Explaining Southern California's economy

Ronald Reagan: A man and his secret harmonica

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Marion Doss/Flickr

Ronald Reagan, an American legend

Ronald Reagan was a...harmonica player? I consider myself something of a student of Reaganalia, having enjoyed some formative years during the Gipper's reign. But Kitty Felde's story today about a Reagan exhibition at the National Portrait Gallery in Washington, D.C., included a tidbit about the 40th President's rumored late-life adoption of the mouth harp as his instrument of choice. That got my attention!

Evidently, Reagan's harmonica playing was something that journalists discussed, but like a sort of musical state secret, could never properly confirm. This is from the UK Independent — in 1994:

Some say it was Bill Clinton's saxophone playing that got him going, others that he read Presidents Lincoln, Teddy Roosevelt, Coolidge and Eisenhower played the harmonica so he felt he ought to.

Bemused friends claim a tutor visits twice a week and there have been suggestions that among the tunes the former actor has been working on are 'Git Along Little Doggie' and 'Streets of Laredo'.

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Can the Federal Reserve end the foreclosure crisis?

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AP Photo / J. Scott Applewhite

The Federal Reserve Building in Washington, DC.

The economist Peter Morici, who has been extremely critical of the Obama adminstration's economic policies of late, has taken a look at the housing crisis and doesn't see much hope. He does see one way out, however. But it's an exceptionally unlikely way out:

Currently, the rate on five-year adjustable rate mortgages is about 3.2 percent. If the Fed could get the investors who buy Fannie and Freddie bonds to accept interest rates of minus 3 percent, then young folks could be offered mortgages with appropriately negative interest rates. To accomplish that feat, the Fed would have to buy all those bonds itself-that's right the Fed would finance all federally guaranteed mortgages and write off 3 percent a year. I can just hear Ron Paul now.

Morici makes this argument in the context of discussing why it makes little sense for young people to buy houses right now (unfortunately, I can't link to his piece, as it isn't on his website yet). He refers to Ron Paul, a Texas congressman and noted libertarian, because Paul is no fan of the Fed

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Chinese carmaker BYD opens shop in Downtown LA

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Matthew DeBord

BYD — it stands for "Build Your Dreams" — is building a future in Downtown LA, new home to its North American HQ. Unfortunately, it's enduring something of a nightmare with its business at home in China, even with billionaire Warren Buffett invested.

In business, timing is everything. So what to make of a dignitary heavy ribbon cutting this morning at the new North American headquarters of Chinese carmaker BYD ("Build Your Dreams"), at a time when the company is facing business challenges at home — and challenges to deliver on ecomomic promises in LA?

This is from Bloomberg:

BYD America opened today about a year behind schedule with fewer workers than first targeted. The company, partly owned by Warren Buffett's Berkshire Hathaway Inc., has delayed plans to sell electric cars to retail buyers, citing limited availability of public chargers. Instead, it's focusing on solar panels, batteries, LED lighting and rechargeable buses.

[...]

Initial goals for the Shenzhen, China-based company's California arrival haven't been met either in BYD jobs or indirect business created. The delays reflect a combination of construction obstacles and an electric-car market that hasn't developed as rapidly as first expected.

In April 2010 when the deal was announced, BYD said it would open the office by the end of 2010, and have 150 employees by the end of this year. It now has 20 employees in Los Angeles, with plans to reach 30 by year-end and 100 by the end of 2012, according to Micheal Austin, the company's U.S. vice president.

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Tweet of the Day: Billy Bragg gives us a 140-character piece of his mind

Remember Billy Bragg? The English musician has always been on the side of the working folk. He's also on Twitter, @billybragg, and he has 75,000 followers. He links to this chart-laden post from Business Insider about why things have gotten completely out of whack in the USA, economically, and how levels of inequality are reminiscent of the 1920s. We're recalibrating now. Occupy Wall Street, in his view, knows what it's talking about.

Or as Bragg might put it, "Waiting for the great leap forwards." Billy nicely updates the late-1980s lyrics of what many consider the world's most romantic protest song in that version I've linked to, from a 2007 appearance on Henry Rollins' show. I've embedded a performance of the original, from "Late Night with David Letterman," circa 1988, below. I still like it best.

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Microsoft is back in the driver's seat on Yahoo deal

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Justin Sullivan/Getty Images

A Yahoo! billboard is visible through trees in San Francisco, California.

I used to think that Microsoft should buy Yahoo. It didn't in 2008 — although that was less about Microsoft than it was about Yahoo's unwillingness to sell. Now that Yahoo has entered something of a tailspin, canning its CEO and exploring some sale options, Microsoft is back. And oh boy! What a deal it's looking to make.

But I now don't think Microsoft should buy Yahoo.

This is from the Wall Street Journal:

Potential suitors said they believe Yahoo’s inherent value is lower than its current share price of about $16.12, which they say includes a “deal premium” reflecting investors’ anticipation of the sale of Yahoo, people familiar with the matter said. The stock has run up since Carol Bartz was ousted as chief executive last month and Yahoo launched a strategic review.

In 2008, Microsoft was offering $31/share. It's traded as low as about $11. I'd say it's worth way more than $16, but in any case, Microsoft is now positioning itself to take a sweet stake, in preferred shares. I think this lessens the chance that I'll get my wish, which is to have Yahoo shed its identify as a tech company and remake itself as a Southern California-based online entertainment juggernaut. Microsoft doesn't need to be buying it. Disney does.

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