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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 to lag the overall economy. So we'll see. (NYT)
Market bounceback: The Dow was up sharply in the opening minutes of trading, but has since pulled back. With the index back over 13,000, there may be a bit too much optimism in the air. Consider this P1 NYT story:
Many on Wall Street, the epicenter of the credit mess, seem to think that the worst is over. For the first time in months, analysts and executives sound upbeat again. Many of them see a broad, sustained recovery in both the economy and the financial markets coming in the second half of this year, a prediction some market strategists call hopeful at best. For now, policy makers are echoing the mood on Wall Street. Treasury Secretary Henry M. Paulson Jr. said in an interview with Bloomberg Television on Thursday that “we are closer to the end of this problem than we are to the beginning.”
No relief on gas: In Central and Northern California, the Auto Club survey has the average price of self-serve regular at over $4 a gallon. In the L.A. area, it's a mere $3.902, which is another record and 50 cents higher than a year ago. But there's cause for some optimism. Oil prices have edged downward in recent days (though they're up this morning), and spring price spikes often peak in May.
Microsoft to decide: Well, maybe. After many weeks of indecision, WSJ reports that the company is leaning towards a hostile bid for Yahoo. An announcement could come today. Price remains the sticking point: Microsoft says it's willing to up its original bid to $33 a share, but Yahoo is looking for something in the $35-$37 range. With Yahoo's large local presence, a merger would likely have major consequences for several hundred folks.
Newer movies on iTunes: Six major studios have agreed to release their films on Apple's online store the same day they become available on DVD. Previously, customers have had to wait several weeks after the DVD debut. From LAT-Bit Player:
When Apple started selling movies through iTunes in September 2006, only one major studio agreed to participate. That was Disney, on whose board Steve Jobs sits. Studio executives complained about the wholesale discounts Apple sought, and disparaged Apple's approach to copy protection. Among other things, they didn't like the fact that movie buyers could transfer copies of the film to unlimited iPods. Paramount, Lionsgate and MGM eventually provided older movies for Apple to sell, but the pickings remained slim for new releases. With today's announcement, new and older titles from Sony, Universal, Warner Bros., 20th Century Fox, Paramount and Lionsgate are all joining Disney in making new releases available for sale. That leaves MGM, a studio that hasn't been much of a force in new releases, as the largest holdout.
Hopeful on mortgages: IndyMac CEO Michael Perry says the Pasadena-based mortgage company has turned a corner and that the first-quarter loss would be reduced "roughly 50 percent to 65 percent" from the fourth-quarter loss. IndyMac has now focused on loans it can sell to government agencies, a safer way to go. From the LAT:
Like many lenders, IndyMac sold many of its worst loans to Wall Street. And the bank has set aside significant reserves to cover losses on loans it holds or loans that investors force back to it. The question is whether those reserves will be enough, given the housing market's ongoing slide. Analyst Eric Wasserstrom at brokerage UBS said in a note to clients Thursday that he still didn't believe IndyMac would be profitable in 2008, "as we expect that credit will continue to deteriorate at an accelerated rate, necessitating additional reserving and impairment charges."
Linens 'n Things goes Chapter 11: The struggling retailer was forced into bankruptcy protection after several weeks of trying to work out a deal with creditors. The chain was bought in 2006 by private equity giant Apollo Management (further proof that those guys didn’t have all the answers). No details about reorganization plans, but Chapter 11s can sometimes lead to layoffs and store closings. (AP)
SAG strike vote?: With contract talks to end today with no agreement in sight, that would be the next step for the Screen Actors Guild. The question is how much support there will be among the rank-and-file. A strike vote authorization needs the backing of at least 75 percent of the membership to have any clout (the WGA received 90 percent backing). Meantime, AFTRA begins its contract talks next week and is likely to have a deal very quickly. (Variety)
Pellicano watch: The jury continues its deliberations today. There are lots of counts and defendants, so it may be a while.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.