Nick Davies writes in The Guardian that, after a second day of questioning under oath, “Rupert Murdoch is in trouble… He is vulnerable.”
The man who has made millions out of paying people to ask difficult questions, finally faced questioners he could not cope with. This is not just a matter of Murdoch losing various arguments in court. The potential danger to him goes wider in at least two ways.
First, as he found himself pushed into one corner after another, he fell back on aggression as the easiest form of defence and proceeded to create or, at least to confirm, the enmity of a string of people who may well now choose to join the attack on him. He went out of his way to smear the Daily Telegraph, took several swipes at the Daily Mail and gratuitously insulted Le Monde. He laid into former friends, including Gordon Brown and Paul Dacre; and former employees, including the former Sun editor David Yelland, his former in-house lawyers Alastair Brett and Tom Crone, and even his former housekeeper (“a very strange bird”). If any of them strikes back, he may live to regret that tactic.
—The New York Times Jessica Silver-Greenberg is good to keep an eye on banks, which are increasingly getting into the check-cashing/payday loan business and charging high fees to the poorest customers:
An increasing number of the nation’s large banks — U.S. Bank, Regions Financial and Wells Fargo among them — are aggressively courting low-income customers like Mr. Wegner with alternative products that can carry high fees. They are rapidly expanding these offerings partly because the products were largely untouched by recent financial regulations, and also to recoup the billions in lost income from recent limits on debit and credit card fees…
Some federal regulators and consumer advocates are concerned that banks may also be steering people at the lowest end of the economic ladder into relatively expensive products when lower-cost options exist at the banks or elsewhere.
Here’s a nifty product for you:
The companies distributing the cards have drawn criticism for not clearly disclosing fees that can include a charge to activate the card, load money on it and even to call customer service. Customers with a “convenient cash” prepaid card from U.S. Bank, for example, pay a $3 fee to enroll, a $3 monthly maintenance fee, $3 to visit a bank teller and $15 dollars to replace a lost card.
— Treasury likes to say TARP bailouts will turn a profit, but Daniel Indiviglio runs some numbers for Reuters Breakingviews that show the deal taxpayers got a much worse deal—one about $200 billion worse than the returns the rest of the market got:
Treasury’s rosy projections aren’t half as bad as its methodology. The government declares a return when an investment’s payments exceed the initial cash outlay. That boldly disregards the cost of money and its value over time.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum. Tags: Bailouts, Murdoch Hacking Scandal, Payday Lending, Poverty, Rupert Murdoch
By contrast, consider Warren Buffett’s bet on Goldman Sachs. In the thick of the crisis, he loaned the bank $5 billion in exchange for 10 percent annual interest and stock warrants. Goldman paid back the Oracle of Omaha a few years later. Though hanging on to the warrants may cost him in the end, even without them he booked an annualized return of 14 percent.
Compare that to TARP, which had seven broad components. Start with the banks. Treasury estimates an ultimate profit of $22 billion. Even if that’s achieved by year’s end, taxpayers will have earned a paltry annualized return of 2 percent. Simply investing in the S&P 500 index would have earned 14 percent a year.