PLEASE NOTE: My new blogging home is now at theNieman Journalism Lab. I’ll continue to update this site for the time being with the introductory portion of my posts, but to read the whole thing, you’ll have to head over to the Nieman site!
The other day I received a snail mail letter from Spain bearing a 0.78 Euro stamp, signed by one Francisco Miceli, Esq., a “barrister” in Madrid. He’s offering to split with me $8.8 million in cash that was stashed in a trunk by a purported relative of mine (who unfortunately died, with his whole family, in the 2004 tsunami).
A neuroeconomist recently discovered that it’s the perception of relative poverty, not the actual fact of poverty, that increases the propensity of people to wager their earnings on lottery tickets and the like. So my friend Mr. Miceli must be feeling relatively poor in these economically challenging times, and is therefore willing to wager actual postage to find suckers, rather than just emailing his overtures for free.
Likewise, Mexican investor Carlos Slim Helú, having yielded the title of world’s richest man recently to Warren Buffett, must be feeling the pinch of poverty, which may explain why he is taking a gamble on the New York Times Company by investing $250 million. The Times will pay him 14 percent interest for the use of his cash, and at the end of the six-year deal, Slim can exercise warrants that came with the bonds that would increase his current 6.9 percent stock ownership of the company to more than 17 percent.
Why does the world’s greatest newspaper find itself paying junk-bond interest to a Mexican billionaire? Clearly, because it, like the Gannett Company, has run out of normal sources of cash, and in effect, it needs to pay off its credit card.