Commercial Paper

As today's Financial Times reports, more and more companies are being frozen out of the commercial paper market, the main source of day-to-day corporate funding. Not surprisingly, a number of the companies being frozen out are from the telecommuncations sector. They include Qwest, Sprint and a number of others to be named sooner rather than later.

Last year, I wrote a column about the woes of telecom that dealt, in part, with the sector's staggering debt loads. Those debt loads are getting a much harder look in the wake of the Enron/Global Crossing debacles. When a company like Qwest (which is not just a fiber-optic network but an RBOC as well) gets tossed out onto the street by the commercial paper market, then the game really has changed.

Greaseball

A time-honored practice of big-time journalism is the "source greaser." It's a fairly straightforward transaction. Source delivers good documents, source gets good press. But what happens when the source being greased is controversial, to say the least? Well, if you're The New York Times, you just gut it out and hope that no one notices.

Today, the Times reported that William Lerach had been named lead counsel for the institutional shareholders of Enron stock. Absent from the story were two salient facts about Mr. Lerach. First, his law firm is presently the target of a federal grand jury investigation in Los Angeles. Second, in 1999 his firm had to pay out $50 million to settle an "abuse of process" suit brought by a Chicago consulting firm.

To banish these facts from a front-of-the-Business Section story strikes me, at least, as yet more evidence of journalistic decline at The New York Times. But then, Mr. Lerach will soon be sitting atop the Mother Lode of Enron documents and depositions. Give good documents, get good press.

Getting Worse.

A while back, I wrote a grim column about the future of New York City. Looking back on what I wrote, I now think that I probably understated things.

The basic math is straightforward. New York City's $43 billion budget is roughly $4.8 billion in the red. The cost of debt service will escalate dramatically in the upcoming "out" years, leaving less money for basic services. A study conducted by the world's leading consulting firms found that September 11th amounted to an $83 billion hit, not all of which will be covered by insurance and federal disaster relief. Not surprisingly, tax receipts are down sharply. And byte flight -- the departure of information age companies from Manhattan -- is proceeding apace. Recently, both Morgan Stanley and Goldman Sachs announced they would be relocating some of their operations to, respectively, White Plains and New Jersey. There are literally dozens of other firms that will soon be packing up parts of their operations and heading out to the Island, or Connecticut or Westchester County or New Jersey (or, for that matter, Dallas, Atlanta and Virginia).

As bad as all that is, what's truly disturbing is what a friend of mine calls the return of the menace. The other day my wife was driving to work and was accosted by a squeegee man on Columbus Avenue. Another friend was chased down the street by a crazed homeless person, who threatened my friend with death by box-cutter ("I'll box-cutter you, you little faggot" were his exact words). Everywhere you go in New York City these days, there's a keen sense that the menace, which was simply not tolerated during the Giuliani era, is back.

Who Benefits?

It's always the key question. The Campaign finance "reform" legislation that passed the House early this morning appears to have three key beneficiaries. They are: (1) incumbents, (2) media and (3) Republicans.

Regarding the first, why are you not surprised? Incumbent protection is the goal of virtually every piece of legislation. This particular piece of legislation makes it even more difficult for challengers to get their message out. That's what made its passage possible in the House and what makes passage through the Senate a foregone conclusion.

Regarding the second, why are you not surprised? It is, of course, obscene for the media to be cheerleading for legislation that curtails political speech. But it's a whore business. And the media whores sincerely believe that free speech for anti-abortion groups is bad, free speech for journalists is the cornerstone of a free society.

Regarding the third, get ready for campaign finance "reform" reform, coming soon to a newspaper box near you. Republicans should be able to raise significantly higher amounts of "hard" money than Democrats. This imbalance will not be felt in this year's mid-term elections (the legislation will not take effect until November 6th, one day after Election Day). But it will work to President Bush's benefit in 2004. Once this consequence of "reform" is understood, Democrats and their media allies will start beating the drums for still more campaign finance "reform."

Buried in the coverage of campaign finance "reform" was the news that the DNC is planning to build a new headquarters in Washington. Expected cost exceeds $200 million. That's a ton of money that many Democrats may feel would be better spent in their districts and states.

Rise and Shine

Get up! That's the latest advice from the scientific community. A new study shows that those who sleep 6-to-7 hours a night live longer than those who rack out for 8 hours or longer. Turns out Mom was right after all.

Wolfie

The man the President of the United States calls "Wolfie" is Paul Wolfowitz, deputy secretary of defense. There's a good piece about him in the new issue of The Atlantic Monthly. As of this afternoon, it was not posted on The Atlantic's website. But I assume it will be shortly. James Fallows wrote the piece.

While you're visiting The Atlantic's web-site, you might want to check out the e-mail exchange between Fallows and Walter Mead on US foreign policy. It's well worth it.

Great Books

From time to time, I plan to post book recommendations. And since there's no time like the present, I'll begin with two books by two old friends. In the non-fiction category, Walter Mead's new book is a must read for those interested in the forces that shape US foreign policy. In the fiction section, Joe Kanon's third novel is his best yet. As the hero investigates a murder, the author explores the larger crime scene.

The Big Easy

Back from New Orleans, after four days of Mardi Gras revelry. Our host was Sam Israel, New Orleans native and legendary hedge-fund manager. His local connections enabled us to ride in the Orpheus Parade, on top of the Smoothy King float. Eight hours after arriving at the Convention Center, we finally reached the beginning of the official parade route and began throwing beads to the throngs below. If you ever get the chance, take it. We had a ball.