Newsletter: California Inc.: An alleged solar scam involving ‘nearly no legitimate business’
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
Investors are increasingly hopeful about a cut in interest rates after Friday’s news that hiring slowed in May, with employers adding just 75,000 jobs. Businesses have become more cautious in the face of slowing global growth and widening trade conflicts. The unemployment rate remained at a nearly 50-year low of 3.6%.
LOOKING AHEAD
Inflation watch: The latest consumer price index comes out Wednesday. Prices rose a seasonally adjusted 0.3% in April, falling short of economists’ expectations.
Spending trend: Retail sales will be reported by the Commerce Department on Friday. Sales were down 0.2% in April as consumers cut back on clothes, appliances, and home and garden supplies.
Feeling groovy? The consumer sentiment index is also out Friday, providing a sense of how we’re feeling about the economy. The index hit its highest level in 15 years in early May.
Can you dig it? New cast, same basic idea as “Men in Black: International” hits theaters Friday. Also opening that day is Jim Jarmusch’s “The Dead Don’t Die” (fun fact: this is Bill Murray’s second zombie movie) and the latest iteration of “Shaft,” which once again features Samuel L. Jackson in the title role.
THE AGENDA
Monday’s Business section visits with a California couple who allegedly scammed Warren Buffett’s Berkshire Hathaway out of millions of dollars. The pair, authorities contend, managed to parlay a do-good incentive to encourage solar investments into an $800-million fraud.
STORY LINES
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Into a ditch: Fiat Chrysler withdrew its proposed $37-billion merger with Renault after the French government, Renault’s largest shareholder, sought to delay the deal to consult with the company’s Japanese alliance partner, Nissan. The Italian American automaker had sought the merger amid steep challenges for the industry as it pivots toward electric and autonomous vehicles.
Swan song: The iTunes Music store revolutionized how the world consumed music when it debuted 16 years ago, but since then other services such as Netflix and Spotify have upended media in their own ways. That’s prompted Apple to replace iTunes and its integrated library into three distinct apps for music, podcasts and TV.
Social-media storm: After a growing backlash, Google “demonetized” the YouTube channel of a popular right-wing commentator. Steven Crowder had hurled homophobic and ethnic insults at Vox Media journalist Carlos Maza. Google first said Crowder had not violated YouTube rules, but a day later turned off the channel’s revenue stream, though it remained available for viewing.
California slowdown: California’s low unemployment rate should persist through the next two years, but the generation of new jobs will lose steam given a shortage of workers, according to the latest UCLA Anderson Forecast. Payroll jobs are expected to grow at a 1.4% rate this year, down from 1.6% in 2018. In 2020, hiring will slow to 0.8% and in 2021 to 0.6%.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Bad blood: In a Letter from Los Angeles, the New Yorker checks out the tussle going on between Hollywood writers and agents. “At issue are two agency practices — ‘packaging’ clients and charging studios for access to them, and starting their own production companies — which, according to the Writers Guild, are diminishing the mutual economic interest that writers and their agents have traditionally shared.”
Down on the farm: The Wall Street Journal visits the California town of Santa Maria, where housing reserved for migrant farmworkers has sparked tension among local residents. “Motels, apartments and single-family homes in Santa Maria and other nearby towns are being converted to dormitory-style residences for temporary guest workers, tightening the supply of housing and pushing up already high rents.”
Getting by: What is a “living wage”? The New York Times takes a closer look at what it means to earn enough money to live on, and introduces us to the Living Wage Calculator. “This tool uses more specific data to gauge the basic needs of American families. It estimates the cost of food, child care, healthcare (both insurance premiums and typical healthcare costs), housing, transportation and other necessities.”
Clumping along: Bloomberg Businessweek says the U.S. is celebrating 10 years of economic growth, but no one’s partying. One reason for that is that it hasn’t been a spectacular rise. “Like Lonesome George, the giant tortoise in the Galápagos Islands who lived past 100, it’s clumped along slowly, never overheating, which is part of the reason for its longevity.”
Beating the odds: Wired tells the story of a couple of guys who found a bug in a video poker system and got rich. And then got in serious trouble. “Las Vegas prosecutors charged Nestor and Kane with conspiracy and violations of the Computer Fraud and Abuse Act.”
SPARE CHANGE
That Wired story makes you wonder: Best song about gambling that wasn’t done by Kenny Rogers? There are plenty to choose from, such as this one from Frank Sinatra, this one from Lady Gaga and this one from Juice Newton. But the king of gambling songs is undoubtedly this one, from the king, who knew his way around Sin City.
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento for helping put this thing together.
Until next time, I’ll see you in the Business section.
