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Mixed market: Inflation fell more than expected in May, but FedEx is sounding downbeat about the economy. After 90 minutes, the Dow is off about 13 points.
More on FedEx: Often considered an economic gauge, the package delivery giant sees tough times ahead. "The operating environment for our first two quarters in fiscal 2010 is expected to be extremely difficult," says CFO Alan B. Graf Jr. (AP)
Socal inflation hits 59-year low: Prices fell at a 1.8 percent annual rate in May, the biggest drop since 1950. From OC Register:
--Transportation costs, primarily fuel, down 13.3% in a year. --Apparel costs were down 3.2% in the year. --Housing costs were up 0.6% in the year. --Medical care rose at a 2.8% annual rate. --Food and beverage was up 2% annually.
Budget showdown: No worry about bipartisanship saving the day in Sacramento. The Democrat-controlled budget panel approved plans to boost oil and tobacco taxes and slash money for schools and other services, and pulled back from some of the deepest cuts proposed by the governor. From the LAT:
The proposal, approved on a straight party-line vote by the six Democrats on the 10-member budget panel, calls for a new 9.9% levy on oil pumped from California soil, which would produce about $830 million in the coming fiscal year. It would increase the state's cigarette tax by $1.50 a pack, raising $1 billion. And the repeal of a corporate tax break approved just months ago would net $80 million. But the levies on big business are anathema to the Republican governor and GOP lawmakers, who blasted the plan and vowed to block it.
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Lawmakers rejected the governor's call to eliminate CalWorks, though they cut the welfare-to-work program by $270 million. And the committee refused Schwarzenegger's bid to reduce by 5% the pay of the state's heavily unionized workforce, prompting an angry response. The governor called it "outrageous" that Democrats would ask Californians to pay higher taxes while refusing to decrease state wages. "This is exactly why so many Californians have lost faith in Sacramento's ability to solve problems," Schwarzenegger said in a statement.
State reassures bondholders: S&P's warning about a possible cut in California's credit grade - already the lowest of any state - included at least the implication of default. A spokesman for California Treasurer Bill Lockyer says the credit rating agency is raising undue alarm, adding that "There is zero chance of that happening." (LAT)
Buying Laker junk: Call it an unexpected economic stimulus. Fans are snapping up championship T-shirts, hats, flags and other mementos. From the LAT:
In the 24 hours after the Lakers' Sunday night victory, AEG's three Team LA stores pulled in 14 times what they did when the team last won a championship in 2002. In addition, the company's website had its best sales day ever, eclipsing the previous high by 650%. Ryan declined to discuss exact sales numbers.
Workday in L.A.?: Don't bet on it. They'll be the mobs along the parade route and at the Coliseum (they're already there), plus all the others watching the festivities on TV or through the Internet. Worker productivity is not likely to be high.
DirecTV to offer targeted ads: Advertisers using the satellite service will be able to reach viewers based on their locations. This is a very big deal for the satellite TV business. From the WSJ:
The new service will allow DirecTV, which has 18 million subscribers, "to compete for a large slice of the TV budget, which is local advertising," said Tracey Scheppach, senior vice president and video-innovations director at Publicis Groupe's Starcom Worldwide. Advertisers have been clamoring for more precision and rival cable operators have ramped up their own local ad offerings.
JetBlue arrives at LAX: The low-cost carrier begins service to JFK and Boston. The airline also flies out of Long Beach and Burbank. (Daily Breeze)
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.