Explaining Southern California's economy

Actually, the economy will self-correct, but we don't have time to wait. So should we start investing?

An interesting comment came out of Gov. Jerry Brown's biotech mini-summit in San Diego yesterday, where he predicted that he'd be able to win over enough Republicans in the next three days to pass his "jobs-and-taxes proposal." This is from the LA Times PolitiCal blog:

"We all know this economy is not going to self-correct," said David Gollaher, president and chief executive of the California Healthcare Institute, a trade group for the biomedical industry. "San Diego and the U.S., we have the talent ... but it's going to take creativity on the part of our political leaders."

Actually, given enough time, the economy — nationally and regionally — will self-correct. The problem is that the nature of the financial crisis and its aftermath would drag out the process so much that the American Way of Life would be completely changed. We've endured what economists call a "balance sheet recession," in which businesses and consumers have to reorganize, renegotiate and rid themselves of debt. That's why we have such high unemployment. That's why why the stock market is so unstable. That why the yield on 10-year treasuries is below 2 percent. Everyone is too busy dealing with the debt orgy of the past 30 years to be able to concentrate on reviving demand.

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Reportings: Yahoo for sale; JOBS!; Cordray versus Congress

Henry Blodget says that Yahoo, now that's it's axed CEO Carol Bartz and pretty much admitted that it's for sale (again), should buy Business Insider and hire "us" as CEO. We're going to assume that by "us", Henry means "Henry." He you have it: "We offer to allow Yahoo to buy Business Insider Inc., for $150 million.  And we offer to allow Yahoo to then appoint us acting CEO of the company…Once we have been appointed acting CEO of Yahoo, we will implement our plan." (Business Insider)

 

"How to bring the jobs back." The New York Times goes big, big, BIG on the Opinion page, serving up four provocative solutions to the unemployment crisis. (NYT)

 

According to Jay Carney, Obama's $300 billion jobs package "would be "paid for," not financed through deficit spending." (LAT) 

 

The battle over the confirmation of Richard Cordray to lead the Consumer Financial Protection Bureau has begun. Who's Richard Cordray? He's so not Elizabeth Warren. (LAT)

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Boomer Bubble: How Baby Boomers plan to spend all their money now and wreck the stock market for decades

Ah, Baby Boomers… soon they'll begin retiring in force, straining Medicare and Social Security. And according to recent reports and studies, they'll also be spending every dime they've socked away, forgetting about leaving an inheritance to their children and…dooming the stock market to pitiful returns for years to come as they withdraw their gains. Talk about the Big Chill!

The LA Times checked in on Boomer plans to enjoy their golden years — and enjoy them to the max:

Upending the conventional notion of parents carefully tending their financial estates to be passed down at the reading of their wills, many baby boomers say they instead plan to spend the money on themselves while they're alive....In a survey of millionaire boomers by investment firm U.S. Trust, only 49% said it was important to leave money to their children when they die. The low rate was a big surprise for a company that for decades has advised wealthy people how to leave money to their heirs...."We were like 'wow,'" said Keith Banks, U.S. Trust president.

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Vacation now! LA Times employees lose control of their time off

As LA Observed reported last week, Los Angeles Times employees are getting a sort of nasty double-whammy, when it comes to vacation time. According to the LAT memo that Kevin Roderick published

As of October 2, 2011, we will put into action a temporary freeze of vacation accrual and mandate the use of vacation days. Given that many of you have more than two weeks of vacation already accrued and the holiday months are traditionally a season when time off is scheduled, our hope is that this will be manageable and not create undue difficulty. 

Just what you want to see in your email in-box on the Friday before Labor Day weekend! This move is happening in the wake of the LAT's owner, Tribune, asking its bankruptcy court judge to authorize between $16.4 million and $42.5 million in — and unfortunately there's no other word for them — performance bonuses for company management. 

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Reportings: Obamanomics in Cali; Carlyle and Calpers; AEG is cocky and carbon neutral

California has the second-highest unemployment rate in the nation. Yet when polled by USC Dornsfire/Los Angeles Times, 49 percent of voters said that cutting government spending is the path to prosperity. "Stimulus is almost a four-letter word here." (LAT)

  

Major private-equity player the Carlyle Group wants to go public. Competitor Blackstone has a market cap of $13.4 billion. Carlyle wants to be in that league. And the "giant California pension fund Calpers has owned at least a 5.5 percent stake in the firm for several years." Cash-out time? (DealBook)

 

Environmental backlash to AEG's fast-track, allegedly carbon-neutral NFL stadium legislation. "Well, what would you expect to happen when a bunch of cocky bizjocks from L.A. insist on a bill that would exempt them from many of the legal hurdles that everyone else must go through - including developers looking to build stadiums in other parts of the state?" (Lacter/LA Observed)

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