Friday, November 02, 2007

As Stock Market Dives, LAT Pays Little Attention

The Dow Jones industrial average went into a 362-point nosedive yesterday, reflecting investor lack of confidence in the Federal Reserve Board as it struggles vainly to contain the subprime mortgage crisis, which has now become a crisis for world finance. Yet while the New York Times plays the story this morning at the top of Page 1, the L.A. Times has it well down in the Business section.

The contrast reflects the lack of sensitivity as to what's news at the L.A. Times. Too often, in recent months, the Los Angeles newspaper has failed to give the subprime crisis sufficient play. It is probably no coincidence that the Times, under the poor leadership of its publisher, Tribune Company-toady David Hiller, has another Page 1 advertisement this morning, this time from that terrible airline, American, which is so poor in its service that discerning travelers have long ago stopped riding it. It is failing companies like Macy's and American Airlines that are allowed to sully Page 1.

The selloff in the stock market came just one day after the Federal Reserve Board again lowered interest rates, by a quarter of a point, but also gave a signal that the interest cuts may have come to an end for now.

The Fed is aware that in cutting interest rates it is putting pressure on the dollar, now already at its lowest level against both the Euro and the Canadian dollar. But the all too evident uncertainty at the Fed as to what to do comes at a time when the ramifications of the subprime crisis have only been growing.

Yesterday, there were reports that Citibank will soon follow Merrill Lynch in reporting a very substantial loss from foolhardy investments in mortgage securities. Merrill Lynch ousted its chairman after reporting a $8.6 billion loss, and the reports are that Citibank's may run to $30 billion, and that its chairman may fall too.

As the New York Times said today, in its story by Michael Grynbaum, "Many investors appeared to have second thoughts about their initial reaction to the Fed's move, focusing yesterday on the central bank's statement suggesting that it was reluctant to reduce rates much further, even as analysts expected the economy to slow further in the next few months.

"The market came to realize that they're not going to get any more freebies from the Fed," said Ryan D. Larson, senior equity trader at Voyageur Asset Management." (The DOW had gone up 147 points the day before, in its first reaction to the Fed move).

The Los Angeles Times story said much the same as the NYT. The trouble was that the LAT foolishly played the news much less prominently. Now , as I say, that the Times is running Page 1 ads, it has lost its ability to run the news as it should be run. Responsibility for this sad state of affairs falls clearly on Hiller, who should have been relieved long ago, well before the head of Merrill Lynch.

In a blog written last July 23, I questioned whether either the subprime crisis or the developing crisis of stability in terrorist-threatened Pakistan, would prove containable. Yesterday, as it turned out, both crises intensified. With the subprime crisis spreading ever further, increasingly affecting the whole economy and threatening to spin the U.S. into a recession, the situation in Pakistan grew more desperate.

Today, again, there is a disparity of treatment of what is happening in Pakistan between the New York Times and Los Angeles Times. The New York Times plays on Page 1 a story that the terrorists affiliated with the Taliban and Al-Qaeda have opened a new front in the northwestern part of the country, coming down out of the mountains into the Swat valley and the country's more settled regions in what the reporter, Jane Perlez, calls "an expanding insurgency."

The L.A. Times reports some of the same developments in a less sweeping story by Mubashir Zaidi and Laura King that runs on A4. (King, who has been in Pakistan recently to cover the violence-marked return to the country of the former Prime Minister, Benazir Bhutto, is now back in her home base of Istanbul. This is not a satisfactory arrangement, since what is happening in Pakistan is of world importance, and, just as in the recent Burma uprising, the L.A. Times' lead reporter is much further away than the New York Times writer).

As the fighting intensifies in Pakistan, with the terrorists putting 48 captured Pakistani soldiers on public display today, a missile attack by what may have been an American drone flying out of Afghanistan, and rumors again arising that the country's dictator, Gen. Pervez Musharraf may soon impose a state of emergency and delay parliamentary elections, the unsteady Bhutto has left the country once again for her home in Dubai. Bhutto, whose arrival back in Pakistan Oct. 18 was marked by an attempt to assassinate her that killed 140 celebrants of her return home, has a long record of both incompetence and corruption. She is, in all likelihood, not capable of really helping Musharraf to ease the crisis.

There is a real danger here that the terrorists could come to power in Pakistan, necessitating action by the U.S. and India to seize control of the country's nuclear weapons before they could fall into the hands of Al-Qaeda. The magnitude of this crisis, in short, continues to be alarming.

Both the subprime crisis and the Pakistan crisis are of world importance. To learn about it in comprehensive reports, we have to rely on the New York Times and not on the L.A. Times and its Page 1 ads from the sorry American Airlines.

--

The dictatorship of the military junta in Burma, confronted by continuing unrest by an aroused citizenry, and a new march this week against it by heroic Buddhist monks, has now demanded that the United Nations remove its leading local representative, Charles Petrie, just on the eve of the arrival of the UN emissary, Ibrahim Gambari, on a second visit to try to get this foul regime to negotiate with the democratically-elected leader of the Burmese people, the Nobel laureate Daw Aung San Suu Kyi. Petrie had issued a statement this week urging the junta to bow to the protests.

Once again, as in the Iranian nuclear issue, the UN is being stymied also by the unwillingness of Russia and China to take part in world moves to bring a more humane government to long-suffering Burma. These major powers adhere closer to their tyrannical traditions than to the needs of humanity.

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