Tag Archives: Commentary
by Chris Roush
Steve Waldman of Washington Monthly reviews Dean Starkman‘s book “The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism.”
Waldman writes, “Starkman spends most of his time analyzing the output of newspapers and magazines, and while he mocks CNBC, he largely ignores network and local TV news (still the sources of news for most Americans), NPR, Fox Business Network, and, for that matter, major providers of digital news such as Huffington Post or Yahoo! He probably figured they were inconsequential players in this drama, and that in and of itself deserves mention.
“And I wanted to know: In the few cases when reporters did write the stories critical of financial giants, why didn’t those stories explode on the public scene? Some interviews with the big-time business editors might have shed more light on why they ignored the growing evidence.
“The digital world is supposed to be able to take great stories—whether they’re in a small hamlet or New York City—and bring them to massive audiences. Why didn’t that happen? To some extent it’s because the 2004-2006 collapse predated the Twitter explosion and the rise of BuzzFeed, Upworthy, and other online news sources that are focused on accelerating virality. Starkman’s contempt for the digital evangelist types, aggregators, and other newfangled media is unfortunate, and may have blinded him to the profoundly important role that this new amplification system could play in accountability reporting of future scandals.
“But we’ll never know: Would those same stories have gotten more traction now because of this new amplification sector? Or would they have been crowded out by lists of ‘Betty White and Animals’ or ‘Cats Who Think They’re Sushi’?”
Read more here.
by Chris Roush
Rich Miller, a well-known political columnist in Chicago, has been hired by Crain’s Chicago Business to write a regular column, reports Robert Feder.
Feder writes, “Starting Friday, Miller’s column will appear twice monthly on chicagobusiness.com and eventually will be seen in Crain’s weekly print publication as well.
“The move marks a return to Chicago media for Miller, 51, whose eight-year run as a free-lance columnist for the Sun-Times ended in January.
“‘I thoroughly enjoyed my years writing for the Sun-Times and I’m looking forward to a new challenge with Crain’s,’ Miller said Thursday. ‘[Crain’s political columnist] Greg Hinz has been a good friend for a very long time, and his encouragement convinced me that I should embrace this change. So far, I’ve totally enjoyed dealing with the management, and I’m looking forward to the publication of my inaugural column.’
“Miller’s crossing coincides with major initiatives at both Crain’s and the Sun-Times to boost coverage of government, politics and public affairs. As reported here earlier, the Sun-Times is about to marshal all of its political and government content in a new digital platform, sponsored by Jasculca Terman Strategic Communications.”
Read more here.
by Chris Roush
Doug Kass of TheStreet.com writes about why many of those who appear on business journalism television shows talk snark instead of facts.
Kass writes, “The fact is that snark (a combination of snide and remark) and opinion far too often envelop the business media instead of facts and figures. Equally infuriating is the confidence of view in the delivery of the snark. Sometimes the reason for this is out of necessity, as the media appearances are typically brief and expected to be on point. Nevertheless, in a world characterized by an absence of certainty and an interrelated and a complicated market mosaic (and complexity of issues) without memory from day to day, too many attach self-confident reasons to randomness.
“I would characterize a lot of the pabulum in the business media as instantaneous entertainment and not as rigorous analysis.
“Of course, there are exceptions. Consider as an example, the preparation that Jim “El Capitan” Cramer goes through when he interviews a corporate executive on “Mad Money.” Another example is CNBC’s “Squawk Box” with Joe Kernen, Becky Quick and Andrew Sorkin, which provides a guest host with one to three hours to do a deeper dive in analysis (e.g., just watch Jim Grant’s appearance yesterday, which was solid and thoughtful in analysis). Or Bloomberg’s “Market Surveillance” in which Tom Keene shares the spotlight with an interviewee for almost a half an hour, digging into the analysis that forms the foundation of view.”
Read more here.
by Chris Roush
Michael Casey, a senior columnist for The Wall Street Journal, writes for the Committee to Protect Journalists about the need for business journalists to do a better job of explaining complex financial topics to readers.
Casey writes, “To be fair, those on the losing side of Wall Street’s profit-driven pre-crisis trade mostly failed to exploit new opportunities to expose the risks associated with it. In this era of ‘big data,’ where high-tech analytical techniques can produce abundant, quantifiable information, we should all have been empowered to uncover the truth. But in reality, for the average investor, journalist, or even regulator, this new trove of data has been mostly out of reach and unintelligible.
“It should now be the duty of journalists to unlock it. And to do so, they need to harness the same tools that financial institutions and corporations use to sift, interpret and make sense of mass digital information. The value of human sources providing information on market players’ activities hasn’t gone away–think of the lasting impact of The Wall Street Journal‘s ‘London Whale’ scoop on JPMorgan Chase’s risky trading bets last year, a story that led to news that the bank had racked up $6 billion in losses and, later, $1 billion in regulatory fines. But those stories must now be complemented with computer-enhanced analysis and interpretation. To get at the truth will require crunching the numbers–billions of them.
“‘The question is: How do you take the proliferation of data and extract something intelligent out of it?’ said the Pew Center’s Murray. ‘I think data analysis is going to become a much more important part of journalism.’
“If journalists are to investigate and interpret the complex systems of data management with which financial institutions create information monopolies, they need resources. Yet in the developed countries in which these complex new financial markets are thriving, the dominant trend in the penny-pinching media industry is for cutbacks, not investment, as traditional news outlets adjust to a highly competitive environment for online advertising.”
Read more here.
by Chris Roush
David Dayen of The American Prospect reviews Dean Starkman‘s book “The Watchdog that Didn’t Bark” about business news coverage during the financial crisis and wonders whether online journalists acted as watchdogs when the mainstream media didn’t.
Dayen writes, “It’s for this reason that Starkman disappoints when talking about online journalism. While he praises blogs like Naked Capitalism and the reporting at places like the Huffington Post, he believes such outlets have not filled the gap created by mass layoffs at the major dailies. In fact, Starkman mostly views digital media as a tool for corporate raiders to downsize traditional outlets, and he does not believe the business models of independent digital media support investigative journalism.
“This ignores a fairly rich body of work, including reporting on the financial crisis and its aftermath, that came directly from the online world. For example, those individuals who broke the story of foreclosure fraud—the mass use of forged and fabricated documents to rush homeowners through the eviction process—did not work at traditional media outlets but were foreclosure victims, who uncovered discrepancies with their own documents and started their own websites, like Foreclosure Hamlet and 4closurefraud.org, to get the word out when the media wouldn’t return their calls. In another era, these people would be either investigative sources or invisible, depending on the discretion of the media, but Internet publishing tools allowed them to tell their story anyway.
“While the Internet ‘presents severe structural barriers to accountability reporting,’ as Starkman writes, it also presents potential breakthroughs. Instead of long-form journalism that bundles months of reporting into one shot, there’s value in incremental, iterative reporting that releases each detail as it’s gathered, breaks down complex material into digestible chunks and furthers the narrative for months, even years. This is the tradition I come out of, and I think it does an able job, even if it’s not the Great Story, which Starkman holds up as the epitome of investigative journalism. There’s nothing inherent in word count that confers superiority.
“If we want to know what happened in the aftermath of a crash, the elites of the media universe can perform that task well. But if we’re going to catch the next instance of financial malfeasance in real time, the warning may come from someone sitting at their laptop. Starkman makes the argument that people rely on traditional media, and he’s right. But his entire book identifies the dangers of that reliance.”
Read more here.
by Chris Roush
Josh Brown, who writes The Reformed Broker blog, wonders whether the business news media is now too much on the lookout for a scandal.
Brown writes, “The premise is that with more middle class investors crowding into the stock markets during the 90′s and an explosion in demand for investing stories, the types of investigative journalism that might have stopped the credit bubble in its tracks simply disappeared. It’s an interesting point.
“It should be noted that non-investors probably can’t be bothered to consume business media regularly, in most cases, so of course the tendency to cater to those who will read you is going to be hard to fight.
“The other counterpoint you could make is that, in the wake of the crash, the media pendulum has probably swung all the way in the other direction. From 2010 on, it’s begun to seem as though EVERYONE wants to talk systemic risk, bubbles, the malfeasance of the banks, etc. The press’s default setting is now “Scandal!” and on Twitter – the financial media’s faculty lounge – we do a public hanging roughly once a week these days the moment there’s even a hint of impropriety alleged.
“There’s even been quite a bit of Zero Hedge emulation in the mainstream press and some of the top financial journalists of the current era are closeted Marxists. There are also, it seems, more outlets for reporters to write at than ever, most of which are simply dying for a juicy story about some potential market scam or shock to the financial system.
“So maybe the problem Starkman describes is, to some extent, already correcting itself.”
Read more here.
by Chris Roush
David Lieberman, the executive editor for Deadline.com, writes about the need for local media to improve their business and economics coverage.
His essay won the American Institute for Economic Research’s Women’s Economic Roundtable (WERT) Business Journalism Prize. The prize awards $2,000 to the best essay on an economic or financial topic written by a current or past recipient of the Columbia Journalism School’s Knight-Bagehot Fellowship in Economics and Business Journalism.
Lieberman writes, “Some news providers are trying to improve things. A University of Missouri School of Journalism professor recently launched Missouri Business Alert to fill the gap in local economic news. Digital First Media’s Connecticut Newsroom, which serves local newspapers and sites across the state, just assigned a reporter to cover poverty full time. A few years ago the Pocono Record assigned staffers to cover high-impact topics such as development and growth, traffic, and infrastructure—and let stringers cover town council and school board meetings. And the Institute for Policy Studies launched the Economic Hardship Reporting Project in 2011 to help bring stories about poverty and economic insecurity ‘to the center of the national conversation.’
“It’s too early to say whether these initiatives or others will unearth a business model to pay for serious local economic news. In the meantime, the press and its allies should encourage it in other ways. Colleges and universities can offer additional seminars to help journalists become financially literate. Many have to learn the basics: the difference between a deficit and a debt, how the bond market works, what’s meant by concepts such as the ‘multiplier effect’ —as well as how to find, and interpret, key reports and documents. The profession also needs programs outside of the major cities that can train reporters to deal with local needs. A community built on agriculture has different priorities than other areas that depend on manufacturing, technology, tourism, finance, oil production, or trade.
“Universities and professional associations also must reconsider their concept of prestige to give reporters who do superior work each day covering local business and economic issues a fighting chance to be recognized. Sponsors of journalism prizes should start by changing the way they’re judged to mimic Most Valuable Player awards in sports. Experts follow athletes’ day-to-day contributions and then pro-actively choose the winners. But in journalism, judges typically aren’t expected to know anything about the candidates. Applicants bear the burden of impressing them with samples of their work. The arrangement stacks the deck in favor of reporters who produce a few high-impact stories and against those who cover demanding beats well every day.”
Read more here.
by Chris Roush
Shaban writes, “Business reporters are supposed to make the complex worlds of finance and commerce intelligible to non-experts. But business journalism generally failed to predict the looming credit collapse, although a few reporters warned of its arrival. Critical stories by Michael Hudson, of the Roanoke Times and the Wall Street Journal, and Gillian Tett, of the Financial Times, drowned in a vat of glimmering C.E.O. profiles and analyst chatter. Business reporters missed opportunities to investigate abusive lending, negligent rating agencies, and dodgy derivatives trading. To critics, they were complicit in the financial crisis and the recession that followed.
One of these critics, Dean Starkman, is the author of a new book, ‘The Watchdog That Didn’t Bark.’ In his history of business news, Starkman describes how reporters, dependent on insider sources to inform an élite audience of investors, practice a kind of journalism that is defined by access. News becomes a guide to investing, more concerned with explaining business strategies to consumers than with examining broader political or social issues to the public. Access reporting is friendly to executives because it relies on their candor. Starkman writes that during the crucial lead-up to the financial crisis, from 2004 to 2006, this news culture crowded out the kind of investigative journalism that might have inspired reform. Andrew Ross Sorkin’s ‘Too Big to Fail,’ a book that paints culpable Wall Street kingpins as weary heroes, is, to Starkman, the definitive account of the crash—and wrongly so.
“Starkman tells his story partly by reaching back into the past. In 1904, Ida Tarbell penned ‘The History of the Standard Oil Company,’ a damning critique of the oil monopoly and its baron, John D. Rockefeller, and pioneered what Starkman calls ‘accountability journalism.’ But, even then, business journalism still functioned mainly as a messaging service between merchants and financiers. Starkman sketches the origins of the Wall Street Journal (founded in 1889) and Forbes (1917). In the early years of these publications, reporters who were cozy with board members were rewarded with scoops about acquisitions and other little-known developments.”
Read more here.
by Chris Roush
Editor’s note: We asked David Jackson, the founder and CEO of SeekingAlpha.com, to respond to a post last month from our PR curmudgeon Frankie Flack. Here is his response.
Investor relations and corporate public relations used to be straightforward, because companies could largely manage their own news coverage.
The recipe: (1) build relationships with analysts and the journalists who cover your industry, (2) issue frequent press releases, (3) alert the journalists and analysts to the latest press releases, (4) call them to add color and extra detail, (5) if the journalists and analysts are hostile or sloppy, educate them or cut them off from the information flow.
Seeking Alpha has changed that. Seeking Alpha is the dominant platform for crowd-sourced equity research, with more investors reading articles about stocks in real-time than any other website or platform, and more contributors than there are sell-side analysts. Because Seeking Alpha’s contributors are opportunity-driven investors, any of them could take an interest in your stock and write about it. And even if an article about your stock is positive, you can’t control what comments Seeking Alpha’s readers will write in response to it.
So if you’re the CEO or investor relations officer of a publicly traded company, it’s now harder to control the coverage of your company.
But if you’re an investor, Seeking Alpha is great news, for three reasons:
First, Seeking Alpha provides coverage of stocks that nobody else covers. Seeking Alpha covers about 2,000 small caps each quarter, about 750 of which have little or no sell-side coverage. Sell-side analysts and journalists have never done a great job at covering small cap companies, because their business model doesn’t support it. In contrast, Seeking Alpha’s investor-contributors love to find profit opportunities where there’s less coverage.
Second, Seeking Alpha articles have proven predictive value. A December 2013 study by a group of academics found that Seeking Alpha articles predict future stock returns and earnings surprises over all time frames studied: one month, three months, six months, one year and three years. Seeking Alpha articles predict stock returns even excluding the initial impact. (Our Top Ideas, for example, move their stocks by an average of 2.9 percent in the first 24 hours.) And the predictive value rises with longer time frames, so Seeking Alpha is for investors, not day traders. Overall, Seeking Alpha articles have higher predictive value than sell-side research and stories from newswires.
Third, Seeking Alpha’s community is highly intelligent. Active debate and even disagreement cause more information to come to light. The study’s findings in this area were remarkable: The Seeking Alpha comment community serves as a self-policing safety net. Comments on Seeking Alpha have strong predictive value. Contributors whose articles generate acrimonious comments underperform the market. And when comments conflict with articles, the comments have higher predictive value. (This is in contrast to stock message boards and stock tweets, which academic studies have found to have no predictive value.
Serious investors recognize the importance of Seeking Alpha, and are making it part of their investment process. Our SA PRO product (which is too expensive to disclose pricing here) gives investment professionals research access to the full library of Seeking Alpha articles and a one day early look at our Top Ideas and small cap coverage. A rapidly growing number of portfolio managers and analysts at hedge funds and mutual funds are signing up
PR and IR people will eventually embrace this reality. They’ll learn to participate in discussions of their stock while not violating RegFD. They’ll learn to build relationships with the Seeking Alpha contributors who write about their stock and the stocks in their industry, just as they built relationships in the past with sell-side analysts and business journalists. And they’ll understand that Seeking Alpha’s crowd-sourcing with strong editorial controls is the future of equity research.
So last month, I was taking a short mental health break (flacking, believe it or not, can be draining at times), and I ran across a weird little story at Gizmodo about a company that will take your ultrasound and, using 3-D printing, create a life-size replica of your fetus. The story wasn’t, strictly speaking, “news” (CNet wrote on a related effort 18 months ago). And it wasn’t, strictly speaking, “important.”
Readable? Yes. Strange. Yes? Critical information that would allow me to better understand the world? No.
My beef isn’t that some digital journalist, somewhere, saw the 3-D fetus story decided it was worth a writeup. Hell, Gizmodo got my eyeballs. My beef is how widespread this stupid little story was. The Gizmodo story I read gave credit to Fast Company’s Co.Design for the story. Co.Design noted that it saw the news first on some site called WebProNews, which also covered the story. WebProNews got the start on the fetus piece from a post on PopSugar. Business Insider also wrote the story, also crediting PopSugar.
To recap: some of the nations largest and quickest-growing business and technology sites all wrote essentially the same, carbon-copy story based on one ur-post from a fashion-and-celebrity blog. A large number of real journalists, getting paid real money, took time out of their day to make sure that this particular meaningless story made it on their site.
Now, pack journalism has always been a problem. During the 1996 Olympics, I took a drive through the neighborhood where falsely suspected bomber Richard Jewell lived, and it was a circus: a hundred cameras, a thousand people, just waiting to report the same marginal set of facts. And that’s a moment that is re-played, with a different cast and a different location, with great frequency. But the Internet has compounded the problem: in the pursuit of the viral, you now have more people chasing less important things.
This isn’t just sour grapes. Once, in the past year, I had a client that was able to capture the zeitgeist. Reporters were crawling out of the woodwork to talk to us. As a flack, I should have been in my glory. Except that all but maybe a half-dozen of the stories followed the same cookie-cutter script. Sure, the bolus of coverage was great, but if I could have siphoned some of that off, given it to some deserving but under-covered story, I would have
That’s my real complaint: no matter how quickly a writer can bang out a re-write of the story of the day, there is still an opportunity cost. Those are minutes not writing about something else that might be equally cool. Minutes not spent finding that exclusive. The reality is that I — and pretty much all flacks — have at least one interesting, stupid-simple story that hasn’t been told yet. We’ve love to share it with you.
So before you go and write the eight-hundredth piece about 3-D printing or the new iPhone or the Bud Light Super Bowl commercial, ring up your favorite flack and give him 60 seconds. We’ll all be better off for it.