The Wall Street Journal takes a withering A1 look at the performance of Securities and Exchange Commission chairman during the credit crisis. The paper makes Chairman Christopher Cox out to look like the Jimmy Cayne of the regulatory set, fiddling while Wall Street burned.

The paper’s lede says Cox missed a big conference call with the “chieftains of U.S. financial regulation” on the weekend of the Bear Stearns bailout. We’ll let the Journal do the talking here:

Big crises put Washington’s regulators to the test. At pivotal times during the current financial turmoil, Mr. Cox has appeared peripheral. The next night, as Fed and Treasury bosses negotiated a bailout, Mr. Cox was at a birthday party. He was missing from a Sunday conference call announcing the sale of Bear Stearns and the Fed’s plan to lend funds to investment banks. The following weekend, he left town for a family vacation.

The Journal writes that former SEC chairmen are complaining about the current regime’s lackadaisical approach, including his un-bureaucrat-like acquiescence to a Treasury Department plan that would dissolve the SEC. It writes that the top Wall Street executives say “they have barely spoken with Mr. Cox over the past year, in contrast to the frequent chats they say they had with past chiefs.”

The paper says it got a two-hour interview with Cox in his office to grill him about his weak-sauce efforts. That must have been excruciating for all involved, because the embarrassing quotes from Cox defending his job performance are painful reading. The WSJ goes into detail about his non-presence and says he didn’t inform one of his fellow commissioners about the unfolding events during the Bear bailout weekend.

And then just after Wall Street narrowly averted total meltdown, Cox went off to the Caribbean for vacation for a week.

The paper writes on A3 that the SEC and Federal Reserve are near a deal to share information and “redraw” how regulation on Wall Street.

Blood on the Street

Citigroup and Goldman Sachs are moving to slash their workforces in a bid to cut costs amid the wreckage of the credit crisis.

The Journal says on C1 that Citigroup is firing 10 percent of its investment-banking workers, a move that means about 6,500 will be out of work beginning today. The Financial Times notes the same news on its page one but leads with Goldman Sachs also cutting 10 percent of its investment-banking employees—confirming a Reuters scoop from last week (although as Bloomberg pointedly notes, the paper does so “without citing anyone”). And Goldman is the best off of the Wall Street giants.

The companies’ units have faced big losses from their underwriting and deal volume has dropped dramatically, too.

The Journal says the Citi layoffs are “unusual in their scope and severity” and will hit senior-level employees. It says the bank has already gotten rid of 9,000 jobs so far (13,000 says Bloomberg). Bloomberg gives context the Journal doesn’t, noting that the bank already had “signaled” 6,000 layoffs in its i-banking unit in March—apparently these are in addition to those.

The FT says “Goldman’s heightened pessimism… could prove a pretext for other banks to wield the axe with greater force.” But the paper buries in the second-to-last paragraph news that the bank will increase its overall headcount in 2008.

The loss of these high-paying jobs will be a blow to the economy, especially in New York. Bloomberg reports that big banks and brokerages have eliminated more than 80,000 jobs globally already since the crisis began.

Globalization at work

The Journal on page two reports that of the $2 billion a day the U.S. has to import from overseas every day to finance its current-account deficit, a “stunning” 39 percent comes from emerging markets like China and Brazil. Quote of the Day:

“Not only are we addicted to other people’s money, but the money we’re addicted to is from the poor countries,” says Joseph Quinlan, chief market strategist at Bank of America.

The paper says that’s a result of the savings glut overseas and because the countries are buying dollars to protect themselves after the Asian “flu” a decade ago. It notes that the investors are getting much lower returns here than Americans are overseas but that has been compensated for by the stability of the U.S. system, something that doesn’t look so great anymore.

But it would have been nice if the Journal had tried to spell out what might happen if the overseas investors began to suddenly pull out their assets. Instead it just bites around the edges, noting that we’re increasingly dependent on undemocratic regimes to prop us up.

More oil; less oil

Saudi Arabia said it will pump 200,000 barrels a day more oil for the rest of 2008. The FT says on its page one that is “completely negated” by a drop in production by Nigeria, where oil facilities continue to be attacked. Late last week, Chevron and Royal Dutch Shell said attacks would keep nearly 350,000 barrels from reaching the market through July.

But in a surprise move, Saudi Arabia said it will push its production capacity to 15 million barrels a day from 11.4 million. The Journal is skeptical:

A capacity increase of that magnitude would be extraordinary for a country that has never produced more than 11 million barrels a day. To get there, Saudi Arabia would have to squeeze greater quantities of oil primarily from huge fields that have been in production since as far back as the 1940s—far from a simple task.

Bloomberg says oil prices rose anyway.

The Journal reports on A7 that speculation now accounts for 70 percent of trading in benchmark oil, nearly double the total 37 percent it did just eight years ago. That’s according to a congressional subcommittee that’s investigating whether Wall Street speculation is driving the energy-price boom.

Bush administration officials, Wall Street banks and federal regulators have taken the position that speculation has played a minimal role in the recent surge in oil prices. But a diverse chorus of institutions and politicians is taking a different view, including the International Monetary Fund, the Saudi Arabian government, some big oil companies and both major presidential candidates.

The main targets of critics of speculative oil trading are pension funds and investment banks that never take physical custody of oil, but instead invest in oil futures contracts as a way to hedge against inflation and diversify their portfolios.

Obama said he would close the “Enron loophole” that prevents government oversight of energy trading, and push for more regulation of energy markets, the Journal and the Associated Press report. McCain has voted against the loophole.

Candidate of the corn

Speaking of Obama, The New York Times on A1 reports on the Democratic nominee’s advisers’ close ties to the ethanol industry, which his positions have supported.

McCain advocates eliminating the billions of dollars of subsidies that the ethanol industry gets a year, and McCain is right.

As a free trade advocate, he also opposes the 54-cent-a-gallon tariff that the United States slaps on imports of ethanol made from sugar cane, which packs more of an energy punch than corn-based ethanol and is cheaper to produce… Mr. Obama, in contrast, favors the subsidies, some of which end up in the hands of the same oil companies he says should be subjected to a windfall profits tax. In the name of helping the United States build “energy independence,” he also supports the tariff, which some economists say may well be illegal under the World Trade Organization’s rules but which his advisers say is not.

We’re sure the ethanol stance was critical for Obama’s campaign in that it helped him win Iowa, but it’s just bad policy. Good reporting by the Times in raising this issue.

Capital spigot starts to close

The Journal on C1 writes that the capital that investors have poured into troubled banks appears to be drying up. It reports that KeyCorp, for instance, had a difficult time raising capital earlier this month to shore up its balance sheet.

The change in sentiment could have sweeping implications for financial institutions that are trying to shore up their balance sheets by issuing stock and other securities to their investors. Some may be forced to lure investors with sweeter terms, further raising the costs of doing these deals.

The WSJ says most of the rescue capital that’s been dumped into banks has lost value, in some cases by more than 40 percent.

Monolines wipe out

The FT reports on page one that the monoline bond insurers, which were finally downgraded last week by the last of the credit-ratings holdouts, are in discussions with Wall Street about “wiping out” $125 billion of coverage on credit-default swaps in order to contain the fallout from the insurers’ woes.

How would this work? Hard to tell from the FT’s story.

Rumble in the terminal

The New York Times on C1 reports that the relatively recently merged Thomson Reuters is gearing up to take on Bloomberg in financial news and data.

It plans to do that by going after Bloomberg on price, which ought to not be too hard considering the service costs $1,500 a month per terminal. Thomson Reuters plans to offer parts of its services instead of Bloomberg’s all-or-nothing offering. Bloomberg says price doesn’t matter for its customers, but the Times follows that with an interesting paragraph:

Some analysts disagree. Brad Hintz, a bank analyst at Sanford C. Bernstein, said that the high price of Bloomberg terminals meant that he did not qualify for one when he was the chief financial officer of Lehman Brothers. That firm, he said, had an executive who was constantly on the hunt for Bloomberg terminals that were not being used. If no one claimed it, Mr. Hintz said, the executive “would grab the terminal and rip it out of the trading turret and carry it off the trading floor triumphantly.”

Newspapers revenue deteriorating even faster

The Times on C3 reports that newspaper advertising revenues this year will be the worst on record—with double-digit declines in store. The story is beyond bleak. We’re now getting into the at-least-some-newspapers-are-going-to-go-bankrupt-soon phase. The paper says The San Francisco Chronicle is losing a million bucks a week.

So far this year, ad revenues are down 12 percent and the decline picked up speed last month. The worst part—those are on “weak comps” as they say on Wall Street: meaning the comparable numbers from last year were already down big (8 percent overall in 2007).

The industry will not bottom out for another three or four years, analysts predict. The question, Mr. Appert of Goldman Sachs said, “is how far things will fall before then.”

Wikipedia scoops NBC on Russert death

The Times writes that NBC News held back reporting Tim Russert’s death for more than an hour, something that allowed Wikipedia to scoop it. NBC says it didn’t want Russert’s family to hear about it on the air, but we doubt it would have extended that consideration to any other public figure.

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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 rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.