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Rupert Murdoch has blown hot and cold on President-elect Barack Obama, and is still doing so, to judge by the tone of his media outlets.
The New York Times has an article this morning pointing out that the New York Post has been displaying a lot of warmth towards Mr Obama since the election, although it did not take such a friendly line before November 4.
Meanwhile, Fox News is apparently unrepentant about its hostility towards Mr Obama on shows hosted by figures such as Sean Hannity and Bill O’Reilly. Fox News is run by Roger Ailes, who does not appear to be a fan of Mr Obama. Read more
Lloyd Blankfein’s decision not to take an annual bonus for 2008, along with other senior executives at Goldman Sachs, surely closes the door on big bonuses for top investment bankers across the industry this year.
Given that Goldman has performed better than any other big investment bank – and than many smaller ones – during the financial crisis, it would be perverse for others to try to force open the door that has been slammed by Mr Blankfein. Indeed, UBS has already fallen in line with Goldman.
Defying the precedent would be risky in various ways. Citigroup’s disclosure this morning that it will cut 50,000 jobs as part of an effort to slash its cost base by 20 per cent shows how much the sector is suffering. That makes largesse at the top tactless. Read more
The New York Times has a long and interesting article on how Sallie Krawcheck, Citigroup’s former chief financial officer, was pushed to the sidelines of the bank’s senior management and ended up leaving. The piece includes a lot of detail about what happened from “a person with direct knowledge of her thinking”, who is so well informed that I assume it to be Ms Krawcheck herself.
It concludes that Ms Krawcheck was the victim of internal politics and her falling-out with Vikram Pandit, the bank’s chairman and chief executive, rather than sexism:
Ms Krawcheck believes her exit from Citigroup is the result of pressures she faced from Mr Pandit to be a team player and to follow his lead on the best way to deploy talent at the bank — and not related to her sex. The two also sparred over how to compensate clients who lost money by following the bank’s investment advice.
That seems plausible, although the financial crisis has been brutal for several of the women who formerly occupied senior positions on Wall Street. The biggest names to lose their jobs apart from Ms Krawcheck were Zoe Cruz, former co-president of Morgan Stanley and Erin Callan, former chief financial officer of Lehman Brothers. Read more
Matthew Yglesias, whose blog on politics I like, has been prompted by Detroit’s troubles to assert that most chief executives are frauds whose jobs require no particular talent apart from convincing people that they are good at them. He also says that we business journalists treat them with undue deference.
“I think that running a major company is largely a matter of riding around on the corporate jet, etc, etc. But at the same time, I’m 100 percent sure that if you put me in charge of Procter and Gamble, the company would sink like a stone. But that’s because there’s a big element of bluff to the whole thing.”
I have three thoughts about this:
First, at the top of the business cycle, business leaders are lauded as visionaries and people start to buy shares on margin and speculate in property. At the bottom, they are written off as dolts and there are loud calls for blanket regulation. Both attitudes are suspect. Read more
The subject of the pricing of Taylor Swift’s new album as a digital download on Amazon and iTunes continues to intrigue me.
As Felix Salmon notes, the reason for the initial low price of $3.99 on Amazon, versus the $11.99 you have to pay on iTunes, was probably more a matter of Amazon doing some loss-leading to lure people away from its rival than a tribute to the music industry, as I suggested. Read more
I went to see Gordon Brown, my prime minister, speaking at the Council on Foreign Relations in Manhattan this morning. He is in the US for the Group of 20 meeting in Washington. Two things occurred to me as I listened.
First, he looked more cheerful and relaxed that I have seen him before. The international economic crisis is clearly treating him well since the UK government’s decisive action to recapitalise its banking system. He has had a bounce in the polls as a result and he has garnered some international respect. Read more
Not so long ago, the “say on pay” movement – the effort by institutional shareholders to get US companies to have non-binding votes on executive compensation – seemed to be losing steam. But there is quite a head of steam now.
Not only have federal bail-outs for financial companies made taxpayers more angry about high executive compensation but Barack Obama, who pushed the idea in the Senate, has been elected as the next president.
The change in atmosphere struck me this morning as I listened to a panel discussing the topic at a Manhattan breakfast organised by the Drum Major Institute for Public Policy, which was founded during the Civil Rights movement.
Of course, you might expect a bunch of people from union and public sector pension funds, which have been among the leading forces pushing “say on pay” to be gung-ho about their campaign and its chances of success.
But what struck me was the renewed sense of self-confidence that this was actually going to happen, whether or not many US corporations like that. Read more
Cometh the hour, cometh the man.
I was struck when watching Barack Obama’s first media conference as president-elect last week to spot, among the group of economic bigwigs standing behind him, Dick Parsons, the chairman of Time Warner. Read more
My FT column this week is on the Detroit bailout and the price that Washington should exact for federal aid. Read more
Nick Denton, my friend and former colleague, has posted a gloomy forecast about how online advertising is about to fall substantially. As proprietor of Gawker, the blog publishing group that relies entirely on advertising for its revenues, he has reason to be worried.
Nick does have a habit of being publicly pessimistic about online advertising, as he concedes. While he is a smart and independent thinker, he is also prone to dramatic overstatement. However, in this case, I think he will prove more wrong than right.
He is acting on his own advice by cutting back expenses at Gawker, and he is not the only one. Conde Nast has trimmed its online operations, including the internet side of Portfolio, its business magazine. Peter Kafka has some more figures on the online advertising slowdown. Read more
Bobby Kotick, chief executive of Activision Blizzard, the video games company, came to talk to the FT in New York this week. He said some interesting things about the state of the industry:
It will be interesting to see whether games are indeed recession-proof in the face of what feels like a crisis of confidence among US shoppers.
It is also selling for $3.99. Yes, $3.99, which is less than some Starbucks drinks for a 13-song collection. So why would you not buy it, if you are even mildly interested? Read more
Is Big Cereal going the way of Big Pharma?
I ask because there seems to be some evidence of sagging innovation in the all-important breakfast cereal market.
Consider this article in Fortune that extols the relentless efforts by General Mills, the maker of Cheerios, Wheaties and Lucky Charms, to fatten its margins by cutting costs. It cites General Mills’ elimination of letter shapes in its Hot’n’Spicy Chex Mix, which has provoked this online protest petition.
Then consider this chart of branded cereal innovation in the 20th century produced by Geek Out New York. It shows a burst of cereal creativity in the mid-century that brought us such great names as Rice Krispies (1928), Cheerios (1941) and Special K (1956). There is a history of Cheerios here. Read more
I hate to disagree with Jim Surowiecki of The New Yorker, who is an astute commentator, but his blithe statement that the US government’s refusal to rescue Lehman Brothers was “clearly an abysmally bad decision” demands to be corrected.
As noted before, I have a dog in this fight since I recommended before the event that Hank Paulson, the Treasury Secretary, refrain from bailing out Lehman. Since then the general consensus has emerged that Lehman’s failure precipitated the most extreme phase of the financial crisis. Read more
It makes me feel nostalgic to consider the possibility that Peter Burt and George Mathewson could end up taking charge of an independent HBOS as an alternative to a rescue/takeover by Lloyds TSB.
In my young days as a banking correspondent in the early 1990s, Sir Peter and Sir George were in charge of the two Scottish banks – Bank of Scotland and Royal Bank of Scotland – that emerged strongly from that banking downturn. Read more
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