Top 8 Media Conglomerates

In 1983, fifty corporations dominated most of every mass medium, including our news sources. In 1987, the fifty companies had shrunk to twenty-nine. In 1990, the twenty-nine had shrunk to twenty three. By the end of 2006, there are only 8 giant media companies dominating the US media, from which most people get their news and information. These Are:

• Disney (market value: $72.8 billion)


• AOL-Time Warner (market value: $90.7 billion)


• Viacom (market value: $53.9 billion)


• General Electric (owner of NBC, market value: $390.6 billion)


• News Corporation (that's Fox, which now owns the Wall Street Journal, market value: $56.7 billion)


• Yahoo! (market value: $40.1 billion)


• Microsoft (market value: $306.8 billion)


• Google (market value: $154.6 billion)

The market failure is that these conglomerates have become part of the establishment on which they are supposed to report. They have become beholden to short term profits and entertainment value. Corporate commercial interests have blunted their ability to speak truth to power at a management level, where the control lies.

The high-flying celebrity status of the hosts, and fear of loosing that status, creates a strong aversion to taking the risks associated with speaking truth to power.

The reduced numbers of employees in this consolidated industry make even the technical jobs rare plums. Thus, young people who want a job in the media industry will tend to do what ever management wants... no questions asked. It doesn't matter if these young people, and the vanishing news reporters, are "liberal"; they don't pick the stories to be covered and don't decide what makes it into print or on the air.

Bottom line is that the media industry reflects corporate conservatism, not liberalism.

Phony Wells Fargo "Profits"?

If we've only learned one thing from the financial industry melt-down it's that we can't trust the establishment. Can't trust the big financial institutions, can't trust most of the regulatory agencies, can't trust the White House or Treasury (regardless of which party is in power), can't trust the rating companies, can't trust the establishment media to give us the truth.

So, when I read the headline "Stocks jump on Wells Fargo surprise profit announcement" I'm very suspicious. And we have reason to be.

That's because, you can't trust Congress or the little known Financial Accounting Standards Board (FASB) either. The FASB may be perpetuating the shell game under pressure from Members of Congress that represent the big financial institutions.

In short, during a hearing of the House Financial Services subcommittee on March 12, FASB chairman Robert Herz was strong-armed to let banks, say Wells Fargo, inflate the value of their assets, with the hammer coming down in this final exchange:

Chairman Rep. Paul Kanjorski (D-PA): You do understand the message that we’re sending?

Herz: Yes, I absolutely do, sir.

Here's the way Democrat Kanjorski wants the shell game to be played.

Assigning (Marking) Value to Bank Assets: The value of financial industry assets can be determined in a couple of ways. One way is to let the market determine the value... see what someone will actually pay for the assets. That's known as marking the value of the asset to market (Mark-to-Market).

Another way of assessing value is to create a mathematical model of the value and use that model to mark the asset's value (Mark-to-Model).

Guess which way Kanjorski was pressuring the FASB chairman Herz to let the banks mark their asset values? Mark-to-Model. Tweak the model to assign a little more value to the assets and voila, Wells Fargo "surprisingly" reports a profit.

Bloomberg offers the take from former Lehman Bros. managing director, Robert Willens:

“By letting banks use internal models, instead of market prices, and allowing them to take into account the cash flow of securities, FASB’s change could boost bank industry earnings by 20%.”

Read More Details...

Psssst... Do Something

• Contact the Broadcast Media
  
• Contact the Newspapers
  
• Contact the US Senate
  
• Contact the House of Representatives

Sources:

Wiskey and Gunpowder, Tomorrow Mark-to-Model Returns with a Vengeance, Samantha Buker, April 1, 2009 (no fool'n).

The Market IS Self-Correcting

Commercial banks and speculative investment banks should NOT be allowed to blend operations. The market knows this and is dealing out its punishment to those who violated this principle. One person in particular who is being punished is former Treasury Secretary Robert E. Rubin.

The following excerpt is from a New York Times article to which Paul Krugman links in his blog on Citigroup's crisis.

[Citi]bank’s downfall was years in the making and involved many in its hierarchy, particularly [CEO] Mr. Prince and Robert E. Rubin, an influential director and senior adviser.

Citigroup insiders and analysts say that Mr. [Charles O.] Prince and Mr. Rubin played pivotal roles in the bank’s current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.

When he was Treasury secretary during the Clinton administration, Mr. Rubin helped loosen Depression-era banking regulations that made the creation of Citigroup possible by allowing banks to expand far beyond their traditional role as lenders and permitting them to profit from a variety of financial activities. During the same period he helped beat back tighter oversight of exotic financial products, a development he had previously said he was helpless to prevent.

Try to cheat the market, and the Country, and the market will punish you. And to think that Obama has been taking advice from Rubin. That might be coming to an abrupt end.

Update:

Citigroup said Friday it is splitting up into two businesses as it reported a fourth-quarter net loss of $8.29 billion — its fifth straight quarterly loss.

There has been harsh blame for Citigroup's woes directed at the board, too — and the company said Friday it plans to get rid of more board members after the recent departure of long-time director and former Treasury Secretary Robert Rubin. [2]

Sources:

New York Times, Citigroup Saw No Red Flags Even as It Made Bolder Bets, November 22, 2008.

2. Associated Press, Citigroup posts $8.29B loss, splits up the company, January 16, 2009.

Graphic Credit: Egg on Face, GDAEman.

The Crash of 08?

Will today's date become famous in future history books? It already has in Hong Kong.

Those who know the US economy is running on borrowed .... money, and time, have wondered, "Will it come as a rapid crash or a slow, grinding decline?" Judging from the following numbers, it might be the former, and the time might be now.

Japan's Nikkei 225 index nose-dived 5.7 percent -- its biggest percentage drop in nearly 10 years -- to 12,573.05, a day after falling 3.9 percent. Australia's benchmark index sank 7.1 percent, the market's steepest one-day slide in nearly 20 years.

Hong Kong's Hang Seng index, which slumped 5.5 percent Monday, finished down 8.7 percent. In China, the Shanghai Composite index lost 7.2 percent to 4,559.75, its lowest close since August.

I sit here at 5:30am thinking, "Should I move my investments into cash?" Since I don't play around with my money that much, 1) I'm not sure I'd be able to do it rapidly, and 2) I'm not sure it would switch over quickly enough to avoid getting caught in today's pending crash here in the US.

Geeez! Hong Kong, 5.5% Monday and another 8.7% Tuesday. That's nearly 13% in two days.


Sources:

Associated Press, Asian Markets Tumble on US Worries, Yuri Kageyama, January 22, 2008.

Thanks to the comment below. Correction made.

Stock Market Domino Effect

7:00am EST

Markets in Asia and Europe fell again Monday, extending their slide into a second week as investors worried about a possible global "domino effect."

"When there's such a big market move in such a short period of time, there's that element of surprise and confusion," said Teruhisa Ishikawa, section chief for investors information at Mizuho Investors Securities Co.

"Everything takes a back seat relative to the sell-off that we are seeing," said Jose Vistan, research director at AB Capital Securities in Manila, Philippines, where the benchmark index sank 4.5 percent. "I don't know where the domino effect will stop."

Analysis

Possible motivations: Yen's jump to a three-month high against the dollar as investors reversed so-called yen-carry trades. In the US, markets were concerns about mortgage defaults and foreign markets.

Update:

The Dow Jones Index finished 63 points lower, having fallen in eight of the last nine sessions for a total loss of 4.6% in value since the market deflation started last Tuesday.

The Nasdaq composite index -- which is dominated by riskier technology and smallcap stocks -- dropped 27.32, or 1.15 percent. The Nasdaq has lost about 7% of its value since the slide began last Tuesday.

HSBC Holdings PLC, Europe's largest bank, said it suffered $10.6 billion in losses in 2006 on bad loans from its U.S. subprime mortgage operations. More on Real Estate.

Sources:

Extensive quotes from Associated Press, AP, March 5, 2007, "Markets across Asia plunge," YURI KAGEYAMA.

Associated Press, AP, March 5, 2007, Madlen Read,
Dow Ends Down 64, Nasdaq Drops 27 After Erratic Session Amid Worries About Mortgage Defaults

The Free Market: Ain't it Great?

The U.S. military has sold forbidden equipment at least a half-dozen times to middlemen for countries -- including Iran and China -- who exploited security flaws in the Defense Department's surplus auctions. The sales include fighter jet parts and missile components.Read More.

Source:

SHARON THEIMER, Associated Press Writer, January 16, 2006. Iran gets army gear in Pentagon sale