Thursday morning headlines

Trading places: Remember the old days, say about a week ago, when the dollar kept slumping to new lows and the price of oil hit $111 a barrel? Well, it's now going in the other direction, with the dollar gaining and oil slumping (it's trading at under $100 this morning). Most all commodities are falling, as investors place their money into safer vehicles. "The trend right now is to just get out of risk," Gregory Printon, a trader at Clarion Trading Services, told the WSJ. "Banks and brokerage houses are trying to clean up their books and... people are [waiting to] see what will actually happen."

Ripple effect: With imports at the ports of Los Angeles and Long Beach down 8.8 percent in the first two months of the year, shippers, railroads and package delivery companies are making some adjustments. Example: three of the largest global carriers are sharing space on the same ships instead of operating their own weekly shipping services. From the WSJ:

The ocean-freight slowdown bodes ill for railroads, delivery companies and others that bring imported goods to U.S. businesses and consumers in the coming weeks and months. Volumes of Asian-made goods crossing the Pacific Ocean peak in the summer and early fall for back-to-school and holiday shopping. Railroads then move the bulk of the items across the continent from ports on the West Coast. Package-delivery companies such as United Parcel Service Inc. and FedEx Corp., which together handle about 22 million packages a day, close the final gap with stores and consumers.

Speaking of delivery: FedEx said profit fell for the second straight quarter and would decline in the current period because of skyrocketing fuel costs and a struggling economy. "The total economic activity that is driven by the shippers who may not have as many packages to ship globally and domestically," Satish Jindel, president of Sewickley, Pennsylvania-based SJ Consulting, told Bloomberg.

MGM in credit crunch?: The studio's financial backers are getting antsy, according to the NY Post, and apparently there's chatter about hedge funds and other investors buying up MGM's $3.7 billion in bank debt at a deep discount and possibly gaining control of the studio. The Post reports that MGM generates about $400 million in annual cash flow but has interest expenses of roughly $300 million. That's enough to service the debt, but there's little is left to finance movies. The subtext for all this is MGM Chairman Harry Sloan's plan to build a full-fledged studio, a strategy that's not being well-received among some shareholders who want to focus on maximizing the value of the library.

No airfare bargains: Airlines are cutting flights, adding fees, trimming frequent-flier programs and cutting customer service personnel. That's right, flying could actually get worse, with packed plans and higher fares. And with a weak dollar, travel overseas may be a nonstarter for many families. Of course, all that assumes there won't be any major airline mergers, which would upend the travel industry even further. From the LAT:

In addition to slashing 2,000 employees, or 4% of its workforce, Delta said it would begin charging $25 to check in a second bag. United Airlines last month was the first big carrier to impose the fee. Delta President Ed Bastian, in a meeting Tuesday with industry analysts in New York, called the high fuel costs "unprecedented if not a crisis for this industry." If oil prices continue to hover at the current record levels, the airlines' fuel expenses would increase by more than $2 billion compared with last year, he said. "It's not a good time for the industry," Bastian said. "We're in an uncharted territory."

Borders on the block: The nation’s second-largest bookseller has hired Merrill Lynch and J.P. Morgan to explore strategic alternatives, which is biz-speak for putting out the for sale sign. Actually, there are other possibilities, such as selling off divisions. Pershing Square Capital Management - the company's biggest shareholder - has offered to buy some international operations. Pershing is also committed to lending the company $42.5 million. Borders has been losing big-time market share to Amazon and Wal-Mart. (AP)

Milberg plea deal: Melvyn Weiss will plead guilty
in connection with an alleged scheme to pay millions of dollars to clients at the Milberg Weiss law firm in exchange for their serving as name plaintiffs in shareholder class-action cases. That’s according to the WSJ. Weiss could have faced 40 years in federal prison if convicted on all counts.

In recent weeks, observers of the case have said a plea by Mr. Weiss was more likely, given that the judge in the case sentenced Mr. Lerach last month to the highest possible term in his plea agreement, two years, and at the sentencing had harsh words for Mr. Lerach's actions. Lawyers familiar with the case say that Mr. Lerach's two-year sentence would likely establish a floor for a potential jail term for Mr. Weiss. The case, out of the U.S. attorney's office in Los Angeles, alleges that Mr. Weiss profited greatly from the kickback scheme. From 1983 to 2005, according to the indictment, Mr. Weiss's share of firm profits was about $209.9 million.

Disney may acquire stores:: The Mouse House is talking to Children's Place Retail Stores about buying part of the Disney Store chain in North America. Children's Place has a long-term license agreement to operate the Disney Store chain, but relations between the two companies have not been smooth since Disney turned over operations in 2004. (DJ)

IHOP sells 41 Applebees: The buyer is Apple American Group LLC and the restaurants are in Southern California and Nevada. Glendale-based IHOP, which bought Applebee's for more than $2 billion last year, plans to sell about 100 company-operated Applebee's in fiscal 2008 for $90 million to $100 million in after-tax proceeds. The money will be used to repay some of the IHOP's debt. (KC Business Journal)

Suit against "Law & Oder": Attorney Ravi Batra filed a $15-million defamation suit in 2004 against producer Dick Wolf, NBC Universal and others, alleging that an episode depicting a "bald Indian-American lawyer" was based on a corruption scandal involving Batra. In what was described as a "libel-in-fiction" case, Acting Supreme Court Justice Marilyn Shafer ruled that the suit can proceed, holding that viewers "would identify" a fictional lawyer character dubbed "Ravi Patel" with Batra "because of the uniqueness of [Batra's] name, ethnicity and appearance." Batra, an Indian-born lawyer, is a well-known figure in Brooklyn political circles. (NY Law Journal)