Explaining Southern California's economy

September housing starts, more on Pandit, Microsoft prices Surface

Microsoft Surface

Microsoft

The new Microsoft Surface tablet. Microsoft will price it a levels competitive with the Apple iPad.

Builders haven't been building this fast since July 2008: "Construction activity rose in three of the nation's four regions. The biggest increases came in the West and South. Housing starts increased by nearly 20 percent in both regions." (Commerce Dept.)

Maybe buying Merrill Lynch wasn't such a great idea. Bank of America suffers an expensive quarter: "Overall, Bank of America reported a profit $340 million versus a profit of $6.23 billion a year earlier." (WSJ)

North American energy boom continues: "Exxon Mobil agreed on Wednesday to buy Celtic Exploration for about $3.1 billion in cash and stock, as it sought to expand its presence in the energy-rich shale formations of western Canada." (DealBook)

The beginning of the end for the PC? Intel takes a hit in the quarter: "The big chip maker, whose microprocessors power most desktop PCs and laptops, said it is significantly scaling back production in the fourth quarter in response to weaker than expected demand." (WSJ)

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Our little corner of the Bank of America sell-off

Bank of America, the country's second-largest bank (or first, depending on if you go by assets rather than market cap), is in a heap of trouble. Its CEO, Brian Moynihan, is presiding over a restructuring that's supposed to refocus the mega-bank on its core consumer business. This means massive layoffs — 30,000, according to various published reports. There's also been speculation that BofA will try to sell Merrill Lynch, the investment back it acquired after the financial crisis. But there's also speculation that Merrill would be absorbed into BofA and become something far less than the top-level i-bank it was back in the day. That's speculation for you! Heads one day, tails the next!

Countrywide is also a major factor. The subprime mortgage lender was picked up by BofA just before the financial crisis and its portfolio of bad loans is often pointed to as the biggest drag on BofA's performance. There's a nightmare scenario in which BofA puts Countrywide into bankruptcy and then witnesses federal regulators take control of the bankruptcy proceeding — and BofA. 

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