Wednesday morning headlines

Bank deal near?: The Obama administration is finalizing a plan to purchase bad assets from banks. Presumably, this would address the problem of how to price those pesky assets. CNBC, which is reporting the news, describes a "model-pricing mechanism" that would take account of the government's ability to hold onto assets, even to maturity, and pay for them with cheap funding. Translation: the government might end up paying more than current market prices.

Wall Street gets bounce: News of the possible bank plan, along with likely passage of the stimulus package, is helping boost the Dow by more than 100 points in early trading.

Will stimulus work?: NYT columnist Dave Leonhardt offers a generally positive review, citing estimates that 64 percent of the money would be spent by next September - not the 75 percent that Obama had promised, but close. The one area that falls short, in his mind, is transportation.

The bill is certainly superior to a huge package of tax cuts, which might be politically popular but end up in people’s bank accounts rather than stimulating the economy. By now, we should know that tax cuts are not a cure-all. The cuts of 2001 and 2003 couldn’t keep the recent expansion from being one of the weakest on record or the current recession from being so deep.

But hold on….: You want to know how economic guru Robert Shiller sees things going? Well, maybe you don't, but here's what he said in Davos (CNBC/Clusterstock)

"Our latest S&P Case-Shiller numbers look about as bad as they've been so nothing has changed for the good in the housing market. But...ah...it will eventually. We have a futures market that says in 2010 at the CME that it will. But that doesn't mean that the whole economy is going to start prospering again. If you look at the Great Depression--I hate to do that, the D word--home price fell 30% until 1933. And then they stopped falling. But we still had a depression for eight more years."

More weak earnings: Wells Fargo lost $2.55 billion in the fourth quarter (slumping loans to blame), while Wachovia, which Wells just acquired, lost $11 billion (Wachovia's numbers are listed separately). Among other big results: AT&T earnings fell 23.6 percent, and Boeing posted a $56 million loss (recent strike to blame).

Layoffs at Avery Dennison: The Pasadena-based label maker, which saw a big drop in Q4 earnings, is eliminating 10 percent of its workforce, or about 3,600 jobs. It seems that people aren't using as many mailing labels, custom greeting cards and notebooks. (Bloomberg)

Movie incentives pay off: A study estimates that NY State is expected to keep or create 19,500 jobs as a result of tax credits. All told, $404 million in tax revenue is generated at a cost of $215 million. Those results come as L.A. location shooting is on the decline, though in my view it’s an apples and oranges comparison. (NYT)

DreamWorks gets financing: THR reports that the refashioned movie company has commitments for at least $150 million from Citi National and Comerica. A syndication group led by longtime Hollywood financier JP Morgan is said to be good for at least $75 million. DreamWorks originally tried to raise as much as $750 million from the banks, but that's been scaled waaay back - as has the commitment by India's Reliance Big Entertainment.

Gender discrimination?: The city of SF accuses state regulators of approving a system that allows the insurance companies to impose "gender rating" when pricing policies. That results in women paying up to 39 percent more for coverage than men, according to the suit. (LAT)

Mini-Madoffs: Would you believe that both the NYT and WSJ have stories this morning about an increase in Madoff-type Ponzi schemes that have surfaced in recent weeks. From the Times:

Some of these schemes have been operating for years, and others are of more recent vintage. But what is causing them to surface now appears to be a combination of a deteriorating economy and heightened skepticism about outsize returns after the revelations about Mr. Madoff. That can scare off new clients and cause longtime investors to demand their money back, which brings the charade tumbling down. “There is no way for a Ponzi to survive given the large number of redemptions and a lack of new investors,” said Stephen J. Obie, the head of enforcement at the Commodity Futures Trading Commission. The agency has experienced a doubling of reported leads to possible Ponzi schemes in the last year, and its enforcement caseload has risen this year.

In the latest case to emerge, Nicholas Cosmo, a Long Island, N.Y., investment-firm owner, surrendered to federal authorities Monday. Mr. Cosmo allegedly raised more than $370 million between 2006 and 2008 by promising investors 48% annual returns from funding commercial loans, according to a federal affidavit in support of his arrest. But little money was lent, and only about $746,000 remains, according to the federal affidavit. According to his attorneys, Mr. Cosmo intends to work with authorities "to allay investors' concerns." A federal judge in New York's Eastern District ordered him held pending a bail hearing Thursday.

Oh, brother: Nick Sanchez will be the agent for his brother Mark, according to the OC Business Journal. Nick has never been an agent before, but he does work as a business litigator in OC. Maybe that explains the decision to turn pro.