Tuesday morning headlines

To cut or not to cut: For several days it's been assumed that the Federal Reserve will lower interest rates by at least a quarter point, but there appears to be some sentiment for no cut at all. This is very unsettling news on Wall Street where a rate cut is not only welcomed but at this point expected. Except here's the thing: the economy is in decent shape. Sure, there's the housing collapse and credit crunch, but there's also low unemployment, higher exports and fairly solid corporate profits. The Fed meets tomorrow. (FT)

Speaking of housing...: Countrywide CEO Angelo Mozilo and KB CEO Jeff Mezger paint a pretty bleak picture, with Mozilo telling a Milken Institute forum that that the worst isn't over. How that jives with his expectation that Countrywide will return to profitability this quarter is a bit mysterious (imagine being a shareholder and trying to sort out this guy's mixed messages). Mezger says housing prices in California could fall 10 percent to 15 percent in the next 18 months, which seems way high for urban areas like L.A. and S.F. And they think the media sensationalizes! (AP)

Countrywide skeptics: So how exactly will the Calabasas mortgage lender score a fourth quarter profit with so many bad loans out there? Countrywide is relying heavily on collecting more deposits at its savings-bank unit (it's pushing 5.65 percent yields), but it's not at all clear whether that will be enough, according to Frederick Cannon, an analyst at Keefe, Bruyette & Woods. He says that the high rates suggest that Countrywide can raise funds "only at very high prices." (WSJ)

It's looking like a strike: Nikki Finke, who along with Variety's Dave McNary seem to be the only people in town covering the WGA contract talks (guess those hard-hitting Denzel Washington profiles are taking up too much time), came across an email from one of the guild's strike captains that reads "We were told, It looks like we are going to have to strike. Basically we are at a standstill." Now it's worth noting that this kind of stuff often pops up in the days before a contract is due to expire - and it's not always on the mark. But the vibes certainly don’t feel good, especially with the head of Teamsters Local 399 essentially saying that members should not cross picket lines. If that happens, production pretty much shuts down.

Torre watch: Believe it, don't believe it, but the reports of the former Yankee manager taking over the Dodgers seem to be heating up this morning. The Journal-News of Westchester, New York, citing two sources close to the situation, said Torre could be named the Dodgers new manager as early as today (that seems doubtful). And Don Mattingly, who was one of the three finalists for the vacant Yankees job, is expected to join Torre in Los Angeles as his bench coach. Grady Little's contract would be bought out. (Sports Network)

And the NFL too?: Oh no, not another campaign for pro football! This time, it's developer Ed Roski, who you might recall tried to nab a franchise back in the 90s. He says he's proposing a stadium in the City of Industry. Some NFL development guy tells the LAT that league staffers will meet in Los Angeles next week and perhaps check out the site, which appears to be a vacant piece of land just beyond the intersection of the 57 and 60 freeways.

"We own the land, have all the entitlements in place, and if you made a list of 100 things you would like to have with a new stadium, this probably has 90 of them," Roski said. "And working in the field that I do, I know something about location, and this is the perfect place for the Greater L.A. area -- located right in the middle of five counties." Roski and John Semcken, who did much of the early legwork on Staples Center, took over the management of the Eisenhower and Zaharias Golf Courses in Industry Hills six years ago and have made a number of substantial improvements to the attached Pacific Palms Resort.

Lerach makes it official: As expected, the now-infamous class action attorney pleaded guilty to conspiracy to obstruct justice. Terms of his plea agreement include forfeiture of $7.75 million to the government, a $250,000 fine, one to two years in federal prison without parole and three years of supervised release. Lerach gave kickbacks of about 10 percent of the firm’s share of settlements to individuals who remained on call to act as lead plaintiffs, according to prosecutors. (NYT)

Blogging for bucks: Curbed.com, the real estate blog with sites in L.A., NY and SF, has obtained $1.5 million in financing to expand into new cities. Gawker Media is an investor, among others. Traffic is growing 10 percent a month and the site is drawing national advertisers. In the real estate Web world, advertising-supported sites seem to be a better bet. (NYT)

Lacter on radio: Today's business chat with KPCC's Steve Julian covers the crop damage from last week's fires, areas where defaults are most prevalent, and the bootlegging of movies for the Internet.