Tuesday morning headlines

Oil nearing $100: At last check it was running around $104 a barrel, a 30 percent plunge from recent highs. Even the lineup of storms moving into the Gulf of Mexico hasn't had any big impact on the drop in prices. Meanwhile, average L.A. gas prices are $3.828 a gallon, down from last week's $3.882, according to the government's latest survey.

Santa Barbara drilling: The City Council is expected to pass a resolution this week in support of an ongoing ban on new oil and gas leasing off the coastline. The vote comes after the County Board of Supervisors narrowly voted to recommend lifting the ban. Both votes are essentially symbolic. From the LAT:

What gets lost in the offshore oil debate, now playing out in this year's presidential campaign, is that oil companies own 37 existing leases in the Santa Barbara Channel that have never been developed. To be sure, drilling on some of these undersea tracts has been thwarted by state and federal regulatory skirmishes. Other reasons include wild fluctuation in oil prices over the years and the fact that many major oil companies resold the leases because they were considered more trouble than they were worth -- at least compared to drilling in the Gulf of Mexico. Much of the oil off the Santa Barbara coast is thick, sour crude, more suitable for making asphalt than high-grade fuels to power jets or even high-performance SUVs.

Gross payday: Bill Gross did very nicely on the first trading day after the Fannie Mae/Freddie Mac takeover. How nicely? Try a profit of $1.7 billion for the mortgage-heavy Pimco Total Return Fund. Gross has been pushing for a federal bailout and was quick to support the weekend announcement. From the OC Register's Jon Lansner:

Pimco is a huge owner of mortgage bonds — 65% of Total Return Fund’s money is in home-loan debts, as of July, triple 2007’s lowest levels. Many of those investments are backed by those two ailing mortgage-bond machines, Fannie and Freddie. Gross defended himself in a Sunday chat with your blogger. Gross explains that his team’s research showing growing housing and mortgage risks was premature. Two years ago, Gross shunned riskier mortgages based on that research, and his fund badly underperformed as riskier bond bets were temporarily rewarded.

DreamWorks deal delayed?: Spielberg & Co. are apparently having a tough time lining up the financing to complete a deal with India's Reliance Big Entertainment. The LAT's Claudia Eller reports that Reliance is ready to invest $500 million, but the deal hinges on raising as much as $700 million in debt financing. Since JPMorgan will not underwrite the entire amount, DreamWorks must try to syndicate it - and in this climate that might take a while.

All of this means that the protracted deal that DreamWorks was hoping to have locked up by now may not happen until November or December. And you can just imagine how pleased this must make Spielberg's DreamWorks colleagues David Geffen and Stacey Snider, who have been champing at the bit to high-tail it out of Paramount Pictures after a stormy 2 1/2 -year relationship with studio Chairman Brad Grey. Grey and his team at the Viacom Inc.-owned studio, which bought DreamWorks for $1.6 billion in 2006, also can't wait to be free of the DreamWorks foxes in the henhouse.

McCain gaining ground: The Intrade prediction market now gives Obama a 52 percent chance of winning in November, down significantly from 61 percent just a week or so ago.

Proxy advisers back Napster: Three dissident investors seeking seats on the board are unqualified to be elected, according to Proxy Governance and Glass Lewis & Co. The L.A.-based music service has been struggling to beat back the iTunes juggernaut, prompting three dissident shareholders to seek board seats. But the proxy firms found that they don't have the needed background or experience. The company holds its annual meeting next week. (Reuters, LABJ)

Closing date on Acres of Books: Unable to find a place to relocate, the owners of the venerable Long Beach bookstore say they will shut down on Oct. 18. Last April, Philip and Jackie Smith decided to sell their 74-year-old business to the Long Beach Redevelopment Agency for $2.8 million. The property is a key component in a mixed-use project that will connect downtown and the East Village. From the Press-Telegram:

The entire inventory is 50 percent off until Wednesday, when it will be 60 percent off regular price. "It will go down in increments from there until the last week, when it will be 90 percent off," she said. "The last three days it'll be `make me a reasonable offer."' The remaining stock will go to various charitable organizations.

Lacter on radio: This morning's business chat with KPCC's Kari Moran (Steve Julian is away) covers the impact of the Fan-Fred bailout on the housing market and the efforts by city officials to develop more affordable housing. Available at kpcc.org and on podcast.