Friday morning headlines

Gas for under $4: Not everywhere in town, but the ongoing drop in pump prices has more and more stations charging $3.99 a gallon. The Auto Club's weekly survey has the average price of regular in the L.A. area at $4.179, which is 40 cents lower than last month but still $1.21 higher than last year. Meanwhile oil prices fell below $117 a barrel this morning.

Less for your money: It's not your imagination that there's less salami in the package - food companies are looking for all sorts of ways to deal with the huge jumps in commodity prices, and that includes giving consumers less and charging more. Sara Lee, just as an example, expects its commodity and energy costs to climb an additional $500 million in its fiscal year ending June 2009, following a $350 million increase in fiscal 2008. Somehow all that has to be paid. From the WSJ:

Nestlé SA, which on Thursday reported a strong profit for the first half of the year, has raised its prices on thousands of products in recent months, passing at least some of its higher costs on to consumers. Before the grain markets stirred in the summer of 2006, the price of corn had stayed below $3 a bushel for a decade. In the space of two years it surged as high as $7 a bushel. Soybean and wheat made similar moves.

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In the past month, the speculative fever has eased. The corn futures contract for September delivery rose 14.25 cents a bushel to settle at $5.22 a bushel Thursday. Still, the efforts by ranchers, bakers and meatpackers to shift the burden of higher grain prices show they think their raw-material costs aren't returning to their old levels soon. "They know prices aren't going backward," says David A. Schawk, chief executive of Schawk Inc., a Des Plaines, Ill., firm that designs packaging for companies. He figures that up to 5% of grocery products are shrinking, a level he calls unprecedented.

Mozilo inquiry stepped up: Sources tell the LAT that the SEC is focusing on whether former Countrywide CEO Angelo Mozilo violated insider-trading laws and whether the mortgage company's financial disclosures misled investors. Bank of America Corp., which acquired Countrywide last month, said in a filing that it had responded to subpoenas from securities regulators.

Federal law bars a corporate executive from buying or selling the stock of his or her company while in possession of material nonpublic information about the firm, unless the trades are made under automatic plans established in advance. Mozilo launched such a plan in October 2006. But in the following two months, as problems in the subprime mortgage market mounted, he revised the plan once and launched an additional trading plan. Both moves allowed him to sell more shares.

MGA appeals mistrial ruling: The maker of Bratz dolls has asked a federal appeals court to overturn a district judge's decision not to order a new trial after a juror made ethnic slurs against MGA's Iranian-born founder. Looking for a fast-track ruling on the mistrial, MGA raised the specter of its financial exposure, saying that if it is found to be liable for damages anywhere approaching the amounts sought by Mattel - and we're talking up to $1 billion – the "business will be ruined immediately." As a result of the first phase verdict, MGA said, the company has lost employees, access to credit and customers. The company "simply will not be around in a year to appeal the final judgment when it is finally rendered," the filing said. (Reuters, LABJ)

Speaking of lawsuits: Would Mattel have been better off settling with MGA in its copyright infringement case rather than take its chances with a jury? There's no way to know at this point, what with the damages phase still going on - and goodness knows what appellate rulings are down the road. But a soon-to-be-released study of civil lawsuits has found that most of the plaintiffs who pass up a settlement offer and go to trial get less money than if they had taken that offer. From the NYT:

Critics of the profession have long argued that lawyers have an incentive to try to collect fees that are contingent on winning in court or simply to bill for all the hours required to prepare and go to trial. “What I would want them to look at was whether or not the lawyers had a strong financial incentive to go to trial,” said Cristina C. Arguedas, a criminal defense lawyer in Berkeley, Calif., when told of the study. “I’m not suggesting the answer, because I don’t know, but that would be my question.” The study, which is to be published in the September issue of the Journal of Empirical Legal Studies, does not directly answer Ms. Arguedas, but it does find that the mistakes were made more often in cases in which lawyers are typically paid a share of whatever is won at trial.

Chinese dealmaking: The value of acquisitions of Chinese companies has reached $135 billion so far this year. That's an 86 percent increase over the same period in 2007 year and only slightly less than the total value of China-targeted mergers and acquisitions for all of last year. Though many Chinese deals were domestic ones, acquisitions of Chinese assets by foreign firms total about $24 billion so far this year, up 44 percent from the same period in 2007. (DealBook)

How to watch Olympics: There are plenty of online ways to see the action - and not be stuck waiting for NBC's prime time coverage. Peter Kafka at Silicon Alley Insider has all kinds of suggestions.