Tuesday morning headlines

Fresh start?: Maybe it's just April Fool's Day, but UBS reported a quarterly loss of $12 billion on write-downs of $19 billion - and the Dow is up more than 200 points. What's up with that? Some investors appear to be betting that it could be the last of the major hits from the credit crisis. (WSJ)

Paulson plan DOA: For all the hoopla about Treasury Secretary Paulson's proposal to overhaul the financial regulatory system, there's little, if anything, in the package that Congress is likely to pass this year - or perhaps ever. Key lawmakers say they want to take their time in weighing such broad changes. And they're hearing from none-too-pleased state regulators and consumer groups who say that the proposal would do little to curb risky behavior by financial institutions. From the NYT:

“Since this is opening day in baseball, I might as well make a baseball metaphor,” said Senator Christopher J. Dodd, the Connecticut Democrat who heads the Senate Banking Committee. “This is a wild pitch. It is not even close to the strike zone.” Mr. Dodd and Senator Harry Reid of Nevada, the majority leader, said in a telephone conference call with reporters that overhauling the regulatory structure was not a high priority. Instead, they said, they were hoping to quickly move legislation that would help homeowners facing higher mortgage rates and foreclosure. The Democrats’ bill would provide an additional $200 million for counseling for homeowners in danger of foreclosure, would authorize $10 billion in bonding authority for housing finance agencies to refinance subprime loans, and provide $4 billion for local governments to purchase foreclosed properties.

M&A action nosedives: First-quarter dealmaking volume in the U.S. fell 41 percent, to $204 billion (Europe had a 17 percent drop). The quarter was marked by an increase in hostile offers - most notably Microsoft's $44.6 billion bid for Yahoo. By the way, the word is that Microsoft has no plans to raise its bid, choosing instead to bide its time until Yahoo softens up. Reminds me a little of Rupert Murdoch's strategy for Dow Jones. (WSJ).

SAG loses leverage: Not having the American Federation of Television and Radio Artists as a bargaining partner could leave the Screen Actors Guild second in line when it comes to negotiating with the networks and studios. You might recall that SAG dragged its heels on getting contract talks started last month - and yet the guild says it should get its deal done ahead of AFTRA. But that's not likely to happen. From Variety:

SAG's new request for negotiations to begin as soon as possible marks an about-face from the position it took after the majors announced they were ready to go with talks in mid-February. It was previously unwilling to start negotiations until after it had completed its official preparations -- despite pressure from high-profile members George Clooney, Robert De Niro, Tom Hanks and Meryl Streep to start ASAP. SAG had insisted it could not start talks until a joint board meeting approved the joint proposal -- an event that had been set for Saturday but was then called off once AFTRA's board voted to end its negotiating partnership with SAG. Sources believe the majors will opt for talks with AFTRA first since early informal discussions with SAG leaders haven't yielded much.

KCBS layoffs: Still no word on how many at the local O&O, but other CBS stations are taking huge hits: 30 staffers at WBZ Boston, 17 at WBBM Chicago and 14 at KPIX San Francisco. Among KPIX’s casualties was reporter Manny Ramos, who has been at the station for 28 years. "When I walked in, they told me it was going to be a bad day in the newsroom," he told the SF Chronicle. "Then they told me it was going to be a bad day for me, too."

Northrop launches counteroffensive: CEO Ronald Sugar is in Washington to defend winning that huge Air Force contract for refueling tankers. The L.A.-based aerospace company is running ads and executives have been on Capitol Hill to present their case on why Northrop and the parent company of Airbus were selected over Boeing. “We normally would not do something like this, frankly,” Sugar told reporters. “The only reason why we’ve chosen to speak up here is that ... we’ve seen so much misinformation … we thought it was important to set the record straight.” He obviously was referring to Boeing, which has filed a formal complaint about the Northrop selection. From The Hill:

The most noise is coming from the Washington state and Kansas delegations, which are strong supporters of Boeing, and the Alabama and Mississippi delegations, which are protecting Northrop’s win. Sugar warned that any congressional moves to reverse or block the award could bog down procurement of future weapons and slow foreign purchases of U.S. weapons. U.S. defense contractors sell six times as much to Europe as vice versa, he said.

Little change in gas prices: The government's weekly survey show that the average price of regular in the L.A. area was $3.602, less than a penny higher than last week.

Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the liquidity problems at Fremont General, a union organizing campaign for L.A. car washers, and the court battle over licensing fees for Marilyn Monroe's estate. Available online or podcast.