Explaining Southern California's economy

Where iTV fits into Apple's future

Mercer 18124

Lintao Zhang/Getty Images

Apple Store in Beijing.

It looks as if the next big Apple product will be...big! After moving away from the computer business into the much more portable consumer device and cellphone game with iPods, iPhones, and iPads, the next frontier for Apple is reportedly TV. And not just any TV, but a TV that will, naturally, completely re-invent the whole idea of TV according to Apple's design values.

Felix Salmon has been pondering the "What's Next" question for Apple and comes to an essentially mathematical conclusion:

Today, however, Apple’s market capitalization is $362 billion. If the company invents a new product which is just as successful as the iPod, and which makes Apple just as much money, and which is completely unanticipated by the market, how much should the stock rise? The present value of $25 billion in future profits is still substantial — but even if you put it at $20 billion, that just gooses the share price by 5% or so. If you look at Apple today, the company’s cash in the bank — its liquid assets — is a significantly larger number than the total revenue it’s made from every iPod ever sold.

If you grow to 50 times your previous size, your new products don’t become 50 times more successful. Or even 10 times more successful. Apple, like all companies, has certain economies of scale, and it has millions of people devoted to its ecosystem. But the market isn’t going to give it credit for having a pipeline filled with unknown products that are going to be bigger than the iPod. The iPad will evolve; the Apple TV will get Siri voice control; the computers will get faster and thinner. All of these things will be profitable for Apple — the company’s not going away any time soon.

Read More...

Tiger Woods has a brand new bag, but is sponsor FUSE Science really good business?

Chevron World Challenge - Final Round

Scott Halleran/Getty Images

THOUSAND OAKS, CA - DECEMBER 04: Tiger Woods plays a shot to the second green as his caddie Joe Lacava looks on during the final round of the Chevron World Challenge at Sherwood Country Club on December 4, 2011 in Thousand Oaks, California. (Photo by Scott Halleran/Getty Images)

US golfer Tiger Woods (L) and his caddie

FREDERIC J. BROWN/AFP/Getty Images

US golfer Tiger Woods (L) and his caddie Joe LaCava (R) discuss matters on approach to the 18th hole on the final day of the Chevron World Challenge at Sherwood Country Club in Thousand Oaks, California, on December 4, 2011. Woods won the Chevron World Challenge on a one-shot triumph in an unofficial 18-man event, his first victory since a 2009 sex scandal shattered his iconic image. Woods had gone 26 starts worldwide without a victory as personal turmoil was followed by struggles on the course with swing changes and, this year, injuries that curtailed his playing time and stalled his pursuit of Jack Nicklaus' record of 18 major titles at 14. AFP PHOTO / Frederic J. BROWN (Photo credit should read FREDERIC J. BROWN/AFP/Getty Images)

Chevron World Challenge - Final Round

Scott Halleran/Getty Images

THOUSAND OAKS, CA - DECEMBER 04: Tiger Woods pulls a club during the final round of the Chevron World Challenge at Sherwood Country Club on December 4, 2011 in Thousand Oaks, California. (Photo by Scott Halleran/Getty Images)

Chevron World Challenge - Final Round

Scott Halleran/Getty Images

THOUSAND OAKS, CA - DECEMBER 04: Tiger Woods pulls a club during the final round of the Chevron World Challenge at Sherwood Country Club on December 4, 2011 in Thousand Oaks, California. (Photo by Scott Halleran/Getty Images)

Chevron World Challenge - Final Round

Scott Halleran/Getty Images

THOUSAND OAKS, CA - DECEMBER 04: Tiger Woods pulls a club during the final round of the Chevron World Challenge at Sherwood Country Club on December 4, 2011 in Thousand Oaks, California. (Photo by Scott Halleran/Getty Images)


After losing numerous sponsors following his SUV-crash-multiple-affairs-rehab-divorce debacle of late 2009, Tiger Woods was reduced to lugging his clubs (well, his caddy was, anyway) in a bag adorned with his own logo, provided by Nike, which looks after the "TW" clothing and equipment brand. Prior to this, he had a bag deal with AT&T that was reported worth "millions." And before that, Woods bag deal was with General Motors; it brought in a reported $7.5 million per year.

A bag deal for the world's most famous golfer had been rumored since Woods returned to competition toward the end of this year. But Tiger formally rolled it out at his own tournament, the Chevron World Challenge, a limited-field event that he — Gasp! — won this past weekend, ending a two-year victory drought. However, the deal is weird. It's with a company called Double Eagle Holdings and its FUSE Science brand.

Read More...

Will cleanup after Occupy LA be too expensive?

Occupy LA - December 3, 2011

Eric Richardson / blogdowntown

Protesters from Occupy LA walk down 1st Street in front of the closed-off City Hall park that they camped in for nearly two months before being removed on Tuesday.

Occupy LA - December 3, 2011

Eric Richardson / blogdowntown

Protesters from Occupy LA gather outside the Police Administration Building after marching from Pershing Square.

Los Angeles Police Move In To Evict Occupy LA Encampment

Michal Czerwonka/Getty Images

Members of the Los Angeles Police Department patrol the park in front of City Hall in downtown in the early hours of November 30, 2011 in Los Angeles, California. Protesters remained on the City Hall lawn despite a deadline, set by Los Angeles Mayor Antonio Villaraigosa, to dismantle their campsite and leave the park which the city declared closed as of 12:01 am November 28th.

Villaraigosa and Beck

Michal Czerwonka/Getty Images

LOS ANGELES, CA - NOVEMBER 30: Los Angeles Police Department Chief Charlie Beck talks to members of the media in front of City Hall in downtown in the early hours of November 30, 2011 in Los Angeles, California. Protesters remained on the City Hall lawn despite a deadline, set by Los Angeles Mayor Antonio Villaraigosa, to dismantle their campsite and leave the park which the city declared closed as of 12:01 am November 28th. 1400 members of the Los Angeles Police raided the park this morning and removed or arrested all of the Occupy LA protesters. (Photo by Michal Czerwonka/Getty Images)

Los Angeles Police Move In To Evict Occupy LA Encampment

Michal Czerwonka/Getty Images

LOS ANGELES, CA - NOVEMBER 30: Members of the Los Angeles Hazmat team prepare to clean the park in front of City Hall in downtown in the early hours of November 30, 2011 in Los Angeles, California. Protesters remained on the City Hall lawn despite a deadline, set by Los Angeles Mayor Antonio Villaraigosa, to dismantle their campsite and leave the park which the city declared closed as of 12:01 am November 28th. 1400 members of the Los Angeles Police raided the park this morning and removed or arrested all of the Occupy LA protesters. (Photo by Michal Czerwonka/Getty Images)

Los Angeles Police Move In To Evict Occupy LA Encampment

Mark Boster-Pool/Getty Images)

Los Angeles Police Department officers arrest a protester during the removal of the Occupy L.A. tent encampment outside City Hall in the early hours of November 30, 2011 in Los Angeles California.

Los Angeles Police Move In To Evict Occupy LA Encampment

Pool/Getty Images

Los Angeles Police Department officers arrest a protester during the removal of the Occupy L.A. tent encampment outside City Hall in the early hours of November 30, 2011 in Los Angeles California.

Occupy LA - November 29, 2011

Eric Richardson / blogdowntown

Arrested protesters from the Occupy LA movement are lined up on a curb next to the Police Administration Building while they are questioned.

Los Angeles Police Move In To Evict Occupy LA Encampment

Kevork Djansezian/Getty Images

Los Angeles Police Department officers raid Occupy Los Angeles campsite in the front lawn of Los Angeles City Hall in the early hours of November 30, 2011 in Los Angeles, California. Protesters have remained remained on the City Hall lawn despite a deadline, set by Los Angeles Mayor Antonio Villaraigosa, to dismantle their campsite and leave the park which the city declared closed as of 12:01 am November 28th.

Occupy LA - November 29, 2011

Eric Richardson / blogdowntown

LAPD officers in riot gear block off the intersection of 1st and Broadway, separating protesters inside the line from those on the outside of it at the start of enforcement actions to clear the Occupy LA camp at City Hall.


That kind of depends on how you price freedom of expression and assembly. Of course, you could argue that Occupy LA didn't need to freely express itself and assemble for quite so long on the lawn surrounding City Hall. According to the Los Angeles Times' L.A. Now blog, the cost of cleanup could hit $1 million

That's in the context of a city budget deficit that's projected to hit $200 million for the fiscal year.

So let's say it does cost $1 million to make City Hall look fresh and new again. That won't seem like much when the cost of cleaning up after the recent wind storm is taken into account. Pasadena and LA together could wind up spending $5-6 billion to take care of that mess. 

Still, Occupy is going to need to be mindful of these costs moving forward. America's large cities are facing post-financial crisis budget struggles. The movement probably understands that there are costs that people are willing to tolerate, associated with the exercise of rights. But people also have limits, when costs rise too high.

Read More...

A Patagonia jacket that will never pay off its debt to the environment

A colleague here at KPCC passed this full-page New York Times Black Friday ad along to me. It's from Patagonia, and the title says it all. Well, OK, it's not that Patagonia doesn't want you to buy its products. But it does want you to know that the R2 jacket shown is like "all the things we can make and you can buy" because "it comes with an environmental cost higher than it's price." 

What I'm wondering about this conclusion — which Patagonia lays out very convincingly in the ad's copy, confessing to gobbling up 135 liters of water and generating 20 pounds of carbon dioxide creating and marketing just one R2 jacket — is whether Patagonia has done a truly full lifetime analysis of the garment.

And here's why (this is where I go anecdotal): Patagonia products are of ridiculously high quality. Patagonia says the R2 is "exceptionally durable, so you won't have to replace it as often" — and even then they'll take it back and recycle it — but what if you...never replace it? 

Read More...

Visual Aid: Why fiscal responsibility may cost the U.S. money

The above chart is from the U.S Treasury's Treasury Notes blog (Cute, right?). It was written by Jan Eberly, who argues that this is not a good time to be pulling back on support for the economy, even though we're running up some significant deficits in the aftermath of the financial crisis. 

What it all boils down to is a question about what we should do in the short term:

While there is a nearly complete consensus among economists and budget analysts that deficit reduction sufficient to stabilize our debt would have significant long-run economic benefits, the literature also cautions that fiscal consolidation is contractionary in the short run. Though under certain conditions the withdrawal of fiscal support can be partially offset by economic and policy changes, those conditions do not prevail in the United States today. Interest rates are currently at historic lows, leaving little room for them to go lower, and though exports have grown at a healthy pace recently, they cannot be counted on to grow enough to offset substantial near-term cuts.

Read More...