Wednesday morning headlines

Inflation up: The Fed is stuck with lowering interest rates, but January's higher-than-expected numbers could limit the size of future rate cuts. Even so, the stock market is up. (Bloomberg)

Separate trials in Pellicano case: L.A. entertainment attorney Terry Christensen won't be stuck standing next to the infamous private eye. Christensen is charged with paying Pellicano $100,000 to wiretap the ex-wife of longtime client Kirk Kerkorian in connection with a bitter child-support case. Christensen's attorneys argued that he was a minor player in the Pellicano case. From the LAT:

According to the indictment, the wiretapping of Lisa Kerkorian began March 15, 2002, when an attorney called Pellicano and told him to contact Christensen about "going after" the wife's attorney in the child-custody dispute. During snippets of alleged conversations included in the indictment, Pellicano alluded to eavesdropping on conversations between Lisa Kerkorian and her attorneys that could help Christensen with a court hearing. Pellicano also told Christensen to "be careful" about the information he was receiving from the private eye because "there is only one way for me to know this," the indictment said. From the outset, however, Christensen insisted that he had never participated in wiretapping and turned to Pellicano only to investigate death threats and extortion attempts against Kirk Kerkorian and his young daughter.

Sharper Image files Chapter 11: Just too many defective air purifiers. The once-flashy retailer (remember how exotic the catalog items seemed to be?) lists $251.5 million of assets and $199 million of debts as of January 31, according to a bankruptcy filing. CFO Rebecca Roedell says the company has suffered from increased competition, narrowing margins, litigation, lower consumer and market confidence, tighter credit from suppliers, and poorly performing stores. (Reuters)

Slaughterhouse rules sidestepped: Workers know when federal inspectors will be at the plant, which pretty much defeats the purpose of an inspection program. Lots of reports and hearings have sounded this theme, but this week's massive beef recall involving a Chino plant is another reminder of how ineffective the government inspections can be. From the LAT:

One USDA inspector, who asked not to be named because he is employed by the Inspection Service, said the agency did not have the adequate staff and resources to enforce multiple regulations on meat production given workers' efforts to dodge oversight. "They know where I'm at. if I'm headed to the plant, they've got the radios to say, 'This guy's headed out to the pens,' " he said. Slaughterhouse employees often struck up conversations with inspectors to keep them from going to parts of the plant where workers were doing something against regulation, the inspector said. At Hallmark/Westland, five on-site inspectors oversaw around 100 employees.

Clemens pulls out: He had been scheduled to appear at Disney World but said in a statement, “I believe my current participation could be a distraction.” (NYT)

Year-round premieres: NBC will introduce new shows throughout the year, perhaps moving towards the elimination of new program lineups each fall. It's hardly a new notion - cable channels and even the networks have moved away from introducing series in only September and October. (NYT)

MySpace holding talks: The social-networking service wants to form an online service that would let users listen to music free - as long as they do it at their computers. The service, tentatively dubbed MySpace Music, would probably be formed as a joint venture between MySpace, which is owned by News Corp., and the major music labels. MySpace has been talking to Universal Music, Warner Music, EMI and Sony. From the WSJ:

The new proposal isn't fully fleshed out, but people familiar with the plan said it is likely to include both free, streaming music and paid MP3 downloads, which can be played on virtually any portable device, including Apple Inc.'s popular iPod. The streaming service would be supported by revenue from advertising sales, which would be split with the labels, these people said. MySpace executives have also discussed the possibility of selling merchandise like T-shirts through the service, and of running a paid subscription service that would let users play rented music on some specially configured portable devices, though probably not on iPods, these people said.