TOP 10 STORIES: Jan. 22-26

1 Greenspan Supports Tax Cuts, Sees Stalled Economy

Federal Reserve Chairman Alan Greenspan shifted his stance and cautiously endorsed the kind of substantial tax cuts advocated by President Bush, telling Congress that federal budget surpluses have grown so large that the government must begin shrinking the amount of money it requires Americans to send to Washington. Greenspan also said the U.S. economy has probably slowed to the point of zero growth and may be tottering on the edge of recession, signaling that the central bank’s policymakers may cut interest rates again this week. The Fed chief declined to suggest what size tax cuts he thought were needed, and he appeared to reject the Bush administration’s argument that the reason to cut taxes is to keep the economy from recession. Greenspan had previously favored using surpluses only to pay down the government’s debt, but said it’s now possible to reduce the debt and cut taxes at the same time.

(Peter G. Gosselin)

2 Energy Crunch Intensifies

The governor’s staff indicated for the first time that electricity rate hikes may be unavoidable after the state had spent more than half the $400 million it had allocated to prevent blackouts. The news tempered enthusiasm from earlier in the week, when California received dozens of bids in an unprecedented Internet auction aimed at securing long-term, low-cost supplies of electricity for nearly 25 million residents. The average bids were higher than Gov. Gray Davis and legislators had hoped they would be but nonetheless made them--and Wall Street--optimistic that the state could tame skyrocketing wholesale prices. Meanwhile, Fed Chairman Alan Greenspan weighed in with a warning that the state’s energy crisis could exacerbate the national economy’s problems . The state endured an 11th straight day under a Stage 3 power alert Friday but no further blackouts after the rolling outages of Jan. 17 and 18 in Northern and Central California. (A Times Staff Writer)

3 DirecTV Fights Back Against Freeloaders

Satellite broadcaster DirecTV Inc. launched an unprecedented electronic attack on more than 100,000 consumers who have been bootlegging its service. Last Sunday, one week before the Super Bowl, the company remotely killed a pirated piece of hardware that--though legal to own--enabled viewers to see premium programs that they had not paid for. In a personal touch to the now cut-off pirates, DirecTV delivered a sneering message along with its attack that read, “GAME OVER.” The El Segundo-based company’s anti-hacker attack reflects a growing aggressiveness in corporate America’s approach to protecting its intellectual property.

(P.J. Huffstutter and John Healey)

4 Injury Settlements At Risk

Scores of injury victims who reached big out-of-court settlements have been victimized again by the loss of a fortune in bonds that had been reserved to pay their medical and living expenses. The scandal, which threatens to engulf a string of blue-chip Wall Street firms, has resulted in the cutoff of payments to about 200 injury victims in California and other states who are collectively owed $118 million in structured settlements, according to a lawyer for the firm that has defaulted on the payments. The first inkling of disaster came in mid-November, when Settlement Services Treasury Assignments Inc., the firm responsible for the payments, failed to send settlement checks for the first time, lawsuits and interviews show. (Myron Levin)

5 AOL Time Warner Starts Paring Staff

AOL Time Warner slashed more than 2,000 jobs, mostly in the former Time Warner Inc. empire, as the newly merged media giant moved to streamline operations and cut redundancy. The company also put its chain of Warner Bros. retail stores up for sale and said the chain’s 3,800 employees would be laid off if a buyer isn’t found. Staff reductions will hit Time Warner’s music group, New Line Cinema, Warner’s Entertaindom.com and the Time-Life books unit, as well as the corporation’s information-technology division. AOL’s share of the job cuts will total about 725 employees.

(Edmund Sanders)

6 Telecom World’s Woes Grow

The once-thriving world of telecommunications took a new hit Friday. Wireless heavyweight Ericsson decided to stop making its own mobile phones as it posted a big drop in fourth-quarter profit, and reports spread that WorldCom Inc. could cut as many as 11,000 jobs from its long-distance units. Ericsson rival Motorola Inc. said recently that it would shutter some mobile phone plants, and financial updates from a string of upstart phone companies have revealed that they are on the edge of bankruptcy. Earlier in the week, Lucent Technologies Inc. said it would slash more than 16,000 jobs, or 8% of its work force. The developments show that nearly every segment of the telecommunications industry is on the skids despite record growth in wireless phone use and strong demand for Internet and other communications services.

(Elizabeth Douglass)

7 IBM Settles Toxic Claims

In a blow to a high-tech industry that has long portrayed itself as a “clean manufacturer,” IBM Corp. settled a lawsuit with two former employees who claimed that exposure to toxic fumes at one of the computer giant’s plants caused their son’s birth defects. The settlement is but one piece of the multibillion-dollar legal fight involving the company, its chemical suppliers and more than 220 IBM employees and family members. National Semiconductor Corp. is facing similar complaints. IBM admitted no liability in the settlement, details of which were sealed. (P.J. Huffstutter)

8 Technology Sector Nets Healthy Profits

Broadcom Corp. reported better-than-expected earnings for the fourth quarter on record sales amid a spate of good results posted by Southland technology companies. Personal-computer leader Compaq Computer Corp. also pleased Wall Street with an 83% jump in fourth-quarter profit. Compaq said strong sales of servers helped make up for weakening PC demand. Chip maker Broadcom said profit climbed 171% as sales jumped 132%.

(A Times Staff Writer)

9 Airwave Auction Most Lucrative Ever

The government’s auction of airwaves to giant wireless telephone companies was its most lucrative ever, raising $16.9 billion, federal regulators said. The auction, which began in December, drew more than 100 rounds of bidding from scores of wireless and cellular telephone carriers fighting over 422 licenses in 195 markets nationwide. Three Los Angeles licenses fetched $1.4 billion, or about $450 million each, second only to New York licenses, which sold for more than $2 billion apiece. The top bidder in Los Angeles was Verizon Wireless, the nation’s largest wireless carrier. AT&T; Wireless and Cingular Wireless, a joint venture of BellSouth Corp. and SBC Communications Inc., picked up the two other Los Angeles licenses, sharing them with two smaller partners. (Edmund Sanders)

10 Businesses Making Few Purchases on the Web

Few U.S. companies are buying supplies online, and those that are so far have seen little savings, according to a study conducted by the National Assn. of Purchasing Management. The findings indicate that the era of Internet streamlining in procurement markets is still on the horizon. The group said 87% of those surveyed said they see the Net as an important part of their purchasing plans over the next 12 months. (Greg Miller)

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* These and additional stories from last week are available at https://www.latimes.com /business, divided by category. Click on “Money and Investing,” “Entertainment Business” and other topics.

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* Please see Monday’s Business section for a preview of the week’s events.