The WSJ, in a C1 Heard on the Street column, disagrees, saying the latest wave of capital infusions by big banks shows the credit crisis isn’t over. It says the 10 percent increase in bank share prices over the last six weeks may be a “just another head-fake.”

This rally ignores what are likely to be mounting credit losses for both consumer and commercial loans because of the weakening economy and the continuing housing crisis. That means any assumption of a return to normal profit levels is about three years too early, according to a report earlier this week by Morgan Stanley analyst Betsy Graseck.

The Rent-A-Center racket

Good work by the WSJ in a report on A4 that Rent-A-Center, which it calls a “rising power in the payday-loan industry,” put the squeeze on food banks who lobbied for caps on the rapacious interest rates the racket charges.

The paper says Rent-A-Center execs threatened to quit giving the $500,000 it has pledged to the charities unless they quit their lobbying efforts in Ohio, which yesterday passed a law limiting payday loans to 28 percent annualized interest and four loans of $500 per borrower per year.

The Journal dryly notes in the next sentence that “Rent-A-Center currently charges interest rates on one-week payday loans that are equivalent to an annual rate of as much as 782%, according to a company Web site.”

Rent-A-Center’s efforts worked. The food banks backed down.

Newsday plot thickens

The Journal scooped online yesterday (and puts on B1 today) that Cablevision will bid as much as $650 million for Newsday, raising the stakes in the battle over the paper, which Tribune Company agreed in principle to sell to Rupert Murdoch’s News Corporation last week. As Sam Zell has said, people sure want to pay him a lot of money for a piece of this dying industry.

The paper notes that Cablevision would face fewer regulatory hurdles than would Murdoch or the other bidder, New York Daily News owner Mort Zuckerman, who equaled the $580 million Rupe bid on Friday. But the WSJ says it might face problems with the company’s own shareholders.

The Journal says it isn’t clear whether Cablevision was proceeding with New York Observer owner Jared Kushner in a joint offer, but Newsday and the NYT say it is not.

The Times says the company “may be working with a partner” but its sources wouldn’t identify who it might be.

Thanks, but no thanks

The Los Angeles Times says a lot of banks and investors are willing to cut the terms and payments for borrowers under water on their mortgages, but our Quote of the Day shows how bad the housing bust really is—prices have fallen so far and people are in so much trouble that they just don’t care:

“We are working with borrowers to keep them in their homes, but a lot of them really don’t want to stay,” said Babette Heimbuch, chairwoman of FirstFed Financial Corp. of Los Angeles, a savings and loan operator that specialized in adjustable-rate mortgages, including many that were made without full documentation of borrowers’ incomes.

FirstFed says up to half of delinquent homeowners don’t even respond to requests to work out their notes.

Investors… are buying loans on the cheap from lenders who want them off their books. By paying less than face value for the mortgages, the new holders can modify loan terms, including shrinking the amount owed, and still make money.

With some economists projecting 2 million foreclosures this year, legislators and regulators are hoping to encourage wide use of this model. They want lenders and investors in mortgage bonds to mark down what borrowers owe and then provide them with lower-cost loans.

Calpers beware

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.