I heard Jeff Jarvis on the radio this week say he wanted someone to, in easy link-and-click fashion, explain what’s going on, what the current financial crisis is about. And I suppose he's right (while hoping he’s wrong) that that easy click and see doesn’t exist. (He did on his site say he likes this explanation.)
And, in so complaining, he put his finger on a major problem with journalism as it’s practiced. Amid all the tit-for-tat accusations, running around trying to dig up, follow the latest, get the scoops, journalists too often forget to explain to those who desperately want it what the story at its deepest levels is really about -- which also would serve to tell the reading/listening/viewing public why they should care. That kind of depth, of course, doesn’t get the quick pageviews, nor is it the kind of investigative journalism that tends to win Pulitzers and other prizes. In a business sense, it’s not the kind of journalism that will pay for the resources it takes create it. But it is a big public service that can accrue pageviews (on pages carrying ads) over time. And there are ways to “monetize” it beyond the pageview-ad formulation. (partnerships, re-branding, syndication, books, new sections ... that would be another blog post.)
Not that it’s easy to explain something like this crisis. A lot of people tasked with explaining what’s going on probably themselves don’t understand, and good journalists are trained not to let their grasp exceed their reach. Heck, some of the smartest professors I had in business school seem at a loss to completely explain what’s happening in the economy right now. (One wrote an email about the opposing views of who’s to blame, without answering a question I asked about whether models he taught us projecting increased value as debt is taken on were still valid, or formulations for calculating risk should be changed). And, the ones who can explain it all to us -- smart MBAs who do financial modeling -- are, after all, ones who helped get us into this, with the very financial models they created or followed. They’re likely to earn a lot more than the ink- and pixel-stained wretches working in newsrooms. Then, again, there’s a few of those folk who have a bit of free time at the moment. Maybe they could write a little something for the papers, even help come up with some graphics and videos to explain it all.
Even without the business justifications, though, the explanation would be worthwhile and a public service.
Vin Crosbie
Dorian Benkoil
Bob Cauthorn
Ben Compaine
1. Paul Pignataro on October 4, 2008 7:32 AM writes...
I very much understand your concern. Making these situations more understandable to everyone and even giving people the opportunity to question professionals on these a huge part of what we do at The Analyst Exchange. Here is a bullet summary of what happened: (and we have much more!)
Before Collapse
• Lehman Brothers struggles to raise capital after losses on risky real-estate investments
• Possible buyouts by Bank of America and Barclays fall through
• Fed decides not to bail out firm
Monday, September 15
• Lehman Brothers files for bankruptcy in the morning hours
• Largest bankruptcy in U.S. history with over $600 billion in assets
• Shareholders’ and bondholders’ investments wiped out
• Norway government pension fund had $800 million at stake
• Default insurance rates increased dramatically
• Largest one day increase in history
• Investors forced to sell assets to make margin calls
• AIG hurt as holder of $400 billion in bond contracts
• Concern over futures of Goldman Sachs and Morgan Stanley
• Bond holders try to buy additional insurance, driving up price
• Clients withdraw money from prime brokerage businesses
Tuesday, September 16
• UBS reported to have possible $4 billion in losses from Lehman exposure
• Stock falls 17% before report corrected by UBS ($300 million)
• LIBOR rate more than doubles overnight
• Banks still hesitant to make loans
• Morgan Stanley stock falls 28% percent in early trading
• Firm releases quarterly returns a day early to ease fears
• Money-market funds take loss from Lehman commercial paper
• Normally safe, net asset value fell below $1 a share for first time in 14 years
Wednesday, September 17
• UK largest mortgage lender HBOS shares fall by 19%
• Government brokers emergency sale to bank Lloyds TSB Group
• Morgan Stanley shares fell 24% by end of day
• Goldman Sachs shares fell 14% by end of day
Thursday, September 18
• Fed extends insurance to $3.4 trillion in money-market funds
• Proposed $700 billion bailout package for banks’ bad assets
Aftermath
• Morgan Stanley and Goldman Sachs apply to become commercial banks
• End of era of independent investment banks
Warm regards,
Paul Pignataro
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The Analyst Exchange
www.theanalystexchange.com
2. Diane Lowell on October 21, 2008 3:27 PM writes...
I'm an old-timer among journalists, but one who gets the connection between "public-service" journalism and marketing, really. No, that's not pushing ads via editorial content. It's selling the reader on the value of news or information that should be well-reported and well-packaged.
Today's journalism has passed through a wash of elitist, illuminati, political, ink-pabulum that is becoming more and more irrelevant to the people it is supposed to serve. If the Fourth Estate rediscovered its roots, newspapers and magazines might have a future.
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