Is this the "old" WSJ or the new one? Seems to be a break down in journalistic integrity? Not to disparage a huge media conglomerate, or anything but...
are you guys in some sort of blogger protection program? the reporters are coming to get you...(and they don't actually believe the pen is mightier than the sword, they've got guns!)
"1. Why does "the person" still get anonymity? "The person" either lied or passed on unverified rumors as if they were facts. Why don't we need to know who "the person" is?"
Well if Bush administration officials can do it then it's only fair that your average everyday joe citizen be given the same consideration.
BTW, Tanta, whenever the media covers any subject about which I know a great deal, the media's ignorance is obvious. Makes me assume that the media's coverage of the gazillion subjects about which I know nothing must be just as bad. Meaning, the media must almost always get everything wrong.
I've posted this same comment before. I worked for a high-tech company in the early 90's. Someone at a major financial periodical wrote something trashing a small company where I had some friends. The CFO at my told me, "Ya, he works with _____, a short seller." It was just a matter-of-fact statement, so I just assumed it wasn't uncommon. Then the CFO matter-of-factly told me he'd like to run the reporter down with his car and back over him.
Something tells me your average everyday joe citizen doesn't get the attention of a WSJ reporter with unproven allegations of Enronity in the First Degree.
If you believe that someone who writes like this has sufficient imagination to have invented the whole story, your estimation of the reporter's skills exceeds mine.
Questions 1 and 4 have been asked before ... about political reporters and the Bush administration. Anonymity is basically an easy way to get access and "scoops", and any reporter that stopped playing the game would get shut out and have to do reporting the hard way.
However, Merrill didn't complete the deal after the firm's finance department determined it didn't meet proper accounting criteria
I think they left out an important piece of this sentence. It should read
However, due to a radical new change in corporate policy, Merrill didn't complete the deal after the firm's finance department determined it didn't meet proper accounting criteria.
I guess I should say explicitly what my problem is here: reporter credulity combined with granting of anonymity to people who make explosive and market-moving allegations.
I am not suggesting the reporter or the paper is conspiring with anyone to rig the market.
Possibly that is true, but to leap to such a conclusion is just the same thing as what happened in this article: to go from some idiot at MER floating an idea to "MER is pulling an Enron" without stopping to verify whether it actually happened or not.
Certainly the editorial judgment involved in putting this on page one is questionable. One has to believe that the editors knew who "the person" was.
So either "the person" was a credible source who just got misinformed--in which case it's hard to know why the paper has to shield him--or the person was someone with an axe to grind or a position to make a few bucks on, in which case it's hard to know why the paper has to shield him.
My guess is that if you start with the "Enron Narrative," you will eventually run into someone with some gossip that can be made to fit the storyline.
That is, of course, not how the Enron story was broken.
hmmm.... do you think if it were not for the report in the WSJ from unnamed sources we would never have observed "However, Merrill didn't complete the deal after the firm's finance department determined it didn't meet proper accounting criteria" ?
This is why in sophomore journalism class you are told upon pain of getting an F to not turn in a one-source story -- and never with an anonymous source.
"However, due to a radical new change in corporate policy, Merrill didn't complete the deal after the firm's finance department determined it didn't meet proper accounting criteria."
Precisely. What in the hell is going on here???? Speaking as a CPA and Accounting Major, what happened to "Arms Length Transactions"??!!??
This is just like the Enron crap!!!! It is utterly amazing to me that this level of fraud and chicanery has been going on for the better part of the decade and has cost me what was once a very good career path.
So basically, like it or not, it's a story about how something went right at MER. Possibly reluctantly, possibly unpleasantly, possibly at the eleventh hour, somebody in legal strapped on a spine and said "Get that effing salesman in here before we all get arrested." Or words to that effect.
So there seem to be grounds to believe that the idea did get run up the flagpole. That's distressing: there's still at least one salesman at MER who doesn't get the picture, or who did not get it until quite recently.
On the other hand, there seem to be grounds to believe that the system worked, for once. Dog bites man.
do you think if it were not for the report in the WSJ from unnamed sources we would never have observed "However, Merrill didn't complete the deal after the firm's finance department determined it didn't meet proper accounting criteria" ?
No. No way in hell.
Look, if MER had backed off only because the Journal got on their case, this wouldn't be a "correction." It'd be the Journal crowing in ALL CAPS about how it's heroic reporting stopped a crime in its tracks!!!!!!
I read this as saying that in fact, MER's compliance people shut this stupid thing down before the WSJ report. And notice that the original report was that the deal had been done, not just that it had been proposed.
The phrasing of the WSJ correction is stilted and specific enough to suggest they were threatened with a libel lawsuit by Merrill and this language in the correction was negotiated betw. Merrill's and WSJ's attys.
Credit where due: Felix Salmon at Portfolio.com was all over this from the beginning.
Unlike their "Jimmy Cayne's life is golf, drugs, and increasingly-poorer bridge playing" piece, anyone with any sense who read it knew this one didn't pass the "smell test" from the beginning.
Tanta, once again, you show great ignorance of journalism and how journalist get articles, sources and scoops.
Why does "the person" still get anonymity? "The person" either lied or passed on unverified rumors as if they were facts. Why don't we need to know who "the person" is?
You don't know this. It could be that the source told 100% truth and the reporter or editor screwed it up.
The answer to your "why don't we need to know this" questions is: it's none of your business. Reporters make mistakes. Reporters can be set up to make mistakes. Editors can force reporters to perpetuate mistakes. In any case, reporters still need to maintain access to confidential sources of value. S**t happens.
Tanta, go and rent the movie "Absence of Malice." It's probably the best movie about journalism movie ever made, and it dramatizes without varnish all of the above problems reporters face and create. It's also the best acting job of Sally Field's career. You'll learn a lot.
This is why in sophomore journalism class you are told upon pain of getting an F to not turn in a one-source story -- and never with an anonymous source.
Doug Watts, You don't have any idea whether or not it was one source. You're just guessing.
Here is where the Ohio court decision guarantees that the next phase of the US mortgage crisis will assume Tsunami dimension. If the Ohio Deutsche Bank precedent holds in the appeal to the Supreme Court, millions of homes will be in default but the banks prevented from seizing them as collateral assets to resell. Robert Shiller of Yale, the controversial and often correct author of the book, Irrational Exuberance, predicting the 2001-2 Dot.com stock crash, estimates US housing prices could fall as much as 50% in some areas given how home prices have diverged relative to rents.
Institutional Risk Analytics
I still think this is a big deal, but the reporting has been confusing. I guess I need to go back and read Tanta's take and then contemplate.
You don't know this. It could be that the source told 100% truth and the reporter or editor screwed it up.
The answer to your "why don't we need to know this" questions is: it's none of your business. Reporters make mistakes. Reporters can be set up to make mistakes. Editors can force reporters to perpetuate mistakes. In any case, reporters still need to maintain access to confidential sources of value. S**t happens. -- rich
That's quite a rude response, rich. And totally incorrect. It is totally 100 percent the reader's business to know why an anonymous source is being used in the first place and why the reader should place any stock in their veracity.
There was no reason for an anonymous source to have been used in this story. In fact, it is a libel trap. The source is alleging possible illegal or at least unethical activity by Merrill. If the source's info. is wrong -- ding ding ding -- winning libel suit.
Deutsche Bank got a hard shock a few days ago when a judge in the state of Ohio in the USA made a ruling that the bank had no legal right to foreclose on 14 homes whose owners had failed to keep current in their monthly mortgage payments. Now this might sound like small beer for Deutsche Bank, one of the worlds largest banks with over 1.1 trillion (Billionen) in assets worldwide. As Hilmar Kopper used to say, peanuts. Its not at all peanuts, however, for the Anglo-Saxon banking world and its European allies like Deutsche Bank, BNP Paribas, Barclays Bank, HSBC or others. Why?
Except under the most unusual conditions, anonymous sources make for bad, untrustworthy news stories. Reporters don't need anonymous sources. Lazy reporters might need them, but that's different.
Scroll back a few days or search for the D-Bank article on this site. Tanta blew apart the idea/rumor/meme that this is some sort of major shift in foreclosure proceedings.
I know that it is an old and oft-repeated complaint, but I'm troubled by the fact that the correction didn't receive the same prominence as the original story. If I read the front page of the WSJ (or any other newspaper) and a headline story turns out to be wrong, it shouldn't be my job to read the corrections column daily to see if the story is retracted three weeks later, particularly because the corrections column typically corrects relatively minor errors (e.g., misspellings of an executive's name).
The fact that it took three weeks to correct a factual assertion - that the deal actually took place, not just that it was proposed - seems very odd to me. Presumably, someone from Merrill was on the phone to the WSJ editors within minutes screaming that the story is just plain wrong. This would particularly be the case given the white-hot nature of the subject and the nature of the allegation. The real story here is what the heck has been going on for the past three weeks? Unfortunately, that story won't be told becuase...well, not sure why. Just because, I guess.
Your posts about journalism will be as sophisticated as your posts about mortgages.
Journalism can be a dirty business.
Most of the people on this board who comment about journalism have taken a class or two. But they haven't worked in the trenches and are ignorant about the real business.
I always had a hard time with this piece because MER just paid out a few BILLION is legal settlements for playing this exact game with Enron.
The correction now confirms that at least someone at MER was willing to play this game again. Ok, so the "accounting" dept. stopped it. (before or after they got wind of the WSJ piece)
But how could anyone at MER even think this kind of stuff is OK? Either MER's books are so bad to make the risk worth it, or nothing was learned from Enron. Neither option is appealing.
"Except under the most unusual conditions, anonymous sources make for bad, untrustworthy news stories. Reporters don't need anonymous sources. Lazy reporters might need them, but that's different."
A good anonymous source is one who tells you where to look and who to ask so you can write the story with real, on-the-record sources. He tells you what the story is and where you can find the evidence. But he himself is not the evidence. A source like this may still have a hidden agenda, but at least the reporter is doing the digging himself and applies his own judgment to the interpretation of facts.
Apparently none of that was happening in this case. Do a story like this from one anonymous source? That would have never made it past the editor 30 years ago.
When I read a story I can base a value judgement upon it based upon the quality, quantity, and identity of the sources.
I do it all the time at work, in talking with others, in learning facts or versions of facts that occur in my world.
I don't expect the quality of news coming out of a "high quality" news agency to be exactly the same for every single article it produces.
Hell, I have never ever ever read a news story about something that occurred in the field (police related) that didn't have at least a few factual errors. And this is the simple reporting of an event, not like opinion or politics would play any role.
In fact, all I do all day is read police reports often by several different officers about things that JUST happened by officers who were THERE ON SCENE, and the differences are astounding.
The reality is that news agencies almost never get anything EXACTLY right.
I can read a story like the ones referenced herein and make a judgement for myself.
It's probably better than never getting it in the first place.
The fact that they were anonymous may not be my business, and I can judge the article accordingly.
Given that MER went so far down the road on the right to sell back deal, then I speculate that this wasn't pulled back at the 11th hour but at the 13th hour - perhaps after all the publicity. We've had backdated options, we've had analysts go and change their historical stock ratings years later to goose up their performance - dressing up a cancellation as a non-consumation wouldn't be out of spec for this lot of liars.
This situation has the stink of lawyers all over it, and not a small amount of booty-covering in anticipation of future litigation. IMO, the reporters are merely pawns in this situation. Legal called the shots on this one.
Is "the person" in a position to profit from a fall in MER's share price? Why don't we need to know this?
Every day, thousands of people make statements to the media to pump up stocks that they (or their employers) own, anonymously and on-the-record. What are you proposing with this question:
Media should know the position of source entities to benefit from stock movements (up or down) before they use anonymous quotes?
Or are you saying it's somehow worse to anonymously pump stocks short than long?
What exactly do you want journalists to do, Tanta, in regard to finding out the stock holdings or affiliations of anonymous sources?
Someone explain to me how "selling" assets of questionable fair value to a hedge fund (presumably at close to par) combined with a repurchase agreement and some guaranteed return, differs materially from RePos that the Fed engages in regularly.
I would think all of these Enronesque deals should be looked upon unfavorably.
This situation has the stink of lawyers all over it, and not a small amount of booty-covering in anticipation of future litigation. IMO, the reporters are merely pawns in this situation. Legal called the shots on this one.
No, not at all. The Wall Street Journal made a serious professional mistake. That's all. Their lawyers helped to extricate from liability. But they still printed erroneous information.
It's not the source that's to blame. It may not be the reporter. It's the media.
Unfortunately this practice, which was perfected by Judith Miller, is rampant among most of the establishment media. The desire of these 'journalists' to be part of the club and feel imporant trumps their integrity. They will continue to accept lies and rumors from their sources and dutifully write them as fact, even when their sources are using them like toilet paper. Stenographer is too nice of a term, and denigrates that profession.
Where were you guys during Plame Gate and the rush to war?
The wives of Dick Armitage, Colin Powell, Scooter Libby and Douglas Fieth use to call them "Senior Adminstration Officals who speak only on the condition of anonymity."
Any business involving money and in particular large sums can be dirty. Much more than dirty.
After 26 years working days, nights, week-ends, holidays (I have worked at one time or other every holiday) enough was enough. Its a miracle (to me) that I got out whole.
Many people find themselves in this trap. The prospective legal issues can be sheer torture, I'd imagine there are a lot of folks in the various financial institutions finding that out about now and some will leave.
What exactly do you want journalists to do, Tanta, in regard to finding out the stock holdings or affiliations of anonymous sources?
Rich, I'm beginning to think you're being willfully ignorant here. "Cui bono?" is always the first question you ask. And if you have exactly one source for a story, and that source has a financial interest in it, and the source demands anonymity, you do, as Doug points out, walk away from it.
The apparent point of writing about illegal shennanigans at MER is, I take it, that there is a public interest in such things. The public is not served by hearing rumors passed around among hedgies.
What are we going to defend next? Testimony by jailhouse snitches who were promised early parole for fingering someone, presented to a jury who doesn't know about the deal?
barely, this is different from Fed repos because Fed repos are, exactly, financings. MER was being accused of doing a financing but calling it a "true sale" in order to cook the books. Had it been offered as a financing there wouldn't have been any problem with it (except that nobody thinks the pig's got enough lipstick on it).
Tanta is in a foul mood today. Don't screw with Tanta.
You got that straight.
The problem here, it seems to me, is that everybody's a little too comfortable with the idea that as long as it's Merrill Lynch (or Mozilo or Deutsche Bank or any other problematic entity), you can just say anything you want. You don't need evidence; hell, it doesn't even have to be plausible. You count on the fact that no one will defend the target.
I don't know how many times someone has asked me why I "defend" these "slimy companies."
Because you don't get to lie about anybody, is why. This is not junior high. We do not decide that MER or CFC or DB is now in the "unpopular" group of kids and so therefore those of us in the ruling clique can just say any mean old thing about them we want to.
God have mercy on what passes for our souls; she surely can't be impressed with our consciences.
It also strikes me as odd (and inappropriate) that once the correction is published, there is no notation on the original story that the story contained inaccurate information. Given that the story will "live forever" in the WSJ's electronic archives, I would think that the puplication itself would want to add some sort of editorial "asterisk" so that a later reader didn't rely on the story. I know that Slate does this. Seems like an easy and responsible thing to do.
OK, so MER called the activity by another name. What I think investors should be enraged about is the mere presence of these leveraged opaque OBS structures , period, post Enron and SarbOx.
"The public is not served by hearing rumors passed around among hedgies."
Well, while I generally agree, I don't exactly see the Wall Street Journal in the business of "public service" when that is defined by serving the public what it "should" have and not what it "wants".
I certainly would LOVE to hear the rumors passed among hedgies. Which is why I turned to the internet, along with just about everyone else. In this case, it is public "service" when it's the business of serving the public what it wants. Again, the article didn't claim to be anything more that what one journalist heard from someone else.
As for whether or not it's "worth" anything...well whose to say?
After all the WSJ reported that Greenspan called the bottom of the housing market in OCT of 06. What exactly was that worth? Who exactly was "served" there?
Rich - raise your standards a bit. But since you seem to be the expert here, please explain to us what Uncle Festus asked about corrections in general: Why don't they get the same prominence as the original story?
"No, not at all. The Wall Street Journal made a serious professional mistake. That's all. Their lawyers helped to extricate from liability. But they still printed erroneous information."
Maybe. We shall see. I am inclined to believe that the original report was accurate, and that the retraction was a machination. This is strictly, of course, IMO. Lacking further evidence on the point, your point of view is also plausible.
I have to say I'm enjoying to show, however. Got popcorn?
I certainly would LOVE to hear the rumors passed among hedgies.
Then sign up for Janet Tavakoli's newsletter. And pay for it.
Here's a thought experiment: let's imagine you own shares of some company. Let's say that someone else is short shares of that company. Let's say that short person fabricates a story about the company engaging in illegal behavior and gets the WSJ to print it. Let's say the share price plummets. Let's say the short picked your pocket. You still happy about this?
Folks, this wasn't an article about arguably unwise business strategies. This wasn't "inefficiencies" that you make a buck with, printed in the "Market Rumors" section of the paper. This purported to be a news article on page one. This was an out-and-out claim that MER had inked a deal that is illegal.
Average Joe, until you stop beating your wife we just can't accept any more of your comments.
"What are we going to defend next? Testimony by jailhouse snitches who were promised early parole for fingering someone, presented to a jury who doesn't know about the deal?"
Good point if the reading public had the power of MER's fate in it's hand like a jury does the accused.
In this case it's just an article for public consumption. A public with no power to do anything other than to buy or sell stock or a political call for a "further investigation".
When the public starts sending MER managers to prison over WSJ articles, then I'll expect more due diligence and better sourcing.
Maybe. We shall see. I am inclined to believe that the original report was accurate, and that the retraction was a machination. This is strictly, of course, IMO. Lacking further evidence on the point, your point of view is also plausible.
This also gets my vote. Reading the retraction sounds as if the deal didn't get done because of the story, and it took them close to three weeks to cancel the deal, sweep up the evidence, make an angry call to the WSJ. I mean, if the story was wrong on Nov. 2nd, why wouldn't they have been breathing fire by 12 noon?
Your posts about journalism will be as sophisticated as your posts about mortgages.
Journalism can be a dirty business.
Most of the people on this board who comment about journalism have taken a class or two. But they haven't worked in the trenches and are ignorant about the real business."
Watching a movie will give people a superior understanding of journalism than taking a couple of classes? And the movie is "Absence of Malice" instead of "All The President's Men?" Or "Broadcast News"? Or "His Girl Friday"?
Having been one of those people who worked in the most glamorous, shallow and vain areas of journalism (TV), I can tell you it's not so much dirty as sloppy, which is what happens when speed is valued over accuracy, or a quote from a more notable but flawed source is valued over a less well-known but more conscientious source.
Sebastian
p.s. "Almost Famous" is also an interesting and entertaining look into how the journalism trade can sometimes be plied...if writing for Rolling Stone can be called journalism.
Actually, the original story itself had this statement from Merrill, issued on the same day the article ran:
"In a second statement issued at midday Friday, Merrill said: "We have no reason to believe that any such inappropriate transactions occurred. Such transactions would clearly violate Merrill Lynch policy.""
I guess you can parse the language ("we have no reason to believe") but it seems like they did deny it pretty much immediately.
It's not the source that's to blame. It may not be the reporter. It's the media.
So this is nobody's fault? Nice. So the standards have been lowered to the point where huge errors in reporting can be made, and when they're discovered they're nobody's fault.
Merrill Lynch was exploring deals with hedge funds to delay taking losses from the write-downs on mortgage backed securities.
Merrill Lynch completed one deal with a hedge fund for a billion dollars, where the hedge fund had the right to sell the commercial paper back to Merrill Lynch for a guaranteed return.
Merrill Lynch has been making the rounds to he hedge funds offering deals with a set buyback price.
As far as I can see, the only thing false in the article is that the deal with the hedge fund was completed. Merrill Lynch has admitted that they were trying to do the deal, but that the finance department found out about it and killed it.
Personally, I think they found out about it from the Wall Street Journal article. They went in, found a way to kill that deal, and issued companywide memos to the salesman.
The insider could be from Merrill Lynch, from a hedge fund they were talking to, or from the SEC. Someone alerted the government to what was going on, which is why they started the informal inquiry. My money is that someone at Merrill Lynch didn't like what was going on, alerted the Wall Street Journal and the government.
Tanta, what do you think was worse, what Merrill Lynch was trying to do, or what the Wall Street Journal reported?
Tanta, what do you think was worse, what Merrill Lynch was trying to do, or what the Wall Street Journal reported?
Whoa, Nellie.
If, in fact, it played out the way you speculate, then that's the story! And it's a damned fine one:
SOMETHING WORKED RIGHT ON WALL STREET
Of course I want to know if a whisteblower at MER stopped this, or if the WSJ actually did some investigative reporting that actually made MER back down. Wouldn't that be news?
But, well, that isn't what we have. We have the WSJ reporting a "correction." Further, even if it's all a bit murkier than that, well, then it's all a bit murkier than that. Maybe our "whistleblower" narrative is as suspect or morally ambiguous as our "Enron" narrative.
You see that, in the absence of the story being told explictly in the paper, we're all having to write "what if" scenarios on the internet. So far we have no particular reason to believe any of them.
So back to my original questions. Why didn't the "correction" say that the original source was a whistle-blower, or an SEC investigator? Why is there no characterization of "this person" at all? Why is the only implicit corroboration in the original article Tavakoli's claim that "some hedge fund" says this?
If this kind of thing is how the media is supposed to be keeping Wall Street honest, then we really are screwed. It works only to the extent that we can imagine scenarios in which what we read might be plausible. Oh joy.
As someone (Tanta, I think) noted earlier, the WSJ could have called Merrill and asked them to confirm or deny the report, and this would likely have had the same preventive effect as publishing the story.
I apologize in advance if this repeats something that has already been stated, but here's the way I always put it to my reporters when I was a newspaper editor:
When you use an anonymous source (which I really, really discourage) you are substituting your (and our) credibility for theirs.
You better have a very good reason, and the only reasons that are very good are the ones I have (i.e. the individual would have to pay a serious price if their identity was known.)
In 16 years as a reporter and editor I can remember two instances where we used an anonymous source.
I know regular readers of the Times, Post etc. may find that hard to believe, but that's the way I learned that journalism works.
He was on CNBC few minutes ago and said that "we" should do this and that "because we care for each other." And doing what he recommends will show the care?
What a moron. In America, those who screw others get the highest rewards! The whole system is geared towards screwing! Bankrupters and Fraudsters of New York City set the pace. Corporate Crooks of America follow. And so on down the scale.
I find the whole thing exasperating because, well, I'm an anonymous blogger.
That means that I have no "name recognition," no institutional credibility. No one has any reason to believe what I write because it is attached to a name that confers credibility on it.
Therefore, what I write stands or falls on whether it's factually correct or not, where what is being written is about the facts, or whether it's plausible or helpful or ultimately justified by unfolding events, where what is being written about is opinion.
I don't have a "pre-publication" fact-checker. I have, potentially, thousands of amateur fact-checkers who read this blog and are in a position to call bullshit on it if necessary.
In all the years leading up to today, when we'd get infested by cranky bulls who hated the message we were sending, we never got one serious accusation of misreporting. We've made a few bona-fide errors, and we've had our readers catch them, and we've corrected them.
Of course, it's terribly important to us to be accurate, even when it forces us to downplay stories our readers would rather like to believe. Our credibility is all we have. Without it, we're just two anonymous bloggers.
I think a lot of reporters are convinced that bloggers "hide behind" anonymity. That makes me laugh. This particular story is "hiding behind" a big name: Wall Street Journal. The fact that it was published there instead of on rumor.com is, as far as I can tell, about the only reason people ever took it seriously.
To be fair to those who put in sweat equity building up the wall street journal's name.. they're now the print version of the Fox Business Channel. Literally and metaphorically, unfortunately.
We can't be sure precisely what stories / angles are determined to be p1 missives from Murdoch.
"So back to my original questions. Why didn't the "correction" say that the original source was a whistle-blower, or an SEC investigator? Why is there no characterization of "this person" at all?"
Simple. Legal wouldn't stand for it. Opens up all kinds of future actions based on a "mischaracterization" of the person involved. When there are two sets of lawyers in the meeting, language is kept neutral on things like that.
"Why is the only implicit corroboration in the original article Tavakoli's claim that "some hedge fund" says this?"
This is interesting, but again, lacking further information, I think it could arguably be taken at face value. Maybe someone did say this. There was no corroboration, other than that person's statement. And, once again, the original reporter stated just that.
What some of the other bloggers on this thread have gotten at, and I will repeat, regards motive. Stuff like this doesn't squirt out by accident. It is impossible to identify motive for all of the actors this far removed. But the point is this: human nature can be far from rational or linear. Robert Schiller's book Irrational Exuberance makes this clear. The story behind the story is what we are exploring. Why not just enjoy?
Because I'm trying to make the case that such things have real-world effects that aren't particularly enjoyable.
If you want to read something enjoyable, there's a giant fiction section of most libraries.
Having to sort through coded language and layers of masked interests in order to interpret the news sounds to me like . . . daily life in the Soviet Union under Pravda, except you substitute crony capitalism/market manipulation for centrally planned economy/political manipulation.
I'm sure there were a cynical few who managed to enjoy deciphering newspaper in communist country.
I have a different set of demands for our press.
I assume the difference between me and some others on this thread is that I don't think this kind of thing is "minor." So far the "best" possible interpretation anyone has come up with is that a handful of lawyers have been able to manipulate news reporting in such a way that a "true" story is now being presented by the WSJ as "false." Oh heavens, what a wonderful thought that is.
Holy Crap! I was the one who told the story of one corrupt journalist who worked with a short seller 15 years ago(or, so said my old boss)..
Not Tanta!
Personally, I think anyone involved in the mortgage industry who, at this point, gets the idea to cook the books, has to have rocks in their head. Take your lumps now with the rest of the class (Mr. Kotter's class, that is).
The correction came three weeks late because the story was "a whisker away" from being totally correct, or so I'm told by someone who looked into it. The wording of the correction has the legal department's fingerprints all over it, so that explanation seems to hold up.
Merrill issued a statement around 11 am on Nov. 2, and it was the "we have no reason to believe" statement mentioned above. It seemed to be worded to give cover and adds credibility to the idea that this story may have killed the deal.
The correction appears on page 2 because all corrections do.
The Journal isn't a sloppy organization. I'm guessing it all added up and they decided to run with the source attribution. And for three weeks they were correct. I would imagine there are people there who argued for a follow up story rather than a correction.
It's a shame the world of journalism isn't more like His Girl Friday.
Both of them may have profited from that little tidbit.
What's with so-called "journalism" that merely repeats uncorroborated rumors
It's called "blogging".
Yo ho, yo ho, a pirate's life for me!
Bernanke & The Beast...
http://miscellany.lolthulhu.com/wp-content/uploads/2007/11/cleveland-do_not_want.jpg
This still makes me laugh.
Is this the "old" WSJ or the new one? Seems to be a break down in journalistic integrity? Not to disparage a huge media conglomerate, or anything but...
are you guys in some sort of blogger protection program? the reporters are coming to get you...(and they don't actually believe the pen is mightier than the sword, they've got guns!)
"1. Why does "the person" still get anonymity? "The person" either lied or passed on unverified rumors as if they were facts. Why don't we need to know who "the person" is?"
Well if Bush administration officials can do it then it's only fair that your average everyday joe citizen be given the same consideration.
How do we even know that there is a "person?"
BTW, Tanta, whenever the media covers any subject about which I know a great deal, the media's ignorance is obvious. Makes me assume that the media's coverage of the gazillion subjects about which I know nothing must be just as bad. Meaning, the media must almost always get everything wrong.
I've posted this same comment before. I worked for a high-tech company in the early 90's. Someone at a major financial periodical wrote something trashing a small company where I had some friends. The CFO at my told me, "Ya, he works with _____, a short seller." It was just a matter-of-fact statement, so I just assumed it wasn't uncommon. Then the CFO matter-of-factly told me he'd like to run the reporter down with his car and back over him.
your average everyday joe citizen
Something tells me your average everyday joe citizen doesn't get the attention of a WSJ reporter with unproven allegations of Enronity in the First Degree.
How do we even know that there is a "person?"
If you believe that someone who writes like this has sufficient imagination to have invented the whole story, your estimation of the reporter's skills exceeds mine.
Questions 1 and 4 have been asked before ... about political reporters and the Bush administration. Anonymity is basically an easy way to get access and "scoops", and any reporter that stopped playing the game would get shut out and have to do reporting the hard way.
I like this part of the apology
I think they left out an important piece of this sentence. It should read
Was only a matter of time...shareholders and pension funds suing rating agencies.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/11/26/cnrate126.xml
I guess I should say explicitly what my problem is here: reporter credulity combined with granting of anonymity to people who make explosive and market-moving allegations.
I am not suggesting the reporter or the paper is conspiring with anyone to rig the market.
Possibly that is true, but to leap to such a conclusion is just the same thing as what happened in this article: to go from some idiot at MER floating an idea to "MER is pulling an Enron" without stopping to verify whether it actually happened or not.
Certainly the editorial judgment involved in putting this on page one is questionable. One has to believe that the editors knew who "the person" was.
So either "the person" was a credible source who just got misinformed--in which case it's hard to know why the paper has to shield him--or the person was someone with an axe to grind or a position to make a few bucks on, in which case it's hard to know why the paper has to shield him.
My guess is that if you start with the "Enron Narrative," you will eventually run into someone with some gossip that can be made to fit the storyline.
That is, of course, not how the Enron story was broken.
hmmm.... do you think if it were not for the report in the WSJ from unnamed sources we would never have observed "However, Merrill didn't complete the deal after the firm's finance department determined it didn't meet proper accounting criteria" ?
This is why in sophomore journalism class you are told upon pain of getting an F to not turn in a one-source story -- and never with an anonymous source.
"However, due to a radical new change in corporate policy, Merrill didn't complete the deal after the firm's finance department determined it didn't meet proper accounting criteria."
Precisely. What in the hell is going on here???? Speaking as a CPA and Accounting Major, what happened to "Arms Length Transactions"??!!??
This is just like the Enron crap!!!! It is utterly amazing to me that this level of fraud and chicanery has been going on for the better part of the decade and has cost me what was once a very good career path.
So basically, like it or not, it's a story about how something went right at MER. Possibly reluctantly, possibly unpleasantly, possibly at the eleventh hour, somebody in legal strapped on a spine and said "Get that effing salesman in here before we all get arrested." Or words to that effect.
So there seem to be grounds to believe that the idea did get run up the flagpole. That's distressing: there's still at least one salesman at MER who doesn't get the picture, or who did not get it until quite recently.
On the other hand, there seem to be grounds to believe that the system worked, for once. Dog bites man.
do you think if it were not for the report in the WSJ from unnamed sources we would never have observed "However, Merrill didn't complete the deal after the firm's finance department determined it didn't meet proper accounting criteria" ?
No. No way in hell.
Look, if MER had backed off only because the Journal got on their case, this wouldn't be a "correction." It'd be the Journal crowing in ALL CAPS about how it's heroic reporting stopped a crime in its tracks!!!!!!
I read this as saying that in fact, MER's compliance people shut this stupid thing down before the WSJ report. And notice that the original report was that the deal had been done, not just that it had been proposed.
The phrasing of the WSJ correction is stilted and specific enough to suggest they were threatened with a libel lawsuit by Merrill and this language in the correction was negotiated betw. Merrill's and WSJ's attys.
Credit where due: Felix Salmon at Portfolio.com was all over this from the beginning.
Unlike their "Jimmy Cayne's life is golf, drugs, and increasingly-poorer bridge playing" piece, anyone with any sense who read it knew this one didn't pass the "smell test" from the beginning.
Tanta, once again, you show great ignorance of journalism and how journalist get articles, sources and scoops.
You don't know this. It could be that the source told 100% truth and the reporter or editor screwed it up.
The answer to your "why don't we need to know this" questions is: it's none of your business. Reporters make mistakes. Reporters can be set up to make mistakes. Editors can force reporters to perpetuate mistakes. In any case, reporters still need to maintain access to confidential sources of value. S**t happens.
Tanta, go and rent the movie "Absence of Malice." It's probably the best movie about journalism movie ever made, and it dramatizes without varnish all of the above problems reporters face and create. It's also the best acting job of Sally Field's career. You'll learn a lot.
This is why in sophomore journalism class you are told upon pain of getting an F to not turn in a one-source story -- and never with an anonymous source.
Doug Watts, You don't have any idea whether or not it was one source. You're just guessing.
Here is where the Ohio court decision guarantees that the next phase of the US mortgage crisis will assume Tsunami dimension. If the Ohio Deutsche Bank precedent holds in the appeal to the Supreme Court, millions of homes will be in default but the banks prevented from seizing them as collateral assets to resell. Robert Shiller of Yale, the controversial and often correct author of the book, Irrational Exuberance, predicting the 2001-2 Dot.com stock crash, estimates US housing prices could fall as much as 50% in some areas given how home prices have diverged relative to rents.
Institutional Risk Analytics
I still think this is a big deal, but the reporting has been confusing. I guess I need to go back and read Tanta's take and then contemplate.
You don't know this. It could be that the source told 100% truth and the reporter or editor screwed it up.
The answer to your "why don't we need to know this" questions is: it's none of your business. Reporters make mistakes. Reporters can be set up to make mistakes. Editors can force reporters to perpetuate mistakes. In any case, reporters still need to maintain access to confidential sources of value. S**t happens. -- rich
That's quite a rude response, rich. And totally incorrect. It is totally 100 percent the reader's business to know why an anonymous source is being used in the first place and why the reader should place any stock in their veracity.
There was no reason for an anonymous source to have been used in this story. In fact, it is a libel trap. The source is alleging possible illegal or at least unethical activity by Merrill. If the source's info. is wrong -- ding ding ding -- winning libel suit.
Hence the correction.
You are wrong, rich.
Doug Watts, You don't have any idea whether or not it was one source. You're just guessing.
rich | 11.26.07 - 12:46 pm | #
Which is why it is a crappily-written story.
Tanta, go and rent the movie "Absence of Malice."
Go watch a movie to learn how the real world works? No, thanks.
What do you mean, it's "none of my business"?
Why was the original article any of my business?
Rich, you're confusing critique with ignorance. I've personally heard the old "you just don't understand how it works" shit before.
So, as I recall, did Judge Boyko. Remember him?
Plaintiffs, Judge, you just dont understand how things work, argument reveals a condescending mindset and quasi-monopolistic system
Calculated Risk: In Re Foreclosure Cases
Deutsche Bank got a hard shock a few days ago when a judge in the state of Ohio in the USA made a ruling that the bank had no legal right to foreclose on 14 homes whose owners had failed to keep current in their monthly mortgage payments. Now this might sound like small beer for Deutsche Bank, one of the worlds largest banks with over 1.1 trillion (Billionen) in assets worldwide. As Hilmar Kopper used to say, peanuts. Its not at all peanuts, however, for the Anglo-Saxon banking world and its European allies like Deutsche Bank, BNP Paribas, Barclays Bank, HSBC or others. Why?
Financial Sense Editorial "The Financial Tsunami, Part 1"
by F. William Engdahl 11/24/2007
Except under the most unusual conditions, anonymous sources make for bad, untrustworthy news stories. Reporters don't need anonymous sources. Lazy reporters might need them, but that's different.
Rubberbandman,
Scroll back a few days or search for the D-Bank article on this site. Tanta blew apart the idea/rumor/meme that this is some sort of major shift in foreclosure proceedings.
Tanta is in a foul mood today. Don't screw with Tanta.
Rubberbandman, that Financial Sense article is complete nonsense. Tanta explained. Go read it.
DB can refile now that it has its papers in order, and it will.
I know that it is an old and oft-repeated complaint, but I'm troubled by the fact that the correction didn't receive the same prominence as the original story. If I read the front page of the WSJ (or any other newspaper) and a headline story turns out to be wrong, it shouldn't be my job to read the corrections column daily to see if the story is retracted three weeks later, particularly because the corrections column typically corrects relatively minor errors (e.g., misspellings of an executive's name).
The fact that it took three weeks to correct a factual assertion - that the deal actually took place, not just that it was proposed - seems very odd to me. Presumably, someone from Merrill was on the phone to the WSJ editors within minutes screaming that the story is just plain wrong. This would particularly be the case given the white-hot nature of the subject and the nature of the allegation. The real story here is what the heck has been going on for the past three weeks? Unfortunately, that story won't be told becuase...well, not sure why. Just because, I guess.
Tanta,
Watch the movie. You'll learn a lot.
Your posts about journalism will be as sophisticated as your posts about mortgages.
Journalism can be a dirty business.
Most of the people on this board who comment about journalism have taken a class or two. But they haven't worked in the trenches and are ignorant about the real business.
I always had a hard time with this piece because MER just paid out a few BILLION is legal settlements for playing this exact game with Enron.
The correction now confirms that at least someone at MER was willing to play this game again. Ok, so the "accounting" dept. stopped it. (before or after they got wind of the WSJ piece)
But how could anyone at MER even think this kind of stuff is OK? Either MER's books are so bad to make the risk worth it, or nothing was learned from Enron. Neither option is appealing.
"Except under the most unusual conditions, anonymous sources make for bad, untrustworthy news stories. Reporters don't need anonymous sources. Lazy reporters might need them, but that's different."
A good anonymous source is one who tells you where to look and who to ask so you can write the story with real, on-the-record sources. He tells you what the story is and where you can find the evidence. But he himself is not the evidence. A source like this may still have a hidden agenda, but at least the reporter is doing the digging himself and applies his own judgment to the interpretation of facts.
Apparently none of that was happening in this case. Do a story like this from one anonymous source? That would have never made it past the editor 30 years ago.
I don't know,
When I read a story I can base a value judgement upon it based upon the quality, quantity, and identity of the sources.
I do it all the time at work, in talking with others, in learning facts or versions of facts that occur in my world.
I don't expect the quality of news coming out of a "high quality" news agency to be exactly the same for every single article it produces.
Hell, I have never ever ever read a news story about something that occurred in the field (police related) that didn't have at least a few factual errors. And this is the simple reporting of an event, not like opinion or politics would play any role.
In fact, all I do all day is read police reports often by several different officers about things that JUST happened by officers who were THERE ON SCENE, and the differences are astounding.
The reality is that news agencies almost never get anything EXACTLY right.
I can read a story like the ones referenced herein and make a judgement for myself.
It's probably better than never getting it in the first place.
The fact that they were anonymous may not be my business, and I can judge the article accordingly.
Of the explanations offered by Rich I would pick "Reporters can be set up to make mistakes."
the game is being played at a deeper level than you might think.
just sayi
Given that MER went so far down the road on the right to sell back deal, then I speculate that this wasn't pulled back at the 11th hour but at the 13th hour - perhaps after all the publicity. We've had backdated options, we've had analysts go and change their historical stock ratings years later to goose up their performance - dressing up a cancellation as a non-consumation wouldn't be out of spec for this lot of liars.
Speculation ? of course.
-K
This situation has the stink of lawyers all over it, and not a small amount of booty-covering in anticipation of future litigation. IMO, the reporters are merely pawns in this situation. Legal called the shots on this one.
mp,
That is always sound advice regardles of the weather report...
Does Joe Klein write for the WSJ now, too?
Tanta,
Every day, thousands of people make statements to the media to pump up stocks that they (or their employers) own, anonymously and on-the-record. What are you proposing with this question:
What exactly do you want journalists to do, Tanta, in regard to finding out the stock holdings or affiliations of anonymous sources?
Someone explain to me how "selling" assets of questionable fair value to a hedge fund (presumably at close to par) combined with a repurchase agreement and some guaranteed return, differs materially from RePos that the Fed engages in regularly.
I would think all of these Enronesque deals should be looked upon unfavorably.
Tanta said: "So, basically, this article is almost exclusively stenographic reproduction of what one person who is not named said."
EXACTLY.
You made the right assesment of the article. Take it for what's it's worth.
The article obviously didn't misrepresent itself.
This situation has the stink of lawyers all over it, and not a small amount of booty-covering in anticipation of future litigation. IMO, the reporters are merely pawns in this situation. Legal called the shots on this one.
No, not at all. The Wall Street Journal made a serious professional mistake. That's all. Their lawyers helped to extricate from liability. But they still printed erroneous information.
It's not the source that's to blame. It may not be the reporter. It's the media.
heavens, issues with the wsj reporting...just wait till rupert takes the reins.
barely, The Fed won't do repos with shit for collateral.
Unfortunately this practice, which was perfected by Judith Miller, is rampant among most of the establishment media. The desire of these 'journalists' to be part of the club and feel imporant trumps their integrity. They will continue to accept lies and rumors from their sources and dutifully write them as fact, even when their sources are using them like toilet paper. Stenographer is too nice of a term, and denigrates that profession.
Where were you guys during Plame Gate and the rush to war?
The wives of Dick Armitage, Colin Powell, Scooter Libby and Douglas Fieth use to call them "Senior Adminstration Officals who speak only on the condition of anonymity."
Any business involving money and in particular large sums can be dirty. Much more than dirty.
After 26 years working days, nights, week-ends, holidays (I have worked at one time or other every holiday) enough was enough. Its a miracle (to me) that I got out whole.
Many people find themselves in this trap. The prospective legal issues can be sheer torture, I'd imagine there are a lot of folks in the various financial institutions finding that out about now and some will leave.
What exactly do you want journalists to do, Tanta, in regard to finding out the stock holdings or affiliations of anonymous sources?
Rich, I'm beginning to think you're being willfully ignorant here. "Cui bono?" is always the first question you ask. And if you have exactly one source for a story, and that source has a financial interest in it, and the source demands anonymity, you do, as Doug points out, walk away from it.
The apparent point of writing about illegal shennanigans at MER is, I take it, that there is a public interest in such things. The public is not served by hearing rumors passed around among hedgies.
What are we going to defend next? Testimony by jailhouse snitches who were promised early parole for fingering someone, presented to a jury who doesn't know about the deal?
barely, this is different from Fed repos because Fed repos are, exactly, financings. MER was being accused of doing a financing but calling it a "true sale" in order to cook the books. Had it been offered as a financing there wouldn't have been any problem with it (except that nobody thinks the pig's got enough lipstick on it).
Tanta is in a foul mood today. Don't screw with Tanta.
You got that straight.
The problem here, it seems to me, is that everybody's a little too comfortable with the idea that as long as it's Merrill Lynch (or Mozilo or Deutsche Bank or any other problematic entity), you can just say anything you want. You don't need evidence; hell, it doesn't even have to be plausible. You count on the fact that no one will defend the target.
I don't know how many times someone has asked me why I "defend" these "slimy companies."
Because you don't get to lie about anybody, is why. This is not junior high. We do not decide that MER or CFC or DB is now in the "unpopular" group of kids and so therefore those of us in the ruling clique can just say any mean old thing about them we want to.
God have mercy on what passes for our souls; she surely can't be impressed with our consciences.
It also strikes me as odd (and inappropriate) that once the correction is published, there is no notation on the original story that the story contained inaccurate information. Given that the story will "live forever" in the WSJ's electronic archives, I would think that the puplication itself would want to add some sort of editorial "asterisk" so that a later reader didn't rely on the story. I know that Slate does this. Seems like an easy and responsible thing to do.
OK, so MER called the activity by another name. What I think investors should be enraged about is the mere presence of these leveraged opaque OBS structures , period, post Enron and SarbOx.
The regulators are less than useless.
"The public is not served by hearing rumors passed around among hedgies."
Well, while I generally agree, I don't exactly see the Wall Street Journal in the business of "public service" when that is defined by serving the public what it "should" have and not what it "wants".
I certainly would LOVE to hear the rumors passed among hedgies. Which is why I turned to the internet, along with just about everyone else. In this case, it is public "service" when it's the business of serving the public what it wants. Again, the article didn't claim to be anything more that what one journalist heard from someone else.
As for whether or not it's "worth" anything...well whose to say?
After all the WSJ reported that Greenspan called the bottom of the housing market in OCT of 06. What exactly was that worth? Who exactly was "served" there?
Not to be persnickety, but the Journal reporting was accurate.
"One person" said the deal was done...
I bet that person did indeed say that it was done.
It is hard to sue for libel when the Journal only published the truth.
Rich - raise your standards a bit. But since you seem to be the expert here, please explain to us what Uncle Festus asked about corrections in general: Why don't they get the same prominence as the original story?
"No, not at all. The Wall Street Journal made a serious professional mistake. That's all. Their lawyers helped to extricate from liability. But they still printed erroneous information."
Maybe. We shall see. I am inclined to believe that the original report was accurate, and that the retraction was a machination. This is strictly, of course, IMO. Lacking further evidence on the point, your point of view is also plausible.
I have to say I'm enjoying to show, however. Got popcorn?
I certainly would LOVE to hear the rumors passed among hedgies.
Then sign up for Janet Tavakoli's newsletter. And pay for it.
Here's a thought experiment: let's imagine you own shares of some company. Let's say that someone else is short shares of that company. Let's say that short person fabricates a story about the company engaging in illegal behavior and gets the WSJ to print it. Let's say the share price plummets. Let's say the short picked your pocket. You still happy about this?
Folks, this wasn't an article about arguably unwise business strategies. This wasn't "inefficiencies" that you make a buck with, printed in the "Market Rumors" section of the paper. This purported to be a news article on page one. This was an out-and-out claim that MER had inked a deal that is illegal.
Average Joe, until you stop beating your wife we just can't accept any more of your comments.
"What are we going to defend next? Testimony by jailhouse snitches who were promised early parole for fingering someone, presented to a jury who doesn't know about the deal?"
Good point if the reading public had the power of MER's fate in it's hand like a jury does the accused.
In this case it's just an article for public consumption. A public with no power to do anything other than to buy or sell stock or a political call for a "further investigation".
When the public starts sending MER managers to prison over WSJ articles, then I'll expect more due diligence and better sourcing.
Maybe. We shall see. I am inclined to believe that the original report was accurate, and that the retraction was a machination. This is strictly, of course, IMO. Lacking further evidence on the point, your point of view is also plausible.
This also gets my vote. Reading the retraction sounds as if the deal didn't get done because of the story, and it took them close to three weeks to cancel the deal, sweep up the evidence, make an angry call to the WSJ. I mean, if the story was wrong on Nov. 2nd, why wouldn't they have been breathing fire by 12 noon?
rich said: "Watch the movie. You'll learn a lot.
Your posts about journalism will be as sophisticated as your posts about mortgages.
Journalism can be a dirty business.
Most of the people on this board who comment about journalism have taken a class or two. But they haven't worked in the trenches and are ignorant about the real business."
Watching a movie will give people a superior understanding of journalism than taking a couple of classes?
And the movie is "Absence of Malice" instead of "All The President's Men?" Or "Broadcast News"? Or "His Girl Friday"?
Having been one of those people who worked in the most glamorous, shallow and vain areas of journalism (TV), I can tell you it's not so much dirty as sloppy, which is what happens when speed is valued over accuracy, or a quote from a more notable but flawed source is valued over a less well-known but more conscientious source.
Sebastian
p.s. "Almost Famous" is also an interesting and entertaining look into how the journalism trade can sometimes be plied...if writing for Rolling Stone can be called journalism.
"All The President's Men?" Or "Broadcast News"? Or "His Girl Friday"?
Don't forget "Superman"; he works in disguise at the Daily Planet.
"Average Joe, until you stop beating your wife we just can't accept any more of your comments."
Good one Tanta.
But how many people reading that remark think I am now a wife beater? Probably the same number as considered it before your remark.
The remark had as much power as it deserved.
Which is my point with the article.
If you have evidence that this was an illegal pump and dump manuevar then by all means send the perpetrators to jail.
It doesn't follow that we then end all information dissemination because of what it "might" make people do.
sdtfs:
Actually, the original story itself had this statement from Merrill, issued on the same day the article ran:
"In a second statement issued at midday Friday, Merrill said: "We have no reason to believe that any such inappropriate transactions occurred. Such transactions would clearly violate Merrill Lynch policy.""
I guess you can parse the language ("we have no reason to believe") but it seems like they did deny it pretty much immediately.
This is not junior high. We do not decide that MER or CFC or DB is now in the "unpopular" group of kids
That's right. On this board, only Sebastian is the unpopular kid, and who gets slimed frequently. Everyone else merits civilized treatment.
It's not the source that's to blame. It may not be the reporter. It's the media.
So this is nobody's fault? Nice. So the standards have been lowered to the point where huge errors in reporting can be made, and when they're discovered they're nobody's fault.
stdfs said: "Don't forget "Superman"; he works in disguise at the Daily Planet."
Not a realistic example, what with him believing in truth and justice.
S.
Claims from the Wall Street Journal article:
Merrill Lynch was exploring deals with hedge funds to delay taking losses from the write-downs on mortgage backed securities.
Merrill Lynch completed one deal with a hedge fund for a billion dollars, where the hedge fund had the right to sell the commercial paper back to Merrill Lynch for a guaranteed return.
Merrill Lynch has been making the rounds to he hedge funds offering deals with a set buyback price.
As far as I can see, the only thing false in the article is that the deal with the hedge fund was completed. Merrill Lynch has admitted that they were trying to do the deal, but that the finance department found out about it and killed it.
Personally, I think they found out about it from the Wall Street Journal article. They went in, found a way to kill that deal, and issued companywide memos to the salesman.
The insider could be from Merrill Lynch, from a hedge fund they were talking to, or from the SEC. Someone alerted the government to what was going on, which is why they started the informal inquiry. My money is that someone at Merrill Lynch didn't like what was going on, alerted the Wall Street Journal and the government.
Tanta, what do you think was worse, what Merrill Lynch was trying to do, or what the Wall Street Journal reported?
Tanta, what do you think was worse, what Merrill Lynch was trying to do, or what the Wall Street Journal reported?
Whoa, Nellie.
If, in fact, it played out the way you speculate, then that's the story! And it's a damned fine one:
SOMETHING WORKED RIGHT ON WALL STREET
Of course I want to know if a whisteblower at MER stopped this, or if the WSJ actually did some investigative reporting that actually made MER back down. Wouldn't that be news?
But, well, that isn't what we have. We have the WSJ reporting a "correction." Further, even if it's all a bit murkier than that, well, then it's all a bit murkier than that. Maybe our "whistleblower" narrative is as suspect or morally ambiguous as our "Enron" narrative.
You see that, in the absence of the story being told explictly in the paper, we're all having to write "what if" scenarios on the internet. So far we have no particular reason to believe any of them.
So back to my original questions. Why didn't the "correction" say that the original source was a whistle-blower, or an SEC investigator? Why is there no characterization of "this person" at all? Why is the only implicit corroboration in the original article Tavakoli's claim that "some hedge fund" says this?
If this kind of thing is how the media is supposed to be keeping Wall Street honest, then we really are screwed. It works only to the extent that we can imagine scenarios in which what we read might be plausible. Oh joy.
As someone (Tanta, I think) noted earlier, the WSJ could have called Merrill and asked them to confirm or deny the report, and this would likely have had the same preventive effect as publishing the story.
I apologize in advance if this repeats something that has already been stated, but here's the way I always put it to my reporters when I was a newspaper editor:
When you use an anonymous source (which I really, really discourage) you are substituting your (and our) credibility for theirs.
You better have a very good reason, and the only reasons that are very good are the ones I have (i.e. the individual would have to pay a serious price if their identity was known.)
In 16 years as a reporter and editor I can remember two instances where we used an anonymous source.
I know regular readers of the Times, Post etc. may find that hard to believe, but that's the way I learned that journalism works.
--
Yesterday's thread...
Prof. Shiller IS a moron.
He was on CNBC few minutes ago and said that "we" should do this and that "because we care for each other." And doing what he recommends will show the care?
What a moron. In America, those who screw others get the highest rewards! The whole system is geared towards screwing! Bankrupters and Fraudsters of New York City set the pace. Corporate Crooks of America follow. And so on down the scale.
Jas
Thanks for weighing in, Ed.
I find the whole thing exasperating because, well, I'm an anonymous blogger.
That means that I have no "name recognition," no institutional credibility. No one has any reason to believe what I write because it is attached to a name that confers credibility on it.
Therefore, what I write stands or falls on whether it's factually correct or not, where what is being written is about the facts, or whether it's plausible or helpful or ultimately justified by unfolding events, where what is being written about is opinion.
I don't have a "pre-publication" fact-checker. I have, potentially, thousands of amateur fact-checkers who read this blog and are in a position to call bullshit on it if necessary.
In all the years leading up to today, when we'd get infested by cranky bulls who hated the message we were sending, we never got one serious accusation of misreporting. We've made a few bona-fide errors, and we've had our readers catch them, and we've corrected them.
Of course, it's terribly important to us to be accurate, even when it forces us to downplay stories our readers would rather like to believe. Our credibility is all we have. Without it, we're just two anonymous bloggers.
I think a lot of reporters are convinced that bloggers "hide behind" anonymity. That makes me laugh. This particular story is "hiding behind" a big name: Wall Street Journal. The fact that it was published there instead of on rumor.com is, as far as I can tell, about the only reason people ever took it seriously.
To be fair to those who put in sweat equity building up the wall street journal's name.. they're now the print version of the Fox Business Channel. Literally and metaphorically, unfortunately.
We can't be sure precisely what stories / angles are determined to be p1 missives from Murdoch.
"So back to my original questions. Why didn't the "correction" say that the original source was a whistle-blower, or an SEC investigator? Why is there no characterization of "this person" at all?"
Simple. Legal wouldn't stand for it. Opens up all kinds of future actions based on a "mischaracterization" of the person involved. When there are two sets of lawyers in the meeting, language is kept neutral on things like that.
"Why is the only implicit corroboration in the original article Tavakoli's claim that "some hedge fund" says this?"
This is interesting, but again, lacking further information, I think it could arguably be taken at face value. Maybe someone did say this. There was no corroboration, other than that person's statement. And, once again, the original reporter stated just that.
What some of the other bloggers on this thread have gotten at, and I will repeat, regards motive. Stuff like this doesn't squirt out by accident. It is impossible to identify motive for all of the actors this far removed. But the point is this: human nature can be far from rational or linear. Robert Schiller's book Irrational Exuberance makes this clear. The story behind the story is what we are exploring. Why not just enjoy?
Why not just enjoy?
Because I'm trying to make the case that such things have real-world effects that aren't particularly enjoyable.
If you want to read something enjoyable, there's a giant fiction section of most libraries.
Having to sort through coded language and layers of masked interests in order to interpret the news sounds to me like . . . daily life in the Soviet Union under Pravda, except you substitute crony capitalism/market manipulation for centrally planned economy/political manipulation.
I'm sure there were a cynical few who managed to enjoy deciphering newspaper in communist country.
I have a different set of demands for our press.
I assume the difference between me and some others on this thread is that I don't think this kind of thing is "minor." So far the "best" possible interpretation anyone has come up with is that a handful of lawyers have been able to manipulate news reporting in such a way that a "true" story is now being presented by the WSJ as "false." Oh heavens, what a wonderful thought that is.
Holy Crap! I was the one who told the story of one corrupt journalist who worked with a short seller 15 years ago(or, so said my old boss)..
Not Tanta!
hmmh... an alternate explanation is
lama, although a short is one possibility, a Rudy type is another.
Yeah, we need another headline-grabbin' perp-walkin' shoot-first-ask-later "investigator" at the SEC, don't we?
Personally, I think anyone involved in the mortgage industry who, at this point, gets the idea to cook the books, has to have rocks in their head. Take your lumps now with the rest of the class (Mr. Kotter's class, that is).
The correction came three weeks late because the story was "a whisker away" from being totally correct, or so I'm told by someone who looked into it. The wording of the correction has the legal department's fingerprints all over it, so that explanation seems to hold up.
Merrill issued a statement around 11 am on Nov. 2, and it was the "we have no reason to believe" statement mentioned above. It seemed to be worded to give cover and adds credibility to the idea that this story may have killed the deal.
The correction appears on page 2 because all corrections do.
The Journal isn't a sloppy organization. I'm guessing it all added up and they decided to run with the source attribution. And for three weeks they were correct. I would imagine there are people there who argued for a follow up story rather than a correction.
It's a shame the world of journalism isn't more like His Girl Friday.
Didn't Rupert Murdoch buy the WSJ?
Isn't this standard journalism for Murdoch?
Word has it...
Our sources tell us....
The media is reporting.....