Tag Archives: Commentary
by Chris Roush
David Warsh of Economic Principals writes about what he perceives to be a subtle change on The Wall Street Journal‘s editorial board.
Warsh writes, “I mention it here because a change took place last week in the WSJ department in which Murdoch may have an interest in changing things somewhat in the orientation of its editorial board. I refer to the departure of Stephen Moore to the Heritage Foundation.
“Moore was the board’s chief economic commentator, a founder of the Club for Growth, enthusiast of Tea Party ideals, possessor of a master’s degree from George Mason University and a disciple of Arthur Laffer and Julian Simon.
“Alex Nowrasteh, of the Cato Institute, writing on the Forbes website, is probably right when he ascribes Moore’s choice of think-tank as a way of signaling a shift in the previously strong Heritage opposition to immigration reform.
“But what about the reasons he left? The WSJ editorial page is a position of enormous influence, thanks in large part to its devotion to sound microeconomics – no one has a better eye for governmental foibles. Depending on how Moore is replaced, the opportunity exists for Murdoch’s paper to play a constructive role in fiscal policy, too – perhaps even to modulate the spirit of intransigence that dates back to 1972, when editor Robert Bartley and Jude Wanniski initiated a new era of political economic discourse in US politics. (The mutual contempt of the news staff and editorialists that arose in those days apparently continues unabated.)”
Read more here.
by Chris Roush
Eric Bovim writes for Salon about why we’re seeing the beginnings of another tech bubble and how financial journalists are contributing to the problem.
Bovim writes, “Many in today’s financial press are doing a fine job as present-day pasticheurs of dot-com era vanity. But why? Why their reluctance to deliver real, incisive business journalism? Why give a free ride to the Mark Zuckerbergs and Marissa Mayers of the Valley? Well, to put it simply: For these journalists, it’s simply more fun to write ‘features’ rather than do the hard work of writing hard news.
“I could, if necessary, refer to the Vogue spread on Mayer in August; the juicy bits about how she made excel sheets to document her favorite cupcake recipes, or how she slips quietly upstairs mid-party, her ‘CEO exit’; the 3-foot tall frog statues in her backyard (‘sprinkled,’ the piece goes, with Mozart concertos). Of course, Vogue could have nested this trivia within a candid portrait of Mayer’s Yahoo tenure, major accomplishments being: redesigning the corporate logo; overseeing the development of what Vogue calls ‘a gorgeous new weather App’; and the $1 billion acquisition of Tumblr — yet another Web platform without a revenue stream and a vaporous business model, which, in Yahoo’s earnings statements, was revealed to have been valued at around $750 million in goodwill. (In other words: Mayer assessed its potential value at nearly $1 billion.) Unfortunately, goodwill does not sustain jobs. Then again, bad press does not sell fashion magazines.
“I could likewise refer to Forbes’ feature on Elon Musk last spring. An ideal way to ensure that you gain entrée for future interview requests with a billionaire is to do a piece that fawns.”
Read more here.
by Chris Roush
Michael Calderone of The Huffington Post writes about the need of muckraking journalism today to let the world know about income inequality.
Calderone writes, “Starkman gives high marks to Michael Hudson, now a senior editor at the International Consortium of Investigative Journalists, and The Financial Times’ Gillian Tett, for raising concerns about the subprime market and collateralized debt obligations before they were headlines and hashed out on cable chat shows.
“Starkman, who edits Columbia Journalism Review’s “The Audit” blog, has written about the similarities between investigative reporters of the early 21st century and their forbearers a century earlier.
“‘What industry concentration was to the muckrakers’ era, financialization is to ours,’ he wrote. ‘Both phenomena were equally baffling to the literate citizen. Both demanded an explanation. Both had been brewing for decades. Both were marked by institutionalized lawlessness perpetrated by increasingly brazen brand-names. Both were widely known among legislators, clerks, cops, bartenders, and prostitutes — just not the public.’”
Read more here.
So last week, the Washington Post’s Ezra Klein, wunderkid (apparently, when writing about Ezra, there is a rule you must use the term “wunderkid”), walked away from the newspaper to create his own digital property. But Ezra is hardly an original; his departure lagged that of Walter Mossberg‘s decision to flee the confines of The Wall Street Journal for a brand-new outpost on the web: Re/code.
You might think that’s great news for flacks: new, high-profile outlets to pitch, billions of pixels worth of online real-estate to be filled. And that is good news, in the short term. I have a list of clients that I can’t wait to get Mossberg to write about. (Walt: give me a call. Lots to discuss.)
But over the long term, this trend is going to make my life more difficult. Ezra and Walt’s decisions to walk away from stable, well-financed journalistic institutions speaks to the power of their personal brands. And it’s not just those guys. Bill Simmons leveraged his everyman sports columns into Grantland, a standalone (though Disney-owned) sports-and-pop-culture site. It’s hip to be a digital pioneer.
But let’s be honest for a second here: neither Ezra nor Walt (nor Bill, for that matter) earned his kingdom based on good, old-fashioned journalism. They all created empires based on the way that they married their knowledge with commentary that clearly belies some opinions. Walt loves Apple. Bill loves the Celtics. Ezra wants nationalized health care. And those guys are all smart enough that we — as readers — are better off for their freedom to editorialize a bit.
Here’s where the problem comes in. Most of the folks covering business today, especially the young guns who see a role model in 29-year-old Ezra, aren’t experienced enough to pull off commentary. Especially in business coverage, which requires in-depth industry knowledge and more than a smattering of accounting know-how, taking sides is a dangerous endeavor. Hell, even the professionals do a crappy job of picking winners.
So God forbid some 25-year-old reporter decides that his route to fame and fortune requires providing snark along with the numbers. I have my hands full just getting the facts out there in a way that folks can understand. If I have to contend with a new army of kids who think they need to smack a “good” or “bad” label on company they cover, I’m going to have to go looking for my bottle of gin.
This isn’t a product of my fevered mind, either. I was lunching with an erstwhile business journalist the other day, a guy who is now up in the ivory tower, teaching college kids the magic of the inverted pyramid and the danger of the anonymous source. I asked him what today’s generation of j-school students expected to do with themselves, given that the job outlook ain’t exactly what it used to be.
“Blogging,” he tells me, with just the slightest hint of an eye roll. “They all think they’ll be bloggers.”
And what Walt and Ezra and Bill have taught these kids about blogging is that you have to take sides, make your best argument, collect the eyeballs. The alternative? Building sources and trust and getting out there in your local community, really knowing the beat? That’s a great approach, and it’s lead to some wonderful, ground-level business journalism, especially in the past few years. A lot of that journalism has come from the network of Patch sites.
Of course, about a week ago, Patch’s longtime patron, AOL, foisted operations of the troubled network off on some other corporate entity, a huge vote of no-confidence. So it’s hard to blame any kid, looking to make a name and a paycheck, that concludes that Walt had it right and Patch had it wrong.
If that’s the case, well: I’d better figuring out where that gin is at.
by Chris Roush
Dwight Cass writes on Fortune.com about how the financial news media are currently analyzing the stock market’s current conditions.
Cass writes, “Skepticism about the sustainability of the remarkable 2013 bull run even has made a welcome appearance in the mainstream business press’s financial blogs. But to give investors the tools they need to understand the market’s current behavior, the press needs to make a far greater effort to bring the debate to a broad audience in a sophisticated yet accessible way.
“Concerns over asset prices could fade if today’s rebound continues. That would be a shame. A public dialogue open to non-specialists, with both sides adequately represented, would be a healthy development.
“There are some moves in that direction. The Wall Street Journal is the finance business’s traditional mouthpiece. But its bloggers occasionally slip the leash. Yesterday’s column by Jason Zweig, ‘When Does A Bubble Spell Trouble?’ is a good example.
“Zweig says, essentially, that individuals who invest based on the belief that rising stock prices are justified become increasingly intolerant of those who argue that valuations are too high, and that their intolerance grows as prices continue to rise above historic norms. This infects the media, and harsh criticism of skeptics keeps commentators from throwing the word ‘bubble’ around too freely. So the current broad debate about whether stocks are in bubble territory means they’re probably not.”
Read more here.
by Chris Roush
Tech stocks have returned to bubble levels, thanks to PR, weak financial journalism and cheap credit, writes noted financial journalist David Cay Johnston.
Johnston writes, “These sky-high valuations get little skeptical coverage in the financial press, which has acted more as lapdog than watchdog in the past decade. Instead of barking warnings, many Wall Street reporters wag their tales in ways that please the speculative crowd, which, at great profit, feeds them market-moving tidbits along with a pat on the head.
“A key element in today’s irrational exuberance is the rise of novel ways of valuing companies that gloss over key facts.
“In the 1990s the stock bubble expanded as companies persuaded journalists to shift focus from traditional measures such as net profits and net earnings per share. A new standard — earnings before extraordinary items — became a common measure, even though some companies reported extraordinary items with almost the regularity of quarter financial reports.”
Read more here.
by Chris Roush
Laura Bennett of The New Republic writes about Bloomberg View, the commentary arm of Bloomberg L.P.
Bennett writes, “But nearly three years into its existence, despite its lofty mission and its gallery of bigwigs, View has largely failed to spark debate among the cultural elite or usurp the clout of The New York Times’ op-ed page. What Bloomberg View has become, however, is a reflection of just how incompatible its founder’s ideas about influence are with the rest of the world’s.
“From the beginning, Bloomberg devised his opinion website as if it were the Davos of dinner parties. He approached a handful of prominent journalists he deemed like-minded intellectuals and made them offers too eye-popping to refuse. For on-site staffers there were ritzy amenities, such as the townhouse’s wireless-equipped rooftop Japanese garden. One former columnist based out of town had travel and accommodations written into his contract, which ended up including stays at five-star Manhattan hotels. Another was told off the bat that he’d be making ‘six figures, the first of which will be a two’ with no specifications for weekly output. And for particularly big-name contributors, the numbers are even more boggling. Michael Lewis makes around $8,000 per 1,200-word column.
“Bloomberg also hired two executive editors for close to half a million dollars each: David Shipley, the widely respected op-ed page editor at the Times, and Jamie Rubin, a former assistant secretary of state under President Clinton. Their styles could hardly have been more different. Rubin, married to Christiane Amanpour, is a big personality and a smooth talker. Shipley is mild-mannered and discreet. After ten months, Rubin was fired, which came as no surprise to him. ‘I had wanted to be part of something new, more like a centrist think tank than yet another opinion website with a limited readership,’ Rubin said.
“For columnists, however, the limited readership was offset by the sense that they were being read in the highest corridors of power. One former columnist walked into the townhouse dining hall one morning to find the mayor on his cell phone, reading aloud from a Bloomberg View editorial about Greg Smith, the former Goldman Sachs executive who resigned via Times op-ed. Asked who was on the other end of the call, the mayor replied: ‘Lloyd Blankfein.’”
Read more here. It’s interesting to note that Bloomberg View has 2.81 million unique views in recent months, up 66 percent from the 1.69 million unique views it had this time a year ago. That would suggest that its audience is growing.
The 71st annual Financial Follies (“The Follies”) was held last Friday at the Marriott Marquis in Times Square and hosted by the New York Financial Writers’ Association.
The Follies is an event where reporters and public relations professionals alike engage in respectable behavior and generally call it a night after their second drink.
I’d been privy to yarns of Follies past and was eager to partake in the gala dinner while representing my firm. Having participated in the Follies this past Friday, I would like to offer a few distinguishing factors that demonstrate why the Follies is the networking event of the PR/business media world:
The amount and diversity of outlets
Based on the crowd size — conservatively speaking about 1.7 million people (certain outlets, such as the New York Financial Writers Association had the official number at 900, but I’m going with my gut on this one) — the Follies is the ultimate networking event. At our table (and I will list them because in an oversight they weren’t listed on the official Follies program), we had editors from Buzzfeed, The New York Post, and CFO Magazine, as well as reporters from Hedge Fund Manager (HFM) Week and The Wall Street Journal. In addition, representatives from Business Insider, MarketWatch, TheStreet.com, and The Bond Buyer dropped by our table to partake in revelry and liberate various beverages.
Inside jokes and financial puns
What better venue to discuss the latest in financial journalist scuttlebutt? During the Follies, an all-star cast of journalists take the stage and perform skits based on current events. The performance rivaled that of “Spiderman: Turn Off the Dark,” and it was clear those on stage had invested their time and had a diversified range of skills.
Some inelegant members of the audience were clearly “Fed up and/or just Yellen” because they lacked a cultured character. Either way, the show eventually tapered off and dinner arrived as our able waiters eased quantitative amounts of steak…I’ll stop.
Meeting reporters face-to-face
In previous posts, I’ve detailed my experiences meeting with journalists and forging professional relationships. This event was perfect because it gave me and the other PR pros in attendance the opportunity to meet journalists and reporters in a festive setting, and none of the reporters could use the excuse that they were on deadline in order to avoid us.
If you work in public relations and didn’t attend – convince your boss for next year
The Follies don’t come cheap, but the access to reporters is unparalleled, and the event itself is sure to generate many a conversation the following Monday at work. Plus, there are several sponsored after-parties with further opportunities for media networking in a professional setting.
The Follies is a unique and boisterous networking experience that can’t be missed if you’re a media professional. The atmosphere, show, and singular access to influential and eclectic media personalities in attendance make this a must-attend event.
Bill C. Smith (@BillCSmith87) is a senior account executive at Dukas Public Relations in New York.
by Chris Roush
Barry Ritholtz writes about how readers of the financial media should assess and use the information.
Ritholtz writes, “One thing I detest most about the financial press is the lack of accountability. All sorts of nonsense is said without penalty. On TV, guests are rarely called out for terrible calls or stock picks. Columnists can say anything without worry of anyone remembering their really dumb statements.
“I use a simple calendar trick to hold talking heads accountable. Whenever someone makes some wild claim or rolls out yet another set of predictions, I diary them. Any calendar or even your Outlook will work, but I especially like to use a simple app called FollowUpThen.com.
“As an example, have a look at this letter published exactly three years ago, signed by a long list of economic wise men and politically connected policy wonks. It warns of ‘currency debasement and inflation.’ My esteem for these folks’ economic judgment is now significantly diminished; each of the list’s signatories now get assessed as incompetent forecasters.
“Second, I hold myself to the same standards, calling myself out annually. I publish a list of my worst errors each year (see this and this). Doing this is a humbling act that keeps me honest (and beats others to the punch). If I am going to trash others for their dumb predictions, I must at least hold myself to the same sort of accountability.”
Read more here.
by Chris Roush
David Jackson, the founder and CEO of SeekingAlpha.com, argues that investors who write about the markets are better than business journalists.
Jackson writes, “The same is true of investors. They are forced to recognize and avoid herd-thinking, because they live by the metric of investment returns, not pageviews. Investors are constantly scored by the market, unlike journalists who are rarely scored on their predictive accuracy. And investors can only generate abnormal returns with a non-consensus view of a stock, since stock prices embody consensus expectations. This leads to rigorous analysis and a drive to question existing narratives.
“I often wonder what would have happened if Seeking Alpha had existed before WorldCom and Enron melted down. The investors who publish on Seeking Alpha would probably have uncovered those frauds, just as they (and not the business journalists) uncovered this.
“Perhaps this explains why fundamental analysis of stocks by investors provides more original insight, both investment insight and business insight, than traditional journalism. It’s why Seeking Alpha is widely read by business leaders, not just investors.”
Read more here.