That’s how my friend Jeff described the most recent flap over a banker allegedly using religion to defend the industry.

If you haven’t caught it, Goldman Sachs CEO Lloyd Blankfein was quoted in the Sunday London Times as saying “we have a social purpose,” in referring to the banking industry. What caught everyone’s eye was the headline: “I’m doing ‘God’s work’. Meet Mr Goldman Sachs,” something sure to inflame already raw feelings against bankers worldwide. And this comes after John Varley (the CEO of the soon-to-be-considered-vampire-squid of Britain when it shows record profits) invoked religion in talking of banking – in an inappropriate defence of British banks at church.

Quite frankly, Blankfein’s comments are not what I would consider good PR for the banking industry or Goldmans in light of the recent flap over Goldmans’ Lord Griffiths’ inflammatory comments on how Britons must:

tolerate the inequality as a way to achieve greater prosperity for all.

Remember, this is the same company pejoratively labelled Government Sachs and a vampire squid.

But, what did Lloyd Blankfein actually say? Here’s the quote from the Times.

Luckily for him and his firm, he’s a damn good salesman. He starts with a little humility. He understands that "people are pissed off, mad, and bent out of shape" at bankers’ actions. Goldman played its part in the meltdown that almost destroyed the global financial system. It, like most other banks, lent too much money, made its first quarterly loss for more than a decade last year and ended up taking bail-out cash from Washington. "I know I could slit my wrists and people would cheer," he says. But then, he slowly begins to argue the case for modern banking. "We’re very important," he says, abandoning self-flagellation. "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle." To drive home his point, he makes a remarkably bold claim. "We have a social purpose."

Do you see anything in this quote about God’s work? I clicked on this article expecting to see something outrageous of the Lord Griffiths variety. I don’t. So, why is the headline pointing to these statements as ‘God’s Work?’ I think the headline is reckless and misleading. Its sole purpose is to inflame anti-Goldman sentiment. The language of the article is construed to cast Blankfein and Goldman in a negative light. This is not what I consider the best of journalism in the least.

So, let’s look at the actual merits of what was said.

• “people are pissed off, mad, and bent out of shape” – I’m glad you realize this. But paying record bonuses doesn’t sound like you understand the gravity of the situation or how pissed off people are.
• “I know I could slit my wrists and people would cheer” – exactly. So you should be as meek as a mouse right now.
• “We’re very important" – poor choice of words, my friend. See the previous statement.
• "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle." – YES! That’s the bloody point here. I see this as an accurate statement of the social purpose of investment banking.
• "We have a social purpose." – In fact, you do.

Later, in the same article comes the money quote:

An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker "doing God’s work"

This looks to be a very damning quote, doesn’t it? Three little words. What was the context here? I’d like to see this quote contextualized like the paragraph I deconstructed above.

So, how do I see this issue?  Investment banking does indeed have a social purpose. In fact, it is the one stated quite well by none other than Lloyd Blankfein. Whether bankers are fulfilling this purpose and how much they should earn for doing so are wholly different questions (see Bookstaber’s question “Why do bankers make so much money?”). But, trying to turn this statement into a polemic against banking is despicable.

As for Blankfein’s other statements, it does not seem from what has been written that he is demonstrating the necessary contrition or humility in this particular situation which is going to cast him in a favourable light. Those three words could make him infamous. Perhaps he thought he could speak on the record in his own voice and explain away the bailout followed by the record profits and bonuses. If so, he’s deluding himself – and this piece of biased journalism and the dozens of pieces in multiple languages sheepishly picking up on the ‘God’s work’ part show why.

May the Lloyd be with you. And also with you.

Sample sources

Goldman-Sachs-Chef: "Banken verrichten Gottes Werk" – Spiegel (Germany)

Banker mit Gottes Segen – tagesanzeiger (Switzerland)

Goldman Sachs boss says banks do "God’s work" – Reuters

Topman Goldman: banken doen werk van God – NRC Handelsblad (Netherlands)

Goldman Sachs boss: ‘bankers do God’s work’ – Telegraph

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• Goldman’s need to change
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Today, I came across two attempts to clarify allegedly misleading articles in the press. Both clarifications were made in regard to how the banking system clean-up in the U.S. is proceeding. I will present them to you in as neutral a tone as I can muster.  However, I should say I am sceptical as to why these clarifications were deemed necessary.

The first is in regard to a Bloomberg News article that quotes FDIC Chairperson Sheila Bair (the FDIC cal her a chairman, but I’ll call her a chairperson).  The FDIC issued the following statement which I received via e-mail:

Statement from the FDIC Office of Public Affairs, "The Bloomberg story referencing Chairman Bair’s discussion of management and board changes is misleading and does not provide the proper context of her comments. Chairman Bair said that management changes could happen based on the capital plans that an institution must submit to the government. She did not refer to CEOs specifically and the comment was in the context of capital plans submitted by the institutions. Chairman Bair also did not suggest the federal government will remove the bank CEOs."

Transcript of the exchange from Bloomberg follows:

MR. HUNT: But in the same situation, or similar situation, the government already replaced CEOs at Fannie and Freddie and General Motors -

MS. BAIR: Yes, that’s right.

MR. HUNT: And some people say, well, why is the head of Bank of America still there? Or why are some of these other banks’ CEO’s still there?

MS. BAIR: Right, well, obviously I don’t comment on open and operating institutions. I think the review needs to go with both the management and the boards as well, absolutely. And management needs to be evaluated and is this the right skill set, have they been doing a good job, are there people who can do a better job, those kinds of questions.

MR. HUNT: Do you think some will be replaced in the next couple of months without getting into the particulars?

MS. BAIR: Yeah, I think there will be an evaluation process. We’re requesting it as part of the capital plan and yes.

The original article did not leave a lasting impression, but the FDIC statement did, so I looked it up.  Bloomberg says:

Federal Deposit Insurance Corp. Chairman Sheila Bair said some bank chief executive officers will be replaced within the next several months after the U.S. scrutinizes lenders subjected to tests of their financial strength.

“Management needs to be evaluated,” Bair said today on Bloomberg Television’s “Political Capital with Al Hunt,” to be broadcast this weekend. “Have they been doing a good job? Are there people who can do a better job?”

The FDIC and other regulators last week released stress tests results on 19 lenders including Citigroup Inc., Wells Fargo & Co. and Bank of America Corp., and ordered 10 to raise $74.6 billion in capital to withstand a “deeper and more protracted” slump than forecast by economists. Bair, in the interview, didn’t suggest the government would remove any CEOs.

“There will be an evaluation process,” Bair said. “We’re requesting it as part of the capital plan. And yes,” she said, responding to a question from Hunt about chief executives being replaced.

Chief executives at American International Group Inc., Fannie Mae and Freddie Mac were ousted by the Bush administration after the U.S. took control in September. General Motors Corp. CEO Rick Wagoner was forced out in March after the Obama administration rejected GM’s recovery plan. The CEOs of Citigroup Inc. and Bank of America Corp., which combined received $90 billion in U.S. aid, remain in their jobs.

Bair said regulators should oversee the “adequacy” of the boards of directors at banks receiving U.S. aid, Bair said.

You can read the rest of the article at your leisure. The link is below.

The second article involves MatlinPatterson, a hedge fund, and Ambrose Evans-Pritchard, a journalist at Britain’s Daily Telegraph.  I linked out to a provocative piece by Evans-Pritchard that Naked Capitalism and Zero Hedge also picked up, in which Mark Patterson allegedly calls the bank bailouts a ‘sham.’  Well, it appears that Mr. Patterson never said any such thing.  According to Zero Hedge, representatives at MatlinPatterson contacted him, stating:

The posts are based on a factually incorrect article that appeared in the UK tabloid, The Telegraph.

We have contacted The Telegraph, which has removed the article from its own site due to the fact that it fabricated, misquoted, and misstated MatlinPatterson’s position.

Just to be clear, The Daily Telegraph is one of four well-respected national dailies in the U.K. It is considered a Conservative Party newspaper. The four former broadsheets are The Times, The Guardian, The Telegraph, and The Independent.  None of these newspapers is a tabloid.

As for the original article, it was removed from the Telegraph website as a result of complaint from Mr. Patterson and his firm (see post at Zero Hedge).  Naked Capitalism has a quote from the original here.  I should also point out that the financial website Seeking Alpha has taken down an article which was based on this disputed article by Evans-Pritchard. (See article here.)

The alleged misstatements may indeed be misstatements. But, I mention all of this because it does smack of censorship.  I thought you would be interested. 

Source

Bair Says Some Bank Chiefs Will Be Replaced in Months – Bloomberg.com

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This comes via the Washington Post:

The New York Times Co. said last night that it is notifying federal authorities of its plans to shut down the Boston Globe, raising the possibility that New England’s most storied newspaper could cease to exist within weeks.

After down-to-the-wire negotiations did not produce millions of dollars in union concessions, the Times Co. said that it will file today a required 60-day notice of the planned shutdown under the Worker Adjustment and Retraining Notification law.

The move could amount to a negotiating ploy to extract further concessions from the Globe’s unions, since the notice does not require the Times Co. to close the paper after 60 days.

While this may be a ploy, it may be the real thing – the end of the line for the Globe. Even Warren Buffet sees unending losses for newspapers – not a good sign of things to come in the newspaper business.

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Last night I featured a video from Jon Stewart that skewered CNBC, and specifically Jim Cramer. The video is quite funny as Jon Stewart’s show is a comedy show.

However, since that segment aired, Jon Stewart has decided to end the comedy and take a much harder and more serious tone on this issue. Today I would like to highlight last night’s Jon Stewart interview with Jim Cramer because it is not funny. It is an indictment of CNBC, of Jim Cramer, and of the entire financial media as a complicit enabler of the most prolific credit bubble in history.

I am not making a statement here one way or another. But, I do feel these are clips everyone should see. They are quite sobering. Warning: these videos contain strong language.

Update 912AM EDT: The guys over at FT Alphaville have an interesting take on all of this. Read Izabella Kaminska’s article here: Cramer capitulates.

And Barry Ritholtz has a good take as well: Anti-Climax: Cramer vs. Stewart.

Related articles
Busted: CNBC Sleaze Jim Cramer Blabs on How He Shorted Stocks and Manipulated Markets – AlterNet
Former GOP Rep. wants Cramer ‘looked at’ for market manipulation – Raw Story

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My video for tonight is this funny segment of Jon Stewart that is a follow-up to his famous takedown of CNBC and Rick Santelli. Jim Cramer is not looking good here.

Enjoy.

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The Tribune was simply over-leveraged with a balance sheet made for this age of debt, leverage and bubbles.

Note the lack of equity and the enormous debt load. Why would anyone, especially someone as savvy as Sam Zell load up a declining business with this much debt? Was it greed, hubris? It seems inexplicable to me.

The Tribune bankruptcy was an entirely avoidable event. Yes, newspapers are declining businesses. Yes, we are in a deep recession and ad revenue is getting killed. But, this is a worthy franchise with lots of brand equity and other assets to sell. The owners got caught up in the credit/debt mania and soon they and their employees will be paying the price.  Expect more of the same later in this downturn.

The publisher of the Chicago Tribune and the Los Angeles Times declared bankruptcy on Monday as the U.S. newspaper industry’s unrelenting loss of readers and advertisers claimed its biggest victim yet.

Tribune Co, which owns eight major daily newspapers and several television stations, filed for Chapter 11 bankruptcy protection after collapsing under a heavy debt load just a year after real estate mogul Sam Zell took it private.

Like other big U.S. newspapers, Tribune is under pressure from declining advertising revenue and circulation as more people get news online and as companies cut their marketing budgets because of the economy.

“The Tribune Co’s financial condition is symptomatic of the ills that plague the newspaper industry,” said Jerome Reisman, a bankruptcy attorney with Reisman, Pierez & Reisman.

Tribune’s bankruptcy filing is the latest chapter in the unraveling of the leveraged buyout boom which saw many companies bought by private equity firms and other investors ending up with massive debt loads.

Zell loaded up the privately held publisher with about $8 billion in additional debt when he took the company private in a transaction largely financed by company contributions to an employee stock option plan.

Like other big companies which took on heavy debt burdens during the private equity boom, Tribune is now being forced to find a way to cut its borrowings to an amount it can handle.

“This process of deleveraging America, whether financial institutions or Tribune, will be a long, slow and painful process,” said Duke University Law School Professor James Cox. “That’s what’s going to prolong this recession.”

Sources
Tribune Company 10-Q, Q3 2008
Tribune files for bankruptcy protection – Reuters
What Went Wrong for Tribune Co. – WSJ

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In a shocking news story, the Wall Street Journal reports that the media company Tribune Company, which publishes the Chicago Tribune, is exploring bankruptcy.  While advertising revenue has contracted significantly, impacting all major media companies, it was not expected that this would lead to bankruptcy.  Below is a snippet of the Journal story.

Tribune Co. is preparing for a possible filing for bankruptcy-court protection as soon as this week, according to people familiar with the matter, in another sign of trouble for the newspaper industry.

In recent days, as Tribune continued talks with lenders to restructure its debt, the newspaper-and-television concern hired Lazard Ltd. as its financial adviser, as well as legal counsel for a possible trip through bankruptcy court, according to people familiar with the matter.

A Tribune spokesman said the company doesn’t comment on rumors or speculation. Tribune owns eight major daily newspapers, including the Los Angeles Times, Chicago Tribune and Baltimore Sun, and a string of local TV stations.

A spokesman for investment bank Lazard didn’t respond to a request for comment.

Tribune’s latest actions underscore the deepening distress enveloping Tribune and other newspaper publishers. Their businesses are being battered by dwindling advertising sales, and they are carrying debt loads that are unmanageable under current market conditions. Insider insiders expect some papers will need to fold or seek protection from creditors to reorganize in coming months.

Tribune has been on wobbly footing since last December, when real-estate mogul Samuel Zell led a debt-backed deal to take the company private. Tribune so far has stayed ahead of its $12 billion in borrowings with the help of asset sales. Now, however, dwindling profits are tightening the noose.

The company’s cash flow may not be enough to cover nearly $1 billion in interest payments due this year, and Tribune owes a $512 million debt payment in June.

A toxic mix of debt and a monumental downturn may well be enough to take down one of America’s most prestigious media empires. This turn of events was not entirely unexpected as the over-leveraged company had a very poor debt credit rating. It’s most recent 10-Q filing with the SEC from 10 Nov 2008 said the following:

As of Nov. 7, 2008, the Company’s corporate credit ratings were as follows: “B-” with negative outlook by Standard & Poor’s Rating Services, “Caa2” with negative outlook by Moody’s Investor Service and “CCC” with negative outlook by Fitch Ratings.

However, this will not be the last such announcement of a major U.S. company before we hit bottom.

UPDATE:  The Tribune has now filed for bankruptcy. See story here.

Source
Tribune Co. Taps Lazard,Weighs Filing for Chapter 11 – WSJ
Tribune Company 10-Q, Q3 2008
Tribune files for bankruptcy protection – Reuters

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A heck of a lot of people in the United States did not expect Barack Obama to be the Democratic nominee for President. Amongst all of his disadvantages, being Black has to rank as the most important. Race is the third rail in U.S. politics and still casts a pall over electoral politics. But, Obama has secured the nomination. Was the television series “24″ responsible?

It seems absurd on its face that a fictional character like President David Palmer in the spy series “24″ could have a real impact on the Presidential nomination contest. But, America is a place where television, film and real-life are intertwined like no other. And, in American cinema and television, Blacks have more often than portrayed drug dealers, pimps, prostitutes, and criminals than politicians, doctors, lawyers and businessman. Here are a few tidbits about the portrayal of Blacks in American media, both positive and negative.

• The first media portrayal of a Black President was James Earl Jones in “The Man” in 1972.
• In 1974, Beverly Johnson was the first Black model to make the cover of American Vogue.
• The Cosby Show, featuring an upper middle class Black family, was the top-rated show on American television in the 1980s.
• On the other hand, a Yale study from 1997 showed that national news magazines like Time, Newsweek, and U.S. News pictured Blacks 62% of the time in stories on poverty, although only 29% of people below the poverty line were Black.
• Black TV characters are more likely to be found in sitcoms than drama.
• A mug shot of a Black defendant is 4 times more likely to appear in a local television news report than of a White defendant.
• Race-unidentified perpetrators of crime are rated as having a high likelihood of being Black by Americans.

This composite of Blacks in the media is a far cry from Amos ‘n Andy. To be sure, there is still media bias. But, against this backdrop of American media portrayal came the first long-running series to have a Black man portray the President of the United States. Dennis Haysbert played the American President for five seasons on the acclaimed and award-winning series “24.”

As formal segregation has receded, Blacks have found an increasing number of roles as qualified, competent professionals in shows like Grey’s Anatomy, 24, The Cosby Show, and ER. The ‘David Palmer’ role has to rank amongst these as a defining moment in the portrayal of Blacks in American media — just in time for Barack Obama to run for President.

So, what do you think? Did David Palmer pave the way for Barack Obama?

Sources
Media and its Portrayal of Black Americans, About.com
Precedent for black president in U.S. film and TV, Jerusalem Post
Media portrays most poor people as black: study – Yale University study, Bnet.com
Media Psychology, Travis Dixon
Beverly Johnson biography, answers.com
Black TV characters more likely to appear on sitcoms and comedies, study finds, Bnet.com

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I was just listening to the Podcast of the Diane Rehm Show’s Friday Round-Up (real media file here) and I heard one of the three press ‘pundits’ (Eamon Javers, Eleanor Clift, and Stephen Hayes) defending the shoddy and fearful work of the White House press corps leading up to the war. Scott McClellan wrote a book in which he accuses the White House press corps of being too soft on the White House.

Now, these guys in the press corps are indignant. I heard NBC’s David Gregory defending himself and his colleagues earlier. Eamon Javers of Politico was incredulous. I find his defense laughable. These two men seem to want to defend the press’ honor. Eleanor Clift comes across as reasonable and logical.

These people abandoned their duty as objective, unbiased, principled seekers of the truth. They were co-opted by the White House and the culture of fear that spread in the U.S. after 9-11. They are a shameful group who have no credibility. This is one reason, many of us do not get our reporting from America’s mainstream media. I will stick with the web, British, Spanish, and German media. Thank you, very much.

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You’ve heard about the book by Scott McClellan, Bush’s former Press Secretary. Well, not only does he accuse the Bush administration of playing fast and loose with the truth, he damns the White House press corps for being too soft on him. The MSM in the U.S. is deplorable. Now, we have the spin doctor in chief saying exactly the same.

This is what Time Magazine’s blog section has to say:

“McClellan, ironically, had been criticized at the time by the press for being the frontman for a stonewalling, stingy-with-the-facts White House. And let’s face it, it may be self-serving for McClellan to be forthcoming now, in a memoir, after having enabled the very practices he aattacks now. But it is truly a sad—or, less charitably put, pathetic—situation to imagine that all the while he was standing at that podium, he was wondering why in the world the supposed jackals of the press weren’t being more aggresive with him and the White House.

Why weren’t they? I’m a broken record about this, but when it comes to press acquiesence, it’s not about ideology or corporate political dictates; it’s about following the money. Put mathematically: Financial Terror + Sense of the Public Mood = Wimpy Press Coverage. After September 11, you had a media business that was dealing with a recession and steep cutbacks and journalists who were convinced that their audience would punish them for delivering discouraging words about the President and the war. Not all journalism between September 11 and the start of the Iraq War was driven by the fear that journalists would be seen as unpatriotic—and thus revenues would suffer—but a shameful amount was. (See, for instance, the directives at CNN and MSNBC about not seeming anti-American before the war.)

If the press is more adversarial now, it’s because, after Hurricane Katrina, they believed that they had the public’s permission—and therefore a business incentive—to be.

It would be nice to believe that the shame of being called too wimpy by the guy whose job it was to keep the media in line would give the press more backbone during the next war or after the next terrorist attack. I’m not betting on it, though. It’s easier for the press to get courage, and for press secretaries to get scruples, after the fact.”

- James Poniewozik, Tuned In Blog for Time Magazine, 28 May 2008

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The Mainstream Media — MSM as they are known on the Internet. One of the main reasons I began blogging in the first place was to vent my frustration that the American MSM did not report on issues I cared about or felt newsworthy. During the Iraq war, I had to turn to the British or German press to get an accurate picture of what was happening. During the 2008 Election campaign, I have turned to the Internet and developed trusted sources their to supplement or even replace the MSM as a source of information. I have stopped watching the nightly news because it is canned and spoon-fed news designed to promote whatever agenda the MSM pundits have. I am sick of it.

So, I was happy to learn that Elizabeth Edwards, the intelligent and successful wife of former Sen. John Edwards, feels much the same way. She contributed to the New York Times with an op-ed piece entitled ‘Bowling 1, Health Care 0′ this morning on the nonsensical reporting and coverage of the 2008 election campaign. The Internet has set us free of the biases and agenda of the MSM. They cannot control us any more. We have other sources of information.

Thank God.

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I was reading a blog that reminded me to post something disturbing about biased coverage in the mainstream media (MSM). This is a little blurb on a story I caught a few days ago about all those military talking heads on the networks in the lead-up to war in Iraq. It seems those Generals were in cahoots with the Bush administration all the while. We were being manipulated and misled in the run-up to the war. Anyone who still trusts what they see and read in the MSM after reading this needs to wake up. Caveat emptor!

Read the New York Times article here. (warning: it is long).

It is ironic this article runs in the New York Times given their complicity in NOT uncovering Bush’s deceptions five years ago.

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