Stocks open higher: Earnings season is providing a salve for the less upbeat news. Dow is up 15 points.
Jobless claims shoot back up: Weekly unemployment filings jumped by 34,000, to 386,000. Just as with last week's sharp drop, the latest increase could be due to seasonal factors. From AP:
Economists view the recent numbers with skepticism. The government struggles to adjust the data to reflect temporary summertime layoffs in the auto industry, they note. And this year, many automakers skipped those typical shutdowns to keep up with demand. That led to fewer layoffs two weeks ago, which the Labor Department didn't anticipate. "All of this is statistical noise," Joshua Shapiro, chief U.S. economist at MFR Inc., wrote in a note to clients. "What will be more important than these short-term gyrations is where claims settle down after the distortions end. We suspect that the data will point to a soggy labor market."
Raises for state employees: Yes, even in a fiscal crisis. More than half of the legislative employees in the state Senate have been given salary bumps in the last year. (LAT)
San Bernardino prepares for bankruptcy: The City Council declared a state of fiscal emergency and moved toward a Chapter 9 filing. From the San Bernardino Sun:
The city will make a bankruptcy plan with public input, and throughout the process the city will remain in control rather than a court-appointed trustee, Penman said. Councilwoman Wendy McCammack, who asked Monday for the vote to be delayed until Wednesday so council members could take in new information and consult with their constituents, said the biggest worry was not public unions or uncooperative council members - groups that have gotten a heavy share of blame for the financial situation - but hundreds of millions of dollars made by the private but city-affiliated Economic Development Corp. that might become the city's responsibility.
Why Compton is in such trouble: It's not so much the immediate $2 million shortfall - it's a $43-million deficit that's accumulated over the years by improperly using money from water, sewer and retirement funds to balance its general fund. From the LAT:
Officials slashed the city's workforce last year and sought the line of credit to help deal with cash flow problems in the short term. But that effort ended after Mayor Eric Perrodin sent a letter to the state controller's office in December alleging that fraud might have led to the city's financial problems and calling for a forensic audit. The controller's office has not launched such a probe. But late last month, Mayer Hoffman McCann -- the firm hired by Compton to perform the regular annual audit of its finances -- told the city it could not finish the audit because it had been unable to get more information from Perrodin about the fraud allegations. Rating agency Standard & Poor's put the city's lease revenue bonds on credit watch, threatening to withdraw the city's bond rating if it can't present a completed audit report within 90 days.
California car sales up sharply: Second-quarter new vehicle registrations rose 27.4 percent compared with a year earlier. It was the 13th straight quarterly increase. (Sacramento Bee)
TV battle moving backwards: Viacom claims that El Segundo-based DirecTV is creating obstacles in the standoff over fees. The satellite service denies it has blocked a deal. From CNNMoneyTech:
DirecTV claims Viacom is trying to jam additional channels into the new contract. "Viacom insists that we carry the EPIX channel at an additional cost of more than half a billion dollars," the company wrote. "We know our customers don't want to pay such an extreme price for an extra channel, they simply want the ones they had returned to them. " Viacom called that statement "one more complete work of fiction" and said it has offered a variety of proposals, both with and without EPIX.
Warning about lost aerospace jobs: Possible cuts in defense spending this fall would have a devastating impact on the industry, Lockheed CEO Robert Stevens told Congress. From the LAT:
Under a law approved last year, $500 billion in federal funds of all kinds would be held back -- "sequestered" -- until Congress reaches an agreement on reducing the mounting federal deficit. Although there is much speculation about whether Congress would let those automatic cuts actually occur in January, military contractors are ringing alarms now.
Emmy nominations: Here's the rundown.