SeanReadsTheNews

TIME Magazine Exposes U.S. As Tax Haven - Really

Credit Ken Stier of TIME for coming up with a unique take on the issue of international tax havens - that the United States treats Mexico the way Switzerland used to treat the U.S.

Ongoing investigations of where Americans stash income to hide it from the U.S. is well-trod territory but I haven't seen this analysis before. 

But for all the bluster about cracking down on Americans who hide money overseas, the U.S. turns a virtual blind eye to foreign tax cheats who are parking money in the U.S. banking system. In particular, the U.S. effectively serves the role of Switzerland for Mexico, which suffers from rampant tax evasion — rates go as high as 70% among professionals and small businesses, and 40% among larger businesses. Much of the estimated $42 billion a year of illicit funds flowing out of Mexico each year (not including drug cartel money) ends up in U.S. banks, according to Global Financial Integrity, an advocacy group in Washington.

Kudos also for labeling the source of the story an advocacy group - it is a liberal pro-tax group in Washington.

Stier makes a strong point about U.S. hypocrisy on this issue - apparently only countries with tax rates lower than the perfect U.S. rates are tax havens. 

The influential trade publication Tax Notes also provides this observation.

"Replace the nationalities mentioned in the letter, and you've replicated the UBS affair point for point," says Robert Goulder, international editor in chief at Tax Analysts, a nonprofit publisher about taxes worldwide, which first reported on the Carstens letter. "If you are a Mexican drug lord, you can put as much money as you want into U.S. banks. We ain't going to tax it, and the Mexicans can't tax it because they are never going to know about it. It's the financial equivalent of 'Don't ask, don't tell.' "

U.S. banks are understandably fighting reform, much in the way the Swiss having been fighting reform there for decades as well.

This was a great pitch by Global Financial Integrity to get their message out in a new way and make its audience think more broadly about what makes a tax haven.

NYT Columnist Norris Rehashes Complaints About Banks

Today's New York Times column by Floyd Norris on how to fix the banking system is a rare miss for the financial columnist.

It reads like a (mercifully) shorter version of Allan Sloan's TIME column from this week but similarly offers little unique insight or ideas in response to the current financial crisis.

In pointing out that bankers makes lots of money and why they do, he makes reasoned arguments - such as looking at the causes (concentration) not the effects (salaries) when looking at regulatory reform - but no idea stuck out as new.

While I can't argue with this, I feel like I've heard it before:

One way to do that is to encourage more competition. The impulse last year to have bigger banks take over failing big banks now looks exactly wrong, even before remembering that the regulators thought Citigroup and Bank of America were good acquirers with solid balance sheets.

Fortune's Barr Tags Commercial Real Estate Sector

Fortune's Colin Barr has been on a mini-rampage against the big Wall Street banks lately but in his hands the kind of biased, snarky reporting that makes me flip the page elsewhere is compelling reading.

Today's article on how bank leadership teams are trying to obscure their pending reckoning with the commercial real estate sector is a great example of how he can write a hit piece backed up with multiple facts, quotes and observations to make his point.

He is far from the first reporter to focus on this issue - but his ability to point out the exact weaknesses in asset allocation, government complicity in letting the politically connected off the hook in realizing the potential losses, hard data on commercial lease spending and early stage delinquencies, work together to paint a grim picture grounded in facts, not rhetoric.

The article was also a happy Friday present for about six analyst teams quoted in the article.  If you are a bear, make sure you're on Barr's call list.  He'll get to you sooner or later, and the way he's been going lately, probably sooner.

Bloomberg Catches Product Naming Complexity Behind Nissan's Leaf

Kae Inoue, Makiko Kitamura and Yuki Hagiwara of Bloomberg News today file a story on the naming of the Nissan Leaf, that company's first electric car.

The article is packed with details about the car's design, as well as deep back story on the pitfalls of trying to find a name that will work globally. 

IP lawyers quoted in the story consider it a miracle that a common word like "leaf" wasn't already claimed but if that's too lawyer-geeky for you, the story of how companies trademark and recycle names, great goofs in history (naming a car after the driver of a chariot that crashed into the sun, for example), a fad in Japan for naming vehicles with English words, as well as standard business information about the design of the car and where it fits in the company's global product line.

The result is a great read full of surprising information from what would usually be a paint-by-the-numbers company product announcement.

I've often observed when planning media strategy with clients that they usually overlook what's most interesting about their own story.  For example, a software developer might be enamored by a unique feature in the software but over look a great story in how he raised his seed capital, or a lawyer focused on a great derivative structure but not in the economic trends that inspired its use.

The PR team and the reporters got creative to look beyond the obvious here and as a result have a much better launch story.

World's Fastest Nudist Fakes Out CNN, NYT Has the Story

Last weekend I met professional fraudster Alan Abel at a conference in which he regaled the audience with tales of tricking daytime talk shows as well as the nation's top news media with stunts such as a "sex Olympics" and campaigns against animal nudity, among many others.

Andrew Adam Newman in The New York Times today reports that corporate hoaxers such as shoe merchant Zappos don't even have to try to trick the media any longer, CNN's Anderson Cooper picked up their online video campaign "World's Fastest Nudist," off the Internet.

Worse, a reporter for a regional paper in New York City actually ran an interview in character with the actor playing the nudist.

On Oct. 9, The Park Slope Courier in Brooklyn (part of Courier-Life Publications, a unit of News Corporation) published an interview with the naked runner. The interview was conducted over the telephone with Mr. Overstreet, who stayed in character and told the reporter, Gary Buiso, that his name was Donnie Montero and that last year in Barcelona, Spain, he won the World Nude 10K race, which does not exist.

The reporter requested the interview through the character’s Twitter account, fastestnudist, according to Agent 16. Informed that he had been misled, Mr. Buiso declined to comment and referred questions to Kenneth Brown, editor in chief of Courier-Life Publications. Mr. Brown did not return messages seeking comment.

Frankly, making such a big deal of tricking the Park Slope Courier seemed like a cheap way to mention News Corp. in the article - as if this story made it on Fox News or in The Wall Street Journal - but still.

Despite our reputation for playing with the truth, most PR people are scrupulously honest (or in our weaker moments, scrupulously willfully ignorant) because our reputations with the media are essential to staying employed.  Nonetheless, I've often been surprised at how little reporters - particularly those below the top tier of journalism - actually check what we're telling them.  Some stories - like this one - may be too good to check but more often too hard to check comes into play as well.

Oh, and the Times shouldn't be too smug about this.  Alan Abel carries a laminated clipping of his obituary from that paper around with him.

WSJ: Issuers Sidestep Credit Rating Agencies in New Debt Offerings

The Wall Street Journal's top credit reporters Liz Rappaport and Serena Ng have a small article on C1 of today's paper that probably should have been A1 above the fold.  The article, "Credit Ratings Now Optional, Firms Find," on bond issuers issuing debt without ratings from the big agencies says more about how to deal with the failures of Moody's, S&P and Fitch during the recent credit boom than any piece on public policy could.

For the last week or so, I've worked hard to stay away from articles that are too heavy in public policy because this isn't a political blog and it's too hard to evaluate the articles as journalism without bias, i.e. "the good articles are the ones I agree with."

However, by checking out what businesses are doing in practice, and how they can sell into the credit markets without ratings shows how badly the ratings agencies damaged their brands during the bust and why further regulation isn't necessary, although the article notes that proposals are still moving through the regulatory structure.

Now that AAA ratings have been exposed as about as meaningful as "Seen on TV" stickers at Odd Lot trading, we can all just move on.

"Our reputation is good....I don't think a rating would have mattered that much," said Bob Kunze-Concewitz, chief executive of Italy's Gruppo Campari, which in October sold €350 million ($515 million) in seven-year bonds with a 5.375% interest rate.

Amen.

TIME Gives Sloan Five Pages To Say...What Exactly?

Business columnist legend Allan Sloan files a long article on "What's Still Wrong with Wall Street" in TIME Magazine this week, and unlike his shorter column in The Washington Post earlier this week, I kept waiting for him to tell me something I didn't already know.

The article is elegantly written but fails to persuade.  He criticizes Wall Street's bonus culture, but seems to feel that Wall Street's middle class, those who get $250,000 bonuses on $150,000 salaries, should be spared. 

He calls for more regulation of how the banks do business, break-ups to solve "too big to fail," etc., but also says don't trust Uncle Sam to protect the financial system.

Using the common proxies of Fox News and MSNBC he criticizes rhetorical extremism - as if one extreme or the other can't be right on an issue.

The article seems to be casting about for a narrative to sustain it and doesn't add anything to the conversation about the big issues it tackles. 

NYT Advertising Column Spotlights the Ghost of Gourmet Magazine

Stephanie Clifford's advertising column in today's New York Times covers the marketing ripples that resulted from the abrupt cancellation of Gourmet Magazine last month, including publishing tie-ins with a cookbook whose book tour is still ongoing, a PBS TV show hosted by the former editor, and the advertising partnership with American Airlines.

Clifford gets interviews with leaders of American, Interpublic Group, which produced the PBS TV show, and Conde Nast, whose spokesperson expressed interest in extending the brand past the life of the magazine.

While her more famous colleague Stuart Elliott handles most of the big ad firm news, Clifford covers brands and marketing more closely and today's story is an interesting and counter-intuitive examination of how brands work, even when the underlying product goes away.

NYT Shines Light on Commercial Sublets in Hometown

Real estate salesmen, whether commercial or residential, hate to admit when there is a sale on, so kudos to New York Times reporter J. Alex Tarquino for his insightful story today about the gap between asking prices for A list commercial space in New York City and what you can get as a sublease.

Tarquino's analysis shows what commercial property in New York is like on the secondary market, cutting through the fog that developers and operators throw up to cover their reputations and protect the next deal.

The thoroughly sourced article deals with real estate brokers, lessors, owners of A list space on Park Avenue putting it up for rent and more.

Too many reporters take whatever numbers are put in front of them at face value and real estate is one area where that's a really bad idea.

Reuters Spotlights Psychoanalysis of Insider Trading

Dr. Joyce Brothers must not have been available, so I guess Anupreeta Das of Reuters had to go with second stringers to remote-psychoanalyze the people arrested in the Galleon Hedge fund insider trading scheme last week.

He interviews a consultant from security firm Kroll on "why they do it," a lot less interesting than the related question "how" did they get away with it, which would also require a lot less pure guessing on the part of the interviewee.

A stream of otherwise respectable college professors show up to give psychobabble and thrills and hubris and related topics.

This story is the result of a reporter looking for something new to say about the story and going fishing when there was no actual news to report.