Thursday morning headlines

Sagging stocks: Dow is down about 18 points at last check, with a mixed bag of news offering no clear direction.

Foreclosures slow: California had the nation's second highest filing rate in October (one out of 156 housing units), though the actual number was down slightly from September. Still lots of concern about a big wave of filings early next year. (Realty Trac)

Wal-Mart's so-so numbers: Third-quarter sales were down and the retail giant said they might continue falling in the all-important fourth quarter. Deflation is one reason for the sales drop. (AP)

Calpers looks into loan: Alfred J.R. Villalobos, the middleman who steered hundreds of millions of dollars of pension fund money into a Hollywood-based developer, received a $1.1 million loan from a partnership set up by that developer, the CIM Group. The loan was used to help finance construction of a $2.7 million home overlooking Lake Tahoe. From the LAT:

Government, corporate governance and investment experts consulted by The Times agreed that the loan raised questions the pension fund needed to pursue. "Whenever you channel compensation through third parties, it lessens the transparency of who is benefiting and by how much," said Robert Fellmeth, executive director of the Center for Public Interest Law at the University of San Diego.

MGM headed for sale?: Peter Bart posts in Variety that the studio will "essentially be auctioned off within the next few weeks," citing sources.

Any sort of auction would need approval of a two-thirds majority of the bondholders, and a couple of the bondholders insist they have not been contacted as yet. Some sources believe a pre-packaged bankruptcy is still an option, and there is still an expectation that Time-Warner might make a last eleventh hour bid.

Shakeup continues: More comings and goings at Disney Studios as the new head guy, Rich Ross, sets up shop. Especially impacted are the marketing and distribution areas. (LAT)

John King takes Dobbs spot: So much for biz news in the 4 p.m. time slot -- King, who host's CNN's "State of the Union" on Sunday will launch a new political program beginning in early 2010. (Politico)

Misery loves company: Nine states face California-style budget woes, according to a Pew Center study: Florida, Arizona, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin. From the LAT:

The Pew scored all 50 states based on six factors that "contributed substantially to California's ongoing fiscal woes": high foreclosure rates; increasing joblessness; loss of state revenues; the relative size of budget gaps; legal obstacles to balanced budgets (specifically, a supermajority requirement for some or all tax increases or budget bills); and poor money-management practices. California, of course, scored worst of all, but it was closely followed by Arizona, Rhode Island and Michigan, in that order.

Churchill Downs buys Youbet.com: The race track company is paying $127 million for the Burbank-based online betting service. It's a cash-and-stock deal. (Business Journal)

Zell pooh-poohs "crisis": He tells an investor conference that expectations of an impending crash in commercial real estate are "greatly exaggerated," From Crain's Chicago Business:

Owners of office and apartment buildings today have no incentive to sell, he said. By 2011 or 2012 they will likely be able to fill their vacancies, albeit at rates 30% below their peaks, because demand will catch up to supply, he said. Hotels, though, "are in a different position," said Mr. Zell, who recently raised $625 million to invest in "credit opportunities." Unlike office buildings, hotels don't have the cushion that long-term leases afford.

Revamp in South Bay?: There's not much building going on these days, but there is plenty of planning. Owners of the South Bay Galleria want develop a mostly vacant commercial area adjacent to the mall with a new $32 million retail complex. (Daily Breeze)