Guess Wall Street is signing onto the warnings being delivered by U.S. automakers. The Dow was down more than 400 points. From the NYT:

"It’s painful,” said Howard Silverblatt, senior index analyst at Standard & Poor’s. “A lot of people have pulled a lot of cash out. They’re sitting on the side. It’s all I hear all day: ‘Where can I hide?’”

So says GM CEO Rick Wagoner, who told lawmakers today that rather than trying to reorganize the company, which is what usually happens in a bankruptcy filing, there would be no choice but to liquidate. As a result, Wagoner added, GM has "concluded it should put virtually all effort into avoiding" bankruptcy and hasn't worked out a detailed contingency plan. Ford CEO Alan Mulally said much the same thing. Sounds like an ultimatum, but the question is how seriously Congress should take the threat? From the WSJ:

Mr. Wagoner said in prepared remarks that if "domestic industry were allowed to fail, the societal costs would be catastrophic." He joined the chief executives of his Detroit rivals in pleading for $25 billion in low-cost "bridge" loans to help the companies weather the economic downturn. The money would be on top of the $25 billion loan package Congress approved this fall to help the auto makers modernize plants.

There's a lot about this bailout request that, well, stinks. Liquidation? I mean, shouldn't there be efforts at restructuring or merger? And what’s so magical about the $25 billion being sought? It’s just another number. Best not to jump to conclusions - as reported by the NYT, the oft-cited statistic about the industry supporting one in 10 jobs overestimates the effect a collapse of one or more carmakers would have on the economy.

The figure appears to come from a 2003 study conducted by the Center for Automotive Research on the “economic contributions of the motor vehicle to the U.S. economy, to a multitude of U.S. industries in retail, manufacturing and service sectors, and to individual Americans.” The center is a nonprofit research organization with ties to labor and government. The study was commissioned by the Alliance of Automobile Manufacturers, an industry group.

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The study has two drawbacks in addressing the question of how many jobs are at risk if the Detroit automakers go bankrupt. First, the study uses data from 1998 to 2001, and the industry has changed significantly since then. Employment in the motor vehicles and parts-manufacturing sector has fallen, for example. Second, the auto-related jobs covered in the report include more than those dependent on the Detroit automakers; they are related to cars sold by any manufacturer in the American market. In other words, the loss of a single United States car company would not necessarily dissolve all those jobs that the entire auto industry supports.

Not helping matters are Democrats in the House and Senate who seem intent on turning the bailout plan into a political issue instead of an economic one. (Barney Frank is sounding more and more like a hack.) This could be Obama's first serious misstep.

The Pasadena online dating service has reached a settlement with the New Jersey AG's Office over a discrimination lawsuit (the company faces a similar claim in California). The upshot is that eHarmony will launch a same-sex matching service called Compatible Partners, which will be marketed in gay and lesbian media outlets. Users of eHarmony.com will not be matched with users of the new site. From the company's FAQ press release (via Law Blog):

--eHarmony, Inc. will start a global, online same-sex matching service called Compatible Partners by March 31, 2009. Users will be able to navigate to it from eHarmony.com.

--Registration on the Compatible Partners site will be free for the first 10,000 users registering within one year of its launch. After that time, subscription pricing for the new site will be equal to that for eHarmony.com.

--eHarmony, Inc. will market the new site in gay and lesbian media outlets.

--The Compatible Partners site will have a statement posted to inform members that its Compatibility Matching System™ is solely based on research involving married heterosexual couples.

--The settlement makes clear that eHarmony, Inc. has not been found in violation of the law.

--eHarmony, Inc. will pay $50,000 to the New Jersey Attorney General's Office to cover administrative expenses and $5,000 to the original plaintiff who brought the case.

This one is likely to get lots of attention. Already among the comments on the Law Blog post:

-- I am all for equal rights and the rights of all people to express themselves however they want (as long as it doesnt get on me), but this is outrageous. The effect of this decision is that companies now have to create businesses where they have no expertise and could be forced to lose their money. eHarmony should look for better lawyers.

--I’m a gay liberal Dem and think this is just outrageous! If a private company wants to discriminate, it should be free to do so. Forcing companies like eharmony to provide services to gays only lends credence to the ridiculous arguments Christianists make that they can be sued for their religious beliefs. Eharmony is a private organization and should be able to provide services to whomever it chooses. Just outrageous.

--So does this mean that all of the gay dating sites must now cater to straight couples?

--Will psychologists with practices specializing in marriage counseling now be forced to counsel same-sex couples?

They're sitting right next to the Port of Long Beach - thousands of Toyotas, Nissans and Mercedes with no place to go because there's so little demand. There are so many unwanted cars that the automakers have asked to lease space from the port. "This is one way to look at the economy," port spokesman Art Wong told the NYT. "And it scares you to death." Cars keep coming in because can take months to adjust to changes in demand.

The inventory glut in Long Beach is not limited to imported cars. There has also been a sharp drop in demand for the port’s single largest export: recycled cardboard and paper products. This material typically goes to China, where it is used to make boxes for new electronics and other products that are sent back to the United States. But Chinese factories reacting to sharply falling demand are slowing production, so they need less cardboard. Tons of paper are piling up recycling businesses around the port, the detritus of economies on hold.

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In the 150-acre terminal where Toyotas are unloaded, there is a sea of Corollas, Camrys and RAV4s. The mere presence of so many cars is not unusual, given that Toyota brings in 250,000 cars a year in biweekly shipments. But in a sign that something is amiss, dozens of tractor-trailers that transport new cars to dealers sat empty last week amid the rows of Toyotas. Kurt Golledge, 48, was one of just two truckers loading his green, 75-foot-long hauler with cars last week. Mr. Golledge said eight of his colleagues were laid off this month because Toyota dealers did not want more deliveries. “I was dropping cars in Henderson, Nev., about a month ago and the dealer told me: ‘Take ’em somewhere else and dump ’em,’ ” said Mr. Golledge, who works for a company called Allied Systems. “All the dealers are telling us the same thing.”

I refer to hedge fund billionaire John Paulson, who threw a little bash at NY's Metropolitan Club the other night to celebrate how much money his firm has made by betting against subprime mortgages. It proved to be a very smart bet – we’re talking billions of dollars. But is this the sort of success that's really worth cheering? From DealBook:

The soiree was held in the cozily candlelit dining room of the club, where Mr. Paulson and his firm, Paulson & Company, feted their funds’ good fortune and outlined their next steps amid the market turmoil. And while the institutional investors listened to Mr. Paulson and former Federal Reserve Chairman Alan Greenspan, a senior adviser to the firm, they also enjoyed choice wine pairings for their dinner. (Bottles of 1999 Chateau Lafite-Rothschild, anyone?)

Despite the chilliness of the November evening — and the slashing of bonuses for top Goldman Sachs executives — the crowd at the Metropolitan Club betrayed no signs of the financial distress. The din that spilled from the dining room into the marbled-and-gilt main chamber was filled with laughter. Mr. Greenspan spoke while guests dined on a three-course meal –preceded, of course, by a cocktail reception featuring Krug Grand Cuvee champagne and 2006 Chassagne-Montrachet from Domaine Marc Morey.

Prices plummet: Well, at least we don't have to worry about inflation. October consumer prices fell by the largest amount in 61 years, much of it from those plunging gas prices. Even excluding energy, core consumer prices dropped for the first time in more than a quarter century. Of course, the new problem might be deflation. From Bloomberg:

Deflation could worsen what some economists already call the deepest recession in decades, by making debts harder to pay off and countering the impact of Fed rate cuts. "We are moving into an environment where prices are falling across the board," David Resler, chief economist at Nomura Securities International Inc. in New York, said in an interview with Bloomberg Television. ``That is going to continue. Deflation is spreading across the economy.''

Home for the holidays: Look for Thanksgiving air travel to drop by 10 percent from a year ago, leading to the unusual circumstance of holiday fare cuts. Overall travel is expected to fall for the first time in six years. (LAT)

MOCA in trouble: The Museum of Contemporary Art, which has been draining its reserves to pay operating expenses, is at the point where there's talk of merging with another institution. From the LAT:

Unlike the Los Angeles County Museum of Art, which is partly controlled by the county, MOCA receives minimal government funding. Its annual budget has grown to exceed $20 million, but it relies on donors to pay about 80% of its expenses. When the gifts have fallen short, as they have more often than not during Strick's nine-year tenure, the museum has gone into its savings.

Auto show opens: The annual conclave at L.A. Convention Center is getting lots more attention than usual because of all the bankruptcy/bailout talk. GM and Chrysler have sharply scaled back their involvement while most of the show talk centers on low sales and massive financial losses. From MSNBC:

Aside from the financial considerations, the Big Three’s executives are likely to keep their heads down in Los Angeles, given the ongoing debate in the Senate and the state of crisis facing the industry, said Rebecca Lindland, an automotive analyst with consultancy IHS Global Insight. “It’s really hard to throw a party when you’re dying, and of course it’s not really appropriate” said Lindland. “These companies are in the throes of throes of chemotherapy right now, so they need to walk a fine line between being excited about new products and respecting the very difficult circumstances they find themselves in.”

Mitt Romney on auto bailout: The former Republican presidential candidate would rather see tighter pay for unionized workers and top management thrown out. In a NYT oped, he also urges the companies to be better about investing for the future.

If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

New date for "Soloist": The long-delayed story of a homeless musician on L.A.'s Skid Row will open April 24 instead of March 13. The film had originally been slated for release this year. (Variety)

The L.A. billionaire wants to build a public museum in Bev Hills that would display works from his charitable foundation and personal collection. The proposal includes offices for Broad's art foundation. "There are other sites we are looking at but this is one we are taking very, very seriously," Joanne Heyler, director and chief curator of the foundation, told Bloomberg News. Broad even has a location in mind: at the corner of Santa Monica and Wilshire boulevards, between the CAA building (now housing Sony BMG) and the Beverly Hilton.

Works in the foundation's collection include photographs by Cindy Sherman, paintings by Jasper Johns, Andy Warhol's 1986 silkscreen of the Statue of Liberty, Damien Hirst's 1994 lamb in formaldehyde, and Charles Ray's 1973 collection of 16 Kodachrome self-portraits called "All My Clothes." "We want a new headquarters, a space to have works that are not on loan to others at any given moment available for study by curators and scholars," Heyler said.

You might recall that Broad decided not to donate his collection of 2,000 artworks to LACMA. Instead, the Broad Art Foundation will continue to hold the collection and lend it to galleries and museums around the world. No comment yet from Bev Hills officials.

Total shipments through the Port of Los Angeles fell 4 percent in October, but the really bad news is that outbound shipments dropped 8.2 percent from a year earlier. At the Port of Long Beach, inbound cargo fell 9.5 percent and outbound was down 8.5 percent. Total shipments were off 7.7 percent. Export activity has been one of the few bright spots for the U.S. and Socal economies, but those October numbers suggest that a global downturn is quickly taking hold (exports out of both ports had been sharply higher for much of the year). Already, Germany, Italy and Japan are officially in recession. From Briefing.com:

Strong export growth was a major reason the U.S. did not enter recession until the fourth quarter of this year. Net exports added 0.7% to real GDP growth in 2005, 1.0% in 2006, 1.0% in 2007, and an average of 1.0% per quarter so far in 2008 (yes, the numbers happen to come out exactly the same). This boost to growth will now disappear. Not only is foreign demand going to weaken, but the rebound in the dollar will significantly lessen the relative value of U.S. goods. The net export component of GDP will soon turn negative, taking away what had been a very strong boost to the U.S. economy.