COMMENTARY | COLUMNISTS | GEORGE CHAMBERLIN

Money in the Morning

The bidding war between several private equity firms to buy Equity Office Properties is really heating up. The current offer of more than $37 billion comes from a group headed by Vornardo Realty Trust and tops an earlier offer from the Blackstone Group. EOP is the largest office real estate trust with more than 600 properties, including 10 in San Diego. Founder Sam Zell will be in San Diego on Jan. 30 to speak at the 11th Annual Real Estate Conference sponsored by USD's Burnham-Moores Center for Real Estate. Zell is always opinionated and his comments should be especially timely.

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Bet on Ben Bernanke to throw water on an economic fire. The chairman of the Federal Reserve Board testified this morning before the Senate Budget Committee and cautioned on the budget deficit, "If early and meaningful action is not taken, the U.S. economy could be seriously weakened, with future generations bearing much of the cost." He said the current economic strength could be "the calm before the storm."

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The Consumer Price Index rose just 2.5 percent in 2006, down from 3.4 percent in the previous year. That was the word this morning from the U.S. Labor Department. The December cost-of-living rose by 0.5 percent on higher energy costs. Also out this morning was a surprising report that showed an unexpected increase in home construction in December. The Commerce Department report said starts were up 4.5 percent over the previous month. However, the numbers were about 24 percent lower than December of last year. Also encouraging was a 5.5 percent increase in building permits, a sign of future construction activity.

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The volatility in the oil market continues this morning. The Energy Department said that crude inventories rose in the past week for the first time in eight weeks. And, gasoline supplies continue to build. That sent oil prices lower, dropping by nearly $1.50 to under $51 a barrel. Crude traded as low as $50.60 yesterday before speculators started doing some buying. That send the price to $52.24.

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More than 90 percent of all U.S. wineries are located in California. That's part of a new study by MKF Research on the economic impact of the U.S. wine industry. In 1999 there were 2,688 wineries and that number increased to 4,929 in 2005. The industry sends $162 billion through the economy each year and accounts for 1.1 million jobs with payrolls of $33 billion. In addition, 27 million visitors tour wineries each year.

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