Wednesday morning headlines

Soaring food prices: Yesterday's U.S. inflation numbers may have looked tame to Wall Street, but drill down to what's going on at your local supermarket and the picture is far different. Socal food prices, already the highest in the nation, increased 5.7 percent in April from a year earlier (nationally, food prices were up 3.9 percent). Some samples, according to the LAT: Yoplait yogurt is up 13 percent, Kraft mac and cheese up 25 percent, grapes up 17 percent and Quaker instant oatmeal up 14 percent. "We are going to see grocery store prices show one of the most rapid increases in the last 15 years or so," said Patrick Jackman, an economist at the U.S. Bureau of Labor Statistics.

Jobs nobody wants: It used to be hamburger flipping - now it’s loading and unloading baggage from airplanes. Airlines are having a tough time filling positions because, well, how many of us are prepared to wrench our backs for $8.75 an hour and minimal benefits? This is the same airline industry that eliminated more than 170,000 jobs between 2001 and 2006. Now they're back hiring, but for much lower wages. From the WSJ:

That's not good news for passengers, as the combination of fewer and less experienced workers is causing more service problems. Planes sit on tarmacs because airlines are short on gate workers. Service on planes is slower because many airlines are flying with fewer flight attendants. When bad weather hits, tight staffing may mean more delays or canceled flights. The situation isn't likely to improve anytime soon. Although airlines were able to raise fares the last two years as travel surged, customers have begun to resist fare increases, domestic demand is softening, and jet-fuel prices have started rising again. These are the same pressures that contributed to more than $50 billion in net losses from 2001 through 2005.

But wait, there's more: Employees at AMR, parent of American Airlines, aren't thrilled about seeing the top brass collect $21 million in bonuses last month, and they're likely to make a stink during today's shareholder meeting in Texas. Four shareholder proposals will come up for a vote, including two related to executive pay. You might recall that AA workers took pay cuts and made other concessions worth $1.62 billion a year through 2008. Here's the American flackery, courtesy of the NYT:

“It’s common knowledge that American has a considerable labor-cost disadvantage compared to other airlines,” said Andrew Backover, a spokesman for the company. “The reality is that American’s employees are among the best- paid in the industry in total compensation, which includes the best-funded pension plan in the industry. As a whole, our employees have benefited greatly from American’s recovery, especially when one considers the many airlines that slashed labor costs and wiped out shareholders by filing for Chapter 11, something we have never done.”

Airlines win ruling: It involves those terminal fee increases that LAX tried to implement earlier this year. A judge for the Department of Transportation determined that they're unreasonable and discriminatory - a decision that, if upheld, could throw into question how airport officials will pay for badly needed improvements at LAX. The judge, who conducted a 15-day hearing in L.A. and reviewed 11,000 pages of documents, said the airport agency's accounting system was suspect. DOT officials will make a final decision next month. LAT

Amgen battles on: The effort by Medicare to curtail reimbursement of the company’s anemia drug Aranesp is likely to face opposition from doctors and patient groups, who say such drugs help cancer patients cope with chemotherapy. The proposal, which still must go through various reviews, follows studies suggesting that the drugs, widely used to treat anemia in cancer patients, could actually make things worse. From ther NYT:

Dr. George Demetri, an oncologist at the Dana-Farber Cancer Institute and Harvard University, who has also consulted for both Amgen and Johnson & Johnson, said the proposed restrictions “seem very strict,” though he added that Medicare might have evidence that he was not aware of. Still, Dr. Demetri, who is on a committee that develops anemia treatment guidelines for an organization of leading cancer centers, said that solid studies on the safety of the drugs were “distressingly limited.”

SEC departure: Randall Lee, head of the Securities and Exchange Commission's Los Angeles office, is stepping down next month. The local SEC office is the nation's third largest, after NY and Chicago, and has had its share of high-profile cases: Homestore Inc., Gateway Inc., Gemstar-TV Guide International Inc., Global Crossing Ltd. and Tenet Healthcare Corp. No successor has been named. LAT

Getting Greenspan's help: OC-based bond king Bill Gross wouldn't seem the sort who needs lots of outside advice - except if it happens to be coming from the former Fed chief. So Allianz AG's Pacific Investment Management Co., where Gross is chief investment officer, has become the first client of Alan Greenspan's advisory firm. Under the arrangement, Greenspan will participate once each quarter in a strategy session with Pimco executives. From the WSJ:

In a meeting with Pimco last week, Mr. Greenspan predicted the recent period of low global inflation could end in the next few years as the downward pressure on prices and wages from China and India's assimilation into the world economy lessens. "I asked him specifically, three years from now, where would he see G-7 interest rates, and he said, 'higher,'" Mr. Gross said. Mr. Gross said that is largely in line with his own views, though he expects interest rates to first head lower in the next 12 months, because of U.S. economic weakness.

Disney's travel channel: The idea is to showcase various destinations and then let viewers contact Mouse House vacation planners through their remote clickers. It'll initially reach nine million subscribers on Time Warner Cable and Cablevision, with other cable systems to follow. New episodes will be added every three weeks to see which generates the highest number of viewer requests for information. ">Reuters