Explaining Southern California's economy

Bad investors v. good investors in the California housing market

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Justin Sullivan/Getty Images

A foreclosure sign sits in front of a home for sale.

This is from AP (via the Washington Post):

A new federal report shows that speculative real estate investors played a larger role than originally thought in driving the housing bubble that led to record foreclosures and sent economies plummeting in Nevada, California, Arizona, Florida and other states.

Researchers with the Federal Reserve Bank of New York found that investors who used low-down-payment, subprime credit to purchase multiple residential properties helped inflate home prices and are largely to blame for the recession. The researchers said their findings focused on an “undocumented” dimension of the housing market crisis that had been previously overlooked as officials focused on how to contain the financial crisis, not what caused it.

The story goes on to point out that less swashbuckling investors in Nevada are now buying foreclosed, abandoned homes, "fixing them up" and selling them.

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The hippest, coolest part of venture capital comes to public media

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People work at computers in TechHub, an office space for technology start-up entrepreneurs in London, England.

This is one of the best ideas I've seen in a while: following on its establishment of an early-stage venture fund at the beginning of the year, the Knight Foundation has announced that it's going to fund a Public Media Accelerator, to the the tune of $2.5 million. It's clear what Knight is up to here: it's putting together a fully functioning venture capital metabolism for the non-profit space, with a focus on media. 

It used to be that you could think of VC in terms of early and later-stage funding. But the emergence of incubators, like Pasdena's own Idealab, and accelerators with a somewhat different funding model — they seek to identify, nurture, and develop startups at an extremely early stage, sometimes before an actual company even exists — has made it necessary for any entity that wants to mimic Silicon Valley to think more broadly. 

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Why public education finances in California are in bad shape

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Students may have trouble getting to class once federal trigger cuts slash $38 million from California's school transportation budget.

KPCC's Adolfo Guzman-Lopez reports today on the effect that anticipated "trigger cuts" to spending, due to a looming budget deficit in California, could have on funding to both K-12 and higher education:

The governor’s office may announce $2 billion in midyear cuts to state-funded agencies on Thursday. That’s likely to reduce state support for public education at every level from kindergarten through college.

The cuts are likely because the revenues state lawmakers had predicted never materialized. That means $100 million in cuts to the University of California and the Cal State systems. Student fees for community college would go up $10 a unit. School districts are figuring out how much money they’ll lose.

Charles Kerchner, an education researcher at Claremont Graduate University, says some public schools are better prepared than others. "It tends to be the case that school districts that have quieter politics tend to have bigger budget reserves."

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Why is Occupy Wall Street protesting the ports?

Grant Slater/KPCC

Protesters blocking the Port of Long Beach

It's a good question. What's the relationship between protesting the ascent of a global financial elite and protesting regular old trade in and out of the nation's largest Pacific coast ports?

Evidently, there's a Goldman Sachs tie-in. The Vampire Squid owns 51-percent of SSA Marine, a global mega-shipper that has major operations at the Port of Long Beach. The general idea, according to Occupy the Ports, is that SSA is somehow contributing to America's rather substantial trade imbalance with China. Greaterlongeach.com summarizes:

[A] flyer [circulated to protesters] cites a variety of reasons for focusing protests on SSA Marine. These include two specific claims—that the company the company failed to alert workers about potentially hazardous cargo in Oakland, and that it was fined for building an illegal road to a project in Washington. They also point to wider policies that protest organizers say have depressed wages and benefits for truck drivers and de-industrialized the United States so that incoming shipping containers at the Ports of Long Beach and Los Angeles outnumber outgoing shipping containers 7-1.

Michael Novick, a retired schoolteacher who is part of the Occupy the Port movement, responded to a call from GreaterLongBeach.com and expanded on the implications of the imbalance of import-export traffic through the local ports.

“If there were as many containers going out as there are coming in there would be 10 times as many jobs,” said Novick, who said he expects Occupy the Ports to protest in front of SSA Marine this Monday from 6 a.m. to 8 a.m.

But coordinating a protest at SSA Marine isn’t easy. The company is so big that it has five locations within the Ports of Long Beach and Los Angeles: Pacific Container Terminal, Terminal A, Terminal c60, and Pier F, Berth 206 in Long Beach, and Outer Harbor 54/55 in San Pedro.

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Wine Report: When the front of the label matters less than the back

The wine store. The wine section at the grocery store. The wine retail website. Terrifying experiences for many. Sweat. Shakes. Nervousness. So many labels. So many labels. So many labels...

There's an easy way to avoid this anxiety, so common among even more experienced wine drinkers. Forget the front of the bottle. Concentrate on the back. 

The back label is where, often, the wine importer's logo can be found. Now, I'm talking about wines from Europe, primarily, here. If all you ever drink is California wine, you don't need this advice.

At right is the famous logo of Kermit Lynch, an importer who owns a wine store in Berkeley, CA and who is highly regarded for seeking out rewarding, delicious French wines that don't cost an arm and leg. I've been a fan since I lived in Brooklyn and had access to the Lynch portfolio through my local wine shop. (Lynch also wrote one of the great wine books, "Adventures on the Wine Route," in which he recounts his experiences finding unusual wines and passionate winemakers in France.) 

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