Gregg Walks on Big Money Talks

How to spend all $800 billion-ish in stimulus money? It's a proposition that proved too much for Republican Sen. Judd Gregg, who yesterday withdrew as President Barack Obama's nominee for commerce secretary, the Washington Post reports. The self-described "fiscal conservative" cited "irresolvable conflicts" with the new administration over the stimulus package, writes the New York Times.  Those in the adminstration charged with prime-pumping the economy might find it harder than they think, says the Wall Street Journal. It describes how, even as the adminstration prepares to inject close to $170 billion into projects such as highways, Internet broadband, and public-housing repairs, many of the agencies charged with executing these new deals "will need an overhaul to handle the huge workload heading their way."

Some of the biggest U.S. banks "are like dead men walking." That's the sobering message from the NYT this morning as it analyses how the "growing mountain of losses from bad bets" would at present "overwhelm the value of the banks' assets," making them effectively insolvent. Ridding the banks of the billions in bad assets they still have on their books is crucial to getting the greater economy ticking again, writes the NYT, and that will involve a "larger, more direct government role than [outlined] in the Treasury Department's plan outlined this week. More money, faster is the message from veterans of Japan's "stagnation decade," the NYT writes in another piece. Many observers fear the Obama administration is repeating the mistakes of a timid Japanese government that, back in the early 1990s, failed to acknowledge or deal with the enormity of the economic mess Japan found itself in. Meanwhile, the current flood of home foreclosures brought on by the toxic mortgage debacle threatens to undermine even a stimulus package as large as the one passed this week, Business Week reports. Even now, it writes, "banks and their advocates in Washington have delayed, diluted and obstructed attempts to address the problem" of foreclosures, and the mag goes on to label the banking sector as an "industry in denial."

As foreclosures grow so does the wave to corporate bankruptcies. The latest to go under is Charter Communiciations, the nation's fourth-largest cable-TV company, the WSJ reports. Charter's problems cap another bad week for corporate America, which saw Muzak Holdings LLC, Pliant Corp., Aleris International, and the U.S. operations of Midway Games Inc. all seek Chapter 11 bankruptcy protection. And there's high drama in the fate of near-bankrupt satellite radio network Sirius XM this morning. Sirius chief Mel Karmazin has been forced to begin discussions with his nemesis, Echostar's Charles Ergen, about a deal to save the company from filing for Chapter 11. At the same time, Karmazin continues to court Liberty Media's John Malone, the WSJ reports. According to the WSJ, Ergen has "offered to inject about $500 million into Sirius and restructure the debt he holds in the company in return for control." The newspaper adds, citing sources, that the rival Liberty deal would be "an investment that would enable Sirius to meet its credit obligations in return for a sizable stake." The two discussions are progressing, but no one can yet call a clear winner. Meanwhile, Bloomberg is calling it a "cage match," pitting Malone against Ergen in a race against time to save the country's virtual satellite-radio monopoly. "John Malone and Charlie Ergen would both be absolutely satisfied to put down the other in a public way,” a bond analyst at Wachovia Securities told Bloomberg. "They're natural cage-match contestants. This is media theater at its best." BusinessWeek, in a profile of Ergen in which the magazine calls him a "tightwad," says Echostar may need Sirius badly as its satellite-TV network continues to lose customers. 

As it did a few months ago in exiting the newspaper game, Google is getting out of the radio business, too. The Los Angeles Times is calling it a "retreat from traditional media" for Google as it looks to exit businesses that simply aren't working out. In killing the business, Google will lay off about 40 jobs. Google's Susan Wojcicki explains on the corporate blog what went wrong: "In 2006, we launched Google Audio Ads and Google Radio Automation to create a new revenue stream for broadcast radio, produce more relevant advertising for listeners and streamline the buying and selling of radio ads. While we've devoted substantial resources to developing these products and learned a lot along the way, we haven't had the impact we hoped for." There's not a lot of optimism in the traditional media world these days, but Viacom's 85-year-old chairman, Sumner Redstone, told analysts yesterday he sees a glimmer of hope for the business as he looks forward, the NYT writes. Viacom on Thursday "reported solid earnings in the context of the grim economy," the newspaper adds, perhaps putting Redstone in an upbeat mood. Too bad not everybody at the company sees it that way. Viacom chief executive Philippe P. Dauman described the current economic times as "an orgy of pessimism," the newspaper writes.

Finally, if you think the banks have been paying a load for underperforming executives, take a look at Chelsea football club. The plaything of Russian billionaire Roman Abramovich has posted a $95 million loss for the last financial year, with $40 million of that being used to pay off two managers and coaching staff who left the club during that time, the BBC reports. The figure doesn't include the $10 million the club is reported to be paying ex-manager Felipe Scolari. He was sacked this week.