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.
April 2010

Latest on oil disaster

LAT describes it as "a problem of unprecedented severity -- a limitless gush in very deep waters."

Munger says Lehman was worst

The L.A. billionaire and long-time partner of Warren Buffett says that the bad behavior "came right at the top."

Light posting

I'm on jury duty and out of pocket for much of the day. Two important local business stories so far this morning:

The future of the world

Mike Milken and Nouriel Roubini took a crack at where things stand today and where things are headed.

United, Continental close to deal

The combined airlines would top Delta as the world's largest carrier based on passengers carried.

Non-answers on L.A. budget

L.A. City Councilman Ed Reyes has a hard time specifying the ways in which the deficit can be pared down.

Pension shock

If you want to understand why California's pension problems are getting so out of hand, look no further than these numbers,

Would you believe $550 Khakis?

pants.jpg We're talking cotton gabardine Khakis, and you can buy a pair at Bergdorf Goodman.

Thursday morning headlines

Goldman may want to cut a deal, high foreclosure rates in CA cities, new optimism about a deal for Greece, and Chase adds branches in Socal.

Angeleno parent for sale

Modern Luxury Media has been approached by several parties. Earlier this year, lenders seized control of the company.

Alitalia returns to LAX

The airline will have five weekly flights between L.A. and Rome, beginning June 5.

Tough sledding for consumer

shoppers.jpg The jump in retail sales, much ballyhooed as the start of a stronger-than-expected recovery, is not indicative of what's going on.

Laying odds on Goldman

It's somehow appropriate that a gambling portal is placing odds on how the Wall Street saga will play out.

Job picture remains bad

Virtually all of California had double-digit unemployment in March, with El Centro topping the list of all metro areas in the nation.

Goldman, bookies and betters

If the case against Goldman Sachs sounds complicated, just think about trying to fix a horse race.

Wednesday morning headlines

Greece on the verge of financial collapse, bank foreclosures likely to rise, WellPoint profit soars, and NY to charge for filming.

More drama at Activision

The Santa Monica-based company has been sued by 38 former and current staffers of its development studio.

More L.A. bashing

No offense to Joel Kotkin, but I just don't believe that L.A.'s job growth picture is worse than in Buffalo, NY.

Goldman stock is up?

That might seem nutty, considering that the firm is getting its butt kicked on Capitol Hill.

*More heat for Arizona

Everybody is taking their shot at the immigration law, including L.A. City Councilwoman Janice Hahn.

More oil dependent than ever

oildependence.png Ted Turner and T. Boone Pickens pushed for federal legislation that would stress cleaner, greener domestically produced energy.

Stocks plunge on Greece worries

All it took was S&P downgrading Greek debt to junk status. Financing risks are growing.

Goldman hearing gets going

Lots of live coverage on today's Congressional testimony involving the Wall Street giant.

Tuesday morning headlines

Goldman hearing under way, L.A. home prices dip, LAX vendors crying foul, and Disneyland alone in local attendance gains.

Looking for high yields?

Try Greek government bonds. Two-year yields are running 13.522 percent.

The boss you wouldn't want

Advertising man Richard Beckman will be running THR. He seems like a perfect Hollywood fit.

Whitman's Goldman problem

Her actions are like a mega-millionaire movie star accepting award show swag: Tacky but permissible.

Southwest cuts Bob Hope flights

All told, 82 flights, or 12 percent, will be trimmed from the airline's weekly schedule out of Burbank.

Azoff's version of the truth

Live Nation's chairman reminds us why nothing that's said in the entertainment industry should be taken all that seriously:

Dems kill Buffett bailout

A provision in the financial reform bill would have allowed Berkshire Hathaway to avoid taking a significant hit.

Monday morning headlines

Big dip in LAT circulation, Carl's Jr. parent accepts buyout bid, rental car costs fall in L.A., and Parks says bankruptcy can't be ruled out.

Here's the real porn surfing story

adultfriendfinder.jpg The SEC may be accused of falling asleep these past few years, but it's not because a few of its employees are watching porn on the job.

Same old story on immigration

illegal%20immigrants.jpg With Arizona turning into a police state when it comes to undocumented workers (see NYT story), and with immigration reform stepping into the center ring in Congress, perhaps it's worth remembering the economic benefits of having a flexible and humane immigration program. A recent UCLA study says that legalization of undocumented immigrants would add about $1.5 trillion to the U.S. gross domestic product over 10 years. A study by the Fiscal Policy Institute shows that...

So the economy is improving, eh?

jobless.gif One in five American workers think it is "very" or "fairly" likely that they will lose their jobs during the next 12 months.

Slugfest at Rock & Republic

jeans.jpg The story behind the premium jean maker's Chapter 11 filing seems to center on the company's biggest creditor Richard Koral.

New delay in Anthem rate hike

Higher premiums of as much as 39 percent couldn't be put in place until the end of May at the earliest.

Careful about housing report

The homebuyers tax credit runs out a week from today, and the big boost in March new home sales seems to reflect that.

Have the ultra-rich changed?

rich_people.gif The financial crisis has shaken everybody up, including folks who would seem to have it made.

Friday morning headlines

Countrywide deal in works, CA's $325 billion pension bill, MTA endorses "30-10" transportation plan, and LAX backlog clearing.

Why Turner wants the madness

By sharing the rights to the NCAA tournament with CBS, Turner can apply more pressure on cable companies to boost its program fees.

Bev Hills a suburb?

bevhills.jpg The average household spent $99,624 last year, which isn't in the same league as Kenilworth, IL. Where?

Where does your dollar go?

You can learn a lot about different regions of the country just by tracking the way money travels.

Dope's business model

dope.jpg The two industries best positioned to capitalize on what could be a $40-billion market are tobacco and pharmaceuticals.

Mayor blames DWP

Now Villaraigosa says that the utility's problem lies with its high-level supervisors - something he says it out of his control.

What the well-off worry about

Besides rising health care costs, L.A.'s affluent are increasingly concerned about whether they'll have enough money to last their lifetimes.

Thursday morning headlines

Why Karatz was convicted, Goldman case gets tougher, L.A. mayor talks pension reform, and Kindles on sale at Target.

Beware of mini-bubbles

Yale economist Robert Shiller sees unusual activity in both the housing and stock markets, putting the recovery at some risk.

*Rise and fall of Bruce Karatz

Bruce%20Karatz.jpg One question kept coming up in the years after the former KB Home CEO was implicated in a backdating scandal: Why?

Karatz is guilty

Daily Journal reports that the former CEO of KB Home was convicted on four of 20 counts, including mail fraud and making false statements to accountants and shareholders for backdating stock options to boost his pay. From AP: A federal jury on Wednesday found Bruce Karatz guilty of two counts of mail fraud, one count of lying to company accountants and one count of making false statements in reports to the Securities and Exchange Commission....

A desperate mayor

You know things are bad when one of the cost-saving measures trotted out in the mayor's new budget is the email system.

Wednesday morning headlines

SEC goes after banks, City Hall lacking credibility, clean truck trial opens, and new hope for Chrysler.

Soboroff steps down

The CEO of Playa Vista tells the LAT that he's looking for another big challenge.

Taming a $485 million deficit

The mayor is proposing a five-step program that includes furloughs, layoffs, and public-private partnerships.

*Why government is hopeless

This video of a 58-year-old woman accused of hitting a federal security agent at Bob Hope Airport is one more example.

Irvine Co. builds its own homes

The giant land developer figures it's in a financial better position than many homebuilders.

Big drop in foreclosures

First-quarter notices of default in L.A. County tumbled 43.5 percent from a year earlier.

Overdraft sleight-of-hand

New report finds that bank overdraft fees continue to be excessive and confusing.

Kate Kelly moves to CNBC

One of the WSJ's star financial reporters was approached about the same time Charlie Gasparino bolted to Fox Business News.

About those economic stats...

Every once in a while we get reminded that the government reports everybody pays so much attention to are only estimates.

Tuesday morning headlines

Goldman makes big money, mayor to outline budget plans, flights to Europe opening up, and Pinkberry closes original store.

Computer problems

Happy Monday. I have an infected computer on my hands. No posts for a while....

Betting on disaster

Here's another case of how a hedge fund bought collateralized debt obligations and then bet against its own securities.

Goldman's alphabet soup

Here's the 66-page presentation of the deal that's at the center of the SEC's case.

Is ash covered by insurance?

iceland-volcano-domijpg-0e4813bb41252a42_large.jpg Travelers who took out insurance before April 13th stand a chance of being covered; volcanic eruptions are sometimes included in benefits.

*Understanding Goldman story

It's not that easy to follow, but here's a good summation of what the SEC charges really amount to.

Beutner hints at taking DWP post

The mayor's "jobs czar" stressed that it would be a temporary assignment, and that he would still work as Villaraigosa's point man on business matters.

Why Goldman charges are a big deal

It's not just that the SEC is coming down on the Wall Street powerhouse, it's that the accusations involve securities fraud.

L.A. jobless rate unchanged

Unemployment appears to be peaking out, but those numbers show little sign of dropping significantly any time soon.

Friday morning headlines

Tech hires picking up, Socal venture capital jumps in Q1, export traffic improving out of L.A. and Long Beach, and another NFL stadium idea.

Demand Media explores IPO

The Santa Monica startup has hired Goldman Sachs to look into a public offering, possibly later this year.

Best business schools

This year's US News ranking has Harvard and Stanford tied for the top spot. UCLA is 15th, USC 20th.

Best email address you've ever seen?

interview.jpg That's one of the strange but true questions asked by business school admissions officers

Economics of Coachella

coachella-crowd-back.jpg Maybe the promoters are right when they say the concert business is recession-resistant.

Budget chief is back

City Administrative Officer Miguel Santana returned to work today almost three weeks after being arrested on suspicion of drunk driving.

LAX cancellations

Forget about getting to London today -- nine flights have been cancelled out of LAX because of the volcanic ash problems

Thursday morning headlines

Economists may have underestimated recovery, eating out is back, and foreclosures and bankruptcy filings take off.

Council deals on DWP hikes

It's the same 0.6 percent rate increase that was passed earlier this month - and the mayor seems fine with it.

Big day for stocks

Who knows how long this might go on, but markets typically change course after extreme volatility, and that's not happening.

No place to hide...

The Republican National Committee offers a preview of what we're in for this fall. Fair and balanced it ain't.

How to help poor people

Some ideas are offered for getting the city's wealthiest donors to contribute to local nonprofits that are aimed at the needy.

Gun shy about recovery

It's not a question of whether the economy is getting better. It's whether growth will get beyond the current okay-but-not-great levels.

Wednesday morning headlines

Bernanke worries about deficit, shoppers are coming back, bids due on CA properties, and iPad sales are booming.

Palin contract in trash

Details about her speaking gig at Cal State Stanislaus have not been made public, but students say they found some snippets.

Car plant near downtown?

coda-automotive-1_pq1cg_11446.jpg Santa Monica-based electric car startup Coda Automotive is said to be in advanced talks with the CRA.

Free tickets!

Business writer Roger Lowenstein is in town this Thursday to plug his book, "The End of Wall Street." It's part of the Drucker Business Forum series - he'll be talking with Tess Vigeland of Marketplace. The event takes place at KPCC's brand new Crawford Family Forum. Breakfast is at 7:45 and the program starts at 8:30. If you're interested, just email me at

State's biggest tax cheats

minor-halsey-minor-lede-slide.jpg The California Franchise Tax Board says it's Cnet founder Halsey Minor and his wife Shannon.

Home prices back up

All told, it was a pretty good month, though not good enough to rule out more trouble later this year.

Tuesday morning headlines

Wamu executives get grilled, trouble for Mercury Insurance, good readings on economy, and Twitter starts taking ads.

Conan will own show

A five-year deal was done in 72 hours. Turner executives say they assumed O'Brien would sign with Fox.

CA's pricey car insurance

The state had the fifth-highest rates in the country, with an average annual premium of $1,74.41,

Tweeting and organizing

The latest effort by Idealab impresario Bill Gross is something called TweetUp, which is basically a Twitter search engine.

Conan heads to TBS

So much for Fox - O'Brien will start up a new late-night show on TBS, beginning in November.

Doubts about high-speed rail

Not a big surprise here, but more questions are being raised about that multibillion-dollar bullet train between SF and L.A.

Tribune lenders not happy

Well, at least dozen of them holding more than $3.6 billion in claims at the media company

Monday morning headlines

Still not calling recession, Karatz jury is deliberating, CPK looks and options, and new rules for using interns.

Rich folks ignoring poor folks

HomelessShelter2.jpg These are tough times for organizations that help the needy. So why isn't L.A.'s wealthy class would pitching in?

Movie futures market delayed

This is the futures exchange that would allow investors to bet on the future box office performance of films.

CPK on the block?

cpk.jpg The popular restaurant chain (aka California Pizza Kitchen) has been soliciting interest from private-equity firms, the WSJ reports.

Making your blood boil...

That would be listening to Peter Kazanjy, who is the 30-year-old co-founder of a Web site called, where most anyone can post "reviews" about anyone else - anonymously. You might have heard about this nonsense - just out of beta testing, it's gotten tons of press, much of it negative (here's an LAT piece). Lawyers say the site is a "litigation nightmare" (we can only hope). Anyway, Kazanjy was on KPCC's "Airtalk" this morning,...

Dow tops 11,000

Briefly - and for the first time in 18 months. Then it slid back near the close. At the close, the Dow stood at 10,997....

L.A. court hears Toyota suits

More than 100 federal lawsuits involving sudden acceleration incidents will be consolidated in the Central District of California.

L.A. still has big deficit

It's not a big enough crisis to shut down city services two days a week, but L.A. faces a shortfall of $222.4 million.

Flying in the dark

private-jets.jpg The owners of private planes are allowed to block their flight plans from the government's air traffic system.

Friday morning headlines

Mood swings on the economy, big banks mask risk levels, L.A. property taxes save the day, and closing arguments in Karatz trial.

A miracle! More money!

MayorAntonioVillaraigosa.jpg Today the mayor is saying that the budget crisis might be averted after all. Huh? How'd that happen?

Good news from controller

March tax money coming into state coffers beat budget estimates by $356 million. Also, expenditures were lower than expected.

Tax relief on housing

The state legislature passed a measure that would exempt certain homeowners from paying taxes on canceled debt.

Big quarter for location shooting

First-quarter film, television and commercial production were up a total of 18 percent from a year earlier.

Mass transit fantasyland

If economic forecasts going out as little as 12 months are more than a little iffy, what about an economic impact study that covers 30 years?

Just one word: computers

graduate.jpg Anybody graduating this spring with a computer-related degree should be in pretty good shape.

Airport follies

airport.jpg Everything's back to normal at LAX after some jerk took off before his bag went through a secondary screening.

Thursday morning headlines

Villaraigosa backs down, B of A foreclosure jump expected, many Californians still satisfied with their state, and Oprah goes nighttime.

United, US Air in merger talks

Any deal is at least several weeks off, according to the NYT, and might not even happen.

Sobering job stats

Among the 29 metro areas with unemployment rates of at least 15 percent, 13 were in California.

Council goes after DWP

Several motions are scheduled to be introduced today that would make the department more accountable for its actions.

*Moving toward budget deal

The mayor said he would ask the DWP board for some of the $73 million that the utility owes the city.

Calpers disputes pension study

Estimates of a $525 billion shortfall were off base, says the pension fund, but the study's authors stand by their findings.

Why baggage fees are a good thing

Fewer passengers are choosing to check in their items, which means the airlines have not been losing as many bags.

Unions respond to mayor's plan

They're less than thrilled with Villaraigosa's plan to shut down city services two days a week.

Wednesday morning headlines

Greenspan defends himself, L.A. budget battle called "a manhood contest," city's bond rating is cut, and Carl's Jr. parent gets better offer.

*Latest Miramax bids

The Weinstein brothers, the Gores brothers and a third unnamed party have submitted new offers.

When coal trumps miners

Company CEO was described by Rolling Stone as "a villain ripped straight from the comic books."

Greuel: L.A. "waited too long"

The City Controller was on Bloomberg News this morning, talking about the budget crisis

*Council to DWP: Give us the $$

Members demanded that the DWP board "honor their commitment" to transfer $73 million the city had been counting on to remain solvent.

Mayor calls for emergency steps

Villaraigosa is proposing that all city agencies, excluding public safety, be shut down for two days a week, beginning April 12.

$500-billion time bomb

That's how much California's public pension systems are underfunded, according to a report.

Toyota extends incentives

No-interest loans (in some cases for as long as five years) and discount leases will be offered for another month.

Security for Wellpoint CEO

angela_brady.jpg The company paid an extra $151,000 last year on a variety of measures for Angela Braly and her family.

Letting food go to waste

save_supermarket.jpg Supermarkets and restaurants do it all the time, despite the desperate need for surplus food.

Tuesday morning headlines

Boost in CA's economy, actress sues "Desperate Housewives" creator, Loehmann's in trouble, and oil prices head higher.

Countrywide heartburn

Mortgage Guaranty Insurance insured a bunch of Countrywide mortgages and says some of them never should have been made.

L.A. running out of money

Without a $90 million transfer of reserve funds, the city will be in the red by May 5, according to Controller Wendy Greuel.

Too little too late

The federal government will seek a $16.375 million civil fine against Toyota, the largest allowed.

Losing control of pensions

It goes back several decades ago when separate pensions were created for cops and firefighters.

FedEx CEO gets Wooden award

UCLA's Anderson School will honor Fred Smith as recipient of this year's John Wooden Global Leadership Award.

How L.A. ignored its fiscal mess

A timely primer about how the city's fiscal condition could have deteriorated so badly.

Monday morning headlines

Financial reform could be getting close, 300,000 iPads sold on first day, corporate jet use increases, and strawberries are cheap.

Lining up for an iPad

Sales begin tomorrow morning at 9 and you had better get in line early.

Judge scolds Karatz jury

He was none too pleased to hear about one juror's inappropriate hand shake. Also today was the testimony of Eli Broad.

Iron chef coming to town?

iron.jpg The idea is to have Masaharu Morimoto create the menu for a restaurant at the airport.

'Skinny bitch in apocalypse'

jeans.jpg Rock & Republic, the Culver City-based clothing house that filed for Chapter 11, does a lot of "inspired bondage numbers,"

*What about long-term unemployed?

Where exactly are those folks supposed to find a job? The short answer is no one knows.

Friday morning headlines

Jobs report shows manufacturing revival, Riordan on Karatz, L.A. budget troubles intensify, and fewer viewers for CBS and ABC newscasts.

Decent jobs report

It's a mushy report that can be interpreted in any number of ways. The early read is that it's decent but not terrific news.

iPad App Store is open

iTunes has a number of them available for purchase; the device goes on sale this Saturday.

Kate Hudson & L.A. bizboy?

kate_hudson_hair.jpg She's dating a big-time hedge fund manager based in Los Angeles, according to the NY Daily News. But who?

Sign of the times


The problem with economists

Most economic work is aimed at prediction, and most predictions are forgotten almost as quickly as they're made.

When it comes to schmucks...

grubman.jpg ...Hedge fund manager Richard Grubman holds a special place in our spleens. Yesterday, he was just another super-rich guy - today he's the jerk who parked his silver 2007 BMW X5 SUV in the wrong place and then went ballistic, throwing his car keys into a valet's face. From the Boston Herald: Grubman pitched his alleged curbside fit Tuesday at about 7 p.m. when he tried to head into the Ritz's Blu restaurant and was...

Another dip in CA gas sales

Some experts point to the $3-a-gallon threshold as a turning point for demand in the state.

Big month for car sales

A raft of incentives obviously helped push deals, though everyone admits it's a questionable strategy.

iPad reviews looking good

For what it does, the Apple tablet device is terrific. But there's a fair amount that it doesn't do as well as a laptop.

Thursday morning headlines

Markets betting on jobs report, Villaraigosa's aide takes shot at unions, hedge fund managers clean up in 2009, and Broad to defend Karatz.