It takes a while for the traveler to get used to Australia. He picks up the phone to call home and can’t quite figure out what time it is back in Kokomo or London; then he realizes that he can’t call anyone – they’re asleep. He reads the news and can’t figure out why the paper doesn’t report yesterday’s stock market close. Then he realizes that back in New York it still is yesterday.
We’re writing this on Wednesday morning. But it’s still Tuesday afternoon to most Dear Readers.
“I like reading the DR,” said an Aussie investor last night, “but what I object to is that it is so long. Couldn’t you just save up your thoughts and put them in a simple message at the end of the week? Do you have to make us read so much to get the gist of it?”
Well, today we will keep it short. First, because less has happened – the day is still barely half over in North America. Second, because we have to rush to get on a plane to Los Angeles. And third, because we want to give long-suffering readers a break.
In that spirit, today we pass our own words through a kind of verbiage distillery and drip out the following moonshine:
Don’t think so…
Nope, one to go…
*** For those who like a little branch water with their hooch, we offer the following cogitation:
Poor Sam Zell! One of the smartest guys in real estate turned out to be one of the dumbest guys in the newspaper business.
Let’s face it, you don’t get much prestige grubbing for money in bricks and mortar. Everyone knows it’s a grimy trade, dominated by tough old birds with no heart. But newspapers! That’s a different story. A newspaper publisher is at the top of the social pecking order…because they can peck anyone they want on the editorial pages. And, heck, they don’t admit it…but they can peck on the news pages too. Editorial…news…sometimes you can’t tell the difference anyway.
So poor Sam Zell sold out his property empire at the very peak of the bull market…and used his cash to buy the Tribune – publishers of newspapers in Chicago and Los Angeles. He didn’t seem to realize that the newspapers were in trouble already – they were losing out to on-line news and opinion publishers. And now, with the falloff in advertising revenue, it looks hopes for a lot of newspapers. In small towns, for example, the local auto dealers took pages of advertising. And the local builders filled the rest of the rag.
But Sam Zell went ahead and bought the Tribune…and maybe he did some pecking…and maybe he didn’t get around to it. Because the papers have been in trouble financially since he bought them; that must have taken up his time and attention. And now they’ve gone broke.
But Zell has plenty of company. More firms are going broke every day. And others are desperately trying to stay in business by cutting payrolls. Sony, for example, announced 16,000 job losses yesterday.
We’ve done our part to help the airlines…but the industry is facing $5 billion in losses for 2008.
And Paulson has only $15 billion left of the $350 billion first draw for his deflation-fighting campaign. What happened to all that money? Well, it’s gone into the pockets of his friends and cronies on Wall Street. Bailouts…loans…nationalizations…that’s the way the new system works. The only big money being spent is money that doesn’t belong to the people spending it.
*** And the fix is in for Detroit too. At least, that’s what it says in the paper…that a “deal is close at hand.”
Whew…what a relief. What would we do without GM?
We’d have to buy cars from one of the dozens of other car manufacturers in the world.
We’ve got more to say…specifically, about “balanced portfolios”…about the next big bubble…and other things. But we have no more time to say them…
So, we sign off for today…
The Daily Reckoning Australia