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.
October 2012
prop37.jpg Quick, what are the arguments for and against Proposition 33, the auto insurance initiative? Yeah, me too.

Don't forget the mortgage scandal's low-hanging fruit

vegashousing.jpg You can blame Countrywide, Goldman Sachs, and all the others - and you'd have a strong case. But the financial mess was also the result of misdeeds at the lower end.

Was American Apparel's Hurricane Sandy sale in bad taste?

americanapparel2.jpg Seems pretty benign to me, but a whole bunch of online yentas are up in arms over the supposed insensitivity of the L.A.-based retailer.

The hypocrisy of Robert Reich*

reich.jpg The liberal commentator and former Labor Secretary is a tad selective when he rags on the unfair marketplace.

Digital helps LAT gain circulation

newspaper.jpg Print is still suffering mightily, but the online editions push daily circulation to 641,369, behind the WSJ, USA Today, and NYT.

Wednesday morning headlines

Flying to NY is still tough (but possible), California not ready for a disaster, City Council considering ballot measure for sales tax hike, and city's digital billboard deal may be thrown out.

Disney buys Lucasfilm for $4.05 billion*

starwars.jpg It's a stock and cash deal for the privately held film company best known for the "Star Wars" series. Kind of makes sense considering that George Lucas has announced that he would step down from day-to-day operations.
storm.jpg During a week like this, the candidate's previous comments about FEMA are creating problems.
jetblue.jpg More than 300 flights in and out of LAX have been cancelled, with more expected today. Once flights resume, it will be many days before all the passengers on those flights can be re-booked.

Tuesday morning headlines

Markets expected to reopen on Wednesday, air travel to the east remains a mess, L.A. housing prices edge higher, and big shakeup at Apple.

Shady Arizona political group invokes Citizens United

Attorneys for the organization that spent $11 million this month to oppose Proposition 30 and support Proposition 32 say that the donors do not have to be identified.

Tonight's network programming is fershlugina

With so many East Coast stations going to continuous local news and with so many homes likely to be without power tonight, don't be surprised to see a bunch of reruns in the lineup.
fema.jpg Sandy-related storm damage will cost the U.S. government a pretty penny, but the real trouble could come early next year if a federal deficit-reduction plan cannot be reached.

Good luck figuring out Sandy's economic cost

sandy3.gif Certainly, there will be a loss in productivity over the next few days - quite possibly longer - and that will likely affect retail sales, jobless claims, car sales and housing starts. But there also might be a pickup in activity after the storm.

Monday morning headlines

Markets closed today and most likely tomorrow, consumer spending increases, L.A. area gas prices down 50 cents a gallon from all-time high earlier this month, and movies could be losing their relevance.

Don't even think about flying to NY or Washington

schedule.jpg Or most anywhere on the East Coast north of Virginia. Looking at the LAX schedule, dozens of flights are already cancelled because of Hurricane Sandy.

Space X splashdown in the Pacific

spacex4.jpg The company's Dragon capsule completed a mission to the International Space Station, part of a $1.6-billion NASA contract.

Trading markets bouncing around as election nears

intrade2.jpg Intrade, the online prediction market, has been especially erratic, with the President's chances of winning falling to as low as 56 percent a few days ago before heading back up.
Instead of shelling out $62.5 million - what has been the projected cost of the project - the actual price presented to voters in a special mail-in election next month will be $85 million.

Citigroup chairman illustrates the jerky way to fire someone

oneill.jpg Letting someone go - especially a high profile CEO - is never easy business, though Citigroup Chairman Michael O'Neill gets the booby prize on how not to do it.

Friday morning headlines

Economy grew at a better-than-expected pace in the third quarter, consumer sentiment is at its highest level in five years, Sumner Redstone says his daughter Shari might succeed him, and more money coming in to defeat Proposition 30.

More civilian cuts considered at LAPD

LAPD.jpg How do you think city officials have managed to keep the number of sworn officers at almost 10,000 - in spite of the budget woes?

Why is Gov. Brown's tax measure losing ground?

prop303.jpg This is not quite a eulogy for Proposition 30, but with less than two weeks to go until the election and support for the measure under 50 percent in two polls it's not looking good.

Super-long flight to LAX is being eliminated

singapore.jpg Singapore Air's nonstop service to Los Angeles covers 8,746 miles and has a flight time of about 16 hours. It's an all-business class cabin, with fares running about $7,300. So why is it ending? Because the airline business is brutal.

Mexican migration picking up?

migrant.jpg These movements are very hard to detect, but new research indicates an increase in northward traffic, perhaps the result of a greater demand for Mexican labor.

Thursday morning headlines

Support for Gov. Brown's tax measure falls below 50 percent, CEOs pushing Washington to enact a full-fledged fiscal plan, employers remain hesitant to hire new workers, and gas prices keep falling.
lakers3.jpg Time Warner has also failed to sign deals with DirectTV and Dish Network. Don't be surprised if they can't come to terms before the start of the season (it's a long year).

Why are incomes stuck?

hourlywage.jpg Not to burst any bubbles, but the causes are a lot more complicated than rich people taking money from everyone else.

The ways and means of whether to call in sick

sick.jpg It's not always easy to decide because you can infect others a full day before symptoms actually set in.

Campaign nonsense about China trade

chinafactories.jpg Of course, what do you expect when the two candidates are desperately pushing for votes, especially in Ohio and other industrial centers?

U.S. sues B of A for $1 billion

bofa.jpg The bank is alleged to have defrauded the government through a mortgage scheme carried out during the financial crisis. It was called "the hustle."

Wednesday morning headlines

Facebook up sharply on encouraging news about mobile ads, gas prices have fallen 30 cents in two weeks, many voters still in the dark about Proposition 30, and World Series could run into ratings problems.

NY still waiting for Umami Burger

umami.jpg The chain's first New York location will be ready next March. Several additional stores along the East Coast are planned after that.

Council falls short on new store ban in Chinatown

walmartchinatown.jpg The ordinance would have prohibited any new retail of 20,000 square feet or more, although the ban would not have included Walmart's new Chinatown store.

Dow falls 243 points

dow23.jpg The question, as always, is whether the slide reflects a pause or something more long-lasting (you can find arguments on both sides).

Early skinny on the iPad Mini

ipadmini.jpg Yes, that's what Apple is calling its new tablet, although the $329-to-$659 price tag doesn't seem all that mini.

Four months into the fiscal year, L.A. is in the red

cityhall2.jpg Revenue appears on target, but unanticipated expenditures and overspending have put the city in a hole.

Crummy day for corporate earnings

One after another, several of the nation's largest companies came out this morning with lousy third-quarter results and tepid outlooks for coming quarters.

Tuesday morning headlines

Stock market taking a dive, Bernanke tells friends he probably won't seek another term, Apple to introduce smaller iPad, and brothers behind GET THIN ad campaign under investigation.

Putting a halt to Expo Line construction?

expoline2.jpg A group of Cheviot Hills homeowners are asking the State Supreme Court for a stay, which would delay completion of the project.

Gallup gets way more attention than any other pollster

gallup.jpg If you're a Obama supporter this is bad news because Gallup has shown a solid Romney lead for more than a week.

Monday morning headlines

L.A.-area gas prices falling significantly, Dish to resume carrying AMC shows after settling a lawsuit, local office market continues to favor renters, and News Corp. denies report that it's in early negotiations to buy the LAT.

Wesson unilaterally dumps parking lot tax idea

parkinglot.jpg Parking lot operators implausibly argued that their customers would balk at paying a little more and instead drive to lots in nearby cities (you mean I'd park my car in Beverly Hills and walk to a restaurant in L.A.?).

An ugly day for stocks

dow19.jpg Today's 205-point drubbing was the biggest one-day loss since June. It fits into the ongoing narrative that corporate earnings in the third quarter were on the weak side.

How a life was saved after Black Monday

storycorps.jpeg Lots of reflections today on the 25th anniversary of 1987's stock market crash, also known as Black Monday, but Robert Griffo's tale is something special.

Meet the Arizona guy who is meddling with California's election

He's Robert Graham, who heads the little-known Americans for Responsible Leadership, a nonprofit that contributed $11 million to opponents of Proposition 30 and 32.

L.A. joins California in sharply lower jobless rate*

jobless4.jpg A generally positive report. The county's unemployment rate for September was 10.6 percent, down from 11 percent the previous month. But it's not all beer and skittles.

Friday morning headlines

Big drop in stocks on 25th anniversary of Black Monday, gas prices start to fall at more accelerated pace, Garcetti opposes 401(k) plans for city workers, and U-T owner says he's interested in (gulp!) Tribune Co.

Big drop in California jobless rate

The state is now at 10.2 percent, the lowest level since early 2009. However, only 8,500 jobs were added to the rolls.

Trying to explain why Gallup poll seems so out of whack

Today's tracking poll gives Romney a 7-point lead (52-45), which is nowhere near any of the other national polls. Turns out this has happened before.

Why didn't they just put Newsweek out of its misery?

newsweek.jpg Face up to it: Recasting Newsweek as an online, subscription-based website has no chance of succeeding.

Another hint that Murdoch might be interested in LAT

This has popped up a few times in recent months, but there's no telling how serious he might be. And there's still little indication when the new Tribune owners will want to sell.

Outsiders meddling in Brown's effort to raise taxes

prop30.jpg By being a nonprofit and not earmarking the money for a particular purpose (something that's very hard to prove), groups do not have to reveal who their donors are.

Google blames printer for early release of earnings

Considering the thousands of earnings statements that are filed each year, this sort of thing doesn't happen very often. But when it does... well, let's just say you wouldn't have wanted to own Google shares.

Thursday morning headlines

Newsweek to cease publication at the end of the year, Warner Bros. wins big in Superman dispute, Amazon opens distribution center in San Bernardino, and county assessor still receiving salary.

Big numbers for second debate

More than 65.6 million people were watching, according to Nielsen, which is only a bit less than the viewership for the first debate.

Can anything be done to save Best Buy from extinction?

best buy.jpg The problem is that the superstore business model doesn't work well anymore - just too many "showroomers" who check out products at the stores and then make their purchases online.

More positive signs for California economy

Higher home prices, lower foreclosure filings, increased taxable sales - it's hard to deny that things are getting better. The question is whether the recovery can accelerate.

California foreclosure filings fall to pre-recession levels

foreclosure2.jpg They're at their lowest level since early 2007, the result of a stronger housing market - and a stronger economy.

Have the Gallup pollsters lost their minds?*

How do you have an incumbent down by such a large margin on one side of your house when surveys on the other side show that the economic metrics keep improving?

Wednesday morning headlines

Smallish profit for B 0f A after settling large claims, state regulators investigating CVS over refilling prescriptions without patients' consent, Nike drops Lance Armstrong after doping report, and NHL team owners offer 50-50 split with players.

L.A.'s population density: 12,114 people per square mile

dense.jpg That might seem awfully tight, but it's positively roomy compared with the NY metro area, which has a population density of 31,251. So does having lots of people cramped into a tiny space do any good?

Two Gallup surveys that make absolutely no sense

Why are Americans increasingly confident about the state of the economy, but still supporting Romney by a 50%-46% margin?

L.A. home to largest number of Asian immigrants

chinese.jpg A total of 1.6 million people in the metropolitan area were born in Asia, according to the Census Bureau. The Chinese are the largest immigrant group.

Citigroup CEO stepped down after clash with board

pandit.jpg An "effective immediately" resignation is almost always a signal of bad blood between the person leaving and the powers that be - typically the board.

Tuesday morning headlines

Still no big downward move on gas prices, L.A.-area inflation picking up because of fuel costs, Citigroup CEO steps down unexpectedly, and new concerns on the Westside about digital billboards.

L.A.-area port activity picking up for holiday season

portofla.jpg Merchants had anticipated a decent but not spectacular year, but the solid increase in retail sales last month could change the outlook.

Supporters of convention hall upgrade might want to read this

convention3.jpg The pending makeover of the Los Angeles Convention Hall - orchestrated by AEG as a way to make its downtown football stadium seem more palatable - will be happening just as the overall convention business is slowing down.

Maxine Waters getting chummy with the big banks

waters2.jpg The California congresswoman is in outreach mode with the big boys - an interesting about-face from her less-than-flattering comments about the role of major banks in the financial crisis,
shapley.jpg UCLA economist Lloyd Shapley and Harvard's Alvin Roth were recognized for their work on market design and matching theory, which is basically the process by which selections are made in markets that don't have prices. That includes selecting mates.

Monday morning headlines

Gas prices falling very slowly, retail sales are better than expected in September, UCLA economist shares Nobel price, and new Variety owner considering different digs.

Measuring election through the prediction markets

predict2.jpg They're a pretty effective way of assessing the race. As of Friday afternoon, an amalgam of those markets gave President Obama a 64.1 per chance of being reelected - down sharply from just a couple of weeks ago.

Brown's tax initiative getting hit on several fronts*

schools.jpg The governor only needs a simple majority, but support for Proposition 30, which would increase the state sales tax and the personal income tax for the wealthy, is only polling in the low- to mid-50s - and that was before a new barrage of opposition ads.

California pushes back on report about jobless numbers

It's not everyday that government number-crunchers get into a public snit, but this is one of those days.

Besides Candy Spelling, who else bought units in the Century?

century4.jpg Paula Abdul, Elizabeth Barkley, and the chef Nobu Matsuhisa are among the big names. Even so, more than half the condos are still for sale.

Home prices climb as inventory remains limited

homesale2.jpg Sales on the lower end are falling, while sales at the mid- and upper-ends are increasing. That, plus low inventory, have been pushing up prices.

Friday morning headlines

Little overnight change in L.A. gas prices, big jump in U.S. consumer sentiment, TV viewership is down for the first two weeks of the fall season, and former mayor Richard Riordan outlines pension proposal.

California at center of today's snafu on jobless numbers?*

joblessclaims.jpg Positive numbers on weekly unemployment claims turned out a lot less positive than first believed. It's another example of why economic data cannot be interpreted in real time, despite the push for instant reactions.

Even with fees, airfares are a relative bargain

airfares7.jpg Another myth shattered - the average fare of $365.23 in 2011 (including fees) compares with the average of $611.76 in 1980. If you break it down by cost per mile, the difference is even greater.
bakery.jpg No offense, but it's really not. Nor is there any basis for the argument that raising taxes on upper-income individuals would somehow damage small business owners.

Downtown Target could become a big deal

targetdowntown.jpg Normally, this isn't the spot for store openings, but the City Target location at 7th and Figueroa is an exception. It's the anchor of a refashioned retail complex.

Thursday morning headlines

Only a small drop in L.A. gas prices, big drop in jobless claims (but there's a problem with the numbers), Variety paywall is coming down, and PC sales are taking a tumble.

L.A. figuring out what to do with Ontario Airport

ontario.jpg The City Council rejected a $246 million offer by the city of Ontario to take over the facility, but it did direct L.A. budget chief Miguel Santana to explore alternatives.

Wall Street has another not-so-hot session

dow.jpg The loss is attributed to the prospects of a weak quarter for corporate earnings - as well as less-than-glowing outlooks for 2013.

So are gas prices coming down or what?

gasprices5.jpg Here it is Wednesday and an average gallon of regular has fallen a whopping half a penny, to $4.701. You call that relief? Well, yes.

Jon Stewart on how Romney lies

FDR.jpg If only Obama had used some of this material he might not be in his current fix. Plus, a fabulous FDR clip that pretty much says it all.

Wednesday morning headlines

Gas prices stay in place, Chinese companies investing big time in California, Space X capsule hooks up with International Space Station, and jeans maker True Religion puts itself on the block.

Chevron refinery out for the rest of the year

An August fire at the Richmond facility has put the squeeze on California oil production - and is responsible, at least in part, for last week's price blowup.

Jack Welch out as contributor to Fortune

welch.jpg The former GE legend notified the magazine that he'd rather write elsewhere after idiotically suggesting that the Obama campaign had somehow cooked the unemployment books.

Walmart testing same-day delivery

walmart3.jpg The same-day movement, while intriguing, is not inevitable: Or do you forget the online grocers in the 1990s that struggled with making deliveries?

Report: Asking price for AEG is around $10 billion

AEG2.jpg That's quite a bit higher than initial estimates of between $6 billion and $8 billion and will likely limit the field of potential candidates. It also suggests that AEG owner Philip Anschutz is not about to hold a fire sale of the company.

Tuesday morning headlines

Gas price run-up is about over, slow recovery expected in the IE, Katzenberg tightens control of DreamWorks Animation, and Boeing sells aircraft manufacturing site in Long Beach.

Variety sold to Deadline owner

variety.jpg After months of negotiations, Penske Media Corp. (aka Nikki Finke's boss) finally cut a deal for the struggling Hollywood trade. Purchase price is $25 million.

Graphic look at the gasoline price spike

gasprices6.jpg Not a pretty picture, though L.A.-area prices should start coming down noticeably later this week.

Zagat is out with top L.A. restaurants

urasawa.jpg More than 18,000 people voted in the annual survey - and despite L.A.'s reputation as a backwater restaurant town, lots of folks are going out.

Monday morning headlines

Gas run-up appears to be peaking out, Feinstein calls for investigation into last week's price spike, Space X's unmanned craft heading to the Space Station, and Black Friday is often not a great day for deals.

Brown issues order that will likely reduce gas prices

The governor is directing the California Air Resources Board to allow refineries to make an earlier-than-scheduled switch to winter-blend gasoline. The move should result in greater amounts of gasoline being refined, leading to lower pump prices.

Update: Slight slowdown in Socal gas run-up*

The good news is that Exxon Mobil's 149,500-barrel-a-day refinery in Torrance is returning to normal operations after being shut down much of the week by a power shortage.

James Bond and his many gadgets

The Sean Connery era was mostly tame compared with today's basic smart phone or tablet, but at the time it seemed anything but.

With gas prices so high, is it time to think electric?*

nissanleaf.jpg Not unless you're planning to keep the vehicle for many, many years. It's true that fuel costs for all-electric cars are way lower, but there's a problem.

Putting a little cold water on the September jobs report*

One explanation for the sharply lower unemployment rate is the large number of workers taking part-time jobs, even though many of them prefer full-time work.

When will gas prices start coming down?

gasprices5.jpg Not before they peak out, and it might be a while before that happens. A few days, a week, two weeks - it all depends on when the state's refineries get back to normal.

Here come the anti-Obama conspiracy theories on jobs report

jobless3.jpg Not only was September a good month, with the unemployment rate falling to 7.8 percent from 8.1 percent in August, but the government has revised upward the job gains in July and August. Those revisions are significant

Business impact of NHL canceling first two weeks of season

lakings.jpg The L.A. Kings no doubt wanted to capitalize on being Stanley Cup champions, so the cancellation of the first five games (four of them at home) is less than ideal. But it's not devastating either.

Spot gasoline shortages reported in L.A. area

gasprices4.jpg Experts say this is a short-term problem and that prices will begin falling once refinery production gets back to near-normal levels. That could run well into next week.

Fresh & Easy chain issued ultimatum by UK parent

fresheasy.jpg The El Segundo-based grocery chain now has to "persuade" the chief executive of its British-based owner that it has a future.

Should struggling OC Realtor head national organization?

thomas2.jpg He had to file for personal and corporate bankruptcy because of the housing crash. His debt totals $13 million. Is this the sort of guy who should be leading NAR?

How badly was Obama hurt by last night's debate?*

debate4.jpg Well, the president's chances took a noticeable drop on Intrade, the online trader's market, though he remains the favorite.

Thursday morning headlines

L.A. gas prices jump nearly a dime a gallon in one day, Facebook tops 1 billion users, chain stores reporting slower sales for September, and billing questions at L.A.'s Department of Building and Safety.

Why driverless cars have so much more potential than subways

driverless4.jpg In a nutshell, they build upon early 21st century technology rather than piggyback on early 20th century technology.
Growth will not be coming back in any significant way for a good number of years - no matter who is president.

Opposition forming to proposed tax hike on home sales

sold.jpg The measure wouldn't go to voters until at least next March, but already you're hearing gripes - mainly from L.A. real estate groups that worry about the effect on home sales.

Wednesday morning headlines

T-Mobile to merge with MetroPCS, L.A.-area gas prices jump due to refinery problems in Torrance, Dodger owner says there's enough money to make big acquisitions, and food truck operators battling city of El Segundo.

Auto rebound suggests a more confident consumer

autosales5.jpg Despite only so-so numbers from Ford and GM, September car sales turned out to be quite strong overall. It's not the perfect economic indicator, but the steady increases are hard to ignore.

Council repeals earlier ban on pot dispensaries

medicalpot.jpg Dispensaries would stay open in the city, pending a ballot measure next year. But it gets complicated because the feds have been shutting down selected dispensaries on their own, citing federal drug laws.

Sitcom shooting in L.A. up sharply; dramas down sharply

runaway.jpg Overall on-location production for the July-September quarter was down 3.9 percent compared with a year earlier. But the numbers tend to be highly seasonal - and volatile.

Why is it still so damn hot? (cont'd)

heatwave.jpg L.A.'s blistering weather pattern is entering its third month, but temperatures are expected to moderate over the next few days.

Housing prices projected to increase in 2013

homesale2.jpg So says the California Association of Realtors as part of its forecast for next year. It's worth noting that the CAR, like other housing economists, have been way off in their price projections.

If you can stomach him, Sam Zell is at it again*

zell5.jpg From the little man, an F-you classic: "Why is it always assumed that if someone doesn't succeed it's because he can't, not because he doesn't want to?"

Tuesday morning headlines

Subdued holiday shopping forecast, council considers action on pot dispensaries (again), Brown vetoes labor-related legislation, and pedestrians accounted for about a third of all traffic fatalities in L.A.

Is this the end of American Airlines?

americanairlines.jpg It's one thing to be late because of weather - it's another to be late because the pilots are pissed. The airline is basically dying before our eyes.

Rich Californians stay put

bevhills2.jpg The idea that high taxes are driving the very wealthy out of the state never made much sense and now there's an analysis from the San Jose Mercury News that concludes as much.

OC Register introduces new business section

register.jpg Goodness knows, I wish them the best. But the changes all sound very .... well, 1985-ish (themes days, local stock charts, bigger staffs, etc.). A print-dominated news organization is simply not going to work very well in a digital-dominated time.

Have Obama's numbers peaked out?

obama4.jpg The forecasts just seem too high, given that the race remains tight in crucial states like Florida, Virginia, and Colorado. Besides, the media loves a contest.

Monday morning headlines

Encouraging news on manufacturing, gas prices inching higher in L.A. area, Gov. Brown signs extension of film tax credit program, and airlines cut and consolidate schedules.