Monthly Archives: August 2007
Did Countrywide CEO lie on CNBC?
by Chris Roush
TheStreet.com media critic Marek Fuchs wants to know if Countrywide Financial CEO Angelo Mozilo lied during an interview on CNBC last week when he said the lender had stopped making loans to people who wouldn’t have qualified.
Fuchs asks the question because he received a mortgage solicitation from Countrywide that included generous terms designed to get someone who would probably not have received a loan during tighter times to apply.
Fuchs wrote, “Anyhow, I called Countrywide to get an explanation. I wanted to see precisely how many of the current loans are stated-income loans and how many are to people with lame credit scores. And I wondered whether that recent corporate line about finding religion when it came to lame loans is legit. And, well, I’m still waiting for a reply.
“Countrywide does not seem to be talking much these days. It is always a source of concern when a public company decides to have some quiet time. If I had a shiny nickel for all its ‘no comments’ lately, including a big one to The New York Times, which took a look into the crisis and were actually told that Countrywide spokesmen were too busy. I’m guessing they still are.
“When I tried to bridge this gap between company line and competing evidence, Ginny Zoraster, who works in the communications office, told me that she sent my inquiries on to four officials. She did that three separate times.”
Read more here.
Mansueto leading bidder for struggling Business 2.0 magazine
by Chris Roush
Keith Kelly of The New York Post is reporting Friday that Joe Mansueto, who already owns Inc. and Fast Company, is apparently the leading bidder to acquire struggling business magazine Business 2.0 from Time Inc.
Kelly wrote, “It is not clear exactly what Mansueto would do with the magazine, although the deal would include a subscriber list of nearly 600,000 names, the brand and Web properties. It is also not clear what would happen to longtime editor Josh Quittner and his San Francisco-based staff.
“Fortune Managing Editor Andy Serwer is said to be interested in poaching some of Business 2.0′s staffers as he girds for battle with Joanne Lipman‘s Portfolio magazine.
“Regardless of the outcome of the negotiations with Mansueto, it now appears that the October issue of Business 2.0 will be the last one published under the Time Inc. name.
“The magazine, which began publishing in 1998, had reached break-even in 2005 but started to slide into the red after that.”
Read more here.
Book from NYTimes writers on Dow Jones/News Corp. in trouble
by Chris Roush
Keith Kelly of The New York Post reports Friday that a book proposal about News Corp. CEO Rupert Murdoch‘s acquisition of Dow Jones & Co., the parent of The Wall Street Journal from columnist Joe Nocera and business editor Larry Ingrassia of The New York Times appears to be in trouble.
Kelly wrote, “As of yesterday, however, Nocera had already bailed out of the project and the entire idea could be dead in the water when book publishers return next week from their vacations in the Hamptons. Publishers had already been cool toward the idea and advance money that was being talked about was believed to be in the low six-figure range.
“When Nocera was reached yesterday and asked if he was working on a book deal with Ingrassia, he replied, ‘Not anymore.’
“And when asked what led Nocera to end his participation in the project, he said, ‘None of your business.’
“However, sources said the deal wasn’t generating enough of an advance to make it worth the duo’s while to split it two ways. And it may not even be worth it for one author.”
Read more here.
CNBC gussies up for pending competition
by Chris Roush
Amy Scott of the Marketplace radio program on American Public Media covers the changes at business news cable network CNBC as it prepares for competition from Fox Business Network, which launches Oct. 15.
Scott said, “Some worry that the big loser in the ratings battle might be the journalism. On one hand, the networks will inevitably compete to break stories and score the best interviews.
“But Fox has indicated it may be less aggressive than CNBC in chasing down stories that might put companies in a bad light. And as CNBC aims to appeal to a wider audience, equities trader Owen Lynch says he’s found the network less useful as a news source.
“With Fox parent company News Corp set to own the Wall Street Journal, Lynch hopes the new channel will target serious investors, like himself.”
Read more here.
Countrywide slams NYTimes article about lending practices
by Chris Roush
Countrywide Financial Corp. responded Thursday to an article in the New York Times Sunday by Gretchen Morgenson about its lending practices by issuing a release refuting some of the accusations.
In part, the statement said, “This article contained numerous inaccuracies and ‘facts’ taken out of context to place Countrywide in the worst possible light.
“Countrywide chose not to respond to this article because we felt that most readers would have the reaction to the article that Thomas Brown of Bankstocks.com had when he wrote his piece entitled, ‘Everything but Evidence.’ In addition, Countrywide has been working diligently to ensure that we continue delivering value to the American people as we have been doing for almost 40 years. As some of our constituencies have assumed that the article is true in all respects, this rebuttal is intended to set the record straight.
“Additionally, we have reached out to Senator Schumer to reassure him that Countrywide’s business practices were not accurately portrayed in the New York Times article. For example:
• Countrywide’s business processes are designed to prohibit steering borrowers who qualify for prime loans into subprime loans. In fact, the majority of consumers who come through Countrywide’s retail subprime channel receive a prime loan.
• Second, Countrywide’s loan officers do not receive higher commissions for subprime loans with prepayment penalties.
• Third, Countrywide prides itself on the extraordinary efforts we are undertaking to assist borrowers who are experiencing difficulty making their loan payments, and in fact we have found solutions to keep more than 35,000 borrowers out of foreclosure during this year alone. The company has a team of 2,500 employees in its Home Retention Division dedicated full-time to these efforts.”
Read more here.
Business press not trying to sensationalize housing market woes
by Chris Roush
Earl Maucker, the editor of the South Florida Sun-Sentinel, responds to reader complaints that the newspaper is sensationalizing the drop in housing prices by arguing that the issue is news.
Maucker wrote, “If we were to rewind to the past two to three years, you would find just as many headlines and front-page stories reporting 30 percent increases in the price of homes and a housing market that was in the midst of a historic building boom.
“Here is another fact we can’t ignore: Based on our research, our readers rate stories about the cost of living, the price of housing, property tax and trends in the housing business among the top stories they want to read about.
“Everybody is impacted by this story. It is one of a number of pocketbook issues that affect readers directly, and they have an enormous appetite for information.
“So stories about the slump — just as stories a year ago about the red-hot housing market — are and will continue to be front page news.”
Read more here.
Changes at Roanoke biz desk
by Chris Roush
Rob Johnson, business editor at the Roanoke (Va.) Times since 2005, has been named the daily’s first-ever writing coach and will also be a senior reporter in the metro department.
The move will be effective when a successor is found to lead the paper’s business team.
In addition, Times reporter Ray Reed, who most recently covered the health care industry, moves from the paper’s business team to the Lynchburg (Va.) News and Advance as political reporter.
And Times technology reporter Andrew Kantor has left The Times to pursue freelance writing.
CNN will stop using Reuters
by Chris Roush
Mark Lee of Bloomberg News writes Thursday that cable news network CNN will stop using Reuters for coverage, according to an internal memo.
Lee wrote, “‘We are making significant investments in our own newsgathering while simultaneously reducing our reliance on agency material,’ according to the e-mail sent to employees by Atlanta-based CNN International’s Managing Director Tony Maddox today. Ranjita Menon, a CNN spokeswoman in Hong Kong, confirmed the contents of the e-mail.
“CNN, which offers international news channels in competition against broadcasters including British Broadcasting Corp., needs to manage ‘continually rising costs’ of outside content, the e- mail said. The unit of New York-based Time Warner is also seeking greater control of its news output.
“The effort will mean ‘changes to some longstanding business relationships,’ Maddox wrote.
“CNN International will continue to use material from Associated Press and Associated Press Television News, Menon wrote in an e-mail. She declined to comment on how much the Reuters service costs.”
Read more here.
BusinessWeek publisher leaving
by Chris Roush
Keith Kelly of The New York Post writes Thursday that the publisher of BusinessWeek, Geoffrey Dodge, is leaving for a job at Salesforce.com after he was passed over for the job of BusinessWeek’s president.
Kelly wrote, “Dodge’s exit comes at a particularly tough time for the business publications category. The big three in the category – Forbes, Fortune and BusinessWeek – are all down in ad pages for the first half of 2007. Mike Dukmejian, the group publisher of Fortune and Money, was bounced earlier this year, with no replacement yet named.
“Business 2.0, a smaller rival in the field, is said to be only days away from ending its run as a Time Inc. magazine. Fast Company, though finally showing a small growth spurt, is still far back in the pack.
“Amid all that, Condé Nast has introduced Portfolio into the category, and most observers think that News Corp.’s pending acquisition of the Wall Street Journal parent Dow Jones will make the battle for ad dollars in the space that much more ferocious. News Corp. publishes The Post.”
Read more here.
The sky is falling
by Chris Roush
TheDeal.com’s Yvette Kantrow writes that the business media has suddenly turned bearish on covering the markets, but wonders if the analysis is a bit too simplistic.
“Look, we don’t mean to carry water for ‘the pros,’ who for the past few years ignored the risks in everything from mortgages to junk bonds that now seem so painfully clear. But come now; when was the last time you heard a real Wall Street titan proclaim that good times would last forever or that market cycles had ceased to exist? Rubenstein, for one, was warning that the PE business was in danger of contracting ‘bubble amnesia’ back in February in remarks that the press pretty well covered. Funny that BusinessWeek would single him out as a symbol of the ‘boasting and bluster’ that it says ‘marked the just-ended era of easy money.’
“For a better, more nuanced take on what went wrong, a reader would do better to turn to Fortune. It, too, explains that banks, hedge funds and leveraged lenders all showed an indifference to risk over the last few years that is now coming home to roost. But, unlike BusinessWeek, it doesn’t imply that the people who run these places are therefore stupid or clowns. ‘In some sense, all financial bubbles are alike,’ Fortune observes. ‘They begin with abundant cash and sound economic fundamentals. People start racking up gains, and more players pile in, eager to grab a share of the loot. Then they get carried away. It always ends in tears.’”
Read more here.