Wednesday morning headlines

Stocks starting to slump: Traders are not venturing far as the Fed is ready to announce its latest plan to boost economy. But Dow is down about 60 points.

Awaiting "Operation Twist": The central bank's latest plan is likely to involve replacing short-term Treasuries in its $1.65 trillion portfolio with long- term bonds. The idea is to make borrowing more attractive, though some economists doubt it will have much impact. From Bloomberg:

"Operation Twist in the '60s wasn't found to be a great success either," said Robert Shiller, an economics professor at Yale University and co-creator of the S&P/Case-Shiller home- price index. "Homeowners are relatively insensitive to mortgage rates when they are lacking confidence," he said. "The dramatic thing that is happening now is that their job isn't secure, if they even have one."

Lost decade for housing?: Home prices might recover just a portion of what will be lost between 2005 and 2015, according to a new survey, leaving millions of homeowners with little, if any, equity. From the WSJ:

The housing bust has chilled consumer spending--the largest single driver of the U.S. economy--with eroding home equity contributing to the so-called reverse wealth effect that prompts people to spend cautiously because they feel poorer. One in five Americans with a mortgage owes more than their home is worth, and $7 trillion of homeowners' equity has been lost in the bust. Homeowners' equity as a share of home values has fallen to 38.6% from 59.7% in 2005.

Paramount plans upgrade: About 1.4 million square feet of development is planned over the next two decades at the studio's Melrose Avenue headquarters and adjacent properties. From the LAT:

There are hurdles to cross before development can begin. The studio will shortly file a master plan application with the city and begin work on the environmental review process. It also will reach out to neighbors and business owners in the area to explain the development it is calling the Hollywood Project. The process, including multiple public hearings, could take about two years.

"Avatar" coming to Disney theme parks: It's an exclusive licensing deal that would involve rides and attractions based on the 2009 hit. First up is an "Avatar" attraction at Disney's Animal Kingdom in Orlando, Fla. (LAT)

Feds sue poker website: The government alleges that Full Tilt Poker was a global Ponzi scheme, with player money transferred to the company's owners and management. From the NYT:

Reimbursements to Full Tilt players slowed or stopped altogether. The money available turned out to be insufficient, according to prosecutors, because the owners and board members of Full Tilt had themselves tapped those accounts for $440 million since April 2007.

Brown says it's not like the old days: The governor has told friends that he was unprepared for the recalcitrance by Republican lawmakers on budget cuts and taxes. From the NYT:

In one case, Mr. Brown told a friend, he said he felt like "we weren't even on the same playing field" in negotiating face to face with a Republican lawmaker who would not accept his assertion that most money in the California education budget did not go to administrative costs. Mr. Brown said he finally just stood up and left the meeting. Again and again, he said, he has found that approaches that once worked -- inviting Republicans to dinner rather than attacking them, offering measured concessions on issues like pension cutbacks and spending, trying to rally public support for what he described as balanced proposals -- were no longer effective. "He is aghast," said Jodie Evans, a longtime associate who had recently had dinner with Mr. Brown in Oakland. "He reports on some of the conversations, like he couldn't believe the narrowness or lack of comprehending by public officials.