Follow LA Observed on Twitter here
Market bump: Warren Buffett's $5 billion infusion into Goldman Sachs helped lift stocks in early trading, but the Dow is now back in negative territory (recent run-ups have had a way of losing steam). Meanwhile, NY Sen. Charles Schumer says that the government bailout package will be worked out this week.
Why Buffett did it: He tells CNBC that "the price was right, the terms were right, and the people were right." He also said that he wouldn't have bought anything if he wasn't confident Congress will approve the financial bailout proposal. By the way, Buffett said that his Berkshire Hathaway partner, L.A. billionaire Charlie Munger, signed off on the Goldman investment and that the deal came together very quickly.
FBI probe: The bureau is looking at potential fraud by Fannie Mae, Freddie Mac, AIG and Lehman. What kind of fraud is not known, but it probably centers on whether any of them misrepresented their assets. The new inquiries bring to 26 the number of corporate lenders under investigation over the past year. That includes two locals: IndyMac and Countrywide. (AP)
Speaking of Countrywide: Andrew Gissinger, the mortgage lender's former No. 3 executive, managed to get a top post at Bank of America after Countrywide was acquired by the banking giant. But Gissinger is now being replaced. The name might ring a bell - he was the fellow who asked Countrywide employees to take a loyalty pledge and wear "Protect Our House" wristbands. (WSJ)
Battery scam?: A lawsuit accuses the Auto Club of selling its members new batteries when only a jump-start is needed. The L.A. Superior Court suit alleges that the Auto Club imposes a quota system on the tow truck operators who answer roadside assistance calls. Drivers who fail to meet their quota risk losing "valuable future customers," the suit contends. (LAT)
Tower Records replacement: The once-iconic Sunset Strip music store is being taken over by denim king Gerard Guez with something called Live! On Sunset. Guez is founder and major shareholder of Tarrant Apparel, but he also has stakes in Antik Denim, Seven7 Jeans, Nicholai, People’s Liberation, and a bunch of others. As for Live! On Sunset, it's not your typical boutique. From Laurie Pike's Chicleak blog:
All of the merchandise is on racks and tables with wheels, so the interior of the store can be easily reconfigured. Even the dressing rooms are mobile. In back, couches surround a huge Buddha statue. Then there’s a stage. Guez plans to feature Webcasts from the store (about fashion and lifestyle, of course), with a host assisted by sales clerks outfitted with cameras. Whether this retail-tainment concept will fly or flop remains to be seen; the shows were supposed to debut earlier this month but have not shown up on the store’s Web site. No matter. A shop’s main draw will always be its merchandise.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.