Monday morning headlines

Dow below 7000: The blue chip index hasn’t been this low since 1997. Is anyone really surprised?

AIG's massive loss: Call it history of the disquieting kind: AIG lost $61.7 billion in the fourth quarter, an all-time record. The one-time insurance giant wrote down $25.9 billion in assets, including mortgage-back securities and credit-default swaps. Hours earlier came word of the federal government providing an additional $30 billion in taxpayer money. From the NYT:

The government intervention would be the fourth time that the United States has had to step in to help A.I.G., the giant insurer, avert bankruptcy. The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 billion to soak up the company’s toxic assets. Federal officials, who worked feverishly over the weekend to complete the restructuring, said they thought they had no choice but to prop up A.I.G., because its business and trading activities are so intricately woven through the world’s banking system.

Ports keep struggling: February imports at the ports of L.A. and Long Beach fell 18.1 percent from a year earlier, according to IHS Global Insight (official numbers will be out shortly). From the LAT:

It's gotten so bad that Los Angeles and Long Beach are slashing cargo rates to keep old customers and lure new business. Oakland's port has laid off 12% of its staff and canceled free tours for the public. The number of ships idled around the world is approaching three times the number that were out of work during the last big ocean trade collapse, in 2002. "It's phenomenal how much things fell away even since December," said Paul Bingham, managing director of global trade and transportation for IHS Global Insight, the business research firm that monitors North America's biggest ports for the National Retail Federation.

Battling over prices: The nation's supermarket chains claim that food manufacturers like Nestle, Unilever and Kellogg are charging too much, given the large drops in prices for fuel, corn, wheat and other commodities. From the LAT:

The grocers are fuming. One large grocery company operating in Southern California has seen the wholesale price for a carton of Kellogg's Corn Pops rise about 17% since June -- despite a 52% plunge in corn prices from their peak that month. "It's disingenuous to consumers that all commodity costs are coming down, interest rates are coming down, everything is coming down, and [the national brands] are taking their prices up," Steven Burd, chief executive of Vons owner Safeway Inc., told investors Thursday.

Markdowns at Fresh & Easy The U.S. offshoot of Britain's retail giant Tesco is trying to lure shoppers with items priced under a dollar and budget meat (chicken Breasts with some bone and rib meat). In just 15 months, 114 stores have opened, though the timing hasn't exactly been great. From the WSJ:

To boost its low-price credentials in the Los Angeles area, Tesco recently changed its advertising strategy and ran radio commercials promoting $9.99 Valentine's Day bouquets. Before, the retailer used only fliers, the Internet and direct mailings for marketing messages. "What we are learning in this market is that 'Every Day Low Price' is not that interesting," says [Tim Mason, president and chief executive of Tesco's U.S. business]. Mr. Mason. "People are buying on deal."

Pimco hired by feds: The OC-based bond investment manager will advise the U.S. government on the value of $118 billion of assets guaranteed in the bailout of Bank of America. Those holdings include securities backed by residential and commercial loans. (Bloomberg)

Car dealers get hammered: A total of 32 dealerships in L.A. County shut down last year (137 statewide) and this year could be even worse. They face all the recession-related tumult, as well as a big increase in car taxes that was required to help close the state's budget deficit. Local dealers said that business is down between 25 percent and 45 percent so far this year. (LABJ)

Beyond the numbers: John McClure had to put 66 people out of work when he closed Courtesy Chevrolet in Thousand Oaks, the business his grandfather helped start 41 years ago. From the Daily News:

In good times, the dealership at the Thousand Oaks Auto Mall sold 80 to 90 new cars and trucks and about 50 used vehicles a month. At the end, its monthly sales had fallen to about 25 new and 20 used vehicles. McClure had been trying to sell the dealership for six months, but that proved impossible. "When I announced it to the employees, it took a lot of weight off my shoulders, but I broke down quite a few times," he said. "The car business has been in my blood all my life."