Tag Archives: Ethics
Words biz reporters use can predict bank stock performance
by Chris Roush
The frequency of negative phrases such as “financial crisis” and “credit crunch” in news coverage is a better predictor of bank stock performance in subsequent months than the reverse — that is, than bank stock performance predicted negative news coverage, according to research coming out in the Journal of Economic Behavior and Organization.
“These findings may imply that journalists not only report on the state of economic reality, but also play an active role in creating it,” write Tomasz Piotr Wisniewski and Brendan Lambe of the University of Leicester. “Investors acting upon sentiment implicit in media reports would have been able to improve their investment performance.”
The researchers looked at bank stock market indices in the United States, Britain and Canada from 2005 to 2010 and compared the drops in the indices to the frequency of phrases such as “credit crunch,” “financial crisis” and “bank failures” in the media.
Their conclusion was that the current climate in journalistic opinion can influence the future valuations of bank stocks.
However, the researchers noted that they do not believe that journalists can forecast future events better than investors. They noted that there are 10 times more investors in the United States that journalists, and that the investors have greater resources.
“Secondly, journalists do not bear financial responsibility for expressing their opinions on the state of the economy, whereas traders have to live with the consequences of their predictions,” conclude the researchers.
Still, the authors conclude that coverage can predict future market moves by bank stocks.
“According to our simulations, an increase in negative coverage induces a statistically significant response in the future returns on banking stocks,” wrote Wisniewski and Lambe. “The results from the variance decomposition analysis confirm the conclusions regarding the strength and directionality of the relationship between the published news and the markets. When confronted with these findings, one is inclined to argue that commentators ought to strike a fine balance between exercising their freedom of speech and using overly dramatic language to report current affairs.”
If you’d like a copy of the paper, send an e-mail to croush@email.unc.edu.
Wired letting advertisers mingle message with editorial content
by Chris Roush
Lucia Moses of Adweek write about how Wired magazine is letting advertisers sponsor blogs and become more involved in the editorial content.
Moses writes, ” A prominent example is Wired, which is running ad-sponsored blogs that let advertisers commingle their messages with editorial content. One that’s now on Wired.com is Cloudline, sponsored by IBM. It’s edited by Jon Stokes, a Wired freelancer who’s the blog’s main contributor. But IBM has a big role in it too, with branding on the site and executives contributing posts.
“Wired publisher Howard Mittman says the topics started as Wired editorial ideas that needed ad support and were not generated by the advertisers themselves, as would be the case with much conversational media. (Separately, the magazine is also publishing some advertorial blogs where the content is driven by the advertisers, currently GE and BMW.)
“‘We’re not creating push-style content; what we’re really doing is trying to create conversations that engage the community,’ Mittman says. ‘These are a new way for us to connect brands with consumers.’
“Kristin Haarlow, associate media director at digital media agency Spark Communications, says interest in conversational media has grown as advertisers have recognized the importance of peers’ opinions in influencing what people buy. The format has also evolved to become more dynamic.”
Read more here.
Bloomberg warns companies not to give gifts to its employees
by Chris Roush
Joe Pompeo of Capital New York writes Monday that the CFO of Bloomberg LP has sent a note to companies that the media and data company does business with, warning them not to give gifts to Bloomberg employees, including its journalists.
Pompeo writes, “‘As the holiday season approaches, we would like to remind you that Bloomberg has a strict policy that prohibits giving or receiving gifts, including meals, tickets or trips.’
“So begins the letter Bloomberg C.F.O. Patti Roskill sent out last week to a group that includes freelancers for the magazine Bloomberg Businessweek.
“But Roskill reminded vendors that they are only being put on the same footing as all Bloomberg employees: ‘Our employees are instructed to return any gifts, irrespective of their value, to the sender.’
“These sorts of rules are enforced at all mainstream news outlets, but reminder letters like this are often prompted by a serious infraction (or an epidemic of smaller ones). One imagines it’d be easy to make a mistake at a company that issues its employees a 350-page encyclopedia of editorial and ethical standards.
“But a spokesman affirmed that it’s just the scary efficiency of Bloomberg L.P. at work.”
Read more here.
Using tech journalists to influence the markets
by Chris Roush
Tim Carmody of Wired writes Wednesday about the games that are played on tech reporters in an attempt to influence company stock prices.
Carmody writes, “This isn’t just about the things we usually worry about, like companies’ PR reps hustling for favorable coverage, or high-profile Arrington-at-Techcrunch conflicts of interest. The tech world is filled with interested parties trying to place stories in order to move the needle on a stock price up or down so they can pocket the difference.
“In March, I wrote about this in the context of the tech bubble for Nieman Journalism Lab. Sometimes, it’s as simple as a tweet to spread buzz about a new company; it can also take the form of detailed scoops that, in addition to their news content, also aim to influence the market by proxy.
“One recent example is the acquisition rumors swirling around Yahoo. I actually stopped reporting on these, except to make fun of them.
“A recent post from Business Insider’s Henry Blodget spells out these shenanigans pretty plainly. Blodget argues that the Wall Street Journal’s reporting on Yahoo, including a potential partial acquisition by Microsoft, is primarily driven by private equity firms involved in the acquisition who’d like to drive the purchase price down below $16 a share. In turn, Blodget, a Yahoo shareholder and employee and former Wall Street analyst, offers up his own blog as a mouthpiece for Yahoo shareholders (including himself and his sources) who’d like to hold out for a higher price. Yay journalism?
“One reason mergers & acquisitions rumors are particularly crazy — Hulu was another example that gave plenty of journalists bottomless copy until finally nothing happened — is because there are just too many parties involved with competing interests who have good reason to use information for their own purposes. I’m not saying journalists shouldn’t go with the information they dig up, but readers should think hard about how much they want to believe.”
Read more here.
Bloomberg story on Koch draws scrutiny when republished in WaPost
by Chris Roush
Patrick Pexton, the ombudsman of the Washington Post, writes that the paper could have handled better the republication of a story about Koch Industries that originally ran in Bloomberg Markets.
Pexton writes, “Post Business Editor Greg Schneider said he ‘was aware’ before republication that ‘the piece had stirred up some reaction, but we look to highlight work that is provocative.’
“I think newspapers should always be provocative. But they should also be fair and provide context.
“The Post could have included a sidebar summarizing and linking to the rebuttals that ran between Oct. 3 and 9. It could have called Koch directly — it didn’t — and put its comments in the sidebar.
“After publication, the Kochs requested that The Post put online a one-paragraph statement from its general counsel, along with a link to KochFacts.com. I thought the statement was too strong; I might have negotiated over the wording of that statement, but the request does not seem unreasonable after a 3,000-word critical story is published. The Post did not publish the statement.
“The Kochs are wealthy people with outsize influence; they are fair game for journalists. But journalists should also play the game fairly.”
Read more here.
Reuters’ Adler sends memo addressing wire service’s objectives
by Chris Roush
Jeff Bercovici of Forbes.com writes Wednesday that Reuters editor in chief Stephen Adler sent a memo to the staff that addressed the news operation’s goals in the wake of criticism about a Reuters story last week that loosely tied investor George Soros to the Occupy Wall Street movement.
In the memo, Adler writes, “Someone asked Mike Williams on a recent staff call how we could maintain our journalistic standards while embarking on investigative reporting. Mike was a little dumbstruck and responded that high journalistic standards and investigative journalism aren’t just compatible, they are inextricably connected. I entirely agree: We uncover hard-to-get facts through meticulous, dogged reporting, and we report what we learn fairly and dispassionately –with no other agenda than informing our readers. The story’s heat emanates from the depth of reporting and understanding it reflects, not from loose logic, innuendo, or what some internally call ‘banalysis.’
“A great virtue of our cherished reputation for accuracy is that readers actually rely on what we write, and they feel betrayed when we fall short of our high standards. We therefore have a responsibility to be worthy of their trust every day. This doesn’t mean every subject of every story has to be pleased with what we have reported. Indeed, if we are reporting deeply and well, we will uncover wrongdoing and other circumstances that reflect poorly on individuals or institutions. People will complain. That’s ok. But even when a story is critical, it must be accurate and fair. And when we do make a mistake, we must correct it fully, openly, and as quickly as possible. I know this ethically demanding approach to journalism runs deep in the culture of Reuters. It remains core to our belief system and our behavior even as we pursue more in-depth modes of coverage.”
Read more here.
Executives ignored questions about WSJ Europe circulation
by Chris Roush
Edmund Lee of Bloomberg News writes that News Corp. executives were given information about questionable tactics raising the Wall Street Journal Europe’s circulation a year before the publisher resigned, but ignored it.
Lee writes, “Les Hinton, the former chief executive officer at the News Corp. unit that publishes the Wall Street Journal Europe, was contacted with details of the payment practice in November 2010, according to former circulation manager Gert Van Mol and e-mails he provided to Bloomberg News. Todd Larsen, president of the Dow Jones & Co. unit, was also notified.
“Van Mol said in the correspondence that a Dow Jones business partner was being compensated at the same time that partner was buying thousands of copies of the Wall Street Journal Europe, effectively boosting the publication’s circulation. Andrew Langhoff, the newspaper’s publisher who stepped down last week, had approved the payments, the circulation manager said in the e-mails.
“‘It was a non-ethical practice,’ Van Mol said in an interview. ‘I didn’t want to be part of it, so I contacted Hinton and Larsen.’
“Bethany Sherman, a Dow Jones spokeswoman, declined to comment on whether Hinton and Larsen had been alerted to the payments last year. She said Langhoff, 49, resigned because of the perception the newspaper’s agreement with the Executive Learning Partnership could have compromised editorial integrity.”
Read more here.
A look at WSJ Europe’s circulation trends
by Chris Roush
Robert Andrews of PaidContent.org examines how the Wall Street Journal Europe’s total circulation had fallen by a third in the eight years before it implemented the circulation program that came to light last week and caused the resignation of its publisher.
Andrews writes, “The ABC originally validated the programme. Sales through this method continued to grow steadily until late 2010, but have returned to original levels after a whistleblower allegedly complained about the scheme last year. In their place, WSJ Europe has upped both its controlled free circulation and its multi-copy bulk sales.
“The background to all this is that WSJ Europe single-copy sales have more than halved in the last 10 years. The paper has used several techniques to add new circulation – all of them commonly used by other publishers and approved by the ABC, except until the day it retrospectively says otherwise following its inquiry.
“But it has not all been about print circulation. The Journal has also been rapidly building its web operations in Europe and Asia.”
Read more here.
Reuters blogger criticizes Reuters story on Occupy Wall Street
by Chris Roush
Reuters blogger Felix Salmon is critical of his employer’s story that attempts to make the claim that billionaire investor George Soros is funding the Occupy Wall Street protest.
Salmon writes, “The article is particularly problematic from my perspective because I’m incredibly proud of Reuters’s long tradition of impartial journalism. I’m on the opinion side, not bound by such things, and if you think I’m biased you’re right. (I should mention here explicitly that this post, just like everything else on this blog, is my personal opinion. It may or may not be shared by others within the organization. But it should emphatically not be taken as representing the views of Thomson Reuters.)
“Reuters news stories like the one about OWS are held to a very high standard of integrity, independence, and freedom from bias. And there’s lots in this article which tilts hard to the right.”
He concludes, “Reuters cannot — must not — get a reputation as a right-wing media outlet. We have to report the news as impartially as we can. In this case, there was no story, and nothing to report. Inventing a tenuous and intellectually-dishonest link between Soros and OWS might get us traffic from Matt Drudge — but that’s traffic which, frankly, we don’t particularly value or care for. Much more importantly, it serves to undermine the heart of what Reuters stands for. And we can never afford to do that.”
Read more here.
The problem with obsessing about scoops
by Chris Roush
Eric Jackson of Forbes.com writes Friday about how business journalists spend too much time chasing after scoops.
“The problem with ‘scoops’ is that they show a basic problem with business journalism today. ‘Scoops’ matter really only to other journalists – not to the readers (with rare exceptions – and Kara Swisher falls into this category often). Most of the ‘scoops’ in this Yahoo! story have been meaningless 48 hours after they ‘break.’ Yet, they get played up as so important at the time they’re released.
“Journalists care about ‘scoops’ but readers don’t.
“If the New York Times or Wall Street Journal want me to pay them for their business ‘scoops’ — forget it. I’ll stick with my free Twitter stream and the 1,400 other free websites that will publish your scoop within 2 minutes.”
Read more here.