Friday, December 5, 2008

Credit Rating Service sees “Several Cities” without Daily Newspapers

A Chicago financial rating service is predicting several cities will have no newspapers by 2010. Editor and Publisher reports on a study recently released the Fitch Ratings that newspapers and newspaper groups will default on their debt in 2009 and be liquidated, leaving major cities without a daily newspaper. They cite McClatchy and Tribune in particular as being in serious jeopardy. Fitch rates the debt of two newspaper companies, The McClatchy Co. and Tribune Co. as junk, with serious possibilities of default. It also assigns a negative outlook to both the companies and the newspaper sector, meaning their credit ratings are likely to deteriorate further. A debt rating service recently cut the NY Times’ rating to junk, while another said they would revaluate it in the near future. Aside from the chains, two individual papers appear to be in deep trouble. The Minneapolis Star Tribune and the Philadelphia Inquirer suffer the same problems, both recently purchased in highly leveraged deals by inexperienced publishers. There has been some wishful thinking in the newspaper industry that debt holders wouldn’t press the publishers if they defaulted because newspapers and their assets were unmarketable. Not likely. But the best evaluators of the financial condition of newspapers are the newsprint salesmen. They know to the day when each paper made its latest payment and how much they owe. Most are tight lipped to outsiders, but the newsprint companies compare notes among themselves. And they will be the ones to pull the plug first. In the newspaper business, the second and fourth quarters are the moneymakers, especially the fourth with the heavy Christmas push by the retailers. The first and third are the worst. If things go south, they will probably happen then.

Tuesday, December 2, 2008

The Cow Tax and Beano

Here is the latest from the EPA. They have issued an Advance Notice of Proposed Rulemaking seeking public comment on whether they should regulate greenhouse gas emissions (methane and CO2 among others). Up to now, they have been restricted to what we normally consider pollutants: toxic chemicals, particulate matter and even toxic dust and dirt from open pit mines. Essentially they have been regulating mechanical things, but their ability to regulate products naturally produced by animals and even humans, opens new doors to our faceless, non-elected bureaucrats. Would bureaucracies like the EPA want to enlarge their jurisdiction three or fourfold? You betcha! It is causing a major stir in the cattle industry which sees the potential costs of a cap and trade “cow tax” at $175 per dairy cow and $87.50 per beef cow. Flatulence of cattle has been a subject of both concern and amusement. Government funded studies are often treated with derision and conjure up mental pictures of methane sensors placed at the exhaust end of a cow, with PhD types copying the sensor data to their notebooks. In reality the multi-stomach, cud chewing cows emit most of their GHGs from the front end, not the rear. But it is a significant problem nevertheless, with cattle contributing 15 to 20% of atmospheric methane discharges worldwide. And methane is a far more potent GHG, 24 times that of CO2. Which brings me to Beano. I consider Beano to be one of the top 25 inventions of the 20th century, right alongside of television, nuclear fission, radar and the Veg-O-Matic. And it works. The active ingredient, the enzyme alpha-galactosidase, affects digestion by prematurely breaking down certain legume sugars before they reach the large intestine where they would normally ferment and produce gas. Knowing that, about two years ago I decided I would save the planet. I went to Beano’s website where I found a “contact us” box. Had more to do with customers’ problems with Beano, but I asked my missive be forwarded to the appropriate department. In it, I pointed out the problem with bovine flatulence, that perhaps Beano could provide a breakthrough solution, that Beano could be sold by the ton around the world rather than in little bottles, and that they (GlaxoSmithKline) might make a gazillion dollars. But I waited and waited for a response. Finally after three weeks, my answer came. They informed me that they did not make Beano for veterinary use and because of that, my request was denied. So much for thinking outside the box (or bottle) at GlaxoSmithKline.