Friday morning headlines

Stocks in zigzag mode: First down, then up (after the Mubarak news) and now fading a bit. Dow is up about 13 points.

Mortgage overhaul announced: The Obama administration wants the government to play less of a role in housing finance - specifically abolishing Fannie Mae and Freddie Mac within 10 years. From the NYT:

In presenting the three options, the administration excluded the possibility of completely eliminating government support for the housing market -- as some free-market conservative Republicans have proposed. But officials said the government's role would almost certainly be reduced from what it was before the financial crisis began in 2008.

Mortgage rates top 5 percent: That's the highest level in nine months and raises concerns about a further drag on the housing market. (LAT)

Brown seeks business support: The governor spoke for only 10 minutes at last night's L.A. Chamber event, urging the business community to back his plan for extending tax increases. From the Sacramento Bee:

Business support for a tax measure is far from certain. Though the California Chamber of Commerce supported a similar, unsuccessful tax-extension measure in 2009, the group ran ads attacking Brown in the gubernatorial race, and their relationship is strained.

Mattel seeks mistrial in Bratz case: The El Segundo-based toymaker alleges that the CEO of Bratz-maker MGA Entertainment made several comments that tainted the jury - including claims that Mattel had destroyed his family. (Reuters)

Blockbuster on the block: Billionaire Carl Icahn and other creditors failed to agree on a plan to get the video chain out of Chapter 11, so the next step could be a court-administered auction. From the NY Post:

The big issue is cash, which is in short supply after a disappointing holiday season -- despite the fact that creditors gave Blockbuster $130 million last fall to fund operations, according to sources close to the company. "Rome is burning and they have to come up with a solution fast," a source briefed on the situation told The Post.

Gas prices keep climbing: The average gallon of regular in the L.A. area is $3.408, up almost 4 cents from last week, according to the Auto Club. Oil and wholesale gasoline prices have been pushing higher at a time when they should be dropping.

Big layoffs at Mannkind: The Valencia biotech company is cutting 41 percent of its workforce, or 179 employees, as it focuses on regulatory approval for its inhaled diabetes drug Afrezza. Company also reported $38.3 million quarterly loss. (LAT)

Ad prices rebound for Oscar show: ABC is charging about $1.7 million per 30-second spot. That could generate revenue of $80 million, which would be up from $70 million last year. (LAT)

Ron Tutor rents out house: The construction magnate and co-owner of Miramax had been trying to sell his 19,000-plus square-foot mansion in Hidden Hills - first at $18.9 million and most recently $12.9 million. He's now leasing out the property for $25,000 a month. (WSJ)