Wednesday morning headlines

Stocks zigzag: Looks like a cool-down to the weeklong winning streak. Dow is down slightly in early trading.

Selling CA budget deal: It won't be easy, especially with the public safety cuts that will result in thousands of prison inmates being released. Some Republicans are vowing to vote no. From the SF Chronicle:

GOP lawmakers accused the administration of double-crossing them in budget talks. "Budget negotiations depend on the good faith actions of all parties," Assembly Republican leader Sam Blakeslee of San Luis Obispo said in a statement. A proposal to release inmates early was "never discussed or agreed to by Republicans," he said. "We made it abundantly clear during negotiations that such policies would endanger the public and were unacceptable."

Mixed views on drilling: Budget deal paves the way for the state's first offshore drilling project in 40 years, tapping into 10.5 billion barrels of oil reserves. The proposal calls for slant-drilling new wells from an existing platform in federal waters. From the Ventura County Star:

State environmental groups sounded the alarm at news of the agreement, but the umbrella group representing 20 Santa Barbara-based environmental organizations reasserted its view that the concessions offered by PXP will result in the termination of oil drilling off Santa Barbara by 2022. "It has incredible benefits to California and Santa Barbara," said Linda Krop, lead counsel for the Santa Barbara-based Environmental Defense Center. "It's what (Rep.) Lois Capps has been saying and what we've been saying all along: It's all about getting rid of oil."

Budget scorecard: Winners include CA GOP, the governor (he got a lot of what he wanted), CA Democrats (they held onto Calworks, college grants, Healthy Families and avoided the closing of state parks), while the losers included California cities and counties. (SF Chronicle)

Grim forecast: Economist Jack Kyser sees L.A. higher unemployment well into 2010 and continued sluggishness in construction, retail, trade and hospitality. His EDC report shows personal income dropping 2 percent in the state this year, the first annual decline since 1938. "Most people haven't experienced anything like this in their lifetimes," he said. (LAT)

Long Beach shortfall: City officials have declared a fiscal emergency, with a projected $43.3 million deficit for 2010 - and $54 million expected by 2011. (Press-Telegram)

East West Bank raising money: The Pasadena bank sold 11 million shares to investors, an effort to raise reserves to levels that will cushion further credit losses. From the LAT:

The new capital also will support more lending, [CEO Dominic Ng] said. He said he sees opportunities to lend to stronger firms in industries that are under stress and consolidating, such as seafood imports, and to green industries such as solar panels and electric vehicles that potentially have huge markets in Southern California.

Troubled hotels: About 250 are in default or foreclosure in California, (27 in L.A. County). Their owners face both slower business and a sour real estate market. As a result, very few hotels on the market are being sold. (LAT)

Haim Saban sued: The L.A. billionaire is accused of defrauding the government out of tax money when he sold his company to Disney in 2001. The suit was filed by Saban's former financial advisor who has been in jail for over a year on charges of identity theft. (The Wrap)