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.
February 2013
mason.jpg Groupon's ousted CEO Andrew Mason is receiving kudos for his willingness to truthfully describe what happened to him. But he's a special case.
jack2.jpg Once a studio receives financing and gives the production go-ahead, it's hard to pull back - even when similar movies do lackluster business. They're stuck.
BWcover.jpg Maybe for the same reason that it's taken nearly a full week for media watchers to make a stink over it.

Dow nearing record high*

It's only a number - 14,164 - but breaking the previous high in October 2007 is another validation of how far the market has come after its 2008-2009 tumble.

The slow, sad decline of JC Penney

penney.jpg Business Insider's Henry Blodget says the company might have just suffered the worst quarter in retail history, and he has a point. Mass market chain stores of this size just don't post those sorts of declines (at least the ones that stay in business).

Guggenheim shroud unveiled a bit in Fortune report

fortune3.jpg An up-close look at the firm's top players, along with news that the SEC has been investigating Michael Milken's dealings with Guggenheim and whether they violate the former junk bond king's ban from the securities industry. Milken is a Guggenheim client.
sequester.jpg But NY Mayor Michael Bloomberg promises that come Monday "we'll be able to police the streets. There will be a fire engine that responds, an ambulance, our teachers will be in front of the classroom." Same thing in L.A.

L.A. electric car company Coda looks like it's barely breathing

coda.jpg Well, this is embarrassing for City Councilmen Eric Garcetti and Herb Wesson, along with a list of high-powered investors that includes former Treasury Secretary Hank Paulson and Limited Brands CEO Les Wexner.

Here's why efforts to pare back labor deals are doomed

cops2.jpg Campaign contributions from union groups point to the near impossibility of L.A. being able to reduce pension and health care benefits to levels where they don't eat into the city budget - and with it staff and services.

LA gas prices going down - kind of

Thumbnail image for gasprices5.jpg Yeah, a whole one-tenth of one cent - don't spend it all in one place. Still, the slight drop finally ends many days of increases and could signal a legitimate pullback (though prices rarely go down as quickly as they go up). An average gallon of regular in the L.A. area is $4.324, according to the Auto Club, up more than 50 cents from a month ago.

Hearst/Davies estate for lease: Only $600,000 per month

hearst2.jpg That's $7.2 million annualized, which seems a little nutty even by L.A. standards.

Biggest post-Oscar myth: More adult fare

movies.jpg The story pops up from time to time, often after awards season, and it suggests that the relative success of a few adult-oriented features - "Argo," "Zero Dark Thirty," "Lincoln," are examples this year - might somehow alter Hollywood's focus on the under-40 crowd. Don't bet on it.

CNBC: Tribune Co. prepares to sell newspapers

lat2.jpg This doesn't guarantee that the LAT or any of Tribune's other dailies will be purchased. But it does indicate that the company's new board is looking to unload the publishing side of the operation.
umami.jpg Taking a local operation nationwide is fraught with risk, whether it's finding the right location or maintaining quality control. We'll see what happens here.

Case-Shiller picks up on higher L.A. home prices

The widely followed index runs more than a month behind Dataquick and other housing researchers, but it's finally showing what many of us have seen: A substantial increase in housing prices, fueled by limited inventory, a drop in foreclosures, and lots of all-cash deals.

Providing second-screen play-by-play of Oscars

scott.jpg The webcast reminded me a little of how local TV stations used to cover live events in the 50s and 60s: A couple of white guys yammering in between long periods of dead air.

Stocks take a tumble in last hour

What has been a mostly up-and-down month is finishing on the down side, perhaps the culmination of higher gas prices, Washington ineptitude, and now Europe.

Bob Hope's Palm Springs estate on the block

hope.jpg The 23,000-square-foot home was designed by California Modernist architect John Lautner and built to resemble a volcano.

Work-at-home prohibition riles Yahoo workers

yahoo.jpg Watch those company parking lots! CEO Marissa Mayer was noticing that they were slow to fill up in the morning and quick to empty in the afternoon - an alarming pattern in the the workaholic world of Silicon Valley.

California economy isn't hugely reliant on federal dollars

Not that long-lasting funding cuts wouldn't have some effect in certain pockets of the state - just that other pockets are likely to get along reasonable well.

Here's why budget-cutting efforts are hopeless

pewpoll.jpg Forget about blaming Congress or Obama - the reason Washington can't settle on a spending reduction plan is that Americans pretty much like things the way they are, at least according to a recent Pew Research Center poll.

Nate Silver predicts the Oscars

bestdirector.jpg It's the bane of any prognosticator: No matter how often you're right, there's always another election/game/award around the corner that could easily upend your record.

Will air travel take the biggest thumping from sequestration?

airportsecurity.jpg The two most vulnerable areas, at least in theory, are security screening and air traffic control. But no one really knows how it might shake out. Seems that Washington can't even stage a full-blown fiscal emergency without mass confusion.

L.A. gas prices unlikely to keep rising much longer

gasprices4.jpg They've been going up all week, but only by penny or half-penny increments each day and that usually signals a run-up is about to peak out.

Nielsen catching up to TV-watching reality

nielsen.jpg That would be counting households with some sort of broadband connection to their television. The networks have been after Nielsen to add these viewers, who are being lost in the traditional measuring methods.

Abusing wheelchair service at LAX

wheelchair2.jpg When someone in high heels strolls into the terminal and asks for assistance, you know something's not quite right.

Oscar ad prices highest in 5 years - and it's a sellout

oscarads.jpg Each 30-second spot is going for up to $1.8 million as advertisers look to Oscar night as a kinder, gentler version of the Super Bowl.

How worried should Californians be about sequestration?

sequest.jpg The answer is..... I'm thinking, I'm thinking. Elected officials say it will be devastating. Economists say it will noticeably dampen the recovery. The rest of us are scratching our heads.

Sony finally introduces PlayStation 4*

With so many alternatives, the updated PlayStation, however it's received by the gaming cognescenti, will have to convince consumers that it's worth spending several hundred dollars.

Readers respond to proposed bike lanes*

bikers.jpg A number of comments have come my way on the city's plan to remove a traffic lane on portions of Westwood Boulevard and Sepulveda Boulevard and add a bike lane.

Pre-Oscar parties provide not-so-little economic boost

oscars.jpg We know all about the glamorous soirees during and after the ceremonies - as well as numerous events on Saturday - but the Oscar hubbub is happening all this week, with several dozen functions.

Bank lending is up. No, it's not. Yes, it is. No. Yes. No...

lending.jpg Here's one of the thorniest aspects of the recovery - and one of the least understood. Whatever the explanation, the economy is not about to shift into higher gear unless bankers become more comfortable with the current environment.

The good and bad news about 'Downton Abbey' numbers

downton.jpg The season three finale drew huge ratings. But quick, can you name the local station that carried "Downton"? That's a problem.

Good times for L.A. bikers, but what about the rest of us?

bikers.jpg The city is being divided again - this time between bikers in search of more space and motorists looking to hold onto what little space they have. I'm on the motorists' side.

'Argo' overwhelming pick to win Best Picture

zero.jpg Academy members have until 5 p.m. today to cast their votes, but the prevailing view is that the Ben Affleck-directed thriller has all but locked up the top prize.

L.A. gas prices keep inching higher

Thumbnail image for gas-prices-mobil-lao.jpg But the penny-a-day increases would suggest that prices might be peaking out. Of course, that still leaves an average gallon of regular at $4.298.
The latest poll, taken by SurveyUSA for KABC, shows City Councilman Eric Garcetti at 26 percent and City Controller Wendy Greuel at 23 percent. After that it's Republican Kevin James (14 percent.)

How Jerry Buss changed the face of sports in LA*

buss.jpg He made Los Angeles a legitimate NBA town and helped turn pro basketball into a multi-billion dollar industry.

Is it just me or is this Herbalife stock story a real snooze?*

herbalife2.jpg It could go out of business tomorrow and most of us wouldn't even notice. Its stock is being toyed with by a handful of billionaire investors who might as well be playing Monopoly. Why should we care?
surf.jpg Over the years, anti-tax crusaders have been desperate to prove that California's wealthiest residents, along with the companies they own, are leaving the state in large numbers because the cost of doing business is just too high. Not true

The big picture on movie theaters

theaterpix.jpg It's an aging industry that's been run more or less the same way for generations, and it's competing with a host of technologies and distribution channels that make it unnecessary to schlep to the multiplex at a set time. But strangely it's hanging in there.

Reminder of why eating out on Valentine's Day is a dumb idea

valentine.jpg We stopped going out on Valentine's Day years ago. I think tonight it's burritos from the food truck near our house. Anything but a restaurant.

Microsoft opens production studio in Santa Monica

microsoft2.jpg Another stepped-up effort by the software giant to develop programming for its Xbox Live gaming and streaming systems. Microsoft is also taking space near Playa Vista.

The women of L.A. - well, kinda, sorta

Here's an un-Valentine's Day ode from comedian DJ Lubel that's been getting a lot of Web attention.

Sam Nazarian using Asian money to bankroll Sahara makeover

sahara.jpg The L.A. nightclub and hotel operator bought the Vegas property in 2007, but he wasn't able to secure financing for a full-scale redevelopment. The answer came from a government program for overseas investors.
americanair3.jpg That's to be expected - combining legacy carriers rarely amounts to a great deal for travelers. Actually, it could turn out to be downright terrible for certain routes and certain fares (though probably not for L.A.).

Report: Time Warner in talks to sell People, other titles*

people.jpg As envisioned, the Time Inc. publishing unit would be rolled into an independent company and sold off. Time and SI would be kept.

Higher-end housing rally gains steam in Socal

It's not a terrific market for folks wanting to finance or deliberate for more than five minutes, which leaves out a good portion of potential homebuyers and raises concerns about how sustainable the price run-ups might be.
cityhall3.jpg The editorial will be good news to the mayoral candidates, and mostly likely it will help kill the measure next month. But that doesn't mean the city's fiscal problems will magically disappear.

Comcast acquires GE's remaining stake in NBCUniversal*

This was expected to happen, but not for several more years. The media giant is paying $16.7 billion for GE's 49 percent position, with the sale expected to be completed by the end of next month.

Feeling old?

Here's a tweet that might set you back.

Sorting out the financial crisis in special effects

R&H.jpg It really doesn't make any sense considering the contributions these production companies play in today's souped-up blockbusters. But this week's bankruptcy filing by Rhythm & Hues in El Segundo is just the latest indication of an industry in turmoil.
Back in November, the union's political action committee recommended opposing the March ballot measure, which would push the sales tax from 9 percent to 9.5 percent.

Economics behind the Dorner case

It's only been a few days, but If the cops are protecting 50 families 24/7, and if it takes 5.5 officers to protect each family, you're looking at 275 officers, and that doesn't count investigators trying to track down the guy.

Tesla's Elon Musk not happy with NYT road test*

tesla2.jpg The Model S sedan has been getting stupendous reviews - and for good reason. But cold temperatures apparently cause the electric battery to lose juice at a faster-than-advertised rate

Ozzie and Harriet house is up for sale

ozzie.jpg For TV watchers of a certain age, the Hollywood Hills home is the familiar backdrop of the long-running series (1952-66) featuring the Nelson family: Ozzie, Harriet, David, and Ricky.

Will the Grammys ever air live on the West Coast?

grammy.jpg The network considers the Grammys to be as much of an entertainment show as an event-like awards show, and it figures entertainment is best run in prime time.

L.A.'s Snapchat suddenly discovered by major media

snap.gif The young company was all but laughed at by the venture capital guys until it became clear last year that the idea was becoming hugely popular, especially at L.A. high schools.

Why were analysts so wrong about Apple stock?

apple9.jpg There were a few contrarians last fall, but they were drowned out by the cheers, as often happens in the Wall Street world of bullish group-speak. In other words, analysts are just like you and me: vulnerable ninnies.

When will flights resume out of the Northeast?

jetblue2.jpg They're guessing that NY flight operations could be back sometime on Saturday, but that's not the same as a normal schedule. Boston will likely stay closed until at least Sunday.
building.jpg For Korean Air, it's an obvious (if very expensive) way of becoming an L.A. icon. It will be cool to look at,of course, and it'll enhance the downtown skyline, but does it make sense?

L.A., NY well down list of world's most expensive cities

laview2.jpg Might not surprise you that Tokyo is in the top spot, and that places like Sydney, Oslo, Paris and Zurich are not far behind. What does seem surprising is L.A. being tied with NY as the most expensive city in the U.S.

Mayoral candidates waffle on budget questions

Thumbnail image for cityhall2.jpg During still another mayoral debate, a tenacious Austin Beutner (who knew?) kept asking the candidates for specific ways of closing the city's $1-billion budget deficit - and he got the usual double-talk that has become the hallmark of this very beige campaign.

Bel-Air vineyard up for sale

moraga.jpg The property runs along the western portion of Bel-Air, within walking distance of the two-block commercial strip on Moraga - right off the San Diego Freeway

Fun (and not so fun) factoids to amaze your friends

Did you realize that as of last month there were 16 people left in the world who were born in the 1800s? Or that If you add up annual profits of the entire airline industry going back to 1948, you get a loss of $32 billion?

Flynt considers selling Hustler building in Beverly Hills

flynt.jpg Truly one of the uglier structures you'll come across: black, bulbous, and completely out of proportion with its surroundings. Old-timers might remember that the Wilshire and La Cienega building was formerly a branch of Great Western Savings.

If American merges with US Air, what does it mean for LAX?

americanair.jpg The combining of two big carriers will sometimes means fewer flights and higher fares, although the impact at Los Angeles International might be more limited than at other locations
Where did he get the idea that plastic would be molded into plates and cups right before serving - and then melted down after the meal, to be molded for the next meal? Yikes!

Reports: Sizable layoffs expected at DreamWorks Animation

dreamworks.jpg The decision to release just two films this year instead of three means all sorts of operating adjustments that could result in cutting as many as 500 positions at the Glendale-based studio.

The Silicon Beach effect

silicon.jpg The moniker is silly and boosterish, but there's no denying the growth of media and technology businesses in Santa Monica, Venice, El Segundo and Culver City.

Want to buy a house? Better bring boatloads of cash

Mortgages? Meh! More California homes were bought with cash in 2012 than any previous year - and by a lot. In L.A. County, one out of four sales were in cash.

Long, slow slog to get anything done at LAX

runway.jpg Even assuming no one challenges the changes in court (and you can be sure someone will), the process is certain to drag out several more years - and that's before they break ground. It could easily be a decade or more before the runway gets moved if the runway gets moved.
Attention must be paid to a candidate who proposes to hire 2,000 police officers and 1,000 firefighters - and who doesn't have a coherent plan on how to pay for it.

Why weren't more people in SF watching the Super Bowl?

sf.jpg The Bay Area, including SF, San Jose and Oakland, is the nation's sixth-largest TV market and yet it finished 28th among Nielsen's 56 local metered markets. Baltimore was number one. So what gives?

More shameless pandering from Greuel

wendy.jpg L.A.'s City Controller continues to be the most disappointing candidate in the mayor's race. In desperately seeking the support of public unions, she is exhibiting zero backbone or vision - just obnoxious brown-nosing.

In-N-Out owner is nation's youngest woman billionaire

innout2.jpg She's 30-year-old Lynsi Torres, who with little formal management training and no college degree, took control of the iconic burger chain after several family deaths.
broad2.jpg If L.A.'s billionaire philanthropist had to do it all over again, he would spend more time with his sons. He'd also improve on his penmanship. For a guy we all think we know pretty well, he offers some revealing snippets.

Stocks down sharply - maybe the party got too crowded

barrons.jpg Too much talk of bullish times is often seen as a bearish indicator- that the market has, in effect, peaked out. Dow was down 129 points.

Disney moving out of Burbank's Alameda office tower

The Mouse House will relocate its people to the Burbank studio lot and to various properties in Glendale. The move will be complete by the time Disney's lease is up at the end of next March

Why gas prices are on the rise

The increases aren't anywhere near as sharp as what we saw last October, but the recent quarter-a-gallon bump is getting some attention.
The Ravens victory over the 49ers set a record for highest overnight ratings in Super Bowl history, according to preliminary Nielsen numbers.

Nate Silver predicts a 49ers win

This is dangerous terrain for a guy who got it so right in last November's election. I mean, what if he's wrong?

Weird tales of selling homes to the super-rich

jade.jpg Agent Jade Mills has seen a lot of excess and, well, strangeness, and she shares a few of her experiences with Curbed L.A.

Report: As bids for AEG are prepared, new names emerge

Westfield, the Australian-based shopping center giant and Steve Mnuchin, chief executive of Pasadena-based One West Bank, are taking a look at Philip Anschutz's sports and entertainment empire.

Dow tops 14,000

Sure, it's only a big, round number, but considering how far the market has come in three years (6547 on March 9, 2009), it's hard not to take note.

How the jobless report has turned ho-hum

A single government report is only a snapshot - a fuzzy one at that. January's results more or less confirm what we've been seeing for many months: An economy that is getting better, gradually.