Tuesday morning headlines

Mattel announces recall: And it's a big one, although different stories have different figures. The WSJ says more than 9 million; Bloomberg says 18.6 million. The recall includes Barbie, Polly Pocket and Batman toys with magnets, and 436,000 die-cast vehicles that contain lead. This appears much bigger than the Mattel's recall of 1.5 million Fisher-Price preschool products, including Chinese-made Sesame Street and Dora the Explorer toys. Mattel began an ad campaign today in an effort to reassure consumers; meanwhile, the stock is down 3.4 percent.(AP)

Troubled market: Wal-Mart and Home Depot report that earnings will be depressed for the year because of the housing slump, turmoil in the credit markets, and higher energy prices (though prices have been dropping in recent months). With the holiday shopping season just around the corner, these projections will get analysts wondering about the ability of consumers to keep spending. No wonder the Dow is down almost 130 points after 90 minutes of trading. (Bloomberg)

Gas helps economy?: Earlier this year, when we were starting to see $4-a-gallon pump prices, the concern was that consumers would stop spending in order to keep their gas tanks filled. But what happens when prices keep falling? The government's latest survey shows that the average price of a gallon of regular in L.A. was $2.889, down from $2.965 last week. As usual, opinion is split on where prices are headed and what it all means. (EIA)

Hollywood agent wins: Ed Limato, who represents Steve Martin, Denzel Washington, Mel Gibson and a bunch of other top names, can leave International Creative Management for a rival firm - and take his clients with him. The arbitration ruling makes Limato a free agent and puts all those stars in play. The speculation is that he’ll land at either William Morris or UTA. "I am deliriously happy to be free to go on with my career," Limato told Daily Variety moments after learning of the verdict. "I plan to continue as an agent for as long as I can."

China piracy crackdown?: Not sure how much good it'll do, but the Bush administration has asked the World Trade Organization to force China to crack down on pirated goods, including movies and software. The U.S. says slipshod rules have created a black market that's costing companies billions of dollars annually. U.S. officials want to see more aggressive prosecution in China of those who pirate copyrighted or trademarked materials. (Reuters)

Oscar and pink slip: Talk about interesting timing. Phillip Feiner, who won an Academy Award this year for scientific achievement, sued his former employer, Safeguard Scientifics Inc. for more than $15 million, claiming that he was pushed out after 30 years at the company. Feiner, who had been president of Pacific Title & Art Studio, said he had been targeted after refusing to go along with an alleged scheme to make rosy projections about the company's earnings. An attorney for Pacific Title and Safeguard Scientifics said the companies had done nothing wrong. From the LAT:

Feiner, who joined the company in 1977 as a cameraman, was named president in 1997 when Safeguard bought an interest. Safeguard acquired the rest of the company two years later. According to the suit, Pacific's sales soared to more than $31 million in 2005 from $13 million in 1997. The company also became more involved in digital visual effects and film restoration. Feiner and three other executives at Pacific Title were awarded a scientific-and-engineering award in February for their work designing the so-called Rosetta process for creating digital archival masters for digital film restoration. Feiner's suit said that when he was fired on March 27, he was told not to return to the offices and he didn't have a chance to say goodbye. Instead, "Feiner's office was ransacked and he was not allowed to retrieve his personal items for two weeks. Even Feiner's Academy Award was paraded through the office as a trophy."

Finger-pointing over Customs: Predictably, we're hearing different versions of why it took so long to fix that Customs computer at LAX over the weekend. The International Air Transport Association says that the Customs folks were much too slow on the uptake, while the Customs folks say they did everything they could. From the LAT:

Accustomed to frequent, short-lived outages, customs officials said they mistakenly believed their computers would be up and running within an hour Saturday. Then they made another mistake, aviation officials said. They misdiagnosed the problem, deciding it involved high-speed communications lines that link to the national law enforcement databases used to assess possible security threats posed by arriving passengers. They called in the service provider, Sprint Nextel Corp. But a technician did not arrive for four hours, aviation officials said, and took three hours to determine that the transmission lines were not the problem.

Meanwhile, there was another glitch early Monday morning that delayed about 1,700 passengers. (Daily Breeze)

Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the confusing housing market, how the new immigration rules will impact business, and LAX's problems with international flights.