Media's Wimpy Wall Street Coverage

I cringed as I watched the press conference for Ken Lewis of Bank of America and John Thain of Merrill Lynch on Monday. The two gathered to discuss B of A's proposed acquisition of Merrill.

The event should have been regarded as a sorry state of affairs, yet another glaring sign of greed, stupidity and mismanagement on Wall Street. Why else would Merrill Lynch , Wall Street's most acclaimed ambassador to Main Street, among other verities, be forced to sell itself in such an inglorious way?

With all the carnage, you might expect to see a pinstripe lynch mob of sorts encounter the two chief executives. But the media were so polite and deferential to the two CEOs, they behaved as if the press conference were a victory lap for the financial services industry.

There was an absence of tough, in-your-face questions. Yes, by all means, the journalists should have shown these fellows the respect that accomplished people deserve.

But where was the skepticism or the sense of outrage by the media? We're supposed to be the proxies for the public. When I saw television networks interview the (wo)man on the street during the crisis, I saw more emotion in the faces of ordinary citizens than in those of the journalists.

Don't treat these CEOs like heroes. I have never quite understood why reporters and editors show Wall Street leaders, and business titans in general, so much deference. These are people who are incredibly talented at doing one thing: making money. They make money for themselves and hopefully, eventually, for their employees and shareholders.

Is it because financial journalists really don't understand the nuances of their beats? Are they hoping to curry the favor of their subjects and sources to cover up a lack of knowledge (there is certainly a lack of institutional knowledge on the reporters' faces, as if Wall Street doesn't have periodic collapses every 10 to 15 years. Remember, Sept. 24 marks the 10th anniversary of the beginning of the end of Long-Term Capital, once the haven of the smartest financial minds on the Street.

Sure, it's inspiring to see billionaires like Bill and Melinda Gates and celebrities like U2's singer Bono give back to poor people so lavishly. They deserve a lot of credit for their generosity, but let's not give them angel's wings just yet. (Besides, Time magazine already named them as Person(s) of the Year, right?)

The only reporter who impressed me at the Lewis-Thain press conference was a fellow from the Guardian (I believe he said). He asked Thain if he judged himself to be a success or failure in his relatively brief reign at Merrill (Thain gave him some double talk but never adequately answered the question).

Wall Street journalists did better at analyzing the crisis to readers and viewers (though there could've been more of an effort to present easy-to-understand primers explaining to the public how we got into this mess in the first place and what it all means).

Wall Street reporters have a difficult job. The public relations machines at various Street firms are as tough to crack as the Kremlin's. The CEOs hate speaking to reporters in general. The jargon on the beat can be mind-bending too. I covered Wall Street in the 1980s and 1990s so I know how it is.

Wall Street media members got low marks during the collapse of Bear Stearns, as journalists did amid the tech-bubble collapse several years ago. Critics resented journalists for behaving like cheerleaders during the good times and for failing to show skepticism. When Bear Stearns crumbled, people said that the media fanned the flames of hysteria and helped trigger a panic.

But this time, I think, the media acted responsibly. Unfortunately, we've also seen seeing speculative pieces suggesting that Goldman Sachs and Morgan Stanley might be the next investment banks to fall. In a time of such nervousness, it would be more constrctive if the media took a wait-and-see posture, instead of contributing to the gloom-and-doom atmosphere.

Priorities

To understand what journalists are thinking when they're covering such a big story, I asked two of the people I respect the most to talk about their priorities.

Elizabeth MacDonald, the stocks editor of the Fox Business Network (the parent of which, News Corp., also owns MarketWatch, the publisher of this column) emailed me to say: "This is the most complicated financial crisis to have ever hit the stock market, involving highly complex, exotic derivatives that clearly not even Wall Street understands, given the steady drip of colossal write-downs. I really want to break down the issues in easily comprehensible terms for viewers as best I can, given that the financial statement disclosures on these trillions of dollars in securities, this drunken daisy chain of paper Kryptonite stretching around the globe, are about as transparent as a bucket of molasses."

Dylan Ratigan, the anchor/reporter of CNBC pointed out that: "Accuracy, context and accessibility are my focus. That, and a calm, candid and deliberate review of the story's repercussions for banking, Main Street America, and the model for Western finance."

Bloggers weigh in

Bloggers weighed in during the crisis, too.

Breakingviews.com ran a characteristically witty and incisive item noting: "Financial system faces fight against toxic shock."

Breakingviews said: "Thanks to B of A, Lehman's failure won't lead to a Merrill collapse. But the deeply intertwined credit economy must still deal with three grave dangers: technical collapse, funding woes and fear itself. Authorities will have to inject distressingly large sums to ward off gangrene."

WallStreetFolly.com had an evocative take on the fiasco. On Tuesday morning, I noticed this post: "The word to shell-shocked Lehman employees in Europe: 'It's over'... 'move on.'"

As the site noted: "A sad ending: They may not be getting their end-of-the-month paychecks, and they could even be liable for expenses on their corporate credit cards. ..."

"Staff had little choice but to follow suit in Lehman's offices around the globe as they came to terms with the reality of the vertiginous collapse of the 158-year-old institution, leaving workplaces with belongings hastily collected and their savings depleted."

It's always nice to see a show of emotion by the Wall Street press corps.

How do you think the media are doing as the report on the financial crisis?

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By Jon Friedman