A change is gonna' come

Tribune filed for bankruptcy today. This, by a very smart
man who sold his $12 billion commercial and residential real estate portfolio
at the very tippy top of the CRE bubble, only to be sucked into another bubble
bursting. The Tribue Cos. And affiliates have sold off a lot of assets, fired a
lot of professionals and cut back on a lot production - in essence, they are
much lesser a producer of actual original content and will shrink further as
time goes on.

Considering "As
investment banks cut back, the serious blogs take the forefront (http://boombustblog.com/index.php?option=com_myblog&show=As-investment-banks-cut-back-the-serious-blogs-take-the-forefront.html&Itemid=92)", there is
a strong current of trenchant, need I say "superior" analysis coming from
blogs, and the ability for bloggers to transform that analytical ability into
most nutritious fodder in the form of being able to quickly analyze news
events not only as they happen but to perform the type of investigative
analysis that is probably too expensive and (in this environment) too intensive
for a reporter who is not a specialist - I think even the most ardent of the old
school must come to face the music, "A
Change is gonna come! (http://www.imeem.com/gorillaz0remedy/music/gEixvkbv/a_change_is_gonna_come/)"

This popped into my mind as I had to spend even more money
to upgrade my servers for the fourth time since starting this blog about a year
ago. I also had to hire customer service for subscribers, since I couldn't handle
it on my own. I hate to say it, but this nascent new media business that I
discovered by mistake by just trying to publish my financial and analytical thoughts
to the world is actually growing (knock on wood) while the mainstream media and
the investment bank analyst model are floundering. I now can count several major
central banks as subscribers, much of what's left of the Wall Street
broker/banks, all sorts of small, medium and brand name hedge funds, commercial
banks and even the IMF (http://www.imf.org/external/index.htm).

If I may make a suggestion to the main stream media, I
believe the advertising model (as it stands) is flawed with the advent of free
flowing information on the Internet and extreme cycles in our economy that are
bound to introduce significant volatility in ad spending and revenues (I'm sure
Mr. Zell can attest to that). I believe it is time to retool in order to create
content that people are willing to pay for, but that content has to be A) truly
useful and value added, or B) truly entertaining, and not a bunch of stereotypical
fluff.

People are still willing to pay for things, even with the
Internet in full boom. They pay to go to the movies, they pay for my blog, some
of us even paid to get Bush out of office. People will pay if they believe they
are getting true value for their dollar. I have paid for Calculated Risk (http://calculatedrisk.blogspot.com/) (well, actually their
newsletter - my condolences goes out to the personification of the high quality
blogger - Tanta, who recently passed away at a very young age) and Roubini's site (http://rgemonitor.com/), and ignore the ads. I pay,
not to see flash animations, but because I believe they offer quality content
that is worth more than I am paying for - and one of those sites charges a lot...

If I were a MSM (mainstream media exec) I would be pursuing
successful blogs to imitate, or outright purchase, ASAP. The only problem is that
the maverick nature of blog creators would probably cause them to refuse such
overtures.

If you haven't noticed, I have started dumping some real
resourced into the blog in an attempt to make it a true, "go to" resource for
those interested in the investment and financial space. Their will be a FAQ
coming online soon to help answer questions.

Well, back to the Tribue story. If you have read the "Butterfly
Effect (http://boombustblog.com/index.php/20081021663/The-Butterfly-is-released.html)" as well as the other installments of the asset securitiziation
crisis, you know that I believe this is just the tip of the iceberg. We will be
seeing a deluge of bankruptcies coming down the pike very soon. A quick recap
of relevant links:

·
Counterparty risk analyses - counter-party failure will open up
another Pandora's box (http://boombustblog.com/component/option,com_myblog/show,The-Next-Shoe-to-Drop--Credit-Default-Swaps-CDS-and-the-Counterparty-Risk-What-lies-beneath.html/Itemid,20/) (must read for anyone who is not a CDS specialist)


·
More
on the banking backdrop, we've never had so many loans! (http://boombustblog.com/component/option,com_myblog/show,The-Dog-Days-of-Defualts.html/Itemid,20/) and Capital,
Leverage and Loss in the Banking System (http://boombustblog.com/component/option,com_myblog/show,The-Dog-Days-of-Defaults.html/Itemid,20/) - Tribune had $12.9 billion in debt
and listed assets of $7.6 billion, who do you think is left holding the
$5.3 billion bag? I'm sorry, I mean leveraged (about 13x) bag? Well, JPMorgan
Chase & Co. was listed as the biggest creditor, representing lenders owed
$8.6 billion. JPMorgan is the biggest holder of that debt, with $1 billion. I
am short JPM because they are the financier/counterparty for many an overleveraged
entity. Remember Bear Stearns and Lehman Brothers. There are enough bones in
that closet to start a fertilizer factory.

·
Continued
Deterioration in Global Lending, Government Intervention in Free Markets (http://boombustblog.com/index.php?option=com_myblog&show=Continued-Deterioration-in-Global-Lending-Government-Intervention-in-Free-Markets.html&Itemid=92)

Bloomberg
version (http://www.bloomberg.com/apps/news?pid=20601087&sid=atd6jUj9jZJE&refer=home). For those who don't remember the early warnings from the Butterfly Effect, here is a repost of a small excerpt. Paying subscribers are urged to read the entire document if you have not already done so: The Asset Securitization Crisis Part 27: The Butterfly Effect (http://boombustblog.com/index.php/20081006629/The-Asset-Securitization-Crisis-Part-27-The-Butterfly-Effect.html). It gives the global macro argument of what is going down in the US in the hear and now. We are the first to get hit, but we are definitely not the last, we will not get hit the hardest, either.