FROM SCRATCH NEWSWIRE

SCAVENGING THE INTERNET

WHY WE NEED MORE NEGATIVE PRESS

Posted by Gilmour Poincaree on November 18, 2008

3:33 PM Tuesday November 18, 2008

DAVID CHAPLIN by David Chaplin

I was at a conference last week where a woman stood up and blamed the press for creating the global financial crisis (or “the GFC” as insiders now refer to it).

The cheek of it, the session wasn’t even about media incompetence. I took offence on behalf of journalists everywhere. If anything, I’d argue that the media wasn’t negative NEGATIVE PRESS - by Kaitlyn McKinley enough in the couple of years leading up to July 2007 when everything started to sink.

Perhaps the press should’ve been a bit harder on, say, CDOs (the now-infamous collateralised debt obligation investments) or pointed out more forcefully the dangers of excessive debt building up in the world’s financial system or just generally tried to poop the party.

A more sceptical media might’ve been able to pierce a little sooner the giant bubble of “greed, jealousy and hubris”, as Jack Brennan, head of Vanguard (one of the world’s largest fund managers), described the state of the pre-GFC financial world.

Brennan, speaking via video at the same Auckland conference (a gathering of Australian superannuation industry types), told the delegates "greed, jealously and hubris" enabled intelligent people to ignore known risks in the pursuit of easy money.

There are a couple of reasons why the financial media was helpless in the face of exuberance. Partly, PRINTING WORKSHOP - Photo - Warren Bucklandit’s because we were enjoying the party too. But it’s true too that almost no-one else was willing to predict how and when it would all come crashing down – what’s a journalist without “sources”?

And then there’s the legal constraints. Well before the collapse of Bridgecorp, for example, it was well-known in media circles that the company was in trouble. Bridgecorp, however, had a particularly belligerent approach to the press, which killed off plenty of negative stories.

Blue Chip also kept its lawyers on speed-dial. Although, I didn’t know that when a financial adviser whispered to me at a conference a couple of years ago: “Have you heard of a crowd called Blue Chip… they’re doing dodgy things mate.”

Should’ve followed that one up.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE NEW ZEALAND HERALD’ (Pakistan)

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