Stocks open higher: No obvious reason, other than the fact that Wall Street has been through an extended losing streak and eventually investors start buying. Dow is up 40 points.
JPMorgan executives ignored red flags: An increased appetite for riskier trades had the approval of senior level managers, including CEO Jamie Dimon, the NYT reported.
"There was a lopsided situation, between really risky positions and relatively weaker risk managers," said a former trader with the chief investment office, the JPMorgan unit that suffered the recent loss. The trader and other former employees spoke on the condition of anonymity because of the nature of the investigations into the trading losses.
JPMorgan's annual meeting: Talk about lousy timing. As the bank's shareholders gather today in Tampa, attention will be focused on how risk is being managed. From AP:
Shareholders will vote on whether to separate the bank's chairman and CEO positions, both held by Dimon. They will also vote their approval or disapproval of Dimon's $23 million pay package from last year. Analysts say Dimon is unlikely to lose those votes.
Retail sales slow down: A 0.1 percent increase in April is weaker than the numbers for February and March. (AP)
Inflation falls flat: L.A. area prices were unchanged in April and up only 1.5 percent year over year, in part due to falling gas prices (which have since gone back up). (OC Register)
Gas increases slowing down: But an average gallon of regular in the L.A. area is up to $4.398, according to the Auto Club, which is 17 cents higher than a week ago. Refinery problems are keeping West Coast supplies on the low side.
Why were budget estimates so wrong? The big jump in the state's deficit has less to do with the economy and more with overly optimistic revenue forecasts. From the Sacramento Bee:
Gabriel Petek, an analyst with Standard & Poor's, said state leaders last year "were kind of taking a little bit of a gamble." He said he would not expect lawmakers to use an aggressive revenue estimate of the same sort again. "When we did look at the state's cash flow, we took the $4 billion off the table and assumed it wouldn't come in," Petek said. "A lot of people even at that point viewed it skeptically."
Softening proposed cuts?: Democratic legislators said they would come up with alternatives to Gov. Brown's painful budget revisions, especially in social service programs, the courts, and university funding. (LAT)
Coliseum Commission approves lease deal: Day-to-day control will be taken over by USC. From the LAT:
USC would put $70 million into stadium upgrades under the deal, and take control of the Coliseum's revenue. The university would also assume the $1-million annual rent payment to the state, which owns the land under the stadium and the companion Sports Arena. A state report in 2005 valued the complex at $240 million to $400 million. Sports industry experts have said the lease gives USC all the benefits of owning the stadium without forcing it to buy the facility.
Facebook a passing fad? That's what half of Americans believe, according to an AP-CNBC poll. Also, half of those surveyed say they think Facebook is a good bet, while 31 percent do not. (AP)
Construction begins on port project: A 40-year, $4.6 billion lease deal between the Port of Long Beach and Orient Overseas Container Line is expected to double cargo movement and create at least 14,000 permanent jobs. From the Press-Telegram:
The long-term lease gives the company and its subsidiary, Long Beach Container Terminal, LLC, exclusive use of the 330-acre Middle Harbor. That will triple the size of the company's footprint, making it the biggest agreement of its kind in the history of container terminals in the United States and perhaps worldwide. It will expand LBCT's 90-acre facility to a 304-acre terminal. Projected for completion in 2019, the $1.2 billion Middle Harbor project will connect and upgrade two old shipping terminals.
No severance for fired CEO: Scott Thompson was forced out after admitting that he had lied about his academic record. He will be paid a $1.5 million "make whole" cash bonus he received on arriving at Yahoo. (DealBook)