I started out this afternoon by running into tech ticker's Top Ten List of BIG Companies Facing Bankruptcy, which included a few surprises, like Hertz, Goodyear tire, and - oops! - CBS. O yes.
Weak advertising and falling license fees have sent CBS's earnings off a cliff in 2009.
If they remain depressed for too long, the company could have trouble refinancing $3.2 billion of debt coming due over the next five years.
It will really come down to whether or not CBS’s earnings collapse is merely cyclical, or the result of structural trend whereby traditional TV is dying.
I wouldn't worry too much. $3.2BIL is just about what the CIS franchise alone will make over the next five years. Still, the thought that traditional tv might be dead is delicious even if it is 50 years too late.
Senior regulators say they are seriously considering a plan to have the nation’s healthy banks lend billions of dollars to rescue the insurance fund that protects bank depositors. That would enable the fund, which is rapidly running out of money because of a wave of bank failures, to continue to rescue the sickest banks.
The plan, strongly supported by bankers and their lobbyists, would be a major reversal of fortune.
Once again, this is wrong on so many levels it's hard to know where to begin. Bair, whose agency has a pre-existing condition - $100BIL credit line with Treasury - doesn't like Wall Street Timmy Geithner (well, who does, really?) and doesn't want to go crawling into his office on her knees, h in h, begging for relief.
“Sheila Bair would take bamboo shoots under her nails before going to Tim Geithner and the Treasury for help,” said Camden R. Fine, president of the Independent Community Bankers. “She’d do just about anything before going there.”
I feel her pain. Besides, if the FDIC availed itself of the promised bread, there would be, like, repercussions.
[A]ny new borrowing from the Treasury would be construed as a taxpayer bailout that could open the industry to a political reaction, resulting in a wave of restrictions like fresh limits on executive pay.
Any populist furor could be avoided, the thinking goes, if the government borrows instead from the banks.
Oh yes. No need to worry about a populist reaction then, nosirree.
This is, naturally, just the course we need to pursue - owing the banksters. Or not. I mean, do I really have to explain at this point in time why this is such a bad idea?
Probably only to Sheila.