Up until yesterday, Michael Whitney was a presenter on Bloomberg TV; he would occasionally get his byline on Bloomberg News stories. Whitney was fined $55,000 last year by the CFTC and is subject to a permanent injunction, after being charged with false reporting and attempting to manipulate natural gas prices.

Is it OK for a financial services professional who has run into major trouble with the law to simply move over to journalism and cover the same asset class there? Henry Blodget certainly thinks so: the former technology analyst is now publishing earnings estimates on his website despite being barred from ever doing exactly that for the securities industry.

At the very least, one would hope that any such journalism would come with extensive disclosures and disclaimers. Blodget was happy to do that when he was writing for Slate, but there’s nothing that detailed at the Business Insider. Instead, his bio there goes into no real detail at all about his fines and banishments:

From 1994-2001, Henry worked on Wall Street at Prudential Securities, Oppenheimer & Co., and Merrill Lynch. He ran Merrill’s global Internet research practice and was ranked the No. 1 Internet and eCommerce analyst on Wall Street by Institutional Investor and Greenwich Associates. He was later keelhauled by then-Attorney General Eliot Spitzer over conflicts of interest between research and banking.

At Bloomberg, there was no disclosure at all of Whitney’s past. Whitney, a freelancer, was fired by Bloomberg yesterday, along with other freelancers on the TV side. Bloomberg’s spokeswoman, Judith Czelusniak, refused to answer questions about whether Bloomberg freelancers are held to the same standards as full-time employees, whether it is acceptable for journalists to have run into this kind of trouble with regulators, and whether or not the discovery of Whitney’s past was the reason for his dismissal.

My feeling is that there are enough highly-qualified journalists looking for work out there that it’s not necessary to bring into the journalism industry people who have been dishonorably kicked out of the securities industry. But if you are going to do that, at least be open about it.

Update: Of course none of this is as bad as Thom Calandra’s bio where he’s plugging his latest investment newsletter:

Thom co-founded and was the editorial spirit of CBS MarketWatch, MarketWatch.com and FT MarketWatch in Europe.

As the voice of Thom Calandra’s StockWatch and The Calandra Report, Thom fancied $300-ounce gold before that metal became an investment rage.

Not mentioned at all is the fact that he was fined $540,000 by the SEC for pumping-and-dumping illiquid stocks while at The Calandra Report. But I don’t really consider investment newsletters to be journalism in the first place.

(Thanks Otto)

Update 2: Henry replies, and I reply back.

I got a phone call this morning from one of the judges of the Loeb awards. A Loeb is one of the high-prestige gongs that important business and financial journalists love to award to each other, and it’s a fundamentally conservative animal: the NYT and WSJ always get lots of nominations and awards, and the winners are generally the kind of long-form investigative pieces which, say, the Pulitzer jury loves as well.

So what happens when the Loeb jury tries to drag itself into the 21st Century and honor online journalism? My guess is that it’s going to be in baby steps: the first winners are going to be newspaper brand extensions like Dealbook or Alphaville, and maybe one of those labor-intensive interactive data dumps that the NYT’s digital team is so good at. (Up until now, the Online award has gone to big Flash-based projects on newspaper websites, which isn’t at all what online journalism is really about.)

But if the Loeb jury wants to go further and start honoring new and disruptive forms of online journalism, they’re going to face enormous difficulties. First there’s the difficulty in defining what even counts as journalism in the first place. If the awards need to go to professional journalists at accredited media organizations, that automatically excludes 90% of the internet, including highly-respected blogs — Calculated Risk, say, or Mark Thoma, or Nouriel Roubini. And insofar as a few great bloggers get picked up by larger media outlets (Mike Konczal, Baseline Scenario), that’s precisely because those media outlets recognized them as being extremely good online journalism before they were picked up. It’s silly to restrict your awards to people who feel like they can or should accept an offer of being hosted on a major media outlet’s website.

What’s more, the biggest and most successful game-changers online have been startups: Huffington Post, Talking Points Memo, Politico, and the like. In the business space, TechCrunch, The Business Insider, and many others are setting the pace for what can be done with imagination, hard work, and a lean, aggressive attitude. Yet at the same time it’s almost inconceivable that the Loebs would honor Henry Blodget for his work, given his $2 million fine for securities fraud.

And if they wouldn’t honor Blodget, they’d never dream of honoring a site like Zero Hedge, which has shown what’s possible when you throw out the entire journalistic rulebook and indeed attempt to disintermediate journalists altogether. Zero Hedge is undoubtedly an important game-changer, and is also rather influential, but it doesn’t really belong in a journalism awards ceremony — as I’m sure its founders would agree.

It’s harder than that, though: the problems with drawing the line are dwarfed by two bigger problems. First is the problem of nominations, which are normally, for the Loebs, handled by managers deep within the media bureaucracy. Executives at media organizations nominate their own stories, which are then handed out to the judges; who’s going to nominate blogs? If bloggers are asked to come up with a $100 entry fee themselves, only the most self-aggrandizing will do so, and that’s going to skew the results enormously.

Bigger still is the problem of judging. Blogs are a conversation, and a lot of the value they add lies in their comments sections and in the interplay between each other. The unit of quality for a blog is the blog itself, a living thing, rather than any individual blog entry or even series of entries. The only way to judge blogs is to read them and interact with them in real time. That just doesn’t work in the context of a Loeb jury, which consists of important and busy journalists receiving packages of printed-out entries and then sitting in their armchair reading them in sequence. It’s hard enough to get them to watch all of the broadcast entries; it’s simply impossible to ask them to start regularly reading a list of blog nominees.

So although the sentiment is admirable, I think the Loeb jury should think long and hard before trying to extend its own brand into the online space. If it wants to expand, maybe it should do so in print, by giving awards to punchier, more aggressive business sections — not just the FT, which rarely gets Loebs, but even places like the New York Post. A couple of awards for art direction, in magazines and newspapers, would fit into the ceremony much more easily, and would be a welcome sign that the Loebs award journalism which isn’t just Important but is also accessible and popular and easy to read. Blogs don’t need the Loebs to give them recognition, and any attempt to go down that road risks embarrassing all concerned.

Gabriel Sherman has a long profile of Andrew Ross Sorkin, which spends a lot of time talking about Sorkin’s problematic status within the NYT in general and the Sunday Business section in particular. But all big companies have internal politics. What’s interesting is what the story says about the NYT’s devotion, or otherwise, to serving its readers by giving them the information they want.

For instance, here’s Sorkin launching DealBook:

It was a radical idea for the Times. The paper had never aggregated outside news under its flag before, and Sorkin had to convince his skeptical bosses that the paper could point its readers to competitors.

And here’s Sorkin asking a NYT colleague, Tim O’Brien, for information a pair of fellow reporters had FOIA’ed:

“I also told him that my reporters on the piece, Don and Gretchen, would probably be uncomfortable simply handing over documents to him that they had spent a lot of time and energy to find, analyze, and report on,” O’Brien told me by e-mail.

As John Cook notes, this is silly at best:

The grand irony of this flap is that much of it would have been rendered moot had the Times simply done what Sorkin did so effortlessly: Put the documents at issue online… That’s another Timesworld disconnect between the youthful web-focused culture and the old-school diggers—after Van Natta and Morgenson spent months working to get access to the documents, they apparently didn’t think to push their editors to share the originals with their readers.

I’m constantly amazed at the number of stories in the NYT which are based on primary sources the paper refuses to put online. In a tiny handful of cases, revealing the document might endanger a source or otherwise be inadvisable. But there’s no good reason not to publish documents received as the result of an FOIA request.

The NYT tends not to publish documents it uncovers as part of its investigations; one NYT reporter told me once that editors, when asked about the policy, mumbled something about copyright. It’s an untenably old-school approach, and serves mainly to promote turf wars and jealousies. The NYT has the best newspaper website in the world; its reporters should be encouraged to make full use of it.

There are two big, above-the-fold stories on the front page of today’s FT. One is the fact that, yes, Santander’s IPO of its Brazilian operations went according to schedule. And the other is headlined “Obama under fire over falling dollar”.

What fire is this? A Sarah Palin Facebook update. Here’s how the story starts:

The falling US dollar is giving ammunition to the critics of the Obama administration and fuelling broader concerns about the potential erosion of America’s reserve currency status.

Republican politicians have highlighted the dollar’s slide as evidence of waning US power.

Sarah Palin, the former vice-presidential Republican candidate, on Wednesday sought to link the dollar decline to rising US indebtedness and dependence on foreign oil. “We can see the effect of this in the price of gold, which hit a record high today in response to fears about the weakened dollar,” she wrote on her Facebook page.

The crazy thing is that the note wasn’t even particularly about the dollar. “Bottom line:,” she concluded, “let’s stop digging ourselves into debt and start drilling for energy independence.”

Since when does an utterly predictable and unoriginal Facebook update justify front-page “Obama under fire” headlines in the FT? Do the editors think that if there isn’t any news they have to invent it?

Update: It’s worth noting that Palin’s Facebook note doesn’t even make sense. Not that that’s much of a surprise, but still.

This time last year, I attended the World Business Forum at Radio City. I came away with a slight ringing in my ears and a blog entry entitled “The Parallel Universe of Leadership Events”, in which I attempted to skewer the content-free nature and general mindlessness of such things. My prize was an invite to come back this year, as part of their “Bloggers Hub“, so I could repeat the whole experience. I’m not there now, but I might pop along once or twice: it’ll be interesting to see how Paul Krugman, for one, approaches such a crowd.

It’s worth asking how Krugman felt himself allowed to take this gig. This is, after all, the man who wrote this:

I do very little paid speaking now, and no consulting, because the New York Times has quite strict rules: basically I can only get paid for speaking to nonprofits that have no possible interest in influencing the content of the column. It’s a good rule - read Eric Alterman’s book “Sound and Fury” to see how speaking fees can corrupt pundits - though it meant that I took a substantial income cut to work for the Times.

The World Business Forum is emphatically not a nonprofit, and it pays its speakers very large sums of money. (That’s how it gets the likes of Jack Welch, Tony Blair, and Bill Clinton to turn up.) So what’s Krugman doing there?

In any case, this annual boondoggle — an event with zero news value, which large companies give to their middle managers so that they can feel important and have a fun couple of days in New York without really working — has managed, incredibly, to get itself an entire dedicated blog at the WSJ. This is probably a function of the fact that the Journal — along with BusinessWeek, Fox Business, and something called ExecuNet — is a “media sponsor” of the Forum. (Those middle managers are exactly the audience that the WSJ wants to reach.)

I don’t for a minute blame the business side of the WSJ for sponsoring the WBF — it’s their job to do such deals. But there’s no indication on the WSJ’s WBF blog that it’s anything other than an editorial-side effort, put together by “reporters and editors at The Wall Street Journal”.

Which leaves just two possibilities, neither of which reflect very well on the WSJ. Either the business side bullied the editorial side into putting together this dedicated blog — which would imply that the wall between the two is porous indeed. Or else the editorial side really believes that the World Business Forum is so inherently newsworthy that it should be blogged by multiple staffers over two days. In which case someone at the WSJ really needs their news judgment examined.

When a number in the newspaper seems too outrageously large to conceivably be true, don’t believe it. For instance, from today’s WSJ:

The campaigns by the four bid cities, Rio, Chicago, Tokyo and Madrid, are heating up. Mr. da Silva has already approved some $240 billion in funding for the Games and offered the federal government’s financial guarantee to cover shortfalls in the organizing committee’s budget.

The Olympics are expensive, but they’re not that expensive — $240 billion would amount to more than 12% of the continent-sized country’s $2 trillion GDP.

The actual Olympic costs are $14.4 billion, and that includes $11.6 billion in construction and infrastructure costs — renovation of airports, roads, subway lines, that kind of thing. And the whole package has been incorporated into Brazil’s monster $240 billion federal investment program, 57% of which is public funds.

Most of the costs of the Rio Olympics, then, are a necessary part of the city’s (and country’s) regeneration in any event, they’re not Games-specific. The organizing committee’s operating budget is $2.8 billion, or about 1.2% of the number in the WSJ. That’s a much more realistic number to look at.

Jeff Jarvis is kvetching, reasonably enough, about “internet bigotry” — the idea that everything bad which happens in the media must somehow be the fault of the internet, and bloggers, and other such new-media developments. It’s a theme running through Damian Tambini’s very long and boring essay on ethics in financial journalism, which has just been published by the LSE and Polis. For instance:

The views of the journalists interviewed for this paper revealed considerable diversity of views on their basic responsibilities: views ranged from those who saw their responsibility in terms of selling newspapers (and thus focused on the shareholders of the companies employing them) – to those with a very developed idea of the social function of financial journalism and associated ethical responsibilities. Others identify with the values of the profession as a whole. And an interesting new challenge is that many of those providing services akin to financial journalism in the new media reject the label of journalist altogether, preferring to opt out of any ethical framework associated with it…

Clearly in the days of blogs, messaging and email newsletters it is important that professional financial journalists put clear boundaries between themselves and the rumour mongers.

(My emphasis.)

Tambini’s paper is not only larded with 17 footnotes and a two-page bibliography; it is also highly concerned with things like “standards of verification and sourcing”. Yet a comment like this — essentially saying with no basis whatsoever that lots of finance bloggers actively choose to “opt out of any ethical framework” — can easily and casually be thrown into the paper. He doesn’t even stop to wonder whether conflating blogs with “rumour mongers” might not be entirely fair.

As Jarvis points out, in many cases (such as Chelsea Clinton not getting married) it’s the professional journalists, not the blogs, which are the worst offenders. And in the world of finance, the most virulent rumors are those spread by the likes of CNBC, while blogs are if anything better at debunking rumors than they are at spreading them. (Alphaville, in particular, is very good at this.)

The problem is that Tambini talked overwhelmingly to old-media types: he doesn’t seem to have had any interest in even trying to approach bloggers or other new-media denizens to get their take on the ethics of financial journalism. Maybe he thought that he might catch something nasty if he got too close.

The front page of today’s WSJ has a big headline: “A President as Micromanager: How Much Detail Is Enough?”. The lead anecdote?

In briefing President Barack Obama one day this spring, White House economist Jared Bernstein delved into such arcana as the yields on different forms of credit relative to the risk. Later, Paul Volcker pulled Mr. Bernstein aside. “Why would the president want to know that level of detail?” asked the former Federal Reserve chairman.

“That’s what he wants,” Mr. Bernstein replied.

This is astonishing stuff, coming from the Journal. Any other US newspaper might be forgiven for underestimating the importance of credit spreads. But for the WSJ, in its lead paragraph, to characterize credit spreads as “such arcana as the yields on different forms of credit relative to the risk” is not only inaccurate (”relative to the risk” makes no sense) but also comes across as unpleasantly faux-naive, in the service of a contentious thesis.

This is part of the new Murdoch Journal, of course — the same paper which has for months been desperately trying to drum up some kind of Congressional expenses scandal by leveraging the power of its front page, to almost no visible effect. It’s aggressive, yes, and that’s normally a good thing. The problem is that it’s aggressive in a particularly unhelpful and often disingenuous way, and there’s no reason to believe that anybody at the Journal is going to stop this carrying through past the silly season of August.

The Journal is clearly desperate for a big political scoop, or at very least a scalp. But it’s sad that it’s letting its desperation show so obviously.

This is a very positive development, I think: the NYT’s Jack Healy has happily filed a story saying “stocks moved a lot and we don’t know why”.

There’s an invidious fiction underlying most market reports: that stock moves are inherently interesting, that any stock move happens for a reason, that the chances are that reason is based in some kind of news, and that the market reporter has a decent chance of identifying the news event which moved the stock. None of these are true, and reports like Healy’s are an encouraging indication that at least some business pages might be taking tentative steps towards a more realistic approach.

But I’m not holding my breath for CNBC to do anything similar.

Overdraft fees and lottery tickets are both in their own way taxes on ignorance, or at least a lack of sophistication — which is one reason why both should be carefully regulated. Richard Sine, today, adds another item to the list: J-school tuition fees. He has a clear message for deans of journalism schools around the country:

Do not charge so much money to walk through the door that the program is open only to the rich, the idle, or the financially illiterate. That’s not a journalism school; that’s a gold-plated welfare program for your old newsroom buddies, built on the backs of starry-eyed naïfs.

I think it’s fair to say that going to journalism school increases your chances of getting a job in journalism. If J-school graduates are almost by definition financially naive — if they weren’t financially naive they’d never have spent so much money on J-school — then maybe J-school is only serving to increase the number of innumerates working in journalism. Which is a sobering thought.