Stocks open lower: More concerns that the Euro crisis might spread to other nations. Dow is down almost 100 points.
Big insider trading probe: Feds are capping a three-year investigation that centers on whether nonpublic information was passed along by analysts and consultants to hedge funds and mutual funds. From the WSJ:
Expert-network firms hire current or former company employees, as well as doctors and other specialists, to be consultants to funds making investment decisions. More than a third of institutional investment-management firms use expert networks, according to a late 2009 survey by Integrity Research Associates in New York. The consultants typically earn several hundred dollars an hour for their services, which can include meetings or phone calls with traders to discuss developments in their company or industry. The expert-network companies say internal policies bar their consultants from disclosing confidential information.
"Shadow inventory" increases: That's made up of homes that are seriously delinquent, foreclosed, or bank-owned, but which are not included in the housing supply totals. Corelogic puts the shadow inventory at 2.1 million homes from 1.9 million last year. (Calculated Risk)
Healthcare jobs being lost: What had been a reliable sector of the state economy is starting to slip, with salary and benefit cuts and even some layoffs. From the LAT:
The ailment: the Golden State's 12.4% unemployment rate, third-highest in the nation. So many Californians have lost their jobs -- and their company-sponsored health insurance -- that many are going without treatment. In addition, employers increasingly are shifting healthcare costs to their employees in the form of higher deductibles and out-of-pocket costs. That's leading many workers to skimp on doctor's visits and postpone elective surgeries. Meanwhile, California legislators are slashing some public healthcare spending in the face of yawning deficits.
How to whittle down the deficit: The focus should be on permanent cuts and ongoing revenue hikes, says legislative analyst Mac Taylor. From the Sacramento Bee:
Politically, lawmakers and the governor have found it easier to sell temporary tax hikes or spending cuts to powerful interest groups, using economic woes as a justification. But the economy is unlikely to bail out the state as it did during the housing and technology booms. "What's different now is that most economic forecasters are not predicting that type of rapid bounce-back," Taylor said. "If you can't count on the economy to save you, you need to make your budget actions (permanent). That's a hard decision. It's easier to reduce somebody's benefits for two years knowing they will return after that period."
Beware of life insurance policies: The claims of thousands of beneficiaries are denied or disputed every year, many for allegedly flawed applications, says the LAT.
Insurers can dispute claims for a number of legitimate reasons -- unpaid premiums, suicide, foul play by the beneficiary. But the No. 1 reason, accounting for about two thirds of disputes last year, is "material misrepresentation." That's failing to disclose information that insurers deem important in assessing risk, and it allows insurers to rescind coverage altogether. To stop abuses by insurers, most states long ago banned limitless rescissions, but in California and elsewhere, they are allowed during the two years immediately after a policy is signed.
Huge numbers for Harry Potter: Opening weekend for "Harry Potter and the Deathly Hallows Part 1" was good for $125 million, the best showing for the franchise. (THR)
Google eyes Miramax: It's talking to the studio's soon-to-be owners, led by Ron Tutor and Colony Capital's Tom Barrack, about getting digital rights to Miramax's archives. (NY Post)