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.
June 2011

McCourt nightmare no surprise - LABJ called it in 2004

Please forgive this former Business Journal editor for a bit of bragging from yesteryear.

Stocks keep surging - Dow up 152

It's the fourth straight day of solid gains.

Downtown stadium deal all but assured

the AEG people are determined to bulldoze this thing through - despite lots of legitimate concerns about financing.

Revisionist history about financial crisis

It's being crafted by bankers, congressional Republicans and former Fed Chairman Alan Greenspan, writes Phil Angelides.

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Just a reminder that we have a separate account from the LAO mothership. Here's the link....

What does the 'Amazon' tax mean for consumers, retailers?

Some basics on the new law.

Jobless rates in California range from 8.1% to 27.7%

Everybody speaks of a single "California economy," but it's really many economies.

Thursday morning headlines

Fallout from "Amazon tax," McCourt's filing has league scrambling, CFOs cleaning up, and Californians pay more for car repairs.

Another really dumb poll

How does someone answer a finding that 4 in 10 Americans believe the economy is in permanent decline?
The media has tended to be overly glum in its coverage of the economy.

Brown signs measure to kill redevelopment agencies

It's part of the budget package that the Democratic-led legislature finalized Tuesday night.

In the big picture, things really aren't that bad

history.jpg Over 23 percent of all the goods and services that have been made since the year 1 AD were produced from 2001 to 2010.

*MySpace is sold for around $35 million

In preparation for the sale, many of MySpace's 500 employees were let go today.

Killing off the bagel

That doughy- crusty-chewy piece of bread-making heaven - has been lost for years in most parts of America
This is actually a pretty good summation of what happened to the social networking site, originally based in the South Bay and now part of News Corp.'s Bev Hills operation. As we posted yesterday, a deal for MySpace is expected this week. Video is from Next Media Animation. Earlier: News Corp. nearing sale of MySpace...

Wednesday morning headlines

B of A cuts mortgage deal, McCourt seems to have upper hand, lifeguards get pension cut, and state Democrats go at it alone.
Program has generated additional business to the state, but it's still a giveaway aimed at a single industry.
What still seems up in the air is which financial package will be chosen to keep the team operating.

Business Update on KPCC

This week's chat looks at a pickup in Socal car sales.
Forget about the current scumbag owner - just concentrate on the value of the Dodger brand.

Major League Baseball says it's all McCourt's fault

The league accuses the Dodger owner of siphoning off more than $100 million in club revenue.

News Corp. nearing sale of MySpace

Purchase price is in the $20 million to $30 million range - only $550 million less than what Murdoch had purchased the business for.

Bachmann answers questions by not answering questions

When she's challenged after making some idiotic statement, she'll try tap dancing her way out of it.

Tuesday morning headlines

Dodgers face bankruptcy judge, L.A. home prices edge higher, AEG tweaks stadium proposal, and vote expected on California budget.

Selig's statement on Dodger bankruptcy

Baseball commissioner says that today's filing "does nothing but inflict further harm to this historic franchise."

L.A. gas prices fall another nickel

That's a drop of around 40 cents a gallon since peaking out on May 2.

*New California budget being hatched?

The revised plan would assume an additional $4 billion in 2011-12 revenues.
Guess where the Dodgers owner came up with the $150 million to keep operating? Yep, another loan.

Northrop executives get cushy deal for move back east

The aerospace giant is cutting its CFO a check for $750,000 to cover relocation costs.

Monday morning headlines

CA videogame law struck down, "Cars 2" has strong opening, LAX traffic up sharply, and football selling tonight.

Dodgers file for bankruptcy

Looks like a preemptive strike just days before the team was supposedly going to miss payroll.

Steve Soboroff steps down as Dodgers vice chairman

The L.A. businessman says that the team's ownership woes make it impossible for him to do the stuff he had been hired to do,

Anschutz buys out convention center hotel partner

An investment fund sold its interest in downtown Ritz-Carlton and JW Marriott hotels at a loss.
Gov. Rick Perry signs a state budget that's filled with all kinds of accounting trickery and deferrals.

Explaining why the housing crisis doesn't improve

A big part of the story is the sharp slowdown in the number of household formations.

When will America's best movie chain open in L.A.?

Still no word from Alamo Drafthouse, other than that the Austin-based chain remains very interested in both L.A. and NY
The issue is not debt - that's merely a means to an end. The issue is the size of government.

Friday morning headlines

Still-cheaper gas, Brown gets free rent from unnamed donors, Sears to spin off Orchard, and Sydney Pollack's house is up for sale.

Pixar finally sputters a bit with 'Cars 2'

Early reviews are not so hot.

Southwest's clumsy move (NSFW)

Private conversation in the workplace? This is as questionable a concept as a personal email sent out on the company computer.

Chaos reigns in state budget impasse

This is getting to resemble one of those movies where there's no one to root for. From Capitol Alert: --Senate Republicans now say they're willing to place a tax proposal on the fall ballot, provided that voters are also asked to consider provisions for pension cuts and a spending cap. But they refuse to go along with a tax extension from now until then because they say that the state's larger-than-expected revenue gains makes the...
Dow was down more than 200 points in the first hour or so of trading, but managed to trim those losses towards the end of the session.
Guess they're not snickering anymore at the Rachel Maddow show.

Next best economic hope: Car buying

Keep an eye out on next Friday's reports from the major automakers.

Spending more time eating, sleeping, and watching TV

Those are some of the tidbits gleaned from the Labor Department's latest American Time Use Survey.

Thursday morning headlines

Oil and stocks tumble, mishmash on state budget, Best Buy to downsize its stores, and shenanigans involving Dodger charity.
Even crazies can seem reasonable until they open their mouths, and fortunately, Bachmann has done a lot of yapping.

*More indecision from City Council over red-light cameras

Leave it to the city to botch an idea that can save lives and generate revenues.

Carl's newest ad - without the sex

The Carpinteria-based burger chain has a new ad agency.

Nearly 11 million people worldwide are millionaires

Three million of those are in the U.S., according to a new report.

Fed acknowledges slowdown

The economy is indeed a little worse than expected, but the central bank says the slowdown is transitory.

Business Update on KPCC

This week's chat with Steve Julian looks at the private world of corporate jets and how Socal's real estate market points up the division between the rich and everyone else. Available at and podcast (Business Update with Mark Lacter). Transcript is after jump....

Wednesday morning headlines

Federal Reserve to assess economy, Brown prepares new budget plan, cities cut back on Rose Parade floats, and Trump gets pay raise.

McCourt's lawyer talking lawsuit

Yeah, this thing is going to be messy.
How a rupture along the southern end of the San Andreas Fault would impact Socal.
The beloved film critic's unfortunate tweet right after the death of "Jackass" cast member Ryan Dunn has the Washington Post's Alexandra Petri lamenting on the inability these days to just put a lid on it.

Wall Street feeling a little better - Dow up 109

Investors have obviously seen a pocket of opportunity these last couple of days.
Before anyone signs off on the downtown NFL stadium complex, here's a little reminder of what city promises can cost long-term.

*New ruling: State lawmakers will not be paid

Next step will be up to the Legislature, which still has a little over a week before the new fiscal year begins.
Global economic growth in a multi-speed world will the subject of the next Drucker Business Forum.
Here's another example of reality trumping rhetoric.

Tuesday morning headlines

Geithner says debt crisis will be avoided, McCourt battle with baseball could drag out, and Feinstein has only a slight edge in poll.

KCET moving to Burbank

The now-independent public TV station will relocate its operations to a 14-story office tower not far from ABC and NBC Universal.

Krugman says we're set for a lost decade

krugman.jpg So does that mean we'll finally see relief in 2018?
That could set in motion a whole bunch of things, starting with the Dodgers not being able to meet payroll at the end of the month.

L.A. gas prices drop a few more pennies

More fallout from the falling price of oil - and good news for motorists, which might translate into good news for the economy.
Here's trying to dredge up some sort of legacy and position himself for a job in the Obama White House.

Monday morning headlines

Wal-Mart wins discrimination lawsuit, charitable giving recovers, another milestone for cable, and arrests made in alleged film scam.

Activision CEO hits the big screen

Bobby Kotick, chief executive of the Santa Monica-based videogame company, appears briefly in the upcoming movie "Moneyball," based on the Michael Lewis book about Oakland A's general manager Billy Beane (played by Brad Pitt.)

Deciphering the McCourt's (sorta) divorce settlement

Very little about the McCourts is predictable, so let's not jump the gun just yet.
Up to now the jerks in the state budget crisis have been mostly Republicans. Now I'm not sure.
Six of the 10 most expensive markets are in California.

How bad are the new California, L.A. job numbers?

Not a total disaster, but certainly not good.

*Report: McCourts reach divorce settlement

LAT is citing sources. No details, but the McCourts and their lawyers are scheduled in Superior Court at this hour to discuss the agreement.

Friday morning headlines

State budget in limbo, no renovations for Coliseum, Riordan still warning about city finances, and L.A. investment firm makes bid for warehouse retail chain.
California lost 29,200 jobs in May, the largest number of any state and another reminder of how sluggish the recovery has been.

How many calories will $1 buy?

Notice that unhealthy food is a lot cheaper - and more substantial - than healthy food?
This time, the end-game is not passing the budget - it's setting in motion a ballot vote this fall.

Chapman forecast: No double-dip recession

Doti expects payroll employment in the state to grow by 1.6 percent this year, and 2.1 percent next year.

*Brown vetoes state budget plan

The governor says that "it's not a balanced solution. It continues big deficits for years to come and adds billions of dollars in new debt."
van nuys2.jpg The run is especially popular among celebrities and corporate types because the facilities are so close to West L.A. and Manhattan.

Thursday morning headlines

California foreclosures decline, redevelopment agencies lose funding, baseball expanding Dodgers inquiry, and Warner Bros. on cable in China.

Gas prices incite economic pessimism

What we really need is a collective slap. How bout it?

Playboy wedding called off as magazine hits newsstands

playboy.jpg This is the problem with trying to mix deadlines and matrimony.

State lawmakers sign off on sleight-of-hand budget deal

The California Senate voted 23-15 on the central piece of the package, and the Assembly is expected to follow suit later today.

*Wall Street having an awful day

With less than an hour of trading to go, the Dow is down around 190 points.
petra.jpg I, for one, am still hoping that Petra Ecclestone winds up with the estate, if only for sheer entertainment value.
Employers still call them layoffs, but in many cases they're really firings - those jobs will never be recalled.

Wednesday morning headlines

UCLA economists see slow growth, lawmakers close on state budget deal, support slipping for Jerry Brown, and buyout talks for Register break down.

TMZ: Spelling mansion goes for $85 million

The 57,000-square-foot, Holmby Hills estate had been listed for $150 million - and it sat on the market for more than two years. TMZ had reported that the buyer, 22-year-old British heiress Petra Ecclestone, initially offered $75 million. If the report is true, there's bound to be chatter about how this reflects L.A.'s sour real estate market, though these mega-sales tend to be anomalous events. What is worth noting is how many of the big...

More money for California coffers

It's another indication that the California economy continues to get better (though at a relatively slow pace).

Good day for stocks

The market opened strong and pretty much stayed that way, with the Dow up 123 points at the close.

How does The New Yorker select Talk of the Town items?

Kind of cute, though Harold Ross must be spinning in his grave.

Business Update on KPCC

This week's chat looks at the not-so-obvious reasons why the jobs recovery has been so sluggish.

Will Dominique Strauss-Kahn end up walking?

It's looking that way, according to Harvard professor Alan Dershowitz.

Eli Broad arranging bond sale for his new art museum

The bond package totals $150 million, with maturities going out 10 years.

Tuesday morning headlines

More hiring expected, California Democrats consider sleight-of-hand budget, McCourt faces another payroll deadline, and videogame sales hit four-year low.

Spelling manor being sold to 22-year-old heiress

The 57,000-square foot Holmby Hills mansion will be the home of Petra Ecclestone, whose father is British billionaire Bernie Ecclestone.

Disney raises park prices

One-day passes at Disneyland go from $76 to $80. A three-day pass for Disneyland and California Adventure goes from $206 to $224.

Sluggish month at Port of Long Beach

Container traffic rose 2.3 percent compared with a year earlier, with imports up 4 percent and exports down 6.1 percent.

Lower gas prices, but pace is decelerating

An average gallon of regular in the L.A. area is $3.971, according to the government survey, which is only about three cents lower than last week - and the lowest weekly decline since early May

*Marie Callender's parent files for bankruptcy

The reorganization plan announced by Memphis-based Perkins & Marie Callender's Inc. includes the closing of 58 restaurants.

Mavs-Heat top Lakers-Celtics in ratings

Last night's series-ending game was the highest-rated Game 6 in 11 years.

Report: Facebook likely to go public in early 2012

CNBC reports that the valuation could top $100 million, citing sources.
He spoke to Dartmouth University graduates over the weekend.

Socal housing market - still stuck in neutral

The lackluster jobs recovery is killing local real estate.

Monday morning headlines

Economists turn bearish on jobs, Gov. Brown reports no budget progress, Facebook growth spurt might be over, and air fares are crazy high this summer.
Robert Morse and Frank Loesser close out the week. From the movie version of "How to Succeed in Business Without Really Trying."

*Senate Republicans block Brown's budget plan

Democrats haven't been able to snag the few GOP votes needed extend taxes until a special election.

Stocks take beating

The Dow fell 172 points, which brings the index below 12,000 for the first time since March and marks the sixth straight week of market declines. From WSJ: "At the moment there doesn't seem to be any place to hide," said Ted Weisberg, president of Seaport Securities. "Best-case scenario, [traders] don't know what to do. Worst case, they're simply throwing in the towel because they're frustrated. Nothing seems to work." Of course it's worth pointing...

Trump on why he's not entering the race

Hate to admit it, but a lot of what he says makes sense.

Early word on redistricting maps

There's still a lot to sort through, but the California rejiggering could boost the House Democratic delegation by four seats. The question is whether it will have the same members. From the LAT: The new maps promise to cause political migraines for a number of incumbents, including one of Los Angeles' most enduring Democratic politicians, Howard L. Berman. Berman could face a challenge from a well-known Latino if he runs in a more Latino east...

*More evidence that the downtown stadium is a bad idea

L.A. is using its resources to review a proposed NFL venue that no one much cares about.

Another reason the unemployment rate is still so high

Companies are spending money on equipment, not workers.

Is it safe to use electronic devices on planes?

Industry study suggest possible safety issues from the use of cell phones, iPads and other electronic devices.

Friday morning headlines

Gas prices keep falling, state lawmakers face redistricting, more shenanigans in Vernon, and report says Live Nation may go private.

Are Republicans trying to sabotage the economy?

It's really the subtext for most anything that goes on these days in Washington.

Preparing for Cirque du Soleil's Hollywood close-up

Previews begin on July 21 and the official premiere is Sept. 25, but Hollywood businesses are already planning what could become a lucrative - and long-running - attraction. Well, at least that's the idea. Cirque du Soleil's "Iris," which is being directed by Philippe Decouflé, looks at the history of movies through dance and acrobatics. The important point is that "Iris" will be at the Kodak Theatre on an ongoing basis, with plans for...

City's budget woes reaching LAPD

You can't just erase a $300-million-plus budget deficit and think there won't be consequences.

Activision CEO part of group bidding for MySpace

Bobby Kotick would be investing in the social networking site as an individual.

No accurate numbers on L.A.'s parking meters

Which means there's probably no way of knowing whether the city is collecting all the meter money. Nice.

Borders may need to close 51 more stores

It's either that or risk defaulting on its bankruptcy loans.

Thursday morning headlines

Jobless claims still high, hackers breach Citi data, Brown could be closer to budget deal, and L.A. trying to keep E3 show.

An appreciation: Sitcom writer Leonard Stern

One of classic TV's funnymen, Stern wrote for "The Honeymooners," "Get Smart," and "The Phil Silvers Show," among many other shows.

Grocery workers say walkout is near

The major sticking point is health care, and union officials say they're nowhere close to an agreement.
Five former employees allege that Alberto del Hoyo engaged in "racist, sexist and illegal conduct."

Fed says economy not collapsing

Hold the depression - things aren't that bad.

Why aren't more people buying homes?

rent.jpg There are obvious explanations (tighter credit, high unemployment) as well as the less obvious ones.
Pollsters can ask people anything, but that doesn't mean they should or that the results mean jack.
Gretchen Morgenson, who has written extensively on the mortgage meltdown, will be in coversation with James Flanigan.

Wednesday morning headlines

State budget talks bog down, fewer homeowners are underwater, record number of TV pilots being made, and airline passengers are more satisfied.

Business Update on KPCC

This week's chat with Susanne Whatley looked at Hollywood's growing reliance on foreign markets.

Greenpeace activists shake up Mattel headquarters

mattel.JPG Actually, the protesters were aiming their sights not at Mattel, but at the Chinese company that supplies Mattel's packaging.

Bernanke says growth will pick up in second half of year

The Fed chairman says that the economy has been slowing down, though he also sees gradual improvement in the job market.

California shows modest growth in 2010

GDP.jpg The state's gross domestic product rose 1.8 percent, helped along mostly by the technology and manufacturing sectors.

Blue Shield of California policyholders get money back

The health insurer is giving back $167 million, which covers a 30 percent credit on one monthly bill this year.

NBC holds onto Olympics

Mildly surprising, given that ESPN was apparently making noises about making a competitive bid.

Zsa Zsa's estate is up for sale

gabor.jpg But not for $28 million, the number that Gabor and her husband initially had in mind.

Free tickets for breakfast featuring NYT columnist

Gretchen Morgenson, who has written extensively on the mortgage meltdown, will be in conversation with former LAT columnist James Flanigan.

Tuesday morning headlines

Wall Street waits for Bernanke, second mortgages causing trouble, new support for Brown's budget plan, and more restaurants coming to LAX.

Does passenger in the middle seat get the armrests?

Fair-minded people would say yes - the other two passengers in the row can lean either toward the window or the aisle. Simple, right?

Paying (a little) less for gas

Based on the average price in the L.A. area of $4.016 a gallon, we're paying about $4 less for a 15-gallon fill up than we were a month ago.

Disney layoffs expected

About 250 jobs will be cut, the LAT is reporting.

USC stripped of national championship

It's the first time a major college championship has been vacated in major college sports since polling began.

Apple's Steve Jobs gets standing ovation

The Apple CEO headlined the company's worldwide developers conference in SF this morning.

Most Americans are not ready for retirement

Once more we are being reminded of how financially ill-equipped many of us are.

Inland Empire business newspaper folds

The closing is part of a sizable cutback at the Press-Enterprise.

Monday morning headlines

MySpace deal nears, videogame trade show opens, and good news for Boeing workers in Long Beach.

Coda Automotive gets ready to make its move

The Santa Monica-based electric car company finally expects to start selling in the second half of the year.

Where 'The Tourist' is becoming a hit

Here's another example of how the movie landscape is changing.

What's the worst part of today's jobs report?

Nearly one in three of the people unemployed have been out of work for at least a year.

Friday morning headlines

Weak jobs report, L.A. gas prices keep falling, Dodgers not the only team with debt troubles, and deadline set on downtown football deal.

Abracadabra - L.A. budget deficit is all gone!

Of course it comes at the expense of $121 million worth of cuts at the police department.

Pay your way at Union Rescue Mission

It's an experiment borne out of necessity: The long-struggling Skid Row mission is now charging $7 for an overnight stay.
Namely, a suspension of their salaries and per diem payments, effective June 15.

Groupon files to go public

The social buying site aims to raise $750 million.

Southwest fares aren't so low anymore

They are, in fact, higher than other carriers on the same routes at the same times.
Former LAT Editor Dean Baquet becomes managing editor, which was Abramson's old job.

Thursday morning headlines

Californians are spending more, poll shows split on dealing with state deficit, Dodger inquiry nearing an end, and L.A. controller wants parking records.
ELLEN.jpg She's supposedly asking $49 million for the 9,000-square-foot main house. Only money, right?

Billionaire Alec Gores in talks to buy part of Borders

Under the deal being considered, 200 of the 405 remaining stores would be purchased.

Car sales take dip in May

carsmay.jpg More not-so-wonderful news: Annual sales rate was 11.8 million vehicles, down about 10 percent from April, but up a touch from May 2010.

*Bad day for stocks

Still two hours of trading left, but it's not looking good.

Marilyn Monroe would have been 85 today

marilyn.jpg Amazing.

Wednesday morning headlines

Weak numbers on jobs and manufacturing, wine business on the rebound, airlines cleaning up on fees, and designer found dead.