Tuesday, March 24, 2009

Paparazzi turning cameras to scandal bankers. A good idea, after all

The paparazzi and some tabloid media might do some
really good after all if one looks at what a very solid and
well-run investment firm, who have understandably no
sympathy whatsoever for crooked bankers and their
practices, have to say.

It began in the USA that the paparazzi and some tabloid
media turned their attention to the overpaid scandal
bankers. The Huffington Post recently pointed this out
and linked to an article in the NYT about that subject:
Paparazzi turn cameras on CEO's
And meantime this idea has caught on in the UK as well
as the Guardian reports:
Rich pickings

It might be be a good thing if this interest of paparazzis
would extent to other countries as well. It's actually quite
likely for many reasons.

And from the tabloid interest in these fat cats we come to
Greycourt & Co., a financial services adviser with lots of
experience in the financial and money market business.
They know what they are talking about. While Greycourt
focus on rather wealthy clients, what they have to say and
the insight they give in the linked - to white paper here is
basically recommended reading for poor poets, a working
poor person just the same as this paper certainly is of
interest to not so poor persons.
They could not have been much more outspoken in the
context of a white paper, providing a proper insight into
the fraudulent practices that evolved over the years and
which are far more serious in their consequences, the
problems created than one might assume. One is getting
used too easily to this mess and softballing. Time is well
spent on this nineteen pages.
Greycourt & Co.:
The Financial Crisis and the Collapse of Ethical Behavior

After being properly briefed by Greycourt's paper the
new found interest of the paparazzis is probably seen a
bit different as well. As highly necessary, probably. Apart
from adding some colour to such dry stuff, maybe even a
bit of crime, sex and money. Their attention is really
necessary because it not just takes away some unresolved
frustration, they shed by coincidence light on matters
which are existential.

They might by coincidence be of some help to take a look
who is on the board of directors of publicly traded companies,
particularly banks. Not that this requires a lot of research.
Investors have been a bit negligent over the years, didn't care
much about those board members who clearly failed in their
duty to excerise their control, their obligation of oversight
of what is going in a bank, for instance.
Here the general description by Wikipedia of the "boards",
their various funtions, what they are supposed to be there
Right now the bonuses are the outrage, the big themes.
That's just part of the story. Who was responsible for these
bonuses? The "boards". And not just that, they were also
great in their failure to exercise control when things got
- and still deteriorate further. Right now "everybody" on
these boards, including politicians, excel with "didn't know",
"nobody knew, could have seen it coming" and so forth. And
so those board members in banks have the same brilliant

And this why a bit tabloid - like attention would shed light
into a corner hitherto unfortunately neglected. If for instance
some such media would have the idea to come up with names
and faces, placating them as the ones responsible for whatever
this would be the spanner in the works. All magic and
mysterious power all too often ascribed would vanish like
morning mist in sunlight.

Let's also hope that those tabloid media digging in such
matters are not regarding people in general just as stupid.
Being not familiar with one or the other subject does not
mean a person is stupid per se. They could just as well
provide some upgrading, some learning, for the general

As we see, upgrading on some basci corparate law and
structure, to name just one theme, is basically damn easy,
no big deal at

Wednesday, March 11, 2009

The newspaper crisis: very easy to explain

The crisis and occasional closures of newspapers in the USA
and here in Europe can, from an ironic perspective, be explained
very easily, summarized to: circulation down and ad rates up.
Just recently the Rocky Mountain News in Colorado shut down
and staged the end pretty media - typical, as not many other
businesses going bust would do.

In 2004 an article appeared in a biz - journal, written by Amy
Bryer, who told of the falling circulation of the two Denver dailies,
the RMN included, that was down by 11,6 % while ad rates at
both papers were increased by 189%. This article made inter-
esting and lucid reading and got noticed also here in Europe,
inlcuding the editorsweblog.

Ever since then some sort of drama, a ratrace took place. Two
opposite strategies were pursued. The one by the more serious
ad professionals, business and tax consultants who know of the
pitfalls of advertising and ad expenses. And of course business
managers, etc. themselves who calculated and decided different
from how the media would want.
The media increased their efforts to get as much ad revenue as
possible. The efforts of ad sales reps were obviously intensified
as much as possible. And all over the place they all had the same
instrumtent: the forecasts of national as well as the global media
consumption and ad expenditures. Both were rising steadily and
permanently, like in this one by the WAN.

That was their tool, mass psychology and instrument of
persuasion at the same time. And that was the only, the
absolutely true, the holy, the only legal and anyhow best possible
criteria for businesses on which to base their advertising
The media would not know any other criteria for ad spending
than that. And would make sure no one has any other ideas in
this universe.

For a long time advertising increased like the arms race decades
ago. It was often merely to make more noise than the others.
Consumers on the other hand were not so enthusiasitic, would
all the time long not have minded somewhat less of that.

Convinced that the whole world decides and spends like told on
ads, some businesses spent like that. For a longer time they
were pretty careless and complacent about that. But only to some
extent. Basically it was clear that it was an unsustainable
situation that would come to an end eventually. The Denver
papers are surely more extreme cases of ad expenses getting
too expensive. But similar pricing strategies can certainly be
found in Europe as well. Usually it is small businesses getting the
worst deals.

For a long time printing a newspaper was considered to be some-
thing like a licence for printing money. In the USA this was more
openly talked, even bragged about, while high - earning papers
in Europe were more discreet about that. The media are not that
holy or very good people when it comes to their revenue. It is
widely known that they are fleecing their clients.

Critical investors consider newspapers risky since a longer time.
Their pricing strategy, revenue policy made it all too clear. The
share prices of newspapers have declined dramatically over the
last two years. A sure bet for short sellers. Bets that were
confirmed time and again.

The unsustainablility of advertising expenses was brought to
a climax last Christmas. For instance, both in New York, USA
and Londong, UK, shops began selling at discount prices weeks
before Christmas. Even the luxury segment had to sell at
discounted prices. A page in the New York Times costs about
$140 000,- (superficial research). A page in The Times, UK,
(circ. 1,2 million) goes up to £ 98 700,-
A page in the Irish Times (circ. 105 000) goes up to about
Euro 32 000,-, in the property even over 34 000,-. That's
(examples of) ad expenses which were splashed out rather
easily as long as people were on the spending spree, before the
credit bubble burst. But such expenses weigh heavy on shops
when the going gets tough and they have to discount prices.
Then even ten or twenty percent of former ad spending burns
a hole in the pockets of firms.

It is further possible to take a critical look at the role of the
media in the years leading to this financial / economic problems.
What Danny Schechter writes about the US media is just as
valid for European media.

Now the media companies, newspapers first of all, have to
face the music, are having the "blues". Here a look at the
stock market of a few, just as examples.
New York Times, NYT, News Corp, NWSA, or INM,
owner of, among others, the Irish Independent.

When the outgoing media threaten with doomsday scenarios,
no life on earth without them, the end of democracy and what-
ever, new media inreasingly come up. And this is probably
continuing. The more old media go out of business, the more
chances and opportunities there are for new start-ups. And
probably doing a much better job than the current ones,
even if it is just something nice centred on crosswords, sports,
recipes, etc. And also journalists are likely to find new chances
in maybe even better circumstances than now.
Intellectual sincerity is most likelyan important criteria for the
future. Not much chances for manipulators, people without any
critical reflection of media drivel, rather problematic money
and finance advising, and so forth.