Wall Street's worst plunge in three years, coupled with the nation's downgraded credit rating and a sense of political leaders' incompetence, are roiling California's economy. The Bee's Dale Kasler tells the tale.
"The huge downturn in the stock market, punctuated by Monday's near-record fall, is costing the state's public pension funds billions of dollars. It's putting a strain on tax revenues – and could throw the just-passed state budget out of whack."
"The aftershocks are being felt on the street level, too. Some real estate purchases are being postponed or canceled. Financiers are wondering if they'll be able to fund promising new tech companies."
"Even businesses that are expanding are doing a double-take of sorts as they try to fathom Monday's 634.76-point drop in the Dow Jones average, the worst sell-off in nearly three years. Monday was the first day of trading after Standard & Poor's downgraded the U.S. credit rating."
Meanwhile, the turbulence on the Street is having an effect on the IPOs of Silicon Valley, dampening one of the key elements of the Valley's economic engine. The Chronicle's James Temple has the story.
"Standard & Poor's downgrade of America's credit rating could sap the unbridled enthusiasm that's buoyed the technology industry for months, pushing back planned public offerings and pricking lofty investor valuations."
"Timing is everything and it's a pretty safe bet that it will be awhile before the markets settle down enough that we can start doing (initial public offerings) again," said Paul Saffo, managing director at investment adviser Discern Analytics in San Francisco."
"That's potentially bad news for companies like Zynga and Groupon, which have filed to go public, as well as businesses waiting in the wings, like Facebook and Yelp."
California has joined several other states in an effort to make an end-run around the Electoral College, giving its electoral votes to the candidate who wins the most votes nationwide.
From Marisa Lagos in the Chronicle: "Brown's signature makes California the ninth state to sign on to the effort, which would hand the electoral votes of all participating states to the presidential candidate who wins the most votes nationwide. Currently, California's 55 electoral votes go to the person who wins the most votes in the state."
"Under the new law, most California voters could choose one candidate, but the state's electoral votes could ultimately go to the competitor; however, it also would make it impossible for a president to win an election without a majority of support nationally."
"It's unlikely the change would take place in time for the 2012 election. Under federal law, states representing a majority of electoral votes - 270 out of 538 - have to agree in order to shift the way votes are awarded in those states."
Gov Brown has vetoed legislation that would have created special courts specializing in the needs of veterans. The bill was overwhelmingly approved by the Legislature, but Brown said the measure was too costly at a time when the court system is experiencing deep cuts.
From Aaron Glantz in the Bay Citizen: "Butler's bill drew no organized opposition and passed both houses of the state Legislature unanimously. Texas had passed a similar bill in 2009 — the first state to do so."
"Brown's veto surprised most observers."
"In an email, Brown’s spokesman, Evan Westrup, declined to elaborate on the governor's rationale, saying, “The veto message speaks for itself.”
"The development highlights how persistent budget deficits are making it more difficult for government to innovate."
And from our "Thrown Under the Bus" file comes the tale of the driver who was fired because he rescued three police detectives with his school bus during a hail storm. We're not making this up.
"A Long Island school bus driver was called into his boss’ office expecting commendation. Instead, he said he was fired for helping three police officers stranded in a violent storm — and transporting them in his school bus."
"School bus driver George Daw lost his job Monday in a firing flap that began during last week’s freak and violent hail storm. He was quite emotional when he spoke to CBS 2’s Jennifer McLogan."
“Who wouldn’t be? It’s crazy,” Daw said.
"Daw snapped pictures as a near-monsoon moved through New Hyde Park. Traffic was stopped, cars were submerged and drivers panicked."
Give the district an "F" ...
