'Like finding lost Rembrandts'

Peter Mullin cracks open the door of a 1935 Voisin Type C25 Aerodyne at the back of the auto museum bearing his name. He points out the intricate details of a vibrant Art Deco interior, restored to its original luster.

A small ashtray hangs on the inside of each door — made from etched Lalique crystal.

Light streams into the car through three small glass windows in the fully retractable roof. A bold black and white patterned fabric covers the doors, seats and roof, sourced from the same French textile mill that wove the original fabric more than seven decades ago.

"You can see why this one is kind of the favorite," Mullin says of the C25 with a smile.

Once relegated to the scrap heap of automotive history, the Voisin brand has undergone a renaissance within the classic car world. The cars, which cost as much as a Bugatti in the 1920s and 30s, are worth millions of dollars today. They were the creation of Gabriel Voisin, a colorful yet fastidious French architect and engineer who made a fortune selling airplanes during World War I.

Mullin's navy blue and grey C25 won Best of Show at the 2011 Pebble Beach Concours d'Elegance, arguably the most prestigious prize in the classic car world. Another Voisin, a 1934 C15 ETS Saliot-bodied Roadster, won Best of Show in 2002.

When Pebble Beach Concours hosted Voisin as the featured marque in 2006, it provoked a frenzied reaction among collectors.

"It was like finding the lost Rembrandts," said Richard Adatto, an expert in classic French cars and a member of the classic car show's selection committee.

Prior to 2006, he said, no Voisin had sold for more than $1 million. After that, prices nearly doubled. Peter Mullin's C25 could be worth as much as $5 million today, said David Gooding, president and founder of the Gooding & Co. auction company. Most experts estimate there are 250 to 300 known Voisin automobiles, though they are starting to turn up as barn finds throughout Europe.

Fortunately for Mullin, he got into the brand early.

"I fell in love with the Art Deco nature of Voisin a number of years ago," Mullin said. "One by one, they found their way into the collection."

In addition to his prize-winner, Mullin owns 15 other exceptionally rare and valuable Voisin models on display at the Mullin Automotive Museum in Oxnard until the end of April. The museum is also home to dozens of gleaming prewar cars from other French marques like Bugatti, Delahaye and the odd Talbot-Lago.

Mullin, the man, owns nearly everything in the building. But the Voisin cars have become his favorite, not just for their intricate details, but because they embody the values of the man behind their nameplate.

Gabriel Voisin was a colorful figure who made a name for himself in the early 1900s as an aviation pioneer. Despite being in their mid-20s, Voisin and his younger brother Charles started the world's first aircraft company. Their early planes set several European flight records.

Gabriel Voisin kept the company open after his brother was killed in a 1912 car crash, and sold several thousand fighter planes to the French military and its allies for use in World War I.

After the war ended, a glut of planes and little demand for new ones pushed Voisin to build a machine with a more benevolent purpose. He spent roughly the next 20 years building some of the most elaborate and expensive cars of the era. The rigors of aviation engineering and attention to detail carried into Voisin's forward-thinking automobiles.

"Everything was designed all the way out," Adatto said. "Even the taillights were handmade."

Many of Voisin's cars have struts connecting the front wheel fender to the grille — like the wing struts common on aircraft from the era. The cars were largely built from lightweight materials such as aluminum or magnesium. Most cars from that time — and even today — were built from heavier steel.

Inside, the dashboard of many Voisin vehicles had gauges to show oil pressure and temperature in an era when most cars didn't even have a fuel gauge, Adatto said. A complex engine design used sleeve valves rather than the standard overhead poppet valves found on engines today.

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Dow rises 35 points but stops short of record again

The Dow Jones industrial average is within striking distance of a new record.

Still.

In what has become a near-daily ritual, the world's best-known stock index inched closer to an all-time high Friday but stopped short once again.

The Dow climbed 35 points to rise for the second straight week. That marked a fresh five-year high and the third-best close of all time.

But whether it's the budget stalemate in Washington or the typical jitters that precede such milestones, the blue chips couldn't push into new high ground.

The Dow ended at 14,089.66 — just 75 points, or roughly 0.5%, from its peak close of 14,164.53 on Oct. 9, 2007.

Since climbing above 14,000 on Feb. 1, the index has largely meandered sideways, unable to muster the additional 165 points needed for the record.

Many experts think that will happen eventually, given the generally upbeat spirits among U.S. investors and consumers.

"The bottom line is stocks are headed higher," said John Bollinger, head of Bollinger Capital Management in Manhattan Beach. "It's going to be volatile and hard going. It won't be easy money, but it will be money."

The Standard & Poor's 500 index is further away from a new high — about 3% — largely because of the continuing travails of Apple Inc. After a 2.5% drop to $430.47 on Friday, the technology behemoth has sunk 39% from its mid-September peak above $700.

Investors are encouraged that stocks have risen in the face of the budget showdown in Washington. The $85 billion in automatic spending cuts, known as sequestration, began taking effect Friday after federal lawmakers could not reach agreement on a plan to avert them.

The Dow might have achieved a new high already if not for the economic uncertainty brought about by the budget clash, said A.C. Moore, chief investment strategist for Dunvegan Associates Inc. in Santa Barbara.

"There's an undercurrent of positive worldwide economic developments that continues to buoy stock prices," Moore said.

Some experts think stocks have risen because of sequestration rather than in spite of it. Their logic is that investors cheer anything out of Washington, albeit unwieldy and scattershot, if it reduces budget deficits.

"Is it possible that the market actually likes the idea of sequestration?" Bollinger said. "It's the only way it sees that any of this is going to get cut."

Consumer confidence surged in February as the improving job market offset concerns about higher taxes and looming federal spending cuts.

The monthly consumer sentiment index from Thomson Reuters and the University of Michigan rose 5.1% last month from January. The new reading of 77.6 also was up 3.1% from a year earlier.

"Consumer confidence continued to improve in February due to expected gains in employment," said Richard Curtin, the survey's chief economist. "These expected job gains have partially offset concerns about higher payroll taxes and the impending reduction in federal spending."

Although the unemployment rate ticked up to 7.9% in January, the economy added 157,000 jobs and figures for the last three months of 2012 were revised sharply upward. Weekly jobless claims have been trending down.

Meanwhile, consumers spent slightly more in January than in the previous month even as their income plummeted by the largest amount in 20 years because of the "fiscal cliff," the Commerce Department said Friday.

People boosted their spending by saving less money as they sought to offset tax increases that took effect. The personal saving rate in January was 2.4%, down from 6.4% in December, the lowest monthly level since late 2007.

The U.S. economic data offset downbeat news from Europe, where joblessness hit a new high.

The Eurozone's jobless rate went up in January to 11.9%, from 11.8% in December, as the region continued to grapple with recession and government cutbacks.

walter.hamilton@latimes.com

jim.puzzanghera@latimes.com

Staff writer Don Lee contributed to this report.

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Student loan delinquency rate is increasing

More people borrowing for education are failing to pay off their loans.

Almost a third of student-loan borrowers in repayment were delinquent at the end of last year, up from about a quarter in 2008 and 20% in 2004, according to a report on household debt and credit released Thursday by the Federal Reserve Bank of New York.

The amount of educational debt, which includes federally backed and private loans taken out by students and parents, has almost tripled in the last eight years to $966 billion, the bank said. With costs to attend college continuing to outpace the inflation rate, more borrowers are struggling to pay. That makes it harder for people, especially those ages 25 to 30, to secure other types of credit, including home mortgages.

"Student loan debt is the only kind of household debt that continued to rise during the Great Recession and has now the second-largest balance after mortgage debt," wrote Donghoon Lee, an economist at the New York Fed. "With delinquent student debt, mortgage origination is very difficult."

The New York Fed report is based on a sample of data provided by the credit bureau Equifax Inc. and examines borrowers' current debt. It doesn't measure how much was taken out at origination.

About 44% of student loan borrowers aren't repaying their loans because of deferments, forbearance or continued schooling.

Delinquency rates in 2012 were highest among borrowers younger than 30 who are repaying their loans. Thirty-five percent were 90 or more days behind, compared with 21% in 2004.

The Fed also reports on the share of all borrowers who are delinquent 90 days or more, including those in deferral, forbearance or still in school. That rate is 16% for those younger than 30, up from almost 8% in 2004.

As more people attend college, the average educational loan balance and the numbers of borrowers and delinquencies are increasing. The number of student-loan borrowers was almost 39 million in 2012, up 70% from about 23 million in 2004. The average borrower's balance in 2012 was $24,700, compared with $15,308 eight years earlier.

Total student-loan debt in the fourth quarter was $966 billion, up $10 billion from the previous quarter, according to the New York Fed. The federal Consumer Financial Protection Bureau put the number at $1 trillion last year.

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Island Air is Ellison's latest buy

How do you follow the purchase of an island in Hawaii?

If you're Oracle Chief Executive Larry Ellison, you buy an airline so you can hop to and from your tropical paradise.

Ellison has been on a shopping spree lately, buying 98% of the island of Lanai in June from Los Angeles billionaire David Murdock and then, in November, buying a beachfront Malibu home from film and TV producer Jerry Bruckheimer.

Ellison's most risky acquisition may be Island Air, which he bought Wednesday through a holding company.

The exact purchase prices of Ellison's recent deals have not been disclosed, but local observers value the 141-square-mile island at more than $500 million and the three-bedroom, three-bath Malibu pad at more than $3.65 million. The details of the airline deal were not announced.

Island Air, a regional carrier serving airports on all major Hawaiian islands, has 245 employees and three turboprop planes, with 224 weekly flights between the islands of Oahu, Maui, Molokai, Lanai and Kauai.

Lanai, the sixth-largest Hawaiian island, was once a pineapple plantation and is still sparsely inhabited. It includes two resort hotels and two golf courses with clubhouses, according to Hawaii's Public Utilities Commission.

But Ellison did not buy the airline just to get to and from his island, airline officials say.

He hopes to expand the businesses to serve locals visiting relatives on the islands and to fly mainland and foreign tourists throughout the island state, airline officials said. The airline plans to retire two 1980s-era planes and expand to four or five new ATR 72 turboprops by the end of the year.

But Ellison should not get his hopes up about pocketing big profits, said Ray Neidl, an aviation analyst for Nexa Capital Partners in Washington, D.C.

"It's a high-risk situation with no significant margins, at least initially," he said of owning an airline.

And if Ellison hopes to expand the business, he should expect to get some resistance from the big carrier on the island, Hawaiian Airlines, Neidl added. "It really depends on what Hawaiian does."

Island Air began in 1980 as Princeville Airways, carrying passengers from Kauai to Honolulu. The history of the carrier has not always been blue skies and soft landings.

"In our 30-plus years, we had our ups and downs, pardon the pun," said Michael Rodyniuk, a senior consultant to the airline.

Like most airlines across the country, he said, Island Air struggled during the economic turmoil between 2008 and 2012 but expects to thrive with a surge in tourism that Hawaii has been enjoying in the past year or so.

The state welcomed a record 8 million visitors in 2012, surpassing the previous high of 7.6 million visitors in 2006.

"All major markets are up," Rodyniuk said.

The previous owner of the airline, California businessman Charles Willis IV, had been looking for a buyer for the airline and had put all 245 employees on notice that layoffs could begin as soon as March 11 if a buyer was not found, he said. "So Mr. Ellison saved 245 jobs," Rodyniuk said.

Forbes ranks Ellison as the third-richest American, with a net worth of $36 billion. He has cut big checks in the past on high-priced properties in Malibu, Lake Tahoe, Rancho Mirage and other locations.

But unlike real estate, air carriers are an investment that can give investors nightmares.

Virgin America, a California-based airline partly owned by millionaire Richard Branson, has been operating for more than five years without recording a profitable year.

California Pacific Airlines is the brainchild of Encinitas businessman Ted Vallas, who has already invested more than $6 million of his own money but has spent the last year trying to clear federal red tape so he can begin selling tickets.

And then there are the 11 other airlines — including American, Delta, United and US Airways — that have filed for bankruptcy since 2000.

"The profit margins on airlines, even though they are improving, are not that attractive," Neidl said.

hugo.martin@latimes.com

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Bernanke urges Congress to avoid spending cuts

WASHINGTON — Federal Reserve Chairman Ben S. Bernanke urged Congress to avert the new spending cuts set to begin Friday, saying they not only are bad for the economy but fail to deal with the underlying problems of the nation's long-term debt.

"You've made progress in the very near term as far as the budget is concerned," Bernanke told members of the Senate on Tuesday, referring to measures now in place that are expected to reduce the government's red ink for the next several years.

"Where the problem still remains unaddressed is in the longer term. And so it doesn't quite match to be doing tough policies today when the real problem is a somewhat longer-term problem."

At the same time, the Fed chief laid out a case for why the central bank should keep priming the economy with monetary stimulus — despite dissent from within and concerns from outside that the Fed's easy-money policies may be doing more harm than good.

Critics said the Fed was encouraging excessive risk-taking and sowing seeds of future inflation.

In his semiannual testimony to Congress on monetary policy and the economy, Bernanke said the Fed's bond-buying and other efforts to hold down interest rates had helped the housing market and car sales.

The Fed should continue those policies given the weak job market and low rate of inflation, he said, noting that he didn't see much evidence of a stock market bubble.

Diane Swonk, chief economist at Mesirow Financial in Chicago, said of Bernanke's testimony, "Those worried that the Fed may end large-scale asset purchases prematurely should be reassured."

Bernanke's remarks cheered Wall Street as investors and analysts concluded that the Fed's campaign to stimulate economic growth was unlikely to be slowed or halted any time soon.

The Dow Jones industrial average rose 115.96 points, or 0.84%, to close at 13,900.13 on Tuesday. That recouped about half the losses the Dow suffered Monday after the Italian election results reignited worries about the Eurozone debt crisis and unsettled financial markets around the world.

Bernanke also pushed back against accusations that he was soft on inflation.

Responding to Sen. Bob Corker (R-Tenn.), who called Bernanke the "biggest dove" on inflation "since World War II," Bernanke said "my inflation record is the best of any Federal Reserve chairman in the postwar period, or at least one of the best, about 2% average inflation."

The record of the Bernanke years has been notably less stellar on unemployment. The Fed has a dual mandate — to control inflation and to maximize employment. Liberal critics have said Bernanke has done too little to stimulate the economy to bring unemployment down, even as conservatives have accused him of doing too much.

In his testimony, Bernanke repeated his oft-stated concerns about the hardships of millions of unemployed people, particularly those without work for more than six months. He also rebutted the complaint that the Fed's efforts to tackle the nation's high jobless rate have hurt savers, especially seniors, by keeping interest rates at record-low levels.

"The only way to get interest rates up for savers is to get a strong recovery. And the only way to get a strong recovery is to provide adequate support to the recovery," he said.

Right now, that recovery continues at a moderate pace, Bernanke said. He described the flattening of growth in the fourth quarter last year as a "pause" and said "available information suggests that economic growth has picked up again this year."

Although the Fed's stimulus programs drew considerable attention in the two-hour hearing, lawmakers were largely focused on their own problems, most notably the automatic spending cuts that are set to start taking effect Friday.

Several pressed Bernanke for his opinion on whether the economy would be better off with a more targeted round of budget cuts instead of the across-the-board effects of the so-called sequestration.

A more "thoughtful approach" would be better, Bernanke said. But he noted that in the short term, the "effect on growth would probably not be substantially different" if smarter budget cuts were put in place.

The basic problem is that any cut the size of the one planned — about $85 billion this year — probably would reduce economic growth, Bernanke said. He agreed with the Congressional Budget Office's estimate that the budget cuts would slice a sizable 0.6 percentage point from economic growth this year.

Combined with other deficit-reduction policies that already have been put into place, the budget changes are likely to slow economic growth by 1.5 percentage points this year, a significant figure given that the economy has been growing on average just over 2% a year.

"I am not in any way denying the importance of long-run fiscal stability," Bernanke said. "I just think that to some extent, the fiscal policy decisions being made are mismatched with the timing of the problem. The problem is a longer-term problem and should be addressed over a longer time frame."

don.lee@latimes.com

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California braces for impending cuts from federal sequestration

California's defense industry is bracing for a $3.2-billion hit with the federal budget cuts that are expected to take effect Friday.

But myriad other federally funded programs also are threatened, and the combined effect is expected to slow the momentum that California's economy has been building over the last year.

As the state braces for pain from so-called sequestration, there are warnings of long delays at airport security checkpoints, potential slowdowns in cargo movement at harbors and cutbacks to programs, including meals for seniors and projects to combat neighborhood blight.

Despite the grim scenarios from local and state officials, economists say the cuts' overall blow to the economy would be modest, felt more acutely in regions such as defense-heavy San Diego and by Californians dependent on federal programs, such as college students who rely on work-study jobs to pay for school.

Critics say the cuts come at an inopportune time because the economic recovery in the U.S. and California is still weak.

"We need stimulus, not premature austerity," Gov. Jerry Brown said during a break at the National Governors Assn. meeting in Washington.

Rep. John Campbell (R-Irvine) contends that critics of the cuts are exaggerating the effects.

"If we can't do this, what can we do" to reduce Washington's red ink, he asked. "We ought to be panicked about the day when people won't buy our debt anymore because we borrowed too much."

If automatic spending cuts occur as planned, the growth in the country's gross domestic product is likely to slow by 0.4 percentage points this year, from about 2% to 1.6%, economists said.

California's GDP would see a similar slowdown. The state stands to lose as much as $10 billion in federal funding this year, according to Stephen Levy, director of the Center for Continuing Study of the California Economy in Palo Alto.

Levy said the more than $1 trillion in cuts planned over the next decade include "items in the federal budget that invest for the future," such as support for research and clean energy, that particularly affect California because of its "innovation economy."

The ripple effects the cuts might have on business and consumer confidence — which would further dampen economic activity — remain to be seen, said Jason Sisney, a deputy at the state's nonpartisan Legislative Analyst's Office.

"We're at a point where gains in housing and construction markets have begun to take hold," Sisney said. "A slowdown from sequestration would come at just the moment that the economy was beginning to right itself."

Jerry Nickelsburg, a UCLA economist who writes a quarterly economic forecast on the Golden State, said the state's recent economic gains would provide a buffer against sequestration.

"California can absorb it," Nickelsburg said. "Will it slow economic growth? The answer is yes. Will it result in negative economic growth? I think the answer is no."

Los Angeles officials project that the city would lose more than $100 million at a time when they're struggling to close a hole in the city's budget.

Douglas Guthrie, chief executive of the Los Angeles city housing authority, said Monday that rent subsidies to as many as 15,000 low-income families would be cut an average $200 a month, forcing many families to search for less expensive housing. His agency also might face as many as 80 layoffs in an already reduced workforce.

But Guthrie said in a letter to the Los Angeles City Council that the housing authority must plan for the "painful consequences" of the federal budget cuts and is preparing to send warning notices to participants in the housing assistance program "as soon as we see that the cuts are made and there are no immediate prospects to resolve the budget crisis."

At Yosemite National Park, snow plowing of a key route over the Sierra would be delayed, ranger-led programs are likely to be reduced and the park would face "less frequent trash pickup, loss of campground staff, and reduced focus on food storage violations, all of which contribute to visitor safety concerns and increased bear mortality rates," according to the National Park Service.

Some programs, such as Social Security, would be spared from the $85 billion in cuts nationwide due to kick in Friday. But defense programs are expected to be cut by about 13% for the remainder of the fiscal year and domestic spending by about 9%, according to the White House budget office.

The Obama administration sought Monday to highlight the effects close to home in an effort to step up the pressure on Congress to replace across-the-board cuts with more targeted reductions and new tax revenue collected from taxpayers earning more than $1 million a year.

The Los Angeles Unified School District is bracing for a loss of $37 million a year in federal funding. Supt. John Deasy said Monday that he is sending a letter to the California congressional delegation warning about the "potential very grave impact" of the cuts on Los Angeles schools.

Rachelle Pastor Arizmendi, director of early childhood education at the Pacific Asian Consortium for Employment in Los Angeles, said she anticipated that the cuts would cost her agency $980,000 in federal Head Start funding. That would force PACE to eliminate preschool for about 120 children ages 3 to 5.

"It's not just a number," she said. "This is closing down classrooms. This is putting our children behind when they're going to kindergarten."

The nonprofit serves about 2,000 children, providing most of them two meals a day in addition to preschool education. The cuts would mean PACE would have to lay off four of its 20 teachers, forcing the closure of eight Head Start classrooms, Arizmendi said.

ricardo.lopez2@latimes.com

richard.simon@latimes.com

Lopez reported from Los Angeles and Simon from Washington. Times staff writer Jim Puzzanghera in Washington contributed to this report.

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Jason Bateman gives Ernest Borgnine's estate a new identity

Markus Canter and Cristie St. James, who share the title luxury properties director at Prudential in Beverly Hills, like Jason Bateman's real estate sense. The actor got privacy, potential and a knoll location for $3 million.

Actor Jason Bateman and his wife, actress Amanda Anka, are dropping anchor in the Beverly Crest area with the purchase of the estate of Ernest Borgnine for $3 million.

The gated country English compound sits on a half-acre knoll. The 6,148-square-foot home features a formal entry hall, a grand staircase, a paneled library, an office, a den, six bedrooms and seven bathrooms. There is a guesthouse and a swimming pool.

Bateman, 44, stars in the comic film "Identity Thief," released this month. He is known to generations of TV viewers for his roles in "Arrested Development" (2003-present) and "Valerie," later retitled "The Hogan Family" (1986-91). Anka, 44, has appeared in "Bones" (2008), "Notes From the Underbelly" (2007) and "Beverly Hills, 90210" (1996).

Borgnine, who died last year at 95, is remembered for his Oscar-winning performance in "Marty" (1955) and his work in the title role as commander of a madcap crew in the sitcom "McHale's Navy" (1962-65). Until 2011 he was the voice of Mermaidman on "SpongeBob SquarePants."

The estate came on the market in October for the first time in 60 years priced at $3.395 million.

Billy Rose, Paul Lester and Aileen Comora of the Agency in Beverly Hills were the listing agents. Richard Ehrlich of Westside Estate Agency represented the buyers.

Where pair spent days of their lives

Soap star Peter Reckell and his wife, singer Kelly Moneymaker, have sold their custom-built, eco-friendly home in Brentwood for $3.35 million.

Before building the 3,345-square-foot house, the couple had the existing home on the site torn down, crated and shipped to Mexico for reuse by Habitat for Humanity. Then they designed and built a three-bedroom, four-bathroom contemporary that uses solar power.

Green elements include a photovoltaic system with battery backup, skylights, recycled glass terrazzo floors with radiant heating, recycled denim and organic cotton insulation, bamboo cabinets and doors, a roof garden and a water reclamation system.

A temperature-controlled wine cave and a recording studio are among other features.

Along with an indoor/outdoor koi pond, a meditation fountain and a solar infinity pool, outdoor amenities include a 16th century East Indian temple that was turned into a pavilion.

"This is my sanctuary," Reckell said. It frames views of the Santa Monica Mountains Conservancy.

Reckell, 57, played Bo Brady on "Days of Our Lives" from 1983 through last year. The show began in 1965. He also appeared in "Knots Landing" (1988-89). He is an avid environmentalist and bikes to work.

Moneymaker, 42, is a former member of the music group Exposé. She was inspired to build an environmentally friendly home because the carpet and other elements in the old house bothered her allergies and affected her voice.

Public records show they bought the property in 2003 for $1.14 million.

Daniel Banchik of Prudential's West Hollywood office was the listing agent. Scott Segall of John Aaroe Group represented the buyer.

Another rock owner for home

Hard Rock Cafe co-founder Peter Morton has made his mark on L.A.'s real estate scene of late, buying the old Elvis Presley estate in Beverly Hills at year-end for $9.8 million.

But flying under the radar was his bigger off-market purchase midyear for a property in Bel-Air at $25 million, public records show. Area real estate agents not involved in the transaction say Morton plans to take down the existing home and build another on the site. The estate had belonged to Joseph Farrell, who founded National Research Group Inc. in 1978 and brought market testing to Hollywood. Farrell died in December 2011.

Read More..

Jason Bateman gives Ernest Borgnine's estate a new identity

Markus Canter and Cristie St. James, who share the title luxury properties director at Prudential in Beverly Hills, like Jason Bateman's real estate sense. The actor got privacy, potential and a knoll location for $3 million.

Actor Jason Bateman and his wife, actress Amanda Anka, are dropping anchor in the Beverly Crest area with the purchase of the estate of Ernest Borgnine for $3 million.

The gated country English compound sits on a half-acre knoll. The 6,148-square-foot home features a formal entry hall, a grand staircase, a paneled library, an office, a den, six bedrooms and seven bathrooms. There is a guesthouse and a swimming pool.

Bateman, 44, stars in the comic film "Identity Thief," released this month. He is known to generations of TV viewers for his roles in "Arrested Development" (2003-present) and "Valerie," later retitled "The Hogan Family" (1986-91). Anka, 44, has appeared in "Bones" (2008), "Notes From the Underbelly" (2007) and "Beverly Hills, 90210" (1996).

Borgnine, who died last year at 95, is remembered for his Oscar-winning performance in "Marty" (1955) and his work in the title role as commander of a madcap crew in the sitcom "McHale's Navy" (1962-65). Until 2011 he was the voice of Mermaidman on "SpongeBob SquarePants."

The estate came on the market in October for the first time in 60 years priced at $3.395 million.

Billy Rose, Paul Lester and Aileen Comora of the Agency in Beverly Hills were the listing agents. Richard Ehrlich of Westside Estate Agency represented the buyers.

Where pair spent days of their lives

Soap star Peter Reckell and his wife, singer Kelly Moneymaker, have sold their custom-built, eco-friendly home in Brentwood for $3.35 million.

Before building the 3,345-square-foot house, the couple had the existing home on the site torn down, crated and shipped to Mexico for reuse by Habitat for Humanity. Then they designed and built a three-bedroom, four-bathroom contemporary that uses solar power.

Green elements include a photovoltaic system with battery backup, skylights, recycled glass terrazzo floors with radiant heating, recycled denim and organic cotton insulation, bamboo cabinets and doors, a roof garden and a water reclamation system.

A temperature-controlled wine cave and a recording studio are among other features.

Along with an indoor/outdoor koi pond, a meditation fountain and a solar infinity pool, outdoor amenities include a 16th century East Indian temple that was turned into a pavilion.

"This is my sanctuary," Reckell said. It frames views of the Santa Monica Mountains Conservancy.

Reckell, 57, played Bo Brady on "Days of Our Lives" from 1983 through last year. The show began in 1965. He also appeared in "Knots Landing" (1988-89). He is an avid environmentalist and bikes to work.

Moneymaker, 42, is a former member of the music group Exposé. She was inspired to build an environmentally friendly home because the carpet and other elements in the old house bothered her allergies and affected her voice.

Public records show they bought the property in 2003 for $1.14 million.

Daniel Banchik of Prudential's West Hollywood office was the listing agent. Scott Segall of John Aaroe Group represented the buyer.

Another rock owner for home

Hard Rock Cafe co-founder Peter Morton has made his mark on L.A.'s real estate scene of late, buying the old Elvis Presley estate in Beverly Hills at year-end for $9.8 million.

But flying under the radar was his bigger off-market purchase midyear for a property in Bel-Air at $25 million, public records show. Area real estate agents not involved in the transaction say Morton plans to take down the existing home and build another on the site. The estate had belonged to Joseph Farrell, who founded National Research Group Inc. in 1978 and brought market testing to Hollywood. Farrell died in December 2011.

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Port upgrades urged to keep pace with Panama Canal expansion

Port and city officials have called for expediting planned upgrades at the ports of Los Angeles and Long Beach to stave off the threat of losing cargo traffic when the $5.25-billion Panama Canal expansion is completed next year.

At a hearing Friday at Los Angeles City Hall, state officials heard testimony from trade economists, shipping line representatives and labor groups on how the state can promote the ports so they keep their share of U.S. cargo traffic, which harbors on the East and Gulf coasts are eager to lure away.

The two seaports, the largest in the U.S., currently receive about 40% of the nation's cargo traffic.

But as construction nears completion on two new Panama Canal locks that will be able to accommodate massive cargo vessels, Southern California officials are increasingly worried about the effect on the state economy — namely the loss of logistics jobs. An estimated 640,000 people work in trade-related jobs in Southern California.

A coalition of labor, business and government estimates that the ports could lose up to 25% of their cargo traffic when the canal upgrade is completed. Trade economists, however, say it's too early to make any reliable estimates on the economic effect on the state.

Nonetheless, the San Pedro Bay ports have been furiously upgrading facilities, focusing on expanding rail access that would more efficiently move goods and deepening the bay to accommodate larger vessels. There are $6 billion worth of upgrades planned for the ports.

Among those testifying Friday was Daniel Miranda, president of the International Longshore and Warehouse Union Local 94, based in San Pedro.

Miranda testified that planned upgrades, such as the construction underway now at the Gerald Desmond Bridge, have taken years to approve. Meanwhile, their Chinese counterparts have built major infrastructure projects aimed at improving the movement of goods in a fraction of the time.

It took "five years to get a bridge pushed through," Miranda said. "We need your help in helping us expedite the completion of these projects. The process is unbelievably slow."

Many of those who testified said the state should streamline approval processes to ensure that the ports stay competitive. Other ports in the U.S., Canada and Mexico have been aggressively expanding as well.

The American Assn. of Port Authorities said U.S. ports are pumping $46 billion into upgrades to boost cargo traffic. The Port of Baltimore, for instance, recently installed four massive cranes — worth $40 million — to load and unload cargo from larger ships.

Absent from the panel were environmental groups and civic groups, which have in the past raised concerns over pollution and increased truck traffic because of construction at the ports.

Despite the construction binge, international trade experts testified that it's impossible to know what the effect of the Panama Canal expansion may be, but that it is better for Southern California ports to be ready rather than stand by idly.

"We can anticipate some diversion but the true extent of it is up in the air," trade economist Jock O'Connell said.

Trade patterns could shift. Companies may choose to unload goods at West Coast ports, moving cargo by rail, rather than tack on longer sailing time by passing through the Panama Canal. Also unknown is the cost of the tolls set by Panama Canal authorities.

State Sen. Curren Price (D-Los Angeles), who heads the Senate Committee on Business, Professions and Economic Development, said the state needs a strong strategy to promote the ports.

"The bottom line is jobs, jobs, jobs," he said Friday.

Price has introduced SB 592, which would direct the Governor's Office of Business and Economic Development to address port activity and promotion as part of its strategy submitted to the state Legislature in 2014.

ricardo.lopez2@latimes.com

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Banks step up efforts to forgive mortgage debt in California

Banks are stepping up efforts to forgive mortgage debt for troubled California homeowners, although more than half of the aid offered under last year's landmark mortgage settlement is still geared toward getting people out of their homes.

California homeowners have received an estimated $16.9 billion worth of completed aid doled out by the nation's five largest mortgage servicers under the accord reached last year. In the most detailed report to date on how that money is flowing to borrowers, regulators noted an increase in the number of principal reductions, although the single biggest chunk of aid has been short sales.

In principal reductions, banks write down mortgage debt for borrowers who remain in their homes. Short sales allow homeowners to sell their properties for less than they owe. Both require banks to take a haircut.

Nationally, more than half a million consumers had received a total of $45.8 billion in aid from the five largest banks as of Dec. 31. The settlement was struck last year by 49 state attorneys general, several federal agencies and Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co., Citigroup Inc. and Ally Financial Inc.

Officials had first estimated that the banks would provide $34 billion in direct homeowner aid through their programs. Housing and Urban Development Secretary Shaun Donovan said Thursday that he now expects the final amount will be more than $50 billion.

The settlement resolved investigations into allegations that the financial institutions had used flawed paperwork and other faulty practices to foreclose on homes.

Before the settlement, many lenders opposed principal write-downs, arguing that they rewarded delinquent borrowers. But consumer advocates have long pushed for wide-scale principal relief.

"Clearly there is some added momentum around principal reduction modifications, and that is encouraging," said Paul Leonard, California director for the Center for Responsible Lending. "But, you know, you look at the overall data and see a disproportionate share of short sales, which is disappointing."

HUD Secretary Donovan told reporters that the settlement was exceeding its goals. The accord has kept people from losing their homes and contributed to the housing recovery, he said.

Under the settlement, banks are required to give homeowners aid in the form of principal reduction, short sales and other modifications. The banks get credit for both principal reductions and short sales under the agreement, but must give 60% of the relief nationally by forgiving principal for families who keep their homes.

Of the $45.8 billion in aid dispensed nationally, homeowners have received about $10.9 billion in first-mortgage principal reduction relief, including trial modifications that are expected to become permanent. Meanwhile, about $20 billion of the total national aid came from short sales. The rest has gone to reducing and forgiving second mortgages, as well as other programs.

According to numbers provided by California's monitor, a total of $16.9 billion worth of aid has gone to homeowners. About $5 billion of that total is first-mortgage principal reduction. About $8.8 billion has been through short sales.

Although short sales remain a big part of the equation, borrowers are getting more principal relief in California than in other states in part because of the state's tough new foreclosure laws, the state attorney general's office said.

So far only Ally Financial, which has provided $257 million in relief, has met its obligation under the national settlement. The other four banks had much larger obligations.

alejandro.lazo@latimes.com

jim.puzzanghera@latimes.com

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White House adopts new strategy to safeguard intellectual property

WASHINGTON — Amid growing evidence that China and other countries are stealing U.S. trade secrets and technology through cyber attacks, the White House announced what it billed as a new strategy Wednesday to protect intellectual property.

The strategy, which does not focus exclusively on cyber theft, seeks to improve coordination of existing efforts by U.S. intelligence agencies and the State and Justice departments, but it does not include new penalties or sanctions.

Obama last week signed an executive order for the government to share more classified information about cyber threats with U.S. companies that own or operate crucial infrastructure, including dams and energy and telecommunications facilities.

"We know that trade secret theft can cripple a company's competitive advantage in foreign markets, diminish export prospects around the globe and put American jobs in jeopardy," White House spokesman Jay Carney said Wednesday.

The modest steps were announced a day after computer security company Mandiant Corp. in Alexandria, Va., released a report that says a secretive Chinese military unit has stolen digital blueprints, plans, bidding orders and other sensitive data from at least 141 U.S. and Canadian companies over the last six years. Chinese authorities in Beijing denied any involvement and questioned the report's veracity.

Carney said the United States and other countries need to develop "an understanding of acceptable behavior in cyberspace."

"We repeatedly, and will continue to, raise our concerns at the highest levels about cyber theft with senior Chinese officials, including in the military," he said.

Briefing reporters at the White House, Robert Hormats, undersecretary of State for economic growth, called China's theft of intellectual property "a serious and highly troubling issue."

The White House distributed a 2011 report by the National Counterintelligence Executive office, titled "Foreign Spies Stealing U.S. Economic Secrets in Cyberspace," that named China as a "persistent collector" of U.S. corporate secrets.

U.S. intelligence officials said China has mounted a concerted campaign to siphon intellectual property and feed it to state-sponsored industries to save on research-and-development costs.

Rep. Adam Schiff (D-Burbank), a member of the House Intelligence Committee, said the pace of cyber thefts from China has accelerated over the last six months.

"I think we need to confront China on this," he said. "We need to let China know in no uncertain terms that this is a relationship-altering, continuing offense, and it will have the most serious consequences.

"We need to make it clear that they are seeking an unfair economic advantage in their cyber theft practices, and they are going to have to change those practices."

Intellectual property also is frequently stolen by human spies, some of whom are caught and prosecuted.

ken.dilianian@latimes.com

christi.parsons@latimes.com

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Regal Entertainment stock up after deal to buy Hollywood Theaters

Shares of Regal Entertainment gained modestly Tuesday after the nation's largest theater chain announced it had reached a deal to acquire Hollywood Theaters.

Regal Entertainment Group said it has entered into an agreement to buy Hollywood Theaters, a Portland, Ore., chain that operates 43 theaters in 16 states, for $191 million in cash and about $47 million of assumed lease obligations. Most of Hollywood's cinemas are concentrated in Texas, Missouri, Hawaii and Kansas.

Investors responded favorably to the news. Regal shares closed up 3% at $15.83. Shares have climbed 9% this year for Regal, based in Knoxville, Tenn.

STORY: Major chains putting the squeeze on indie cinema houses

“Regal is well-positioned to once again generate results above expectations in 2013 driven by its leading industry position on a robust film slate,” Eric Wold, an analyst with B. Riley Caris in San Francisco, said today in a research note.

The acquisition, subject to regulatory approval, would add 513 screens to Regal's portfolio, which includes 6,880 screens in 540 locations.

The Hollywood Theaters deal will add to the company's cash flow, Regal Chief Executive Amy Miles said in a statement. Such acquisitions are "a key component of our overall business strategy and we look forward to a successful closing and integration of the Hollywood Theater assets during the second quarter," Miles added.

The deal is the latest in a string of consolidations in the U.S. exhibition industry. Cinemark USA Inc., the nation's third largest theater chain, announced in November that it was acquiring Rave Cinemas, the Dallas chain that operates the former Bridge theater in Los Angeles, for $240 million.

Carmike Cinemas, the Columbus, Ga., chain, said it had already signed an agreement to buy 16 theaters with 251 screens from Rave for $19 million in cash and $100.4 million of assumed lease obligations.

China's Dalian Wanda Group last year acquired AMC Entertainment, the nation's second-largest theater chain, for $2.6 billion.

ALSO:

Cinemark signs deal to buy Rave Cinemas

'The Hobbit' will usher in new technology at movie theaters

Theater chains raise revenue and tensions by charging to show trailers

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Chinese car companies likely Fisker Automotive investment partners

Fisker Automotive Inc. has what it is calling “detailed proposals” from several investment partners that could save the maker of expensive hybrid sports cars.

The Anaheim company behind the $110,000 Karma plug-in hybrid sports car has previously said it needs about $500 million to launch a second, less expensive model, which would be made at a factory in Wilmington, Del.

Fisker ran into a cash crunch after the federal government froze a Department of Energy loan to the company and its battery maker went bankrupt.

“We can only confirm that the company has received detailed proposals from multiple parties in different continents," the company said in a statement, "which are now being evaluated by the Company and its advisors.”

A deal could be reached in March.

Previously reported potential partners include Geely Auto, the Chinese company that owns Volvo, and Wanxiang Group, another Chinese company, which recently purchased battery maker A123 Systems out of bankruptcy. A123 builds the lithium-ion battery that goes into Fisker’s cars.

Fisker also is in talks with Wanxiang to start purchasing batteries again. But for now, production of the Karma, which is built in Finland, has been halted until the automaker secures a battery supply. The company had built up an inventory of cars prior to A123’s bankruptcy and there are cars still for sale at dealerships in the U.S. and Europe.

The automaker is looking for funds to restart work on the Atlantic, a $55,000, four-door rechargeable sports sedan that Fisker sees as a higher-volume model that would have a broader market.

Work on the Atlantic came to a halt last year when the federal government suspended a $529-million loan after delays in the introduction of the Karma. Fisker had drawn down about $192 million of the loan.

ALSO:

Lexus bikini ad comes to life

Alfa Romeo will launch new sport car in U.S.

Lexus, Toyota top JD Power dependability list

Follow me on Twitter (@LATimesJerry), Facebook and Google+.

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A secret agent reveals her secrets of success

The prospect of a business book written by a former CIA officer fills one with dread at the inevitable 007 anecdotes and labored corporate parallels.

But "Work Like a Spy: Business Tips From a Former CIA Officer," published by Portfolio, turns out to be rather different. There are no gadgets, few cloaks and fewer daggers: Instead it is a bracingly realistic book about people at work. It is short. It is sharp. Better still, it is sensible.

It is also about spying, though only enough to lend a sprinkle of glamour and danger. The book jacket photo shows author J.C. Carleson, an undercover agent for eight years, looking like a real-life Carrie from "Homeland" — without the blond hair and the bipolar disorder.

Yet her stories from the field are as much blunder as conspiracy. The book opens with the heroine as a young case officer in an armed convoy in Iraq. It is 2003 and she is going to inspect a plant that the U.S. is convinced makes biological weapons. They disarm the guards and terrify everyone — only to discover it is a salt factory.

"Salt. (Insert your own expletive of choice here.) Salt!" she writes.

Carleson assures us that not all CIA work is suitable for general adoption: The threatening, lying, trapping, cheating, misleading and detaining that go with the territory should not be tried in the office.

But the spy can teach the general manager about human nature. Spies are simply better at observing people because they have spent more time practicing and because the stakes are too high to screw it up.

By comparison, the rest of us are pretty hopeless, only we don't know it. Reluctantly, I have started to reappraise my own view of myself as a brilliant judge of character and admit that such a belief is a liability.

I've just tried the following exercise: Pick a stranger and try to guess their education, profession, religion, income bracket, marital status and hobbies. Disaster: I was wrong on every score.

Because we cling to this idea that our gut instincts are reliable, we make a lot of avoidable mistakes. We make bad hiring decisions. We talk vaguely about wanting passion and creativity rather than setting to work corroborating resumes and seeking out references. Employers should make a short, precise list of the traits a job requires and hire to fill it. It is all obvious. Yet it takes a spy to point it out.

Less obvious but no less valuable is her tip for job candidates: Get the interviewer to do most of the talking and then hang on their every word. Since hardly anyone can resist talking about themselves to a rapt audience, a job offer is almost bound to follow.

To the public speaker and the salesman, Carleson has further good advice: Never rely on a script and never learn what you are going to say by heart. When you do this you use a different tone of voice, go on to autopilot and all trust is lost in an instant. Carleson is right. I have done this, but never again.

I also liked the observation about newly minted CIA officers (for which read new Harvard MBAs and so on) who emerge from the yearlong training process all swagger and irritating charm. This doesn't wash in the agency, any more than it does elsewhere. More seasoned colleagues slap them down. "Don't try to case officer me," they say.

Not everything from the book can be copied. The CIA keeps its best staff by doing sensible things such as moving people around, giving them interesting work and letting lone wolves be lone wolves.

Yet the perks of being an undercover agent also involve wearing disguises, learning how to crash cars and jump out of aircraft — all of which are big pluses, but not terribly transferable.

The main lesson from "Work Like a Spy" is that we are much more likely to get what we want if we watch other people carefully. It helps to identify the other person's weaknesses, and for this there are some common denominators: "… ego, money, ego, ego … ego, ego, ego."

Lucy Kellaway is a columnist for the Financial Times of London, in which this review first appeared.

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Breakdown of U.S. housing prices shows gains almost everywhere

The latest numbers from the field are in, and the news is good. Housing prices were up almost everywhere across the country in 2012.

Of the 134 core-based statistical areas (CBSAs) that reported 500 or more sales last year, 123 saw gains, according to year-over-year data collected as of Dec. 31 by Pro Teck Valuation Services of Waltham, Mass. CBSAs are defined as "micropolitan" areas of at least 10,000 people who are tied to an urban center by commuting.

Some increases were exceptional, such as the nearly 35% jump in the price per square foot in the Phoenix CBSA and 25% each in San Jose and Fort Myers, Fla. Others were minuscule, such as the 0.23% increase in Salem, Ore., or the 0.26% gain in Nassau County, N.Y.

But even those slight increases are welcome, and far better than the 10% drop in square-foot prices recorded in South Bend, Ind., which had the biggest decline among the 11 markets where prices are still falling.

Overall, the national median price per square foot rose from $81.08 in 2011 to $86.42 last year, according to Pro Teck, which takes its numbers at least daily from about 850 multiple listing services.

Since all real estate is local, the national median is useful only as headline material. What's more important is judging whether the real estate market is rising or falling in your area — and not just your city or town, but your community, your neighborhood and sometimes even your block. Breaking down housing prices by CBSA is a step in the right direction.

Moreover, Pro Teck's median price per square foot is more helpful than other measures in gauging the path of housing prices. Most of the more popular indexes are influenced by product mix and the number of sales in a particular price range. Consequently, an unusually large number of sales of more expensive houses can result in misleading readings, sending the average or median price higher than it otherwise would be. The same phenomenon can occur when most sales are in the lower price brackets, pushing the announced figure lower.

But the median price per square foot tends to even things out. By normalizing for swings in the type and price of houses sold, it represents a truer picture of the market. In that sense, then, price per square foot — let's call it PPSF — is the great equalizer by which all houses can be judged and compared with one another.

It also is worth mentioning that Pro Teck's figures are more current. Whereas other indexes you might read or hear about are 3 and perhaps up to 6 months old, the numbers supplied by the Massachusetts valuation company in its latest report are as of year-end 2012. You can't get much more current than that.

With that said, let's take a look at what's happening throughout the country:

In 39 CBSAs, the PPSF rose by double digits in 2012, with Phoenix, San Jose and Fort Myers leading the way. Interestingly, those markets were three of the hardest-hit in the country during the downturn. But now they seem to be thriving.

So does Atlanta, another spot that took it on the chin from the recession. The PPSF there was up 19.35% last year.

The measure was up 18.85% in Bend, Ore., 18.67% in Tucson and 18.14% in Santa Rosa, Calif., and Flint, Mich.

On a PPSF basis, San Francisco is far and away the nation's most expensive housing CBSA. Expect to pay $492 and change per square foot in the Bay Area. That's a 16.1% jump from year-end 2011. By comparison, the current PPSF in San Jose is $454, and in Honolulu it is $409.

Nowhere else do housing costs come even close to those cities. The next most expensive place is the Santa Ana-Anaheim CBSA, where the PPSF is $281.

Las Vegas is another strongly improving market. The PPSF there was $77, a year-over-year increase of 15.6% and a relative bargain compared with the West Coast. The Riverside CBSA, at a PPSF of $114, is less expensive than, say, the San Diego CBSA, where the PPSF ended 2012 at $219.

In the nation's capital, the PPSF is $141, a jump of nearly 9% from a year earlier. Surprisingly, the cost is the same in the Baltimore CBSA, which has always been considered a cheaper, albeit somewhat distant alternative, at least by East Coast standards.

The PPSF is relatively equal in Dallas and Houston too. In Dallas, it's $81; in Houston, $75. Both are up about 7.5% from a year earlier.

In New York, the PPSF is nearly $239, a jump of nearly 7% from year-end 2011. But in Chicago, it is only $96, a gain of about 3.5%.

The least expensive of the most active CBSAs? That would be Flint, where the median price per square foot of living space is an affordable $51 — an 18% jump from Dec. 31, 2011.

As an alternative, consider South Bend, where the PPSF is just under $53 and falling.

lsichelman@aol.com

Distributed by Universal Uclick for United Feature Syndicate.

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Google draws fire over data sharing on app store

SAN FRANCISCO — When someone buys Sebastian Holst's Mobile Yogi app in the Google Play store, Holst automatically gets something he says he didn't ask for: that person's name, location and email address.

No other app store transmits users' personal information to third parties when they buy digital goods, he said. And he and other mobile app developers say many people are unaware that their personal details are being shared.

"Google is not taking reasonable steps to ensure that this data is used correctly," said Holst, whose apps have 120,000 users.

Google is coming under fire just as regulators in the U.S. and overseas are stepping up their scrutiny of how all the players in the industry — mobile app developers, stores, advertising networks and others — handle consumers' private information. Regulators are pushing for greater transparency of what information is collected by apps and how it's shared.

Google defends its app store's operation, saying it's set up differently from other stores' to let customers interact directly with the app makers.

With Google Play, which launched in October 2008, an app developer sets up an account through the mobile payment system Google Wallet, which makes the developer a merchant in the store. When someone buys his or her app from Google Play, that transaction — and the customer's information — is sent to the developer.

The app developer has to comply with rules about what he or she can do with the information, Google says. Google sees itself more as an intermediary, whereas when consumers buy apps from Apple Inc., iTunes is the merchant, and app developers say they never receive customer information.

"Google Wallet shares the information necessary to process a transaction, which is clearly spelled out in the Google Wallet privacy notice," Google said.

Barry Schwartz, news editor of the Search Engine Land blog and an app developer, said Google's system works better for developers and for customers.

"They are my customers, not Google's and not Apple's customers. They download our products. They call the developer with questions. We provide them the tools and the content," Schwartz wrote in a blog post. "Apple doesn't tell us who our customers are, and when we need that information to verify ownership or to give refunds, we are left with blindfolds on. Google, in my opinion, does it right by making the user who downloads the app our customer."

But Danny Sullivan, founding editor of Search Engine Land, said Google should make it clearer to consumers that their information is being shared with third-party developers.

"I sure had no idea that Google Play did this," Sullivan said.

Nor did Dan Nolan, an Australian app developer. He said he was astonished when he found out that Google was sending him users' personal information. He wrote a blog post Wednesday condemning the practice.

"Under no circumstances should I be able to get the information of the people who are buying my apps unless they opt into it and it's made crystal clear to them that I'm getting this information," Nolan said.

App stores have become the engines of the mobile economy. Apple kicked off the mobile app boom in 2008, but Google is catching up. As of October, Google Play had the same number of apps — 700,000 — as Apple, although Apple's app sales still generate several times the revenue of Google's.

Google is trying to gain an advantage by making it easier for developers to build apps and easier for users to buy them. Apps help fuel the growing popularity of cellphones that run Google's Android software.

But privacy watchdogs say Google is not playing fair with Google Play customers by not making it clear who has access to their personal information.

In a 2011 settlement with the Federal Trade Commission, Google agreed it would ask users before sharing their data with outsiders after the government alleged the company had violated users' privacy with its social network Buzz. The settlement also required the search giant to submit to independent privacy audits every two years for 20 years. Last year Google had to pay $22.5 million to settle charges for bypassing the privacy settings of millions of Apple users. It was the largest penalty ever levied on a company by the FTC.

Google denied that Google Play's handling of personal information violated its agreement with the FTC.

"This is not a violation of the consent decree," it said in a statement.

A commission spokeswoman declined to comment.

Google is not the only company that has drawn criticism for how it shared information with app developers. In 2011, Facebook Inc. agreed to a 20-year privacy settlement with the FTC that required the company to get users' permission before changing the way it treats personal information. The FTC alleged that Facebook engaged in deceptive behavior when it promised that third-party apps would have access only to user information they needed, when in fact many apps had unrestricted access to users' personal data.

"The question is: What constitutes meaningful consent?" said Marc Rotenberg, executive director of the Electronic Privacy Information Center. "The bottom line is that users are not able to control how their data is being gathered and disclosed."

jessica.guynn@latimes.com

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Anthem Blue Cross rolls back rate increase

In response to pressure from California regulators, Anthem Blue Cross agreed to a slightly lower rate increase for about 630,000 individual policyholders that will save consumers an estimated $54 million.

Anthem, a unit of Indianapolis insurance giant WellPoint Inc., had sought to raise rates an average of 18% beginning Feb. 1. California Insurance Commissioner Dave Jones said Thursday that the company had agreed to reduce the average increase to 14% after regulators reviewed Anthem's rate filing.

Some Anthem customers will still see their premiums rise as much as 25% under this agreement with the state.

"Health insurance premiums continue to increase substantially, and health insurance has become unaffordable for far too many Californians," Jones said. "I appreciate that Anthem Blue Cross has agreed to lower these rates so policyholders will pay $54 million less than they otherwise would have."

The state cited a number of factors that led it to deem Anthem's proposed rate hike excessive, including unsubstantiated estimates of expected medical costs. Insurance officials review these rate filings, but they don't have authority to reject them for being unreasonable as they do for property and auto policies.

Voters will get a chance to change that in November 2014 with a ballot measure that would give the California insurance commissioner the power to approve or reject health insurance rate increases.

Anthem said it plans to issue refunds or premium credits to customers who paid the higher rates this month. It also said policyholders who either dropped or changed coverage because of the planned rate increase would be able to reinstate their prior benefits without having to reapply.

Even with these higher rates, Anthem said, it expects to lose money on its individual health insurance business in California this year, primarily because of rising medical costs.

"This agreement with the Department of Insurance and rate filings by our competitors reinforce the fact that escalating healthcare costs are an economic reality faced by the entire industry," said Anthem spokesman Darrel Ng.

A separate rate hike of 15%, on average, for an additional 100,000 Anthem policyholders remains under review by another regulator, the California Department of Managed Health Care. These increases don't affect most Californians, who are insured through employer group plans.

Anthem is the dominant player in California's individual insurance market with a 43% share of the market in 2011, according to Citigroup research. Nonprofit Kaiser Permanente was second with a 25% market share.

The federal healthcare law aims to dramatically change how people buy their own health coverage starting in January. Californians will be able to shop for standardized coverage in a state-run exchange called Covered California and check whether they are eligible for federal premium subsidies or coverage under an expansion of Medi-Cal.

chad.terhune@latimes.com

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California housing recovery may gain momentum, experts say

New foreclosures in California fell sharply in January as state rules for banks took effect, signaling that repossessions may finally settle in at levels not seen since before the housing bust.

The resulting decline in bank-owned properties listed for sale on the market — as well as record numbers of investors prowling for bargains — should give the state's housing recovery momentum this year, experts said.

In the Southland, the new year kicked off with a sharp annual gain in sales, the highest volume for a January in six years. The region's median home price notched a sharp 23.5% gain over the same month last year. And new foreclosure actions plummeted statewide.

“The recovery is for real, that is what I think is happening,” said Esmael Adibi, director of Chapman University's A. Gary Anderson Center for Economic Research. “It is being driven by real demand, and fundamentals are favorable.”

The price gains reflect a shift in the market away from foreclosures and toward regular sales, indicating a recovery on solid ground, said Christopher Thornberg, founding principal at Beacon Economics.

“The question is, is it the real deal?” Thornberg said. “Sure it is. It is driven of course by a very tight market … about as tight as it gets, and ultimately inventory drives prices.”

Although prices may be gaining, the healthiest contributors to housing strength — employment gains and consumer confidence — appear to be playing less of a factor than investor activity and low mortgage interest rates. That's cause for some concern, but the housing market still has a long way to go to recover from its peak summer 2007 levels, DataQuick President John Walsh said.

“This fledgling housing recovery has momentum,” Walsh said in a statement. “Already, price hikes have caused some to question whether it's sustainable, whether it's a ‘bubble.' Let's not forget, though, that we're still climbing out of a deep hole from the housing downturn.”

The home price and sales gains came as foreclosure starts in California took a massive tumble last month as new state laws aimed at prohibiting certain aggressive bank repossession practices went into effect. The real estate website ForeclosureRadar.com reported a 60.5% decline in California default notices in January from December.

The number of default notices — the first formal step in the state's foreclosure process — fell 77.7% from January 2012. A total of 4,500 such filings were logged last month — the lowest number of default no-
tices since at least September 2006, when the website's records begin.

The website noted that the foreclosure drop came in January, when a package of tough new laws protecting California homeowners went into effect. Most notably, the Homeowner Bill of Rights bans the practice of “dual tracking,” in which a lender seizes a home while the owner is negotiating to lower mortgage payments.

The laws also outlawed so-called robo-signing — the improper or faulty processing of foreclosure documents — and would allow state agencies and private citizens to sue financial institutions, under limited conditions, for economic compensation and for additional civil damages of up to $50,000. Passed last year, the legislative package was sponsored by California Atty. Gen. Kamala D. Harris and written by 10 Democratic lawmakers.

While dramatic, the drop is part of a general decline in foreclosure actions over the last year as banks look toward short sales and loan modifications as alternatives to seizing homes.

“You will see a continued decline in defaults from regulator activity, new laws and from the economy,” said Dustin Hobbs, a spokesman for the California Mortgage Bankers Assn. “As long as the economy, and especially the housing market, continues to slowly heal itself, you will see fewer and fewer defaults.”

Katherine Porter, a UC Irvine law professor who is monitoring the state's accord with the nation's five largest mortgage servicers over foreclosure abuses, said that it was not clear to her whether the dramatic drop in foreclosures resulted directly from new laws. The decrease could be temporary, she said, as mortgage servicers adjust their foreclosure processing systems.

Madeline Schnapp, director of economic research for ForeclosureRadar, believes the low levels of foreclosures will continue.

“The plethora of anti-foreclosure laws have been very effective in reducing foreclosure activity to what you are seeing today,” she said.

Foreclosed homes made up just 15% of the Southern California resale market last month, down dramatically from the worst of the crash, when they hit a high of 56.7% in February 2009, according to DataQuick. Short sales made up an estimated 25.9% of January's resale market.

Fewer foreclosures will probably lead to more gains in home prices, because foreclosures have been the main supply of cheap housing. But rising prices also will lift more underwater homeowners out of a negative equity position, helping them sell their homes, which could also loosen up supply.

Buyers paid a median $321,000 last month in Southern California, a reflection of rising prices and a shift in the buying mix from lower-end starter homes to pricier digs.

Sales of homes in the region's move-up market have continued to gain. Sales of homes priced from $300,000 to $800,000 soared 49.6% year-over-year in January, while sales of homes costing more than $500,000 jumped 74% from a year earlier.

Meanwhile, sales of homes costing less than $200,000 fell 23.5% from the previous January, an indication of tight inventory levels in those markets as investors look to snap up houses and rent them out.

alejandro.lazo@latimes.com

Times staff writer Andrew Khouri contributed to this report.

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Texas Gov. Rick Perry tries to woo California businesses

Texas Gov. Rick Perry is on a hunting trip in California. And the prey is Golden State businesses — and jobs.

Perry kicked off his in-your-face campaign to woo companies to the Lone Star State this month with radio ads declaring that "building a business in California is next to impossible." Now the governor is on a whirlwind trip through the state courting companies in person.

"You fish where the fish are," Perry said Tuesday during an interview in Beverly Hills, his slow drawl emphasizing each point. "You're at a tipping point in California from the standpoint of high-wealth innovators. Many are looking for somewhere else to go, and we'd like them to consider Texas."

Perry's not the only one who has come knocking.

The Arizona Commerce Authority recently opened offices in California staffed with employees to pitch businesses full-time. Nevada has hired recruiters as well. And Iowa Gov. Terry Branstad said last year that he was making calls to California companies looking to move.

Although interstate job poaching is nothing new, many states and cities have gotten downright aggressive about recruiting California businesses ready to bolt with promises of low taxes, loose regulations and a hard stance on organized labor. They're betting that myriad new policies will push more corporations to look for a new home.

California voters in November approved Proposition 30, which hiked income taxes for the state's wealthiest residents and nudged up the sales tax. They also voted yes on closing a corporate tax loophole for out-of-state businesses. And California's cap-and-trade program requires businesses to pay for emitting carbon dioxide or other greenhouse gases above a certain threshold.

Gov. Jerry Brown has publicly dismissed both Perry and the idea of firms fleeing California. In a statement, his Office of Business and Economic Development noted that 257,000 private-sector jobs were added last year and that firms such as Samsung Electronics Co. and Amazon.com Inc. were expanding in the state.

"No state has ever poached their way to long-term prosperity," the statement said. "This is something so many governors have done before and with the same ineffective results."

Successful or not, poaching "does seem to have surged in the last few years," said Greg LeRoy, executive director of Good Jobs First, a group that tracks government subsidies. "More public officials want to appear aggressive on the economy."

But are California companies really susceptible to the siren call to flee?

Many economists say companies griping over higher taxes or new regulations is nothing new, but relatively few of California's lost jobs can be blamed on businesses moving out of state.

From 1992 to 2006, for example, only 2% of job losses in the Golden State were because of firm relocations, according to a study from the Public Policy Institute of California. Fewer than 1% of the state's jobs leave annually, and that has remained consistent through times of boom or bust.

"It's a tiny percentage of the economy overall," said Jed Kolko, coauthor of the study. "But when a business does actually move, it does get a lot of attention and the public debate about businesses moving is very visible."

After 15 years of being based in Northern California, trash and recycling firm Waste Connections Inc. moved its headquarters to Texas last year. Chief Executive Ron Mittelstaedt said the board also considered Nevada, Arizona and Colorado. But he said one thing was clear: California's high taxes, pricey real estate and budget shortfalls meant that it was imperative to move.

"The overall cost of living and working in California just became too burdensome relative to other options out there," Mittelstaedt said, pointing to the company's top three rivals, which are headquartered in the low-tax states of Florida, Arizona and Texas.

"We didn't make the decision to save dollars and cents, though," he added. "We did it so over time we could retain and recruit the best level talent at a lower price point. Over time we believe it will save several million [dollars] a year."

Such tales don't surprise Joseph Vranich, a business relocation specialist from Irvine. Vranich scoffs at economists who insist that few companies are exiting California, and points out the extreme difficulty of tracking all businesses that flow in and out of the state. He said the number of local firms seeking his advice for relocation has doubled since November.

"The number of calls is literally unprecedented," Vranich said.

The Greater Phoenix Economic Council has already flown out four CEOs from the Golden State this year who were interested in seeing what the region had to offer for companies.

Implemented after the November elections, the tours are a big departure from the council's normal strategy of pitching businesses on expanding in Arizona rather than leaving California altogether, spokeswoman Melissa DeLaney said

"Prop. 30 was the turning point," she said. "It's kind of changed how we are marketing ourselves to California. We used to go with a softer approach, positioning Arizona as a partner. But if companies are leaving, which they definitely are, we want to show them Arizona has a great value."

As for Perry, the governor makes no apologies for making the big sell to California. On Tuesday, he rattled off a list of companies — Apple Inc. and EBay Inc. among them — that recently announced expansions in Texas.

"I'm not going to apologize when a major business or a small business says, 'We are going to relocate from California to Texas,'" he said. "I didn't hear anyone from the Giants apologizing for winning the World Series. And I don't think the 49ers would have apologized for winning the Super Bowl."

Perry sees it all as healthy competition. And it's a game Californians are welcome to try down south.

"Come to Texas and try to lure companies — you're welcome to do it," he said. "But you better come with a good story."

shan.li@latimes.com

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Phone rate hikes have landline customers ready to cut the cord

Joseph Aguon believes in preparing for the worst. So even though he makes most of his calls using a cellphone, he maintains a landline at his home in the Fairfax neighborhood — just in case an earthquake or storm knocked out wireless service.

But Aguon, 61, is finally ready to cut the cord, not because he's less mindful of potential disasters, but because AT&T keeps jacking up his rates.

I've heard from dozens of AT&T customers in recent weeks about big jumps in their bills for basic landlines and measured phone service, which provides customers with a fixed number of local calls each month.

Welcome to the exciting world of deregulation, where state officials allow phone companies to do as they please in hopes of encouraging a more competitive marketplace.

In Aguon's case, he paid about $20 for his landline in 2011. Last year, the cost rose 15% to $23. Now he's learned his monthly bill has climbed an additional 26% to $29.

That's a 45% rate hike in just two years. And did Aguon's service improve appreciably during that time?

"Not at all," he told me. "It's a landline. You call people. People call you. It's a landline."

Like Aguon, Peter Nardi, 65, maintains a landline at his Los Feliz home just to be on the safe side. His measured service plan cost $12 a month in 2011. It now runs $18.

"That's a 50% increase," Nardi said. "So I called AT&T to complain."

What did the company say?

"They apologized but said there was nothing they could do."

In fact, AT&T can do whatever it wants.

Since 2011, the California Public Utilities Commission has allowed phone companies to raise — or lower — basic phone rates whenever they choose, rather than seek approval from regulators. Since then, costs have steadily gone up.

Jarryd Gonzales, a Verizon spokesman, said the company raised its monthly rate $1.90 for basic phone service to $20.91 in 2010. He said the rate will climb again, to $22, next month.

"They're doing it because they can do it," said Bill Nusbaum, managing attorney for the Utility Reform Network, a San Francisco advocacy group. "The PUC has turned its back on the market."

That's not how AT&T would characterize things. Lane Kasselman, a company spokesman, defended the latest price hikes by saying they "reflect changes in the marketplace."

He said there's more competition for new wireless services such as phones you can plug into any outlet and access your home number. "Prices are going down for the products that people are moving to," Kasselman said.

Perhaps. But that doesn't justify higher prices for the products that people have had for decades. A 50% rate hike in just two years?

"That's not the right way to look at it," Kasselman replied. "You have to look at it from 1994. Our rates were frozen for 14 years."

Um, no. AT&T's and Verizon's rates were regulated for 14 years, meaning that state officials had to approve any price increases. If phone companies could make a reasonable case for why they needed to increase prices, they could do it.

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