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The full Tribune board will be meeting this weekend to review the competing offers from L.A. billionaires Broad/Burkle and Chicago real estate mogul (and also billionaire) Sam Zell. They're still hoping for a resolution in the next day or two - that's certainly what the board wants - but the WSJ reports that there's concern about how vulnerable Tribune might be to a shareholder lawsuit if the directors choose the Zell bid without giving Broad...
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Mark Lacter covered business, the economy and more here from 2006 until his death on Nov. 13, 2013.
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March 2007
Just imagine, for a moment, that Uncle Ben, the rice guy, got a promotion - to chairman of the board. A little weird, no? But ad agency TBWA/Chiat/Day, which has a long history of going for the unconventional, figured that it made all the sense in the world, so with the blessing of its client, food giant Mars, it's launching a new campaign that features Ben (no last name) as an accomplished businessman with a...
Ever wonder about those big shot members of Sherwood Oaks Country Club, that glorious bit of real estate in Thousand Oaks where Tiger Woods hosts the Target World Challenge golf tournament each December? Hint: Countrywide Financial is one of the major sponsors. So yeah, there's Countrywide Chairman Angelo Mozilo, who has enough money to build his own country club (several, no doubt) - and now his recently promoted No. 2, David Sambol. Michaelle Leder over...
Tribune update: There are no details of last night's revised offer by Broad and Burkle for the Chicago-based parent of the LAT. Everybody seems to have gotten the same barebones information - not for attribution, of course - that the new offer was valued by Broad/Burkle at $34 a share and that the two billionaires would be willing to structure the deal with an employee stock ownership plan, just like the Sam Zell proposal. They...
The L.A. billionaires' revised bid is $8.2 billion, or $34-a-share, which includes $500 million in equity. Zell's bid was $33-a-share, which includes $300 million in equity. The LAT quotes another one of those unnamed people as saying that Broad and Burkle would structure the deal with an employee stock ownership plan - just as Zell has proposed. So what's the Tribune board supposed to do now? It was ready to do the Zell deal -...
Still quite a bit of chatter today about the Marie Antoinette-ish tactics of Circuit City CEO Philip Schoonover, who along with his board decided to fire several thousand workers who were making more than the market would bear (we're talking $12-$15 an hour). Anyway, a few folks were wondering how much Schoonover himself raked in. According to Forbes, he was at $1.4 million (salary and bonus) in 2006, plus another $3 million or so in...
It's not exactly a huge deal, but Pacific Title & Art Studio, one of Hollywood's earliest production houses, is being sold to an investment group for $23 million. A guy named Leon Schlesinger started the business in 1919 and focused those early years on making tltle cards for silent films. (Legend has it that he helped finance "The Jazz Singer.") Once the talkies took over, Pacific handled main titles and opticals, and by the 1990s,...
The annual U.S. News survey comes out tomorrow, but law bloggers already have the numbers. Among the locals, there's very little change from a year ago, when UCLA was 15th and USC 17th. At the top of the list is Yale, followed by Harvard and Stanford, which tied for second, NYU is fourth and Columbia fifth. The topsecond-ranked California school is UC Berkeley, at eighth. Law.com...
Just don't tell our old friend Barry Diller, who still manages to make life interesting for us know-nothing, low-wage scribes. In a chat with the FT, Diller says executive compensation is "no big deal" for shareholders - "a very tiny slice" of companies' overall expenses. (Which of course is true but not quite the point.) He blamed journalists for fanning the flames, even calling their reportage "close to criminal." Hmmmm. Last I checked, stealing is...
Oh brother, yet another panel on the future of newspapers. Must they? Many of the usual suspects were on hand at the NY W (midtown branch) to hear about those floundering Tribune boys and how morale at the LAT has reached subterranean levels and how newspaper companies shouldn't be concerned about quarterly earnings (yeah, easy for them to say). And of course, Grazergate came up. Baquet, staying comfortably above the fray as Washington bureau chief...
Tribune update: The betting still favors a Sam Zell acquisition by week's end, but the NYT reports that Tribune was open to resuming talks with L.A. billionaires Broad and Burkle, who apparently have or will receive some of the information they claimed had only been provided to Zell. They have not yet made a new offer, reports the Times, but their reappearance is probably complicating what had been expected to be a Zell victory. Meanwhile,...
It could very well turn out to be News Corp.'s 2005 purchase of MySpace for $580 million (sorry Viacom). Pali Research analyst Richard Greenfield figures that the Bev Hills-based social networking site is generating in excess of $30 million a month in revenue, and that should double over the next 12 months with little increase in operating expenses. Annual revenues: over $700 million a year - not including the $900 million that Google pays out...
Yesterday's early drop was trimmed quite a bit by the close, but today's naysaying was just too much - a lukewarm forecast by Fed Chief Ben Bernanke, higher oil prices, slower-than-expected durable good orders, etc. The Dow was down 96 points, with especially poor showings by homebuilders and mortgage lenders. Bloomberg...
The big story in the homebuilding biz involves a federal investigation into the way Beazer Homes helped cut lending deals to low-income buyers in the area around Charlotte, N.C. The Charlotte Observer reported that of the 2,900 homes the company built in Mecklenburg County between 1997 and 2006, at least 388 have foreclosed. That's a 13.4 percent foreclosure rate, compared with national rates of 3 percent or so. The newspaper said that Beazer's aggressive lending...
OK, you're running a pretty lousy company in a very tough industry and your shareholders are demanding that you do something - anything -to get earnings and the stock price back up. So somebody in your shop has a masterstroke: why don't we just fire a few thousand of the higher-paid employees and replace them with schlubs willing to work for way less money? Brilliant, right? Circuit City CEO Philip Schoonover didn't put it quite...
Wall Street jitters: Fed Chairman Ben Bernanke told Congress this morning that the economy will keep growing - moderately - and that troubles in the subprime market don't appear to be spreading. Still, he says risks remain - he's calling inflation "uncomfortably high." Well, the market isn't happy ($64 a barrel oil and a weak durable goods report hasn't helped). The Dow is off 125 points after about 90 minutes of trading. Bloomberg New Century...
Funny what a couple of transposed digits will do for a media giant's respectability. News Corp.'s proxy lists a phone number for agent Georgeson Inc. - the folks who provide shareholder information - but as reported by MarketBeat, callers are connected to a woman who talks about getting together "with exciting people everywhere" and then mentions another number to call. "As of Tuesday afternoon," according to the post, "the automated voice that answered that second...
This might as well be an L.A. government holiday because many of the higher-ups were on Capitol Hill today lobbying for more of a balance between taxes going to Washington and federal funding coming to Socal. Right now, we give out way more than we take in. Along with the government honchos - Mayor Villaraigosa, School Superintendent David Brewer, Police Chief William Bratton, Councilwoman Janice Hahn and lots of others - was a bidness contingent...
The $142 million acquisition by Internet giant Intuit seemed all ready to go and then, Bam!, it's kaput. Electronic Clearing House, which handles the processing and collection of Internet commerce, disclosed this morning that it was a witness in a federal investigation and that the deal with Intuit was off. Electronic Clearing House, according to an SEC filing, has agreed to shell out $2.3 million and in return the U.S. Attorney for the Southern District...
That's what Bloomberg News is reporting this morning - and it sounds a little more definitive than stories earlier this week (assuming you can call unnamed sources definitive). Anyway, an agreement is likely by March 31, Tribune's self-imposed deadline. Nothing mentioned about the letter Broad and Burkle sent to Tribune's board over the weekend in which the two billionaires claim that Zell had access to more financial information than they did....
Housing jitters: Homebuilder Lennar Corp., which has a big Socal presence, this morning reported a 73 percent drop in first-quarter profit and its CEO said he couldn't forecast when the market might stabilize. This was pretty much the same report offered last week by L.A.-based KB Home, which reported an 84 percent drop in earnings. Especially disturbing was that Lennar's new orders fell 27 percent - more than many on Wall Street had expected. The...
The latest iteration of the storied magazine - a weekend newspaper supplement that never gained much of a following - will publish its final issue on April 20. Life, which is stuffed into over 70 newspapers (including the LAT), was relaunched in 2004 and focused on celebrity and human interest stuff. But it was a snooze for advertisers, and Time Inc. executives have considered it on life support for more than a year. All told,...
That's what the WSJ just posted, based on efforts by Morgan Stanley and Barclay's - two of the subprimer's biggest bank lenders - to take possession of the loans that were being used to secure financing and auction them off on their own. The banks have little confidence that New Century can pay them back - a little like a bank that forecloses on your house. There's been lots of speculation in the last couple...
Now that downtown has added a few thousand more residents to the mix, film companies don't have the place to themselves anymore - and that's causing complaints about noise, lack of parking and clogged streets. A recent Verizon shoot in which a helicopter buzzed over the Historic Core area at midnight appears to have put folks over the edge, according to the Downtown News: The latest round of anger began last month, when Green, owner...
Strike vote authorized: As expected, workers for Albertsons voted to give union officials the authority to call a strike. No date was set and an earlier contract extension means that the earliest walkout date would be April 13. It's hard to gauge how likely a strike might be because there's limited information on how the negotiations have been going - other than slowly. Albertsons, by the way, is now owned by Minnesota-based Supervalu, which, as...
Eli Broad and Ron Burkle have just made life a little more uncomfortable for the Tribune boys who seem inclined to accept Sam Zell's offer. You remember Broad and Burkle - the L.A. billionaires who made an early bid for Tribune that was turned down weeks ago. Well, the WSJ reports that the Los Angeles guys sent a letter to Tribune's board over the weekend, complaining that the company provided Zell with more financial information...
Now, don't get me wrong: I'm not predicting the future. But sometimes it can be instructive to look for potential patterns by peering into the past. And stumbling around for items about Sam Zell - the Chicago real estate mogul who might cut a deal to purchase Tribune Co. a week from now - I came across an interesting tidbit. It goes back to August 5, 1991, in the L.A. Business Journal, and it quotes...
So the experts have finally weighed in: multitasking increases the chances of making mistakes. This would seem pretty obvious for anyone in back of a driver on a cell phone. Actually, cell phones are the worst kinds of distractions (destined to be judged a scourge of mankind, in my view), but multitasking appears to be a bad idea on any number of fronts. I mean, does it take a study or legislative fiat to affirm...
L.A. County's February unemployment rate was 4.6 percent, unchanged from the previous month and well below the 5.0 percent level in February, 2006. Statewide, unemployment was at 4.8 percent, unchanged from a month earlier. A separate survey of county payrolls shows that 27,000 jobs were added last month, with strong increases in education, the media and entertainment sector, and professional services. Even manufacturing added 3,000 jobs. These numbers tell you a lot about why real...
As in Teddy Roosevelt, the great Republican conservationist. I haven't paid that much attention to the governor in recent months, but he sounds pretty impressive in an interview with Fortune at his office in Santa Monica. Is this the same guy we used to make fun of over the way he pronounced "California"? Some snippets: How did you get to this point on the environment? We now know that what we've done in the past...
That's what the LAT is saying in a story posted on its Web site this afternoon. At $33, Tribune shareholders would get a modest premium over the current stock price, which closed Friday at $30.53 (it's inched up a bit on speculation that the Zell deal may happen). The problem is that there's only a week to go before the company's self-imposed deadline to make a decision on a sale, and that's not much time...
Well, for now anyway. The Dow finished the week at 12,481, up 19 points for the day and 3.1 percent for the week. Turns out that U.S. housing sales rose unexpectedly in February, leading investors to believe that real estate might not be in the awful state that some had described just a couple of weeks ago (see what fun predicting Wall Street can be?). Of course, no market summary would be complete without a...
Forget about sports or show business - if you want to make the really big bucks, just stick with oil. L.A.-based Occidental Petroleum released its latest proxy today and Chairman and CEO Ray Irani, consistently among Socal's highest-paid executives, received a pay package last year totalling $55.6 million, down from 2005's $80.7 million. Here's how the 2006 pay day breaks out: stock awards valued at $31 million, options awards valued at $17.4 million, salary ($1.3...
Blue Cross fined: Not a lot - $1 million - but at least state regulators acknowledged that canceling individual health coverage after the policyholders get sick (and we're talking about being seriously sick) isn't exactly the right thing to do. Bunch of California consumers have filed lawsuits in which they claim to have been unceremoniously dumped from the rolls. Consumer advocates say $1 million was way too low. LAT Garcetti urges boycott: The L.A. councilman...
A bunch of local honchos, including L.A. Mayor Villaraigosa, School Superintendent Brewer and L.A. Chamber Prez Gary Toebbin, are headed to D.C. next week to plead/demand/suggest that the feds fork over some additional money to Socal for more schools, cops and mass transit. It's not exactly news that L.A. has gotten the short end of the stick in the Republican Congress when it comes to federal money, so maybe the Democrats will be more responsive....
Ever hear of LoanCity? Me neither. It's a privately held wholesale mortgage lender based in San Jose that stopped funding loans on Tuesday - and the thing is, it's not a subprimer. Borrowers generally have good credit scores (not great but better than subprime), but credit has tightened throughout the mortgage biz and that's putting the squeeze on everybody. "We just didn’t have the capital to withstand the continuing of the credit crunch," LoanCity CEO...
KB tumbles: The L.A.-based homebuilder this morning reported an 84 percent slide in first-quarter earnings, reflecting the industry's slowdown, and new CEO Jeffrey Mezger expects things to remain gloomy for at least the rest of the year. There are just too many homes on the market - both new and existing. Plus, with all the subprime problems - and the likelihood of more foreclosures down the road - expect even more homes to be available....
Chairman and CEO Dennis FitzSimons sent out an attaboy memo to employees today and noted in passing that the board still planned to make The Big Announcement concerning the company's future at the end of the month - as in the end of next week. At this point, it still seems to be between Chicago real estate guy Sam Zell and his employee stock ownership plan or Tribune's own self-help plan that would involve spinning...
Quick quiz: A $10,000 investment in Starbucks in 1992 would be worth how much today? a)$76,000 b)$123,000 c)$301,000 d)$467,000 Answer on jump...
Julie Roehm and Sean Womack actually kept a speaking engagement in Hollywood yesterday - and Roehm even addressed the brouhaha over Wal-Mart's countersuit to her suit, in which she and Womack are accused of having an adulterous affair (see earlier post). In a five-minute video interview with MediaPost's Laurie Petersen, they mostly rambled about the marketing consultancy they were forming. But finally, Petersen asked about the, er, situation and Roehm - far too talkative for...
Fremont General is taking an important step this morning in an effort to stay in business: It's unloading its lousy subprime loans. The Santa Monica-based insurer, through its Fremont Investment & Loan unit, has agreements to sell at a discount about $4 billion of its subprime loans. The sale will result in a pretax loss of about $140 million, but at least it brings in much-need cash - about $950 million so far, and more...
Strike vote looms: What happened to the cautious optimism by negotiators for the major grocery chains and the unions? Apparently, the contract talks are moving slowly - so much so that union workers at Albertsons will vote Sunday on whether to give their leaders authorization to call a strike. No walkout would happen before April 9, when the current contract extension runs out, but strike authorization votes suggest growing unhappiness among the rank and file....
I've given up trying to figure out what the heck is going on with those boys in Chicago, but for what its worth Sam Zell was interviewed by AP (unclear whether it was his idea or theirs) and he says that his proposal for Tribune remains in play. That's contrary to reports a few days back that suggested his idea to take Tribune private through an employee stock ownership plan was dying on the vine...
OK, so it doesn't have much to do with L.A. business, but Wal-Mart's countersuit against one of its former executives, Julie Roehm, would work well as one of those smarmy Lifetime TV movies (or maybe it could be a business-oriented reality show). In case you haven't been following this, here's a quick summary: Roehm and Sean Womack were recent arrivals in Wal-Mart's advertising and marketing department - Roehm a rising star, Womack less so -...
Ever wonder what those rich private equity folks are really thinking? Well, a memo from Carlyle Group founder William Conway is making the financial media rounds (most likely leaked) in which he warns that the cheap debt PE firms have been using to fuel all those deals is about to disappear. "The longer it lasts, the worse it will be when it ends." Conway said. "Frankly, there is so much liquidity in the world financial...
Here's a little regulatory filing worth noting: Michael Milken wants to sell $1 billion worth of his juggernaut of companies called Knowledge Universe. As reported by Bloomberg News, Milken has hired Goldman Sachs and Credit Suisse to look for investors (he has commitments for half the offering, according to a spokesman). He's barred for life from any securities activities, but that hasn't stopped him from deftly manipulating a group of companies - largely with his...
Mayor vetoes "air rights": He still seems to support the plan to sell 9 million square feet to developers - he just wants more of a say in reviewing proposed projects. Villaraigosa's second veto in 21 months in office apparently took the Council by surprise because he appeared supportive at first on the idea to offer the air rights over the Los Angeles Convention Center. As noted by the LAT, the veto "was seen by...
And with 62 separate award categories (that even tops the L.A. Press Club), there are only five L.A. nominees. Did I read that correctly? Heck, Flagstaff probably did better. It was nice to see Los Angeles Magazine get two nominations - one for Patric Kuh's reviews and one for Jesse Katz's October piece on L.A.'s taco trucks. Aside from that, Wolfgang Puck's Cut at the Beverly Wilshire Hotel was nominated for best new restaurant, Spago's...
Smith & Wollensky CEO Alan Stillman really wants to sell the steakhouse chain to Joachim Splical's Patina Group - even if the $9.25 price is 50 cents a share lower than what's being offered by Houston-based Landry's Restaurant Group. And Landry's now claims in a letter to the Smith & Wollensky board that Stillman is looking out for himself instead of the S&W shareholders. That's because as part of the Patina deal, Stillman would buy...
Cole's P.E. Buffet, which along with Phillipe's lay claim to the famous French dip sandwich, is being taken over by Cedd Moses, who says he wants to restore the downtown landmark to its original 1908 charm (well, we're supposing that the place had charm 99 years ago). Cole's is the city's oldest operating restaurant and bar and according to the Downtown News has supposedly seen a bit of a bounceback in business. Moses, who also...
Stocks looking good: It's early but the Dow is up about 75 points after 90 minutes of trading. One explanation being thrown around is all the unresolved M&A activity (largely fueled by private equity money) that always helps prop up the market. The Federal Reserve meets tomorrow, but the betting is that rates will remain where they are. Big bird arrives: A huge crowd is expected for this morning's touchdown of the eight-story Airbus A380...
We seem to be in the goofy zone this afternoon, so here's one more: nightclub owner, film producer and man about town Sam Nazarian showing off his $1.4 million Bugatti Veyron to Fortune's Sue Zesiger Callaway. In case you're wondering, this is a car, described as unlike any other car on the planet, which it had better be if you're shelling out enough money to buy a nice house (even in L.A.). It's also a...
The Mouse House has finished up its inquiry into backdating options at Pixar, which it now owns, and has concluded that, well, yeah, there was a bunch of stuff going on at the Steve Jobs' run animation studio before it was purchased by Disney, but that no one now connected with Disney did anything wrong, so can't we just all just get along and forget about it? Pleeese. OK, that's my translation of the press...
ShaRon Lewis might have pulled a fast one. She was used in an anecdotal quote for the Times' March 10 story about folks being swept up by problems in the subprime market. Lewis talked about the home she bought in June 2005. Here's the opening of the piece: ShaRon Lewis is facing a 50% hike in the payment on her adjustable-rate mortgage next month. This week, she discovered she can't qualify for a new loan...
Is John McCain still running for president? You wouldn't know it, judging from the California bidness heavyweights who have jumped over to Mitt Romney. We're talking about developer Rick Caruso, eBay CEO Meg Whitman, Robert Day, chairman of the Trust Company of the West, and Brad Freeman of the investment firm Freeman Spogli & Company. Caruso, who has contributed heavily to George W. Bush and other Republican candidates, is planning a March 27 fundraiser at...
Looks like Joachim Splichal's Patina Restaurant Group has some company in the bidding for steak house chain Smith & Wollensky. Landry's Restaurants has sweetened its offer to $9.75 per share, a half-buck higher than the deal Patina cut with S&W last month. The stock is now trading at $9.85, up 9.4 percent for the day. Landry's earlier low-ball offer was $7.50 a share. Patina execs had talked about expanding the S&W chain to L.A. and...
Zell losing steam: WSJ, NYT and Chicago Tribune report that yet another bid for the Tribune from yet another billionaire might be turned down. Tribune is still likely to go ahead with its "self-help" plan, which involves taking on debt in order to pay a dividend to shareholders - except maybe not as big a dividend as earlier thought, given how poorly the newspaper business is doing. Zell's proposal for an employee stock ownership plan...
It's the annual Calpers rundown of companies that have failed in the area of corporate governance and financial performance. Ten other companies made it on the list: Marsh & McLennan Cos., Eli Lilly & Co., Sara Lee Corp., International Paper Co., Corinthian Colleges Inc., Tenet Healthcare Corp., EMC Corp., Dollar Tree Stores Inc., Kellwood Co. and Sanmina-SCI Corp. Tribune gets dinged for financial performance, but there's also the corporate governance stuff: --Concern over high level...
That's what forecasters are telling the WSJ in one of the paper's periodic surveys. Slightly more than half of the 60 economists surveyed said that it was either "very" or "somewhat" likely that the subprime mess will spill over to the rest of the mortgage market, but there's not much concern about things getting ugly. First quarter forecasts have been lowered, though the group still expects growth to increase to 3 percent by year end...
There's a lot of rumble in the newsroom these days about people moving here to there - and some of it is actually in plain sight. Like former Tribune design/innovation guru Tony Majeri being escorted around by editor Jim O'Shea. Majeri left the Tribune a year or two back and is currently a newspaper design consultant. There certainly is a lot happening in the LAT design arena, including a makeover that's been going on since...
Et tu, Dow?: Yeah, this is the Ides of March, all right, and the market has gotten so nutty these past couple of weeks that stock analysts are actually referring to that famous moment in their assessment of today's action. Bottom line: lots of potential for more volatility (mixed economic reports, tomorrow's quadruple witching hour, speculation about New Century filing for bankruptcy). But so far, it's a pretty tame morning, with the Dow up about...
Not only that, but the market actually picked up 56 points on the day - not bad considering that the Dow fell under 12,000 for the first time since November. Some of the technical analysts have been warning that finishing below 12,000 would be a bad sign, so 12,133 should be a cause for celebration. But it's really rocky out there, evidenced by local stocks that were all over the map. Just after the close,...
It's the old farts at Viacom vs. the youngins at YouTube. The old model of actually paying for content vs. the new notion that all content should be free. By filing its $1 billion lawsuit against the popular video site - owned by Google - the Viacom folks are basically saying, look we're hip, we're cool, but for crying out loud, we're in the business to make lots of money and you're taking our stuff...
Can't this guy cut a deal without complications? The former Mouse House CEO has gotten the baseball card company Topps in a tizzy by proposing the buy the company (along with a private equity firm) for $385 million, or $9.75 a share (the stock is trading at around $10). A couple of Topps directors got the heave-ho earlier this week from a committee looking for a better deal because they had voted against the Eisner...
Literally. I've heard there's some sort of sign hanging over the LAT's Spring Street exit that reads -30-, which is what reporters used to tap out to signify the end - of their stories, that is. (There are all kinds of theories on why -30- was used, ranging from it being an old AP story quota to the XXX numeral that Romans supposedly put at the end of news items. But that's all besides the...
Could be another tough one. The Dow is down about 80 points at mid-session, but more ominously the index is under 12,000 for the first time since November. The 12,000 line is considered among technical types to be an important breakpoint. There's still lots of concern about the subprime situation....
Market stabilizes: A fourth-quarter profit by GM has gotten Wall Street into a more positive mood this morning - the Dow is down a touch after 90 minutes of trading - but the automaker's numbers aren't really very good, with North American operations still losing money. Also, the results include a partial sale of the GMAC operations. Bloomberg All that space: The OC office market will probably be opening up, thanks to the sour subprime...
Just when you think the city of L.A. can't possibly get any more misguided about downtown development, along comes the latest "brainstorm": selling 9 million square feet of unused "air rights" above the Convention Center (that's enough space to build several 50-story-plus high-rises). The City Council apparently snuck in this little ditty last week with little, if any, discussion. Based on an LAT posting this afternoon, developers would be allowed to build projects significantly larger...
Anything having to do with real estate took big hits - no doubt the fallout from worries about subprime financing. So among local issues, you had mortgage lenders IndyMac off 7.6 percent and Countrywide off 4.7 percent; and homebuilders KB off 5.4 percent and Ryland off 4.9 percent. But here's the thing: foreclosures are increasing for folks with good credit ratings, not just the subprime people. That's what has Wall Street worried - that the...
That would be Korea's Red Mango yogurt, which opens its first U.S. location in Westwood in May. It was in 2003, according to Dan Kim, president of Red Mango's U.S.operations, that the chain first served "all-natural" yogurt in plain and green tea flavors (yuck!). That was followed two years later by Pinkberry's now-famous store in West Hollywood. Kim tells EaterLA that the original Korean Red Mango stores have an Asian-pop design with lots of kiwi...
As in L.A. attorney Robert Shapiro, who is representing Angels centerfielder Gary Matthews Jr. in connection with a government case involving synthetic growth hormones. Investigators allegedly found documents showing that Matthews was sent Genotropin in 2004 - and federal law prohibits possession of human growth hormones without medical supervision. But never mind that - what about Shapiro? Well, the WSJ's law blog recounts the basics: founder of LegalZoom, a Web-based legal document service, and name...
Chick Hearn would have called it nervous time. Wall Street remains jittery about whether the subprime tumult might spill over to the rest of the market. In this climate, statistics confirming what everybody pretty much knew already have a way taking center stage. Thus comes word that mortgage-delinquency rates jumped in the fourth quarter. Delinquency rates have been going up for months now (and fourth-quarter delinquencies are often high because of home-heating bills and Christmas...
Viacom sues Google: The media giant is alleging "massive intentional copyright infringement" of Viacom's entertainment properties on YouTube, which is now owned by Google. The suit, filed this morning in U.S. District Court for the Southern District of New York, seeks more than $1 billion in damages. The complaint claims that almost 160,000 unauthorized clips of Viacom's programming have been available on YouTube. There have been similar suits against YouTube, but this appears to be...
Weren't prices supposed to be falling this year? So far, they're increasing. The latest February numbers from DataQuick show that the median price of all homes sold in L.A. County was $528,000, up 7.8 percent from a year earlier. Sales, meanwhile, fell 11 percent - the slowest February since 1997. But that percentage drop is an improvement over the 20 percent-plus monthly declines seen throughout much of 2006. Anyway, keep in mind that February is...
The latest numbers released by the government this afternoon show that an average gallon of self-serve regular in the L.A. area was $3.05 a gallon, up from $2.58 just four weeks ago. That's enough for folks to start noticing the extra $15 or $20 they're shelling out every time they tank up. Normally, oil prices are in lockstep with gasoline prices, but year-to-date, oil is down 3.5 percent and today it fell more than a...
That it's even being called as much is a sacrilege, but here goes: NY magazine's Grub Street discovers a place in Brooklyn called Flatbush Farm that interprets the L.A.-based sandwich thusly: grilled baguette split and stuffed with slices of red-wine braised boutique beef, melted Gruyère, and horseradish cream, and served with a cup of flavorful jus (plus fries and a small salad). The Grub Street writers are compelled to provide a short backgrounder on the...
Another decent and unspectacular day on Wall Street. The Dow was up 42 points, with airlines, utilities and biotech issues doing especially well - but more importantly, no one, except maybe a couple of subprime lenders, on ther ropes. So here we are two weeks after the market's big drop and financial life goes on, reasonably clear of the panicky scenarios about the economy. The New Yorker's James Surowiecki reexamines the news during that terrible...
Subprime mess: OC's New Century Financial said this morning that it's losing all short-term funding from its bank lenders, another nail in the coffin of the mortgage company. This is a very big deal because independent mortgage lenders rely on short-term financing from Wall Street and the big commercial banks to keep operating. Without that pipeline, New Century can't lend money and is essentially out of business. The company says it doesn't have sufficient liquidity...
•More complications for Amgen's anemia drugs Aranesp and Epogen. Both will get stronger warnings about serious health effects, including death. The FDA said today it is "reevaluating" the safety of the drugs and telling doctors to use the lowest doses possible. Bloomberg •No Socal companies on Fortune magazine's list of 20 most admired companies (General Electric ranks #1). But the numbers are is sliced and diced in lots of ways, with Disney topping the list...
Call it the illusion of originality. Instead of airing a plain old repeat that will get only so-so ratings, why not freshen up the original episode by editing out a little stuff, adding new stuff and calling the whole thing a "newpeat"? NBC plans just such a scheme next week with two previously seen episodes of "The Office" that have been re-cut into an hour-long show. From the WSJ: In an age where old TV...
Federal Reserve Gov. Susan Bies didn't tell us anything in a speech today that we didn't already know - that there will be more missed payments and foreclosures as the subprime disaster starts to unfold - but somehow coming out of the mouth of a Feddie, it has a little more impact. Regulators are getting nervous about "payment shock," which is hitting those subprime borrowers after their teaser rates end and they're stuck shelling out...
Decent employment news: The U.S. February jobless rate fell to 4.5 percent from 4.6 percent the previous month (that's the L.A. County rate), and total employment rose by 97,000 - slightly better than analysts had been expecting (though still low because cold weather cut into construction jobs). Anyway, the numbers seemed to relieve Wall Street this morning, with the Dow up about 30 points in the first 90 minutes of trading. The employment report has...
The Irvine-based mortgage company specializing in subprime loans has stopped accepting loan applications, which is another sign that the end might be near. The company said in a regulatory filing that it's received $265 million in new financing from an unidentified lender (the WSJ said it's Morgan Stanley), but that won't be enough to keep going. Meantime, there were lots of rumbles today about New Century having to file for bankruptcy protection. It's looking like...
There's being rich and there's being ludicrously rich. Forbes deals with that latter category in its annual ranking of the world's richest people. There are 946 billionaires on the planet, and their combined wealth is $3.5 trillion. I plowed through the first 200 and came across only six Socal names. They're all the usual suspects: Kirk Kerkorian ($15 billion), Donald Bren ($8.5 billion), Sumner Redstone ($8 billion), Eli Broad ($6 billion), Bradley Hughes ($5.3 billion),...
Based on an internal investigation, CEO Bobby Kotick is in the clear, as far as "intentional wrongoing" in the way the Santa Monica-based videogame company handled the granting of stock options. Four unnamed individuals (the outgoing head of human resources, former heads of finance and legal, and a former outside legal advisor) "bore significant responsibility, in varying degrees, with respect to the measurement date inaccuracies," otherwise known as backdating. The board's subcommittee looking into the...
Well, what do you think is going to happen when someone with a poor credit history can "buy" a house without a downpayment and with crazy-low introductory mortgage payments - only to see those payments jack up by 50 percent or more after the introductory period runs out? That pretty much sums up the subprime market. Dirk van Dijk, director of research at Zacks Investment Research, notes that subprime adjustable-rate mortgages originated in 2006 have...
Back at those CAA HQs, Nikki Finke hears about a mandate to cut expenses by a whopping 20 percent. That means no more flying on first class; from now on, CAA agents will have to slum it in biz class. They're also being told to get their clients jobs - if they want to keep getting paid, that is. Who knows whether the cuts are for real (beware of Hollywood promises to spend less), but...
He's Henry Winterstern and his resignation last week as CEO of First Look Pictures, an upstart independent, is another example of way too much hedge fund money being spent in the wrong places by the wrong people. Specifically, hiring a staff of 140 and moving to the plush new Century City headquarters building of Creative Artists Agency at a cost of $4 million. I mean, come on!!! And, not surprisingly, New Look's portfolio was underwhelming:...
Ratings-wise, the Katie Couric Evening News seems to be going nowhere fast, so CBS News President Sean McManus is bringing in veteran Rick Kaplan to stir the pot a little. Kaplan, who has run MSNBC and CNN, replaces Rome Hartman. Kaplan is tall (6 foot 7) and intimidating ("He's going to bend a lot of people the wrong way," somebody told the NY Post), but during the February sweeps period, the CBS nightly news was...
Verizon has a serious outage problem, so LA Biz Observed is more or less shut down for now. No morning headlines....
Wallstrip.com has a video clip of the real Suze Orman and a made-up version doing an impersonation of Jim Cramer. Bet you can't tell which is which....
Katie Couric isn't exactly taking the ratings world by storm and Rebecca Dana wonders in Slate whether there are some lessons here for the senator from NY. The issue, of course, is the public's willingness to accept a woman for what some consider to be the role of a father figure. Network data apparently shows a small but unmoveable number of viewers who simply don't want to get their news from a woman. Period. Dana...
The former Lakers great and his joint-venture partner, Canyon -Johnson Urban Fund, are providing $12.4 million of financing to help build a 130-unit condo project in the growing Greenpoint section of Brooklyn. It's Johnson's fifth project in NY, and while it's not much money, the Magic Johnson name still draws attention. Other Magic developments include a 17-story condo in Manhattan, and a bookstore, medical office and condo project in the landmark Williamsburg Savings Bank in...
Toilets, refrigerators, beds, medicine cabinets and cereal boxes are apparently pretty terrible places, according to PFAdvice.com, which got the skinny from a real live burglar (an earlier post with the same burglar said that there's really no safe place). Unlike what you see on TV, most burglars are part of organized crime, a gang or drug addicts - and thus have their own ideas on where to look. For instance: Toilets: While this might seem...
At least parts of it. The Santa Monica-based subprime lender is talking to as many as six suitors, according to Bloomberg News. During a conference call with employees, who remain on paid leave, a Fremont executive said final presentations may be made today. Fremont does other things besides making subprime loans, so it's unclear what part of the company is on the block. More than two dozen mortgage lenders have gone bankrupt, closed operations or...
Flat market: A pretty low-key first hour on Wall Street (for a change), with the Dow up just a shade. By the way, a WSJ/NBC News poll finds that 46 percent of those surveyed expect the market to move higher over the next year, while 16 percent expect a decline (respondents had to have at least $5,000 in the market). Among all Americans, however, the survey shows increased pessimism about the direction of the economy....
The stock market had a good day - finally. The Dow was up 157 points, or 1.3 percent, and most local stocks were on the plus side too. Just before the closing bell, Countrywide Financial was up 4.72 percent, Disney up 2.14 percent, KB Home up 2.18 percent and California Pizza Kitchen up 3.36 percent. Even Alan Greenspan couldn't upset things by saying - again - that there's a possibility of a recession towards the...
Michael Eisner could be in store for a bit of a rumble. As noted earlier, his investment company, along with private equity firm Madison Dearborn Partners, have bid $9.50 a share for baseball card maker Topps Co., which is a problem because the stock is trading at close to $10 this morning. Late Monday, three out of seven Topps directors voted against the merger, saying that the company failed to shop itself to potential bidders...
Some of the high-end boutiques within a couple of blocks of The Ivy are shelling out $17 a square foot, compared with just $5 in 2000. That's the price you pay to have celebrities like Paris Hilton, Lindsay Lohan and Britney Spears shop at your store. But it's likely to push out the more successful independents in favor of big corporate retailers. Coach just announced plans to open a boutique called Coach Legacy at 112...
Market bounceback?: They're calling it "Turnaround Tuesday" and stocks are indeed up this morning, but not by all that much - just half a percent on the Dow. Perhaps that's due to not-so-great productivity numbers. Marketwatch Subprimers bounce back: The bottom feeders have arrived. Both Fremont General and New Century, hammered yesterday by troubles in the subprime business, are up sharply this morning. Of course, New Century has lost almost 90 percent of its value...
Nikki Finke reports that THR's Cynthia Littleton and Anne Thompson are jumping to Variety. Littleton, who had been editor of the trade pub, becomes deputy editor for news development at Variety (which apparently involves writing a column), while columnist Thompson becomes deputy editor of Variety.com (and will continue writing a column). Finke is calling it a "death rattle" at THR and notes that Reporter owner VNU was bought a year ago by a bunch of...
They must be close to pulling the plug at Irvine-based New Century, while Fremont General's condition is extremely critical. It's not hard to figure out why: The mortgage business relies on those monthly payments to keep coming in and when they don't - or Wall Street folks bankrolling those loans fear they won't - the bottom can fall out of a company pretty fast. So it is at New Century, whose stock lost nearly 70...
Another bad day: Well, a bad opening, for sure. Asian and European markets were down today and that will cascade to the U.S. One ominous sign is that commercial hedgers who try to anticipate the movement of the Dow are solidly in bear territory, preferring to stay "short" in anticipation of a dropoff, rather than maintain a more bullish "long" position. Another potential problem: Mondays can be especially volatile during a down cycle as investors...
Two Socal financial institutions are under the gun for making subprime residential loans, which are loans to folks with weak credit records or high debt. Irvine-based New Century seems to have the bigger problem - a federal criminal inquiry into accounting and trading of its securities. In addition, the SEC wants to meet with New Century to discuss last month's announcement that the company would restate earnings for the first three quarters of 2006 due...
In these nervous-making times, markets can get extra jittery on a Friday afternoon. Weekends mean two full days to ruminate and given what's happened to stocks those ruminations are unlikely to be positive. Better to sell off some stuff now rather than risk the Asian markets getting flaky again on Monday and leaving the U.S. markets stuck with a weak hand. So on a day that had the Dow down 50 or 60 points for...
Sometimes nuance can be a very big deal - as in describing what former Fed chief Alan Greenspan said about the possibility of a recession later this year. You'll recall that Greenspan's comments during a conference in Asia on Monday were cited as one of the factors behind Tuesday's 416-point market tumble. As reported by AP, Greenspan said that the economy has been expanding since 2001 and that there are signs the current economic cycle...
Is this really the end? Boeing has told its top C-17 suppliers that it will stop ordering parts because the Air Force has not commited to future orders of the plane. Boeing took a similar step last year, but Congress coughed up enough orders to keep the line going. Now, the Air Force has omitted C-17 funding in the 2008 budget that Congress is reviewing. There had been some international commitments, but those orders are...
January's 4.6 percent jobless rate is up from 4.5 percent a month earlier, but it's still very low - lower than the state's 4.8 percent (the U.S. rate was 4.6 percent). L.A. County unemployment has stayed in the low to middle four percent range since last spring, defying conventional wisdom that in an urban region as large and poverty prone as Los Angeles, there is expected to be a higher-than-average rate of joblessness. But there...
It's turning out to be more than a one-day rout after all. The Dow was down around 100 points with a little over an hour of trading to go. That's around a 5 percent drop from recent highs....
All clear now?: The Dow seems to be back to normal this morning (it's down around 15 points in early trading), but there's still all kinds of nervousness out there. The talk remains focused more on fear than fundamentals. Volatility - and downdrafts - are likely to continue for a while. Countrywide's payment woes: You want to know why Wall Street folks are nervous these days? Check out an SEC filing by Calabasas-based Countrywide Financial...
The Oracle of Omaha's annual letter to shareholders is remarkable both for its folksy touches (shopping tips for Berkshire Hathaway shareholders who will be visiting Omaha during the annual meeting in May) and its sound financial offerings ("compensation reform will only occur if the largest institutional shareholders – it would only take a few – demand a fresh look at the whole system"). Buffett's letter, released this afternoon, is also remarkable for its lack of...
That's the challenge presented to Oracle founder and occasional Malibu resident Larry Ellison. You see $30 million is what Ellison would have to spend each week in order to keep from accumulating more money than he already has. (Austan Goolsbee, a professor of economics at the University of Chicago Graduate School of Business, arrives at that number in a NYT essay by assuming Ellison's net worth is $16 billion and his rate of return is...
Kevin Sharer, who has not seemed very concerned about studies raising safety concerns of Amgen drugs, is suddenly sounding a bit concerned. Speaking on a conference call this morning with clients of Goldman Sachs, Sharer said that some physicians have modified their use of the anti-anemia drug Aranesp, given recent studies about negative effects in some patients. "There is no doubt that the totality of what's going on now is giving us headwind in this...
As often happens when bidness news becomes front-page news, there's a lot that gets lost in the translation. This week's stock market tumble turned into crisis coverage on TV and even in some newspapers, with many of the more inexperienced folks assuming the worst. That is, a disaster. As chronicled by Dan Gainor of the Business & Media Institute, ABC's Diane Sawyer talked about "the bottom simply dropping out, the market dropping off the face...
Settling down: This is shaping up to be a very volatile day on Wall Street. The Dow opened down 200 points, then recovered much of that loss and now is drifting down again. At last check, the index was off about 50 points, but this thing is moving all over the place. As they used to say in old-time radio, "Please stand by...." AP Local angle: This might quickly change given the last few days,...
Wednesday's semi-recovery seemed way too tentative - and so we have the Dow down around 175 points in the first few minutes of trading. Again, there's no one reason for the drop - a combination of factors, much of it being described as a "reassessment of risk." Also, there are rumors about a subprime lender in the U.S. being in trouble, which might or might not be true but sounds plausible enough for folks to...
Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.The multi-talented Mark Lacter
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