'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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SpaceX mission for NASA suffers a setback

A capsule carrying cargo to the International Space Station ran into trouble shortly after its Friday morning launch from Cape Canaveral, Fla., but officials expressed confidence later in the day that the mission would go forward.

On its third commercial mission to the space station under contract with NASA, Hawthorne-based Space Exploration Technologies Corp., or SpaceX, ran into a thruster issue with its Dragon capsule as it orbited around the Earth.

The capsule is packed with more than 1,200 pounds of food, scientific experiments and other cargo for delivery to the six astronauts aboard the space station. But trouble struck when SpaceX engineers found that only one of the spacecraft's four thruster pods, which help maneuver the capsule in orbit, was working.

By late afternoon, both NASA and the company said all four pods were operational and the mission was back on track.

"The company will continue to check out Dragon, test its systems ... and perform some orbital maneuvers," NASA said in a statement. "The next opportunity for Dragon to rendezvous with the International Space Station is early Sunday, if SpaceX and NASA determine the spacecraft is in the proper configuration and ready to support an attempt."

In a conference call with reporters, SpaceX Chief Executive Elon Musk said the problem was initially "frightening" but was under control. "I think it was essentially a glitch of some kind and not a serious thing."

Musk speculated the problem could be traced back to a stuck valve or other blockage that caused a drop in pressure in the pods' oxidizer tanks. But he cautioned that it was too soon to determine the cause.

NASA requires at least three thrusters be functioning for the capsule to approach the space station. Now that the thrusters are online, the space agency will review the data before giving the go-ahead for docking.

William Gerstenmaier, NASA's associate administrator for Human Exploration and Operations, said during the conference call that the agency would "make sure it doesn't put the station in danger."

The initial mission plan was that Dragon would reach and attach to the space station Saturday and would return to Earth on March 25, splashing down in the Pacific Ocean about 300 miles off the coast of Baja California. Those plans are subject to change.

The mission began without a hitch on an overcast morning, when SpaceX's Falcon 9 rocket launched from Space Launch Complex 40 at Cape Canaveral Air Force Station and sped through the clouds on its way to the space station.

However, about 12 minutes into the mission, a problem arose after the spacecraft separated from the rocket's upper stage.

John Insprucker, Falcon 9 product director, told viewers during SpaceX's live webcast: "It appears that although it reached Earth orbit, Dragon is experiencing some type of problem right now. We'll have to learn the nature of what happened."

The live webcast was then shut down.

SpaceX, Musk and NASA posted updates throughout the day on their websites and Twitter feeds to keep the public informed.

On the teleconference, which was made before all four thruster pods were put back in operation, Musk said: "We're definitely not going to rush" docking with the space station.

The company has already performed successful NASA resupply missions to the orbiting outpost. There was one official mission in October, and a demonstration mission took place in May.

Both of those missions also had problems.

In May, a problem with the Dragon's onboard sensors pushed back its capture by the space station to about two hours later than planned.

In October, one of the nine engines on the massive Falcon 9 rocket experienced a problem and shut down shortly after launch. Because of the glitch, a satellite the rocket was carrying didn't reach proper orbit, but the NASA resupply mission went on as planned and the Dragon capsule connected with the space station.

SpaceX is the only commercial company so far to resupply the space station. The company has secured a $1.6-billion contract to carry out 12 cargo missions, and if the current mission is successful, it would be the second.

NASA wants to turn the job of carrying cargo and crews over to private industry. Meanwhile, the agency will focus on deep-space missions to land astronauts on asteroids and Mars.

SpaceX, founded in 2002, employs nearly 3,000 scientists, engineers and technicians, many of whom work at the company's sprawling production facility in Hawthorne where it builds rockets and capsules.

But SpaceX is not alone in the so-called private space race. Orbital Sciences Corp. of Dulles, Va., is nipping at the company's heels, with a test flight of its commercial rocket set for later this year. Orbital also has a $1.9-billion cargo-hauling contract with NASA.

The idea is that the cargo missions will one day lead to privately run manned missions. Critics, including some former astronauts, have voiced concerns about NASA's move toward private space missions. They have said private space companies are risky ventures with unproven technology.

But currently the United States government has no way for its astronauts to reach space other than doling out $63 million for a seat on a Russian Soyuz rocket.

william.hennigan@latimes.com

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For the love of the book

CHARLOTTE, N.C. — Duncan Rule discovered "The Hunger Games" shortly after the novel came out four years ago. He recommended it to Eddie Mansius, his best friend since seventh grade. Eddie urged Nick Rhyne and Maddie Moore to read it.

Maddie devoured the book, which meshes a teenage coming-of-age story with reality TV and war, in three days.

"It was like I never wanted it to end," said Maddie, who went to YouTube and was disappointed to find a movie hadn't been made.

She and her three friends, high school sophomores at the time, decided to make their own.

Maddie played Katniss, the 16-year-old heroine who is forced to fight other children to the death for the entertainment of a vapid futuristic society. Nick played Gale, the heroine's love interest; Eddie portrayed Peeta, a former schoolmate of Katniss' who teams up with her in the arena. Friends and family members were enlisted to round out the cast.

Their budget starting out: $30.

When they needed to shoot interiors, they used Duncan's home in Charlotte's Eastover neighborhood. Exteriors were shot at Maddie's family farm an hour north of Charlotte, or at the park down the street from Eddie's house. Costumes came from Goodwill or their own closets.

After their first video and subsequent installments went live on the Internet, they were on their way to becoming celebrities.

These days, the friends — minus Duncan, who is camera shy — get stopped in all sorts of places; outside the Sprint store, at Wendy's and at summer camp. Nick was recognized while on vacation with his family in Turks and Caicos Islands in the Bahamas.

Even the new girl at their school who arrived from Ireland last year had seen the videos. "Don't I know you from somewhere?" she said to Eddie and Maddie in an honors French class.

Last spring Eddie, Maddie and Nick were invited to ConCarolinas, a science fiction convention in Charlotte, to sit on panels including "Film Directing 101" and "Everything You Wanted to Know About Filmmaking." Then they entered an overflowing screening room and watched their videos on a big movie screen for the first time.

It was billed as their North American premiere.

On a recent Saturday evening, Eddie and his friends gathered outside Duncan's house to shoot a sequence from "Catching Fire," the second book in the trilogy. The scene involves Katniss stumbling up the steps of the house and falling into Gale's waiting arms.

Duncan lighted the scene with a $40 LED video light. Cullen McMillian, a friend of Eddie's, held a makeshift boom built from a shotgun microphone attached to a broken camera tripod.

Eddie, who directs the videos, looked down at his camera. "This isn't going to work," he said. "Duncan, make sure to follow her with the light. Cullen, you don't need to do boom because there is no dialogue in this scene. Maddie, walk slower this time."

Two more takes and the scene was done. They put it on YouTube on Jan. 4. The feature film version is scheduled to come out in November.

So far, the group has written, produced, edited and starred in 10 videos based on the "Hunger Games" trilogy, each about eight minutes long and posted on YouTube under the name L4gMast3Rz. The teenagers posted their first video in December 2010, more than a year before Hollywood's first film came out. That episode was quickly picked up by the "Hunger Games" fan site Mockingjay.net and in less than a week was viewed 6,000 times.

The friends were so excited they filmed a video thanking their fans for watching it.

It has become easier for amateur productions to find an audience beyond indulgent friends and relatives. Sites such as YouTube and Vimeo give even the most amateur backyard auteur access to millions of viewers.

Today, the friends' DIY videos altogether have been viewed more than 4.5 million times. Their videos are popular, but the friends haven't made any money from them.

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Irvine firm buys Bacara Resort near Santa Barbara

Plush Southern California seaside resorts suffered during the recent recession, but they are making a comeback as business and leisure travel picks up.

Now, Bacara Resort & Spa near Santa Barbara has been acquired by an Irvine hotel company that plans to upgrade the luxurious inn as well-heeled guests return to coastal resorts.

Pacific Hospitality Group bought Bacara from SB Luxury Resort, an affiliate of Ohana Real Estate Investors and Rockpoint Group, which have owned the property since 2011. The sale price was not disclosed, but real estate experts said the seller was asking for more than $150 million.

The 354-room hotel will continue to be known as Bacara, a name made up for the property that opened in 2000. It will be operated by Pacific Hospitality, which also acquired Estancia La Jolla Hotel & Spa in San Diego, Balboa Bay Resort in Newport Beach and the Meritage Resort & Spa in Napa, Calif., during the last 15 months.

"We see this as a really dynamic hotel environment, which we have been lucky enough to take advantage of because we are an owner-operator," said Kory Kramer, chief investment officer.

Pacific Hospitality will spend more than $5 million on improvements, he said, starting with refurbishments to guest rooms. The company's strategy also calls for booking more conferences and meetings on weekdays.

"Our goal is to double that business," Kramer said.

The hotel industry lost a lot of customers during the economic downturn in 2008 and 2009, said consultant Alan Reay of Atlas Hospitality Group. "Resorts suffered the largest drop in revenue of all hotel segments."

Now the trend is reversing as companies book more out-of-town retreats and leisure travelers open their wallets again for top-drawer destinations, Reay said.

New boutique hotel kicks off Redondo Beach makeover

As Redondo Beach sets out to revitalize its waterfront and make it into a regional recreation attraction, work is set to begin this week on a new boutique hotel on the edge of King Harbor.

The first order of business starting Thursday is to raze the former Red Onion restaurant building on North Harbor Drive. The Red Onion was once a hot spot for live music but also known for its rowdy clientele. It closed more than a decade ago.

The city purchased the property in 2001 and leased it to other restaurants, but none of them clicked, developer Michael Zislis said.

"The city finally realized that you can't put lipstick on this pig anymore and it's time for a new building," he said.

Zislis, a Manhattan Beach restaurateur and hotelier, won approval from the city to build the 54-room Shade Hotel Redondo Beach on the site. The hotel will cost about $21 million to build, he said, starting with the expensive requirement of driving 200 support pilings 50 feet deep into the shoreline.

"I'm going to bury a million dollars in the dirt," he quipped.

Timber from the 1960s-era Red Onion building will be salvaged to make bed frames, desks and other furniture for the eco-friendly Shade Hotel, he said. It will also generate its hot water from solar panels.

Zislis operates the Shade Hotel Manhattan Beach, and his restaurants include Rock & Brews in El Segundo and Rock 'n Fish eateries in Manhattan Beach, Laguna Beach and downtown Los Angeles.

The city of Redondo Beach has acquired 15 acres of land on the waterfront in an effort to improve it, real estate consultant Larry Kosmont said.

"It's been fairly tired for years," he said. "It needs refreshing and investment. The plan is to design a locally sensitive regional attraction."

El Segundo retail real estate developer CenterCal Properties was selected by the city in December to make that happen. Preliminary plans call for restaurants, shops, a hotel, water features including a saltwater swimming pool and a small movie theater.

The City Council will vote on CenterCal's waterfront plan in March. The project will be a joint venture of CenterCal and the California State Teachers' Retirement System.

The new Shade Hotel is slated to open in early 2015. Rooms are expected to cost about $195 a night on weekdays and $250 on weekends, Zislis said.

roger.vincent@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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Bank of America should just play the tape of disputed sales call

It's perhaps not so surprising that a Bank of America customer discovered recurring payments on his credit card bill for a service he swears he never signed up for. This kind of thing happens a lot.

What is surprising is that BofA told the customer to pound sand when he requested proof that he authorized the bank by phone to enroll him in its Credit Protection Plus program, which came with a $212.50 monthly charge.

BofA's stance: Trust us, we're right. We have nothing to prove.

This didn't sit well with Craig Chatfelter, 60, of Lake Hughes after he realized he'd paid more than $4,000 in Credit Protection Plus charges over 19 months — and, yes, he blames himself in part for not having kept closer tabs on his card statements.

"When you phone Bank of America, they say they record all calls," he told me. "OK, so play me the tape. Show me the proof that I really signed up for this.

"I'd never sign up for anything like this," Chatfelter insisted. "Never in a million years. I'm self-employed. I don't sign up for anything that comes with extra fees."

Betty Riess, a BofA spokeswoman, acknowledged that "this is not the type of experience we want customers to have."

However, she was less forthcoming when it came to addressing Chatfelter's reasonable request for proof of his enrollment in the bank's program. More on that in a moment.

Chatfelter, who works as a real estate appraiser, remembers being pitched by the bank for Credit Protection Plus, which can cancel up to 18 monthly credit card payments if you lose your job or are hospitalized.

"They had contacted me because there was an unauthorized payment on my account," he said. "They had me change my card number, which I did."

During the same call, a BofA service rep asked if Chatfelter wanted to sign up for credit protection. He said he declined the offer.

Months passed. It wasn't until last March that Chatfelter noticed the $212.50 charge on his bill. He accepts that he should have spotted it sooner, but said that, like many people, he seldom looked closely at his statement.

Whatever the case, once Chatfelter realized that he'd paid $4,037.50 for the unwanted service, he contacted the bank and canceled his membership in the program. Then he asked for a refund.

A service rep promptly offered to give back six months' worth of payments, or $1,275, which the bank did. The remainder would depend on the outcome of an investigation by the bank.

In April, Chatfelter was informed that "the records maintained by Bank of America indicate that you enrolled for this protection during a customer service call on Sept. 3, 2010."

The bank's records also indicated that Chatfelter was mailed a "welcome package" spelling out the details of the plan.

He wasn't impressed. Chatfelter contacted the bank again to reiterate that he'd never agreed to enroll in the program and that he didn't recall any "welcome package." He once again asked for all his money to be refunded.

In June, BofA sent a letter stating that its records indicated that Chatfelter enrolled in the credit-protection program on Sept. 6, 2010 — three days later than the bank stated in its prior correspondence.

The bank said that it had refunded $1,275 as "a one-time goodwill courtesy" and that "this adjustment is not to be construed at any time or for any purpose as an admission of liability on our part."

"We consider this matter settled," BofA said in its letter to Chatfelter.

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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.

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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.

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Demand for cruises stays strong despite Carnival Triumph mishap

The misadventure of the Carnival Triumph cruise in the Gulf of Mexico has provoked several passenger lawsuits and a storm of bad publicity, including horror stories about overflowing toilets and long food lines.

But if you think the debacle might lead to heavily discounted cruise rates this summer, think again.

Demand for cruise vacations remains strong enough that industry experts predict no sizable fare cuts this summer and fall. The only company offering big deals is Carnival Cruise Lines, operator of the ill-fated ship.

"I don't foresee a panic," said Sherry Laskin, a travel agent and online cruise columnist on the website Cruise Maven. "The cruise lines are not going to shoot themselves in the foot."

In the wake of the Triumph fiasco, social media sites are strewn with comments from people who say they are ready to sail with Carnival again. But others vowed never to step on a ship.

"I don't think that I will ever take another cruise," San Diego resident Carol Brouse, whose sister-in-law Janie Esparza was a Triumph passenger, told The Times. Esparza feels the same way, Brouse said. "One close call is enough."

A cruise website that monitors prices — CruiseCompete — shows the average per-person rates for a seven-night cruise for the upcoming summer period have dropped between $3 and $136 compared with six months ago. But the decline is just a fraction of overall fares that range from $946 to $2,458 per person for the summer.

Recent history shows that bookings do not drop significantly after a high-publicity cruise disaster, Laskin and other industry experts say.

In November 2010, the Carnival Splendor suffered a fire that disabled its engine and left the ship adrift off the Pacific coast. Passengers complained of long food lines and disabled toilets — similar to the gripes by Triumph passengers. But the Splendor was back in operation three months later, sailing at more than 100% capacity, according to federal records.

The Costa Concordia, operated by Costa Cruises, crashed off the coast of Italy in January 2012, killing 32 passengers. The captain, accused of causing the accident by maneuvering too close to shore and of abandoning his passengers after the crash, faces criminal charges.

Still, Carnival Corp., the Miami parent company of Carnival Cruise Lines and Costa Cruises, reported an increase of about 3% in passenger bookings for the 12 months that ended Nov. 30, 2012, with passenger revenue almost flat compared with the previous year.

Carnival Corp., the world's largest cruise company, controls nearly 50% of the cruise market through 10 cruise line brands around the world.

Bookings on all U.S.-based cruise lines rose about 4% in the first three months of the year compared with the same period in 2011, according to federal statistics.

"There may be a hiccup in bookings but people have moved on," said Stewart Chiron, another cruise line expert and founder of the Cruise Guy website.

In the latest fiasco, the Carnival Triumph was left adrift in the Gulf of Mexico this month after an engine fire. The 893-foot-long ship, carrying more than 3,000 passengers, lost power for air conditioning and some bathrooms and kitchens, requiring many people to sleep on the deck, use plastic bags as toilets and stand in line for hours for food.

Carnival offered to reimburse its passengers for their fare and transportation costs, plus $500 to compensate them for their inconvenience. Still, several filed lawsuits against the cruise line, seeking damages for emotional distress and other issues.

The mishap generated a slew of news reports based on the reactions of passengers, some of whom said they feared for their lives.

Carnival said that Monday it will start offering several discounts for Carnival Cruise Line vacations, including a 50% cut in deposits for select sailings through Dec. 31, plus discounts of up to $200 per stateroom on cruises six days or longer. For European voyages this summer, Carnival is letting a third and fourth guest sail free in the same cabin.

Most cruise trips are booked nine to 12 months before the ship sails, which means many summer cruise trips have already been booked. Chiron said he has heard of no mass cancellations.

"People are not going to stop booking," he said.

For people thinking about trying a cruise for the first time, the Triumph incident may persuade them to stay away, said Michelle Fee, chief executive of Cruise Planners-American Express Travel. But veteran cruise vacationers won't be frightened off, she said.

"People realize that sometimes things happen," Fee said.

hugo.martin@latimes.com

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CalPERS plans 85% rate hike for long-term-care insurance

Dailey Mayo received some stunning news in the mail this week: an 85% rate increase for the long-term-care insurance he has had for 15 years from the California Public Employees' Retirement System.

The retired sales manager in Pasadena said his monthly premium of nearly $400 would jump to $738, or about $8,850 annually, under this plan. "I'm 82 now and I might need this care soon," he said. "It really ticks me off that they are doing this."

More than 110,000 CalPERS policyholders are receiving similar news this week after the pension fund's board approved the changes late last year. CalPERS said the hefty rate hikes won't take effect until 2015 and are necessary to keep this $3.6-billion insurance fund intact for future claims. This CalPERS program, like other plans sold by private insurers, has been plagued by higher-than-expected claims, lower investment returns and poor pricing.

"We understand people's anger and frustration," said Bill Madison, a CalPERS spokesman. "It's not something the board wanted to do, but it's necessary so benefits are available to people when they need it. We know these rate increases can be a financial hardship."

Insurance regulators in California and other states say insurers too often underestimated the cost of care and the number of customers who would hold on to these policies. These plans typically help pay for nursing-home stays, home-health visits and other residential care that's generally not covered by Medicare.

Many insurers have stopped selling the most generous, unlimited policies, and some companies have left the business entirely. All this comes as millions of baby boomers enter retirement and weigh difficult decisions about what type of financial protection they may need against future medical expenses.

CalPERS, which runs the nation's second-largest long-term-care plan, after one for federal government employees, said it would offer affected policyholders several ways to adjust their benefits to avoid these premium increases.

For instance, customers can drop the option of having benefits that automatically increase with inflation or they can forgo lifetime benefits in favor of a finite period or amount. CalPERS said it would ask policyholders to make a decision on any changes by June 30.

Overall, the agency has more than 148,000 policyholders in its long-term-care program. Some policyholders will see a 5% rate increase this year, while most will see the bigger 85% increase starting in 2015. The 85% increase primarily affects about 110,000 people who purchased the agency's policies from 1995 to 2004 that provided lifetime benefits.

The giant pension fund said it is taking numerous steps to shore up the struggling program. Thursday, the CalPERS board of administration approved plans to reopen enrollment by the end of the year and to offer newly designed long-term-care policies aimed at fortifying the program with new premium dollars. Enrollment has been closed since 2009.

Large rate hikes have become the norm for many of the nation's 8 million long-term-care policyholders.

John Hancock Life Insurance Co. received approval for 40% rate increases on certain policies sold in California late last year, according to the state Insurance Department. A unit of CNA Financial Corp. has sought increases of 45% for some California policyholders, but state officials said they are still reviewing that request.

California lawmakers approved a law last year that imposed new requirements on insurers wanting to raise these rates, and it bolstered other consumer protections.

Industry officials say pricing long-term-care policies accurately has been a long-standing challenge as people continue to live longer and medical costs keep rising. CalPERS and private insurers have also been stung by historically low interest rates that have contributed to lower investment returns, which are used to pay claims.

"Long-term-care insurance is probably the most complex insurance product imaginable," said Jesse Slome, executive director of the American Assn. for Long-Term Care Insurance in Los Angeles. "You have to predict correctly 20 years into the future what economic conditions will be like and what health conditions will be like."

Slome said the federal employee program for long-term-care insurance raised rates as much as 25% in 2009 and less than 2% of affected policyholders dropped their coverage.

"Nobody likes paying more, but these policyholders will have options," Slome said. "Now is the time for people to reassess their personal situation."

CalPERS said its average annual premium for long-term-care insurance now is $2,206, or $184 a month. Since the start of the program, dementia and stroke have been the leading causes of claims, accounting for 44% of all payouts. The agency said the number of active claims increased 6% in 2012 over 2011, and total claims paid amounted to $182 million.

The fund for long-term-care insurance is separate from CalPERS' $255-billion pension fund and financially independent. As a result, that pension money cannot be used to hold down the long-term-care rates.

Richard Carter, 64, a math teacher in the Los Angeles Unified School District, got one of the letters this week about the 85% increase in premiums. Carter said he cannot afford for his rates to rise to about $5,000 a year.

"That's just not affordable on what I expect to receive in retirement," said Carter, who plans to retire next year. "And that doesn't include what I am sure will be further increases in the coming years."

Mayo, the retired sales manager in Pasadena, was able to purchase a long-term-care policy through CalPERS because his daughter worked for the state's workers' compensation bureau at the time. He said he's studying his options for changing benefits to stave off the huge run-up in premiums.

"As I get older I need some protection," Mayo said. "I am really debating whether to keep the damn thing."

chad.terhune@latimes.com

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More Fed officials worry about negative effects of stimulus

WASHINGTON — An increasing number of top Federal Reserve officials are worried about the downside effects of their economic stimulus efforts, raising the possibility that the central bank could curb its monthly bond purchases sooner than financial markets are expecting.

Fed policymakers met at the end of last month and decided to keep buying $85 billion of Treasury and mortgage-backed bonds a month. The program is aimed at pushing down long-term interest rates to spur investment and economic growth and help lower the nation's high unemployment rate.

But minutes of that Jan. 29-30 meeting, which were released Wednesday after the usual three-week lag, indicated that "many" of the Fed policymakers were concerned about the potential costs and risks of the stimulus, namely higher inflation and the threat of destabilizing financial markets and exposing the central bank to significant losses.

Some analysts interpreted "many" as meaning a majority of the policymakers, contrasting that with minutes from the central bank's previous meeting in December when only "several" officials were said to have expressed a desire to slow or stop the bond purchases well before the end of 2013.

The minutes pushed stocks lower. The Dow Jones industrial average dropped 108.13 points to 13,927.54, with most of the loss coming after the minutes were released.

The Fed's public statement after the January meeting said that it would continue the bond buying until the labor market improved substantially, which many analysts and investors don't see as happening until 2014.

Even so, the latest minutes also make clear that "most" Fed officials feel that the bond purchases "had been effective in easing financial conditions and helping stimulate economic activity."

And with Chairman Ben S. Bernanke and the Fed's vice chair, Janet Yellen, having publicly expressed strong concerns about the dangers of high unemployment, analysts said the central bank was unlikely to make a premature exit from its easy-money policies.

"Although concerns about the costs of [the Fed's] balance sheet expansion are rising, the committee judged that 'the recovery in the labor market was far from complete,'" said Michael Gapen, an economist at Barclays Bank, in a note to clients.

"We maintain our expectation that the Fed will conduct asset purchases through the end of 2013, with some tapering in the pace in the second half of the year," Gapen said, though he noted that the threat of fiscal budget cuts could extend the stimulus program.

With the debate over asset purchases intensifying, Fed officials instructed their staff members to do a review of the bond-buying program ahead of future meetings. The Fed's next policymaking meeting is March 19-20.

don.lee@latimes.com

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Computer security firm blames cyber spying on Chinese military

WASHINGTON — A clandestine Chinese military unit has conducted sophisticated cyber espionage operations against dozens of American and Canadian companies, according to a private report that provides unusual new details about China's involvement in cyber theft of economic and trade secrets.

The report by computer security firm Mandiant Corp. in Alexandria, Va., breaks new ground by attributing attacks against 141 companies to a specific 12-story office building in the financial center of Shanghai.

According to the report, the building is home to the 2nd Bureau of the People's Liberation Army's General Staff Department's 3rd Department, which is known as Unit 61398.

Mandiant said it traced computer penetrations to Unit 61398 by telltale digital signatures left in malware, the use of Shanghai phone numbers and social networking information posted by some of the hackers. The report profiles three operatives associated with the unit, including one known by the moniker "Ugly Gorilla."

The report said Unit 61398 has stolen "technology blueprints, proprietary manufacturing processes, test results, business plans, pricing documents, partnership agreements and emails and contact lists."

It said it's impossible to inventory the losses since hackers often copy, rather than remove, digital data and erase all but traces of the theft.

Mandiant, which signs confidentiality agreements with its clients, did not name the companies targeted. The New York Times first disclosed details from the report Tuesday.

Chinese authorities have repeatedly denied any government involvement in hacking of U.S. companies. Officials at the Chinese Embassy in Washington did not answer phone calls or emails Tuesday.

Richard Bejtlich, Mandiant's security director, said the report "should dismiss all the wiggle room that the Chinese use to deny engaging in this conduct."

Bejtlich said U.S. officials had indicated that they were "ready to go beyond just sort of watching the fireworks happen and they wouldn't be particularly upset if we released a report."

President Obama signed an executive order last week that aims to improve U.S. cyber defenses by sharing more classified government information about digital threats with private companies that operate critical infrastructure, including energy, telecommunications, utilities and dams.

White House spokesman Jay Carney declined to address the report or discuss U.S. intelligence assessments of Chinese cyber spying.

"We have repeatedly raised our concerns at the highest levels about cyber theft with senior Chinese officials, including the military, and we will continue to do so," Carney told reporters.

U.S. intelligence officials have said for years that Chinese cyber attacks present a growing threat to U.S. security and economic interests, but they have been reluctant to provide details in public.

A highly classified National Intelligence Estimate under preparation asserts that China is a major player in cyber attacks, along with Russia, Iran and several other countries.

U.S. intelligence and military agencies conduct aggressive cyber operations against foreign governments and their agencies. U.S. and Israeli experts, for example, allegedly cooperated on a cyber attack that sabotaged Iran's efforts to enrich uranium for several years.

But U.S. intelligence officials said they don't steal foreign trade secrets or technology to benefit U.S. companies.

Bejtlich said no evidence indicates that Unit 61398 tried to destroy American infrastructure via a cyber attack, but he said the unit stole potentially sensitive data from electric utilities and chemical companies.

"By virtue of the access that they have, they could cause some damage," he said. "They wouldn't even have to do it on purpose."

It's sometimes easier for hackers to disable computer networks than to sneak into them and steal data, said Michael Hayden, former head of the CIA and the National Security Agency, which conducts America's digital spying abroad.

"In the cyber domain, an actual attack is often easier than conducting the reconnaissance," Hayden said in an email. "That's what makes this so unnerving."

Members of the House and the Senate intelligence committees responded sharply to the 76-page report.

"This is a sobering public report on the lengths to which the Chinese military has gone to infiltrate and hack American companies," said Sen. Dianne Feinstein (D-Calif.), who chairs the Senate Intelligence Committee.

"The Chinese government's direct role in cyber theft is rampant and the problems have grown exponentially," said Rep. Mike Rogers (R-Mich.), chairman of the House Intelligence Committee.

"The Mandiant report provides vital insights into the Chinese government's economic cyber espionage campaign against American companies," he said.

ken.dilanian@latimes.com

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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

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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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The myth of deregulation's consumer benefits

Here's a question for you: Is there a single example of consumer prices going down and market competition increasing after deregulation of a U.S. industry?

I'm serious. The phone industry? The cable industry? Regulatory oversight for both was eased — and in some cases eliminated — and look where that's gotten us.

And now look at the airline industry, which witnessed its latest multibillion-dollar deal Thursday with the merger of American Airlines and US Airways, creating the world's largest carrier.

Experts were buzzing after the announcement with dire warnings of higher fares, more crowded planes and fewer options for travelers — and they're probably right.

Once the merger is completed, four airlines — American, United, Delta and Southwest — will control about 75% of the U.S. market.

So I'll ask again, is there one, just one, example of deregulation working in consumers' favor?

Richard H.K. Vietor, a professor of business administration at Harvard Business School, said there have been numerous examples of deregulation bringing prices down for varying amounts of time.

In the case of airlines, he said, we've enjoyed decades of lower fares since the industry was deregulated in 1978.

"That's the good thing," Vietor said. "The bad thing is that, as we've seen, competition erodes and you get back to oligopolies."

The U.S. airline industry now resembles how it looked in the 1930s, he said, with just a handful of carriers controlling most air traffic. As a result, the primary benefit of deregulation — lower fares — could disappear as fewer airlines duke it out for business.

"Consumers used to get meals, free drinks and much better service," Vietor said. "Now you have to pay for your friggin' bags."

Before deregulation, airlines had to ask the Civil Aeronautics Board to sign off on fares and routes. Deregulation allowed carriers to make those decisions for themselves, the hope being that a more market-driven industry would give rise to new competitors and thus push fares lower and improve service.

It's a song we've heard free marketers sing before in defense of all deregulation efforts: Less interference by clumsy old Uncle Sam will unleash the dynamic forces of capitalism and usher in a new era of industrial and consumer paradise (see Rand, Ayn, "Atlas Shrugged").

AT&T's monopoly over phone service ended in 1984 in a government settlement that gave the local phone networks to seven regional operators, known as the Baby Bells. The telecommunications market was deregulated in 1996 in hopes of promoting more competition.

Where are we now? A wave of mergers has resulted in just two companies, AT&T and Verizon, controlling almost the entire U.S. landline market. AT&T, Verizon and Sprint account for about 75% of the wireless market.

On the cable side of things, four companies — Comcast, Time Warner Cable, Charter Communications and Cox Communications — now account for about two-thirds of all U.S. subscribers.

Needless to say, phone and cable rates have risen steadily since the telecom market was deregulated.

Airline fares have been a different story. They've stayed relatively cheap since deregulation, though many travelers might say service hasn't exactly been something to cheer about.

Meanwhile, it's been nothing but turbulence for the airline industry. From 1978 to 2001, nine major carriers and hundreds of smaller ones either went bankrupt or were liquidated. Storied names such as Pan Am, TWA, Eastern and Braniff disappeared.

In recent years, the focus has been on big-ticket consolidation. Delta acquired Northwest. United picked up Continental. And now American and US Airways are tying the knot.

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California housing recovery may gain momentum, experts say

New foreclosures in California fell sharply in January as new 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, reflecting 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 December 2011. A total of 4,500 such filings were logged last month — the lowest number of default notices 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 resale market last month, down dramatically from the worst of the crash, when they hit a high of 56.7% in February 2009. Short sales made up an estimated 25.9% of the resale market last month.

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 some 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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California tomato farmer gets 6 years in prison for price-fixing

A man who built one of California’s most successful food companies was sentenced to six years in prison for scheming to inflate tomato prices and deceiving consumers about his products' quality.

Frederick Scott Salyer, former owner of SK Foods, was accused of bribing buyers with companies such as Kraft Foods and Frito Lay to pay inflated prices for his tomato products, prices that were then passed along to consumers.

He also instructed employees to write false reports about the tomatoes’ quality, lying about mold content and whether the product qualified as organic, federal prosecutors said.

“Scott Salyer used bribery and fraud to deceive his customers about SK Foods’ products in order to maximize his profits,” said Benjamin B. Wagner, the U.S. attorney in Sacramento. “He turned his company into a machine of corruption and economic crime.”

U.S. District Judge Lawrence K. Karlton imposed the sentence Tuesday at a hearing in Sacramento.

Salyer, 57, pleaded guilty in March 2012 to racketeering and price-fixing charges. He had been free on $6 million bond, living under house arrest at his Pebble Beach home.

Ten other people have been convicted of charges related to the scheme, prosecutors said.

“This case is a prime example where public trust was breached by corporate greed,” said Herbert M. Brown, special agent in charge of the FBI’s Sacramento office.  “Salyer's business practices knowingly defrauded consumers for financial gain and he attempted to use the cloak of an agribusiness giant to insulate himself.”

Salyer’s attorneys had asked for a sentence of no more than four years in prison, saying he had already paid dearly for his crimes.

“Mr. Salyer has suffered in other ways. He has lost his business and his home, suffered personal financial ruin and lost all standing in the community and the business world,” defense attorney Elliot R. Peters said in a sentencing brief.

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Tax help comes with health insurance advice

Derrick Bean filed his income taxes at an H&R Block office in Los Angeles this month, and the 26-year-old left with something unexpected: a price quote on federally subsidized health insurance.

Using the information from his 2012 return, a tax advisor told the actor and waiter that he would qualify for significant government help and pay only about $65 a month in premiums under the federal healthcare law. If he skips coverage, H&R Block warned him, he faces a $95 tax penalty next year and $356 the following year.

"I was surprised to hear all that," Bean said. "It's good to finally see some concrete evidence that this is happening."

As tax season kicks into high gear across the country, millions of Americans are getting their first taste of the biggest change to health insurance in nearly half a century. Many of the changes in President Obama's Affordable Care Act take effect in January, when most Americans will be required to buy coverage or incur a penalty.

The individual effects and consequences of the nation's healthcare overhaul in 2014 are far from certain, but insurance companies, tax consultants and other financial planners are starting to offer cost estimates for next year and describe the penalties for inaction.

For many consumers, their 2012 tax returns will offer some of the first clues on what financial aid may be available and what coverage may cost.

"Your 2012 tax return is key to determining if you're eligible for any financial assistance on health insurance," said Meg Sutton, senior advisor for tax and healthcare services at H&R Block. "This law represents sweeping changes for how the middle class will get insurance."

The Internal Revenue Service and state insurance exchanges will rely primarily on 2012 federal tax returns, officials say, to verify people's income and household size and to help determine what premium subsidies are available. By October, exchanges in California and other states are slated to open for enrollment and allow comparison shopping of health plans.

In California, individuals earning up to about $15,000 will qualify for an expansion of Medi-Cal, the state's Medicaid program for the poor and disabled.

Beyond that, people and households earning up to 400% of the federal poverty level are eligible for subsidies. For instance, a family of four earning about $93,000 in modified adjusted gross income may be eligible for a monthly credit of $445 and pay $742 a month for health coverage. In 2014, the penalty for not having coverage is $95 per adult or 1% of household income, whichever is greater. The penalties grow in subsequent years.

An estimated 2.6 million Californians would qualify for premium subsidies, and nearly 800,000 of them are in the Los Angeles area, according to state data.

At an H&R Block Inc. office on Wilshire Boulevard in Los Angeles, Cindy Salcedo Bravo, 35, flipped through a stack of drugstore receipts on a recent Friday morning as her 8-month-old son, Fernando, bounced on her knee.

She rattled off dollar amounts to her tax advisor, who tallied them for a potential deduction on medical expenses. Then they sorted through W-2 forms, investment statements and other paperwork.

As they wrapped up, tax advisor Blanca Chavez began the company's free health insurance review by asking the Northridge mother whether her family of six had health coverage.

Bravo responded that they have insurance through her husband's engineering job. Chavez reminded Bravo that her family could face a steep penalty if they lost employer-based insurance and didn't find new coverage.

"On my tax return? Regardless of my age?" asked Bravo, her reddish-black hair pulled back in a ponytail. "I didn't have any idea about that. I need to talk to my parents, because they don't have health insurance."

Nationwide, H&R Block officials are urging customers such as Bravo who have existing health coverage to examine the estimated cost of subsidized insurance through the new exchange since they may be paying more for their employer plan.

"A lot of people think, 'I have insurance with my job and I don't need to worry,'" said Frank Gomez, an H&R Block manager in Beverly Hills. "We're telling them to make sure you're aware of your options."

For customers who want more healthcare details, H&R Block refers them to insurers affiliated with the Blue Cross and Blue Shield Assn., an industry group that represents both Anthem Blue Cross and Blue Shield of California in the state. That partnership stands to give those insurers valuable leads on potential customers.

Although the Blue Cross and Blue Shield logo is present, there is no mention inside H&R Block's offices of Covered California. That is the state's new insurance marketplace, and it is planning to spend about $250 million on marketing statewide to establish its brand name and make it a prime destination for consumer information.

Some healthcare experts consider it a missed opportunity for Covered California with so many customers streaming into tax offices now. About 15 million Americans visited an H&R Block office last year, and it typically handles nearly 1 in 7 U.S. tax returns, according to the company.

Lucien Wulsin, executive director of the Insure the Uninsured Project, a nonprofit research group in Santa Monica, said "this is exactly when people are needing to hear about all this."

Peter Lee, executive director of Covered California, said he welcomes the information H&R Block is providing before the state's marketing ramps up this summer closer to when enrollment begins. A Covered California website is set to launch this month.

"We will be exploring relationships with tax preparers because they offer a great way to provide one-on-one assistance," Lee said. "But we don't want to be too far ahead of when people can enroll."

Bean, the actor and waiter, is among the "young invincibles" that Covered California and health insurers are eager to reach. Those young, healthy consumers can help offset the risk of too many older, sicker individuals enrolling early on and potentially driving up premiums in the exchange.

Bean said he earns less than $20,000 annually and welcomes any subsidy to make coverage more affordable. He said he has health coverage for another year on his parents' policy and saw firsthand the value of insurance when he broke his leg last summer.

"The medical bills started coming in," he said, "and they were pretty hefty."

chad.terhune@latimes.com

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