The NYT has a nice story this morning on the overwhelming demand yesterday for… wait for it… newspapers!
The election of Barack Obama produced a clamor for newspapers that publishers said they had never seen. From The Cincinnati Enquirer to The Charlotte Observer to The Dallas Morning News, papers accustomed to years of declining sales pumped out extra copies by the thousands, and could not keep pace with demand…
On Wednesday morning, The (Washington) Post ordered up 150,000 copies of a special edition of the day’s paper, charging $1.50, not the usual 50 cents. As the day wore on, it raised that to 250,000, then 350,000. “I’ve been here for 21 years and I’ve never seen anything like this,” Mr. Hills said.
The Chicago Tribune planned for an extra 20,000 copies, on top of its usual single-copy sales of about 50,000. “We’ve ended up doing 200,000 more,” said Mike Dizon, a Tribune spokesman.
Papers were forced to turn their headquarters into newsstands. “We sold 16,000 copies from our lobby, where we’re not set up to sell any,” said Jennifer Morrow, a spokeswoman for The Atlanta Journal-Constitution.
I don’t think it was right or wise for the WaPo to gouge its newfound customers by tripling the cost. It’s not going to convert many into long-term subscribers that way, but maybe the paper’s given up on that by now.
And the Post is wrong to cover up its gouging in its own story on the one-day phenomenon, even while it calls out some random guy on a street corner for doing the same.
A man stood at 17th and L streets last night selling copies of The Post for $5, shouting, “Barack makes history!”
The Journal has a good report on how consumer-credit debt markets are still frozen.
Banks and other finance companies are stuck holding more loans on their balance sheets, which crimps their ability to offer new loans. That, in turn, shrinks available credit for consumers, who need it to finance an education, buy a new car, or pay for household expenses using a credit card. Banks were already reining in lending to customers as they try to reduce exposure to loans that may ultimately go unpaid.
For years, the asset-backed securitization markets fueled the explosion in consumer borrowing, as it allowed lenders to spread their risk to other investors such as pension funds, hedge funds and insurers. But the securitization pools have dried up after losses in the mortgage markets, where risk was also widely dispersed via securitized bonds.
The Journal posts a lukewarm roundup of what the Obama administration is likely to do in various areas of regulation and the economy in general.
The Times and Journal look at how Wall Street’s bonuses are likely to plunge this year, but that fall may not be enough for the public or government officials asking why there are any bonuses at all. The NYT:
In an interview on Wednesday, Mr. Cuomo suggested that even 70 percent declines for top executives might not be enough, given a financial blowup that culminated in a $700 billion federal rescue for the industry. Many critics, Mr. Cuomo among them, contend that outsize pay encouraged bankers to take outsize risks in the first place…
“Given this economic situation, how do you justify any performance bonus at all, is my initial point,” Mr. Cuomo said.
Bankers and traders have been rewarded for taking risks that Wall Street clearly failed to manage. “When you incentivize that type of behavior, you shouldn’t be surprised when you find very risky, overly creative, short-term, highly leveraged products,” he said.
I could have done with more context from both on how the bonus system works.
The Journal has a smart story reporting that consumers are buying more off-brand products now to save money in the economic downturn.
Shoppers are even buying toilet paper differently. “When they get to the end of the month, and they’re out of paycheck, they may buy a smaller-count pack,” Mr. Falk said. “You’re seeing that shift in consumer behavior during a pay-period cycle more than we maybe have in the past.”
Retailers are also sensing more shopper experimentation. This fall, supermarkets Safeway Inc. and Kroger Co. noted that sales of their store brands are on the rise. “In this economy, customers are much more willing to try a private-label item, and we’re seeing signs that this is happening more and more as the year progresses,” Kroger CEO David Dillon said on a conference call.
The Big Money has a brief post on Obama’s support of ethanol, which is surely a cynical political ploy to win Iowa votes, though the post says he’s considering the Iowa governor as Agriculture secretary, something that would be sure to continue the ethanol boondoggle. I would have liked to have seen an exploration of Obama’s ethanol policies, but I guess that leaves it for someone else to do.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 firstname.lastname@example.org. Follow him on Twitter at @ryanchittum.