Apple stock: From $6.56 to $403 in about 8 years

Some recent and historical data points for Apple Inc. stock, before markets react Thursday to founder Steve Jobs' decision to step down as CEO:

--- The shares closed the regular session at $376.18 on Wednesday, up $2.58, before Jobs’ announcement. The price fell 5.3% to about $356 in after-hours trading.

The stock hit a record high of $403.41 on July 26, before it began to slump amid the market’s broad sell-off.

--- The company’s stock market value was $348 billion at the close of regular trading Wednesday. Earlier this month Apple briefly topped Exxon Mobil as the most valuable U.S. company by stock market value, but Exxon now is back on top, at $357 billion.

Apple is far more valuable than any other U.S. tech company, including Microsoft ($209 billion), IBM ($199 billion), Google ($169 billion) and Intel ($104 billion).

--- The first Apple mania: The company generated huge investor excitement with its initial public stock offering in December 1980. Adjusted for splits since then, the stock's IPO price was $2.75 a share. It peaked in the 1980s at $14.82 in October 1987.

But the stock languished for much of the period from then until the late-1990s.

--- The second Apple mania: After falling from 1995 through 1997, Apple stock posted huge gains in 1998 and 1999 with the dot-com boom, rising 212% and 151% in those years, respectively. The stock also was fueled by excitement over Jobs’ return as interim CEO in September 1997.

The stock then crashed as the tech bubble burst in 2000. Apple plunged nearly 50% on Sept. 29, 2000, to a split-adjusted $12.88 a share, after warning that quarterly earnings would fall far short of expectations. "We've clearly hit a speed bump,” Jobs told investors.

--- The third Apple mania: After bottoming for the decade at $6.56 on April 17, 2003, Apple’s shares began a dramatic ascent as the company’s sales and earnings began to rocket. The stock reached $199.83 on Dec. 28, 2007 -- then plummeted to $119 by late-February 2008 after a disappointing forecast from the company.

The stock rebounded to nearly $190 in May 2008, then crashed again with the market meltdown later that year.

--- The fourth Apple mania: After falling as low as $78.20 on Jan. 20, 2009, the stock began the climb that took it above the $400 mark late last month.

Underpinning the runup since the start of 2009 has been explosive growth in sales and profit from iPhones, iPods, iPads and Macs. Apple’s sales have tripled from $9.08 billion in its second fiscal quarter of 2009 to a record $28.6 billion in its latest quarter, ended in June. Earnings rose from $1.79 a share to $7.79 a share in the same period.

--- For the full fiscal year ending in September, Apple is expected to earn $27.34 a share, according to the mean estimate of analysts tracked by Bloomberg News. That would be an 80% gain from the $15.15 a share the company earned the previous year.

But bottom-line growth is expected to slow in 2012. Analysts’ mean estimate for fiscal 2012 is for profit of $32 a share, which would be a gain of 17% over expected 2011 results.

--- At $376.18 on Wednesday, Apple stock had a price-to-earnings ratio of 13.8 based on analysts’ 2011 earnings estimate and 11.8 based on the 2012 estimate.

By contrast, the P/E ratio of the Standard & Poor’s 500 index of blue-chip stocks is 11.7 and 10.4, respectively, based on S&P’s estimates of 2011 and 2012 operating earnings.

Compared with other major tech stocks, Apple’s estimated 2011 P/E is below that of Qualcomm (15) and Google (14.7) but above the P/Es of Cisco Systems (13.2),  Microsoft (9.3) and Intel (8.2). Typically, the higher a company's expected earnings growth, the higher the P/E ratio investors are willing to pay.

-- Tom Petruno

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Photo: Steve Jobs waves to the audience before unveiling the iCloud storage system at the Apple Worldwide Developers Conference in San Francisco on June 6, 2011. Credit: David Paul Morris / Bloomberg

Boeing satellite-making operation in El Segundo turns 50

Boeing Co.'s sprawling satellite-making operation in El Segundo celebrated its 50th anniversary Wednesday with an event attended by high-ranking company officials, local media and politicians.

Since it was first opened in 1961, the plant has produced satellites used for research, exploration, communication, navigation, entertainment, intelligence and surveillance.

The El Segundo plant encompasses more than 1 million square feet and belonged to Hughes Space and Communications Co. before it became part of Boeing in 2000.

“We made history in the 1960s, when our team of scientists designed and built the first geosynchronous satellite, which launched the satellite industry,” said Boeing's Craig Cooning, Space & Intelligence Systems vice president and general manager, in a statement.

The company is developing sport-utility-sized satellites that are part of an $8-billion GPS upgrade that will make the system more reliable, more widespread and more accurate.

Boeing’s workforce at the plant currently stands at around 5,500. It has backlog of 27 orders. At its peak in the 1990s, Boeing had employed more than 10,000 at the complex, which is near Los Angeles International Airport.

The operation began experiencing a resurgence last year, snagging orders for several large commercial satellites, placing the company atop the large commercial satellite market.

U.S. Rep. Janice Hahn, a Democrat whose district includes El Segundo, made a speech at Wednesday's event.

"There's not a day goes by that someone on this planet doesn’t benefit from the satellites you produce," said Hahn. "This facility is key to the industrial base here in the South Bay and helps to anchor the aerospace industry in Southern California. It is a national asset that has produced nearly 300 satellites -- everything from the first communications satellite in geosynchronous orbit to the most recent GPS IIF satellite that was launched last month."

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-- W.J. Hennigan

twitter.com/wjhenn

Photo: A commercial satellite under construction for Intelsat will go through a series of rigorous tests at the El Segundo facility.  Credit: Michael Robinson Chavez / Los Angeles Times

Legislators vote to audit controversial bond agencies

California legislators voted to open an official probe of two controversial state agencies that channel money earned from issuing municipal bonds to private companies.

Assemblyman Mike Feuer (D-Los Angeles) in May requested the audit of the California Statewide Communities Development Authority (CSCDA) and the California Municipal Financial Authority (CMFA).

The Joint Legislative Audit Committee approved the request on an 8-to-3 vote Wednesday and will now conduct a full review of both agencies.

The CSCDA has grown over the last two decades into one of the largest issuers of municipal bonds in the country. It specializes in so-called conduit bonds, which allow public agencies to raise money through tax-free bonds and then channel that money to private businesses and nonprofit organizations.

At most public agencies the fees collected for issuing such bonds are used to fund other public projects and programs. The CSCDA is a public agency but it passes along most of the fees it collects -- $32 million in the last two years -- to HB Capital Resources, a private company in Walnut Creek, Calif.

A Los Angeles County staff report concluded in 2008 that the CSCDA was a "shell entity operated solely by a private contractor."

CSCDA has disputed that characterization and said it is run by a board of public officials.

The CMFA was created more recently on a similar business model with guidance from former HB Capital employees.

The business model has come under scrutiny from more traditional municipal bond issuers, The Times reported in May at the same time that Feuer issued his call for an audit.

"There are many unanswered questions about how these two joint-powers authorities operate and whether they adequately protect the public’s investment of scarce tax dollars," Feuer said Wednesday after the vote. "I am pleased that we are moving forward with a more extensive review today."

Neither agency responded to a request for comment.

The audit is expected to take several months.

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-- Nathaniel Popper

 

Owner of Daikokuya ramen restaurant pays $145,000 in overtime back wages

Employees working overtime to serve the crowds at Little Tokyo’s Daikokuya ramen restaurant weren’t properly paid for their extra hours, according to a government agency.

Los Angeles-based Daikokuya owner Bishamon Group Restaurants will pay $145,000 in back wages to 66 employees, according to the U.S. Department of Labor.

The agency’s wage and hour division found violations at seven of the company’s sites in Monterey Park, Covina, Arcadia, Costa Mesa and downtown Los Angeles. Investigators found that dishwashers, prep cooks and cooks working overtime weren’t being paid their mandated time-and-a-half wages.

Most of the employees affected were Spanish-speakers; the rest spoke Japanese.

“Our law protects workers regardless of their immigration status,” said Kimchi Bui, district director for the wage and hour division’s Los Angeles branch. “But these violations are very common. Our hope is to make sure there’s a fair playing field out there.”

As of February, there are 257,000 restaurant workers in Los Angeles County, according to the agency.

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--  Tiffany Hsu

twitter.com/tiffhsulatimes

Photo: Daikokuya in downtown L.A.'s bustling Little Tokyo. Sixty-six employees at the restaurant were not paid properly for extra hours worked, according to the U.S. Department of Labor. Credit: Jay L. Clendenin / Los Angeles Times

Regulatory group warns of gold scams

First came the boom. Then came the scams. Now comes the warning.

Individuals who have become enamored of gold amid the dramatic rise in the price of the precious metal should be on the lookout for investment traps hatched by con artists, according a warning issued Wednesday by a financial-industry regulatory group.

As the price of gold pushed to a series of record highs this year, various scams have been hatched to lure unsophisticated small investors, the Financial Industry Regulatory Authority said in a warning posted on its website.

“Even a cursory Internet search will pull up numerous websites, blog posts, investment newsletters and social media posts (including YouTube videos and Tweets) devoted to the topic of investing in gold,” the warning says. “But some of the stocks and opportunities being promoted have precious little value, and others are outright frauds.”

Authorities already have cracked down on a number of scams.

The Securities and Exchange Commission brought action against a Florida company that claimed a mining project in Ecuador had turned up gold reserves worth more than $1 billion.

In another case, the agency alleged that a Ponzi scheme bilked 3,000 investors out of $300 million. The six people charged with running the scam used free-lunch seminars to entice victims to invest retirement savings and home equity, according to the SEC.

Investors should be dubious of claims that a company’s stock price is certain to rise simply because gold prices are going up, according to the FINRA warning.

People also should be wary of companies that alter their names to associate them with gold, according to FINRA. For example, a company that claimed to do gold mining was formerly in the golfing business.

Perhaps the best disincentive could be a fall in the price of gold.

After surging dramatically over the last two months, gold fell sharply on Wednesday. Gold suffered the biggest fall in more than three years, sinking $103.60, or 5.6%, to $1,757.70.

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-- Walter Hamilton

Photo: Gold bullion at a smelting facility in India. Credit: Manjunath Kiran / EPA

Top retail districts show strength in first half

The economic downturn took a toll on landlords in the country’s most elite urban shopping districts such as Fifth Avenue and Rodeo Drive, but merchants came bustling back in the first half of 2011, a real estate brokerage said.

“The pronounced decrease in rents and increase in vacancy rates over the past few years have created opportunities for well-positioned retailers,” said Nina Kampler of CB Richard Ellis. “With tightened availability in the best locations, asking rents either stabilized or rose and tenants have been willing to pay top money for the prime spaces.” 

New York’s Fifth Avenue continues to be the top retail destination in the United States, with high national and international brands actively seeking sites. Notable transactions in the first half of the year include Zara’s purchase of the former NBA store at 666 Fifth Ave. for about $400 million.

The Beverly Hills retail market remains tight with little availability along Rodeo Drive. By the end of the 2011, the blocks of Rodeo should be 98% occupied with asking rents of $500 per square foot per year. The newest tenants to the market include Lanvin, Agent Provocateur, Vertu and Richard Mille.

The volume of leases in San Francisco’s Union Square district picked up in 2011 while rents remained flat, Kampler said. Much of the leasing activity has moved south toward the Westfield San Francisco Centre on Market Street, which recently reported annual sales of $679 per square foot, nearly double the national average for malls.

-- Roger Vincent

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Photo: Westfield San Francisco Centre on Market Street.  Credit: Los Angeles Times

 

In big turnaround, Bank of America stock soars

 
The Bank of America Corp. roller coaster has reversed course again, with its stock up as much as 11% and a host of analysts saying capital fears are overblown.

The shares, which fell to a two-and-a-half-year low of $6.30 on Tuesday, jumped as high as $6.97 on Wednesday morning before backing off a bit. They were up 59 cents, or 9%, at $6.89 in early afternoon trading in New York.

Hammered by short sellers, who make money when stocks go down, Bank of America stock took its latest blow this week when a blog said it might need $100 billion to $200 billion in new capital.

The bank issued a point-by-point rebuttal, saying blogger Henry Blodget had gotten his facts entirely wrong. Many observers agreed, with RBC Capital Markets analyst Joe Morford saying the stock price "has been detached from the fundamentals" and is now trading on rumors.

Independent bank analyst Meredith Whitney helped touch off the rally in BofA shares Wednesday morning by telling Bloomberg radio that the bank has no urgent need to raise capital and that Chief Executive Brian Moynihan is "the right guy for the job."

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-- E. Scott Reckard

Photo: Bank of America headquarters in Charlotte, N.C. Credit: Davis Turner / Getty Images

 

 

California offers "Top Gun" and "Lost Boys" to draw English tourists

 

 

 

 

 

 

 

 

 

 

The California Travel and Tourism Commission has recruited Goose, Maverick and a bunch of vampires to help draw tourists from England to the Golden State.

In the latest campaign to promote the state's $95-billion tourism industry, the commission has partnered with a British entertainment firm to show the iconic 1980s movies, "Top Gun" and "The Lost Boys" at London's Canary Wharf on Sept. 3-4.

Both movies were set in California. Although "The Lost Boys" was set in a fictitious California beach town called "Santa Carla," much of the movie was filmed in Santa Cruz. "Top Gun" was set at the Top Gun Naval Flying School in San Diego.

The films will be shown by Future Cinema, a live-event company that shows movies at unusual locations in England.

The idea behind the campaign is to promote a California lifestyle and spark interest in visiting the state.

About 683,000 travelers from Britain visited California in 2010, most of them for vacation. Visitors from Britain and Ireland generate $688 million in spending annually, according the California Travel and Tourism Commission.

-- Hugo Martin

Photo: Anthony Edwards as Goose and Tom Cruise as Maverick in the 1986 movie "Top Gun." Credit: Paramount Pictures

 

Can good online reviews be bought?

Does that bistro down the street get an awful lot of online love for its superior service, delectable menu and charming location? Those glowing reports might be the result of reviewers-for-hire, according to several recent reports.

Review sites such as TripAdvisor and Yelp wield substantial influence over indecisive consumers, a reality not lost on restaurants, hotels and even merchants on Amazon.com eager to attract clientele.

Enter the bustling business of reviewing for profit, where fake evaluators offer to post positive recommendations online for a fee.

Freelance writers are hired by “review factories” to churn out five-star love-fests, according to a recent New York Times report.

There’s so much “deceptive opinion spam” -- fictitious opinions designed to seem authentic -- that a group of Cornell researchers crafted a computer algorithm to root out the fakes. (Apparently, words including “I” and “my” show up a lot in the sham reviews.)

Though many customers seem resigned to online ratings inflation, several threads on Yelp’s talk forums feature users griping about sketchy review practices.

Among them: businesses offering gifts in exchange for positive reviews, managers creating Yelp accounts just to promote their company and cookie-cutter opining applied to multiple establishments.

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-- Tiffany Hsu

twitter.com/tiffhsulatimes

How Much More Can the Fed Help the Economy?

With the risk of another recession on the horizon, many economists and investment analysts are hoping that Ben S. Bernanke will signal on Friday that the Federal Reserve is ready to step in once again and save the economy from disaster. After all, Congress seems wholly unwilling to engage in fiscal stimulus, and instead is planning further fiscal tightening.

But there are reasons to believe the Fed’s remaining tools may be losing their potency.

Monetary policy works best when the Fed cuts interest rates, giving banks a good opportunity to extend more loans. If more loans go out to people and companies, those people and companies can buy more goods and services, creating more demand and eventually more jobs.

CATHERINE RAMPELL

Dollars to doughnuts.

Interest rates are already at zero, though (and have been for a while), so the Fed cannot lower them any further. That’s why the Fed has engaged in more unusual — in some cases, unprecedented — measures.

Dollars to doughnuts.

Twice now the Fed has engaged in large-scale asset purchasing, a process known as quantitative easing. (Hence the nicknames QE1 and QE2.) This is meant to lower long-term interest rates, which should, in theory, stimulate economic growth in two ways.

First, it should encourage more borrowing, so companies and consumers will have more money to spend.

Second, lower long-term interest rates could encourage investment in riskier assets, like stocks. Why? Because if long-term Treasuries don’t offer much in the way of returns, investors will seek higher yields elsewhere. If investors do start buying up riskier assets, those asset prices rise. Consumers then see that their portfolios are worth more, causing them to feel richer and so more comfortable with spending. This is known as the wealth effect.

But this two-pronged attack is probably less powerful today than it was three years ago.

After two rounds of quantitative easing, long-term interest rates are already quite low. It is not clear that lowering them further with a third round of quantitative easing (QE3) would do a whole lot more to encourage investment in riskier assets, or to increase lending. Many companies are choosing not to borrow primarily because demand is so weak, and not because credit is expensive.

Additionally, if investors do start increasing their investments in assets with higher yields, they may pour more money into commodities like oil. And commodity prices are already higher today than they were a year ago; pushing energy and food prices further up could actually discourage consumers from spending.

And many economists are still debating whether the last round of quantitative easing was terribly useful.

“It’s hard to make the argument that QE2 was a rousing success or we wouldn’t be on the verge of seeing QE3,” the economists at RBC Capital Markets wrote in a client note. “The market may very well get what it seems to desire, but we believe there is no magic bullet here.”

There are other measures the Fed could take besides quantitative easing. These include changing the composition, rather than the size, of the assets already on its balance sheet so that they have longer maturities. Like quantitative easing, this could lower long-term interest rates, with many of the same pros and cons. There would probably be less political resistance to reconfiguring, rather than expanding, the central bank’s debt holdings.

The Fed could also lower the interest rate it pays banks on their reserves. Maybe this would encourage them to hold less cash and increase their lending. There is some debate about how effective this measure would be. If demand for credit remains low, encouraging banks to lend more may not be helpful.

Many economists have suggested that the most powerful tool the Fed might employ would be an announcement that it is raising its medium-term target for inflation.

If prices are expected to rise, banks, businesses and consumers will be more eager to spend their money before it loses value. That could have positive effects throughout the economy, since spending means more demand for goods and services, which means companies need to hire more employees, which means more spending, and so on. That is the much-sought-after virtuous cycle.

The problem, though, is that inflation has some major downsides too — especially if coupled with sluggish growth, as seen during the “stagflation” of the 1970s. Not having a good sense of how much your next gallon of milk or gas will cost is stressful, particularly if your wages aren’t rising to match the higher prices.

Today inflation is pretty low, but it’s higher than it was a year ago when the Fed last engaged in quantitative easing. Already the more hawkish members of the Federal Open Market Committee are getting antsy. Since Mr. Bernanke cannot unilaterally carry out any of these stimulus strategies, the chances that the Fed will increase its inflation target in the near future seem low.

But hey, the Fed has surprised people before.

Good economic data send stocks up

Stocks rose again early Wednesday after new data showed that spending on durable goods rose more than expected.

The Dow Jones industrial average was recently up 32.70 points, or 0.3%, to 11,209.46 after being up more than 100 points earlier in the session.

A Commerce Department report showed that orders for things like cars and airplanes rose 4% in July, when analysts expected to see slower growth.

The figures cheered investors, though some market experts said the real test will come in the numbers from August, when businesses and consumers will have had time to react to the recent economic gloom.

The stock market has now been climbing for three straight days, including Tuesday's 322-point jump. Much of the optimism this week comes from investors looking forward to a Federal Reserve meeting on Friday at which the central bank's chairman, Ben Bernanke, could signal new measures to help prop up the economy.

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-- Nathaniel Popper

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Photo: Monitoring the markets. Credit:  Richard Drew / Associated Press 

Aircraft and autos drive up demand for U.S. factory goods

Demand for aircraft and autos helped push up orders for long-lasting manufacturered items 4% in July from the month before, the U.S. Census Bureau said Wednesday.

The semblance of promising news buoyed the stock market in morning trading.

In the largest increase since March, overall orders for so-called durable goods -- products expected to last at least three years -- rose to $201.5 billion.

Demand for vehicles and their parts jumped 11.5%, the largest run-up in eight years, as Japan’s recovery from the March earthquake smoothed out kinks in the production chain.

With American Airlines requesting 100 new Boeing 737 planes, nondefense aircraft orders soared 43.4%.

But, excluding the brisk pace of the transportation sector, orders rose just 0.7%. New orders for military aircraft and parts slumped more than 6% and machinery orders were down 1.5%.

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-- Tiffany Hsu

Photo: A 2011 Ford Escape compact SUV on the showroom floor. Demand for cars and car parts jumped 11.5% in July from the month before. Credit: Charles Krupa / Associated Press

Stocks: Is everyone too bearish?

Hedge fund manager Doug Kass of Seabreeze Partners in Florida writes some entertaining commentaries on financial markets, and isn’t afraid to go out on a limb with his predictions.

He got it wrong in spring 2009, when he warned of a possible double-dip recession by the end of that year.

But early this year Kass again warned that the economic recovery looked feeble, and he turned out to be right. He also predicted that partisan politics in Washington would weigh heavily on consumer and business confidence by mid-2011, a call that was dead-on (think: debt-ceiling brinkmanship).

Now, with global stock markets down sharply since late July, Kass argues that “everyone is too bearish,” and that the market is more likely to be bottoming than getting ready for another cliff-dive.

Early Tuesday he said he expected the Standard & Poor’s 500 index (charted at left) to bounce after “testing” the 1,130 to 1,150 range. The S&P surged 38.53 points, or 3.4%, to close the day at 1,162.35.

In a note to clients Tuesday, Kass wrote:

"Fear is pervasive . . . and even pros are acting like amateurs. How else to explain my dinner at Nick and Toni's last night in East Hampton with my friend/buddy/pal, Joe Zicherman, who, when active professionally, was an enormously successful stock broker to the stars in Hollywood? At last night's dinner, Joe and I stupidly positioned his iPad on our table as we fixated on the CNBC application and watched with bewilderment every $0.50 change in the S&P futures and every $5 change in the price of gold.

 "These sort of idiotic things don’t happen at or anywhere near market tops; they occur at or near market bottoms," he says.

Kass listed 11 “buffers” that he believes are likely to keep stocks from plummeting from here, and make for a good environment for bargain-hunters:

--- There will be no double-dip recession (the “negative feedback loop” is hurting business and consumer sentiment, he says, but other hard economic indicators don't signal a recession).

--- Short-term interest rates are anchored at zero.

--- Inflation and inflationary expectations are contained.

--- Corporate balance sheets are strong, and earnings growth has been, too.

--- Valuations, such as stock price-to-earnings ratios, are reasonable, he says.

--- 55% of the all S&P stocks now yield more in dividends than the 10-year U.S. Treasury note.

--- Risk premiums (the difference between stocks’ earnings yields and corporate bond yields) are near record levels, which favors stocks over bonds.

--- Investors' expectations are limited.

--- Hedge funds have "de-risked," meaning they've already bailed on the market. The ISI Hedge Fund Survey reports the funds’ net exposure to stocks is down to 45.8%, the lowest level in two years.

--- There has been a “wholesale abandonment” of the market by the individual investor -- $30 billion withdrawn from mutual funds in the last two weeks alone, Kass notes. That's a contrarian argument in favor of buying.

--- The possibility of a large reallocation out of low-yielding bonds and into stocks.

Just one man's opinion.

-- Tom Petruno

Good economic data sends stocks up

Stocks rose again early Wednesday after new data showed that spending on durable goods rose more than expected.

The Dow Jones industrial average was recently up 32.70 points, or 0.3%, to 11,209.46 after being up more than 100 points earlier in the session.

A Commerce Department report showed that orders for things like cars and airplanes rose 4% in July, when analysts expected to see slower growth.

The figures cheered investors, though some market experts said the real test will come in the numbers from August, when businesses and consumers will have had time to react to the recent economic gloom.

The stock market has now been climbing for three straight days, including Tuesday's 322-point jump. Much of the optimism this week comes from investors looking forward to a Federal Reserve meeting on Friday at which the central bank's chairman, Ben Bernanke, could signal new measures to help prop up the economy.

RELATED:

Stocks: Is everyone too bearish?

Stocks look past economy to focus on Bernanke

Gold slides from record high as profit-takers cash in

-- Nathaniel Popper

twitter.com/nathanielpopper

Photo: Monitoring the markets. Credit:         Richard Drew / Associated Press 

 

Local and National Stimulus

Casey B. Mulligan is an economics professor at the University of Chicago.

It’s a lot easier to move spending from one area to another than it is to create spending anew. That’s why it may be too much to ask the federal government to use its ability to spend to get the recovery going.

Today’s Economist

Perspectives from expert contributors.

In 2009 the New York Yankees opened their new stadium on the north side of East 161st Street, replacing the historic stadium on the south side of the street. Not surprisingly, 2009 spending by consumers, news organizations and entertainment businesses, among others, on the north side of East 161st Street was a lot more than it had been in years past. It all started from the Yankees’ spending at the new location.

Perspectives from expert contributors.

So a spending advocate might assert that this episode is proof that spending by one organization can stimulate spending by others, because the spending by the others on the north side of the street surged at exactly the same time that the Yankees started having their people work there.

Of course, such an analysis is flawed, because it ignores what happened on the other side of the street. Much of what happened north of East 161st Street was just a displacement of activity from the south side, rather than a creation of new activity. Even the construction workers building the stadium may well have been drawn from other tasks.

This pattern is not special to the Yankees’ move. A number of studies have shown that consumer spending associated with a sports team to a large degree displaces spending in other areas and displaces spending on other leisure activities; a family is unlikely to conclude that because there’s a new team in town or a new stadium, it should sharply increase its spending on entertainment.

Yet ignoring the displacement effects is exactly what Paul Krugman and Dean Baker have done in their praise of recent studies that use “cross-state variation in stimulus spending per capita to estimate the employment effects of the stimulus,” studies comparing states that received more stimulus to states that received less.

Spending from the American Recovery and Reinvestment Act (a.k.a., the “stimulus”) could be very much like the stadium spending — a locality that received more stimulus spending merely enjoyed a displacement of activity into its area from localities that received less spending, and that nationally little or no additional spending occurred as a result of the legislation.

If you want to know about the national effects of the stimulus, at least part of the analysis has to look at the nation as a whole. The same is true of the national effects of changes in labor supply. If one group suddenly becomes more willing to work, it is possible that the group solely takes jobs from the rest of the population, with no new jobs being created for the nation as a whole.

That’s why, in addition to looking at the experiences of specific groups and specific regions, I have examined the effects of supply and demand on national employment. (Professor Krugman and Dr. Baker assert in so many words that I ignore national employment, though my papers on the subject look very much at national aggregates. For example, see Figure 3 and Figure 6 of this paper and Table 2, Table 3, Figure 2, Figure 3, Figure 4 or Figure 5 of this paper).

I found, for example, that national employment increases during the summer precisely because young people are more willing to work. Not surprisingly, the summer surge of young job seekers does seem to reduce employment of the rest of the population, but the net national effect is still almost a million more jobs in the summer.

For now, it appears that government spending reduces private spending, even while it may benefit specific regions or groups.