Newsletter: California Inc.: A sale for the record books
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Technology and Business editor Ben Muessig, pinch-hitting for Business columnist David Lazarus. Here are the most interesting stories of last week and the themes we’re keeping an eye on in the coming days.
Money talks: Federal Reserve Chairman Jerome Powell will provide his semi-annual report on monetary policy Wednesday and Thursday to two congressional committees. He’s bound to be questioned about the prospect for an interest-rate cut, which was complicated by last week’s robust jobs report.
Tape tale: Looking for more insight into whether the central bank will lower rates at its next meeting on July 30-31? Other clues will come Wednesday when the minutes of the June gathering of Fed policymakers will be released. Rates were held steady at that Open Market Committee meeting, despite President Trump’s continued calls for a cut.
Price gauges: We’ll get the latest look on inflation when the Labor Department releases consumer prices for June on Thursday. The CPI rose only 0.1% in May for a 12-month gain of just 1.8% — tame numbers that also have fueled speculation of a Fed rate cut. The latest on producer prices comes Friday.
Monday’s Business section examines instant-buying — a practice that could bring efficiency to the real estate market or upend it. Instant-buying uses algorithms to quickly read disclosures, analyze the market and determine a property’s value. But if the market slows, so-called iBuying could put a disproportionate segment of the market into the hands of institutional buyers.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
The big one: The $119.75-million sale of a 14-bedroom, 27-bathroom mega-mansion in Holmby Hills earned its spot in the record books as the highest home price in Los Angeles County history. The Manor — which is bigger than the White House and for a time included more than one room dedicated to the wrapping of gifts — was built for late producer Aaron Spelling and his widow, Candy Spelling. It sold eight years ago for $85 million to Petra Ecclestone. The new buyer remains unknown for now.
An automotive giant: Famed automotive executive Lee Iacocca died Tuesday at age 94. One of America’s first celebrity CEOs, the brash businessman helped roll out the wildly popular Ford Mustang in 1964 and pulled off the dramatic rescue of Chrysler in the early 1980s. Never one to mince his words, Iacocca once derided the orange Datsun of then-Wall Street Journal reporter and current Los Angeles Times Executive Editor Norman Pearlstine.
Food fight: Restaurants aren’t happy with the food delivery firm Grubhub, which purchased domains and built websites bearing the names of thousands of eateries. Some restaurants say the practice was deceptive, but Grubhub insists all eateries consented to the arrangement. Either way, the spat illustrates the growing distrust between small business and major internet platforms that have the power to commandeer their customer relationships and skim their profits.
Cold world: As shoppers embrace online grocery delivery and prepared meal services, businesses have a desperate need to keep food cold. The nation needs an estimated 100 million square feet of new cold storage over the next five years, meaning that refrigerated warehouses are all the rage in the commercial real estate industry.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
Plastics plague: California has banned most single-use plastic bags, but the Indian government decided on a different solution to battle the rising popularity of hard-to-recycle, “multilayer’ packets containing everything from Nestlé noodles to shampoo, the Wall Street Journal reports: “To get a grip, India has instituted some of the world’s strictest rules on single-use plastic, forcing companies to collect packaging that is often left as litter. The country’s environment minister even launched a Bollywood-style song — complete with dance moves — to persuade Indians to reject single-use plastics.”
Who’s behind 8chan: The forum site 8chan is one of the internet’s most notorious corners — a place where extreme ideologies flourish and bring violence into the real world. But who is behind it? The digital news outlet Tortoise tells the story of the site through its founder: “The anger and hate that spews from 8chan is not a conscious extension of the anger and hate of its creator — though he had plenty — but an inevitable byproduct of the dark structure he built.”
Tropical heat: The average American may know the British Virgin Islands as a tourist destination, but it’s also a leading offshore tax haven. That’s about to change, now that the Panama Papers led to a U.K. crackdown on the Caribbean archipelago: “The disclosures sparked probes worldwide into money laundering, sanctions violations, and tax avoidance, and it didn’t pass without notice that more than half the companies outed in the leak were registered in the BVI,” writes Bloomberg Businessweek.
Accept your decline: At a time when many professionals expect to work well into their golden years, former American Enterprise Institute president Arthur C. Brooks argues for a new conception of retirement that accepts the realities of aging. “Decline is inevitable, and it occurs earlier than almost any of us wants to believe. But misery is not inevitable. Accepting the natural cadence of our abilities sets up the possibility of transcendence, because it allows the shifting of attention to higher spiritual and life priorities,” he writes in The Atlantic.
Pavement isn’t just the best band to come out of the Central Valley (sorry, Korn) — it’s also a rare act that brings a Stockton perspective on California politics. More than 20 years before some tech type ran for governor on the platform of splitting the state in six, Pavement’s “Two States” made a simpler case for dividing up the north and south. “Unfair,” from the band’s next release, dug into the rationale: “Man-made deltas and concrete rivers, the south takes what the north delivers.” Malkmus: come write for us.
For the latest money news, go to latimes.com/business. Lazarus will return to the Business section next week.