Cash Crunch at NYT; $400 Million Due in May

Henry Blodgett reports that

... the company must deliver $400 million to lenders in May of 2009, six months from now. The company has only $46 million of cash on hand, and its operations will likely begin consuming this meager balance this quarter or next. The company has been shut out of the commercial paper market, but has a $366 million short-term credit line remaining that it entered into several years ago, when the industry was strong. It has not yet drawn this cash down, and given the current environment and the trends at the company, we would not take for granted that it will be able to do so.

Blodgett notes that this doesn't mean bankruptcy for NYT, but merely that it may have to sell assets to survive.

But, if the NYT can't sell assets in time, will Treasury step in and buy commercial paper from NYT? Thus extending the bailout to MSM companies? And, just how tough will NYT be on the bailout, if they become part of it?

The Clueless New York Times Expands Into Clueless Blog Posting

Last week I pointed out how ELEVEN NYT reporters missed the heart of the financial crisis:

NYT put 11 reporters on this story and they all missed the mismatched balance sheets of the institutions in trouble, they failed to point out that while Bernanke is begging for $700 billion, the Fed can print $700 billion everyday if it wants to, and they failed to point out the immediate cause of the crisis--Bernanke's crashing of the money supply over the last four months.

This week an NYT blogger, Tom Kuntz, visits the Wall Street jungle, calls out EPJ and declares Goldman isn't the lion of the jungle and that it is, I guess, a meek kitten and that all this and this is just coincidence.

Go ahead,Tom, pet the pretty kitty.

The Very Clueless New York Times

Today's NYT carries a story reported by Andrew Ross Sorkin, Diana B. Henriques, Edmund L. Andrews and Joe Nocera. It was written by Nocera. There was additional reporting by Jenny Anderson, Nelson D. Schwartz, Eric Dash, Louise Story, Michael M. Grynbaum, Carter Dougherty and Vikas Bajaj.

Written in the style of a cheap paperback thriller, it recounts the recent activity by Treasury Secretary Henry Paulson, Fed Chairman Ben Bernanke and other government officials in dealing with the current financial crisis. Yet none of these reporters reported on the key elements behind the crisis. For starters, not a word about the poorly structured balance sheets of the firms in trouble. Simply put, the financial incompetents borrowed short-term and lent out long term--a mismatch of assets and liabilities that was an accident waiting to happen. Properly matched assets and liabilities would have gone a long way toward eliminating the runs on most of the investment banks.

Botching this, the NYT reporting gets worse. They report a ridiculous statement made by Bernanke:

That Thursday evening, however, time was of the essence. In a hastily convened meeting in the conference room of the House speaker, Nancy Pelosi, the two men presented, in the starkest terms imaginable, the outline of the $700 billion plan to Congressional leaders. “If we don’t do this,” Mr. Bernanke said, according to severl participants, “we may not have an economy on Monday.

But fail to point out that while Bernanke is begging Congress for $700 billion, he has authority at the Federal Reserve to buy as much of whatever he wants, whenever he wants. Indeed, when the House failed to pass the bill on Monday, the Fed went in and pumped $630 billion into the system.

Ultimately, this crisis is about the Fed creating an economy dependent on more and more new money pumped into the system, and that the Fed stopped creating new money approximately four months ago. As we warned during the entire period here, here, here, here, here, here, here and here.

Am I justified in calling this the VERY CLUELESS NYT? I think so.

NYT put 11 reporters on this story and they all missed the mismatched balance sheets of the institutions in trouble, they failed to point out that while Bernanke is begging for $700 billion, the Fed can print $700 billion everyday if it wants to, and they failed to point out the immediate cause of the crisis--Bernanke's crashing of the money supply over the last four months.

-Robert Wenzel

Slim Takes A Fat Stake In The New York Times

Mexican billionaire Carlos Slim has taken a 6.4% stake in The New York Times Co., according to a Securities and Exchange Commission filing.

Forbes lists Slim as the world's second-richest man.

The Ochs-Sulzberger family maintains control of the company through ownership of a special class of super-voting shares.

-EPJ Newsdesk

New York Times Goes From Six Sections to Four

NYT said yesterday that it will cut back the number of sections it has in the daily paper it sells in the metro New York area beginning next month.

The change returns the paper to the four sections it printed more than a decade ago. Since 1997, it had been publishing six sections. The Sports section will now be pushed back into the Business section on Tuesdays through Fridays. The Metropolitan section will be published as part of the A section, with national and international news, on Monday through Saturday.

The change is a cost cutting move. The savings, which the paper would only describe as "significant," come from eliminating an early shift in the printing plant on certain days.

"We are not reducing the space devoted to metro or sports news," Arthur Sulzberger Jr., the paper's publisher, said in the note to staff. "This is simply a way to produce the paper more efficiently."

NYT July Revenue Falls 10.1% ; Ad Revenue Down 16.2%

New York Times Co. reports that its July revenue from continuing operations fell 10.1percent this year as advertising revenue slipped 16.2 percent.

Overall revenue dropped to $235.9 million in July from $262.3 million in July 2007, the publisher said.


A continuing drop in classified ads and cutbacks in spending by movie studios, car companies and hotels were offset only partially by a rise in revenue from media, financial services, advocacy and health care ads for a net drop of 16.2 percent, the company said.

The company's flagship The New York Times paper had 15.3 percent lower ad revenue. At its New England media group, which includes The Boston Globe, July ad revenue dropped 24.5 percent.

The company said its overall Internet revenue rose 2.6 percent with online ad revenue adding 5.5 percent, boosted by gains at its About.com Web site.

For the year to date, total revenue from continuing operations has fallen 6.1 percent to $1.73 billion.

New York Times to Raise Newsstand Price to $1.50

The New York Times Co. will increase the Monday-Saturday newsstand cost of its paper by 25 cents to $1.50.

The move comes a week after The Wall Street Journal said it would boost its newsstand price by 50 cents to $2 starting July 28 to reflect both new content and higher costs.

Not Fit For The New York Times

Approximately a week ago, The New York Times ran an OpEd piece written by Barack Obama, My Plan for Iraq. John McCain wrote a rebuttal and submitted it to NYT. According to the Drudge Report that piece was rejected by NYT. We happen to think that on the issue of war, McCain is close to a nut job. But, hey, the man is running for President and his views should be known. In this spirit, we print the entire Op-Ed piece as McCain submitted it to NYT:

In January 2007, when General David Petraeus took command in Iraq, he called the situation “hard” but not “hopeless.” Today, 18 months later, violence has fallen by up to 80% to the lowest levels in four years, and Sunni and Shiite terrorists are reeling from a string of defeats. The situation now is full of hope, but considerable hard work remains to consolidate our fragile gains.

Progress has been due primarily to an increase in the number of troops and a change in their strategy. I was an early advocate of the surge at a time when it had few supporters in Washington. Senator Barack Obama was an equally vocal opponent. "I am not persuaded that 20,000 additional troops in Iraq is going to solve the sectarian violence there,” he said on January 10, 2007. “In fact, I think it will do the reverse."

Now Senator Obama has been forced to acknowledge that “our troops have performed brilliantly in lowering the level of violence.” But he still denies that any political progress has resulted.

Perhaps he is unaware that the U.S. Embassy in Baghdad has recently certified that, as one news article put it, “Iraq has met all but three of 18 original benchmarks set by Congress last year to measure security, political and economic progress.” Even more heartening has been progress that’s not measured by the benchmarks. More than 90,000 Iraqis, many of them Sunnis who once fought against the government, have signed up as Sons of Iraq to fight against the terrorists. Nor do they measure Prime Minister Nouri al Maliki’s new-found willingness to crack down on Shiite extremists in Basra and Sadr City—actions that have done much to dispel suspicions of sectarianism.

The success of the surge has not changed Senator Obama’s determination to pull out all of our combat troops. All that has changed is his rationale. In a New York Times op-ed and a speech this week, he offered his “plan for Iraq” in advance of his first “fact finding” trip to that country in more than three years. It consisted of the same old proposal to pull all of our troops out within 16 months. In 2007 he wanted to withdraw because he thought the war was lost. If we had taken his advice, it would have been. Now he wants to withdraw because he thinks Iraqis no longer need our assistance.

To make this point, he mangles the evidence. He makes it sound as if Prime Minister Maliki has endorsed the Obama timetable, when all he has said is that he would like a plan for the eventual withdrawal of U.S. troops at some unspecified point in the future.

Senator Obama is also misleading on the Iraqi military's readiness. The Iraqi Army will be equipped and trained by the middle of next year, but this does not, as Senator Obama suggests, mean that they will then be ready to secure their country without a good deal of help. The Iraqi Air Force, for one, still lags behind, and no modern army can operate without air cover. The Iraqis are also still learning how to conduct planning, logistics, command and control, communications, and other complicated functions needed to support frontline troops.

No one favors a permanent U.S. presence, as Senator Obama charges. A partial withdrawal has already occurred with the departure of five “surge” brigades, and more withdrawals can take place as the security situation improves. As we draw down in Iraq, we can beef up our presence on other battlefields, such as Afghanistan, without fear of leaving a failed state behind. I have said that I expect to welcome home most of our troops from Iraq by the end of my first term in office, in 2013.

But I have also said that any draw-downs must be based on a realistic assessment of conditions on the ground, not on an artificial timetable crafted for domestic political reasons. This is the crux of my disagreement with Senator Obama.

Senator Obama has said that he would consult our commanders on the ground and Iraqi leaders, but he did no such thing before releasing his “plan for Iraq.” Perhaps that’s because he doesn’t want to hear what they have to say. During the course of eight visits to Iraq, I have heard many times from our troops what Major General Jeffrey Hammond, commander of coalition forces in Baghdad, recently said: that leaving based on a timetable would be “very dangerous.”

The danger is that extremists supported by Al Qaeda and Iran could stage a comeback, as they have in the past when we’ve had too few troops in Iraq. Senator Obama seems to have learned nothing from recent history. I find it ironic that he is emulating the worst mistake of the Bush administration by waving the “Mission Accomplished” banner prematurely.

I am also dismayed that he never talks about winning the war—only of ending it. But if we don’t win the war, our enemies will. A triumph for the terrorists would be a disaster for us. That is something I will not allow to happen as president. Instead I will continue implementing a proven counterinsurgency strategy not only in Iraq but also in Afghanistan with the goal of creating stable, secure, self-sustaining democratic allies.