Tuesday morning headlines

Big oil profits: Keep this in mind the next time you fill your tank: Royal Dutch Shell and BP both reported record first-quarter numbers, beating analysts’ expectations. Shell’s net income rose 25 percent to $9.08 billion. Exxon Mobil and Chevron are set to report later this week. (NYT)

Big lender tumble: Countrywide Financial posted a $893 million first-quarter loss, the result of more foreclosures and late payments. That won't offer any comfort to shareholders of Bank of America, which is in the process of acquiring Calabasas-based Countrywide. From Bloomberg:

"The problem with Countrywide is that it comes with this portfolio that was not underwritten correctly and is very sloppy,"' said Paul Miller, an analyst at Friedman Billings Ramsey & Co., in an interview with Bloomberg Television. Miller expects Bank of America to end up buying Countrywide at a lower price than originally negotiated.

Speaking of the deal: Federal Reserve got an earful during an L.A. hearing on the Bank of America-Countrywide deal. Some of the speakers said the Fed shouldn't approve the takeover without requiring more help for struggling buyers. U.S. Rep. Maxine Waters also ripped into the compensation of Countrywide CEO Angelo Mozilo. (LAT)

Zell's tough love: Before he began dabbling in newspapers, Sam was a pretty fair observer of the real estate scene (and made a few bucks in the process). Speaking at the Milken Institute Global Conference, the Tribune CEO blamed the government for encouraging homeownership and the borrowers themselves. "We need to clear out all of those people who should never have been in houses in the first place and who for sure shouldn't be getting sympathy," he said. (LAT)

"Grand Auto" day: Never mind all the recession talk - the latest edition of the action-packed videogame goes on sale today and over the next two weeks, it's estimated that five million players will be plunking down $60 apiece. Actually, folks are spending money on all kinds of games - software sales were up 63 percent in March compared with a year earlier. From the NYT:

Avid fans of the Grand Theft Auto games acknowledge that buying the new Grand Theft Auto — and spending hours descending into a free-for-all of crime and punishment set in an animated facsimile of New York City — can require some financial sacrifice. But for many, the purchase of the game is justified by its entertainment value. Finishing the game can take more than 40 hours, turning a $60 investment (tax not included) into entertainment that costs less than 70 cents an hour (food and bathroom breaks not included).

Pellicano end-game: Closing arguments are set to begin today and the jury could start deliberating in another day or two. The case boils down to whether the Hollywood private detective engaged in wiretapping for the purpose of getting incriminating material to help clients (or the clients of the attorneys he worked for). His fellow-defendants include a former LAPD sergeant who allegedly ran illegal police checks on hundreds of people and a former phone company supervisor who allegedly helped set up the illegal wiretaps. (THR)

Another resignation at Calpers: This time it's CEO Fred Buenrostro, who is leaving California's giant pension fund. The announcement comes just days after the resignation of Russell Read, chief investment officer. In February, another senior executive left. All of which has folks wondering what's going on. From the WSJ:

Three members of the fund's 13-member board are new in recent months, and one question has been whether tension has emerged between the board and the executives. Mr. Buenrostro said that "the board is very engaged. That's a healthy board. We have exciting discussions, and not everyone agrees." In a statement Monday, Calpers Board President Rob Feckner said, "Media reports that raise a specter of controversy between him and the Board are exaggerated. Anyone who knows Calpers knows that part of our success as an organization is our willingness to speak frankly and debate the issues. It comes with the territory."

Trouble over airport contracts: The head of Los Angeles World Airports will meet today with Councilwoman Janice Hahn to explain her controversial decision on a recent airport contract. The flap is over Gina Marie Lindsey wanting to take a second look at a bidding process that had Bechtel getting more points than DMJM (the award was eventually given to DMJM). The Daily Breeze broke the story over the weekend.

Backdating case recommended: Former Pixar CFO Ann Mather has been notified that the SEC could take civil action against her for allegedly improper dating of stock-option grants. This was before Pixar was acquired by Disney, which had conducted its own backdating inquiry. (Reuters)

Unions to fight layoffs: Lots of grousing about Mayor Antonio Villaraigosa's plans to eliminate jobs and require furloughs as a way of closing a $406 million budget shortfall. A labor coalition says the mayor has to negotiate with the unions to enact any mandatory unpaid leave. Villaraigosa says the city can order furloughs. Meanwhile, Councilman Bernard Parks says he's concerned that the mayor wants to balance the budget with one-time revenues - rather than confronting the fact that L.A. spends more money than it brings in. (Daily News)

Maguire proposal turned down: The downtown real estate mogul offered to buy a majority stake in the publicly owned Maguire Properties, but he was rebuffed by the board (even though he's the founder of the company). It's just the latest crazy chapter of a company that's been on and off the market for months. Maguire's highly leveraged offer involved selling most of the company's buildings outside of Orange County to help pay for the acquisition. From the LAT:

Selling properties in Los Angeles and San Diego counties would leave Maguire with substantial holdings in Orange County, where he made a big investment in 2007 as part of a nearly $3-billion purchase of a portfolio of office buildings from New York investment firm Blackstone Group. The blockbuster deal saddled Maguire Properties with considerable debt, now at $4.8 billion, and helped put pressure on Robert Maguire to relinquish control of the company. But he remains chief executive and chairman.

Lacter on radio: This morning's business chat with KPCC's Steve Julian covers the drop in local auto sales and how consumers are cutting back in the face of an economic downturn. Also available at KPCC.org or through podcast.