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.
Because consumer spending accounts for about two-thirds of U.S. economic activity, prognosticators watch closely to see if we're keeping the wheels of commerce spinning by hitting the stores. In August, not so much. The Commerce Department said Friday that consumer spending barely grew during the month after a sharp rise in July. The problem: Incomes rose by the smallest amount since winter.
New CEO: American Apparel, the Los Angeles clothier that has been wracked by turmoil in recent years, gets a new leader on Monday. Chelsea Grayson, who has been serving as the company's general counsel and chief administrative officer, moves into the chief executive spot, replacing Paula Schneider, a longtime retail executive who was brought on in January 2015 after American Apparel's board ousted founder Dov Charney as CEO. Grayson is a lawyer with a background in mergers and acquisitions but little retail experience.
Device unveiling: On Tuesday, Google is hosting an event in San Francisco that has the tech world abuzz with speculation. While the Mountain View company hasn't offered much detail — beyond assigning the event the hashtag #MadeByGoogle — many expect Google to announce new models of its Chromecast streaming media device and its Nexus phone. The tech site Gizmodo further predicts Google will kill the Nexus brand and replace it with phones called Google Pixel.
VR conference: Oculus, the Menlo Park-based virtual reality company owned by Facebook, will host its third annual developer conference Wednesday through Friday in San Jose. The company is expected to provide more clarity on the release of its Touch handheld controllers and talk about new features and games for its virtual reality device. Oculus is in a race to reach consumers in the hot VR market. Next week, Sony releases its $399 PlayStation VR headset, a device that sold out in preorders at GameStop in record time.
Olympics bid: Friday is the deadline for organizers of Los Angeles' bid for the 2024 Summer Games to submit a second round of material to the International Olympic Committee. The deadline comes as many L.A. city leaders are asking pointed questions about what financial protections would exist should the city win the Olympics, but then have a funding shortfall or an unforeseen catastrophe. Bid leaders have said the cost of the Games could exceed $6 billion. They expect sponsorships, broadcasting rights and other revenue streams to cover those costs and leave a $161-million surplus.
What a trip: Bob Dylan, the Rolling Stones, Neil Young, Paul McCartney, the Who and Pink Floyd's Roger Waters are coming to Indio this weekend — and so is plenty of cash. The Desert Trip music festival, nicknamed "Oldchella" (almost all of the above are in their 70s), is expected to bring in some $400 million to the Coachella Valley, according to a study contracted by Goldenvoice, promoter of the event. Desert Trip runs Friday through Sunday this week and next, with the classic acts performing both weekends.
Monday's Business section looks at whether consumers should pay a tax to watch Netflix and other video streaming services. Pasadena and dozens of other California cities are mulling whether to tax subscribers of Netflix, Hulu, HBO Go and other services using existing municipal utility tax codes that initially were designed for taxing cable television subscribers. That follows so-called "Netflix taxes" that already have gone into effect in Pennsylvania and Chicago. Some analysts predict more levies could be coming as state and local agencies try to replace revenue lost from consumers who became cord cutters by dropping cable TV and switching to video streaming.
Here are some of the other stories that ran in the Times Business section in recent days that we're continuing to follow:
Wells Fargo: Chief Executive and Chairman John Stumpf suffered a brutal beatdown on Capitol Hill just days after the bank announced he would forfeit compensation worth about $45 million over revelations that employees created millions of accounts without customers' permission. The San Francisco institution took a more symbolic hit when California state Treasurer John Chiang announced that he has temporarily severed some business relationships with Wells Fargo for the next year.
'Slumlord' settlement: The Los Angeles city attorney has reached a $13.5-million settlement with U.S. Bank to resolve allegations that the nation's fifth-largest bank operated as a slumlord and allowed hundreds of foreclosed properties to deteriorate, fostering crime and blight in L.A. neighborhoods slammed by the housing crisis. The settlement requires the Minneapolis-based firm to maintain its foreclosed properties in "accordance with all applicable laws and standards for two years."
Retirement plan: Nearly 7 million workers for California companies will be automatically enrolled in a new state-run retirement program under a bill signed by Gov. Jerry Brown. The law requires all companies with at least five employees to enroll their workers in the new California Secure Choice Retirement Savings Program if they do not offer their own retirement savings plan. State Senate leader Kevin de León called it the "largest expansion of retirement security since the New Deal."
TV troubles: It's a new TV season, but the first week's ratings indicate that the networks will be facing what has become the same old problem with younger viewers. During premiere week for the 2016-17 season, overall prime-time TV usage was off around 7% among the 18-to-34 age group compared with a year ago, based on Nielsen data. The number has been on a downward trend over the last few years, reflecting the emergence of online video streaming and video on demand.
Off to Mars: SpaceX CEO Elon Musk has finally laid out his plans to eventually transport up to a million people to colonize Mars. But there are more than a few hurdles he'll have to clear first. In a speech, Musk presented a grand vision — massive rockets launching a fleet of 1,000 spaceships that would each carry about 100 people to Mars. Once on the Red Planet, Musk plans to develop a propellant farm to harvest the methane and liquid oxygen necessary to power the spacecraft for the journey home.
WHAT WE'RE READING
And some recent stories from other publications that caught our eye:
Rough crowd: Don't mess with Goldman Sachs. That's the takeaway from a remarkable Bloomberg story about how Libya lost $1.2 billion after investing with the Wall Street bank. The Libyans blame "Goldman's gifts, slick salesmanship and misleading marketing materials."
Drive my car: Will autonomous vehicles do away with drivers? Probably not, says Fast Company. Just look at airplanes, which can fly in autopilot mode. However, "current cultural norms don't necessarily accommodate pilot-less flying."
Hired gun: The Atlantic checks out Remedy, a start-up that, for a piece of the action, will help fight your medical bills. It sounds attractive, but as one cybersecurity expert notes, "he personally wouldn't find the savings worth the risk of a medical data leak."
Lame-stream media: The New Yorker examines Republican presidential nominee Donald Trump's adversarial relationship with the press. "He appears to believe in a captive press, of the kind found, for example, in Benito Mussolini's Italy or Fidel Castro's Cuba."
Purrrrr: Elon Musk may want to colonize Mars, but how did cats colonize Earth? According to Quartz, cats conquered the planet "by doing odd jobs for farmers and hitching rides on sailing ships." At least that's what new research on feline DNA suggests.
I think we can all agree that if it wasn't for cat videos, there'd be no need for the Internet. But here's the question: What are the best cat videos of all time? Surprised kitty perhaps? Ninja kitty? I've always been partial to the existential crises of Henri the French cat. And then there's this spectacularly awful jump.
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For the latest money news, go to www.latimes.com/business. Until next time, I'll see you in the Business section.