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.
August 2012

California pension changes pass handily

sacto3.jpg Not much doubt about this one - a 49-8 vote in the Assembly and 38-1 in the Senate. This is not the package that Gov. Brown was proposing last year, but it was the best he was going to get.

Jerry Brown challenges Chris Christie to a fitness contest

jerrybrown.jpg The boorish New Jersey governor called California's governor a "retread" the other day, and as you might guess the 74-year-old Brown wasn't going to take that lying down

Freeway ramps reopen early

rampture.jpg Three weeks ahead of schedule and just in time for the back-to-work crush next week.

Labor Day Weekend prices, travel times

laborday.jpg You'll be paying more than usual at the pump this holiday weekend, but there appears to be little, if any, pushback from motorists.

Jon Stewart on Republican non-fact facts

"Daily Show" correspondent John Oliver doesn't see what this accuracy fuss is all about - just "change facts, reality, and the meaning of words in order to make a much larger point." Don't know whether to laugh or cry.

Friday morning headlines

Bernanke strongly suggests Federal Reserve action, consumer sentiment picks up in August, Trutanich receives contributions from Live Nation executives, and marijuana dispensaries get reprieve.

Dick Clark Productions going to Guggenheim?

dickclark.jpg The new majority owner of the Dodgers is close to acquiring the Santa Monica-based production company for nearly $400 million, says the LAT.

I want to say one word to you. Just one word. Optics

Add it to paradigm, organic, dynamic, metric, off-line, and all the other perfectly fine words that have been recycled in ways that their definitions never intended.

14 California hospitals cited for violations

hospital.jpg They were in violation of licensing requirements in a way that was "likely to cause, serious injury or death to patients."

Thursday morning headlines

Retailers report solid sales in August, L.A. hotels set occupancy record, no plans for another council vote on pot shops, and lawsuit to be filed over downtown stadium plan.
If most of the savings aren't realized for 20 or 30 years down the road, how does this plan address the current shortfall faced by state and local governments?
CFTC.jpg A Rancho Cucamonga man is being charged by federal authorities with fraudulently soliciting and accepting at least $670,000 from at least 17 people. He reached Investors through a video phone system that enables communication through sign language.

Secrets of being a successful entrepreneur

inc5000.jpg You don't have to be the next Mark Zuckerberg to find success (judging by Facebook's stock price, you probably don't even want to be the next Mark Zuckerberg).

Why the housing recovery will be such a slog

housing5.jpg Sales and prices have been coming back, but if history is any indication it could be many years before the recovery truly takes hold.

Wednesday morning headlines

Economic growth is revised upward, L.A.'s pot ordinance could be put off, ESPN extends deal with Major League Baseball, and report of a snag in the Variety sale.

The one chart that explains the nation's debt troubles

debt3.jpeg Tonight's convention speeches will focus on how President Obama has added huge amounts of red ink to the nation's debt. The reality is quite different.

What plays better in China: 'Spider-Man' or 'Dark Knight'?

spider.jpg In the first day of head-to-head competition, it's "The Amazing Spider-Man." But the numbers are underwhelming.

The witch has landed - latest adventures of Jaine Austen

witch.jpg Another shamless plug - my wife Laura Levine is out with her 12th book in the Austen series, "Death of a Neighborhood Witch" (Amazon, Levine website). It's the tale of one-time TV character Cryptessa Muldoon (she's become a bitter old dame), her beloved parrot Van Helsing, Jane's feisty cat Prozac, and a bunch of really wacky neighbors. Or as one reviewer put it: "If good fences made good neighbors, ad writer Jaine Austen would need...

Brown announces 2-tier pension overhaul

jerrybrown.jpg The governor calls it "radical change," though it appears as if current workers won't see much difference. New hires, however, will have the salaries used to calculate their pensions capped and the minimum retirement age extended.

Still searching for the real Mitt

romney4.jpg "All politicians flip-flop from time to time," the Economist editorializes, "but Mr Romney could win an Olympic medal in it. And that is a pity..."

Bad vibes for rest of Dodger season

hanley.jpg I'm betting that this is the start of a frustrating month. I'm also betting that the addition of so many high-profile players so quickly might be counterproductive.

Tuesday morning headlines

L.A. home prices nudging higher, airlines cancel flights to New Orleans in preparation for storm, shareholder pressure to oust CEO of major health insurer, and state's vehicle fleet is reduced.

Pension 'reform' package to be announced Tuesday

steinberg.jpg The proposed changes do nothing to address pension obligations for current and retired state workers - what's really at the core of the crisis.

A look inside South Korea's money machine

park.jpg Park Jaesang's huge K-Pop hit "Gangnam Style" contains cultural references that are a lot more intriguing than this idiotic music video would suggest.
apartment3.jpg It's the combination of low vacancy rates, rising rents, and a flood of institutional investors.

Most Americans believe Obama will win

election.jpg Over the years, Americans generally have predicted the winner of a presidential race, though Gallup says the implications of this "expectation" measure on voter behavior are not clear.

Monday morning headlines

Hertz buys Dollar Thrifty, state lawmakers have a large agenda in last week of legislative session, Dodgers in preliminary talks with Fox on extending TV deal, and Barry Diller's IAC acquiring

Jury says Samsung violated Apple patents

apple5.jpg Complicated case ends with a complicated jury verdict. Samsung was found to have infringed on six of seven patents for smartphones and tablets.

Report: Owner of Downtown Car Wash property nearing deal

car wash.jpg After years of offers being turned down, the Olympic and Figueroa location has three interested parties - and apparently an interested seller. Asking price is $25 million.

Romney aside, rich people still pay a lot of taxes

tax4.jpg I know you're fed up with all the back-and-forth about income and taxes, but Business Insider has prepared a very useful (and evenhanded) presentation on who makes what and who gets taxed what.

The other not-so-happy side of runaway production

allenpark.jpg Another cautionary tale on how incentives make for terrible fiscal policy, whether it's Allen Park, Michigan or the entire state of California.

Icky stuff that hotels keep from their guests

hotelroom.jpg Current and former staffers were asked for examples on Reddit - just in time for the upcoming Labor Day weekend. It's not a pretty picture.

How to tell if you're an entrepreneur

Good, basic information from, a website that provides all sorts of resources for folks considering an MBA degree.

Friday morning headlines

Gas prices stuck on the high side, stocks turning around to close the week, sluggish orders for durable goods in July, and construction stops at Burbank Walmart.

Legislation to bypass state environmental law falls apart

ceqa.jpg So much for an effort by business and labor interests to do an end around on the California Environmental Quality Act.
billboard2.jpg Parking lots, billboards, marijuana dispensaries, parking scofflaws - it's getting to be a long list.

Poor day for stocks

No telling what all this means (volume has been low all month), but several cross currents are at play.

The 55-64 crowd taking the biggest income hit

retire2.jpg Household income within this age bracket is nearly 10 percent less than it was three years ago, Younger Americans have taken a big hit as well.

Sacramento Kings headed to Virginia?*

sactokings.jpg The plan would be for the Maloof family to move to Virginia Beach, Virginia and for Comcast to help build a new sports arena.

Thursday morning headlines

Possible contamination at Disney, LAX gets Dreamliner in January, changes in state environmental statute gain supporters, and city not able to enforce statute on blighted homes.

Who is most to blame for the problems of the middle class?

middleclass.jpg Well, don't look at us! Pew asked a group of middle class Americans who was to blame for their decline over the past 10 years and only 8 percent fessed up.

Latest proposal to handle L.A.'s crumbling sidewalks*

sidewalk.jpg The idea is to document what needs to be fixed - a project that would take three years and cost $10 million - and then ask voters to pass a bond measure to pay for the repairs.

How well do you really know your iPhone?

iphone.jpg The basics are easy enough to figure out, but WSJ tech writer Katherine Boehret finds that many of us aren't aware of various shortcuts.

Brown tax initiative is leading but could be vulnerable

browntax.jpg Nearly half of Californians surveyed say politicians should focus on wasteful spending before raising taxes.

Nasty Gal is fastest-growing L.A. company

nasty.jpg New companies tend to grow quite fast, of course, but five-figure growth is something else again. Nasty Gal's 28-year-old founder got her start selling one-of-a-kind vintage pieces on eBay.

Bidders lining up for downtown skyscrapers

usbank.jpg The company that owns Wells Fargo Tower, U.S. Bank Tower, and other prominent downtown high-rises is considering an outright sale or a big cash infusion.

Wednesday morning headlines

Recession predicted unless Washington acts, City Council considers tax hikes for parking and property sales, retail development near USC on hold, and more talk about pension reform.

Looking to cut Medicare? Just get folks to die sooner

medicare.jpg Let's face it, the real reason costs have gotten out of control is that there are lots more people over 65 and because the health care system is so much more effective than it used to be
potpix.jpg The current round of litigation involving local medical marijuana laws resembles a giant jigsaw puzzle that's shy a few pieces.

Michael J. Fox's risky return to TV

michaelfox.jpg Judging by the wise ass tweets I've come across these past few days, not even someone suffering from Parkinson's disease gets a free pass anymore.

Leno takes shot at 'Tonight Show' layoffs*

A couple of quick Comcast-directed hits to begin the monologue last night, even though the new owner of NBC Universal isn't really responsible for the cuts.

Health care investors seem to be betting on Obama

aetna.jpg Aetna's $5.7-billion purchase of Coventry Health Care, a huge provider of Medicare and Medicaid programs, is just the latest example of health care dealmaking in advance of the election.

Tuesday morning headlines

Billionaire unloads Facebook stock, "Fifty Shades of Grey" helps Barnes & Noble earnings, DreamWorks Animation cuts distribution deal with Fox, and West Hollywood bans plastic bags.

Obama's no-win housing policies

housing4.jpg The administration didn't do very much, perhaps at the cost of a delayed recovery. But the possible options were political non-starters.

Slicing and dicing charitable giving

richest3.jpg Being the largest, richest state, it's no surprise that California ranks first in total amount of donations. But the state ranks only 26th in percent of income given (4.4 percent).

Business side of Phyllis Diller

diller.jpg She was a pioneer - at one time Diller operated seven separate companies. "I'm good at making up my mind," she said.

Apple is most valuable company of all time

apple2.jpg The stock reached a record high of $664.74 a share, which translates into a market value of $623.13 billion.

Monday morning headlines

Some early backers of Groupon are getting out, Facebook shares are trading below $19 a share (IPO price was $38), L.A. area gas prices were little changed over the weekend, and layoffs at the "The Tonight Show."

Moody's to consider credit downgrades for California cities

sanbernardino.jpg There's no telling how all this will play out - the Stockton and San Bernardino bankruptcies are probably years from being resolved - but it's easy to see why the ratings agency would want to have a look.

Why is it still so damn hot?

weather2.jpg You can blame a strong high pressure system over the southwest that was supposed to move east but never did.

Pot shop supporters sue to block L.A. ban

medicalpot.jpg They're seeking an injunction against the citywide ban, which is supposed to take effect Sept. 6.

Is Facebook finally a buy?

FB3.jpg When the stock of a very successful company loses more than half its value in the space of three months you figure it can't get much worse. Actually it can.

July jobs report is only fair

jobfair.jpg All told, not horrible but far from wonderful. What the numbers really show is a continued uneven recovery, with the Bay Area doing noticeably better than L.A., especially inland L.A.

Friday morning headlines

California adds 25,200 jobs in July, Facebook stock still dropping, Apple shares hit high after four-month slide, and audit show miscues at Caltrans.

Retirement costs for L.A. cops, firefighters going way up

LAPD.jpg We're talking 56 percent over the next four years, according to projections by budget officials. Simply put, the city can't afford to pay what it owes current workers and retirees

Advice to job candidates: Don't drink during an interview

Researchers found that applicants who ordered a glass of wine over dinner were viewed as less intelligent than those who ordered a soft drink.

Getting up to speed on Medicare flap

medicare.jpg Democrats accuse Paul Ryan of ending Medicare "as we know it," while Republicans accuse President Obama of robbing the program to the tune of $716 billion. What's the story?

Marvel CEO brings tensions (and resignations) to Disney*

avengers2.jpg Isaac Perlmutter has turned out to be a real problem, especially on the merchandising and licensing side, resulting in numerous departures.

So-so port traffic an indicator of a slow holiday season?

backtoschool.jpg Probably not (it's still early), but economists are wondering how much consumers will be willing to buy, what with heavy debt loads and meager wage gains.

Thursday morning headlines

Facebook shares taking another hit, L.A. gas prices are settling down, L.A. County has a new plan for the chronically homeless, and Socal port traffic only so-so.

Riordan, chamber push city pension reform

cityhall3.jpg They are proposing a ballot measure that would allow voters to determine pension policy for civilian employees.

Another hypersonic aircraft goes down

waverider.jpg The idea of going from L.A. to NY in an hour or so has been a tantalizing idea going back 50 or more years, but engineers have yet make much headway.
medicalpot.jpg Keeping track of who does what is a lot tougher than it might seem - the L.A. metro area has more than 300,000 business establishments, and some of those aren't exactly trumpeting their existence.

Well, at least somebody is challenging the campaign nonsense

What's nice to see is a TV person actually challenging a talking point instead of just sitting there blankly.

Wednesday morning headlines

Gas prices settling down, L.A. inflation was tame in July, pot shop owners say they'll stay open despite the citywide ban, and reality TV having a sluggish summer.

Careful shoppers are taking a pass on Cosmo

cosmo1.JPG Maybe Helen Gurley Brown was wrong: Maybe you can't have it all - at least when it comes to circulation.

So far so good on power supply

power5.jpg Demand is comfortably below available supply this afternoon. But the heat wave is expected to continue through the week.

Congress approval rating down to 10%

congress.jpg Gallup poll shows that 83 percent disapprove of the way Congress is handling its job - a stunning number considering that most incumbents will be reelected this November.

Three numbers that will determine the election (cont'd)

election.jpg Time to check in on gas prices, stocks, and the unemployment rate - not the most important economic indicators, but the ones people are watching.

Socal housing rebound looks real

homesale2.jpg Not only did July homes sales in Southern California increase for the seventh straight month, but the median price neared a four-year high.

Tuesday morning headlines

Gas prices rising sharply, solid July for retail sales, final tally on NBC's coverage of the Olympics, and Disney worker alleges that she was harassed for her religious beliefs.

A new leading bidder for Variety

variety3.jpg Forget about billionaire Ron Burkle - at least for now. The likely buyer is NY billionaire Marc Lasry, whose holdings include the parent company of the National Enquirer.

Flex alert issued for Tuesday

grid.jpg That means keeping en eye on thermostats and not using heavy-duty appliances between 11 a.m. and 6 p.m. Some relief could arrive by Wednesday.

Why Ryan complicates Romney's electoral math

romney3.jpg How do you hold onto the core constituency by proposing to phase out Medicare, at least in its current form, and restructure the tax system to favor the very wealthy?

Chevron refinery unit may be down 6 months

refinery3.jpg Investigators found extensive damage in the cooling towers, pipe racks and heating tower from last week's fire.

Monday morning headlines

Gas price increase slows down in L.A., more hot weather to puts strain on state power grid, BP sells its Carson refinery, and L.A.'s inability to draw major conventions.

Early assessments on the Paul Ryan pick

ryan.jpg Romney is not much for bold moves, so this morning's choice would suggest that he's looking to reset his campaign. We have several views on the selection.

Whatever happened to the center portion of supermarkets?

You remember those center aisles - canned veggies, ketchup, laundry detergent, soup, coffee. All the boring stuff. These days, most of the action is on the perimeters.

Why Romney's put-down of California was so bone-headed*

calichart2.jpg He has zero chance of taking California in November and much of the Republican base considers the state one step from Satan, so why not? Problem is, he doesn't know what he's talking about.

State power officials ratchet down heat warning

heat2.jpg They had issued a flex alert through the weekend, but now it's only in effect today, which should be the peak of the heat wave.

Latest crackdown on local sweatshops

seatshop.jpg State and federal investigators are looking for Southern California garment factories that don't pay minimum wage or overtime and that don't register their businesses.

Friday morning headlines

Average L.A. gas prices hit $4, economists worry about Washington logjam, health care not being covered by California cities, and putting the squeeze on scalpers.

Big bump in $1-million+ California homes

manhattanbeach2.jpg Another signal that the housing market is turning around: The increase in quarterly sales was the highest since the July-September period in 2007.

City can't figure out how many parking lots it has

parkinglot.jpg Which means there's no way of knowing whether L.A. is receiving all the revenues it's owed from the Parking Occupancy Tax. It probably isn't.

State power officials declare flex alert

heat2.jpg Demand won't break any records, but they're advising everyone to reduce energy use, especially between 11 a.m. and 6 p.m.

L.A. financial giant is sold

TCW.jpg TCW, which is short for Trust Company of the West, manages about $130 billion in investments. For non-money people, TCW is best known for alleging that its former super-star bond trader Jeffrey Gundlach had stolen trade secrets to set up his own firm.

Thursday morning headlines

Local gas prices start climbing, Obama losing Wall Street support, rents in the L.A. area increased in June, and Eli Broad suspends payments to MOCA.

More about borrowing $105 million for almost $1 billion

poway2.jpg When raising taxes is out of the question, government officials can resort to unusual ways of raising money. These bonds are structured so that the district can avoid any debt service until 2033, with the biggest amounts due in 2046 and 2051.
mars2.jpg NASA has been one of the most successful R&D labs over the years, a point that Washington lawmakers would do well to notice when they prepare the space agency budget.

Drought's effect on food prices: Not much

drought.jpg On average, we're talking about an extra $32.76 for all of next year, according to a back-of-the-envelope calculation. That's $2.73 a month.

Peter O'Malley reappears at Dodger front office

dodgers8.jpg In the weeks following the team's $2.15 billion sale, the former owner was offering advice to the new owners, something that never would have happened during the Frank McCourt administration.

Streaming still trails DVD, but the numbers are narrowing

MovieRentalsCHARTS_1208.jpg Changing of the guard: Digital movie rentals increased 5 percent during the first half of 2012, while DVDs and Blue-ray discs fell 17 percent.

Wednesday morning headlines

Gas prices about to shoot up, higher home prices signal market turnaround, L.A. supervisors approve sales tax vote, and celebrity magazines get hammered.
marks.jpg "We still need the development of some events that are going to scare the hell out of people," says the CEO of L.A.-based Oaktree Capital.
richpoor.jpg It might not be what you'd expect. Everybody spends about the same proportional amount on housing, clothing, and eating out. Where the rich spend more - actually a lot more - is on education and retirement.

Look out for a boost in gas prices

refinery.jpg Could be a big boost, in fact, the result of a fire at Chevron's 110-year-old Richmond refinery. No estimate on how long it will be before the facility resumes normal operations, but oil markets are already factoring in a substantial price increase.

Why supersizing works

upsell.jpg It's what economists call "default bias," which basically means that when people are given an option that is easier to select, for whatever reason, they'll choose that option.

Tuesday morning headlines

Steady job growth forecast for California, DreamWorks plans theme park in China, L.A. residents bummed about helicopter noise, and Padres sold to group that includes the O'Malley family.
convention.jpg L.A. could save money and attract more business, says City Administrative Officer Miguel Santana. But labor officials oppose the idea.

How to borrow $105 million for $981 million

poway.jpg The Poway Unified School District has cut a sweet or a lousy deal, depending on your point of view. Sweet if you're on the school board - lousy if you're a local resident.

Westwood gets luxury movie theater

theater4.jpg The six-screen complex will replace the Avco on Wilshire Boulevard and should provide a little boost to an area that has seen numerous theater closures.
Especially a NY cop - not a great move. Also not too bright: Acting like a jackass while a 17-year-old is filming the entire moment.

Early trailer for controversial bin Laden movie

Still more than four months before its release, Kathryn Bigelow's "Zero Dark Thirty" already has gotten more attention than most films - even though no one really knows what it's about.

L.A. near top of music food chain

laphil.jpg Nashville is number one, followed by NY and then L.A. Ranking is based on concentration of musicians and number of music and recording businesses.

Monday morning headlines

State legislature returns to work with a big agenda, U.S. markets are popping a year after S&P downgrade, OC Register to focus on print subscribers, and "Dark Knight" still on top after three weeks.

Huge win for L.A. aerospace

boeing2.jpg It's essentially a new kind of space race, though the ultimate economic benefit to the area has yet to be determined.

Case of the disappearing tuna

tuna.jpg Apparently there were smaller amounts in cans of Bumble Bee, Chicken of the Sea and Starkist, and a Superior Court judge ordered the three companies to pay $3.3 million in penalties.

Stocks take off on jobs report - Dow up 217

The numbers for July were just all right, but they gave investors a reason to buy into a market that continues to trend higher.

L.A.'s celebrity tour business is getting out of hand

tours.jpg A decade ago there were only a half-dozen or so companies. Today, the number is closer to 40, although no one knows exactly. That's part of the problem.

Chick-fil-A CEO is swimming against the tide*

gay2.jpg The fast food chain may have had record crowds the other day in support of Dan Cathay's views on same-sex marriage, but these Pew results show that the nation is moving in the other direction.

Friday morning headlines

Economy still has a long way to go, big boost for Toyota in latest quarter, Space X and Boeing win NASA award, and L.A. County assessor probe expands.

Stocks taking off on unexpectedly good jobs report

Early reaction is that July was good but not great. Yes, 163,000 jobs were added to the rolls, stronger than the 100,000 consensus estimate and a world away from the revised 64,000 figure for June. But the unemployment rate inched up to 8.3 percent.
junejobs.jpg This is always an important moment on the economic calendar, but the data will be getting a lot more attention because of the November election. And seasonal adjustments could foul things up.
chick.jpg Business professors and marketing experts would grit their teeth at the exclusionary corporate culture. But this may be a case of a business that is successful in spite of itself.

Uh-oh, orange juice futures are soaring

Apparently there are concerns about a tropical depression that's brewing in the Atlantic and could impact the Florida crop. Just like "Trading Places."

Planes getting smaller - and fuller

jetplane.jpg Not only have the carriers cut back on routes, they're often using cramped planes (one lavatory, limited space overhead and under the seat). Have fun.

Ralphs is selling gas*

kroger.jpg The superrmarket chain has opened four stations in Southern California, including one in the L.A. area. As with Costco and other big chains, prices are lower than average.

Thursday morning headlines

Europe still a question mark, retailers report decent July, San Bernardino files for Chapter 9 bankruptcy, and mortgage rates inch higher for the first time in months.

Why August is the worst month

august.jpg No holidays, lousy sports, everything turns brown, grilled foods get tiresome - no doubt about it, this month is a basket case.

Look, Tim Geithner is sitting in the next row!

geithner.jpg In coach no less. But should the third or fourth most powerful person in the world, the guy who determines the nation's economic policies, be crammed into a Washington-to-L.A. flight? I don't think so.
stockton3.jpg Tom Morris is the third of four police chiefs in that city, now in bankruptcy protection, who served less than three years and retires with an average of 92 percent of their final salaries. And it's not just Stockton.
FB2.jpg Back in May, the Legislative Analyst's Office had projected that the state would pick up between $1.6 billion and $2.1 billion in tax revenue as company shareholders began cashing out. Never mind.

Still no movement from the Fed

fed2.jpg Officials from the central bank know that the economy is slowing down, and they know that some sort of intervention is in the cards. One of these days.

If California were a country...

califecon.jpg The state's $1.9 trillion economy would be ranked ninth largest in the world, ahead of Russia and behind Italy.

Wednesday morning headlines

Moderate hiring by private businesses in July, NBC might break even on Olympics, campaign coffers of mayoral candidates keep filling up, and movie academy has a new president.