Will financial reporting ever have a Woodward and Bernstein, the two metro desk Washington Post reporters who broke the Watergate Scandal? After attending last night's panel on Financial Journalism Under Fire: Did We Do Our Job?, hosted by the New York Financial Writers Association, the answer is clear: no. (Changes may and should happen, and I'll touch on a few of those).I have a theory that if you took a psychological assessment of a sports writer, a political reporter, and a financial writer to see who was the most cynical, the answer would most definitely be the financial writer. They're reporting on an industry ruled by greed and people who make more money in a year than they'll see in a lifetime. The system is just too large, too shady, and too encouraged to be bad in the name of profits (deregulated) that reporting on any of this would be best reserved for some hippie outlet like Mother Jones, not the respectable Wall Street Journal. Big scoops in finance usually involve mergers and acquisitions, company and exec failures -- going after anything else is cute idealism. (In fact, someone last night compared it to steroids and baseball -- you don't want to know where those home runs are coming from, you just want to enjoy the game).
The reason why no financial reporter pointed out that the emperor has no clothes on is because we thought that's how the system worked best -- everyone making easy money. And some of these things, like CDOs, are just too complicated and unsexy to report on. We stuck to the flashy stuff and figured the world was allowed to have masters of the universe, until they came crashing down, taking everyone else with them.
Even last night's panelist, Erin Arvedlund, who first questioned Bernie Madoff's record in 2001 in Barrons, failed to stay on top of the story. She opened the panel by saying she deeply regrets this now, but also, it must be pointed out, her reporting fell on deaf ears. What should we do, continue to push the story, report on it again and again, Diana Henriques, senior financial writer of the New York Times, asked the panel. Panelist Jon Friedman, who writes the Media Web column for MarketWatch.com, answered, yes. "If you do that you don't work for the same editors I work for," Henriques grumbled.
The winners for the Pulitzer Prize were announced on Monday and not a single financial reporter scored one, because they were blindsided by the biggest story in over a generation. That's what opened last night's panel -- ten painful minutes pondering why no one in finance won when they had the biggest story. Ugh. Maybe its time for financial writers to take a hint from the Huffington Posts of the world and make advocacy the foundation of their reporting, not getting seduced by corporate jet rides and hedge fund receptions, or overwhelmed by the complexity and vastness of it all.
Other highlights from last night include Arvedlund saying how CNBC told Barrons their reporters will no longer be welcomed on the show after running a story looking at how Cramer's recommendations underperform the market. Arvedlund's father was a big Mad Money fan, she said, and took Cramer's advice seriously, buying Bear Stearns right before the company crumbled. Arvedlund also had a good quote, calling the S.E.C. a revolving door where law school grads put in a few years before heading to Wall Street to "make their bones."If only she made this the focus of her reporting, beat it into the ground, along with her big Madoff scoop, then maybe the financial media wouldn't have to wonder, where's our Pulitzer?
That kind of reporting would be worth all the money in the world, literally.
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Reader Comments (Page 1 of 1)
4-23-2009 @ 10:29AM
lfjaeger said...
It would take a Woodward and Bernstein to break down the role that oil had in shoving the world economy off the precipice upon which it was balanced. While the savings and loan industry was poised for self destruction, the sheer mass of the cataclysm that beset that industry was a consequence of the exponential rise in heating oil prices creating a panic among homeowners with steep mortgages and tight budgets. The fact is that the savings and loan crisis could have been managed, in fact, may never have gone critical were it not for fuel oil prices. The next Pulitzer awaits.
4-23-2009 @ 11:46AM
Darrell Delamaide said...
I thought the title of that panel was wrong when it was announced -- it should have been "How did we fail?" not "Did we do our job?" Some form of "advocacy" a la Huffington Post might be the answer, but traditionally financial journalism has been confined by the fact that for all but the daily newspapers the people we report on are also our readers and advertisers. Not sure what the business model is for the Huffington Post -- unpaid writers and borrowed content? -- so I'm not sure how this is going to work in the real world. Btw, the crisis is not over and media by and large are still far too uncritical of TARP and the banks.
4-23-2009 @ 5:22PM
JedB said...
Andrea-it couldn't be your crackpot idea that journalists are somehow obligated to continue to pursue stories long after their publishers--the ones that pay their salaries-- have said 'Move on, nobody cares..lets find something else to write about.."
Arvedlund was arguably the first accredited journalist that raised the red flags via the Barron's article. And others within the hedge fund newsletter world followed the same story in 2006...But, re: Arvedlund's reporting, the prevailing wisdom of the Dow Jones publisher team determined that nobody cared enough about the story, so it was not worth pursuing. Should Arvedlund have quit her job to pursue the story on her own..and starve along the way??
Its nice to fantasize that journalists and reporters should be the common man's advocate--all on a pro bono basis. Let's fantasize about something that actually makes sense...Like Bernie's Blog--www.bernard-madoff-scam.blogspot.com