In a cruel twist of fate, the man for whom Michael Jackson once said he felt "strong hate" is taking a central role in his final memorial. Joseph Jackson, the 79-year-old family patriarch who, according to Michael, dished out regular beatings to his children, has also raised eyebrows in the past few days, rarely missing the opportunity to promote his new record company.
    
"Joe Jackson is like the ultimate evil stage mom," British music author Barney Hoskyns told Reuters, comparing him to the abusive father of the Wilson brothers in the Beach Boys. "You ask what ultimately killed Michael Jackson: It was the self-hatred that was cultivated in him by an extremely abusive -- both physically and mentally abusive -- man."
    
Michael Jackson, the third-youngest child in the Jackson clan, made no secret of his father's harsh methods.
    
"He was very strict, very hard, very stern," Jackson told Oprah Winfrey in 1993. "Just a look would scare you ... There's been times when he would come to see me and I would get sick. I would start to regurgitate (as both a child and adult)."
    
In an interview with British broadcaster Martin Bashir that aired in 2003, Michael said he got off lightly compared to his older siblings. He tearfully recalled that his father would "tear you up" with a belt or some other convenient cord, and "would throw you up against the wall." At such times, he said he felt "strong hate" for his father.
    
In the 1994 book "Michael Jackson Unauthorized," author Christopher Andersen wrote: "Beatings were administered with razor straps, belts, wire coat hangers, rulers, switches, and fists. Bloody noses were not uncommon, and more than once one of the boys was knocked senseless."
    
But Michael Jackson said he still loved and forgave his father. Billy Wilson, head of the Motown Alumni Association, said spankings were common with black families before "we started moving into mainstream America."
    
"Without his father, Michael would have taken a different path," Wilson wrote in an email. "Michael was brave on stage because his father instilled that toughness needed. The only person Michael was afraid of was his father! Which meant ... he was fearless with anyone else and on stage."

After Michael Jackson died on Thursday, concert promoter AEG Live found itself on shaky ground, with 50 shows in London scrapped and ticket buyers clamoring for refunds. The company in recent days has been forced to consider how much it could lose on the canceled shows, amid reports that it spent up to $30 million in production costs and as questions emerged about Dr. Conrad Murray. He is the physician AEG Live hired to care for Jackson and the one who was there when the singer died. He performed CPR on a bed, instead of the preferred method of placing him on a hard surface, like a floor.

Would AEG be the target of lawsuits? Will its insurors decline to pay out if they make a claim? Time will tell, but one outside observer is giving AEG, which is owned by companies controlled by Colorado-based billionaire Philip Anschutz, credit for the way it has controlled the damage that could've been caused -- or may still be caused -- by Jackson's death.

"AEG is at the center of this right now and it seems the people at AEG are very, very switched on," said Jerry Kroll, an attorney who specializes in insurance cases. "They seem to be dealing with it as if they had a crisis management team come in."

Randy Phillips,  chief executive of AEG Live, has said that Jackson looked fit and ready to perform the night before he died, and that the company planned a tribute show that could involve the singer's famous family. Phillips also said he tried in vain to convince Jackson not to hire Murray. 

This comes after the company released photos of Jackson's last rehearsal in downtown Los Angeles on Wednesday, the night before he died. The photos show Jackson looking in good shape, unlike the skeletal man in frail health that media reports often describe. The images undercut speculation that Jackson was in no shape to handle 50 concerts.

AEG Live even offered concert goers the chance to hold onto their ticket instead of receiving a refund, on the grounds that the piece of paper will be worth money as a collectible.

"Whoever dreamed up the idea that if you want to keep the ticket, we don't refund it but you get the ticket as a souvenir was a genius," Kroll said.

AEG Live had insurance to cover itself in the event Jackson did not take the stage in London. The insurance on a concert would normally cover the concert promoter's production costs, but in this case payment will likely hinge on the results of the two autopsies done on Jackson, because the insurance companies might not pay if Jackson died of a drug overdose, Kroll said. Jackson had a history of prescription drug abuse, and police investigators have searched for medicines at his home to determine what role those might have had in his death.

Representatives from AEG Live did not return calls for this blog post.

The company also reportedly has enough material from video footage of Jackson rehearsing to release a DVD and an album. Kroll, who was not involved in plans for the London shows but had a legal role in the unravelling of the singer's 1990s "Dangerous" tour, said that AEG could realize hefty revenues on sales of material from the rehearsal.

"You put that out, that alone would be an amazing event," he said. "It's like saying, 'OK we have Elvis' last rehearsal.'"

Michael Jackson fans danced in the aisles of Harlem's famed Apollo Theater on Tuesday to celebrate his life, cheering and placing tributes on the stage where the "King of Pop" performed as a child.

A line stretched across several city blocks from the theater with fans chanting Jackson's name to passing tourist buses and singing his songs as they waited to see a 45-minute music and video tribute being repeated throughout the day.

Here's a look at fans inside the Apollo celebrating his life.

On the streets outside the Apollo Theater in Harlem, vendors were selling t-shirts, posters, badges, and music of Michael Jackson. And this little boy shows you are never too young to be a fan.

News about the media industry:

Google Makes a Case That It Isn’t So Big (NYT)
"Google has begun this public-relations offensive because it is in the midst of a treacherous rite of passage for powerful technology companies — regulators are intensely scrutinizing its every move, as they once did with AT&T, I.B.M., Intel and Microsoft," writes Miguel Helft.
> Graphic about Google share of all ads and online ads (Lost Remote)

Media and cable now the riskiest sector (Reuters)
"Default risk for the media and cable sector has risen from its already high levels a year ago, CreditSights said. Rising leverage, along with a protracted decline in advertising revenues that was accelerated by the U.S. recession, are behind the higher risk," writes Dena Aubin.

Sun-Times seeks more time to reorganize (Crain's)
"Lawyers for Sun-Times Media are asking for three more months to come up with an exit strategy, a request they considered “neither surprising nor remarkable.” The publisher currently has until July 29 to submit a reorganization plan," writes Lorene Yue.

Vibe magazine shutting down (Daily Finance)
Jeff Bercovici writes: "Vibe enjoyed significant success in the late '90s and early part of this decade as hip hop and R&B became the nation's predominant forms of pop music. But in recent years the title has fallen on hard times under its new owner, the Wicks Group, which bought it in 2006."

MSNBC Beat CNN on Weeknights in Second Quarter, Fox Still on Top (NYT)
Bill Carter writes: "The trend of cable news viewers moving away from CNN continued in the second quarter of 2009 with MSNBC beating CNN in weeknights for the first time ever for a full quarter of a year."

In other news:

• Gannett Said to Prep Massive Layoffs (Gannett Blog)
• Times' retirement plan hit by $154M loss (Boston Business Journal)
• Cable Hits a Big Winner With DVRs (WSJ)

My colleague Chris Swann says to beware of housing false dawns. I couldn't agree more.  While the pace of decline in house prices moderated in April, one has to consider the stupendous monetary stimulus that helped drive that improvement.  With rates about as low as they can go, the only way to drive a sustainable increase in prices is to increase buyers' income.  With the employment picture continuing to deteriorate, don't look for rising incomes any time soon.

(Click chart to enlarge in new window)

The chart above plots the month-over-month change in the composite 20 index compared to average 30-year fixed-rate mortgages.

Bulls would point to an improvement in the so-called "second derivative," a decline in the rate of decline.  From March to April prices dropped only 0.6%, far better than the 2%+ declines each of the prior six months.

Bears would argue that the data showed a similar increase a year ago, and then promptly turned back down.

But prices have fallen 18% since last year, bulls might say.  They can't fall forever.

The trump card, however, falls to the Bears in my view:  Mortgage rates are 110 basis points lower today than they were just last fall.  That's a lot of monetary stimulus.

When rates go down, prices go up (all else equal).  A quick present value calculation shows that a $3,000 monthly payment can pay off a $500,000 30-year mortgage priced at 6%.  Drop rates to 5% and that same monthly payment will support a $558,000 mortgage.

Admittedly, this is a simplistic way to look at house prices.  But it serves to show how incredibly sensitive they are to interest rates.

But low interest rates, along with lending structures that allow people to borrow more relative to their income, only offer a temporary sugar high for house prices.  There won't be a sustainable increase in prices until there's a sustainable increase in buyers' income.  And that's not happening any time soon, not with unemployment speeding towards double-digits.

For more charts analyzing today's Case-Shiller data, see below.

The first chart shows the decline in the 20-city index from peak to trough.

(Click chart to enlarge in new window)

Prices have now declined 33% from the peak, but remain 39% above 2000 levels, when the index was first calculated.

The table dissects the data by metro area.  In April, eight cities showed a month-over-month increase.  That compares to three in March.  The pertinent question: is the improvement merely a byproduct of easy money?

Don't underestimate the power of California, and its ability to suck in a reluctant federal government to bail it out of a fiscal mess of its own making.

But the Obama administration and Congress should resist.

Not only is the federal government shouldering the already heavy burden of sorting out the auto and banking industries, the housing giants Fannie Mae and Freddie Mac and the
hard-to-get-rid-of American International Group, but such action would undermine the state's need to revamp what has become an ungovernable system built on gerrymandering, ill-conceived tax schemes like Proposition 13 and unrealistic restraints like needing a two-thirds majority to pass a budget.

Intervention in California would open another too-big-to-fail Pandora's box, but one that is much more difficult to navigate politically since the federal government would be dictating which state, and by extension which voters, are worth saving. California, though the most extreme case, isn't the only state suffering.

In fiscal year 2009, 38 states are experiencing revenue shortfalls, according to a joint survey by the National Governors Association and the National Association of State Budget Officers. Over three quarters of the states have already slashed their budgets by $31.6 billion, but that won't solve the more than $180 billion gap still projected between 2009 and 2011.

It would also further encourage complacency in the $2.7 trillion municipal bond market, where the assumption persists that no matter how disastrous a state's finances, investors need not worry about default.

That California has itself to blame as much as the slump in revenues should also make it a hard sell for a bailout.

The embarrassing budget impasse has left the Golden State with a $24 billion gaping hole in its state finances and a cash crunch that will force the state controller to send out IOUs for the second time this year later this week.

So far the cash crunch is limited to a $2.8 billion shortfall in July that can be plugged by handing out IOUs to local governments, state vendors and recipients of income tax refunds. But by September that shortfall will swell to $6.5 billion, according to the state controller, and by October, California will need to pay off the IOUs issued this month.

Of course this could be remedied by the governor and state legislators if they could agree on a budget and painful measures to address the cash shortage, but even the June 30 deadline hasn't been enough to force them to overcome the entrenched dysfunction in the state government.

It should be said that the prospect of defaulting on the state's roughly $70 billion of bonds outstanding -- that includes its general obligation bonds and its Economic Recovery Bonds -- is likely some months away, but the rapid deterioration of the state's finances, the size of the budget gap and the governor's insistence that short-term borrowing in the credit markets is off the table as a solution, brings the possibility into much sharper focus.

The scope of the mess and state government's inability to tackle it has caused those with an aversion to drama to sell California municipal debt, pushing up 30-year yields to a lofty 6.2 percent this week, up from the 5.3 percent to 5.4 percent seen in the beginning of May, according to Municipal Market Advisors. The cost of protecting the bonds has also been rising.

Given the unprecedented nature of a California default -- you have to go back to The Depression to find a state, Arkansas, failing to meet its debt obligations -- there's an expectation that the federal government would intervene to ensure bond holders are protected, at least partially.

That's because a state the size of California -- it would be the world's eighth largest economy if it stood alone -- would have an extremely difficult time managing its finances without access to the capital markets.

It also promises to darken the United States' black eye from the credit crisis since it would show how weak such big states, which contribute to federal coffers, are. That could pressure its own cost of borrowing higher as international investors become even less enamored with government debt.

California has already asked the U.S. Treasury for a healthy heaping of funds from what has become the catch-all Troubled Asset Relief Program, which was initially created to buy toxic assets from financial institutions, but Timothy Geithner has kept his distance, signaling back in May that any decision to lend a helping hand to the state should come from Congress.

The pressure is likely to mount in the days, weeks and months ahead, however, if there's no resolution from the state on how to right its finances. Fitch Ratings has already downgraded California's ratings, and Moody's Investors Service and Standard & Poor's have warned that they could do the same if nothing is done. Negative press surrounding hardships from those receiving IOUs in lieu of cash will also turn up the political heat to do something.

The federal government, however, should stay out of the mess and signal more strongly to state politicians and investors alike that they're on their own.

From Jeff Gerth and Brady Dennis:

GE has joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates. Public records show that GE Capital, the company's massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government's actions have been "powerful and helpful" to the company, GE chief executive Jeffrey Immelt acknowledged in December...

The FDIC has been working to wean financial institutions off the program. The TLGP originally was slated to end in June, but at the Treasury's request the FDIC agreed to extend it until Oct. 31. Some participants have stopped using the program, but GE Capital continues to do so for the overwhelming majority of its debt.

Much of the $340 billion in debt will come due in 2012, the year the FDIC guarantees expire. At that point, known in banking circles as the "cliff," the agency will have to make good if companies such as GE are unable to honor their obligations. FDIC officials say they are comfortable that the agency has collected more than enough money to cover potential losses.

It's abundantly clear that the FDIC won't have collected nearly as much money operating the TLGP as it has offered to GE Capital in guarantees. It's also abundantly clear that GE Capital is too big to fail and won't be allowed to default -- instead, the FDIC guarantees will just be rolled over somehow. What's not clear at all is how on earth the US government intends to separate GE Capital from its parent, in line with the current administration's promises that systemically-important financial institutions can't be owned by non-financial companies.

GE ended up borrowing disproportionately from the TLGP because it had a disproportionately large amount of short-term liabilities which needed to be rolled over -- in that sense it was even more of a bank than most banks, if your definition of a bank is any entity which borrows short and lends long. It clearly needs to be regulated as a standalone bank. But how we're going to get there from here is far from obvious.

Shares in the suffering utility Pacific Ethanol shot up over 8 percent on Tuesday, reaping the rewards of cheaper ethanol prices, thanks largely to what is expected to be a bumper crop year for U.S. corn. Units of Pacific Ethanol that owned four ethanol plants filed for Chapter 11 protection last month, stung by volatile prices for corn, low fuel demand and the credit crisis.

A senior company official at India's Suzlon Energy said the wind power company was looking at selling assets and shares to lower its debt, dealing a major blow to its shares, falling 11.44 percent in Tuesday trading.

A coalition of progressive U.S. faith groups and pastors has launched a push for affordable health care reform, an effort they say is rooted in a "scriptural call to act."

Radio ads will appear from today until July 4th in five states: Arkansas, Colorado, Louisiana, Nebraska and North Carolina. The ads urge those states' Senators, whose votes could ultimately decide the fate of President Barack Obama's drive to transform America's health care system, to back legislation "that makes quality coverage truly affordable for every American family." You can see the ad script and audio here.

Organizers also say that more than 600 clergy from 41 states and 39 denominations have said they will deliver sermons in coming weeks on the issue and urge their flocks to act. A pastors' guide to health care will also be distributed to 4,250 religious leaders along with a shorter version to wider church members.

PICO National Network, Faith in Public Life, Faithful America, Sojourners, and Catholics in Alliance for the Common Good are the main religious advocacy groups behind the campaign.

If this all sounds familiar, it should. The tactics being adopted by these liberal and centrist groups and activists are a carbon copy of the successful ones employed in the past by the U.S. religious right. The distribution of pastors' guides, the call for public policy to be guided by scripture (in this case compassion for the poor and the ill), the preaching of sermons on looming legislation -- it's all taken from the loose network of conservative Christians which has delivered many a vote for the Republican Party.

Conservative Christians remain a key base for the Republicans and they have also been decrying "Obama-care" on talk radio, the blogosphere and other outlets.

Photo credit: REUTERS/Larry Downing.  Members of the audience shake hands with U.S. President Barack Obama after his speech about reforming America's health care system in Green Bay, Wisconsin, June 11, 2009.

It appears the punishing 150-year sentence meted out by a federal judge to Ponzi king Bernie Madoff is already having legal reprecussions.

A day after Madoff was sentenced to spend the rest of his life and then some in a federal prison, another federal judge in Texas sided with prosecutors in ordering R. Allen Stanford to remain in jail pending a trial on his own Ponzi-related charges. Now there's no definitive connection between the Madoff sentencing and the ruling in the Stanford case, but it's hard not to see some cause-and-effect.

After all, a federal magistrate judge initially ruled that the alleged $7 billion Ponzi mastermind could be released after posting $500,000 in bond. But a federal judge overruled that decision, agreeing with prosecutors that the one-time Texas billionaire is a flight risk.

It's this kind of tough justice that may do more than anything the SEC could ever do to deter future scamsters.