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The economy is an obvious culprit - as is the L.A. location (numbers were higher last year in NY).
LA Biz Observed archive
Mark Lacter covered business, the economy and more here from 2006 until his death on Nov. 13, 2013.
The entire LA Biz Observed archive — more than 10,000 blog posts by Mark —
remains online and available.
May 2008
Author of the best-selling "Bright Shiny Morning" helped shape his publishing resurrection.
No relief on gas prices, controller clears LAX head, Kerkorian proceeds with tender offer, and so-so year for books.
Sallie Hofmeister, deputy biz editor since 2006, has been promoted to the top spot.
Warning: The following post is not advisable for journalists with weak stomachs.
Even the online world will be taking it on the chin in the April-June quarter. Automotive is a sore spot.
GDP revised upward, SAG still has issues, Murdoch leaning Obama's way, and Dior drops Sharon Stone.
B of A is still buying the mortgage lender, but they won't be including the executive they paid $28 million to be in charge.
He said the networks were nuts to allow a writers strike at a time when their audiences were already slipping.
East Coast burger aficionados have been raving about Five Guys Burgers and Fries - and now it's here.
Provisions appear similar to the contract worked out between the writers and media companies earlier this year.
The good news is that oil prices have been falling and some analysts believe we've seen the worst of the run-ups.
The high-stakes custody battle over who owns rights to the Bratz doll features two of the nation's most prominent litigators.
Home prices still dropping, actors could be nearing a deal, oil takes a dip, and another bad month for newspapers.
It's more challenging than you think. Toilets and sinks can only cost so much, no matter how extravagant they may be.
It's a very strong, but not record-breaking performance for the latest Indiana Jones sequel.
After layoffs and cutbacks, three more executives leave the struggling newspaper company.
In general, the numbers were modest - at least relative to the craziness of the previous few years.
United led the new round of increases, boosting roundtrip ticket prices $10 to $60, depending on distance and competition.
With $4-a-gallon gasoline, consumers are being careful about discretionary spending - as in eating out.
The long-struggling online tech magazine has been displaying error messages all day, which is not a great sign.
The impact of $7 gas, negotiators upbeat about port pact, Stringer urges folks to get mad, and preying on foreclosure.
The unusual weather pattern will continue for the next day or two, with showers popping up in the afternoon hours.
The projections range from $142 million to $175 million over the long weekend. I'm guessing more.
Much of the county is already built out and not subject to subprime calamities further inland.
A merger of the nation's two top bookstore chains is a possibility - antitrust concerns and all.
Oil prices finally slow, new concerns about crude shortages, and L.A. not ready for a big earthquake.
The online music company reported another loss, which means more shareholders putting in their two cents.
Government delays in the awarding of several large contracts are behind the pink slips.
Charging $15 to check in a piece of luggage may seem outrageous, but higher fuel costs leave American little choice.
Oil still going up, first class travel is down, airport traffic is flat, and Mozilo presses the wrong button.
Are the guild leaders just talking a good game or do they have the backing of the rank and file?
He's Robert Thomson, who has served as the Journal's publisher since Rupert Murdoch took over.
The latest Carl's Jr. ad ditches the usual bumping and grinding for another kind of faux reality.
The legendary Washington Post reporter took a huge pay cut two years ago and now may be paying the price.
Oil crosses $129, Maguire speaks out, two views on home prices, and Disney Web users in a lather.
The stumbling block centers on clips of actors' work appearing online, the same issue gumming up talks with SAG.
Shares of the Pasadena bank jumped almost 4 percent on a favorable story in Barron's. But the stock has a long way to go.
Thin refinery margins are the only thing between us and even higher prices - and that could change this summer.
The place is a minefield that's riven with factions, something the new executive director is learning the hard way.
April Socal sales were up sharply from a month earlier, although L.A. home prices continue to drop.
Maguire is ousted, states can still offer tax-exempt munis, and Microsoft is once again eyeing Yahoo.
Dealmaker Kirk Kerkorian is on top for the fourth year in a row. He's followed by Sumner Redstone and Eli Broad.
Redstone managed to take a shot at CBS' Les Moonves and heap praise on him - all in the same day.
This is almost certain not to happen. Check that, it simply can't happen. Or can it?
The real estate company's board is under pressure from shareholders to name a new CEO and chairman.
Had a poor quarter? Just blame it on the writers walkout. Lots of companies are doing it.
L.A. unemployment last month was 5.9 percent, which isn't great but not a disaster either.
New forecast has oil reaching $148, more finger-pointing on Pellicano case, and health care coverage restored.
More folks were taking the bus and subway last month than a year earlier. We'll see how long it lasts.
The Hollywood gumshoe was found guilty on 76 of the 77 charges he faced. Those charges included racketeering, racketeering conspiracy, wire fraud, identity theft, conspiracy to intercept or use wire communications and manufacture or possession of wiretapping device. All four of his co-defendants were also found guilty. They are former LAPD Sgt. Mark Arneson, former phone company technician Ray Turner, computer expert Kevin Kachikian and businessman Abner Nicherie. Kevin is also following the verdicts over...
One transaction is the largest non-options-related sale by a Disney insider in the last five years.
Unlike many of today's publicists, he never made it seem as if he were doing you a favor by just doing his job.
Icahn goes after Yahoo board, CBS to buy CNET, Countrywide suit goes to trial, and Samueli steps down.
He's battling the IRS over whether his family can claim $290 million in tax losses from a $6 million investment.
The SEC accuses Henry T. Nicholas III and Henry Samueli of a scheme to backdate stock options. As a result of the backdating, the SEC alleges, Broadcom had to restate its financial results and reported more than $2 billion in additional compensation expenses. "This egregious misconduct resulted in the largest accounting restatement to date arising from stock option backdating and warrants the significant sanctions sought from these individuals," said Linda Chatman Thomsen, director of the...
Remember when LAT columnist Steve Lopez knocked on the gate leading to Sam Zell's Malibu estate, and Zell got all hot and bothered about "some guy named Lopez" harassing the staff? Well, the folks at Newsday ran into something similar a few days back – right before word came down that the Zell-led Tribune Co. was selling the Long Island paper. Instead of going with Rupert Murdoch's $580-million offer, Zell chose the $650-million offer by...
If you're still a little confused about the particulars behind the housing collapse, check out last week's edition of "This American Life" that's titled "The Giant Pool of Money." It's a little simplistic in some places, but they do an excellent job of connecting many of the mortgage dots - as well as putting human faces (or voices) behind the various steps of the disaster. Looking back on those days, it’s still hard to believe...
Wolfgang Zwiener was asking for trouble by opening his Wolfgang's Steakhouse just down the street from Spago, which happens to be run by some other guy named Wolfgang. Last year Zwiener agreed to use his full name if he ever opened a restaurant outside Manhattan - and technically he does. But in a trademark infringement lawsuit filed in L.A. Superior Court, Puck says that the "By Wolfgang Zwiener" part appears in small print. “People have...
Sidestepping recession? That's the view of a growing number of economists, many of whom all but declared an economic downturn just a few weeks ago. Now understand, no one believes the economy is in good shape - and won't be for quite a while. But that's different from an actual recession. Why the switch? The Fed's sharp reduction in interest rates has a lot to do with it – as do some better-than-expected economic numbers....
Only 7 percent of Angelenos fall into that category, far fewer than the 12 percent in Austin, Texas, according to a new Scarborough Research report. To give you an idea, Vegas, Sacramento and San Diego were near the top of the rankings, at 10 percent; Green Bay, Wisc. was dead last, at 1 percent. The national average was 6 percent. So what does it take to be a digitally savvy consumer? Scarborough identifies 18 areas...
At least that’s according to the latest numbers from Pubmatic, an Internet consulting firm. On average, according to the April results, advertisers paid 38 cents per thousand ad impressions, 23 percent less than the previous month. Faring the worst were larger sites, which as a rule attract a less targeted audience (for advertisers it's often all about targeting). From BW's Rob Hof: The main culprits may be social networking sites, whose CPMs dropped 47%, to...
Losses on home-equity loans will be even worse than predicted three weeks earlier, according to Liam McGee, president of the consumer and small business group. More customers are using credit cards to pay for necessities, and they're also cutting back on shopping, travel and entertainment. McGee, speaking at an investor conference in NY, expects the economy will shrink during the second quarter. But he said the purchase of Countrywide Financial is still "on track" to...
This is one of those devil-in-the-details cases. The City Council is considering a proposal that would impose $25,000 fines on hospitals that drop off patients at places that are not their residences. As in, say, Skid Row. But by making the offense a misdemeanor, the hospital could lose millions of dollars in federal funding. There's also the matter of jurisdiction: what happens if the hospital is in Burbank and the patient-dumping is in L.A.? Supporters...
Signs of spending?: Retail sales fell last month, as expected, but much of the drop came from a plunge in car sales. Put that aside and some of the numbers were actually up a little. Meanwhile, Wal-Mart just reported a big increase in first-quarter earnings, in part because cash-strapped consumers are looking for deals. (NYT, AP) Gas prices steady: The government's latest report shows that the average price of regular in L.A. is $3.898, up...
Weekend talks between the Service Employees International Union Local 1877 and the Building Owners and Managers Association appear to have done the trick. L.A. Mayor Antonio Villaraigosa got into the discussions late last week. At issue were higher wages and benefits and a two-tier pay system in which janitors in some buildings were paid more than others. Terms of the deal were to be outlined at a news conference this afternoon. (LABJ)...
Some of you might find it perverse to consider the economic fallout from today's disaster in China's Sichuan province, but the nation's manufacturing activities have become so critical to global commerce that it's hard not to ask the question. Merrill Lynch economists say that the earthquake did not hit a major manufacturing center and caused little or no damage to regional transportation. The province is mainly an agricultural area, accounting for just 2.5 percent of...
All of a sudden companies - or their bankers - are willing to take out their checkbooks, which is another sign that corporate America believes the worst of the credit crisis is over. It may be true, it may be wishful thinking, but there's no denying that deals are suddenly getting done - and Wall Street is noticing (the Dow closed up 130 points). Just today: --Hewlett Packard is in advanced talks to buy Electronic...
Downtown project stalled: This was to be a $125 million mixed-use development near the Historic Core, the Toy District and the Civic Center. It's an unusual decision because construction is already under way – the plug usually gets pulled before this point. Developer Saeed Farkhondehpour tells the Downtown News that the economy and rising costs are to blame, though he's hopeful that construction will resume next year. "Financing was all arranged; financing is still in...
More deli and meat selections, better signage and additional "international" products are in the works, according to the OC Register's Nancy Luna. An announcement could come as early as next week. Analysts say that the fledgling chain, which is owned by the British retailer Tesco, has not been doing well (store openings were suspended in March in order to smooth out the wrinkles). Tesco executives insist that sales are just fine, but I'll side with...
Out of the blue (at least to us outsiders), News Corp. has pulled its $580 million bid for the Tribune-owned Long Island newspaper, just days after CEO Rupert Murdoch told analysts that a deal was imminent. It seems that he was unwilling to match the $650-million offer by Cablevision, which is controlled by the Dolan family and has a bunch of Long Island ties. Also making a $580-million offer - and considering upping that -...
These are cellphone companies that package all kinds of features and re-sell the phone service part through Sprint Nextel. L.A.-based Helio was started by Sky Dayton and, like Virgin Mobile, has been under pressure in the face of slowing growth. You might recall that Disney dropped its Disney Mobile service last year, and L.A.-based Amp'd Mobile declared bankruptcy (these businesses burn lots of cash). Anyway, Helio and Virgin are in advanced merger talks, according to...
Boy, talk about your sign of the times. The Bloomingdale's by-mail catalog is being discontinued next year in favor of a major push to online retailing on the Bloomingdales.com Web site. Might this be a harbinger of similar moves by other retailers? Well, Bloomingdale's CEO Michael Gould issued some gobbledygook comments in announcing the transition that would seem to point that way. “As more customers turn to the Web for access to Bloomingdale’s, their shopping...
The Bev Hills billionaire wants to boost his stake in the car company from 4.7 percent to 5.5 percent. That follows an unsuccessful effort last year to bid on Ford's Jaguar and Land Rover divisions. Tracinda Corp., which is Kerkorian's investment arm, said in a filing today that it may "from time to time, propose business strategies and, subsequent to the expiration of the offer, acquire additional shares.” Hmmm. In 1995, he made an unsuccessful...
This time, two Romanians have dismissed their discrimination and fraud case against the film's producers. Nicolae Todorache and Spiridom Ciorebea, who were depicted in the opening scenes (a Romanian village substituted for Kazakhstan), didn't pursue their case after filing one of the early "Borat" suits. So far, plaintiffs haven't gotten far in their allegations, most of which center on the producers somehow tricking them into the film (and of course having them act like idiots)....
Gas prices ease: Not that you'll notice. The Auto Club survey shows that the average price of self-serve regular gasoline in L.A. is $3.896, a whole six-tenths of one cent lower than last week. Consider it more of a pause - oil prices reached $125.12 a barrel in electronic trading on the NYMEX and that will hit gas pumps soon enough. (AP) Circuit City relents: The struggling electronics retailer now says it will allow Blockbuster...
This may come as bad news in some parts of Hollywood, but Disney has re-signed Stephen McPherson as president of the network. Based on what’s been written, this is not a nice guy. At a television critics convention, he supposedly told a group of reporters that he hoped one of their absent colleagues had been in a car crash. He once called NBC executive Ben Silverman "either clueless or stupid." What he does do well...
It's a partnership of Phil Anschutz's sports and entertainment company and the boxer's Golden Boy Promotions. The idea is to use AEG's assets (it owns or is affiliated with nearly 100 venues worldwide) and Golden Boy's roster of 50 fighters. From the LAT: AEG Chairman Tim Leiweke said discussions of a possible union have been going on since De La Hoya fought Mosley at AEG's Staples Center in 2000. Schaefer said those negotiations intensified in...
Deputy Editor Glenn Hall will be leaving the paper to become editor of TheStreet.com in NY. Register Editor Ken Brusic said Hall told him that the move was not prompted by the recent round of layoffs or any lack of confidence in the paper. Hall oversaw the decision to move the Register’s business section into main news - as well as the elimination of most stock listings. Since 2007, he has been deputy editor in...
Tejon deal reached: The developer of the massive residential project agrees to set aside 178,000 acres and offer up an additional 62,000 acres for public purchase. In exchange, a coalition of environmental groups will not oppose plans for more than 26,000 homes, as well as hotels, condos and golf courses. Tejon Ranch is about 60 miles north of Los Angeles. From the LAT: Eight times the size of San Francisco, the unfragmented 270,000-acre property embraces...
Councilwoman Janice Hahn seemed to give the all-clear today by praising Gina Marie Lindsey, the city's airport director, after two weeks of allegations and innuendo that Lindsey had improperly handled a big contract. "We have great confidence in Gina Marie Lindsey and are delighted she was tapped to run our airport," said Hahn, who chairs the Trade, Commerce and Tourism Committee. The suspicions apparently got started with an anonymous email making the rounds at City...
Among the well-to-do out there - we're talking about folks with an average discretionary income of $342,000 - optimism about the U.S. is at an all-time low. A new survey on affluence in America finds that nearly 80 percent of those sampled in April say a recession is under way, and four in five say it's due to the easy availability of debt. Nearly two-thirds of survey participants remain upbeat about their own lot, but...
At least that's according to research company TNS, which is out with its annual survey of millionaire households. L.A. County maintains its top position, with 261,081 seven-figure households, though that’s down 7,000 from a year earlier. OC, ranked fourth nationally with 115,396 millionaires, is also down. Nationwide, there were 9.9 million millionaire households in 2007, a 5.9 percent increase (TNS defines millionaire households as those with at least $1 million in net worth, not including...
Morale at the Los Angeles office of Sidley Austin is "perilously low," according to Above the Law - so much so that the firm held a three-day "mini-retreat" at the Biltmore (just a few steps from Sidley's downtown offices). As ATL notes, one day was for senior associates, one day for mid-level folks, and one day for juniors. The meetings were not well-received in all quarters. The idea of mandatory, lengthy, and non-billable meetings didn't...
$150 oil?: It might happen as early as this fall, according to some prominent energy analysts. That, of course, raises huge questions about gas prices and the overall economy. In case you're wondering, $150-a-barrel oil would probably push L.A. gas prices well over $5 a gallon. This morning, U.S. benchmark crude was running a little under $122 a barrel. From the WSJ: "It's not that the genie is out of the bottle -- it's that...
I'll be away for a couple of days. Be back Wednesday....
Superstar economist Robert Shiller (aka Dr. Doom) took a crack at that one during a lengthy interview with Portfolio's Lloyd Grove. The reference centered on Shiller's warnings going back to 2003 that there might be a housing bubble. By 2005, he was raising the possibility of a major housing crisis. Of course, no one listened – even though he’s the same guy who called the dot-com bubble. Guess everyone was too busy buying houses and...
And I really mean betting. All week long we've been hearing predictions of how many jobs would be gained or lost for April, as always happens in the days before the first Friday of each month. But now there's actually a futures market where traders can place bets on what the number will turn out to be. This exotic product provided no better insight on the April numbers than any economist. As Annelena Lobb reports...
Here's another case of why it's hazardous to predict the course of labor negotiations. Just when it appeared - at least from the outside - that the Screen Actors Guild and the media companies would end their contract talks today with no agreement in sight, along comes this morning's announcement that bargaining has been extended until next Tuesday. Variety's Dave McNary reports that SAG dropped its proposal to double DVD rates, what many considered to...
The blogosphere strikes again. There is indeed a Malibu estate up for sale, but it's not Renaissance Malibu, the posh alcohol and drug treatment center. It's Villa Versailles, which was built in 1992 and apparently was lived in for one weekend (too far from the city for the owners). Since then, it's been rented out for parties, movie shoots and the like. It was also rented out as a rehab center/wellness center, which is probably...
That's not an editorial comment - just the latest credit rating from Standard & Poor's. The agency slashed the Calabasas-based mortgage lender's rating to "BB+/B," which falls into the category of a junk bond. The company is also being placed on S&P's credit watch. Here's the latest problem: Bank of America, which still plans to acquire Countrywide, said that it may not guarantee all of Countrywide's $38 billion in debt. That leaves debt holders potentially...
Bottoming out?: The economy lost 20,000 jobs in April, which doesn't sound very good until you realize that analysts had been expecting a decline of up to 85,000. In a separate survey, the unemployment rate fell to 5 percent from 5.1 percent. The innards of the report still look pretty ugly - manufacturing and construction jobs keep disappearing and employees are working for fewer hours and less pay. On the other hand, employment numbers tend...
Why does today's firing of Gregory Probert as president of Herbalife not smell right? All right, the guy admitted to lying on his resume - he claimed to have received an MBA at Cal State L.A. when in fact he hadn't. That's a huge error in judgment, but it's not like ripping off the company. "The truth is that my vanity prevailed," he says. When the credentials flap broke a week or two ago, Goldman...
The Pellicano case is now in the hands of the jury - and Allison Hope Weiner, who has been covering the trial for the Huffington Post, sums up her feelings this way: The prosecutors and the defense attorneys have shaken hands and I'm sitting in the hallway wondering about how so many people who broke the law walked away from this mess without so much as a scratch. That's really the nub of this thing....
I suspect you're getting tired of this topic, but there's an intriguing business story behind the semi-naughty pics in the June Vanity Fair. That is, what to do with Miley Cyrus now that she’s becoming, ahem, a woman. Truth is, she has already gotten to be womanly, as Karl Taro Greenfeld points out on portfolio.com. The Mouse House planned on milking another year or two out of the Hannah Montana schtick before repositioning Miley for...
It's one of those depends-on-who-you-ask situations. The International Longshore and Warehouse Union claims that its membership has taken the day off up and down the West Coast to protest the war in Iraq. But shippers suspect it was a negotiating tactic. The union and the Pacific Maritime Association, which represents ocean carriers and terminal operators, have been working on a new contract for a month or two. Whatever the motivations, the work stoppage defies an...
Business protests raids on workers: The Los Angeles Area Chamber of Commerce comes out today against the federal government's crackdown on immigrants and calls for immigration reform that includes more worker visas. A new study by the Los Angeles County Economic Development Corp. finds that tens of thousands of jobs and millions of dollars in revenue could be lost if continued raids forced businesses to flee the state. (LAT) Hispanic growth slowing: California continues to...
Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.The multi-talented Mark Lacter
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