California Inc.: Be careful before you spend $100,000 to go to space
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m energy reporter Sammy Roth, filling in for a vacationing David Lazarus. Here’s a rundown of upcoming stories this week and the highlights of last week.
Stock markets have continued to ping-pong, falling dramatically on Christmas Eve, rising sharply after Christmas and finishing with the first weekly gain in a month. The volatility capped off a year marked by trade wars, data breaches and a slowing housing market in California.
Happy New Year: 2018 mercifully comes to an end Monday. With the government still partially shut down, another election on the horizon and no end in sight to economic uncertainty (or President Trump’s Twitter feed), expect 2019 to offer much of the same as this past year.
Jobs data: On Friday, the Labor Department is expected to report another solid month of job growth. Forecasters anticipate that the economy added about 183,000 net new jobs in December, with the unemployment rate holding steady at 3.7% and year-over-year wage gains slipping a bit to 3%.
Car sales: Carmakers will reveal U.S. auto sales for 2018 this week. The total, according to Cox Automotive, is expected to reach 17.2 million, a modest uptick over last year. Although the figure has topped 17 million four years in a row, industry analysts believe the U.S. market is overdue for a cyclical downturn. Auto sales in China, meanwhile, are expected to plunge in 2018 as the nation’s growth rate slows.
Tesla too: The electric automaker is set to announce fourth-quarter sales, which are likely to be primed because Tesla is rushing to sell cars before federal subsidies cut off in January. Chief Executive Elon Musk wowed fans and foes alike in the third quarter, when Tesla reported 55,840 Model 3’s were delivered. Supporters and critics alike will be watching to see whether Musk can keep it up. The Model 3, an electric sedan that with a price range of roughly $50,000 to $80,000 before incentives, is considered a make-or-break vehicle that will determine Tesla’s financial future.
Monday’s Business Section explores a groundbreaking investigation into alleged price-fixing by generic drug companies, which are supposed to sell prescription drugs on the cheap but are accused of working together to raise prices aggressively over the last few years. The companies deny the charges, which are slowly being revealed through a wide array of lawsuits.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
No refunds in space: If someone offers to take you to space for $100,000, and it sounds too good to be true … it may be too good to be true. A decade ago, Xcor Aerospace Inc. started taking $100,000 for planned trips into suborbital space. Now the company has filed for bankruptcy, and it’s unclear whether some of the would-be astronauts will get their money back. Virgin Galactic and Blue Original continue to work on planned commercial space flights.
California coal: Did you know some Californians get their electricity from PacifiCorp, a coal-burning utility controlled by Warren Buffett? Well, they do, and Buffett’s utility wants permission from state officials to charge those Californians for the costs of upgrading three coal plants in Colorado and Wyoming, even as the Golden State looks to eliminate the burning of fossil fuels for electricity. The Sierra Club has objected.
Slowing home sales: While far from a sign of economic catastrophe, California’s sustained housing boom is moving into the rear-view mirror. Home sales fell sharply in November, the fourth consecutive monthly decline. Price growth was also minimal, amid signs that people are holding back on buying homes as they wait to see whether prices drop and how the economy fares in the coming months.
Record viewership: The unpredictable politics of the Trump era have been good news for talking heads on cable news. Fox News had a record number of prime-time viewers this year, as did MSNBC. Cable entertainment channels, meanwhile, continued to see viewership slip as more people got their TV fix from Netflix, Amazon and Hulu.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Environmental rollbacks: The New York Times has an in-depth look at the real-life consequences of the Trump administration’s environmental rollbacks, which officials have justified as economically beneficial while often ignoring the costs to human health. The piece focuses on toxic pesticide use in California’s Central Valley, air pollution in Texas and North Dakota, and water contamination in West Virginia.
Fake internet: The term “fake news” has entered the national lexicon, but New York Magazine’s Max Read says the internet has come to be dominated by all kinds of fakery: fake metrics, fake people, fake businesses, fake content and fake politics. It’s scary to think about how much of our lives we live in this digital world where the line between real and fake is ever-harder to find.
Dirty secret: Electric cars reduce greenhouse gas emissions and pollution, but anyone who thinks they deserve a halo for buying one should learn more about cobalt. Essential to the lithium-ion batteries that power electric vehicles, it’s rare and rising in price. It’s also toxic, much of it is mined by children in the Congo, and it’s lusted after by sophisticated thieves. Bloomberg Businessweek looks at a cobalt theft ring in Rotterdam.
Political speech on Facebook: What should we be allowed to say on Facebook, and what types of speech are too dangerous or hateful? It’s a high-stakes political conundrum — not to mention a serious business dilemma — for the social media company, and Facebook doesn’t seem to have a great handle on the answer. The New York Times got a look at Facebook’s confusing, haphazard rules for censoring speech.
Restrictions on Elon Musk’s Twitter feed took effect Friday, part of the Tesla CEO’s fraud settlement with the Securities and Exchange Commission. But don’t expect Musk to stop making headlines with his controversial remarks. Tesla’s board is supposed to pre-approve only those Musk tweets that could move the company’s stock price, and Musk’s lawyers continue to defend his calling a British cave diver a “pedo” and a “child rapist,” saying the accusations “were not intended to be statements of fact.”
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