U.S. Economic/Financial News

Murdoch Adds Another Notch to His Belt

Aug. 3 (EIRNS)—In one of the largest mergers of media brothels in history, Rupert Murdoch's News Corp. this week reached an agreement to buy Wall Street Journal publisher Dow Jones & Company for $5 billion. News Corp. is a major media conglomerate, owning a string of newspapers from the stuffy Times of London to the garish New York Post, as well as the Fox News cable television channel, the Fox broadcast television network, and MySpace.com, among many others. The merger has caused some consternation among the elite employees of the Wall Street Journal, who fear that their status as high-class hookers would be undermined by any association with the common streetwalkers of Fox News, a pseudo-news operation which combines the ideological fervor of Hermann Göring with the intellectual heft of Entertainment Tonight.

The folks at the Journal take their mission of making America safe for the super-rich financiers and their cartels quite seriously, while the fans of Fox News are basically as dumb as rocks. There is room for concern, because while the editorial page of the Wall Street Journal has long been a bastion of fascist corporatism, some of the news coverage occasionally falls short of the same standard. Under Murdoch, this propaganda lapse should be remedied. Rumor has it that the revamped Journal will feature such headlines as "If you don't buy stocks, the terrorists win!" and "Hedge funds for God and Country."

British Intelligence front-man Murdoch bought MySpace, the Orwellian social networking website, in 2005. MySpace is one of the jewels in Big Brother's crown, a place where millions of people voluntarily donate the details of their personal lives to the Big Brother databases, thereby dramatically reducing the police state's intelligence-gathering expenses.

Stock Market Dives, Bear Stearns Loses

Aug. 3 (EIRNS)—Although any sane individual knows that the gyrations of the stock market reflect nothing remotely close to reality, today will mark the worst three-week collapse on the markets since 2003.

Credit markets are freezing up around the world, foreclosures keep soaring in the U.S., and yet Congress insists on ignoring reality while the system is coming down!

The three stock markets all finished down on Aug 3. The S&P 500 erased its gains for the week closing 2.7% down or falling 39.14 points in a day—its worst day since Feb. 27. The Dow Jones fell 281.42 points, or 2.1%, while the Nasdaq index tanked 64.73 points, a 2.5% loss. Bloomberg characterized the activity as "exacerbat[ing] a rout last week that wiped out $2.1 trillion in value from global equity markets."

A big driver for the Aug. 3 stock losses was Standard & Poor's announcement that it lowered Bear Stearns' credit-rating to negative. The rating agency said the move was due to concern over the fall in mortgage-backed securities (MBS) prices which would lower the hedge funds' earnings. Bear Stearns' CFO Samuel Molinaro said, "I've been out here for 22 years, and this is as bad as I've seen it...." The company's shares fell another 6% today, bringing its yearly stock price decline to 33%.

Another indicator of the rate of collapse was evidenced by Sowood Capital Management LP's announcement today that the hedge fund had lost 60% of its assets in one month. Sowood had reported having $3 billion in assets as of June 30. But today, Jeff Larson the fund's founder, a former star trader for Harvard's endowment, told investors there remains only $1.4 billion which he intends to return to them.

See the InDepth Economics section for a full report on the U.S. foreclosure crisis and the blowout on the housing market.