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Market stumbling: Intel's warning about a steep fourth-quarter revenue drop adds to the Wall Street gloom. In early trading, the Dow is off almost 200 points.
More job losses: The government releases its December employment report on Friday, but already there are hints of another weak month. Private employers cut 693,000 jobs last month, up from 476,000 in November, according to an ADP survey. The December job losses were the highest since ADP's survey launch in 2001. (AP)
Madoff's last days: The alleged scamster received $250 million from an old buddy just 10 days before his arrest. Still unclear is whether Carl Shapiro, a 95-year-old Palm Beach philanthropist and entrepreneur, gave Madoff the money as a loan or investment. From the WSJ:
In the first week of December, Mr. Madoff allegedly told one of his sons that clients had requested about $7 billion in redemptions, "that he was struggling to obtain the liquidity necessary to meet those obligations, but that he thought that he would be able to do so," according to a criminal complaint filed by prosecutors against Mr. Madoff and lawyers involved in the case. Several days later, he allegedly confessed to his sons that his investment-advisory business was a "giant Ponzi scheme" and that he was "finished."
Why banks aren't lending: They're still shoring up their balance sheets - and relief appears nowhere in sight. Analyst Meredith Whitney says the major banks will have to take another $13.7 billion in writedowns. That, in turn, will create a scramble for new capital. Clusterstock's John Carney says we better get ready for TARP 2.0.
Mall vacancies increase: Nationwide, they reached 7.1 percent in the fourth quarter, which would be close to a 10-year high. More than a dozen retailers, including Circuit City, Linens ‘n Things, and Sharper Image, filed for bankruptcy protection last year - and there could be more in 2009. In any event, retailers will be shutting lots of stores. (Bloomberg)
Blue Shield comes around: The health insurer will reissue medical coverage to nearly 700 Californians whose policies were canceled after they got sick. It also will reimburse consumers whose coverage was canceled for medical expenses they paid out of pocket. In turn, the state agreed to drop its case. From the LAT:
Jerry Flanagan of the advocacy group Consumer Watchdog said the settlement lets Blue Shield off too easy. "This settlement does not adequately protect against future rescissions -- no admission of wrongdoing, no mandatory fines, no clarification of the legal standard" for rescissions, he said.
Billboard law upheld: The 9th Circuit Court of Appeals rules that the city of L.A.'s outdoor advertising ban does not violate a 1st Amendment right to free speech. That reverses a lower-court ruling. No decision on whether the billboard company bringing the case will appeal. (LAT)
L.A. Live gets another sponsor: Panasonic works out a marketing deal with AEG, which operates the downtown venue. Others sponsors include Coca-Cola, Amex and Wachovia (now owned by Wells Fargo). From the LAT:
Under the terms of the partnership, Panasonic will install more than 1,000 TV monitors throughout L.A. Live, as well as an 8,000-square-foot screen that AEG says is the largest in North America. The companies plan to use L.A. Live to unveil and showcase Panasonic products and solicit consumer feedback on them, said J.M. Allain, president of Panasonic System Solutions.
Parking gripes: The city of L.A.'s decision to raise meter rates (15 minutes per quarter) has gotten some business owners in a tizzy. They’re concerned that the extra charge will discourage customers from patronizing shops and restaurants. (Daily News)
Swag takes a holiday: Fewer sponsors will be offering freebies to show-folk during the Golden Globes. Guess giving away a pair of $300 jeans might not look good in these tough economic times. (Variety)
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.