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.
April 2012

Misleading comparisons with South L.A.'s economy in 1992

Another cautionary tale in using two percentages nearly 20 years apart to make a point about economic growth: The numbers tend to fluctuate a lot, depending on what's happening with the national economy.

New roadblock facing Rick Caruso's Miramar Hotel development

The L.A. developer keeps running into delays. This time it's over a property tax break worth $200,000 a year - the result of reducing the assessed value of the hotel property by $24 million.

Milken conference opens with a lot of blah-blah-blah*

zell.jpg Often dubbed a smaller, duller version of Davos (another blah-blah fest), this year's gathering started off with Sam Zell noting that "there is no 'effing' demand" in Europe.

Why California taxpayers should be steamed at Apple

Part of it has to do with the accounting sleight-of-hand that saved the company $2.4 billion in federal taxes last year - as well as millions more in California taxes. But there's something else.
bigmac.JPG If you're in the U.S., 27. If you're in China, 85. If you're in India, 195. A Princeton University economist trying to compare wages worldwide decided to take a wage rate and divide it by a product.

Monday morning headlines

Hollywood payday for Obama, Walmart opponents using Mexican scandal, Mircrosoft buys into Nook, and Dodger sale expected to close today.
Sorry for sounding a bit cynical, but examining the economic ups and downs of urban L.A. should not be based on how many years it's been since the riots. I mean, is all this reflection just a pro-forma rehash we'll be carrying out every five or 10 years? Where is everybody the rest of the time?
Who knows what investigators will come up with as they sift through Walmart's alleged bribery activity in Mexico. But as a rule companies have been able to slide by. But here's another Arkansas-based company that had been accused of similar payoffs and coverups

L.A.'s housing inventory is down, bidding wars are back

inventory.jpg The first-quarter drop was nearly 21 percent, bringing down the inventory supply to 4.7 months. One likely explanation is that not enough homeowners are willing to put their properties on the market.

Gavin Newsom offers sneak peak of his talk show

No offense, but this guy must really love seeing his name in print. California's lieutenant governor has penned a piece for THR on the new Current TV show (also being careful to make mention of his upcoming book).
AMC.jpg Netflix users are discovering old episodes of shows like "Mad Men," and that has prompted them to watch new episodes on cable.

Friday morning headlines

Economy slows in first quarter, L.A. gas prices are down 17 cents a gallon from a month ago, consumers will receive rebates as part of health care law, and huge pre-bankruptcy payday for Lehman executives.

L.A. is home to largest number of NFL players

NFL.jpg A total of 114 players in the league, according to data cruncher Patrick Adler, followed by Miami (73), New York (55), Houston (44), and Chicago (39). We lead in quarterbacks too. When it comes to NFL player production per 100,000 people, it's quite a different story.

I have Aladeen news and Aladeen news

sasha.jpg We take you to the North African nation of Wadiya, where General Haffaz Aladeen (aka Sacha Baron Cohen) changed over 300 Wadiyan words to "Aladeen," including positive and negative. Let's just say that created a little confusion.
Folks like Atlantic writer Conor Friedersdorf, who feels funny about receiving an interest rate subsidy to cover his loan payments. I'd feel funny too.

Feds in LA looking into Goldman Sachs banker

The case involves Matthew Korenberg, a San Francisco-based investment banker, and whether he illegally tipped off a now-defunct hedge fund called the Galleon Group.

Thursday morning headlines

Jobless claims still worrisome, state deficit could be getting bigger, Gov. Brown's plan to raise taxes receives lukewarm support, and Wilshire Grand holds liquidation sale.

TSA screeners at LAX charged with taking bribes

They allegedly received up to $2,400 in exchange for allowing large drug shipments to pass through checkpoints. One drug courier is in custody and another is expected to surrender tomorrow.

Showdown nearing on Century City subway stop

MTA wants the stop at Constellation Boulevard and Avenue of the Stars. But a group of Beverly Hills elected officials and activists say that the subway would have to run under Bev Hills High, which they argue is a bad idea for all sorts of seismic reasons.

'Breakfast at Tiffany's' townhouse is sold

Actually, the elegant NY property has another claim to fame: It was the home of Peter Bacanovic, the Merrill Lynch broker who spent five months in prison as part of the Martha Stewart insider trading scandal.

Google tries taking its self-driving cars to Detroit

"Millions of miles" of testing are still ahead, but Google is talking to car companies about potential partnerships that could bring self-driving vehicles to market within the next decade.

Fed outlook mostly unchanged

The central bank's short statement raised concerns about the financial outlook overseas and pulled back slightly in assessing the U.S. job market. But the basic message was unchanged.

Courtroom closings are bad news for business litigation

Good luck getting your civil suit on the Superior Court docket. Plans to shut down 56 courtrooms and lay off 350 workers are certain to delay cases for months, possibly years.

Warrants served at home of L.A. Assessor John Noguez

Also the assessor's downtown L.A. headquarters and the Phoenix home of consultant Ramin Salari. It was Salari who received large tax reductions for his clients - and who, along with Noguez, are at the center of an influence-peddling investigation.

Wednesday morning headlines

Britain could be slipping into recession, Walmart steps up damage control, feds investigating Hollywood dealmaking in China, and smog still bad in L.A. - but it's getting better.

Another subway scuffle

subway-rendering-johnies.jpg This one centers on efforts by the L.A. County Museum of Art to have the Fairfax station located at the corner of Wilshire and Orange Grove, just a few steps from the museum.

Apple's very weird day

apple4.jpg First the stock continued its free fall. Then the company announced its quarterly earnings results, which were stupendous. Finally, in after-hours trading, the stock was once again soaring.
Bribes? What bribes? The finance minister said there wasn't enough information to launch an investigation, the attorney general said her office didn't have jurisdiction, and the economy ministry said it's a state and local matter.
Since January, 2000, the price of a typical L.A. home has appreciated by 59.5 percent, topped only by Washington, D.C. (75.7 percent) and NY (59.6 percent). Of course, there is a catch to those numbers.

California on the verge of huge generational change

A lot more older people, a lot more younger people, and not as many folks in between. That's among the findings of a new USC study on California demographics, and it points up some important social and economic adjustments facing the state.

Big drop in L.A., California foreclosures

Initial filings fell to their lowest level in almost five years, suggesting that fears of another wave of foreclosures appear to have been wrong. Oh, and those "toxic mortgages" that were supposed to bring down the economy are holding up pretty well.

Jobless Californians to lose federal benefits

These are the 20 extra weeks that had been provided under a federal program and which raised the maximum amount of unemployment benefits to 99 weeks. But the state no longer qualifies for the program.

Tuesday morning headlines

Report says feds investigating Walmart, L.A. home prices keep dropping, lawsuit could delay downtown stadium, and Mexican immigration at standstill.

Barry Diller's many paychecks

One of the perks of being really rich: You get money you don't need for work you never did.
The late-night shows will have a field day on this one. An OC company has come up with a contraption that will sell pot at all hours - except you need a registration card and a PIN number. Payment can be made with cash or credit card.

Good tip for job candidates: Always ask questions

City National CEO Russell Goldsmith says it tells him a lot about the applicant. "If you have questions but are too intimidated to ask, then you're in the wrong company. If you have no curiosity, then you are in the wrong company."

Former Calpers CEO charged with fraud*

The SEC is accusing Fred Buenrostro, who was chief executive of California's giant pension fund from 2002 to 2008, along with former board member Alfred Villalobos with falsifying letters that defrauded a private equity firm into paying $20 million in fees.

The Walmart story that everyone is talking about

This is a real nightmare for the retail giant. Its stock is down nearly 5 percent today, federal authorities will no doubt launch an extensive investigation, and many senior executives, including perhaps the CEO, will be out.

Social Security funds to run out sooner than expected

The new date for the retirement and disability trust funds is 2033, three years earlier than previously projected. It's another reminder that the system is under stress.

Monday morning headlines

Walmart shares slide, construction is coming back in Socal, prime-time ratings are down, and California job gains revised upward.
I'm still trying to figure that one out. The total budget weighs on at $7.22 billion, with a deficit of $238 million that Mayor Villaraigosa has managed to close - on paper anyway.

Villaraigosa's transit proposal getting cautious reactions

It's a good bet that L.A. County Mike Antonovich is a no vote, but local business leaders seem generally supportive. Editorials in the Daily News and LAT are dubious about the merits of making the half-cent sales tax permanent. In other words, a mixed bag.

Keep those tax checks coming in... please!

April is not looking all that great, according to the state controller's tally. To date, $5.28 billion has been received; the governor's budget estimate is looking for $9.13 billion.

Disney Studios Chairman Rich Ross steps down

He had been at the post for two-and-half years, but it was never considered a great fit (he even acknowledged as much in his email to staff.) Besides, the studio's track record had not been great.

L.A., California job gains; unemployment rate is flat

Pretty strong report - the state added 18,200 jobs to the rolls in March, the eighth straight month of employment growth and the best showing so far this year.

Friday morning headlines

New concerns about the economy slipping, more chatter about an NFL team moving to L.A., Socal bucks down quarter for venture capital, and little action on Variety sale.

WSJ-NBC poll has Obama up by 6 points

Another in a flurry of national surveys to mark the unofficial start of the fall campaign. Throw them all into a blender and Obama has a slight edge. But it's early.

Just doing your job can be tough if you're Muslim

Seems like one of these discrimination suits comes along every few months - and goodness knows what all goes on that never gets to the litigation stage.
Extending Measure R, the half-cent sales tax that's being used to finance future transportation projects, might be even harder than voting in the original plan in 2008. With his own term quickly running out and matters of legacy at stake, Villaraigosa must put on those tap shoes.

Assessor's Office scandal is getting tougher to stomach *

What's considered a sleepy county department has been a cesspool of corruption, with some of the most blatant pay-to-play activity to hit L.A. in years (which is saying a lot).

Business Update on KPCC: Consumers are spending, but why?

Because jobs are being created and folks are making money. Not lots of jobs and lots of money, but apparently enough for shoppers to be reasonably confident.

Frantic searches to set up shop in tony parts of L.A.

intermix.jpg With consumer spending on the rise, especially among affluent shoppers, it's little wonder that merchants are starting to compete for the most desirable locations. Stores along Beverly Drive and in portions of West Hollywood are being snapped up. As you might guess, prices are ludicrous: One space at the corner of Beverly Drive and Brighton Way is said to be leasing for $180 a square foot. That compares with $25 a square foot, give or...

Thursday morning headlines

New worries that hiring has slowed, gas prices have fallen to about what they were a year ago, rising costs for F-35 fighter, and "Saints Row: The Third" helping THQ.
Mayor pushes for an extension of Measure R, the half-cent county sales tax that will help fund several major transit projects, including the Westside subway. No details on how to close the $222-million budget deficit, but he did say pension reforms would be involved. The L.A. budget will be released on Friday.

NYT-CBS Poll: Economy is getting better, but...

Nearly two-thirds of those surveyed are concerned about paying for their housing. One in five mortgage holders say they're underwater. Four in 10 parents say they're altering expectations for the type of college they can afford.
He really set the tone for hucksterism in the music and TV business - the cheery, boy-next-door persona who made big money through tie-ins with record labels, pressing plants, music publishers, artist management firms, and of course the networks.

Fresh & Easy expansion slows down

Shareholders haven't been thrilled by all the red ink - or by the business model. The concept is still hard to get your arms around - smaller than a standard supermarket but larger than a convenience store.

L.A. churches being foreclosed on in record numbers

Lenders have moved in on 59 churches since 2008, The problem is especially prevalent in L.A. because of the high concentration of small churches, and because changing demographics have hurt membership.

Gavin Newsom to host talk show on Current TV

The lieutenant governor will be keeping his day job (good move). He joins other notable political names, such as former Michigan Gov. Jennifer Granholm and former NY Gov. Eliot Spitzer, who recently replaced Keith Oolbermann.
scotus.jpg Pew Research asked Americans a while back who the chief justice of the Supreme Court was. You might be surprised by the answers. You might also be frightened.

Wednesday morning headlines

Pay divide widens, Villaraigosa pushing for permanent tax hike to fund mass transit, warning on bullet train cost, and Brown expects budget deficit to grow.

L.A. courts face monster budget cuts

lance-ito-300.jpg A total of 56 courtrooms will go dark by June 30 and 350 workers will be laid off in a $30 million budget slashing - the biggest in history. "We are already rationing justice," said presiding Judge Lee Smalley Edmon. Lance Ito will lose his courtroom.

Are taxes fair or unfair?

taxes2.jpg Roughly six in 10 Americans believe they're fair, according to Gallup, which is significantly higher than the level a decade or so ago - before the Bush tax cuts were implemented.

Warren Buffett has prostate cancer

The longtime head of Berkshire Hathaway says the disease is in stage-1 and that his doctors have told him it is "not remotely life-threatening or even debilitating."

Dow jumps 194 points

Triple-digit days - both up and down - are becoming more common over the last few weeks.
titanic.jpg A few tried to double down on their ignorance (not a great idea).

L.A. budget chief warns about public safety cuts

"Given the projected deficits that we're facing, we think it's very difficult -- actually, we think it's impossible -- to maintain the same level of service," Miguel Santana told the L.A. City Council this morning.

Barney Frank: 'We paid a terrible price for health care'

The Massachusetts congressman says it was a mistake to push for reforms, especially after the Democrats lost Ted Kennedy's Senate seat. More broadly, he says that people want lots of services from government, but they don't want to pay for it.

Only modest gains in L.A. housing market

Homes sales jumped 28.7 percent from February to March, which sounds good. The problem is that Socal sales average 37 percent between the two months. Prices, meanwhile, were mostly flat.

Tuesday morning headlines

Apple shares back on track, L.A. post offices not open late tonight for tax filers, it's time to start booking flights for Memorial Day weekend, and concerns about seafood mislabeling at local restaurants and groceries.

How much do Californians pay in state and local taxes?

Measured as a share of family income, poor people pay the most. Measured by the percentage of personal income tax, rich people pay the most.

Why it's pointless to pay attention to polls in April

Gallup's tracking poll has Romney over Obama by 2 points. CNN poll has Obama over Romney by 9 points.

Walmart to open grocery in Panorama City

Sounds like the same setup that Walmart is planning for Chinatown, and which caused such an uproar among the unions.
The culture of umbrage strikes again - we're SHOCKED, SHOCKED to discover that Secret Service agents were caught hooking up with prostitutes in their off hours.

Monday morning headlines

Strong retail sales help the market, disappointing Barbie sales hurting Mattel, top lawyers raise their average hourly rates to $873, and how decision-making by L.A. officials worsened the budget picture.

Dodger sale approved

The Frank McCourt era is over - well, mostly.

*LAT: MLB raising objections to Dodger deal

What a way to spend a Friday night in Delaware.

Romney camp chooses not to distinguish "fact" from truth

Women did make up the vast majority of workers who lost their jobs since President Obama took office. But...

At last, civilization gets back to normal

three-stooges-movie.jpgDorothy Pomerantz tweets:"Three Stooges poised to overtake Hunger Games at the box office." Watch the trailer.

Hollywood union reaches tentative deal with studios

Agreement calls for a 2 percent annual wage increase and modest increases in health and pension plans.

How KCET finally gave up on PBS

In the world of public television it was nothing short of the nuclear option. I have a piece in this month's Los Angeles magazine.

AMC pulls movie listings from Calendar section *

It's been happening in other markets for some time. The question is whether other chains will follow and how badly the cutback will affect LAT ad revenues

Tweeters who didn't know the Titanic was a real ship

titanic.jpg As Jack Paar used to say, "I kid you not." (Guess they'll have to find out who Jack Paar was.)

Friday morning headlines

Why gas prices are falling, Time Warner Cable would consider Dodger stake, OC gets back on bullet train route, and Port of L.A. has big month.

A bit less upbeat about economy

The new normal - not terrible, but not altogether wonderful. The problem is in the headwinds that threaten to limit expansion.

Big day for stocks

The Dow jumped 180 points, to just under 13,000.
Somewhat convoluted opinion on a somewhat convoluted case.

Hotels looking to make good first impression

It's not easy in the days of social networking and nightmarish airline flights.

Thursday morning headlines

Jobless claims jump, MLB still not happy with Dodgers, and Amazon cuts e-book prices.

Gas prices appear to have peaked for a while

gas-sign-crop.jpg Who knows what might happen with Iran, but for now the outlook is downward. Locally, gas prices have been edging lower for more than a week.

Video: Anderson Cooper loses it again

This time, it's over the celebration of Dyngus Day. Jon Stewart skewers the networks in a separate clip.

Stocks recover a bit

The five-day down streak is broken with the Dow gaining 91 points, to 12,807.
city-hall-flags-100.jpg The city's chronic deficit is being dealt with in only patchwork ways. And that tax holiday for new businesses coming to L.A. isn't helping.

The problem with steakhouses

You mean aside from being gross, overpriced relics of an earlier, gluttonous age?

L.A. rents expected to take off

Seems that the market is being squeezed.

Wednesday morning headlines

Dodger sale expected to be approved, county assessor gets grilled, U.S. sues Apple over e-book pricing, and pension gap widens.

Dov Charney's unorthodox view of finance

The CEO of American Apparel says the company if unprofitable, but only if you look at it a certain way.

Struggling DreamWorks gets extension on financing

The studio's main source of funding, India's Reliance Entertainment, is providing $200 million.

Stocks get clobbered

Market was ugly all session.

One nation, two economies

A rift is opening up between the two.

March is another lean month for state coffers

Everything was under projections, but especially corporate tax receipts.

In-N-Out's quick trip to Tokyo

But no immediate plans to expand in Japan.

More questions about how Dodger purchase is being financed

The head of the investment group seems to be living out a childhood fantasy, using other people's money.

Tuesday morning headlines

Limited support for NFL stadium, county faces property tax shortfall, LAX costs head upward, and Fresh & Easy faces new pressure.

Why men started buying diamond engagement rings

ring.jpg They were considered a kind of virginity insurance.

Dow falls below 13,000

The fourth-straight down session.
Economist Tyler Cowen says eating is all about supply and demand.
Actually, the company hasn't been around long enough for there to be much of a backstory.

Buying is cheaper than renting in parts of Socal

Low home prices and mortgage rates helps explain it.

Monday morning headlines

Bad day for stocks, gas prices fall a dime a gallon in past month, L.A. budget chief warns about deficit, and early reading on mayoral race.

New Dodger owners supply a few more details *

magic-mccourt-jsh.jpg Baseball officials are concerned that the prospective owners have not provided more data on the deal. It's not really an all-cash deal: new owners will assume $12 million in debt.
Being founder, chairman, primary stockholder, and CEO is not the ideal arrangement.
As could be expected, the TV folks are practically forecasting a new recession.

Higher-priced housing market may be picking up

It helps that sellers have been lowering their asking price.

Matzo wars!

U.S. producers like Manischewitz and Streit's are having a tough time competing with the Israeli-made product.

Friday morning headlines

Parsing job numbers, gas prices keep falling, AEG betting on mass transit, and Aetna called on higher rates.

Jobs numbers are disappointing

Only 120,000 jobs were added to the workforce in March.

Prepping for Friday's jobs report

As usual, everybody and their uncle are guessing about the March number.

State sues OC over diverting funds

This really goes back to the Orange County bankruptcy in 1994.
It boils down to the Republican's perverted view that the federal government, aside from defense, is worthless.

Music mogul Irving Azoff sells Malibu home

Located along "Billionaire's Beach" (David Geffen, Jeffrey Katzenberg, Larry Ellison, Paul Allen et al), it fetches $10 million.
When that many people descend on a smallish area there's only so much that can be done.
retail.jpg Hmmm - doesn't seem to be happening, at least based on March chain-store sales, which largely topped expectations.

Anschutz group releases report on downtown stadium

The summary alone is 183 pages.

Thursday morning headlines

Good month for retailers, gas prices keep falling, early word on stadium plan, and Playa Vista gets its downtown.
I wouldn't trust anything this guy says, but it's interesting to watch the dance.

*Is there a future for Google's amazing driverless car?

Unfortunately this will require a lot more than technology.
airbus-first-flight3.JPG Saudi prince Alwaleed bin Talal is spending well in excess of $500 million for an Airbus A380.

Four days of corporate discomfort and hypocrisy

That, of course, would be the Masters.
Today's news is disheartening.

Obama still considered likely winner in November

obama3.jpg Today's trading is only a snapshot, but it does capture conventional wisdom.

Business Update on KPCC: All quiet on the Dodger front

There's a lot that we still don't know about the deal.

Wednesday morning headlines

Gas prices still falling, Dallas air service returning to normal, council considers incentives for hotels, and Americans taking fewer doctor visits.

Get ready for big layoffs at Yahoo

They're being announced early tomorrow morning.

Storms delay travel to and from Dallas

Sounds like a real mess.

A remarkable turnabout in Mogadishu

Any economy, no matter how beaten up, can be reborn if the conditions are right.

Location shooting dipped in Jan-March quarter

Movies did the best and TV the worst.

300 newspapers have erected paywalls

Many of the current pay plans have been fashioned by a company called Press+

The problem isn't energy, it's oil

Big difference.

Fed is still not feeling it

Talk about being stuck in the Twilight Zone.

*Not to pile on the DNC chairwoman, but....

Please tell me that the party's brain trust can do better than this.

Tuesday morning headlines

L.A. gas prices edge lower, March car sales looking good, Anschutz ups his offer, and "slime" blamed for bankruptcy.

Who is running the show at Tribune Co.?

Was there a tentative deal with DirecTV on TV retransmission and was nixed by creditors?

Another reason why high-speed rail makes no sense

Self-driving cars could be changing the transit conversation.

Who is really to blame for the nation's energy problem

Once more, it's a case of Americans wanting it all - and wanting it cheap.

1940‐2010: How Has America Changed?

Lots of ways, from education to major industries.
Actually, there were quite a few this morning during the so-called interview.

Monday morning headlines

Gas prices keep edging lower, AirTran gets top performance grade, AEG could be caving on NFL demands, and Oprah tap dances.