Steven Cuevas / KPCC
As if bankruptcy weren't enough to deal with, San Bernardino is home to some of the highest unemployment and home foreclosure rates in the country, recent surveys say.
Sound like enough to keep one struggling municipality busy? Not quite. Two new reports indicate that the city's problems run deeper than just being broke.
On Wednesday, the U.S. Labor Department reported that what it calls the Riverside-San Bernardino-Ontario "metropolitan area" had the highest unemployment rate of all large U.S. cities in December: 10.9 percent. That’s down from more than 12 percent in December 2011.
Meanwhile, real estate analytics firm RealtyTrac says the San Bernardino area had the second highest foreclosure rate in the U.S. last year: nearly 4 percent of homes there had a filing in 20-12.
Frederick M. Brown/Getty Images
Meet the new CEO of Tribune Co., owner — and possible soon a seller — of the L.A. Times.
Tribune Co. emerged from bankruptcy last year owned by a bank, JP Morgan, and private equity investors from Los Angeles-based Oaktree Capital Management. Now it's going to be run by an executive whose most recent job was at the giant private equity firm the Carlyle Group. Peter Liguori landed there for a stint after serving as the Chief Operating Officer at Discovery Communications.
Last year, the bankers and private-equity guys who now control the company started to talking to yet more bankers about possibly selling Tribune Co.'s newspapers, which include the Los Angeles Times and Chicago Tribune, as well as local TV station KTLA.
In an interview with the L.A. Times published Thursday, Liguori said that he's isn't interested in selling, say...the L.A. Times for a "fire sale" price. And then he said some other things:
This is one in a series of year-end stories that look back at the most memorable pieces KPCC reporters worked on in 2012 and look ahead at a key issue that will be the focus of coverage in the coming year.
How much happened in the Golden State in 2012 when it comes to business? Lots. Lots and lots. The DeBord Report covered most of it.
The slide show above serves up the business year in pictures for the state with the largest economy and two of America's most storied industries: Hollywood and high-tech.
And if you want to review the business year in links to the original posts...well, I've got that covered, too.
9. The long, long, LONG Tribune Co. bankruptcy comes to and end. So who will buy the Los Angeles Times?
Steven Cuevas / KPCC
The Inland Empire city filed for bankruptcy protection last summer.
The Economist provides a crisp assessment of the simmering battle between bankrupt San Bernardino and and CalPERS, the biggest public pension fund in the U.S. I've written a lot about San Bernardino's troubles and the Very Big Question of how hard the broke city will fight CalPERS. But The Economist article is well-worth reading as a summary of the risks of tangling with the money managers in Sacramento.
Here's a taste:
As part of their bankruptcy arrangements, Vallejo, an old port town near San Francisco, and Stockton, in the Central Valley, slashed workers’ pay and stiffed bondholders but made good on their CalPERS payments. In September Compton, a struggling city south of Los Angeles, did fall behind on its obligations; it was quickly brought into line by a lawsuit.
San Bernardino has proved less of a pushover. An unlovely, crime-ridden city at the heart of the Inland Empire, the suburban sprawl east of Los Angeles, it followed Stockton into bankruptcy this summer. The city’s particular troubles go back decades, but much of its story followed familiar contours: overbearing unions, political dysfunction and financial commitments made during good times that could not be met in bad. In one respect, though, its behaviour has been strikingly original. Since its declaration in August, San Bernardino has not paid CalPERS its full dues.
The problem is simply that CalPERS is, by some distance, San Bernardino’s biggest creditor, and the city cannot cut services any further without jeopardising basic safety. The fund, like all creditors, will eventually receive what it is owed, the mayor adds, but the city needs breathing space. (It wants to resume payments in 2013-14.) On November 30th it filed a proposed emergency budget with a bankruptcy court. Among the cuts and deferrals were $13m-worth of payments to CalPERS.
Bill Pugliano/Getty Images
Signs stand in front of the General Motors world headquarters in Detroit, Michigan. The U.S. Treasury will sell its remaining stake in the company over the next year or so.
The day has finally arrived. The U.S. Treasury will sell off its stake in General Motors, the automaker that, along with Chrysler, was bailed out in 2009 before it declared bankruptcy and returned to the public markets via a massive $20 billion IPO in 2010.
The government put $50 million into GM and has gotten back about $30 billion. That figure includes a pre-loaded GM buyback of 200 million of its own shares from the Treasury at $27.50 a pop, a modest premium on Tuesday's closing price that amounts to $5.5 billion.
The remaining $2o billion (more or less) and the government's 300 remaining shares will be dealt with in slow motion fashion over the next 15 months, to avert a big dump of shares on the market. To make back the $20 billion, GM's stock price would have to rise to $72, a highly unlikely event. So the Treasury is admitting that it will "lose" money on the deal.