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And the band played on: covering the economic crisis

December 11, 2008

dean-150I recently visited one of the most frightening sites on the Web—the place where I look at my shrinking retirement account.

As I calculated the investment loss since the steep decline in the markets began, and particularly since the collapse of Lehman Brothers in mid-September, some questions arose (in addition to: Will I ever be able to retire?).

–Did we in the media do our job in reporting on the run-up to the crisis?

–Now that an “official” recession has been declared in the U.S. and the depth of the crisis is becoming clearer around the world, are we in the media keeping things in perspective? Should we even be using words like “crisis” or “meltdown?”

On the first question, I can’t help thinking of Claude Rains’ “Casablanca” character Captain Renault, who was “shocked, shocked to find that gambling is going on” in Rick’s club. In hindsight, given the current state of the financial markets, wasn’t it obvious a problem was brewing?

Not necessarily. And it probably wouldn’t have been obvious to anyone reading online or print coverage or watching television news in the United States.

A look at a study by the Pew Center’s Project for Excellence in Journalism indicates that, in the United States, coverage of the economy was pretty much drowned out by coverage of the presidential election—at least until the two stories converged in mid-September. Indeed, as the Pew material shows, in the month preceding the week of Sept. 15, which saw the Lehman bankruptcy, the Merrill Lynch sale, the AIG bailout and large drops in share prices, the proportion of the news hole devoted to the economy reached a low for the year, filling only 4.8 percent of the time on television and radio and space in the print and online media. Since then, that focus has shifted, as the presidential campaign narrative became, again, “it’s the economy, stupid,” and as the presidential transition has focused on U.S. economic problems.

Reuters News Editor-in-Chief David Schlesinger is skeptical that financial journalists could have done much more to predict the depth of the crisis.

“Journalists do best when reporting what’s happening and giving the news context and analysis,” he said. “We also do well when we look backwards and discuss past events from the perspective of the present. We do least well when we prognosticate. While our reporting and commentary did discuss potential weak points in the economy, we did not — and nor frankly could we — accurately predict the calamitous events of this year.”

Schlesinger worries, though, that there was a certain inevitability to the crisis and that the media played a role.

“I do worry about the narrative lines of reporting that contributed to the crisis,” he said. “To take just one example, much of the crisis was caused by banks taking on excess risks in the pursuit of higher profits. Yet had a major bank president stepped back from that fray and declined to participate, the ‘grammar’ of our results reporting would surely have compared that bank’s results negatively against expectations and against its peers.

“That brave bank president would surely have lost at least his bonus and probably his job.The very fear of that kind of negative comparison helped spur things on — as Citibank’s ex-CEO Charles Prince said (while still in his job), ‘As long as the music is playing, you’ve got to get up and dance.’

“We in the media help play that music, probably exacerbating the highs on the way up and the lows on the way down.”

So did our reporting help change the tune that was being played? Did it raise questions about the factors that contributed to the crisis, including complex financial instruments, subprime mortgage lending and excessive risk?

To fully answer that would require a deeper analysis than we have room for in this space, but there is evidence that questioning notes were sounded.

As early as Aug. 18, 2003, a Reuters story quoted Fed governor Edward Gramlich citing the dangers of “predatory lending” in extending subprime credit. By 2006, the pace had accelerated. A Factiva search of Reuters News found 128 stories that mentioned the phrase “subprime mortgage” that year, including a number in which analysts predicted a deterioration in credit quality. The crescendo came in 2007, when there were more than 10,000 stories that referenced subprime mortgages and when Reuters.com built a special section to house material on the issue. That section developed into the current Crisis in Credit and Housing Market sections.

Still, the overall “music” was loud and infectious and it’s easy to understand why so many couldn’t stay off the dance floor.

Now that the crisis is here, some are accusing the media of deepening the problems. Richard Lambert, director general of the CBI, a U.K. employers group and a former editor of the Financial Times, said “careless headlines or injudicious reporting risk becoming self-fulfilling prophecies of a very serious nature.” He urged journalists to be especially vigilant in their fact-checking and called on the press to avoid such words as “panic,” “fear” and “chaos.”

He also suggested that journalists should cut bankers, regulators and politicians a little slack, since “precious few journalists gave any hint at all of what was about to come.”

The FT’s Lex column (Note: subscription required) accused Lambert of shooting the messenger and lamented that some would “seek to clamp down on the fourth estate…, hoping regulation will recreate a golden age when the business press was a tamer, more deferential beast” that “could be hushed up in times of financial turbulence.”

But those days are gone, as Lex put it. “The digital revolution, by lowering entry barriers and intensifying competition, has put paid to all that. It will not return.”

And good riddance. As a card-carrying lover of the First Amendment and the digital revolution, I’m happy those days are gone. But with our freedom comes a sometimes frightening responsibility, especially in troubled economic waters.

As Schlesinger says, “We have a responsibility to be careful, and most of our reporting has been very careful. But we too have played some discordant notes and we need to learn from that.”

What do you think? Did we in the media do our job in reporting on the financial crisis, both before the market collapse in September and since? Are we being careful enough not to sow panic and make things worse? How can our reporting help you weather the storm?

Please post your comments here.

I’ll be using this space regularly to explore issues arising from Reuters and other media coverage of the world and to have a discussion with you. Among the topics I plan to look at: the dangers and rewards of covering religion; the use of anonymous sources; the debate over shield laws for journalists, and much more. I’ll also be providing lots of space for you to have your say.

In the meantime, I’ll be watching that retirement account.

Dean Wright, Global Editor, Ethics, Innovation and News Standards

Comments

I am just an average guy. I look at the Bloomberg, Reuters, and CNBC websites. I feel that I am getting a sense of what is going on in the market by following the financial news. I’ve lost twenty percent in the market this year, but I feel like I saved myself from another twenty percent loss just by adjusting my portfolio based on what I have read on these sites.

Posted by Ron | Report as abusive
 

Dean,Thank you for your article/question.GNP — Gross National Product…no longer directly reported. M3 — Total money supply…no longer available to the public.Combine basic economic principles from, “An Inquiry…Wealth of Nations” and the intentional omission of the two aforementioned statistics and perhaps the real cause for concern is brought to light.Sincerely,Rick W.

Posted by Rick W. | Report as abusive
 

Sounds like you are seriously looking for feedback. As a real-estate broker with a conservative company founded in the 1950′s, I can vouch for the fact that while sellers were appalled at the drop in housing prices, buyers were not. But buyers were appalled by the yearlong onslaught of daily media reports that can only be summed up as “the sky is falling”. The media overall seemed to take a distinct glee in squelching any rays of hope for the housing market. This appallment caused many creditworthy buyers to rent rather than buy, waiting for a faraway media-speculated “bottom’. This lack of buyers fueled the inventory and foreclosure problems. Which fueled the global deleveraging. Even now, in this phase of the crisis, do I ever read about companies that are solvent and whose stocks are undervalued? No. Doom and gloom seem to be considered much more fun than optimism by most journalists these days. For God’s sake, can’t anyone in the press find anything nice or hopeful or helpful or positive to say about Anything any more? I read the news and want to hide under a pillow. I look outside, and the sun is shining and the trees are green and the world is lovely. It’s a choice of perspective… I vote for the happier choices.

Posted by Sheila Curtis | Report as abusive
 

Newspapers, magazines, blogs, TV programs, about investing exist to sell issues and, incidentally, to sell advertisements from financial institutions, fund groups, brokers, and the like. So when things are hot they have no reason to dash cold water on the race. And when things look bad they pile on the negatives. It is in the nature of journalism to tell/sell people what they expect.It is not our job as reporters to regulate markets but it is surely the job of regulators who abdicated their responsibility or even denied that it existed. Gutting the SEC, outsourcing the Fed, removing prudential rules was done without sufficient press scrutiny. That is where the fault lies. We should have raised questions over the 21st century U.S. trend to laisser faire excess. We didn’t because we got caught up in the ideology of free markets, booms, froth. And our retirement accounts show that we really did believe in the Kool-Aid.Vivian Lewis, ed.www.global-investing.com

 

I second the feelings of Joe.I am a retired businessman and thus not in the mainstream of economic activity, but could see this coming for at least two years, and feel the bubble warning signs have been evident for longer than that. In watching journalistic coverage as this was unfolding, I saw way too much “opinion” and way too little “facts” and an awful lot of similarity in front page articles, with dissenters buried deep in the rear, and in some cases warned not to be negative or they wouldn’t get any exposure.I realize there is a difference between journalism as a business and journalism as a profession. I started warning friends and family over a year ago to turn off the talking heads because it was obvious the harm that could befall them by following the blather that was being created.The failure of Bloomberg to get the Fed to disclose the details of the assets being accepted by them as reserves should be a campaign by the entire journalistic world, under both freedom of information and responsible reporting, but so far they seem to be alone.Let’s get with it boys, and create some of the transparency we so badly need.-Gary Leeper

Posted by Gary Leeper | Report as abusive
 

You say there was no coverage for the ‘impending crisis’ online. As recently as a year ago, I read about the coming “crash” because of excessive leveraging within the financial community, governments, and personal revenue. I remember the long, convoluted explanations from ‘financial experts’ dismissing the author’s analysis (even though it meant a great deal of sense to me). I wish I could remember the link to give you. I did move my 401(k), which saved my losing it almost entirely.My point is that the establishment-knighted ‘financial experts’ have failed to credit any contrarian critics just as the entire country buried its majority head in the ground and allowed neo-conservative propagandists to dominant mainstream thought. Fox Murdoch and Rush Limbaugh provided a 24/7 barrage supplemented by the lesser shock-pundit minions in every corner of our country.In the triumph of neo-conservative ideology, everything became opinion. Facts that contradicted the orthodox view were dismissed as “liberal”. And where the slogans of neo-conservative thought were clearly wrong after years of staying the course, a new slogan was rolled out and no “finger-pointing” or “looking at the past” was countenanced.Indeed, the mainstream media failed because it could not admit that it was dominated by Corporate interests. (We see it even today in the lopsided support of a $700 billion, no-accountability bailout of Wall Street while excoriating workers not sacrificing enough as disqualifying a short-term, well-secured loan to save auto manufacturing and perhaps millions of jobs. 2% of what CEO’s got is too much to save the workers making above minimum wage.)Thus, Cheney could proclaim that deficits didn’t matter and not surprisingly the CEO’s followed suite. Those predicting a financial catastrophe were ignored as liberal kooks.If we can let facts be treated with respect again and a rational, free discussion prevail, then the media becomes an accomplice to disseminate the truth.Oh, but I forgot. That is a “liberal” bias. Now dismiss my comments because they are not fair and balanced….

Posted by Jack Oak | Report as abusive
 

In my opinion the press is no better than the people whose greed created this situation.The press has exploited fear and uncertainty through out this crisis to serve it’s own economic and politial interests. Fear and uncertainty is a negative accelerant for Wall Street and it’s clear that the constant dramatization of the negative from the press has contributed significantly to the depth of the losses in the stock market. While the financial challenges in our country are serious, much of the ‘real’ economy is still in tact and performing regardless of Wall Street’s valuation of their stock or the perspective that the sky is falling from the press.There was a time in this country when the press felt a responsibility to use it’s power to support our country and defend ‘right’. Those days are long gone and the press has become a self serving greedy entity, just like…. well, all the folks in the financial industry who walked away with millions in compensation on the taxpayers dime.Frustrated Midwesterner

Posted by Frustrated Midwesterner | Report as abusive
 

Dear Mr. Dean Wright. The econoimic woes and recession went on for two years before anyone in the press announced it. The Democrats were in full control for those two years, but sat on their thumbs and stayed very quiet. The meltdown and near depression that has occured I blame the Democrat Congress directly. They are always saying how they are keeping a watch on things? Well, this is the result of all that watching. NOTHING DONE, but I guess that could have not been done on a Republican President. I’m sure it will be brought up a ton of times next election cycle. I AM DISGUSTED! You reporters have no place to go with you cute little socialist views. NO BODY IS INTERESTED. Notice how your News Papers are going belly up?

Posted by john smith | Report as abusive
 

I find it strange, that Reuters would worry or posit, if they had adequately covered the run-up to the financial crisis…1) NO…2) Have you honestly and truthfully covered anything correctly in the last year, dealing with finance or politics (see answer 1)3) Had you noted in a prominent place, anywhere in your coverage, the number of times REPUBLICANS tried to stop the problem? or how the Democrats, to the financial advantage of all their cronies, stopped such efforts? (See answer 1)4) Considering your giddiness in horribly biased coverage of the events (Fawning over Obama for only 10,000 a minute, only lefthanded coverage of Republicans, only 200% candycoated coverage of dems… You have the effrontery to try to innocently ask such a question?? (Yes, you have the effrontery; see gaul, see temerity…5) See how many newspapers are going belly up… Sic NYTimes… those that still believe it tells the truth, will never learn what truth is.I am posting this with a little contempt (in case you failed to notice). I am usually avoid your site, but seeing the smug look of the reporter, and the question… I had to.No apology offered, but, articles like that, are why I am well informed, and don’t read newspapers, except for select comics. If I did, I would not be well informed. If all you know is wrong, you know nothing.vince

Posted by Vince | Report as abusive
 

As soon as a journalist considered his/her retirement account online, thereby making calculations, he compromised his ability to objectively perceive the bubble that was developing. The run up in real property asset prices began when interest rates dropped in 2001, pushed down by an administration intent on avoiding a recession, and then kept down by an administration intent on borrowing massive sums to fund the twin towering deficits of trade and budget. I cannot understand how so many economists could not see that those asset prices were unsustainable, out of reach for ordinary Americans with ordinary earnings. Journalists who failed to question those arithmetic facts were complicit. I was astounded personally to see how long the bubble took to unravel, and then to see how the media continued to buy the administration’s optimistic forecasts of a “short downturn” that persisted from late 2006 until early 2008.

Posted by James Neumerski | Report as abusive
 

Some fortunate folks do not have significant retirement accounts. Some fortunate folks have a mortagage that they can afford, even if things get a little worse. There are a lot of folks who work very hard, earn enough money, but aren’t so lucky with their financial decisions. All of us are going to suffer. It might be the ‘landslide,’ hopefully not. Some of us don’t watch the ‘financials.’ Some of us figure we are in rather sound position, not so strong or so better, just conservative/restrained/responsible home economics. so we keep on going to work, watch the government, and keep on being attentive to regular job responsibilities. Those of us who have done this, do not want to suffer in mass. Those of us who have been responsible resent the cheaters… who seem to be slick, perhaps, and wonder what’s next?? We can’t keep track of all potential cheaters and mismanagers. (That’s how come this country is too big, maybe). Even those with significant $$ aren’t immune.

Posted by Paul Christopher Anzalone | Report as abusive
 

I am completely taken aback by your news piece. The way I view it is like one who throws a stone, gets somebody bloodied on the face and asks did I hurt you?With all due respect, it seems like you gingerly are asking something that it is plain and clear to some of us. There were and remain objective problems in our economy but for some reason the media time and time again chose to focus on the negative. I would suggest that your time would be better spent in understanding why the news organization have chose to focus on the negative. I wonder if it is some morbid sensationalism or if in their dislike for the present administration, they wanted to show how bad thing are. If the latter, they did a great deal of harm to the country; indeed the world.In case you are wondering, I am a real person. I hold a PhD in physical chemistry and have around 20 patents and more than 50 publications in my technical field. In other words, I am not some sort of pundit or activist. But I am very disappointed to the point of being angry at the media. Your title includes ethics. I wonder how many people in your business have taken a single ethics class.Sincerely;C Garza

Posted by C Garza | Report as abusive
 

No, the media did not do a good job and has not done a good job. Just look at the blank stares our political experts were giving when asked what was going wrong in the credit markets 1-year ago. It was too complicated to understand for te average joe.if the media was covering the story correctly they would be blaming Washington for creating the product, Wall Street for marketing the product and Main Streeet for going along for the ride.

Posted by Cris pellegrino | Report as abusive
 

As a long time reuters reader I find that whole american news media has failed here big time! I live in Finland and we have a state run non-profit tv channel here amongst commercial ones, that has shown several documents about “cheap money” and USA debt risings since early 2007. At the end of many reports they predigted a financial meltdown like what´s going on now. The thing is that none of the commercial channels mentioned anything about the situation.

Posted by tom | Report as abusive
 

Rather than take down a buffalo by hand, which is very hard work, some native cultures would run small a segment of the entire herd off a cliff and collect the spoils at the bottom. It was far less work to panic the herd, than to face down an angry bull buffalo with a flint knife.If you panicked the herd, your job becomes easy, scavenging the dead at the bottom of the cliffs…now WHO in their right mind still thinks that the media serves the people? Are you just plain stupid or what?

Posted by Kiki | Report as abusive
 

I am from china,you might know that from my spelling of my name.And I am a student.I appreciate your article because actually I have learned something.I applaud the view that journalists should use the proper words.As I know,coverage sometime is really harmful,especially its demagogic headlines.Some worldwide presses also have such blemish.But a wise man as CEO,president,etc, should have sufficient wisdom to gain an insight into what is gong on.So my opinion is clear,no matter what the newspaper say,a man should read with his hesd not his mouth.Newspaper broadcast news,you read and think.Not to economy ,but to all.sincerely

Posted by Zhang xinxi | Report as abusive
 

Please give us perspectiveTo mis-quote Walt Kelly’s Pogo, “This could run into the billions or the millions, maybe even the thousands.” Most readers are not getting enough background quantitative information through the news, to let them put economic numbers into perspective.If we rely only on the typical news articles, we get just a few scattered numbers. I want graphs, tables, and additional figures for comparison. Maybe this is a moment in history when people can be motivated to look at some numbers in a table. (Maybe this is a moment in history when being ignorant will cease to be cool.)We need perspective across many years. Economic cycles didn’t begin a few years ago; they were happening even before the Dow index started. I want per capita real numbers or graphs, if necessary with log scales.We need perspective across variables. What are the USA’s GDP, government budget, value of all real estate held by individuals versus by businesses, value of equities, value of bonds, value of savings, social security taxes, social security expenditures, national debt, annual deficit, population (0.31 billion), and so on?Put all of the values in billions, to avoid wasting time on the minor numbers alluded to by Pogo. Consider rounding off; the goal is getting readers to internalize the big picture. Point out the per capita value of $1 billion (currently about $3.25 per person).We need perspective across countries. Is the European Union’s GDP larger or smaller than ours? What is world GDP? Foreign exchange holdings? Trade deficits? Value of currency traded? Value of U.S. equities and bonds held by foreigners? What do these and related things mean?Indicating other sources of data might seem to be self-defeating for a news company, but I claim that it is your civic duty, just as it is our civic duty to keep some basic numbers in mind, so we will be less swayed by would-be demagogues with fake or irrelevant statistics. You may have heard that saying, “87 percent of all people make up their own statistics.”Free online resources include the Census Bureau’s annual “Statistical Abstract” and its “Historical Statistics of the United States, Colonial Times to 1970,” which have lots of interesting data, and which list sources. Top them off with the most recent numbers and narrative from Reuters. Then we will be ready for perspective on regulations, government programs, and other qualitative information.

Posted by Ralph | Report as abusive
 

Your comments are long overdue from an established member of the media. As an editor and at times consultant to large corporate media in South Africa, I had occasion over the previous 24 months to debate signs of trouble with blue chip company directors and others. All denied the obvious for more than 12 months. I was verbally abused as an editor when I brought up the facts in editorial meetings and the circumstances have borne out my fears.Why ? The answer is fewer reporters being used by more media agencies purchased by fewer holding company’s and staffed by yesmen and women. The culture of the financial journalist also entails a certain amount of kowtowing to get the story and NOT to rock the boat. Corporate culture and editorial became intertwined, and here we now sit.It works like this….Holding Company A purchases 40% shares in Media Holding Company B, senior management hold joint strategy sessions where managers from various sectors (entertainment, publishing, Film/Tv, outside advertising, Retail Mall land owners, below the line products) agree on a single policy. The Manager returns to publication and actively becomes part of the shareholders by pushing positive fluffy stories about new share options etc and refuses to allow free flow of real stories beyond hoopla onto the front page (web, radio, tv, print) without actually stating this as a policy.Like intellectual lemmings these journalists were swayed into ignoring their years of training to perceive threats and warn the public – into rounds of PR flights, technical jargon, and greed. Many senior financial journalists have shares in their publishing house/title and are paid an almost criminal salary – therefore they lost their analytical abilities in their greedy rush.Beyond the media, the economic causes, dispassionatly, are :1) financial trading instruments which have been created by a less than fine line between company’s and their watchdogs, auditors and despite being in a word, gambling, being permitted by government’s and stock markets. At the same time the allegedly independent administrators began to job hunt inside investment banks, and vice versa. Greed rampant, directors remunerations rocketed simultaneously creating a false value chain inside the top echelons of capitalism. Suddenly there was no-one to say NO.2) real economic value of property and stock plummeted while accounting and investment agencies became one (Merill, Goldman, Enron) therefore leading to what can only be called informed lying in the last 4 trading quarters.3) manufacturing of basic items of retail were produced away from job seekers in the world’s main economy’s – to subsidiary company’s in China et al causing a massive deficit in the world’s biggest economy.4) Growth was not pinned on basing cash investments on local industrial capex or productive worker force, but acquiring existing business, often in the service industry, at massively inflated amounts leading to non-competitive policies, thus a form of mercantile capital reformed within 10 years. This led to the fifth main cause of our predicament…5) Commodities controlled by corporates with a nationalist tinge – eg, Steel/ India/ Mittal, Software/ USA/ Microsoft, Liquified Gas/Russia/Gazprom, Copper/China/Great Wall company (parastatal), Oil/3rd World/OPEC. Shell, BP, Sugar/Brazil/Cosan etc etc etc. This is bad news as any attempt at questioning these operations leads to authority declaring each a so-called key industry. That’s led to an information shutdown the effect and journalists being accused of committing a form of treason if they criticised the protectionist policies.There are more reasons. That’ll do for now. Globally, the prognosis is therefore bad because these problems are structural and not just technical.

 

What a great community!I’m really heartened, though not surprised, by the high and civil level of discourse here. It’s testimony to the quality of the audience at Reuters.com and the importance of the subject.I want this space to be a welcoming place for ideas, debate and discussion–and this topic has certainly struck a nerve.I believe one of the most important jobs of the media is to provide what I like to call the “spine of truth” around which informed debate and discussion can take place. We’re certainly getting that discussion here. In coming weeks, we’ll tackle other subjects.Thanks again for your ideas and your enthusiasm.–Dean Wright

 

The Media is still not on the job.Peak Oil is the real crisis sitting in the background and waiting for humanity to notice it. It is the proverbial ‘elephant in the room’ and yet NO-ONE in the media has theimagination to do the reading, draw the conclusions and alert the mainstream.If you want to visit the most frightening website on the planet spend a couple of months reading http://www.theoildrum.comThen finally we might start getting real investigative journalism rather than the ‘C’ list drivel that even Reuters is happy to content it’s readership with.

Posted by louis | Report as abusive
 

The media. Such a large, authoritarian word–and so easy to blame for all our problems. The bloggers and talking heads will save us! But, wait a second, where do bloggers and talking heads get their info from?To be sure, the shock jocks of US media, FOX, CNN, MSNBC, basically all the 24 hour news outlets battling out for those very important “ratings”, are all jokes. They aren’t much better than Weekly World News, and I’m just glad shows like The Daily Show put these jokers in their place. Unfortunately, Americans have no one to blame but themselves concerning the vapid 24-hour news outlets. I have yet to see a concerted effort to boycott or otherwise hold these outlets accountable–because other than anonymous comments on a MEDIA website, folks just slurp up the “news” from these outlets like pigs to the trough.However, more sober outlets such as Wall Street Journal and NPR have been doing an excellent job of keeping things in perspective. It’s really all about being selective, not complaining and doing nothing.

Posted by Mike from PA, USA | Report as abusive
 

It`s difficult to tell if the media have under or over reported the `crisis` since we all approach it from differing positions.From my position,it was `incorrect` or possibly `too late` reporting.I became aware of an impending personal doom 4 yrs ago, as house prices took off in the UK and my newly graduated,newly indebted to the government daughter couldn`t get a job locally,because she was either over or under qualified.She took a job in the community appropriate to her degree for 18 months ,desperately job searching.House prices and rents continued to rise on the new `buy to let` ballon,hailed by all as a wonderful retirement pension plan.She managed to get a job just over 2 years ago and chooses to live at home since fuel and food prices have made life alone in the rent sector a joke.Buy a house?how?no bank is willing to lend anyone money these days,even the nationalised .We will have to use OUR pension savings to help her to buy somewhere to live from a repossession auction.No,for us,the media didn`t tell us how bad it would get soon enough,we worked it out ourselves.

Posted by C Brettell | Report as abusive
 

Isn’t the biggest story where Hank Paulson’s two trillion dollars went? Why aren’t you guys on that one, instead of doing post mortems?

 

There will always be reasons to absolve yourselves. Sure you are only reporting and not forecasting. Sure you are just journalists and not economists. Sure this and that.But you fall short (and not only in economics reporting) because you rely on too few sources. You fall short because you content yourselves with quoting people that matter, but not checking out the facts.How can it be that numerous independent bloggers were way ahead of you, though they didn’t have your budgets? I will give you the answer: your news has to be cheap to produce and cheap to sell. And that doesn’t allow for decent journalism. It allows for quotes. Lots of them. And instant news. Within minutes! Time matters.NO! CONTENT matters.

Posted by MarcVdB | Report as abusive
 

The media? What a disaster. Local real estate brokers, mortgage brokers, and local lenders were raising concerns about ‘junk loans’, and rapid price appreciations relative to stagnant wages as early as ’04.I remember warning off a Buyer (I’m a real estate broker – 20 yrs), with obvious deep concerns in the fall of ’03. From then on I warned every customer/client I worked with to consider that that market would correct; and if it did, to consider the consequences to themselves. Most bought despite my warnings. Most likely because they hadn’t read of my concerns in the ‘main stream media’.In ’05 I listened to a radio broadcast where a banker was expressing his strong frustration over the ‘junk loans’ he was able to provide to borrowers. The situation troubled him so much that he took the time and trouble to warn the public on local radio. He frustratingly explained that if he told a customer that he would not provide a loan to him, (an otherwise ‘qualified’ borrower), that that borrower would merely go down the street and do business with his competition.On the street, on the front lines, those of us in the business had various levels of concern. At the highest levels of media, rarely did I read of concern, even as Freddie and Fannie and SEC problems in ’04, ’05, ’06, and ’07 the silence was beyond annoying. Books of concern were being written. Still the media was as enlightening as an idiot. I had been somewhat ostracized in the office for my doomsayer concerns. My co-workers shrugged me off as a nut. After all, if there were any truth to what I was talking about, the media certainly would be writing about it. Even the chief economist for the National Association of Realtors made consistently reassuring comments, even until most high school drop-outs could put together that something was very wrong with the housing picture.Local newspapers do not ask questions about national policy. National media, for the most part does not either. Perhaps they used to. The main stream media (and most federal officials and politicians) failed because they simply don’t care about the people on the street. They care about those at the top. That’s the way it will remain.

Posted by Thomas | Report as abusive
 

People were saying the word recession over a year ago but due to the fact that the government controlls the media, the word did not get out. A few of us kept spreading the word in order to warn some of the people but the word was repressed because people would rather believe good news than bad news. The problem is that the worst hasen’t come to pass. Things are only going to get much much worst. The coming depression will make the great depression look like something to be cherrished. What we see is only the tip of the iceburg but eventually the iceburg will flip and reveal itself as much more bad news coming our way. If the government had not denied the recession over a year ago then things might not have gotten out of hand. Unfortunately we cannot go back in time. Part of the problem is that most people believe what the government says until the truth is revealed. The truth is that you can never believe anything that the government says. Our leaders are a bunch of liars, never to be trusted. Obama has spun a great fairy tale that the public wants to believe in’ and he is right,Change is coming but not the change that people want. People want to believe in a fairy tale where everything looks rosy. If they knew what was coming our way they would be horrified. Just because most people believe in a good outcome doesn’t necessarily mean it will happen. We are about the relive history but with a twist.

Posted by Emile | Report as abusive
 

News break commercials are investment firms, pharmaceuticals,and oil company’s. Our three major problems? Oil energy,health care, and failure of banks(ie investment firms)

Posted by joethedumber | Report as abusive
 

LIfe’s too short for daily news. As someone who has independently researched our predicament for fifteen or so years, I reached the conclusion several years ago that learning is far more comprehensive if one takes advantage of hindsight/history. Daily news tends to focus on symptoms rather than cause.If you took time off from the daily news to read just one book, John Ralston Saul’s “The Unconscious Civilization,” you would have been able to see this whole bubble thing coming. Written in 1995, it forecasts this bubble — and pinpoints the cause. Saul is not the only author to forecast the event, but The Unconscious Civilization, word for word, gives the most bang for the buck.On a related matter, Sam Zell thinks that the the U.S. property market will start to recover in the spring. Sam is an example of why the daily news services are unable to foresee the future. Why would a news service report the prognostication of a man with a hammer? Of course, Sam Zell will say that the property markets will rebound quickly. The real story is that pension plans have not even begun to write down commercial property values. If history is a guide, these write downs will occur over the next 5 years. Commercial property markets values may *never* get back to the level they are at today.

 

You guys were as clueless about this as you are about all of the political criminals from Illinois.

Posted by kelly p | Report as abusive
 

There is a notorious misconception that the media exist in order to keep people informed about what is going on.Wrong. The media are a bunch of private companies which are making money by printing advertisements and broadcasting commercials funded by big business. The purpose of “stories” is to make people see advertisements. Obviously, the dominating “stories” are the ones which sell best. This selection process virtually guarantees for an inappropriate media coverage.This, however, is not the sad story. The sad story is that neither the media nor the people consuming the media actually want the latest news to be covered appropriately.As a consequence of the financial crisis, 50 million people will starve to death. Did you want to know that? Of course not. Worrying about your job is more convenient.

Posted by Dan King | Report as abusive
 

The financial press could have been a lot more helpful if reporters had written more stories around the theme of whether or not stocks were overvalued. Some old-fashioned focus on p/e ratios and other metrics for evaluating share prices could have raised more red flags when the Dow was trading at 13,000-14,000. The broadcast media coverage has been especially bad. I’m really tired of hearing the idiot-savants on TV ask the investment bankers what they’re buying, or what looks attractive, when the market keeps pitching down.

 

Anyone familiar with mortgage or credit markets at any level, or who heard about the well-documented collapse of the south Florida real estate market that began three years ago, is aware that the financial status quo could not be sustained indefinitely.The larger question turns on this: is what appears on the nightly news and the pages of our journalistic publications no more than a reflection of ourselves- of our desires and fears? If that is the case, we can’t castigate the media for merely acting as a mirror. But is the media, or should it be, more than that? If the news instead is what the media think we want, or what they wish us to want, that creates a different set of expectations.A number of well-respected daily news outlets appeared to me to be, for weeks, fanning the flames excessively in their coverage of the global economic and financial stories. For how many concurrent days did the word “fear” or “fearful” appear more than three times in boldface on the front page of the day? How dense was the daily sustained use of similarly laden words such as chaos, plunge, plummet, crisis, meltdown and gloom? Does an editorial policy that fosters this practice promote emotional responses or does it advance knowledge and encourage independent thought and rational analysis?Dean Wright is wrestling with a large demon and I applaud him for having the courage of creating the opportunity for public introspection on the part of members of the media as well as its consumers. What we have seen recently appears at best to be the mark of poor journalistic practice and thoughtless expression of the written and spoken word. Those accountable for what is being published are the chief editors and members of the editorial boards, but ultimately those who own the outlets and who set policy at an even higher organizational level bear the responsibility for the impact on the world- whether positive or negative- of their publications.

Posted by valerie | Report as abusive
 

“According to the U.S. Mortgage Bankers Association, as of March 2007, the subprimemarket was 13%, or $1.27 trillion (that’s trillion with a t) of the total $9.8 trillion outstanding in the U.S. residential mortgage debtmarket.” –from Willis Jan 2008 report, citing an AIG Oct 4, 2007 seminar powerpoint.But editors sure were on the ball, because the price of Sarah Palin’s wardrobe or what Barack Obama had for lunch is FAR more relevant.News outlets need to abandon the cliche’ pondering of how ____ reflects on our society, and ponder what their own poor editorial choices say about our society.

Posted by Stiles | Report as abusive
 

The media is not doing an adequate job covering the financial crisis. Watching 60 Minutes last night there is much more mortgage fallout to come. There will be no government bail-out to cover an equal loss to the first one. The media is too caught up in being a business (reporting what is popular to give them good ratings) rather than objective news reporting that serves the public interest.

Posted by Bob | Report as abusive
 

The only place the credit debacle was foretold and examined every step of the way was amongst the pajama people bloggers on obscure finance-oriented websites. As with the state writers in the employ of the former Soviet Union and Eastern Bloc, being paid by the word is not market based journalism.

Posted by Pat Shuff | Report as abusive
 

It’s hard to believe that anyone in the media would even ask if they did their job running up to the crisis in the markets and the economy. Given that the trends (the ability of a donkey to secure a mortgage with no down payment, appraisal fraud, etc,etc, and etc). That you need feedback to confirm your total incompetence is mind boggling.

Posted by Robert Bartley | Report as abusive
 

Mr. Wright evaluates the media by re-reading the old media coverage.The information people needed was there if you could find it. The housing bubble was apparent a good two years before the bubble broke, for example. However, it is hard to find good information among the babble that passes for news.Most journalists are terribly uneducated about finance and investment. Most stories are good for nothing. A person could spend an hour a day reading about finance and investment and if the person did not have the insight to select stories carefully, he would learn little.

Posted by rh13 | Report as abusive
 

this guy is crazy…we are now using the media to control “intelligence”. not to know anything we didn’t already expected.

Posted by el zorro | Report as abusive
 

Lynn Tilton (CEO of Patriarch Partners) was on CNBC Squawk Box on Friday…relevant insights to this discussion…Fixing the Financial Crisis: The truth of the situation can be ignored no longer (http://www.cnbc.com/id/15840232?video=9 60926779.)This is the same woman who predicted the financial crisis on Bloomberg TV back in 2006 (http://www.blinkx.com/video/lynn-tilton -on-bloomberg/87JL8lMSQmrDI4ALaa5zdQ) so perhaps she’s worth listening to now.She proposes direct lending to businesses through a new “Provisional Federal Bank (http://www.patriarchpartners.com/Lynn_T ilton_WashPost_NYT.pdf)”…Liquidity must be made available not solely to big banks where Treasury-injected capital has been amassed to fill the cavity left by gambling losses, but rather expressly to deserving American companies and their people who will reignite our sputtering economy. A provisional Federal Bank must be initiated to foster enterprise and to provide job opportunities for every American.”

Posted by Truthseeker | Report as abusive
 

There has been no shortage of stories on Reuters and elsewhere over the past five years warning about the cracks in the financial system, from the bubble in the housing market to the U.S. budget deficit, the balance of payments and beyond. Our own columnist Jim Saft has been sounding the alarm bell on these pages for many months. Many of us know people who moved their money into safer harbors earlier in the year because of what they were reading in the news. So does the anger in these comments reflect the lack of coverage on U.S. television rather than the media in general, the inability of people to sift through the overwhelming volume of information now available to them or a genuine belief that the traditional media didn’t do its job? Isn’t there an argument that the warnings were there but people chose not to hear them so long as they were getting richer on rising stock and property values? If you admit to being guilty on that last point — and I do — then don’t we have some personal culpability here? I don’t mean to wash my hands of the media’s responsibilities. I ask to get an even better sense of what you expect from us as we report on the economy in 2009.Richard BaumGlobal Editor, Reuters.com

 

“The only way forward , is forward” Brad. Read the article below and stop talking negative. Buffet didn’t become the wealthiest man on the planet by looking backwards, did he? I’ve said it before and I’ll say it again, the Electric Car is a winner in so many ways for the US. To name a few: Cheaper Fuel, Cleaner Fuel, New industry, Many new jobs in Detroit, New friends in the Global community for doing something constructive. It will leave the BIG 3 carmakers for dead. Time to move on Yankees. Many people have the money to buy the plug-in electric vehicle, we are just waiting for you to build it for an affordable price. Better hurry up or we wil have to buy Chinese (Again).Read Buffets story below:Buffet Into Chinese Electric Future cars and BatteriesThese finance guys always amaze me. Here is Warren Buffet, who of course is one of the richest men in the world, invests $230 in a Chinese future cars manufacturer. Of course, china is the up and coming industrial powerhouse, but still it takes a lot of guts because the economy there is extremely volatile.In September, Warren Buffet invested $230 to by ten percent of BYD, a Chinese electric car and battery manufacturer. BYD could soon become a major leader in electric future cars and battery production. BYD is reportedly planning to start selling electric cars in America by the end of 2009The electrical future car will present storage challenges which BYD may be able to answer. Our aging electric grid and our wall sockets are not equipped to deal with recharging car batteries should the electric car become mainstream. There will need to new developments such as swapping stations where cars can come in and swap batteries. Maybe this will be Buffet’s new line of investment.

Posted by Brad | Report as abusive
 

Ahh, Mr. Wright,Did we in the media do our job in reporting on the financial crisis, both before the market collapse in September and since?Let me answer your questions directly. . for starters, since the late summer of 2008, when it was slap in the face fact of markets collapsing… yes, those in the media started reporting on it. Even then, grudgingly. NOT ONE media organisation reported on any rumination’s before the market collapse in September however. In fact, I laughed the other day, as I lay down some newspaper on the floor as I started re-painting my flat (a copy of the Financial Times no less, dated late 2007) that stated more optimism is needed, instead of worry. Perhaps John Authers (of the FT Short View Column) was the most sensible on reporting. This is why he became my favourite columinst.Are we being careful enough not to sow panic and make things worse?Perhaps your esteemed selves are living up to that, but not some of your colleagues in the industry. In fact, there still, even today, seems to be a large portion in the media who think “it’s bottomed out” and it’ll all be over by Christmas! Then, there’s the flip side, PANIC, BAD NEWS, sell it. There genuinely is no sensible, intelligent and balanced agenda in the media anymore.How can our reporting help you weather the storm?Glad you ask this. . .well, lay the facts out clearly. Then, quite simply, follow through in the article the options, avenues and even perhaps when possible, the most sensible solutions for the reader. If by chance, you do not know the solutions, then get your hands on an Oracle- If that’s too difficult; opt for a clear-thinking, jargon-free, rational and ruminating type of person. Once upon a time, I believe reporters had to have the skill of reporting . . . not buffed up, glossed up, shiny, preening, wanna-be minor celebrities who can write . . .albeit atrocious copy.What do you think?1) Accountability is the name of your game. Make people accountable, starting no less, with reporters et al.2) At least you ask the Wright questions!

Posted by Street | Report as abusive
 

Mr Wright,The credit crises of US are not going to come to an end unless the administration or treasury dares to know the exact magnitude of the credit default swaps(CDS)market which is whopping around $60 trillion for all the global banks and insurance companies.It is an off the balance sheet item and creates problem for a bank or insurance company when gets added to its balance sheet in the wake of deepening credit crises.Citi and AIG have been victims of this phenomena. As the CDS market is presently not regulated,no aunthetic figure is availabe about each bank or insurance company’s exposure to it leading to distrust among banks.Any stimulus package by the next US government without knowing the depth of this disease will backfire and will unnecessarily burden the gullible tax payers of America.Yours Truly,Mahesh Natani,Financial consultant,Indore(India),Date :18.12.08

Posted by Mahesh Natani | Report as abusive
 

In America the Financial Services Industry is heavily overpopulated. Too many people trying to earn something out of nothing. The number of Intermediaries is too HIGH. Analyst estimates of Earnings is too rosy,if not fraudulent. Rating Agencies are dishonest.How many Financial Reporters have questioned whether America qualifies for a AAA rating? There is no Regulation and no Oversight.We hear the dubious stories that that X,Y or Z are too big to fail. If such be the case why on Earth were Companies allowed to become so Big? If so please break up these too Big Companies – Goldman,JP Morgan,Morgan Stanley,AIG,GM etc into 4 or 5 pieces and Sell them off. And can someone please ask Paulson and Bernanke what they are up to. A 1% US Fed rate(Thank You Mr Greenspan) caused giant Global Bubbles. A 0% Fed Fund rate is going to solve all our problems? So we must assume there is no RISK attached to Credit,just as Wall Street imagined when they went on a 6 year Credit binge. Are these guys Economists or Lunatics? The Price that will be paid for this folly is unimaginable. Why not Paulson send a cheque for a Million dollars to every American citizen — problems solved ????Morons !!

Posted by F.Daruwala | Report as abusive
 

Let’s blame bush or Paulson or Wall Street. No wait lets blame the people that wanted six digit houses and only wanted to pay a small payments. The people that want to blame someone else need to look at them self. If you did not take one of these loans then life sucks for you and you need to call your congressmen every day and say enough is enough. When are we as a society going to get it and start doing the right thing, a true free market, less government and responsibility of are self. I don’t know if the media over covered the bubble or under covered or not, I know I am tried of hearing about it. All so we must start demanding are government to start living in there means. Also the moron that said every American should get money from the government should be taxed 99% for saying that.

Posted by Robert | Report as abusive
 

Given the ability for anyone to be so readily published, the media certainly is not the prime suspect….but I do wonder if our English language is the prime suspect…after all, how could anyone who handles investments could be duped into believing that any investment vehicle so labeled as SUB-prime could be worthy of consideration? Unless of course, an independent arbitrary source rated the investment…say wait a minute….WE ALL were duped! ! ! Where was/is the media in investigating how credit ratings were so manipulated?

Posted by Mike in Providence | Report as abusive
 

Dean, why is everyone talking about how bad things are and no one it talking about the feeding frenzy that’s going on in the housing market. No one it talking about the large REO’s out there buying houses in blocks at a time at .25 cents on the dollar. We just bought a home in the mountains that just 18 months ago was $500,000 now it’s half that.One more thing I don’t hear is how the only way to change this slide is for everyone man, woman and child need to get out there and spend, spend, spend. The more comsumers hold back on spending the worse it’s going to get. The new slogan should be ” you have to spend money to make money”. If that doesn’t start soon we’re all heading to the end of the good times.Our job is to consume….jh

 

Of course, we won’t see this posted. I’m wondering about Randy Fabi’s report in 2003. http://www.boston.com/news/nation/articl es/2003/10/11/fda_warns_of_food_terroris m/I find it interesting that we have been warned FOR YEARS of agroterror, yet reuters has been SILENT since this report. I’ve decided that you guys are just another pawn of the government, not real reporters. Basically, you lie for them. What is the evidence for MY report? Do the research. http://fpc.state.gov/documents/organizat ion/73987.pdfhttp://www.state.gov/g/oes/ rls/rm/2006/77206.htmhttp://www.cidrap.u mn.edu/cidrap/content/bt/botulism/news/a ug0207botulism.html

Posted by magster | Report as abusive
 

I know your business is selling information and getting eyeballs on media print… but at least state that as a qualifier of ALL information before pretending to report the facts and not promote an agenda for sensationalism and sales.To wit: Why is it that in “reporting” the issue with Citgroups 50mil plane contract the 70 BILLION GIVEN to that group is characterized as a “rescue” (mind you this is money given, not borrowed) where as a manufacturing base like the domestic auto industry is listed as a MULTI BILLION BAILOUT when in fact it is a loan to be paid back?This is a small not so subtle unconcious mind slip that speaks volumes about the intention.Some people just read…others actually think, compare, and watch that the walk matches the talk!Be honest, look up this word in an dictionary then maybe try standing on solid ground.

Posted by Jim E | Report as abusive
 

When will the media inform Americans that the U.S. cannot achieve fiscally responsible health care reform or substantially reduce unemployment unless we first drastically reduce legal and illegal immigration although some immigrants are great assets to the U.S.? I used to prepare immigration applications.Acording to the March 2007 Current Population Survey conducted by the U.S. Census Bureau, about one-third of all foreign-born lack health insurance; immigrants and their U.S.-born children under 18 accounted for nearly one third of all people in the U.S. without health insurance and more than 70 percent of the growth of the uninsured population in the U.S.Meanwhile, every year one million legal immigrants, at least half a million illegal migrants, plus hundreds of thousands of “guest workers” continue to enter the U.S. Their U.S.-born children are American and will be eligible under the Obama health plan.President Obama and Congress should be aware of the explosive fiscal burden if the misnamed “comprehensive immigration reform” — amnesty and massive guest worker visas — promoted by open-border advocates is enacted. That “reform” could add over 120 million U.S. and foreign-born relatives of legalized people and “guest workers” to the U.S. over the next 20 years.Not only will these newcomers need jobs, they will also require health care, education and other social services whose expenses could well exceed the tax dollars they will generate because of their low incomes.Decades ago, China already understood that population growth would impede its economic success. It has seriously restricted immigration even for people of Chinese descent. When will American leaders stop burrying their heads in the sand?

 

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