Saturday, September 25, 2010

Has Financial Journalism Lost Its Teeth??

John Friedman of MarketWatch was at the press conference announcing the Bank of America's acquisition of Merrill Lynch and wrote,
"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."

The above comment just so simply describes the present appalling state of financial journalism. It is true as I pointed out earlier and how easy it is for the media to be susceptible to external influences and how financial dailies and shows can influence the markets themselves.

Too much respect for seniors
One of the main problems affecting financial journalism today is the that business reporter are too close to the Wall Street that they forget the Main Street, and have too much respect for the institutions they are covering. If you have pre-bias towards the organization your covering, then most certainly you would end up asking sugar coated questions.

Also the innate behaviour to idiolise famous public figures like Warren Buffet, Richard Branson or George Soros is very damaging to prejudice free reporting. Every word that comes out of their mouth is said to be the view of the market or industry. It is shown as an implied piece of advice. Rather the journalists should be reviewing their decisions and investments.

Losing reality
Besides the above pre conceived impressions that have set in, many angry bloggers point out gradually financial journalists become part of niche circles in the industry and lose touch with the base and the common people they are writing for. They become very influenced by the views of the circle and many a times their daily columns show their responses to each-others opinions.

A major part of the flaw lies in the fast paced media culture, where ‘journalists are like fireman, going from one fire to another, dousing flames and moving on’. So they publish what is seen and avoid going to the heart of the story and dig out the facts. This surely leads to ‘the death’ of investigative reporting.

Listen then seek to be understood
During an interview recently on the Editors Weblog, the Financial Times's Managing Editor Daniel Bogler said, "It's unfortunate that the financial literacy and understanding of how things work in the City and of basic accounting and so on, is actually very thin in financial journalism." Thus this amplifies the need to have more knowledgeable people covering events which they fully understand and thus are more effectively communicate with their readers or viewers.

Looking back over the rapid collapse of the world's financial markets, and the uncertainty ahead, I very confidently say it is, a financial system failure, a regulatory failure and a media failure.
Everyone is willing to talk about the first two, but they are not willing to discuss the last one. We are all in this. It's a media failure of omission and commission.

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