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.
January 2013
Well, nicer anyway. Standard & Poor's upgraded California's general obligation bond rating from A-minus to A, which is still two grades below top notch but certainly an improvement from the last past few years.

Time Warner Cable defends huge Dodger deal

CEO Glenn Britt tried to deflect any criticism of hosting a new Dodgers channel - and along with it higher cable fees - by emphasizing the potential cost savings of cutting a long-term agreement.

Traders favoring 'Argo' for best picture

argo.jpg Looks like a two-movie race, with the Ben Affleck thriller given a 59.4 percent chance of taking home the Oscar, according to the online trading site Intrade, and Steven Spielberg's "Lincoln" running at only 34.7 percent. It falls sharply after that.
The City Controller claims that as mayor she would be on top of the city's management challenges because her office has identified $160 million in "waste, fraud and abuse." But even if that number were accurate, it doesn't address the city's systemic fiscal problems.
Stocks actually fell today, but that still puts the Dow within 200 or so points of it's all-time high in October 2007. But what about now? Is the market about to peak out or is this just the start of an extended bull market?

Big bump in sales of California million-dollar homes

Nearly 27,000 of them sold in 2012, according to Dataquick, a 27 percent increase over a year earlier - and the highest sales total in this category since 2007.

What the hell happened to the economy?

Expansions are not supposed to contract. It makes people wonder about whether to hire or take vacations or buy cars. Not good. So this morning's headline number on fourth-quarter gross domestic product is bound to raise a few questions.

Here's how to map L.A.'s separation of classes

class.jpg The breakdowns for creative, service and working classes are not especially surprising, but the map's shadings offer a dramatic relief to what's become one of the most polarized regions of the country.

Slow jamming the debt news

Funny stuff from Jimmy Fallon, Brian Williams, and The Roots. Why can't Congress be this entertaining?

So what would happen if Villaraigosa left office early?*

MayorAntonioVillaraigosa.jpg Not to jump the gun, but in the event that the mayor is nominated to be Transportation Secretary (Ray LaHood resigned this morning), the City Council would almost certainly fill the vacancy by appointment. Here's the relevant charter section.
Seems as if the bean counters took control of the engineers (never a good thing), and the result was too much outsourcing.

Garcetti, Greuel keep talking, but say nothing

cityhall3.jpg Boy, these two are BORING - and I'm afraid one of them is almost certain to be the next mayor. It's a shame, really, because in real life they're both pleasant, interested people who obviously care about the future of the city. But their campaign strategies focus on doing no harm rather than on how they would lead L.A.
barnes-noble-westside.jpg CEO of the struggling bookstore chain expects to close another 200 or so locations over the next decade. That would bring down the total to between 450 and 500 stores. Right now, only three stores are on the Westside.

Unexpected choice to run Warner Bros. Entertainment

Kevin Tsujihara, president of the home entertainment side and a key player in the company's digital strategy, apparently impressed Time Warner CEO Jeff Bewkes a lot more than many in Hollywood had suspected.

Dodgers formally announce new channel

Time Warner Cable will carry the all-Dodgers channel, to be called SportsNet LA, and become the main distributor in a long-term deal that is worth about $7 billion.

Does Wall Street finally have believers?

Stocks finished higher again, with the Dow up 67 points, to 13,779 - inching ever closer to the all-time high of 14,164 in October 2007. Those numbers were tempered, though, with disappointing earnings from Apple.

Big bump in L.A. tourism is good news - sort of

More visitors means more jobs, but the not such good news is the wage level for many of these workers. This is your have- and have-not economy at play.

California foreclosures at 6-year low

Another reminder to be wary of know-it-all analysts, some of whom had been predicting wave-upon-wave of foreclosures.

Southwest to take over all of Terminal 1

southwest2.jpg The airline already has 12 of the 15 gates, but with US Air moving to Terminal 3 it's in a position to expand its service out of LAX.

Dodgers strike deal with Time Warner Cable

But TWC will not own the TV rights, Bloomberg is reporting. The games will be carried on a new regional sports network to be bankrolled by Guggenheim Partners, which owns the Dodgers.

CAA hosts racy pole-dancing soiree at Sundance

The performers were flown in from Vegas, reports THR, and apparently things got a little out of hand (well, for some), with two dancers performing a simulated sex act and another using a strapped-on penis.

Dodger owners looking for their own channel?

dodgers-kasten-right-lao.jpg The idea is for a partnership that would give the Dodgers a channel separate from SportsNet, which TWC launched last year as a vehicle for the Lakers.

Boeing's troubles draw attention to 787 outsourcing

boeing3.jpg Did you know that more than 30 percent of the plane's components came from overseas suppliers, compared with 5 percent with the Boeing 747?
lance.jpg Not that ratings were bad. By the usual standards of Winfrey's struggling OWN channel, they were stupendous. But why wait three days to air the interview?

Sour jobs report

It's doubtful that California's economy has taken some fundamental nosedive (the national picture remains good but not great). But fragile recoveries like this one often experience hiccups and inconsistency.

Armstrong saga gets sleazier by the day

armstrong.jpg The guy who is supposed to be enforcing anti-doping rules is being advised by the same money management firm that's at the center of the doping scandal.

FAA grounds U.S.-operated 787s

So much for United's L.A.-to-Tokyo run, at least for now. The government wants to figure out why Boeing's Dreamliner is running into electrical problems that have resulted in several recent incidents.

Phew! Another 'sky is falling' economic moment averted

Remember how December was supposed to have been a disaster for the economy because everyone was so uptight about the fiscal cliff? Turns out that things weren't so bad after all.
At first news stories said it was a Russian billionaire. Then a local website said it was Oakley eyeglass founder James Jannard. At this point, nobody seems to know.
boeing3.jpg The airline has not announced any changes in its 787 schedules - despite the decision by Japan's two biggest carriers to ground their Boeing Dreamliners.

Why record tourist year is not as good as it sounds

tourism.jpg The average annual wage in the hospitality and tourism industry is only around $35,000. That ranks dead last among the 14 largest industry clusters.

L.A.-area housing market closes out year on a high note

With inventory levels still low, buyers are swooping in whenever a decent property is listed. In my neighborhood it's a zoo - bidding wars have become fierce.

San Bernardino's budget troubles turn ugly

This is what happens when your city gets into such a financial pinch that cops have to be laid off. Having filed for bankruptcy, San Bernardino's homicide rate jumped more than 50 percent in 2012.

Brown's misleading budget surplus

brown3.jpg The state's fiscal situation, while improved because of a brighter economy, remains pretty beaten up.
lindsay.jpg Just hire Lindsay Lohan and then allow a writer for the NYT magazine to follow everybody around during production of a sex-filled movie that's being financed on pennies.

Albertsons gets reunited

albertsons.jpg This is a complicated deal involving different investment groups and financing arrangements, but the transaction, boiled down, is a reminder of why traditional supermarket chains have been struggling so much.
sheen2.jpg Does he really want to be aligned with people who, in many ways, are responsible for what led to the bulging deficit?

Battle of the hedge funds centers on L.A.'s Herbalife*

herbalife2.jpg This is pretty intramural stuff for those of us who thankfully don't have stakes in the billion-dollar-plus distributor of nutritional products. Still, it illustrates how two high profile hedge fund managers can overwhelm a stock.

Producers opting for soundstages over streets

star-waggons-parked-lao.jpg A drop in TV dramas shooting on location last year stems in part from more shooting at local soundstages and back-lots.

Already bad week just got worse for Boeing's 787

boeing3.jpg This time it was about 40 gallons of fuel leaking from a Japan Airlines 787 that was preparing to take off from Boston to Tokyo

Driverless cars are a hit at Consumer Electronics Show

The basic technology has been taking shape, but applications remain a work in progress. Much of the debate centers on whether these cars would operate with complete autonomy or require some human involvement.

Worst companies for customer service

What do they have in common? Limited, if any, competition. It makes a difference.

Hazards of being buddies with your stock broker

Even after all the high-profile financial scams in recent years, investors are still willing to believe what they want to believe.

Sigh - not much daring in mayoral candidates' traffic ideas

There's some exciting stuff on the transit horizon and yet all we're getting from this crowd is warmed-over hash. It's a missed opportunity that is playing out before our eyes.

Impact of government job losses on rest of economy

cityhall3.jpg You don't hear much about this because elected officials don't want to make it appear as if they're incapable of handling fiscal problems (even if it's true).

Big day at LAX for the Boeing 787

boeing3.jpg United is banking heavily on the twin-engine Dreamliner, which is built with lighter-weight composite materials and consumes 20 percent less fuel than a similarly-sized aircraft.
It's really a jumble, depending on which gauge you're using. And more numbers are still to come.

How does Hollywood manage to keep a $430 million tax break?

The entertainment industry has lots of friends on Capitol Hill - Democrats and Republicans - who are willing to peddle this terrible piece of policy-making even as other tax breaks rightfully go by the boards. Who said pork was passe?

Dow gains 308 points

That's coupled with a 166-point gain on New Year's Eve - both fueled by a last-minute budget compromise.

A new year, a new schedule

This being the first day back (sort of) after the holiday break, I thought it would be a good time to let you know of some changes in my L.A. Observed routine.
Turn off cable news and take a breath - the truth is most folks in this country have jobs and lead a fairly comfortable existence that will be getting even more comfortable as the recovery takes hold.

NFL owners showing no signs of interest in moving to L.A.

The period between January 1 and February 15 is when owners normally indicate their plans to sell or relocate their franchises - a key six-week stretch for any team moving to L.A.

Stocks open sharply higher

Perhaps this is a sigh-of-relief rally - that finally there were enough Democrats and Republicans in the House to beat back the numbskulls who were about blow up the deal.