DVR playbacks, up slightly from last year. So much for the theory that everyone would just fast forward. From the NYT:
"It's completely counterintuitive," said Alan Wurtzel, the president of research for NBC. "But when the facts come in, there they are." Almost across the board, the gains for playback are growing. The best preseason estimate for the current season, said David F. Poltrack, the chief research officer for CBS, was about a 1 percent increase from playback over the live program for the networks combined. Instead, many are in the range of 7 to 12 percent, with some shows having increases of more than 20 percent when DVR ratings are added. The four networks together are averaging a 10 percent increase.