This chart is disturbing. It's from the Bureau of Economic Analysis and it summarizes percentage change in real GDP growth for U.S. metropolitan areas from 2009 to 2010. Have a gander at the lower left hand corner of our fair mainland (not Alaska and Hawaii). That large area of middling and lower-than-middling improvement is SoCal. In fact, the entire state managed a feeble performance — with the obvious exception of that little bit of overachieving dark blue: Silicon Valley.
For contrast — and tale of two years — here's the 2009 chart:
Jon Stewart & Co. go to town on the Solyndra bankruptcy and potential Obama administration scandal. It's funny. Real funny. But I'm still worried that the media coverage of Solyndra-gate — as well as the blogospheric response — is perpetuating a couple of big misunderstandings:
1. That Solyndra wasn't being invested in before the DOE showed up with its $535 million loan guarantee. It had already been indentified by investors as a viable company that had a unique solar technology.
2. That Solyndra's total investment of roughly $1.5 billion...wasn't supposed to be spent! It had to get spent and spent fast, and here's why. Solyndra needed to provide an exit strategy for its investors that would have culminated in an IPO. No reason to save money while driving toward that goal. Also, if Solyndra was going to create the economic stimulus that the adminstration wanted, it had to get as much of that $535 million in play as it could, as fast as possible. On that front, Solyndra succeeded wildly: it managed to spend $527 million before it had to declare bankruptcy earlier this month.
So laugh along with the 'Daily Show.' But try to think a little bit like an investor in a risky, cutting-edge industry at the same time.
Bank of America's stock price is drifiting down again today, edging precariously close to $7. There's really no convenient way to phrase it: the bank continues to suffer a hangover from its pre-financial crisis acqusition of Countrywide. So how do you solve a problem from Mozilo? Possibly...bankruptcy? This is from Bloomberg:
The option of seeking court protection exists because the Charlotte, North Carolina-based bank maintained a separate legal identity for the subprime lender after the 2008 acquisition, said the people, who declined to be identified because the plans are private. A filing isn’t imminent and executives recognize the danger that it could backfire by casting doubt on the financial strength of the largest U.S. bank, the people said.
The threat of a Countrywide bankruptcy is a “nuclear” option that Chief Executive Officer Brian T. Moynihan could use as leverage against plaintiffs seeking refunds on bad mortgages, said analyst Mike Mayo of Credit Agricole Securities USA. Moynihan has booked at least $30 billion of costs for faulty home loans, most sold by Countrywide during the housing boom, and analysts estimate the total could double in coming years.
Not a rounding error. California was at 12 percent unemployment. Now we're at 12.1: "California's dependence on the real estate industry is going to continue to cause pain until home-building starts again. But with uncertainty throughout the economy, few businesses in any field seem willing to hire." (LAT)
Lose your job in a recession, see your future income reduced by almost 20 percent: "For high-tenure workers who experience job displacement in a recession, the losses amount to about three years of earnings at pre-displacement levels and 19% of the present value earnings of otherwise similar workers who retain jobs." (Brookings Institution)
It's springtime for car mechanics in LA: "And as the U.S. vehicle fleet ages and consumers continue to save, repair shops, analysts said, are in a good position to continue their growth." (LAT)
It's time to get exasperated about tuition hikes again: the University of California is considering a plan that would see tuition raised 16 percent a year until 2015-16, which would amount to a doubling of the cost of an education in the system.
The Mercury News helpfully points out that this is all part of a trend — a gruesome trend which has seen education become ridonkculously expensive:
Several regents repeated what has become a mantra for the university: California needs to overcome its aversion to taxes, or UC's quality will suffer...."I think we have to start asking better questions because this just isn't going to work," said Lt. Gov. Gavin Newsom, also a UC regent....Indeed, budget talks routinely consume the regents even though, for more than three decades, colleges and universities across the country have been jacking up tuition at a faster rate than costs have risen on any other major product or service -- four times faster than the overall inflation rate and faster even than increases in the price of gasoline or health care....If UC's fees had increased at the rate of inflation, students who paid $776 in 1980 would have paid $2,200 this year — instead of the $12,193 that was actually charged. That's a 1,471 percent increase in 30 years, an era when inflation climbed 183 percent.