Tag Archives: Ethics
Gary Weiss, the author of Wall Stret versus America, complains mightily on his blog tonight about how the CJR Daily web site makes some unfounded complaints about a Wall Street Journal article focusing on Warren Buffett‘s gift of $37 billion on Berkshire Hathaway stock to the Gates Foundation.
Weiss noted that the story from the Journal was a “Heard on the Street” column that focused on the impact of Berkshire’s stock price. Yet, the CJR Daily, a blog about journalism run by the Columbia Journalism Review, failed in the most basic understanding of how business journalism works.
The CJR Daily’s critique was this: “Is it because the Journal’s sources actually stand to profit from the very fluctuations they claim to fear (and profit even more if they can whip up some market hysteria with an article in a prominent business newspaper)? We can only speculate, but there is no doubt that there is a deeply cynical strain of business reporting that has come to reduce everything to numbers, seemingly blind to the reality that business affects people — real lives that are either trampled or uplifted depending on the decisions of market players like Buffett.”
And Weiss replied: “Jumping butterballs! What is wrong with these people? There is absolutely nothing in the article suggesting that dark, nefarious market players were feeding info to the Journal, hoping to ‘profit’ from ‘market hysteria.’ Besides, it is beyond me how a story like this, a story so non-earthshaking, could whip up ‘hysteria’ for a stock as large as Berkshire.
“But that’s not what I find bizarre. The obvious answer to the ‘why write it’ was that an editor assigned it or that a reporter thought, with good reason, that it was a good story. For the CJR website to allege, without evidence, that a couple of Journal reporters (this was a joint byline) were manipulated by market players is just… it’s just… yecch. (Oh, and full disclosure: I have never met either Journal reporter.)
“The CJR Daily piece concludes with this sanctimonious cheap shot: ‘Maybe one day the folks on Wall Street will come to realize that good deeds add value, and maybe the journalists who cover that beat will report on the perfect negative correlation between the rise in Berkshire’s stock and the demand for tasteless fortresses and marble statuary in Greenwich, CT.’
“There are plenty of reasons to find fault with financial journalism. I criticize the media severely in my book for touting investment managers and being overly deferential to hedge funds, among other things. But this kind of snarky article seems only to prove that the folks at CJR Daily are having a hard time filling space.”
Read more here. Weiss makes a good argument.
Today’s hearings on short selling should be interesting for business journalists in the wake of recent allegations that some reporters have been in cahoots with hedge funds and others who short stocks to drive down the price of shares.
Former BusinessWeek reporter Gary Weiss has a couple of nice postings about the hearings and notes that there are a couple of interesting witnesses who have been called to testify. One is a former employee of Gradient Analytics, which is being sued by Overstock.com. If you have been following the issue, Overstock’s leader, Patrick Byrne, has gone toe to toe with business journalists such as Marketwatch’s Herb Greenberg.
Weiss also notes the lack of fact-checking by the Columbia Journalism Review’s Daily blog on the issue. It is recommending readers check out a letter from a witness posted on the SanityCheck.com web site, when a more reputable web site for the letter would be The Wall Street Journal.
Writes Weiss: “Odd, don’t you think, that a journalism review — a site presumably devoted to advocating tough journalism — would link to the financial world’s leading enemy of tough journalism? Particularly since CJR could have linked to the place where ‘sanitycheck’ got the letter — the Wall Street Journal’s website? As you can see, the Aguirre material is available there, at no charge, to subscribers and nonsubscribers alike.”
Read more here.
Orange County Register columnist Jon Lansner, a former SABEW president, notes in his real estate blog that government statistics are notoriously bad, yet many business and economics journalists continue to report them as if they were the truth.
He uses the new home sales statistics as an example:
“News flash! New homes sales nationwide were up a surprising 4.6% from April to May! Or was it actually up 17.7%? Or, were they really down 8.5%?
“The confusion comes from the government’s sampling error — standard in all polling efforts — in creating this estimate. Here’s the nut of the Census Dept.’s report:
“Sales of new one-family houses in May 2006 were at a seasonally adjusted annual rate of 1,234,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 4.6 percent (plus or minus 13.1%) above the revised April rate of 1,180,000, but is 5.9 percent (plus or minus 10.8%) below the May 2005 estimate of 1,311,000.”
Note the margin of error is so high that the positive numbers could actually be declines.
Read more here.
Advertising Age editor Scott Donaton praised the New York Post’s business section in a column posted on the publication’s web site on Sunday, noting that it operates distinctly from the rest of the newspaper and writes about stories that are later covered by other media.
Donaton wrote, “I’m talking here specifically about the paper’s business coverage, which often is criticized by other business journalists as being gossipy or lacking credibility. But the business section actually employs some talented and hard-digging journalists who regularly break big news. And it is an operation distinct from the paper’s frighteningly downmarket and screechy news pages. That, in fact, is the brilliance of the New York Post. It simultaneously serves gory crime stories to a blue-collar audience and gossip, business news and sports to a more upscale reader-power players on both coasts.”
Later, Donaton noted, “On a recent Saturday, the Post splashed across its front page a story about the relationship between the CFO of a major media company and a woman accused of running a prostitution ring. BlackBerries buzzed from the Hamptons to Greenwich to Malibu-Omigod, can you believe it?-as word spread through the pop-culture industries.
“That day, the story found its way onto the radio, and by Monday and Tuesday it was in other papers, on the Web and on TV. But many of the stories were about the Post story, in some cases exploring whether the CFO was a legitimate target or whether the paper had blown the whole thing out of proportion. Ignored was the fact that these reports were doing the same thing the Post had done: spreading word to their audiences about this man’s personal life.”
Read more here.
The Boston Globe is considering selling ads on the front page of its business section, according to an article in the Saturday Boston Herald, in a move that would mirror a decision made by its parent newspaper, The New Yoek Times, which announced earlier this week it would sell ads on the front page of its business section.
Herald reporter Jesse Noyes wrote, “Selling ad space on section fronts is a controversial move. But with the industry facing tough financial straits, more newspapers are considering the practice.
“The Herald began running ads on the front page last September.
“Ironically, online advertising, which has caused grief to print publishers, has contributed to the blurring of the line between commercial and editorial content as newspapers seek out a place on the Internet, said Fred Bayles, a journalism professor at Boston University.
“‘Thereâ€™s so much advertising commingled with editorial copy on (newspaperâ€™s) Web sites that itâ€™s hard to tell where the line should be drawn,’ Bayles said.”
Read more here.
University of Illinois law profesor Larry Ribstein writes that there are advantages to the concept of having billionaire Mark Cuban invest in the stocks that business journalists will write about on the investigative journalism web site ShareSleuth.com that he is funding.
Ribstein wrote, “There is a particular advantage in combining short-selling with journalism. The seller’s or his boss’s investment in the journal and its reputation in a sense ‘bonds’ the accuracy of the disclosure. A short-selling journalist’s short-term profits from lies may be more than offset by the long-term hit to his reputation.
“So instead of thinking about regulating this sort of trading, we should consider de-regulating it. We could start with a law clarifying that those who trade on information about fraud are not liable. The law might, for example, clarify that an employee who sells information about fraud to one who trades on the information is not misappropriating the information for purposes of the insider trading laws.
“Once we’ve cleared up what to do about Cuban’s idea, there are analogous situations that may deserve similar attention. For example, there have been stories recently about trading on advance knowledge of lawsuits, also known as ‘dumping and suing’ debated here. There are other stories about dumping and boycotting, where a prospective boycotter shorts the shares of the company he plans to boycott.”
Read more here.
I will let you decide:
Scary in their similarity. A photographer for the Richmond Times-Dispatch was fired recently for staging a photo that was similar to one used in another publication. Is this any different?
BusinessWeek editor Stephen Adler stated on Romenesko that he wrote the cover headline, and he was unaware of the Seattle Weekly cover.
The New York Times will begin selling ads that will appear on the front of its business section, Times’ reporter Katherine Seelye noted in a Wednesday story.
An announcement was made by executive editor Bill Keller in the newsroom on Tuesday.
Seelye wrote, “The ads are expected to sell at a premium rate because of the prominent showcase the front of the section affords. They will appear in a strip along the bottom of the page.
“The change comes as The Times, along with other newspapers, faces an increasingly difficult economic environment. Mr. Keller also said yesterday that the paper was considering cost-saving measures, including shrinking the width of the paper.
“Mr. Keller disclosed the moves during a presentation to newsroom employees, meetings he holds twice a year. His remarks yesterday focused in large part on the paper’s journalistic accomplishments of the last six months.
“The Times already runs ads on the front of The Metro Section on Sundays, and some newspapers, including USA Today, are now selling advertising space on their front pages â€” a move The Wall Street Journal, for one, has said it is considering.”
Read more here. Personally, I am disturbed by the move. It blurs the line for readers between what is for sale and what is not for sale in the newspaper.
BusinessWeek Online reporter Marc Hogan takes a hard look at ShareSleuth.com, the new investigative business journalism web site being started by former St. Louis Post-Dispatch business reporter Christopher Carey and being funded by billionaire Mark Cuban.
The ethics of the web site, which is not yet up and running but has generated interest this week after it was disclosed, are being questioned after Cuban said he would invest in some of the companies mentioned on the site.
Hogan quoted a journalism school dean: “At first blush, it just sounds so weird it’s kind of hard to get my mind around,” says Dean Mills, dean of the School of Journalism at the University of Missouri-Columbia. “Whether online or in print or in any other form, the main mission of journalism is to give the best, most accurate, most objective news it can to its readers. You just have to think that this kind of personal individual investment motive would contaminate the journalism.”
Hogan later wrote: “The stories will take an ‘anti-fraud, pro-investor’ point of view and will likely steer away from the ‘he-said, she said’ approach of much contemporary journalism.
“Nor is Cuban’s plan necessary illegal. Under the law, Cuban must disclose his interest in the securities Carey covers, and Carey’s stories must be true, according to Mike Missal, a partner at Kirkpatrick & Lockhart Nicholson Graham specializing in securities regulatory matters.”
Missal prosecuted former Wall Street Journal reporter Foster Winans in the 1980s for sharing information in his stories with investors before they were published.
Read more here.
Former BusinessWeek reporter Gary Weiss, who has covered his fair share of Wall Street scandals and uncovered a number of crooked companies, has a problem with the idea that Dallas Mavericks owner Mark Cuban is going to invest in the companies that departing St. Louis Post-Dispatch business reporter Christopher Carey is going to write about in their new venture, Sharesleuth.com.
Weiss wrote, “A journalism conflict I say? Yes, it is a journalism conflict. A big journalism conflict. In this world or any other. A bedrock principle of journalism, what distinguishes journalism from stock research, is that you carry out sleuthing for public enlightenment and only public enlightenment, not private gain. Sure, you can make a living at it, through advertising or subscriptions, if you can. But you don’t trade on the info. Ever. It is not even at the level of Journalism 101, it is that basic.”
Later, Weiss added, “What makes that idea particularly bad is the lynch mob atmosphere surrounding short-selling which has actually gotten worse since I described it in the book. I’ve written numerous blog items on the crazies of the naked short-selling conspiracy cult, many of whom have targeted Cuban — whose blog is excellent, by the way — as well as tough journalists like Herb Greenberg. But if Cuban profits from his new venture, even if disclosed, it will simply reinforce the view that journalists and independent stock analysts are in bed with the shorts.”
Read more here.