Tag Archives: Commentary


Tech stocks rise due to weak financial journalism


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.


Bloomberg View has failed to spark debate


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.

Bill C. Smith

The Financial Follies from a PR perspective


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.

Financial news

How to get the most out of the financial media


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.

Seeking Alpha

Why business journalists and investors are different


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.

Michelle Quinn, Mercury News business columnist. (Michael Malone/staff)

Biz columnist: Tech companies need to talk to us more


Michelle Quinn, the new business columnist at the San Jose Mercury News, writes her first column and argues that the tech companies in Silicon Valley need to talk to the media more.

Quinn writes, “I see this column as a conversation. I’ll bring insight and analysis about the big news, and point out the big news that is being overlooked. But as I give you my two cents, I welcome yours.

“And here’s my take on the new valley: The swagger and confidence are great, because they are the fuel that leads passionate entrepreneurs to create the Next Big Thing.

“But they need to be balanced with more transparency, for both investors and users. Sure, reporters like me get frustrated when the boardroom doors close and you’re left begging the person looking in the keyhole to dish.

“But I’d argue that the more tech companies talk, even at the risk of embarrassing themselves, the better for all. Google, Apple, Facebook and many others are the new fourth estate, a societal and political force that is influencing everything we do, and with that comes a responsibility to be more open about what they do.”

Read more here.

financial bubble

How the financial media will spur the next financial crisis


Lynn Stuart Parramore writes for Salon.com that the business media is doing nothing to prevent the next financial crisis.

Parramore argues, “Yet in the financial media bubble, being critical of Wall Street means that you are a wild-eyed radical from the far left, a view which is particularly surprising given the rush of even conservative Republicans like Sen. David Vitter to brandish their bank-taming credentials.

“The official inquiries into JPMorgan’s activities may indicate a shift toward a more aggressive stance by the U.S. government in trying to prevent American banks from ripping off the public and their investors, and that’s a good thing. Of that $11 billion JPMorgan may have to pay for its mortgage shenanigans, $4 billion could go to consumer relief for struggling homeowners. That’s something, though clearly a fine that only adds up to two quarters of JPMorgan’s profits isn’t nearly enough.

“But financial media personalities like Maria Bartiromo are standing in the way of this process by continuing to act as the marketing arm of Wall Street and apologists for people like Dimon. In her brain, Eliot Spitzer is a demon for going after AIG, public employees are responsible for state budget problems, and banks are being unfairly assaulted. And unicorns are producing her show.

“If the Bartiromos have their way, we may never adequately prosecute fraud, hold executives accountable, or get giant banks like JPMorgan under control so they don’t go on to wreck the entire economy and cause even more damage than they did the last go-round. Wall Street cheerleading from the business press could help bring on yet another financial crisis when one of these banks implodes.”

Read more here.

Breaking Bad

NYT’s fictional Sorkin column mentioned in “Breaking Bad”


New York Times business columnist Andrew Ross Sorkin has penned a short, fictional column that goes along with the story line in the television show “Breaking Bad.”

He was mentioned in Sunday night’s episode as having written the column.’

Here is an excerpt:

Last week, the founders of Gray Matter Technologies gave a $28 million grant to create a drug abuse treatment center throughout the Southwest. The family, which is said to be worth more than $1 billion — Gray Matter’s market value is $2.16 billion — was heralded by advocates of drug control and treatment throughout the country. In Washington, the White House’s Office of National Drug Control Policy said in a statement that the Schwartzes are among “the next generation of great American philanthropists tackling one of the biggest epidemics confronting our country: illicit drugs.”

Maybe it is cynical to suggest, but the timing and backstory of the grant is raising red flags among some investors on Wall Street and prompting some to ask: Is the donation a publicity stunt meant to mask troubling news about the company?

Little known except to a small cadre of industry insiders, the Schwartzes have been scrambling in recent weeks to keep a long-running secret from being revealed. Gray Matter’s stock has sunk over the last week as speculation has mounted that the company could be tied to a drug kingpin in Albuquerque who has made national headlines: Walter White, the former chemistry teacher turned international methamphetamine dealer known as “Heisenberg.”

According to people close to the company, Mr. White was a co-founder of Gray Matter and was a former college sweetheart of Mrs. Schwartz. The company’s name – Gray Matter – was a mix of the Schwartz name, which is German for “black” and Mr. White’s name, hence “gray.”

Read more here.


The financial media is not a toy to be used and discarded


Josh Brown, who blogs about the financial markets at The Reformed Broker, writes about how the biggest player in the bond market has turned against the financial media.

Brown writes, “The Bond Kings have it in their heads that the media is spinning a false narrative about the riskiness of the bond market and driving investors out of fixed income funds…

“Here’s Doug Hodge, the COO at PIMCO, as quoted by CNBC yesterday:

“In the aftermath of the financial crisis,the media—which play a large role in setting the tone of the markets and the psyche of investors—went from being cheerleaders for bonds, stressing their virtues and role in maintaining a diversified portfolio, to romancing the notion that bonds are riskier than stocks.”

“There’s some truth to it, but the very same media did the opposite for the prior ten years – it obsessed over the risks for equities and drove a trillion dollars into bond funds, the prime beneficiary of this largesse being none other than PIMCO itself.

“The financial media is not a toy to be used and discarded as you please. It is very serious about itself and it will swing its big, fat pendulum extraordinarily far in both directions – too far, eventually – thank you very much. This is how it works. We have some money with PIMCO and I have a great deal of respect for that firm. They are the largest bond manager, so I use them as an example here.

“The media was absolutely culpable in both the creation of the Bond Kings mythology as well as the notion that plowing huge chunks of one’s portfolio into low-yielding investments with interest rates having no eventual direction but up was somehow safe. At the top of the bond market earlier this year, investors were actually paying the government, in real terms, to hold onto their cash – and there’s no question that the media was somewhat culpable in feeding into the idea that this was somehow ‘conservative.’”

Read more here.

Houston Chronicle

Houston Chronicle has two openings on its biz desk


The Houston Chronicle is looking to fill two positions on its business news desk, reports business editor Laura Goldberg.

The Chronicle is looking for a reporter to join its energy reporting team. The reporter will cover some of world’s biggest companies, break news and provide analysis. She or he will write for print and online, including the Chronicle’s award-winning energy site, FuelFix.com. Business reporting experience preferred, and experience covering energy is ideal.

The previous energy reporter, Jeannie Kever, left to work at the University of Houston.

If you are interested in this position, send your resume and clips to laura.goldberg@chron.com.

In addition, the Chronicle is looking for a business columnist to break news and set an agenda. The columnist should have an authoritative, aggressive voice and knowledge of the energy industry. She or he will write columns of interest for investors, workers, consumers, small businesses and corporate leaders. Responsibilities include a regular column as well as a strong social media presence. A business news background is required.

The previous columnist, Loren Steffy, left to work for 30 Point Strategies.

If you are interested in this position, send your resume and clips to laura.goldberg@chron.com.