Coda: June / July 2008

Off the Top of the Deck

Stormin’ Norman Pearlstine, former top editor of The Wall Street Journal then editor-in-chief of the Time Inc. empire, recently moved to Bloomberg News. Pearlstine’s brand of keen insight and savoir faire works in all environments; he is a leader to the ink-stained troops but also knows how to make the bean counters feel at ease. While Bloomberg has not made the significant impact either in print or the internet that it has made on its terminals and TV program, CEO Peter Grauer is one brilliant and savvy operator who can be as aggressive as the job calls for. Against Rupert Murdoch’s WSJ his strengths will be tested, but with Norm on board this will be a battle to watch closely.

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Get Into the Game

You don’t have to be on the board of a media company to know the importance of internet technology. Take the example of Zipcar, a private firm grossing more than $100 million annually selling hourly transportation at a cost of about $9 to $14 per hour. You can reserve a BMW for your date or a pick-up to load mulch from Home Depot. How do they do it? Technology allows registered members to unlock cars parked in a nearby parking lot (many of them eco-friendly) through a bar code. Watch out Hertz, taxis, maybe bicycles, and second cars, your business model is being threatened. P.S. They pay for the gas.

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When the Fed Ups the Ante

The Fed has announced its intention to tinker with the bubble mix, and use interest rates as an antidote. Well, heavens, one wonders that as rates rose the internet bubble burst in 2000 and funny enough, as they rose in ‘06 through ‘07 the housing bubble burst? What do we make of that? We argue that more likely, with the housing market, shall we say, a bit slumped, low interest rates will be fashionable for some time to come with implications for the dollar, exports, and international earnings.

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Intelligence in Spades

There is no more able member of the House, nor one more equipped to deal with the current housing crisis than the chairman of the House Financial Services Committee. Barney Frank, known for wit, sagacity, and tenacity, is also a consummate deal maker and, had he not been born with a predilection for government service, no doubt would today be running around Wall Street putting together massive deals. Instead, he is creating the same kind of value, shall we say, on a much larger canvas.

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Inquisitive Ace

For those who know Ace Greenberg, former CEO of Bear Stearns, his tough-love avuncular style won him praise and loyalty. Whether public or private, Ace paid attention to the smallest detail. Example: he wrote his staff to inquire what the company was spending on office supplies, then announced that all paper clips would now be scavenged from incoming mail. Later, he wrote again, saying the new paperclip policy worked so well that the company was going to start selling them. As you may have read, Ace was not happy with Jimmy Cayne’s performance at Bear Stearns, whose paper was certainly clipped.

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