Monday morning headlines

Market way down: Today's numbers from Bank of America can't offset worries about the economy. Also, there's been lots of profit taking from the recent gains. At last check the Dow was down about 220 points.

B of A beats forecasts: First-quarter net income more than tripled from a year earlier, to $4.2 billion. But the results were helped by a $2.2 billion gain that B of A booked for a decline in the value of Merrill Lynch debt (Merrill is now part of the bank). Meanwhile, more calls to remove CEO Ken Lewis. From the NYT:

Of particular concern is Mr. Lewis's latest conquest, Merrill Lynch. Bank of America shareholders signed off on the acquisition in early December, only to discover that gaping losses at Merrill would force Bank of America to seek assistance from the government for a second time. Some investors are suing, claiming that Mr. Lewis failed to fully disclose the risks of the deal. Bank of America said Monday that "the Merrill Lynch integration is on track and expected to meet targeted cost savings" and that Merrill had contributed $3 billion to its net income. It also said the integration of Countrywide Financial, the mortgage lender it bought last year, "is on track."

Where is the lending?: Banks receiving the biggest share of taxpayer aid made or refinanced 23 percent fewer new loans in February, according to a WSJ analysis (February data is the most recent). The Journal's methodology in getting those numbers was different than that of the Treasury Department's - and produced bleaker results.

The level of lending is an important factor in determining how fast the economy will turn around. It's also key for the government in deciding whether to allow individual banks to repay federal funds. If the Treasury believes doing so will diminish the economy's lending capacity, it could take a hard line on repayments. Banks defend their lending, saying they're eager to issue new loans, refinance existing ones and modify those in danger of default. Complicating their efforts, bank executives say, is a decline in demand among consumers and businesses.

Trouble for commercial real estate: Vacancies are higher and rents are falling - pretty much what you would expect in the midst of a deep recession. From the LAT:

Desperate landlords in the Inland Empire have begun offering such perks as a year of free rent to attract tenants. In West Los Angeles, owners are steeply discounting the monthly cost of an office -- cutting rates that, ironically, grew so high during the boom years that many companies were forced to move out and find cheaper digs. Vacancy in Los Angeles County reached 14.3% in the first quarter, up from 11.2% a year earlier, according to a report released last week by Cushman & Wakefield. In Orange County, where demand has been dwindling for more than a year, vacancy ticked up to nearly 18% from 15%.

Downtown bankruptcy: Milbank Real Estate's Roosevelt Lofts has filed for Chapter 11 protection. Going into bankruptcy allows the Roosevelt to restructure its loan agreement. (Downtown News)

More Namvar bankruptcies: Ezri Namvar, the Brentwood businessman who had a hand in many local ventures, is watching the empire fall apart, with Namco Financial Exchange Corp. put into involuntary bankruptcy on April 2. Namvar is accused in several lawsuits of running a Ponzi scheme and stealing money to prop up his failing ventures, (Business Journal)

Venture funding slips: L.A. firms only received $150 million in the first quarter, a 35 percent drop from the previous three months and 40 percent less than a year earlier. From the LAT:

The reasons for the decline are familiar: Venture capital firms, unable to sell or merge the companies they had invested in, don't have the cash to pump into new companies; stock markets are sharply down from their peak, so angel investors don't have much money with which to seed new companies; and investors are focusing on saving their existing companies, rather than finding new ones. But some venture capitalists say this decrease in funding could be a positive development -- a "right-sizing" from the last few years, when firms put too much money into too many companies that didn't deserve it.

Will SAG members ratify?: Well, the board only approved the two-year contract on a 53-47 percent vote, so there doesn't appear to be much wiggle room. And despite the guild's moderate wing now in control of the board, SAG President Alan Rosenberg isn't exactly happy with the deal. From Variety:

In the next few weeks, warring SAG factions -- the moderate Unite for Strength faction, which sprang up last year to combat Rosenberg and his Membership First movement -- will no doubt use the tentative agreement as a key point. SAG's ruling moderate coalition, which has a narrow majority on the 71-member board -- will almost certainly blast the MF group by accusing them of stalling tactics and for alienating AFTRA to the point that the sister union broke off from SAG and signed its own primetime deal last summer. Rosenberg vociferously opposed the AFTRA deal, which received a 62% endorsement.

Redstone's pay: The Viacom head was awarded a $14 million compensation in 2008, up 7 percent from a year ago, and CEO Philippe Dauman received $27.9 million, up 7 percent. Over the last year, Viacom's stock price fell 54 percent. (AP)

Tribune update: The parent company of the LAT has asked a U.S. Bankruptcy Court in Delaware to extend its exclusive right to file a reorganization plan until Aug. 4. That gives CEO Sam Zell first dibs on drafting a plan to restructure operations. (Chicago Tribune)