This was a week for fallen heroes and flailing leaders.
On Tuesday, Treasury Secretary Tim Geithner disappointed with too few details on the new bank bailout.
On Wednesday the bank CEOs got flogged in Washington – one more indignity after schlepping there on the Delta Shuttle or Amtrak’s Acela.
President Obama scored with the $789 billion stimulus bill. But it emerged, after plenty of compromise, leaner than most economists had hoped for. Obama’s honeymoon is short – and now another nominee for Commerce Secretary is out.
And look at our sports legends. Or not. A-Rod admits he took steroids when he played for the Texas Rangers. After Michael Phelps blows his hero status with a bong. Did you catch the news about Lance Armstrong? Five months after the seven-time Tour de France champ agreed that he would return to cycling and submit to a strict anti-doping program, he reneged on the commitment to the custom regime. This galvanized skeptics who have suspected his purity for a long while.
And in business, a slew of companies went bankrupt or edged towards collapse. Most prominently, Paul Allen, who co-founded Microsoft with Bill Gates 34 years ago, announced that Charter Communications, where he’s chairman and the largest voting shareholder, will file for Chapter 11 by April 1 in order to restructure its $21 billion long-term debt load.
One other titan who once had the golden touch, Mel Karmazin, is fighting to save his company: debt-ridden Sirius XM Radio. Karmazin is the empire-builder who founded Infinity Broadcasting, sold it to CBS, and became Sumner Redstone’s No. 2 at Viacom – until they clashed and he left the company. Late last year, when I talked to Karmazin for a profile of former Viacom CEO Tom Freston, he seemed jaunty and confident. He noted, in fact, that he had smartly sold a portion of his Viacom holdings while he was working for Redstone. “That was one of the reasons that Sumner hated me,” Karmazin said. “He asked me, ‘Why aren’t you loyal? Why aren’t you keeping the stock?’ Then when I left, I sold the rest at $37.”
Viacom shares now trade at $17. Too bad Karmazin shoveled his millions into Sirius, which has sputtered from $3 to 10 cents over the past year. Karmazin holds 8.5 million shares of Sirius XM, according to recent SEC filings. If he doesn’t secure a buyer or partner to inject the needed capital, Sirius could file for bankruptcy as early as Tuesday.
Let’s get through this Friday the 13th. And have a good weekend.