Friday morning headlines

Plummeting gas prices: In the L.A. area, self-serve regular is running an average of $3.387 per gallon, which is 12 cents less than last week, according to the Auto Club. It's the 17th week in a row there has been a drop (a double-digit drop in just a week is very unusual).

Benefits of cheaper oil: Oil may be back over $70 a barrel this morning, but the trend lines continue to point downward. Even if prices stabilize at, say, $80 a barrel, one analyst says the savings could amount to upwards of a $275 billion stimulus package. Of course it's not all good news. From the WSJ:

The sharp drop in U.S. oil demand -- down in recent weeks by about 9% from a year ago -- shows how deep the economic malaise is across much of the industrialized world now. As the U.S. unemployment rate rises and retail sales and manufacturing orders slump, the world's largest consumer of oil needs less crude to move goods, fly passenger jets, and transport workers to the office.

Market is down: The Dow had been off more than 200 points, but seems to be pulling back. Still, the news continues to be bad: construction of new homes fell 6.3 percent in September, the slowest pace since early 1991. Also, the University of Michigan's consumer sentiment index nose-dived in October.

Buffett still bullish: He's buying U.S. stocks and urging others to do the same. Why? Here's what he writes in a NYT op-ed:

A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Office space blues: Well, at least if you're a landlord. Vacancies are up and rents are down, even in desirable locales like Santa Monica. In OC, the situation is worse because of all the subprimers that have gone out of business. From the LAT:

Trouble in the economy takes months or even years to show up in vacancy rates, because businesses sign long-term commitments when they rent offices. "When companies downsize, they don't immediately give up their space," said Richard Green, director of the USC Lusk Center for Real Estate. Green predicted that landlords would keep their asking rents up as long as they could while offering other incentives such as reduced parking prices and generous allowances to help tenants build out their office interiors. It's only when those types of inducements are no longer sufficient that property owners tend to lower rents, he said.

Downey trimming down: The struggling S&L will no longer offer loans through outside brokers and will cut back on loans it originates itself at its branch offices. As a result, 200 jobs will be cut. Downey has been done in by lousy loans, and the U.S. Office of Thrift Supervision the thrift to increase its capital. (LAT)