California lost close to half of its construction jobs when the housing bubble burst.

The nation’s most populous state was an epicenter of the national housing bust. From June 2006 through last month, it lost 43% of its construction jobs, or 401,900 positions. That far outpaced a 28% decline in total U.S. building employment during the same period.

California’s debt relief law expires at the end of 2008.

When the foreclosure crisis started, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007 so foreclosed homeowners would not be liable for their canceled debt. It is in force through 2012. California had a similar law, but it expired at the end of 2008, leaving Californians who lost their homes in 2009 potentially liable for big state tax bills. … California legislators last week passed a bill that would fix the situation. It mirrors a federal law that excludes “forgiven debt” on a principal residence from being considered taxable income. It covers short sales, foreclosures, deeds in lieu of foreclosure and loan modifications that reduce the principal due.

However, Gov. Arnold Schwarzenegger, who has until March 23 to sign the bill, indicated that he is likely to veto it based on an unrelated provision regarding tax fraud.

The downpayment requirement for $1M + homes in California is at nosebleed levels.

A total of 18,621 Golden State homes sold for a million dollars or more last year. That was down 23.8 percent from 24,436 in 2008. In 2007 it was 42,506; in 2006 it was 50,010; and in 2005 it peaked at 54,773… Among buyers who got mortgages, the median down payment was 39.4 percent of the purchase price. Bank of America, Wells Fargo and Union Bank were the top lenders for the $1 million-plus homes, according to DataQuick.

This group is preparing an initiative on the next election ballot to reign in the cost of pension plans for California’s public employees.

http://www.californiapensionreform.com/

A campaign to publicize the identities of thousands of people receiving hefty government pensions — from onetime professors to former fire chiefs — is catching on around the country.

The effort was launched earlier this year by a California interest group determined to promote its view that steep pension payments are bankrupting states and localities. Newspapers in New York, Rhode Island, Massachusetts, Illinois and elsewhere have published lists of their six-figure public retirees.

Despite the governmental distortion of the market, California foreclosure and default notices doubled from last year.

A total of 85,420 California properties received a foreclosure filing during the month, a decrease of 1 percent from the previous month but still nearly 50 percent above the total reported in October 2008. The state’s default notices and scheduled foreclosure auctions were up 120 percent and 73 percent respectively from October 2008, when California foreclosure activity was in the midst of a three-month trough after a law (SB 1137) requiring lenders to give distressed homeowners extra notification before initiating foreclosure took effect in September 2008.

California had seven cities among the top 10. Vallejo- Fairfield ranked second and Modesto was third, both with a rate of one in 81 households. Riverside-San Bernardino was fourth and Bakersfield, Merced and Stockton ranked sixth through eighth, respectively. Sacramento came in 10th.

Beginning the next paycheck, California state tax withholdings go up 10 percent as the state attempts to meet this year’s budget by borrowing from next year’s tax payments.

Starting Sunday, cash-strapped California will dig deeper into the pocketbooks of wage earners — holding back 10% more than it already does in state income taxes just as the biggest shopping season of the year kicks into gear. …

Sacramento, meanwhile, is awash in red ink again. The state controller recently said revenue in the budget year already had fallen more than $1 billion short of assumptions. Outsize deficits are projected for years to come.
Such temporary measures as the withholding tax increase don’t really fix the budget gap, “they just more or less hid it,” said Christopher Thornberg, a principal with Beacon Economics in Los Angeles. “I call it a fraud.”.

VC funding is at its lowest since 1998. This does not bode well for the Valley since historically, startups are the engines of growth in the past few decades. Is the Valley finally maturing as the old stalwarts consolidate their grasp on the tech industry ?
Venture investors are still keeping a tight grip on their capital in the wake of the world’s financial meltdown, making the third quarter of 2009 look about as anemic as the first two quarters of the year.

According to data from industry tracker Dow Jones VentureSource, VCs put $5.07 billion into 616 deals in the third quarter, which marks a 6% drop from the $5.42 billion put into 595 deals in the second quarter of the year.

NUMMI the last auto plant in the state of California and Toyota’s only unionized plant in America is set to close.

California officials say as many as 40,000 jobs could be lost after Toyota closes the plant in Fremont, Calif., where it builds the popular Corolla sedan and a small pickup, the Tacoma. And the U.A.W., which accused Toyota of callously abandoning its workers, criticized it for shifting Corolla production to Canada and Japan after millions of dollars in cash-for-clunkers rebates from the United States government caused sales of that car to surge…Nummi opened in 1984 as a joint venture by Toyota and G.M. It gave Toyota its first chance to build cars in the United States, while G.M. sought an education in more efficient manufacturing.

The discontinued Pontiac Vibe was built in this plant. The auto bailout dollars obviously did not reach California in this case.

The job losses continued in California in June 2009 as 66500 positions are eliminated in California. All sectors are hit including government jobs which will continue to be reduced as the budget crisis continues.

EDD’s report on payroll employment (wage and salary jobs) in the nonfarm industries of California totaled 14,285,000 in June, a net loss of 66,500 jobs since the May survey.
This followed a loss of 61,100 jobs (as revised) in May. Eleven categories (natural resources and mining; construction; manufacturing; trade, transportation and utilities; information; financial activities; professional and business services; educational and health services; leisure and hospitality; other services; and government) reported job declines this month, down 66,500 jobs.
Professional and business services posted the largest decline over the month, down by 13,700 jobs.
One industry division, educational and health services, posted job gains over the year, adding 19,500 jobs (a 1.1 percent increase).

Cisco announces a 1 percent reduction in force.
The workforce reduction makes up about 1 percent of Cisco’s global workforce. At the end of 2008, Cisco had about 66,000 employees, TMCnet reported….
Ironically, the company’s job cuts were made the same day that Cisco launched a new “Workforce Retraining Initiative” and pilot training program to create new job opportunities for U.S. workers and contribute for a better economic growth of the country.

California May tax revenues dropped more than a billion dollars which is 18 percent down from last year. This puts the state into a 800 million deeper hole than what the state budget projects !!

Total General Fund revenues were down $827 million (-13.5%) from estimates in the Governor’s proposed 2009-10 May Budget Revision. Personal income taxes were $475 million below the May Revision estimate (-23.0%), corporate taxes were down $84.4 million (-25.8%), and sales taxes lagged by $109 million (-3.3%).

Single Family Home Sales
31,150 In April 2008
37,967 In April 2009
Newly Permitted Residential Units(Seasonally adjusted Annual Rate)
71,676 In April 2008
34,646 In April 2009
Foreclosures Initiated (Notices of Default)
113,809 In 1st Quarter 2008
135,431 In 1st Quarter 2009
Total State Employment (Seasonally Adjusted)
15,493,000 In April 2008
14,795,900 In April 2009