Friday morning headlines

Big dip in jobs: Wowser - a decline of 63,000 payroll jobs in February after a revised decline of 22,000 in January (monthly drops like that rarely happen). And get this: Had it not been for a solid increase in government jobs last month, payrolls would have fallen by over 100,000. It was the fastest falloff in the labor market in five years, offering perhaps the clearest indication to date that the economy is contracting. The numbers also raise the likelihood of a huge cut in interest rates later this month, perhaps as much as a full percentage point. From the NYT:

The private sector lost 101,000 jobs last month, the biggest drop-off in five years. Retail stores shed 34,000 jobs, while the manufacturing sector lost 52,000 workers and construction firm payrolls shrank by 39,000 jobs. Would-be workers are also feeling more discouraged. Fewer Americans looked for work in February, and the size of the nation’s overall labor force declined. Those developments sent the unemployment rate down to 4.8 percent last month from 4.9 percent in January. Wages grew more slowly, further depressing the outlook for consumer spending over the next few months. Among rank-and-file workers — more than 80 percent of the work force — average pay grew just 0.3 percent to $17.20 an hour. Wages are effectively running flat when adjusted for inflation.

Cargo falloff expected: Not a big surprise, given what's been happening on the retail front. A report by the National Retail Federation and Global Insight expects the decline to continue through July. Cargo container volume at the nation's ports fell nearly 10 percent in February from a year earlier. Drops in national cargo container volume have been reported for seven consecutive months. (Daily Breeze)

Gas prices keep rising: Well, what do you expect when oil prices are $105 a barrel? The Auto Club's latest survey shows that the average price of regular in L.A. is $3.498, which is 13 cents higher than last week, 45 cents more than last month, and 61 cents above last year. Let's see, thousands of folks are losing their jobs, wages are nearly flat, foreclosures are at an all-time high, and now we have to shell out way more for gas. Time for a group hug?

And then there's Angelo: A House committee looking into the pay package for Countrywide CEO Angelo Mozilo discovered that two consultants hired by the mortgage company raised concerns about Mozilo's compensation. A third consultant was then brought on who apparently said the three magic words: Pay the man. The result was a contract "significantly more generous to Mr. Mozilo" than originally recommended, according to the committee report. Today, Mozilo will testify before the House Committee on Oversight and Government Reform, along with E. Stanley O’Neal, the former chairman of Merrill Lynch, and Charles O. Prince III, the former CEO of Citigroup. From the LAT:

"We're trying to understand why these three gentlemen should collectively walk away with hundreds of millions of dollars while their companies are losing billions," said Rep. Henry A. Waxman (D-Beverly Hills) in an interview. "It's hard to know why we're rewarding failure." Mozilo made $48.1 million in salary, bonuses and stock-based pay in 2006, the most recent year available. As the mortgage industry swooned in late 2006 and 2007, he cashed out stock options valued at about $140 million. Countrywide's shareholders, meanwhile, have lost nearly $23 billion in equity since February 2007, when the Calabasas-based company's share price hit a $45.02 peak. On Thursday, the shares fell 50 cents to $5.20. Mozilo declined to comment Thursday, although he has defended his compensation in the past as his rightful reward.

NYT has coverage of this morning's hearing:

“There seem to be two economic realities operating in our country today," Representative Henry Waxman, Democrat of California, the committee chairman, said as the hearing opened Friday morning. “Most Americans live in a world where economic security is precarious and there are real economic consequences for failure. But our nation’s top executives seem to live by a different set of rules.” The question before the committee, he said, was this: “When companies fail to perform, should they give millions of dollars to their senior executives?”

Bloomberg bracing: As news organizations go, it's still a pretty cushy place, but the NY Post's Keith Kelly reports that Bloomberg recently imposed a salary freeze for anyone making a base salary of over $200,000 a year (that apparently includes 20 percent of the editorial staff). Next up is expected to be freezes on the headcount – and some staffers are getting grumpy.

A new conference room, just constructed for Editor-in-Chief Matt Winkler, who is also a corporate board member, is also rubbing people the wrong way. While they're freezing salaries, they went ahead and expanded, by about half, the square footage of Winkler's personal conference room and office, and added new Italian furniture and lighting. The total cost: upward of $50,000. "It's good to be king," sniped an insider.

New mortgage inquiry: Illinois's AG issued subpoenas for Countrywide Financial and Wells Fargo as part of an investigation into whether lenders improperly steered minority borrowers into high-cost loans. There are other similar investigations going on in the wake of the mortgage crisis. If discriminatory lending is found, lenders could be forced to modify loans. From the WSJ:

Government officials, civil-rights groups and housing advocates have long complained that minority borrowers were unfairly steered into high-cost loans. They now worry that rising foreclosures might push down home prices and property-tax revenues and contribute to urban blight. A Wall Street Journal analysis last year found that in 2005, the peak year of the subprime boom, borrowers with relatively good credit scores got more than half -- 55% -- of all subprime mortgages that were ultimately packaged into securities for sale to investors, as most subprime loans are.

Toothpaste charges: Four executives at two American companies have been accused of selling imported toothpaste from China that contained a poison used in some antifreeze. The toothpaste ended up being distributed in the United States in prisons, hotels, hospitals and discount stores. L.A. City Attorney Rocky Delgadillo filed a criminal complaint against two Los Angeles-based importers, Vernon Sales Inc. and Selective Imports. It's the first instance of criminal charges being filed in the toothpaste scare. (NYT)

SAG, AFTRA make nice: After all their bickering, the two unions will negotiate jointly on a new contract with the studios and networks. Talks should begin in late March or early April. The AFTRA folks had been pushing for the end of March. Had AFTRA moved to cut its own deal, SAG's bargaining power would have been greatly diminished. Of course, there's considerable doubt about how well the SAG and AFTRA folks can work together. (Variety)

Auto dealership to close: Peninsula Pontiac in Torrance will be shutting down today. The dealership's three-acre lot is owned by the city, which leases the land to General Motors. Torrance officials plan to discuss the lot's future with the automaker. (Daily Breeze)