| Media Failed to Warn of Financial Meltdown |
|
|
|
| by Tom McGregor | Mon, Oct 6, 2008, 05:08 PM |
|
The stakes are enormous in a fast-moving financial crisis where the traditional fear about journalists causing a run on the bank is hardly a theoretical danger. Yet, as news organizations chase exclusives about the Wall Street meltdown, they also are struggling with a troubling question: Why didn’t they see this coming? The Washington Post quotes Charlie Gasparino, a reporter for CNBC and a former Wall Street Journal and Newsweek reporter, as saying, “we all failed. What we didn’t understand was that this was building up. We all bear responsibility to a certain extent.” The shaky house of financial cards that has come stumbling down was established largely in public view: overextended investment banks, risky practices by Fannie Mae and Freddie Mac, exotic mortgage instruments, which become part of a shadow banking system. Although these were conveyed in incremental stories – and a few whistle-blowing columns – the business media never conveyed a real sense of alarm until institutions started to collapse. According to the Post, “Marcus Brauchli, The Washington Post’s new executive editor, who was the Journal’s top editor until last spring, says no policy maker who followed those papers, the New York times, the Financial Times and CNBC could have been unaware of the explosive growth of derivatives that embedded debt across the financial system.” Mr. Brauchli said, “I regret that when I was the Journal, we didn’t keep the focus on some of these questions, including the possible moral hazard posed by the structure of Fannie Mae and Freddie Mac. These are really difficult issues to convey to a popular audience … You do have an obligation as a journalist to push important issues into the public consciousness. We also have to remember you’re pushing against a powerful force, which is greed.” To read the entire article from the Washington Post, link here:
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
Bookmark
Email This
Comments (14)
...
written by Layne , October 06, 2008 Here are some videos about the current financial meltdown that should be watched by everyone - http://uk.youtube.com/watch?v=_MGT_cSi7Rs http://www.youtube.com/watch?v=exxVZTKq1vA http://www.youtube.com/watch?v=0I9tKmyNcuU http://www.youtube.com/watch?v=Y4wgwKPQIhI
...
written by Boo , October 07, 2008 Lets see, a highly edited video of a congressional hearing from 2004. When the Republicans controlled Congress, and could have taken action despite Democratic protests. A commercial from a 527 group, and a speech by John McCain. Why should everyone be watching this again?
...
written by Sandy McDonough , October 07, 2008 The root of the problems can be laid at the quasi - governmental agencis, Fannie Mae and Freddie Mac. The Community Reinvestment Act passed under the Clinton administration made it much easier to obtain home loans despite the creditworthiness of the borrower. Banks, mortgages companies, and other lending institutions were "freed" to make these loans under the impression that all would be backed by Uncle Sam. Several politicians, including Senators Christopher Dodd and Obama were the top two recepients of $ from these two entities. McCain and others saw the problems and are on the record. The media, which is about as popular as Congress today, typically did little if any reporting on the matter.
...
written by Amy in Austin , October 07, 2008 You obviously missed Jim Craymer's Mad Money episode in early 2007.
...
written by Steve Heath , October 07, 2008 You can always count on the mainstream media to tell you some of the truth on issues of utmost importance to all of us - -after it's too late.
...
written by Bill M. , October 07, 2008 Nonsense! I remember reading warnings about this months ago -- in magazines and newspapers. That is, reputable experts warned and were widely and accurately quoted. Is there really anybody here who pays attention to the "media" who did not at east suspect that this was coming? What you meant to write was "Media warnings of financial meltdown not heeded."
...
written by ElHombre , October 07, 2008 If the media failed in its job, there's a few simple steps that can start correcting things. First off, make a list of every person they interviewed or used as a source that got the story wrong. Never call these people again*. Next, make another list of people who have made accurate predicitions about the collpase and tried to warn the public, but were ignored**. Make these people your sources and interview them. *Phil 'nation of whiners' Gramm, for example. Definitely Grover Norquist. **Take a look at Barry Ritholtz's 'The Big Picture' blog. Or *shudder* the Shrill Paul Krugman. Note that these steps can apply towards other aspects of journalism, as well.
...
written by Boo , October 07, 2008 Sandy: I keep hearing about how the Community Reinvestment Act deregulated banks and caused this to happen. I've done some research on the act, and although I don't think I could consume enough coffee to finish reading it before my kidney's exploded I am unclear on how the act freed up banks, mortgage companies, etc to make these loans or where it implied that these loans would be backed up by the federal government. I am however reading from the updated version of the act from the first Bush administration to address the S&L crisis so I might be missing it. This update of the bill actually added further regulation and over site to the industry. These additional over sites were later repealed in the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994. A bill passed by a Republican congress. Perhaps you are confused and mean to reference the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 which mandated that Fannie Mae and Freddie Mac devote a certain percentage of their income to low cost housing loans. Please note that is low cost housing loans, not high risk housing loans. I've seen various members of the Republican party reference this act, and I think that they are trying to obfuscate the truth here. The act was initially passed under the Carter administration, then updated to add regulation and over site during the first Bush administration, and then these regulations were repealed in '94 under Clinton(I still haven't been able to locate any information on if it was vetoed by Clinton and then slammed through by a Republican legislature). Perhaps the various talking heads that blame this bill and by extension of that the Democrats for this crisis are trying to simplify a very convoluted group of legislation, but my money is that they're just using that to try to pass the buck to the Democrats. Don't just parrot what politicians on either side of the isle say. It's often riddled with false hoods, or intentionally obfuscated. Just like the information you've presented here.
...
written by dt , October 07, 2008 So, Boo, the democrats did protest? You bet they did and they killed regulation in 2005.
...
written by HSH , October 07, 2008 Tom: I don't the media failed to report the crisis. I have read lots of reports since February 2007 talking about the real estate bubble, the rapid growth of completely unregulated and opaque credit derivative swaps, the expansion of investment banks and institutions into subprime lending,and Fannie/Freddie's expansion of subprime and "boutique" loans in order to compete with private lenders such as Countrywide. If a vacuum existed, it was in putting all of the pieces together. The failure to see this massive train wreck rests with the degree of complexity, lack of transparency, and lack of leadership at the executive level. Alan Greenspan allowed the expansion to take place, then talked about it's danger (in 2007-08) after his departure from the Fed. John Snow, the previous Treasury Secretary, was nothing but a seat-warmer. Bernanke is a terrific scholar and historian but not a very good tactician. GWB didn't give a rats-you-know-what as long as the Dow was rising. Unfettered capitalism has failed us. The era of greed has pushed us off the cliff. It's time to lay down some serious playground rules.
...
written by Bob Reagan , October 07, 2008 To whoever Boo is: The Congress in 1994 was not Republican controlled. The Republicans won a majority in the 1994 mid-term elections, but did not take office until January 1995. (See the 20th Amendment to the Constitution). The regulations you referred to were repealed by a Democratic Congress and signed by President Clinton. (Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, (Pub. L. No. 103--328; 108 Stat. 2379, effective September 29, 1994)) There is plenty of blame to go around, but you cannot lay this one at a Republican Congress's feet. The CRA in toto is yet another example of how altruism (of the government forced or enabled variety, in particular) does nothing but increase the moral hazard all around.
...
written by Steve Heath , October 08, 2008 I completely disagree with you who defend the media. Yes they reported it -maybe on page 23 of the dallas Morning news, or an occasional article or story on TV. They should have been screaming it from the rooftops and putting these stories on the front page- over and over - like they're doing now - even though the spin they put on it is a bunch of pathetic half-truths and BS. I've been reading alarming stories from dozens of reliable sources -who have repeatedly warned us for many years - very specifically the last three years about all this mess. Go back and listen to what people like Pat Buchahan, Ron Paul, Peter Schiff, Jim Rogers, and Lew Rockwell were saying. There's no comparison. We might survive this sub prime and credit crisis if we handn't exported two thirds of our manufacturing and industrial jobs and not run up trillion dollar trade and budget deficits. Now we are in deep trouble. Every republican candidate and the media laughed at Ron Paul about these issues - about how borrowing from the Chinese to fund wars would bankrupt - how the Fed with their cheap credit was destroying the dollar and leading us to continuous boom and bust cycles -and how reckless government actions in creating bubble after bubble to prop up this phony economy would lead to the disaster we have today. I'm sorry you trust the media and feel they did their job. Most people probably would agree with you -the media will blame it on a few patsies. The result is we are assured to get no accountability-and more of the same.
...
written by Steve Heath , October 08, 2008 Layne -those videos are very relevant but governmet backed loans to minorities who were not credit worthy were only a small part of the problem. I recently saw another Utube video of George Bush from 2004 bragging about how under his administration Fannie Mae/Freddie mac were making home ownership possible for millions of minorities, and that he was working hard to assure all Americans owned a home. Both parties were at fault. I really can't see one more culpable than the other, and I've looked at this very closely. I think just about every incumbent should be thrown out - with just a few exceptions. What ever happened to the principle of accountability?
...
written by Steve Heath , October 08, 2008 Amy - I've seen and heard enough of Cramer to know he is not in class of people like Ron paul who tried to warn us. I did see Cramer interview Ron paul about a month ago, and listening to Cramer, he would have his audience believe that Ron paul and Cramer were the only ones who had predicted and warned us of this mess. paul just smiled and politely declined to take issue with him. I thought the moment was priceless. Cramer on occasion covers himself by making such proclamations. One week he says buy Lehman brothers, and a month later when its obvious they're going down, he says sell. And when Lehman collapses, he says 'I told you so." Most people who are serious investors seem to think Cramer is a joke. Many watch him with the aim to do the opposite, believing he pushes a stock when his Wall Street buddies whisper to him that they need to unload their inventory. That is the sentiment I have heard from many people. Telling us the obvious once is not doing their job. You have to follow through daily, weekly and monthly -over and over. If you want someone who has been very consistent, look at this video by Peter Schiff- Ron paul's economic advisor. He used to be on the mainstream media occasionaly as the representative bear, and so the moderators and commentators could laugh and mock him. The mainstream media took him off the air when the economy really started to heat up. Look at this August 28, 2006 video where he debates Art laffer. They're not laughing now. http://news.goldseek.com/GoldSeek/1205727731.php Write comment
|
|
| < Prev | Next > |
|---|
