The Times says it’s potentially a black-gold mine for oil companies at a time when they’re having trouble getting access to big oil fields and when prices are at record highs. But it notes the security “nightmares” that await the companies. It buries too low in its story information that these firms aren’t the first to get oil contracts since the war started.

Regional banks still heading down, down

In credit-crisis land, the Times in a C1 story on the woes of regional banks in general says things are going to get worse for many of them. Fifth Third Bancorp says it will raise capital, slash its dividend, and sell assets to help it deal with a wave of bad loans (the Journal reports this on C3). Its shares got trashed, down 27 percent.

Investors are worried that the banks are going to get hit by their heavy exposure to commercial real-estate loans (which include lots of condo construction loans), and that their shares are going to be devalued by the fact that they must raise capital to stay afloat—check out the NYT’s nifty share-price chart. The paper has our Goth Kid’s Diary Quote of the Day:

“You are in this death spiral of dilution,” said David Ellison, the chief investment officer of FBR Funds, a mutual fund company based in Arlington, Va. “It’s this toxic math.”

Meanwhile, Thornburg Mortgage said the Securities and Exchange Commission issued it subpoenas in an investigation of its accounting and that its ability to stay in business is “in doubt,” the Journal reports inside its Money & Investing section. It wouldn’t be unusual. Reuters says more than 100 lenders have gone bust or gotten out of the business in the last year and a half.

Hedge fund head John Paulson said the credit crisis could get much worse, with total losses reaching $1.3 trillion, more than three times what have been realized so far, the FT reports. Why should he be listened to? He made $3.7 billion last year predicting the subprime collapse.

That other Paulson, the Treasury Secretary known as Henry, will call for more power sooner for the Federal Reserve in a speech today, the Journal says on A3.

And for my next trick…

The Journal says on C1 that banks are rewriting the way they classify which loans are nonperforming in order to make themselves look healthier.

From lengthening the time it takes to write off troubled mortgages, to parking lousy loans in subsidiaries that don’t count toward regulatory capital levels, the creative maneuvers are perfectly legal.

Yet they could deepen suspicion about financial stocks, already suffering from dismal investor sentiment as loan delinquencies balloon and capital levels shrivel with no end in sight.

Pretty friggin’ brutal, indeed

Morgan Stanley’s first-quarter profit plunged 60 percent from a year ago, due mostly to asset sales, the Journal says on C1 and the Times on C4. Its chief financial officer was admirably forthright:

“The truth of the matter is this is pretty frigging brutal.”

The FT focuses on news that a rogue trader cost Morgan Stanley a $120 million in revenue write-downs in the quarter after it caught him inflating his positions’ value.

The Journal’s Heard on the Street says Morgan Stanley was “tripped up by bad trades, poor management and investments, as well as less-than-stellar risk management.” It says the company’s shares aren’t cheap and the writing in the column (the Journal recently swiped the FT’s Lex column writers) appears to be getting tarted up:

Morgan Stanley can’t fumble this way and hope to be spoken of in the same breath with Goldman.

Absolutely, positively bad news

In a bad sign for the economy, FedEx reported its first loss in eleven years on a one-time accounting charge and weak results, and said its outlook is slow and that it is cutting back on investment and operations, the Journal says on B3 and the FT says on its Companies & Markets front. The economic bellwether’s package volume was up 1 percent in the last quarter and its fuel costs soared. The WSJ:

Results from other big transportation companies in the coming weeks are likely to reflect similar pressures on profits, as low retail spending continues to restrain U.S. demand for shipments of manufactured goods and threatens to delay the start of the peak shipping season in late summer.

The Los Angeles Times says overnight shipping is suddenly not as crucial as it was not so long ago, in part because of hefty fuel surcharges.

Pfizer sticks it to consumers on Lipitor

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.