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.
November 2012

Washington budget battle held up by two words: 'I want'

Republicans don't want taxes raised on the upper class and Democrats don't want entitlements lowered on the middle class. In other words, both sides want what they want.

Story of the day - or the week or the year or maybe ever

About those studies that link foods to cancer? Many of the connections are tenuous at best. Guess we can all eat parsley again.

Friday morning headlines

As port activity shuts down, labor talks resume, Socal Edison electricity rates to go up, consumer spending dips in October, and L.A. Auto Show opens to the public.

Powerball coming to California

powerball.jpg But you still hear questions - and criticism - about where and how the money is used.

The curious case of a port walkout*

portstrike.jpg The potential impact of a full-scale strike would be serious to the local economy (a 10-day lockout in 2002 resulted in billions of dollars of losses), but it seems unlikely things will reach that far.

Why do hotel rooms cost so much?

shutters.jpg Not that long ago, $300 a night used to be considered high end. Then it was $500. Now? Well, you can easily shell out $700 for a not-so-wonderful room.

Jobless benefits could be cut off at the end of December

That's if they can't resolve Washington's budget stalemate. About 400,000 Californians might be affected.

Thursday morning headlines

November was weakish month for retailers, third-quarter growth revised upward, walkout spreads at the ports of Los Angeles and Long Beach, and Jeff Zucker officially gets CNN job.

Good luck getting a handle on fiscal cliff talks

For some reason, the market is encouraged about the prospects of a deal. Don't believe it - Hollywood's classic "Nobody knows anything" line really seems apt here (except Hollywood has nicer-looking players).

Good news about state budget leaves something out

Namely the fact that California has come off several years of massive cost cutting - and these are not temporary cuts. That money is basically gone.

Control of Playa Vista quietly changes hands

playa.jpg As part of the agreement, Brookfield Homes will pay more than $250 million for the remaining 110 acres of undeveloped land.

Wednesday morning headlines

California gas spikes revisited by senators, UCLA hospital gets F grade on preventing medical errors, Anthem plans rate hike for individual policyholders, and picket line at the Port of L.A.

Award-winning angst for three little pigs

This highly creative two-minute ad for The Guardian is worth a look. Adweek named it the best commercial of the year.

Tuesday morning headlines

Another jump in L.A. home prices, consumer confidence reaches a 4-year high, U.S. regulators bar Intrade bettors, and local gas prices are 90 cents a gallon cheaper than in early October.

Black Friday is special but not because of the bargains

blackfriday2.jpg Frankly, there's plenty of evidence to suggest that you're not getting especially good deals by shopping on Black Friday - that you often end up buying more stuff than you planned and at prices that aren't all that low.

Arrests made in LAX protest*

laxprotest.jpg About 12 so far, according to KNX, but apparently the brief disruption had been anticipated and there doesn't appear to be any major problems.

Preparing for today's LAX demonstrations

There's no telling how many protesters will show up or how badly this will disrupt holiday traffic, but it probably won't be great: Century Boulevard and Sepulveda Boulevard are expected to be shut down for at least portions of the afternoon.

Washington media still haven't a clue about Villaraigosa

For years the guy has gotten a free ride, first in L.A. and more recently in Washington.

Hostess to proceed with liquidation

An eleventh-hour mediation effort failed to result in a deal between the company and the bakers union.

LA tax hike plan set for March ballot *

cityhall2.jpg Today's City Council vote came despite Service Employees International, one of the city's largest public employee unions, coming out late last week against the proposal, which would raise the sales tax in Los Angeles to 9.5 percent

Pricing turkey dinners

thanksgiving.jpg A Bloomberg analysis found Target running a few bucks cheaper than Walmart: $45.48 versus $52.31, based on a basket of 18 items.

Federal judge favored companies where he owned stock

Judges are supposed to recuse themselves when there's a financial conflict, but Manuel Real, a federal district judge who has been reprimanded in the past, apparently issued rulings anyway.

Tuesday morning headlines

HP takes huge charge because of financial irregularities at a company it bought, Best Buy reports big loss, Pasadena City Council agrees to have NFL team at the Rose Bowl (if one comes along), and TV could be sold soon.

Stocks bounce back

Markets don't keep going up or down and so after several weeks of steep declines, the Dow gained 207 points, to 12,795.

Twinkies might be saved after all

Hostess and the bakers union have agreed to mediation, CNBC reports, which means that the maker of Twinkies, Ho Hos and Wonder Bread might not be shutting down - at least not immediately.

Monday morning headlines

Californians feeling more upbeat about the economy, little relief from mortgage settlement involving the major banks, Virgin America trimming flights and canceling orders, and big numbers from Activision.

Peter Liguori to become Tribune Co. CEO

The former TV executive won't be formally named until the parent company of the LAT comes out of bankruptcy protection in the coming weeks.

Snapping up the last Twinkie

twenkies.jpg Well, maybe the last. Hostess says it has received proposals to buy some of the assets, but the cold reality is that businesses cannot survive on nostalgia.

Another dip in state, local jobless rates

Ever so slowly, the numbers are approaching the single digits. Perhaps more importantly, employers added 45,800 jobs to the state rolls in October.

Richard Zanuck's one-bedroom home sells for $20.1 million

zanuck.jpg That's right - one bedroom (though there are two guesthouses, each with an additional bedroom).

Friday morning headlines

Wall Street still struggling, new ideas for averting the fiscal cliff, Hostess moves to liquidate after failing to reach a labor deal, and OC Register owner wants to buy the LAT.

Is Proposition 13 Gov. Brown's next target?

brownpix.JPG A major revamp of California's third rail has been in the cards for years - it's always been a matter of when the politics would be most favorable.

L.A.'s neighborhood court system goes down the drain*

courthouse.jpg What on earth is happening to our judicial system? An improved budget situation in Sacramento appears to be having little or no impact in the courts. It's a civic disgrace.

Report: DirecTV agrees on deal to carry Lakers

An announcement could come as early as this afternoon, reports the LAT. The El Segundo-based satellite service had been balking at the price being asked by Time Warner Cable, which has exclusive rights to the games through its new SportsNet and Deportes channels.

Thursday morning headlines

Huge jump in jobless claims because of Hurricane Sandy, L.A.-area inflation shot up last month because of high gas prices, 10 courthouses could close in L.A. County, including locations in Beverly Hills and West L.A., and Riordan agrees to debate pensions.

Good, bad, good news about next year's state deficit

Projected shortfall is way lower than what California faced earlier this year. If the economy improves and the stock market cooperates, the state could even see a surplus in 2014.

Tribune Co. clearing the final hurdle in bankruptcy

Nearly four years after the parent company of the LAT filed for Chapter 11, the end appears to be in sight. Now what?

Another terrible day for stocks

dow8.jpg What mainly drove down the market is what's been driving it down for several weeks: Concern about Washington's fiscal cliff and the possibility of increases taxes on capital gains.

Forever 21 opens new headquarters in Lincoln Heights*

Forever21Front.jpg Mayor's office is trumpeting the new facility, which will house the company's distribution, logistics, e-commerce, merchandising, and warehouse operations. It seems like an entrepreneurial success story, except...

Obama digs in on higher taxes for the wealthy

obama6.jpg The president seemed to mark his ground by declaring that he would not extend tax cuts at upper levels. Republicans in Congress want the Bush tax cuts extended for everyone.

For those of you who missed it, Lakers lose again

lakers4.jpg That would be DirecTV subscribers who still can't receive Time Warner Cable's SportsNet channel because the satellite company and the cable company still haven't come to terms on a distribution deal.

Wednesday morning headlines

California's cap-and-trade program makes its debut, departure of senior Microsoft executive creates a stir, high deductibles becoming more popular with employers, and Michael Eisner gets a movie deal.

Business breakfast with 'Clean Tech Nation' author

Ron Pernick, author of two books on innovation and the clean-tech business, will be speaking at the next Live Talks Business Forum.

Guy Fieri's new restaurant gets skewered in the NYT

guy.jpg One of the prices of being a TV personality is getting examined a lot closer - and a lot more critically - than the average Joe, or in this case Guy.

Searching for higher rates? Don't look to California banks*

They're even lower than the national average (and those rates were pretty darn low).
cityhall2.jpg The half-cent increase would boost the sales tax in L.A. from 8.75 percent to 9.25 percent. If L.A. voters approve the measure, proceeds will go towards paring the budget deficit.

L.A. home prices, sales shoot up

homesales3.jpg Much of the local market is smoking. It's really the combination of pent-up demand in the $500,000 and up price range, along with very limited supply in the most sought-after locations.

Tuesday morning headlines

Late mortgage payments fall to lowest level in more than three years, City Council to vote on sales tax hike, business owners receive tax breaks after contributing to assessor's campaign, and SEC investigating L.A. money manager.

Housing affordability takes dip in L.A., California

homesale2.jpg Only 42 percent of L.A. buyers could afford to purchase a median priced single-family home ($355,700) in the third quarter, says the California Association of Realtors.

U.S. to be top oil producer by 2017

oildrilling.jpg In fact, the U.S. will become a net oil exporter by 2030, a stunning turnabout from the days of energy dependence.

Monday morning headlines

Market investors concerned about higher taxes on capital gains, young voters helped save Proposition 30, Villaraigosa plans trade mission later this month to South America, and James Bond dominates the box office weekend.

Lockheed fires incoming CEO for having improper relationship

lockheed.jpg Christopher Kubasik was set to start his new job in January. Longtime executive Marillyn Hewson will now become chief executive. .

What effect would sales tax hike have on LA business?

Sales of expensive purchases could fall as much as 3.9 percent if the proposed increase goes through, according to Beacon Economics, though the overall sales drop would be closer to 1.3 percent.

What's really driving U.S. deficit

deficit2.jpg Social Security is expected to increase, but not at an alarming level. Spending on everything else is actually falling. It's health care that's the problem.

How has Space X shaken up the local aerospace business?

spacex6.jpg Elon Musk's company is hiring lots of people (close to 2,000 workers at last check). Still, Space X remains a work in progress - as does the refashioned space business.

Friday morning headlines

Consumer sentiment hits five-year high, Disney meets expectations thanks to ESPN and theme parks, Chief Charlie Beck warns of officer layoffs unless the sales tax is raised, and Michael Jackson's Holmby Hills home is sold.
Readers have been commenting about IBM CEO Virginia Rometty getting a base salary that's lower than what former CEO Louis Gerstner was making in 2000.

Jan Perry talking tough about pension changes

perry.jpg Whether she can gather support among a fragmented electorate remains to be seen, but her speech today was more impressive than anything I've heard in this still-early campaign.

L.A. voters: Are you ready for the next campaign?*

cityhall3.jpg Municipal elections are just around the corner, and they will be a big deal - not just because voters will be selecting a mayor, but because at least one measure to raise taxes is likely to be on the ballot.

The aging of Barack Obama

obama5.jpg Businessweek is out this week with another of its provocative covers, this time a photo illustration of how the job of president can take its toll.

Thursday morning headlines

Wall Street continues to slide, state Democrats appear to have won supermajority in Assembly and Senate, Villaraigosa seeks funding alternatives after Measure J goes down, and another tough day to travel back east.

DirecTV still balking at Laker channel

timewarner2.jpg Or perhaps it's Time Warner Cable balking at what DirecTV has offered to carry the Laker channel. Whatever the case, both sides have yet to reach a deal and that has many thousands of DirecTV customers unhappy.

Boeing cuts back in Socal as part of restructuring

Several business units will be consolidated and some facilities in Seal Beach will be closed as part of the cost-cutting effort within its defense operation.

Markets get whacked in post-election trading

dow7.jpg One kind of uncertainty (the election) was resolved, but it was replaced with other uncertainties. Dow plunged 312 points.

Who was the most accurate pollster?*

"For all the ridicule directed towards pre-election polling, the final poll estimates were not far off from the actual nationwide vote shares," said a Fordham University researcher.

On Measure J transit tax going down

The transit tax extension received almost 65 percent of the vote. It deserves to win passage, period.
munger.jpg The day after most of them went down to defeat, you have to wonder whether they now think it was worth the effort - and the dollars.

Stocks open sharply lower*

So much for the Obama rally. Now that the presidential election has been resolved, investors are focusing their attention on Washington and that dreaded fiscal cliff.

How Prop 30 came back in the final days

prop30a.jpg Credit stepped-up advertising, Gov. Brown's statewide campaigning, and the fact that the tax measure was on the November ballot, when turnout was going to be larger than at any other time of the year.

Could be a long night in Virginia

Polls closed at 4 p.m. L.A. time, but it's likely to be well into the evening before a projection is made.

Dow up 132 points

An Obama rally? Seems unlikely, given his unsteady relations with the financial community, but the Dow is up more than 50 percent since the president took office.

Totaling up the cost to watch sports in L.A.

timewarner2.jpg Operators are paying close to $10 per subscriber per month, an increase of more than 90 percent. And that doesn't including the upcoming Dodger TV deal.

Ontario Airport will lose more flights in 2013

ontario.jpg Airlines have been cutting back, especially since the recession, and a number of second-tier airports are taking serious hits.

Why is IBM's female CEO paid less than her male predecessors?

IBM.jpg Not that $1.5 million isn't a handsome wage (and that's not including bonuses and perks), but it isn't what the guys were making.

Election Day headlines

Bracing for tax hikes no matter who is elected, state regulators consider criminal charges involving an $11 million political contribution, iPad market share takes a dip, and American Suzuki files for bankruptcy and will no longer sell cars in the U.S.

More bad news for videogame publisher THQ

thq.jpg Three high-profile releases have been pushed back next year, forcing the Agoura Hills-based company to raise new capital in an effort to keep going.
luxe.jpg Complimentary valet parking and hors d'oeuvres throughout the day - sure beats an "I Voted" sticker.
Of the 30 most recent polls in the state, Romney leads in just two - and both surveys come from Republican-leaning groups.

Money used to oppose Brown's Prop 30 tied to Koch brothers

The California courts required an Arizona group to turn over donor information to the state's Fair Political Practices Commission.

Monday morning headlines

Arizona group turns over donor records, L.A. area gas prices nearing $4, Time Warner Cable cuts deal with Cox Cable on carrying Laker games, and first Dreamliner lands at LAX.

Surprise - stocks fall despite employment report

The Dow dropped 139 points - roughly what it gained on Thursday and another sign that investors remain conflicted on the short-term direction of the economy.

UCLA honor goes to Pepsico CEO

pepsi.jpg Indra Nooyi will receive this year's John Wooden Global Leadership Award from the Anderson School of Management.

The delusion behind Measure J tells you a lot about L.A.

traffic.jpg What's needed are shorter-term strategies for incrementally improving rush-hour flows. Of course who wants to cut commuter times by a measly three or four minutes?

Friday morning headlines

L.A. gas prices plunge 60 cents a gallon from all-time high, San Onofre shutdown costs utility more than $300 million, nearly six of 10 California homes for sale are receiving multiple offers, and fading support for Prop 32.

Strong jobs report - and for the right reasons

jobless4.jpg Beyond all the predictable rhetoric, not much has changed: The economy continues to grow at a relatively modest pace - and for reasons that go way beyond presidential politics.

AEG settles dispute over downtown stadium

farmers4.jpg This one involved the Play Fair at Farmers Field Coalition, which wanted to invalidate a state law that limits legal challenges against the facility.

What does Sandy mean for the overall economy?

sandy5.jpg You don't want to count on natural disasters to provide an economic stimulus. Yes, there will be some upside as victims are forced to purchase furniture, clothes, and cars. But there's a downside as well.

Chances of Obama win edging higher on trading markets

Intrade gives the president a 67 percent probability of being reelected, up several points from last week, while British-based Betfair is running just under 75 percent.

Space X to stay in Hawthorne through 2022

spacex6.jpg The Elon Musk company has been leasing any and all available property close to its headquarters, formerly the building where Northrop made fuselages for the Boeing 747

Thursday morning headlines

Retailers report strong sales in October, consumer confidence at highest level since early 2008, airline schedules to NY returning to normal, and Prop 30 is "tantalizingly close" to passage.