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Stocks down sharply: So much for the smallish rallies this week. Bank stocks are taking it on the chin while health-care related industries are mixed. Dow is down 150 points.
News Corp. board approves split: One company for the entertainment holdings and one company for the publishing side. Both will be publicly traded and have Rupert Murdoch as chief executive. (Reuters)
Brown signs budget: The governor trimmed $128 million in last-minute cuts that included financial aid for college students and child-care programs. The budget is predicated on voters approving more than $8 billion in temporary tax increases. (LAT)
JP Morgan's loss gets higher: The bungled trade could cost as much as $9 billion, the NYT reports. The original estimate was $2 billion.
JPMorgan plans to disclose part of the total losses on the soured bet on July 13, when it reports second-quarter earnings. Despite the loss, the bank has said it will be solidly profitable for the quarter -- no small achievement given that nervous markets and weak economies have sapped Wall Street's main businesses. To put the size of the loss in perspective, JPMorgan logged a first-quarter profit of $5.4 billion.
Jobless claims dip: Weekly filings for unemployment benefits are 386,000, down from last week's revised 392,000. That's still too high to show a pickup in job growth. (AP)
Tepid first-quarter growth: The third and final estimate of the Gross Domestic Product remained unchanged at 1.9 percent - a pace that likely continued into the second three months of the year. (AP).
Madoff's brother seeks plea deal: Peter Madoff is expected to plead guilty to criminal charges and has agreed to a prison term of 10 years. From the NYT:
The guilty plea does not amount to an admission that Peter Madoff knew about or participated in his brother's Ponzi scheme. Rather, it confirms the government's allegations that Peter Madoff served as a sham compliance officer who exercised little if any legal oversight over the firm's operations, effectively enabling his brother's crimes. A securities lawyer by training, Peter Madoff, 66, served various roles at the firm, including chief compliance officer and general counsel. He is expected to plead guilty to charges including falsifying documents, lying to regulators and filing false tax returns.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.