Quarterly earnings could be up year-over-year by the fourth quarter. A low threshold for improvement, as a result of last year's Q3 financial meltdown, could set the stage for the appearance of a recovery, but the ride from here to there will be a difficult one.

Data from Bloomberg and S&P suggests that profits for stocks comprising the S&P 500 Index may be down 21% next quarter. It's still a double-digit blow, but a better result than Q2's estimated 34% -- and far ahead of Q1's 60% year-over-year fall in profits. The driver of a recovery, however concealed by low expectations, is likely to be a combination of unemployment and consumer spending. Last month, we saw unemployment reach a 26-year high, putting obvious constraints on purchasing.

Bloomberg L.P., where I worked for seven years as a reporter for Bloomberg News, has announced plans for its first-ever corporate layoffs, proving that the media empire founded by New York City Mayor Mike Bloomberg in 1981 is not immune to the economic slowdown.

The cuts, 100 in total, were in the company's radio and TV operations. They are not surprising. Both Bloomberg TV and radio station WBBR have been poorly managed for years. Many of CNBC's biggest stars, including Dylan Ratigan, started their careers at Bloomberg TV. They no doubt went to the General Electric Co. (NYSE:GE)-owned network for bigger money and bigger audiences. The reorganization that the New York Times refers to may include the end of non-English language programming. It also means getting rid off high-priced talent.

My former employer, Bloomberg News, is on a quest to learn the identities of the recipients of $2 trillion in emergency loans from the federal government and what collateral the Federal Reserve is accepting in return. The government has thrown up roadblock after roadblock.

Bloomberg and other media organizations filed suit under the Freedom of Information Act to force the government to disclose how it's spending money under the biggest intervention in the economy since the Great Depression. On December 8, the Fed rejected the request, saying it's allowed to withhold information about trade secrets and commercial information, according to an article in Bloomberg.

"If they told us what they held, we would know the potential losses that the government may take and that's what they don't want us to know," Carlos Mendez, who oversees about $14 billion at New York-based ICP Capital, told Bloomberg.

Good point. But the government wants taxpayers to take its word for how it's spending an ungodly amount of money. How gullible does the Fed think the American people are? How do we know that the Brooklyn Bridge is not part of the collateral being offered? Maybe there are strip clubs. Don't laugh. The government has wound up in the gentleman's club business before.

This post is part of our feature on Money Winners of 2008. See them all.

In Michael Bloomberg, you're dealing not just with a person, but with a brand.

Bloomberg, of course, in 1982 founded what is now Bloomberg LLP, the firm that runs Bloomberg News, a financial news service that competes with Reuters, Dow Jones, and News Corp. (NYSE: NWS) to provide breaking news, features, data, and analytics, among other products, to financial players worldwide.

Bloomberg ingeniously developed a product that essentially aggregated, summarized, and presented financial market data at a time when financial institutions -- particularly bond market participants -- were ripe for such a product, and along with editor and former Wall Street Journal reporter Matt Winkler, built a financial news empire known for its speed, accuracy, and comprehensive coverage of the markets.

Bloomberg's reward for the above, in monetary terms? About $20 billion in estimated net worth, good for eighth place on Forbes magazine's 400 Richest Americans list.

It is beyond outrageous that the Bush administration has refused to disclose information about the collateral behind $2 trillion in bailouts.

Typical is the response from Federal Reserve Governor Kevin Warsh to Bloomberg News -- my former employer, which has filed suit to force the government to divulge the information -- regarding the news organization's request for information on the $29 billion loan between JPMorgan Chase & Co. (NYSE: JPM) and Bear Stearns Cos. to prevent the investment bank's collapse.

"The information at issue contains confidential commercial business information regarding securities pledged as collateral in connection with JPMCs acquisition of Bear Stearns," he wrote to Bloomberg.

So, the government's attitude is that taxpayers should not worry their pretty little heads about such questions like whether the deals being struck on our behalf are good ones. That's like putting a fox in a hen house or a mountain lion near a field of grazing sheep. Any animal metaphor you choose shows this is a bad deal.

Wall Street bankers can't seem to accept the fact that this is no longer the 1980s. Members of Congress are the "masters of the universe." What they say goes. For instance, I argued yesterday that American International Group Inc. (NYSE: AIG) should fire its CEO after another report of a company junket surfaced. The fact that the company thought it was justified is immaterial. Some very powerful members of Congress wanted the insurance company to keep its meetings at the Holiday Inn and there will be hell to pay for not doing so.

The same thing is at work with disclosure. Some powerful members of Congress want the process to be more transparent. Once Barack Obama takes office in January and a new Congress takes office, more details will emerge about the bailouts. Chances are members of Congress will not like what they see and heads will roll.

As expected, New York Mayor Mike Bloomberg's blind trust is interested in buying Merrill Lynch & Co. (NYSE: MER)'s 20% stake in Bloomberg LP for between $4.5 billion and $5 billion, according to The New York Post.

The acquisition would give Bloomberg total control over his namesake media company and my employer for seven years. Merrill, of course, also is looking to unload its 49% stake in Blackrock Inc. (NYSE: BLK) to shore up its balance sheet. No word on potential buyers there.

As I posted yesterday, Mike Bloomberg is a logical buyer for the Merrill stake in his company. Bloomberg has the right of first refusal of the sale as well, which probably scared away the few other potential buyers that were out there. Bloomberg LP also prides itself on being a private company that marches to the beat of its own idiosyncratic drummer.

Merrill shareholders, including a close relative, have not had too much to smile about lately. Shares of the New York-based investment bank are down more than 41% this year. Obviously, it's selling its assets from a position of weakness. The New York mayor will gain control over his media empire at a bargain that would have been unimaginable a few years ago.

Merrill Lynch & Co. (NYSE: MER) may wind up selling its 20% stake in Bloomberg L.P., the parent of Bloomberg News, to Mike Bloomberg.

Bloomberg, whose personal fortune is estimated by Forbes magazine at $5 billion, can easily afford the buy back the 20% stake in his company that he does not already own. Given its financial condition, Merrill better hope that the New York mayor is willing to open his check book. Other media companies are not going to shell out big bucks for a minority stake in the company where I worked for seven years. This is especially true given that many of Bloomberg's biggest customers in Wall Street are cutting spending given the uncertainties in the world's financial markets.

Maybe the private equity players would be willing to pay up provided that they could see an exit strategy through an IPO. I don't see that happening either. Bloomberg, which the Wall Street Journal says has the right of first refusal for the sale, likes being a private company because it enables it to march to the beat of its own drummer. That was especially true when Mike Bloomberg ran the show.

Who is the boss of Bloomberg News?

During my career there, there was no question that Matthew Winkler was in charge. My colleagues laughed hysterically when I told them I asked Winkler about his bow ties during my interview with him before I was hired. Bloomberg's editor-in-chief is not known for his sense of humor. Good thing I didn't bring up bow ties -- which he wears every day -- again.

That's why I found the appointment of former Wall Street Journal top editor Norman Pearlstine as Bloomberg's chief content officer so curious. Does this mean that Pearlstine, who was Winkler's boss at the Journal, will supervise him again? What exactly does a chief content officer do that's different than an editor-in-chief? I am not sure of the answers to those questions and neither is the New York Times.

As the Times opines, "the move suggests that Bloomberg, whose fortunes have been buoyed by the selling of its hugely profitable data terminals to brokerage firms and investment banks, plans to expand the journalism side of its business."

Merrill Lynch (NYSE: MER) Chief Executive Stan O'Neal, who is holding onto his job by a thread, likely will sell the Wall Street firm's 20% stake in my old employer, Bloomberg LP, to shore up his company's bottom line. Heck, O'Neal's successor probably will sell it as well.

If I was a betting man, I would bet that company founder and current New York Mayor Mike Bloomberg will probably buy out Merrill. Maybe a private equity player would buy the Merrill interest, reportedly valued at $20 billion, that Fortune values at least $4 billion. The magazine says Bloomberg LP is worth at least $20 billion. But I'm not sure Bloomberg would be willing to cede any management control to an outside investor. The same goes for a huge media company such as News Corp (NYSE: NWS) or Time Warner (NYSE: TWX).

What was obvious to even the lowliest peons at Bloomberg -- including me -- is that the company really likes being private. Management was always willing to try almost anything to keep people glued to their Bloomberg terminals even if it didn't earn an immediate profit. Legend has it, one time Mike Bloomberg noticed that people were away from their Bloombergs and learned that a major sporting event was going on -- he decided on the spot that the company would provide sports news. I have no idea whether this story is true, but knowing the company's corporate culture, it sure seems to be on the mark.

This post is part of our Money Face-Offs feature. Let us know who you think comes out ahead in this head-to-head match-up, and check out our other Money Face-Off posts.

From the bodegas of Brooklyn to the penthouses of Central Park, most New Yorkers would probably tell you that they like the present mayor Mike Bloomberg a whole lot better than the previous occupant of Gracie Mansion, Rudy Giuliani.

Neither Bloomberg nor Giuliani suffers from low self-esteem. I worked for Bloomberg LP for seven years and had some brief encounters with Bloomberg over the years. One time, I called him "Mr. Bloomberg" when I shook his hand at the company's Christmas party. He insisted that I call him "Mike." I continued to call him Mr. Bloomberg. Warm and cuddly, he is not, and working for Mike's company wasn't always easy.

Thomson Corp. (NYSE: TOC) and Reuters Group Plc. (NASDAQ: RTRSY) joining forces to fight a common enemy: Bloomberg Plc. LP

The company founded by New York Mayor Mike Bloomberg -- and my former employer -- is the 1,000 pound gorilla in the business data market. It has gained marketshare at the expense of both Reuters and Dow Jones & Co. (NYSE: DJ) for years.

Bloomberg and Thomson were on friendly terms until fairly recently. Then, Thompson wouldn't answer questions from Bloomberg reporters about the company's earnings estimates. Eventually, Bloomberg decided to do its own polls of analysts.

The combined company may be able to erode Bloomberg's pricing power. When I first started with Bloomberg, it was a mark of status on Wall Street to have your own Bloomberg terminal. Most users that I see now share a Bloomberg to save money.

Nonetheless, Thomson and Reuters have a tough challenge. In addition to Bloomberg, there's the potential that a Rupert Murdoch-owned Dow Jones can pour money into digital publishing products that compete against offerings of the merged company. The Bloomberg threat isn't theoretical.

Though the Bloomberg terminals aren't cheap and aren't very user friendly for the untrained, it's tough to beat their functionality. Many companies have tried and failed to develop a "Bloomberg killer" over the years. Bloomberg terminals even have survived the Internet age.

But it's going to take more than just data for the combined Thomson-Reuters to thrive. More and more financial data is available on the Internet for free. Most individual investors don't need the proprietary data that these companies offer. To survive, they will need compelling content, which in the old days was called news.

A Microsoft Corp. (NASDAQ: MSFT) acquisition of Yahoo! Inc. (NASDAQ: YHOO) makes tons more sense than Google Inc. (NASDAQ: GOOG) buying Dow Jones & Co. (NYSE: DJ). Thomson Corp. (NYSE: TOC) or private equity players are the likely suitors for Reuters Group Plc. (NASDAQ: RTRSY).

Microsoft could combine its struggling search business with Yahoo!'s, which isn't struggling as badly. The dull MSN portal would benefit from being integrated with Yahoo!'s superior content. Moreover, Microsoft would gain the ability to market its products to millions more new users.

Even if this happens, the integration wouldn't be easy. With a market capitalization of more than $38 billion, Yahoo! would be a big acquisition to digest even for a gigantic company such as Microsoft. Combined, these companies would pose a formidable challenger to Google.