The phone-hacking scandal at Rupert Murdoch’s News Corp., which resulted in 1) the resignations of Dow Jones CEO and Wall Street Journal publisher Les Hinton and U.K. newspaper head Rebekah Brooks, 2) the collapse of a takeover bid for the U.K.’s BSkyB network and 3) recognition that Scotland Yard either overlooked or suppressed information on the potential hacking of nearly 4,000 people, is reshaping many lines of business and political influence.
MY TAKE: While Britain’s Labor Party leader Edward Miliband said “It’s not just about one individual, it’s about the culture of an organization”, it is likely that the culture of abuse, poor judgment and lack of oversight includes some government and political leaders as well. As global policymakers attempt to manage a broad array of debt crises, many are constrained by alliances with interest groups, political ideologies, or poor comprehension of the challenges. In the Eurozone, questions persist on the validity of the banking stress tests released on Friday. In the U.S., policymakers continue to dance around the $14 trillion deficit. NOTE: on Friday, Pimco’s Bill Gross said people do not understand what is going on, “The U.S. has a $60 trillion net present value liability burden, and that constitutes Medicare, Medicaid and Social Security in combination. That is 4-5 times GDP and it certainly exceeds those liabilities in Greece, Portugal and Spain. Ultimately, the U.S. has a big, big problem.”