Category Archives: Media watch

Bill Black: The New York Times Thinks Jailing Banksters Would Cause a “Bind”

Yves here. Bill Black continues to heap well-deserved scorn on efforts to defend New York Fed president William Dudley’s revealing performance in Senate testimony last week. In its efforts to pretend that the New York Fed can’t possibly be expected to regulate, the Grey Lady goes beyond the usual hoary canard that jailing banksters is just too hard (as in trying to say that what they perpetrated didn’t break any laws, when plenty of writers, such as Charles Ferguson, long form in Predator Nation, and yours truly, among plenty of others, have cited both legal theories and fact sets that show the reverse). The additional bogus claim is….drumroll…that keeping banks out of criminal and improper conduct is somehow inconsistent with making sure they “operate successfully”. In other words, the Times is effectively saying that banks have become so dependent on criminal and near-criminal conduct as profit sources that regulators dare not deprive them of that out of fear of weakening their financial performance.

Bill Black: Why the New York Fed Isn’t Trustworthy

Yves here. Readers may recall that we criticized the New York Times’ reporting on an important story on a criminal investigation underway involving both Goldman and New York Fed employees. A Goldman employee who had worked at the New York Fed and his boss were fired because the ex-Fed staffer allegedly had obtained confidential bank supervisory information. A New York Fed employee was also fired immediately after the Goldman terminations. The piece was composed as if the intent was to be as uninformative as possible and still meet the Grey Lady’s writing standards. Readers were left in the dark as to where the two Goldman employees fit in the organization and what the sensitive information was.

Bill Black dug through later news reports, did some additional sleuthing, and based on is experience as a regulator, concluded that there is no way the Goldman employee, Rohit Bansal, didn’t recognize that he was misusing confidential bank supervisory information. That matters because whether or not breach is criminal hinges on whether he “willfully” broke the law.

Russia Can Survive An Oil Price War

Yves here. This article is an important sanity check on the impact of the current oil price war on Russia. We’ve seen similarly skewed conventional wisdom on the Saudis: “No, they can’t make it on a fiscal budget basis at below $90 a barrel,” completely ignoring the fact that the Saudis clearly believe it is in their long-term interest to suffer some costs to inflict pain on some of their enemies, and render some (a lot) of shale oil and alternative energy development uneconomical, which increases their ability to extract more in the long term from their oil asset.

Why is Anyone Surprised that Abenomics Failed?

In case you managed to miss it, there’s been a fair bit of hand-wringing over the fact that Japan has fallen back into a recession despite the supposedly heroic intervention called Abenomics, whose central feature was QE on steroids.

But Japan of all places should know that relying on the wealth effect to spur growth has always bombed in the long term.

The Upshot’s ObamaCare “Interactive” Explainer in the New York Times: A Critique

Taking some swipes at visualizations and analysis based on Enroll America data.

Slugfest Over Taibbi Exodus From First Look Fails to Address Editorial Meddling Doubts

As reader Christopher put it, this got ugly fast.

Yesterday, Glenn Greenwald, Laura Poitras, Jeremy Schill, and John Cook issued a joint “inside story” on why Matt Taibbi left First Look. Let us note that it is pretty much unheard for journalists to report on personnel matters at their own employer, particularly so rapidly after a story breaks. The reason for the haste, and the focus on l’affaire Taibbi, appears to be to get out in front of an article coming out in New York Magazine about their patron, Pierre Omidyar.

The real issue, as we discussed in our earlier post, is whether this account supports the claim made in Omidyar’s press release about Taibbi’s departure: that it has nothing to do with editorial independence. As we’ll discuss, this story does not lay that issue to rest; in fact, it attempts to draw a bright shiny line between “corporate” matters like overall direction, editorial philosophy, mix of stories, as well as routine matters like expense controls, and “editorial freedom”. The distinctions aren’t that tidy. The degree of retrading of Taibbi’s deal with Omidyar and ongoing pressure to keep refocusing a shifting mission looks like bad faith. And one reads between the lines that Omidyar might have cooled on Taibbi’s plans to venture out of satire into more costly and more disruptive investigative reporting.

Matt Taibbi Leaving First Look

Matt Taibbi has been missed. He went into a writing black hole when he decamped from Rolling Stone to Pierre Omidyar’s wannabe media empire, First Look in February. But when the billionaire’s news venture was launched, the press was sloppy in reporting on Omidyar’s financial commitment. It was widely depicted as a $250 million venture, when the tech titan never committed anywhere near that amount of funding. Admittedly, it takes time to get a new publication going, but the lack of any apparent progress was becoming noteworthy. From the outside, it looked like the project might be going pear-shaped, and it appears it did.

Revolt Starting in UK Over Private Equity Secrecy

Mirabile dictu, is a revolution against private equity secrecy starting on the other side of the pond, meaning in of all places, finance-dominated England?

Jamie Dimon: U.S. Must Create a “Safe Harbor” Where JPM’s Corruption Is Not “Punished”

Yves here. The irony is delicious. Chief bank apologist Andrew Ross Sorkin accidentally elicited a damning admission from JP Morgan chieftan Jamie Dimon. But that also reveals Dimon’s confidence that he is a member of a protected class, which sadly happens to be true.

Why is the Boston Globe Covering Up for Gubernatorial Candidate Charlie Baker? (Updated)

Boston’s paper of record is effectively covering up for Massachusetts gubernatorial candidate Charlie Baker by failing to cover a growing pay to play scandal in New Jersey, with Baker as one of its central figures. David Sirota has been doing impressive sleuthing, and his latest report, which we’ll cover shortly, reveals that Chris Christie is persistine in his effort to hide information that presumably implicates Baker.

DealBook Says Citi “Cannot Afford” to Run an Honest Bank in Mexico

Yves here. In our ongoing efforts to thrash Andrew Ross Sorkin when he shills shamelessly for banks (admittedly a Sisyphean task), we are turning the mike over to Bill Black, who also sees Sorkin as a pet project. We trust you’ll enjoy his shredding of another defense of financial firm misconduct in the New York Times’ DealBook.

AIG Bailout Trial and the Deadbeat Borrower Defense

It’s déjà vu all over again.

I’m only starting to dig into the AIG bailout trial by reading the transcripts and related exhibits. That means I am behind where the trial is now. However, that gives me the advantage of contrasting what is in the documents with the media reporting to date. And what is really striking is the near silence on the core argument in this case.

How Obama Controls Media Coverage of the Administration

This Real News Network segment describes some recently-exposed strategies the Obama Administration uses to control the press.

Gretchen Morgenson Collects a Scalp: Blackstone Ditches Private Equity “Termination Fees”

There’s nothing like seeing the good guys score a goal. We have two this evening. One is a win by David Sirota, whose reporting on San Francisco’s plan to shift up to 15% of retiree funds into hedge funds appears to have led to a climbdown by the city. Sirota uncovered an unreported conflict of interest by the consultant recommending the change, who also operates a hedge fund of funds. Admittedly, CalPERS’ recent announcement that it was exiting hedge funds entirely also put pressure on the city to reverse course.

But Gretchen Morgenson collected an even bigger scalp in the form of Blackstone halting a practice that she highlighted in a May article: that of taking “termination fees” when portfolio companies are sold. However, as we discuss later, as positive as this move appears, this is almost certainly Blackstone throwing a big, visible bone to investors in the hope of deterring an SEC enforcement action.