Newsletter: California Inc.: L.A.’s Olympic dreams are about to come true
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.
Traders are undoubtedly hoping this week will be smoother than the last one. The Dow Jones industrial average fell 189.77 points over the abbreviated post-holiday week, while the S&P 500 fell 0.61%. The Nasdaq composite dropped 1.17% since last Tuesday. Hurricanes, a big quake in Mexico and the persistent issue of North Korea added to uncertainty. None of that will ease any time soon.
LOOKING AHEAD
Fundraiser: All the major television networks will simulcast an hourlong telethon Tuesday to raise money for victims of hurricanes Harvey and Irma. The “Hand in Hand” broadcast will be based in Los Angeles at the Universal Studios lot, with stages in New York’s Times Square and Nashville’s Grand Ole Opry. The event will be televised live on ABC, CBS, CMT, Fox and NBC at 8 p.m. Eastern and replayed on the West Coast at 8 p.m. Pacific.
Olympic dreams: On Wednesday, the International Olympic Committee is expected to officially award the 2028 Summer Olympics to Los Angeles. The IOC, meeting in Lima, will formalize a deal that has been in the works for months. Paris will host the 2024 games, while L.A. gets the event four years later. Organizers of the L.A. bid say the $5.3-billion cost of the 2028 games will be covered by corporate sponsorships, ticket sales and other revenue sources.
New cars: The Frankfurt Auto Show, historically the stage where edgy new car designs are unveiled, kicks off Thursday. Among the concept cars likely to turn heads this year are a Mercedes-Benz AMG “hypercar,” a Smart Fortwo electric car, a Honda CR-V hybrid prototype and a Kia Proceed, which looks like a hot-rod station wagon. The show, officially known as IAA 2017, ends Sept. 24.
Looming deadline: The state Legislature adjourns for the year on Friday, so the race will be on this week to pass bills before the deadline. Among the issues under debate is a proposal that would eliminate, in steps, the use of fossil fuels in creating power for the state’s electricity grid. Legislators are also considering bills to increase funding for low-income housing projects and to limit challenges, under the California Environmental Quality Act, to large commercial developments.
Emmy Awards: The TV industry honors itself Sunday when the 67th annual Emmy Awards are handed out at the Microsoft Theater in Los Angeles. NBC’s “Saturday Night Live” and HBO’s “Westworld” received the most nominations this year with 22 each. FX’s “Feud: Bette and Joan” and Netflix’s “Stranger Things” both received 18 nominations. In the network tally, HBO received the most nominations at 111, followed by 91 for Netflix and 64 for NBC. The show begins at 5 p.m. and will be aired by CBS.
THE AGENDA
When natural disasters strike, the costs can be high — but some industries can benefit. Hurricane Harvey is projected to be one of the most expensive disasters in U.S. history. And it’s expected that 500,000 damage or total loss claims could be filed by truck and car owners. That means big business for Houston-area dealers in coming months.
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:
Data breach: Equifax, one of the nation’s three major credit reporting firms, announced that its computer systems had been breached, leading to the potential unauthorized access of Social Security numbers, birth dates and other personal information of up to 143 million U.S. consumers. The credit card numbers for 209,000 U.S. consumers were also compromised, as were dispute documents related to 182,000 U.S. consumers. The Atlanta-based company said the intrusion occurred from mid-May through July.
Amazon’s HQ2: Amazon.com is shopping for a city to house a second headquarters — and mayors across the country, including L.A.’s Eric Garcetti, already are lining up to bid on the crown-jewel prize. The online retailing giant’s new campus would deliver an economic boost well beyond the $5 billion in construction costs and 50,000 jobs anticipated at Amazon’s “HQ2.” Amazon launched the search for its second North American base because its Seattle headquarters is overstuffed with workers.
DACA uncertainty: Workers and employers are scrambling to understand the implications of President Trump’s decision to phase out the Deferred Action for Childhood Arrivals program, initiated in 2012 by President Obama to protect undocumented immigrants who arrived as children. The Trump administration said Congress now has six months to change the immigration laws and find a DACA replacement, if it chooses. Trump’s decision faces court challenges, which could delay or block the termination of DACA.
Money problems: A year after Wells Fargo admitted creating millions of sham accounts, an internal bank report shows further problems. The report, produced for a risk-management committee that monitors Wells Fargo’s community bank — the business unit at the center of the accounts scandal — identifies several so-far undisclosed issues, all classified as “high risk.” They include improper fees charged on some accounts that were closed when the holders either died or were declared legally incompetent.
Fraud charge: A federal regulator accused Monex, a Newport Beach precious metals investment firm, of defrauding thousands of customers of more than $290 million through an illegal scheme that used high-pressure sales tactics and left many elderly clients with no life savings. The U.S. Commodity Futures Trading Commission called the alleged fraud “one of the largest precious metals” cases it has filed, involving the holders of some 12,000 accounts. Monex denies the allegations.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Retro chic: Run-down roadside hotels are getting fashionable makeovers, reports Bloomberg. “Around the U.S., hoteliers are turning down-at-the-heels motels — a national icon of sorts — into stylish, remarkably upscale hotels.” Entrepreneurs with an interest in remodeling can often get the properties at relatively modest prices. Still, it can be time-consuming and risky, with some communities resisting changes to what they consider local landmarks.
Atomic age: Longreads takes a look back at a little-known nuclear plant explosion that killed three men in Idaho in 1961. The explosion happened during a period when American industry was excited by the seemingly magical properties of atomic energy. “Businesses, thinking radiation would remove impurities from or enhance the strength of their products, blasted their goods — gold, diamonds, plastic, papayas, potatoes — with gamma rays.”
Chasing Kevin: The fans of Kevin Smith — the creator of Gen-X slacker movies like “Clerks,” “Mallrats” and “Chasing Amy” — just can’t seem to get enough of him, reports Vulture.com. Smith’s primary source of income is talking to crowds at sold-out events. He also hosts six popular podcasts, and produces and hosts an AMC reality show that’s entering its seventh season. “He’s in the business of giving his followers more and more Kevin Smith, and business is quite good.”
Kaiser exec: The head of Kaiser Permanente’s operations in Southern California originally wanted to be a nurse, but changed her mind when she saw doctors talking harshly to the nursing staff, says the Orange County Register. “I thought, with my personality, the first time somebody talks to me like that, I’m going to get fired,” recalls Julie Miller-Phipps. She decided to shift her career to the business side of healthcare and today oversees a staff of 70,800.
Urban revival: The city of Detroit, having suffered from years of economic problems, is getting a boost from a surprising source: megabank JPMorgan Chase. Fortune reports that the bank is funneling money into a collection of projects to revive Detroit real estate, launch small businesses and provide job training to residents. “The program may lift up the needy, but it isn’t charity. JPMorgan Chase wants to foster businesses with the skills to pay the bills — with interest.”
SPARE CHANGE
Rick Smith, the CEO of Equifax, posted a video to explain the massive data breach involving his company and apologize to consumers. What he failed to address is why it took Equifax so long to notify people after learning on July 29 that hackers had accessed the firm’s system. He also didn’t mention the three Equifax execs who sold nearly $2 million worth of stock before the incident was publicized.
For the latest money news, go to www.latimes.com/business. Mad props to Scott J. Wilson for helping put this thing together.
Until next time, I’ll see you in the Business section.
