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.
August 2011

Looking back to that horrible day in Cerritos

memorial194.jpg Lots of smiles and hugs - some folks hadn't seen each other in years.

Buzzing about a possible AOL sale

Not much doubt that the idea is at least being considered.
Not much of a question, I know.

How much did B of A's purchase of Countrywide really cost?

Legal costs and writedowns have put the price tag at $30 billion and counting.

Business Update on KPCC: Beware of those tax breaks

The state gives out huge number of tax breaks to businesses, often for little fiscal gain.

Wednesday morning headlines

Modest job gains in August, Icahn ends battle with Lions Gate, AEG turns on the screws, and DWP warns of slower service.

Nevada, U.S. Bancorp go after B of A

The sea of litigation never seems to end.
At issue is a payment dispute between the wife of county Supervisor Mike Antonovich and an affiliate of the stadium developer.

Still no refunds from Sunset Junction fiasco

Ticket holders and vendors have been trying to get the event organizers on the line since the festival was canceled last week.
California tops the list, with $7 billion of the capital, although the L.A./OC area makes up less than $1 billion of that.

Why isn't Steve Jobs giving more money to charity?

Philanthropy has been curiously absent from the Jobs resume.

How far along is AEG on stadium project?

The L.A. Planning Department has been waiting five months for documents from Anschutz Entertainment Group.

Passengers on canceled flights struggle to re-book

It would be bad under any circumstances, but for the week prior to Labor Day weekend it's a nightmare.

Tuesday morning headlines

Small gain in L.A. home prices, consumer confidence plummets in August, Vernon survives, and supermarket talks continue.
It's encouraging to see so many California universities at the top of Washington Monthly's rankings. But for how much longer?

Gas prices going back up, but don't ask why

An average price if regular in the L.A. area is up about seven cents from last week.
The downtown facility only works if developer AEG finds an NFL team willing to relocate to Los Angeles.

Stocks have another big day

Wall Street's gloom appears to be lifting, at least for now.

*Airline snarls remain

Just because the airports have reopened doesn't mean things are back to normal.

Nordstrom offers free shipping for items bought online

The Seattle-based chain is throwing in free shipping for all returned merchandise as well.
Among the concerns: Underage workers, the use of poisonous chemicals, and illegal working hours.

Monday morning headlines

Airlines resume operations back east, B of A sells stake in Chinese bank, state officials question benefits of downtown stadium, and more air service to Hong Kong.

Irene not the monster that had been feared (promised?)

Irene came into New York this morning as a tropical storm.

Deciding when to cancel flights

It's a balancing act for the airlines.

Not a great weekend to open a movie

Also, Broadway will be dark on Saturday and Sunday.

Kirk Kerkorian's slow fade from Vegas

There was a time when Kerkorian used Vegas as his personal craps table. Now, he seems to be cashing out.

The sick (and quite lucrative) world of reality TV

The reality world is studded with examples of shameless exploitation.

The curious case of the Sunset Junction Festival (cont'd)

Does anyone find it weird that the festival website has been taken down?

American Apparel's latest class act: Grading large women

big.jpg The L.A.-based company is selecting its plus-size models by asking applicants to solicit photos for its website.

Friday morning headlines

More threats from AEG, Roski looks at alternatives to stadium, legislation to bypass Amazon referendum, and bad weekend to fly back east.

No Fed move - stocks fall

Bernanke said that the economy has softened and that the Fed could do more if necessary.
AEG had assured had assured city officials that construction would not cause any loss of major convention business.

Brown's tax plan running into immediate roadblocks

I must say this seems kind of thin.

*Another reason Steve Jobs is such a big deal

apple3.jpg In 1996, Apple's market cap was $3 billion. Today it's $347 billion.

Job cuts at Northrop

Not a huge number by big corporation standards - 500 - but most of the losses are likely to come from Socal.

What to make of Bank of America's troubles?

It's really an impossible task, even among the most expert analysts and commentators.

The curious case of the Sunset Junction Festival

Needless to say, there's a lot we don't know about how these folks operate.

Comparing Steve Jobs and Walt Disney

Quite a few similarities between the two.

Thursday morning headlines

Buffett invests in B of A, Brown to propose corporate tax plan, Payless to close stores, and LAX's busy summer continues.

*WSJ's Walt Mossberg on why Steve Jobs is such a big deal

He calls Jobs an historical figure, one of two or three in the tech revolution.

Is Apple stock about to nosedive on Jobs news?

Well, it's already fallen sharply in after-hours trading - just not as sharply as you might expect.

*Steve Jobs resigns as Apple CEO

Tim Cook, who has been in charge of day-today operations during Jobs' medical absences, becomes the new chief executive.

Another sprightly day on Wall Street

The Dow closes up 143 points, to 11,320.
They're not, of course, which is why the current push to cut costs doesn't make much sense.

Sunset Junction permit denied

Festival promoters couldn't come up with $141,000 to cover fees.

Say goodbye to the Las Vegas Hilton

hilton2.jpg The financial picture is a mess.

Speaking of Texas as a job creator...

There's not much doubt about the state's economic success story, but how much of that is the work of Gov. Rick Perry?

California near the bottom in job creation survey

jobs3.jpg Only 28 percent of those surveyed by Gallup said their companies and/or employers were hiring.

Wednesday morning headlines

Gold finally starts falling, a not-too-terrible economic outlook, California's mishandling of leases, and raises next year to average 2.8%.

Business Update on KPCC: Rise of the dollar stores

They're about the hottest thing in retailing, not only because of lower prices, but greater convenience.

Sampling of today's earthquake devastation

desctruct.jpg Oh, the humanity!

Choppy growth for downtown L.A.

Population in 2011 is 45,518, up 15.1 percent from the last time the survey was done in 2008.

Big day for stocks - Dow up 322

Worsening economic data could prompt Ben Bernanke to respond in some way later this week.

*Shallow quake shakes up East Coast

The epicenter was only three miles deep, which is why the moderate-sized 5.9 temblor was felt in Washington.
Unless you're in his Assembly district, all correspondence will either be bounced back or not sent through at all.

Trying to contain the damage at Bank of America

It's not easy. The stock is down to $6.35 a share.
Even as he paints a conspiratorial picture on the government and financial systems, he's often funny, in a glib and goofy sort of way.

Tuesday morning headlines

California mortgage delinquencies improving, community colleges being squeezed, Ticketmaster to get competition, and Ron Burkle looking at American Apparel.

Those Kardashians sure know how to make a buck

That includes the weekend wedding in Montecito, which could generate revenue of around $18 million.

Wait a sec... gas prices are going up?

Sorry, but gas hasn't been falling at nearly the level that crude has.

No strike this week by supermarket workers

A federal mediator is bringing both sides back to the bargaining table next Monday.

Life isn't all wars and recessions, you know

Here's what happens when a lectern and megaphone are placed in the middle of NY.

One more word about North Dakota

Not only does it have the nation's lowest unemployment rate, but it's the second-happiest state,

Is Grab-N-Go too similar to In-N-Out?

grab.jpg The In-N-Out people insist that it is and they've filed suit.

Monday morning headlines

Supermarket talks continue, UC students paying more than state, 99 Cents Only Stores might get better offer, and Romney to build new home in La Jolla.

Dancing through Hollywood history

Here's a lovely collection of the best moments from 1921 to 2010.

If you want job envy, try North Dakota

July's unemployment rate was 3.3 percent, lowest in the country and light years ahead of California's 12 percent.

Another down day - Dow falls 172 points

H-P fell 20 percent on the company's possible exit from the PC business.

Secrets of a successful dollar store

Narrow aisles, merchandise stacked high, and managers on the prowl for bargains are among the must-haves.

New owner of Spelling mansion unloading fixtures

Reminds me a little of the last scene in "Citizen Kane."

L.A. County has a rough July

Unemployment jumped to 12.4 percent from 12 percent in June, and 30,600 payroll jobs were lost.

Poor people? How dare they own refrigerators!

Jon Stewart takes on the class warfare rants from the Fox crowd.

Friday morning headlines

B of A layoffs, gas prices keep dropping, grocery workers prepare to strike, and state accuses lawyers of fraud.

California, L.A. County jobless rates move higher

The state rose to 12 percent in July from 11.8 percent the month before.

Stocks wavering

The Dow opened lower and has been clawing back in the first hour of trading.

Government allowing young immigrants to stay in the U.S.

As long as they haven't committed any crimes and aren't deemed a threat to public safety.

Sleeping on the job is a good thing

More employers are discovering that nap times can help increase productivity.

Stocks pare losses a bit - but Dow still down sharply

The fear factor has been the real killer on Wall Street.

*Chipmaker Broadcom celebrates 20 years, a few of them racy

You could call them Internet godfathers - Henry Samueli and Henry Nicholas.

After mid-session pause, selloff continues

Dow is down about 460 points and back under 11,000.
There are only two things that elected officials really, truly care about: raising money and holding onto their district lines.

Thursday morning headlines

Inflation dips in L.A., Caruso gets Vegas gig, supermarkets taking applications, and AEG wants to skip lawsuit stage in stadium plan.

*Stocks open sharply lower

Could be a bad one - Dow is down 320 points in the first few minutes of trading. Bank of America if off almost 8 percent. *7:45: Dow down 488....

SEC's L.A. office taken to task by alleged insider trader

This is clearly more than what the government lawyers had bargained for.

Only 26% approve of how Obama is handling economy

How on earth someone gets reelected with a number that low on the economy is a mystery to me.

Private giving increases sharply at UCLA

Perhaps it's in response to the well-publicized state cutbacks in the UC system

Geez, this guy Rick Perry is a real idiot (cont'd)

How long has he been running? Five days?

*L.A.'s decision to drop S&P not a big city move

The ratings agency downgraded the city's investment pool. But so what?

Apple planning glass-roof store in Santa Monica?

apple2t.jpg Sure sounds that way, based on a Planning Commission report.

Wednesday morning headlines

L.A. hotels filling up, Brown to name jobs czar, union battle at Kaiser, and SpaceX rocket to dock with Space Station.

*Chargers executive pushes back on move to L.A.

Calls AEG's plan to break ground on a stadium in downtown L.A. by next June "really far-fetched."

Tentpole movies aren't about story, says Disney exec

They're supposedly all about the spectacle.

Villaraigosa proposes revamp of Proposition 13

Right idea coming from the wrong guy.

Business Update on KPCC: Another supermarket strike?

Frankly, no one seems all that thrilled about a walkout, not with 12 percent unemployment.

Crisis in the making: Long-term care

What happens to these people when they get sick and can't care for themselves?

*Geez, this guy Rick Perry is a real idiot

It's not only what he says about Fed Chairman Ben Bernanke, it's the clueless way in which he says it.

Tuesday morning headlines

Fitch affirms AAA rating, more care with credit cards, settlement over port emissions, and convertible sales slip.

Another corrupt idea crawls out of L.A. City Hall

The current system for financing the Planning Department is already compromised, so what's another $500,000?

Big drop in SAG TV earnings

They fell 8.2 percent last year and are now 24 percent below 2007 levels.

We want information (in a hurry), not ideas

The world minimizes most anything that can't be summed up in a few words or readily monetized.

Big drop in gas prices

An average gallon of regular is 8 cents lower than just last week.

Another strong day on Wall Street

So much for panic in the streets.

Promises, promises - AEG is never short of them

The beginning of what is destined to be the incredible shrinking stadium deal.

Socal housing market stays tepid in July

But the sales figures aren't all that bad, considering that consumer sentiment has been a notch short of suicidal.

Monday morning headlines

Google to buy Motorola cellphone business, Disney shuts down "Lone Ranger," California scrutinizing nonprofits, and Council reviews solar program.

Fewer imports moving through Port of L.A.

Could be an early indicator of sluggish retail ordering for the holiday shopping season.

Whew! Wall Street ends week - and Dow gains 125 points

After all the crazy moves, the Dow managed to lose just 1,5 percent.

L.A. most expensive city for sushi

Really? Well, maybe we're confusing cheap with good.

Schwarzenegger lounges on Sunset Boulevard

billboard.jpg That would be Patrick Schwarzenegger, Arnold's son.
How about this guy replacing Tim Geithner at Treasury?...

*Solving the state's pension crisis - well, maybe

Several reasonable reforms have been suggested, but the unions are not thrilled.

Friday morning headlines

Consumers kept spending in July, L.A. gas prices tumble, USC might block pro football at Coliseum, and council considers privatizing zoo.

Boyfriend of Disney staffer charged with insider trading

Too bad that other financial misdeeds can't be tied up so neatly.

Market craziness continues: Dow up 421 points

This might have been the most unenthusiastic 421-point gain in the history of Wall Street.

Whatever happened to L.A.'s economic boycott against Arizona?

The same thing that happens with most economic boycotts: not much.

Rick Perry's California connections

The Texas governor and soon-to-be presidential candidate has been quite successful in the state.
Anyone looking to escape this week's maddening stock market might check out a wacky $50 million lawsuit.

Thursday morning headlines

Good news on jobs, drop in California foreclosures, City Council saves redevelopment money, and Unami Burgers in expansion mode.

Murdoch isn't going anywhere

Wall Street shows very little interest in the phone-hacking uproar.

Why the world's financial s--- has upended Germany

Michael Lewis explains how the European debt crisis can be traced to Germany's anal obsession.

Dow loses 519 points

The market bloodbath, interrupted briefly on Tuesday, resumed throughout the session.

*Socal supermarkets offer health care proposal

Albertsons, Ralphs and Vons say the new plan would increase their contributions to the health care fund.
Sean Harrigan, who was president of a city pension board, wants to be reimbursed for his legal bills in connection with an SEC investigation.

B of A CEO getting grilled by major investor

Brian Moynihan is not afraid to acknowledge that buying Countrywide Financial was a dumb idea.

All different ways of making money these days

There's nothing like recapitalizing a loan to put a whole new perspective on things.
Billionaire investor Wilbur Ross neatly sums up what's really happening.

Wednesday morning headlines

Quelle horreur in France, stock drop hits state budget hard, slowly improving jobs picture in Socal, and layoffs at THQ.

Dow down more than 400 points

So much for yesterday's rally - another stomach-churning session is under way....

Which NFL team is most likely to come to L.A.?

All the usual suspects have been bandied about for months, but only two or three would seem to really be in the running.

Yipee!! Dow soars 430 points

Good luck trying to figure out why.

*Council approves downtown stadium deal

Vote is 12-0. But several steps remain before construction can begin.

Why on earth would Tribune Co. want to compete with Apple?

An idea that makes next to no sense.

California tax revenues take a hit in July

Unless those numbers turn around, the state will be forced to implement another round of cuts.

Business Update on KPCC: S&P aftershocks?

So far they've been limited, at least as far as downgrades on local government issues.

Fed will keep interest rates very low until mid-2013

Federal Reserve policymakers downgraded its view of the U.S. economy.

Throwing cold water on downtown stadium deal

Upgrading the convention center won't necessarily make L.A. a top-tier convention city.

Jon Stewart on S&P's nutty downgrade

Funny stuff. Did you know that the Isle of Man has a triple-A rating?

Tuesday morning headlines

Waiting for Fed announcement, City Council to vote on stadium deal, lower gas prices, and Tribune Co. is working on its own tablet.

City of Angels goes to hell

The city has been effectively taken over by a small group of special interests.
He's worried about what Friday's S&P downgrade means for the overall health of the U.S. economy.

Dow closes down 634 points

An even uglier day than last Thursday.

Stock plunge accelerates

Dow down over 600 points....

*Where's Obama?

Same old blah-blah. This guy really doesn't get it.

*AIG expected to sue B of A over troubled mortages

Yep, that's the same AIG that came close to bankruptcy in 2008 before being bailed out by the government. The insurance giant is expected to seek $10 billion, claiming that Bank of America - and its Merrill Lynch and Countrywide Financial units - misrepresented the quality of the mortgages that were packaged up as securities and sold to investors. From the NYT: The private actions stand in stark contrast to the few credit crisis cases...

Hottest search terms on Google

Not surprisingly, they're all things financial.

Monday morning headlines

Stocks keep falling, Brown speaks up for Schwarzenegger, poor immigrants in L.A. on the decline, and big drop in Dodger attendance.

*As expected, stocks open sharply lower

One of those fasten-your-seat-belts days - the Dow opened down more than 200 points, and now it's running in the 160-180 range. *7:32: Losses are accelerating - Down down 336 *8:11: Dow is down 260. *9:05: Down 304 *9:55: Down 308 *10:45: Down 407...

Asian markets are down, but not that much down

At last check, the major indexes were down 1 percent to 2 percent.

S&P downgrade: Is it as bad as it sounds?

The early going is almost certain to be volatile, but after that who knows?

S&P downgrades U.S. debt

The ratings agency is cutting the nation's top AAA rating by one notch to AA-plus, a stunning development.

Latest Jaine Austen murder mystery

pampered3.jpg Set in a not-so-swanky spa outside of L.A., "Pampered to Death" is the latest installment in the long-running series.

*Bracing for credit downgrade from S&P

Government officials are waiting for word, perhaps as early as this afternoon.

How to spend your summer vacation...

...And just think, no hassles with airport security.

Dow ekes out gain, other indexes slip

dow2.jpg Whew - glad this week is over.

Has Mattel finally lost the battle over Bratz?

Toymaker is not known for giving up these sorts of cases, but perhaps on this one it's time.
B of A has lost billions of dollars as a result of Countrywide's mismanagement - and there's no end in sight.

The scariest jobs chart of them all

jobless2.jpg Post-recession job gains continue to trail other downturns by quite a pace.

*Dow down more than 200 points

Very volatile trading - most of it down.

Friday morning headlines

Mattel ordered to pay $310 million, South Korean trade deal could help economy, Southwest to cut back on flights, and celebrity magazines take hit.

Stocks open higher on jobs report, then pull back

This is shaping up to be another wacky session.

What goes into an Empire kosher chicken?

Kosher poultry tends to be expensive, but the chances of a salmonella outbreak are not high.

Why did the market pick this particular day to nosedive?

Well, because it just did.

One more reason why LAX is unappreciated

Of the 100 most-delayed flights in the country last year, guess how many originate at Los Angeles International Airport?

Many more hearings in McCourt divorce case

The question of whether Jamie McCourt owns half the team isn't likely to be ruled on until next year.

Millionaire tax filings are pretty rare

Only 8,274 tax returns were filed by those with incomes of more than $10 million.

Dow down 512 points

If it wasn't a bloodbath, it was awfully close.

Deal reached in FAA impasse, Majority Leader Harry Reid says

No details so far, but pressure had been building ever since Congress left town.

Wall Street getting hammered

With about 20 minutes to go, the Dow is down about 430 points....
No amount of analysis is likely to upend the bond package with AEG.

Thursday morning headlines

Stocks getting hit badly, downtown stadium plan wins key vote, McCourts back in divorce court, and grousing at AMC.

Prepare for an ugly day on Wall Street

The Dow is down 250 points after 90 minutes of trading.

Fresh & Easy to experiment with downsizing

The idea is to shoehorn the new stores into urban areas that would not accommodate larger formats.

Follow the bouncing stock price

The Dow managed to break its eight-session losing streak.

How two sixth-graders assess the debt talks

A pretty astute round-up, courtesy of NY magazine.

Martha Stewart is back to her mean, money-grubbing ways

In a nutshell, her company is in the toilet and her employees are crying in the bathrooms.

Glad somebody is making money this summer

The airlines should be thanking Congress for failing to agree on a funding package for the FAA.

Wednesday morning headlines

Stocks keep falling, Congress went after wrong problems, ground turkey mystery, and why Amazon is fighting sales taxes.
Good news is that two of Southern California's most successful industries probably won't be impacted all that much.

Dow nosedives 265 points

The last 30 minutes were very ugly.

Senate passes debt deal

Hooray! Oh, and the Dow is down 128 points. If this keeps up, it will be eight straight down days....

In a nutshell, here's what's wrong with the economy

output gap and growth.jpg The bigger the output gap, the lower the growth.

Tuesday morning headlines

Americans cut spending, debt deal means trouble for California, Fox is ticked off at McCourt, and Ryan Kavanaugh to sell stake in his movie company.

Houses passes debt-ceiling deal, 269-161

That pretty much wraps it up.
That's a big recovery from earlier in the session.

Debt deal looks like it has enough votes for passage

Republicans are good for at least 180 votes.

Rick Caruso is finally ready to build Miramar resort

Well, as soon as he can get the cash.

Stock market in a tizzy

Stocks did open sharply higher this morning, as expected, but after that it was a straight shoot down.

This is no fun - it's Cheesecake Factory lite

The lineup includes 15 entrees under 590 calories and 12 appetizers under 490.

Monday morning headlines

Stocks are shaky in early trading, A's owner urges Dodgers sale, plastic bag ban in Long Beach, and questioning downtown stadium plan.