WSJ What’s News - Wildfires Intensify Around Los Angeles

Episode Date: January 8, 2025

P.M. Edition for Jan. 8. Two people are dead and thousands ordered to evacuate as multiple blazes in Los Angeles County push firefighting resources to their limits. WSJ reporter Sara Randazzo reports from Pasadena. And a prominent Chinese economist made comments about his country’s government last month, infuriating Chinese leader Xi Jinping. Chief China correspondent Lingling Wei tells us what this says about the state of the Chinese economy. Plus, with lots of office space sitting empty, Wall Street Journal reporter Peter Grant joins us to talk about the top-tier space in high demand. Alex Ossola hosts. Sign up for the WSJ's free What's News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

What's in this McDonald's bag? The McValue Meal. For $5.79 plus tax, you can get your choice of junior chicken, McDouble, or chicken snack wrap, plus small fries and a small fountain drink. So pick up a McValue Meal today at participating McDonald's restaurants in Canada. Prices exclude delivery. Wildfires around Los Angeles are spreading, covering tens of thousands of acres and leaving at least two people dead. We hear from our reporter on the scene.

And why Xi Jinping is punishing one of China's top economists and what that could mean for investors. The Chinese market has become so much more opaque. It is a problem for investors both inside and outside China to understand what's going on there. Plus, though lots of offices are still sitting vacant, certain spaces are seriously in demand. It's Wednesday, January 8th. I'm Alex Osala for The Wall Street Journal.

This is the PM edition of What's News, the top headlines and business stories that move the world today. Multiple wildfires are devastating the Los Angeles area and stretching the region's firefighting resources to their limits. There are now at least four fires, the Palisades, Eaton, Hearst, and Woodley fires. They're covering more than 20,000 acres as firefighters contend with strong winds and low humidity.

The Los Angeles Fire Department says that as of this morning, fires have destroyed over 1,000 structures and killed at least two people. Seventy thousand LA area residents are under evacuation orders. Wall Street Journal reporter Sarah Randazzo joins us now from Pasadena, where the Eaton fire covers more than 10,000 acres. So Sarah, you're in Pasadena. What is the scene like there? What have you been seeing? Yeah, so I left my house around 5.30 or 6 this morning and went first to an evacuation center at the Pasadena Convention Center. And there was hundreds of people there, hard to get an exact count, but lots of dogs, one person who had a cage with some birds. People

had just evacuated there from all over the area in the hills behind Pasadena. And so I went around talking to people and heard a range of stories. Most of them had either gone to bed not realizing there was a problem and gotten woken up at two or three in the morning. Some people made it until six in the morning and then got the evacuation orders. And so everyone was just fearful for what they would find when they went back home. Wow, that sounds quite dire. What is it about these fires in the LA area that are making them so difficult to contain? I spoke to someone with the US Forest Service here at the Rose Bowl, which is serving as

the command center for this fire. And so he was telling me that they got a heads up at least a week ago that there was going to be these strong Santa Ana winds happening starting yesterday. So they knew there was a high chance of fire risk. So they sent hundreds of firefighters to LA from all over the state and even out of state. And so they were here ready, but once these fires started, he said they haven't even been able to try yet to contain the fires. Usually the first thing you want to do is create a perimeter, try to kind of contain the outside of the fire so it doesn't spread and just try to gradually chip it down from

the outside. But he said they've done zero containment so far because the winds are so strong, they just haven't been able to get a handle on it. So instead, they've just been focusing on essentially search and rescue and evacuation and saving people's lives, getting them out of harm's way, trying to stop spot fires from starting up and spreading. He said some embers were flying a mile away from where like the main fire line was. And so they have fire crews all around looking for places that embers are going to be landing in other neighborhoods to try to put out those smaller fires because that's something they can do while the main fire essentially rages

on unchecked. So authorities might not have been surprised, it sounds like, by these fires, but a lot of residents were, even as firefighters are having trouble containing them, as you were saying. So all this seems like it happened really fast. What might the next 24 hours look like in terms of containment and evacuation? Yeah, so hopefully nothing new breaks out today. And there's obviously more than enough to handle with the three fires in Los Angeles area right now.

And so they'll just try to hopefully get containment as the day goes on. They haven't been able to send aircraft up in the air. Usually helicopters and other aircraft can go over fires and dump fire retardants. They haven't been able to do that. So hopefully if the winds die down, they can start doing that. And in the meantime, the evacuation orders really just keep spreading. In some places, they're just trying to get more and more people out of potential harms way.

You know, nothing has abated. So it's going to get probably worse before it gets better. That was Wall Street Journal reporter Sarah Randazzo in Pasadena. ——————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————— money paid to an adult film star. The sentencing is currently scheduled for Friday. Last year, a New York state jury convicted Trump of 34 felonies for falsifying business records. Judge Juan Marchand, who's presiding over the case, has made clear that he would not sentence Trump to prison and that an unconditional discharge, or a sentence without any punishment, was quote, the most viable solution. China's economy Prominent Chinese economist Gao Shenwen

made some comments about his country's government that have landed him in hot water. Gao cast doubt regarding Beijing's ability to take the steps needed to bolster economic growth and questioned whether China's economy really grew the 5% that authorities have touted. Here he is speaking at a forum in Washington last month. My own speculation is that in the past two to three years, the real number on average

might be around 2%, even though the official number is close to 5%. According to people familiar with the matter, Chinese leader Xi Jinping was furious when he found out about these comments. They said he ordered an investigation of Gao Shanwen and then ordered authorities to discipline the economist by banning Gao from speaking publicly for an unspecified period, though for now, Gao has been allowed to keep his job. Wall Street Journal's chief China correspondent Lingling Wei is here now with more on what this means.

Lingling, it's not the first time that she has taken action against people he thought were criticizing him or his government. What's different here? You're right, Alex. This campaign to snuff out dissent has been going on for quite a while because there has been so much more sensitivity

over China's economy, given the mounting problems they're facing. What's different here now is number one, Dr. Gao made those remarks in Washington and it was live streamed and that added more problems for him because it's at a time when Beijing really wants to project strength as another trade war with Washington looms. And also what's different is that we have seen increased efforts from authorities to basically stamp out any kind of negative commentary about economy, which is really problematic. You know, the Chinese market has become so much more opaque. It is a problem for investors both inside and outside China to understand what's going on there.

You mentioned investors. What do they make of this treatment of this economist? There was definitely some kind of shock among some investors we talked to. From a lot of people's perspective, it's just another sign of how bad the economy has become. Dr. Gao has been known as quite a outspoken economist. He's frequently advised regulators

on economic and financial policies. And he's got a lot of credibility. So clamping down on someone like him definitely is not really a good sign showing your confidence in how things are going. That was WSJ Chief China Correspondent Lingling Wei. Thanks, Lingling. Thank you for having me. Coming up, at a time when a lot of office space is sitting empty, why are some offices

in high demand? That's after the break. U.S. stocks were mixed today as U.S. Treasury yields rose. A steep climb in yields can be destabilizing for the stock market by lifting borrowing costs across the economy. The S&P 500 was up about 0.2 percent, the Dow was up about a quarter of a percent, and the Nasdaq was down less than a tenth of a percent. In many cities across the U.S., would-be office space continues to sit empty.

According to Moody's, the national office vacancy rate for primary markets ended 2024 at a record 20.4 percent. But some business districts are contending with the opposite problem. They don't have enough top-shelf real estate to meet demand. Peter Grant, a reporter for The Wall Street Journal, is here now with more. So Peter, paint us a picture. What kinds of office spaces are we talking about that are in such high demand? What we're seeing right now is an astonishing disconnect between the broader office market

and what I call the primo space, the space at the top of the market. The reason for this is that what's happening is that companies want employees to return to offices. And to do this, they feel like they have to offer them the most attractive space, the space closest to transit with the best views and the greatest amenities like rooftop decks and food and beverage offerings. And this space is going fast in a lot of markets while the rest of the market has been languishing.

What are some of the places where the demand for high-end office space is greater than the supply? In New York, look at Park Avenue or look at 6th Avenue. Some of the vacancy rates in these business districts are getting into the single digits. You are also seeing a lot of demand in places like the Brickell district of Miami or Century City in the Los Angeles region. But surprisingly enough, even in the markets that are saturated with surplus space like Chicago and Washington, D.C., developers there are beginning to think about new development. A law firm which

has agreed to lease half of a new building that a company named BXP has just announced that it's going to start developing about three blocks from the White House because there wasn't enough highest quality space for that law firm when they were conducting their space search. So they're getting on the ground floor of this new property. Well, they're actually getting in on the top floors of it. But yes, in a sense, they're getting in on the ground floor. You know, Peter, this trend really seems like quite a big shift in the market and also in

terms of who's holding the cards here, right? It seems like offices were begging tenants to come back and now maybe it's flipped a little bit. It is beginning to flip. If you roll back the clock a couple years, in the years immediately after the pandemic hit, there was some question about whether or not we were just going to move to remote work completely. That issue was resolved and companies began adopting what they call hybrid workplace strategies. Slowly, that's now beginning to shift, and companies are pressing workers

to come back even more and more. The pressure is beginning to build in that direction of four days, and even some companies are going to five days. That was Wall Street Journal reporter Peter Grant, and that's what's news for this Wednesday afternoon. Today's show is produced by Anthony Bansi and Pierre Bienamé with supervising producer Yolanda McBride. I'm Alex Osela for The Wall Street Journal. We'll be back with a new show tomorrow morning.

Thanks for listening.