The Road to Zell

The happy-juice was so sweet, it made it hard for them to realize that the fast-flowing stream of easy (dumb) money was actually getting slower-and-slower until it became, painfully, obvious that the cash-flow started to flow in reverse. Their "Money Train" was bleeding value each day and there was not foreseeable way to stop it or even slow it down.

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I don't see a problem here poeple! This guy just sold 38 Billion $ worth of property, now he wants to not pay for a bad investment; does anyone else see sothing wrong with this pitchure

didnt he sell buisnisses worth 38 billion $ .what is the broblem . pay what you owe.

The house of cards comes a tumlbing down. Monopoly money and fake cash based on inflated and worthless assets. From this article I am gatering that it will be diffucult to assess the value of anything anymore. Easy credit led to an infaltion in value of hard assets due to infinitely available credit. That credit was based on value that did not exist. Once reality set it everyone has begun to realize that not only is the wellspring of credit run realisticly dry, but the value of assets bought with that credit was artificially inflated and therefore must come down to reality if it is ever to be bought again. Those foolish enough to not own outright the assets will find it harder to finance the installment payments as their cash streams inflated by bogus credit dry up. Sounds alot like the housing market, but in reality this problem stretches well beyond it. A deflationary cycle aka what just happened to Japan is sounding more and more likely now that I am beginning to grasp just how far the reach of the inflated bogus credit bubble became and how it must inevitably play out. No wonder banks are hoarding real assets such as cash as they dont have anything of value to back up their lending anymore at the levels that they once were and they won't be lending that much again for quite some time, if ever. The government tried to close the closet door to hide the skeletons by suspending mark to market, but following this logic allows us to see around it. It also sheds light on why the fed abandoned the TARP proposal, those assets were likely worth pennies on the dollar. I think throwing billions of dollars at these banks instead to get them to lend is an equally foolish and an attempt to reinflate the easy credit bubble. It seems th banks have more sense and are hoarding that cash in order to lend a bit more now that they have something real to back up a bit of lending. It seem to me now that the only way to sell assets inflated artificially in value by the bubble of falsely abundant credit is to lower their price to within reach of existing real credit. In other words deflation is going to have to happen to set things straight. Wow. If your assets were acquired before the bubble and not inflated in value by it then you are safe. If you cashed out on those assets and did not reinvest you hit the jackpot. If you bought in you are taking a loss. Homeowners who bought in at inflated prices will either default or take a loss. The same goes for the stockmarket and just about anything else bought at inflated value. Banks and the government leaders must set things straight and not try to create another bubble or the damage could increase and the crisis can become protracted. Reforms must be put in place to prevent the creation of false lending vehicles generating unbacked credit. Here is hoping they do the right thing, as they haven't for quite some time.

Hey Donfield< it was an inuendo, read between the lines, it actually supports his article of declining print news demand in favor of electronic media. Rookie

Hey Donfield, it was an inuendo, read between the lines, that actually spports his story of declining paper newsprint in favor of electronic media. Rookie

I believe it was Bill Ackman whom suggested Target form a REIT recently.

I believe it is Bill Ackman whom suggested Target form a REIT recently. Kudos, Daniel.

Sorry, Daniel Gross turned me off his article when he interrupted a paragraph to plug a book he's writing. Try writing about your actual story, not plugging yourself.

Sam Zell and his enablers should be thrown in prison.
Am I the only one who thinks it's a stupid idea to try solving the problem of a company being mired in debt by tripling it's debt in a buyout scam?
Am I the only one who thinks it's some kind of Ponzi scheme that allowed Zell to "buy" a company using none of his own money but all of the employee stock plan in which he held no interest?
Am I the only one who is angry that the first people who will lose everything are the employees, who gained nothing, while Sam Zell won't lose anything at all?

Sam Zell is a vulture. I would like to know whick govt. agency approved it. What happened to all those smart lenders who were involved in this transaction. How can you loan $800 billion with a down payment of $615 million.
Tribune employees and their pension funds will go BK.

One more point. Who the hell is Daniel Gross, but another human being with opinions that have no basis in fact. Congratulations Mr, Gross on having people laugh at you, and if you were here with me now, you would see the tea coming out of my nose from laughing at how stupid you are for referring to one of the best business minds in the world, as spending Dumb money. you just have no idea what you are talking about. Someday when Newsweek decides to become relevant instead of dying off into much deserved extinction, my Smart money is on them firing your ass.

If Daniel Gross thinks that Sam Zell was stupid, I've got a bridge in Brooklyn to sell him. If Mr Gross believes anything written by Mr. Sorkin, who got his math completely wrong on the Detroit Auto Workers, why take anything in this article as anything but stupid.. Soon enough, mr Gross will realize that newsweek is as doomed as the Tribune and that Mr. Sorkin is really lousy at math and has no business putting his own lousy math in any of his articles, unless he is trying to bring down the New York Times.

Mr. Zell never planned to build the Tribune franchise; he was intent on destroying it from the beginning. His liquidation of the company was the only real reason the deal was done. He has managed to exclude the most valuable part, the Cubs, from the bankruptcy in a move the lenders will regret forever. His own net worth will not suffer during this debacle, but the Tribune employees will not only lose their jobs but also their pensions and 401k's. Mr. Zell managed to leverage their retirement assets during the transaction.. When all is said and done, the people who made the Tribune a great company will have bitter memories and empty pockets. Mr. Zell will still have his billions to devote to the ruination of yet another company.

Greed leads and there will be massive closings of Hedge funds that never made any sense in the first place. Harvard's genius foundation guru's outperformed everyone ... ooops this year they are down 8 billion and that is not going to be the final at their year end.

making an error in anothers name is a grain of sand on a beach, compared to the vast judgement errors , & simple greed that overtook these financial "genius" guru's.

making an error in anothers name is a grain of sand on a beach, compared to the vast judgement errors , & simple greed that overtook these financial "genius" guru's.

fatso68, don't let it surprise you that Gross doesn't bother to let facts get in the way of a good story. Remember, this is the same guy who, a short while ago, wrote the inflamatory piece insisting that the poor would be blamed for the financial mess we are in.