10. A MIGHTY WIND IN PASADENA. Little did the hamlet of Pasadena know that on the night of November 30, hurricane-force Santa Ana winds would howl through the "urban forest" and bring down tree after tree after tree. Houses were damaged. Cars were crushed. The total cost of cleanup could hit $5-6 million. Weeks after the disaster, Pasadena is still hauling away the damage.
Kevork Djansezian/Getty Images
9. THE DODGERS FEUD. Dodgers owner Frank McCourt's contentious divorce and dispute over who really owned the team rapidly degenerated into a battle between McCourt and the commissioner of Major League Baseball, Bud Selig. MLB assumed control of the Dodgers in April, but by late June McCourt put the team into bankruptcy. His countermove ultimately didn't work, and by November he'd given up. A new owner will now have a chance to pay upwards of $1 billion for one of baseball's most famous franchises.
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8. APPLE IS THE BIGGEST COMPANY IN THE WORLD! On August 9, Apple's market cap hit $337 billion, briefly sending it past ExxonMobil as the world's most valuable company. It was quite a comeback for Apple and an at-the-time still-ailing-and-not-yet-dead Steve Jobs. The company had more than fully recovered from near bankruptcy in the late 1990s. Sadly, Jobs wouldn't recover from cancer. But he did get to experience a brief moment of joy at the company he started in a California garage challenging a pillar of the "old" economy.
California High Speed Rail Authority
7. HIGH-SPEED RAIL COST OVERRUN. A high-speed rail line linking Los Angeles to San Francisco was slated in 2008 to cost $43 billion. Voters responded to that estimate by voting yes on a ballot measure to fund the project. But by 2011, the cost had increased to a whopping $98.5 billion. Would voters still support the project? They might, if they understood that the cost of additional highways and airport runways could cost $170 billion.
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6. AMAZON TAX DEAL. A spat over collecting online sales tax in California put the state and the giant retailer Amazon on a collision course. Amazon was gearing up for a battle at the polls in 2012. But then the entire thing was settled amicably (sort of) with both sides agreeing to kick the can down the road for a year. Maybe in the meantime Congress will act. Or perhaps California's budget woes will clear up... Want to calculate the odds of either of those outcomes?
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5. BANK OF AMERICA DEATHWATCH. The banking giant saw its stock price decline 60 percent over the course of the year, at one point in December dropping below $5 a share. The big problem? The neverending challenge of fixing Countrywide, the subprime lender that BofA acquired before the financial crisis. Some bloggers actually started a BofA death watch. Why should Californians care? Maybe because of the $200 billion in deposits in SoCal alone.
AP Photo/Damian Dovarganes
4. FORECLOSURE SETTLEMENT — NOT! The big banks would very much like to settle with the states on the illegal-foreclosures matter. There's $20 billion on the table, and the Obama Administration wants the states to take it and call an end to the agony. But California's Attorney General, Kamala Harris, along with the AGs of several other states, including New York and Nevada, isn't going along. So it could be game-over for the deal.
3. SOLYNDRA SOLAR SCANDAL. California solar startup Solyndra flamed out in spectacular fashion in August, declaring bankruptcy and disappearing almost immediately $1 billion is private investment and most of a $535 million Department of Energy loan guarantee. The meltdown of a former greentech high-achiever morphed into a political crisis, with critics aggressively questioning the role of the Obama Administration in "picking winners" involved with campaign donors, as well as whether the DOE had any business acting like a venture capitalist.
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2. THE CALIFORNIA BUDGET BATTLE. You knew California's budget was going to be a mess when, back in June, Jerry Brown became the first governor since 1901 to veto a spending plan, bucking the Democrats who supported it. By July, a new budget was in place. But by the end of the year, it was clear that hoped-for revenues weren't going to materialize, and so "trigger cuts" would kick it. And this wasn't all she wrote. The state's finances look to be deplorable for the remainder of the decade.
Eric Richardson / blogdowntown
1. OCCUPY LA STAKES A CLAIM. Following in the footsteps of Occupy Wall Street, Occupy LA took up residence in a tent city on the City Hall lawn. There they peacefully protested, right across the street from police headquarters, as the mayor and the City Council tried to figure out what to do. But by the evening of Nov. 29, the game was up. The 99%ers, demonstrating against inequality in America, were sent packing by the authorities. Will their protest continue in 2012?
Yesterday, I blogged about the Top 10 business stories for 2011, on a national and even international scale.
Today, I'm getting closer to home, with the Top 10 California and Los Angeles business stories. I'm sure I left a few out — the AEG downtown football stadium plan, for example — but it was a pretty lively year. The choices were tough.
From the Great Pasadena Wind Storm right through high-speed rail cost overruns, the Amazon tax deal, a foreclosure settlement that wasn't, the Dodgers soap-opera, and of course Occupy LA, business and breaking news consistently intersected in 2011 in the Golden State.
Could 2012 possibly generate more stories? We'll soon find out...
There's a deep Calvinist preoccupation in the American workplace with hard work. Break the big rocks into little rocks all day long and you shall surely see a reward. And in fact, for some people, this is an excellent formula.
However, it may not be the way to go for most of us. I've been following the Energy Project for a while now, via the blog posts that president and CEO Tony Schwartz writes for his site and for Harvard Business Review. Schwartz offers a very different perspective, based on the idea that people aren't machines and that our energy is actually the most valuable capital we bring to the workplace:
The way we’re working isn’t working. Does anyone doubt that’s true?
Only 20 percent of us– 1 out of every five – feels fully engaged at work, according to one global study of 90,000 employees across 18 countries. Forty percent of us are actively disengaged. Over 100 studies have now demonstrated the correlation between employee engagement and business performance.
So where have we gone so wrong?
The answer is rooted in the false assumption that we operate best in the same linear way that our computers do: continuously, at high speeds, for long periods of time, running multiple programs at the same time.
That’s unsustainable. When demand exceeds our capacity, we default into the survival zone. We’re suboptimal. It’s not good for us, and it’s not good for our employers.
Justin Sullivan/Getty Images
Bank of America customers use an ATM on January 21, 2011 in San Francisco, California. Bank of America reported today that it has reached an agreement for an $8.5 billion settlement with a group of investors who lost money buying mortgage-backed securities from Countrywide Financial.
Recall, if you will, this past summer when Warren Buffett put a floor under Bank of America's then-plummeting stock, serving up a $5 billion "Buffett bailout." Now, as one of the worst years for bank stock ever winds down, Bank of America has been headed South again. Yesterday, it dropped through the symbolically important $5 per share level (it's back up over $5 today). As the Wall Street Journal reports, Buffett is now like a lot of people who hold BofA mortgages: $1.5 billion underwater.
Is Buffett concerned? Probably not:
Don’t worry about Buffett, though. He is guaranteed a profit on his BofA investment. The banking giant must repay Buffett’s $5 billion, plus a 5% premium, at any time. Plus, the world’s third-richest man will rake in dividends of $300 million a year from BofA, and he won’t give up those payouts no matter what sub-basement BofA shares tumble into.
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It looks like it's finally game over for Saab, the struggling Swedish company that owner General Motors sold to an obscure Dutch carmaker in 2009. What now looms is a liquidation bankruptcy, with Saab effectively sold for parts.
I've written many, many, many times about Saab and its seemingly unending quest to revive itself, make good on the legacy of its "quirky" brand, and possibly even get bought by the Chinese or a Russian money man.
Fail on all those fronts. And now it looks as if they only company that will really get anything out of Saab is it former corporate parent, GM, which blocked an 11th-hour sale to a pair of Chinese companies but will be able to salvage some Saab tech for use in future GM cars, according to some reporting by the LA Times' Jerry Hirsch.
Saab was a somewhat popular brand in Southern California, along with Volvo, its Swedish cousin. This was a bit strange, as Saab was optimized for good performance in bad weather. However, as a result of all the love that Angelenos gave Saab — not to mention the very un-Swedish climate — there are plenty of well-preserved versions still tooling around.
AP Photo/Andy Wong
At the New York Times, Paul Krugman turns his attention to China. Simply put, the Middle Kingdom could be the next domino to fall — after the U.S. financial crisis an the ongoing eurozone crisis — in what now looks like a pitched global battle between regulated finance and finance that, if not purely criminal, isn't exactly above-board.
Krugman zeroes in on the big difference between limited consumer spending in China, surging investment spending, and our old friend, real estate:
Do we actually know that [Chinese] real estate was a bubble? It exhibited all the signs: not just rising prices, but also the kind of speculative fever all too familiar from our own experiences just a few years back — think coastal Florida.
And there was another parallel with U.S. experience: as credit boomed, much of it came not from banks but from an unsupervised, unprotected shadow banking system. There were huge differences in detail: shadow banking American style tended to involve prestigious Wall Street firms and complex financial instruments, while the Chinese version tends to run through underground banks and even pawnshops. Yet the consequences were similar: in China as in America a few years ago, the financial system may be much more vulnerable than data on conventional banking reveal.