That’s socialistic. No way round that.

1) The financial crisis was greatly caused or at least triggered by the housing problem.

2) The housing problem was caused by affirmative action efforts by Congress, once again trying to be social architects. The Democrats came up with the idea and pushed it hard. The Republicans did not have the backbone to tell the truth about it being a poor idea. Congressional hearings on the efficacy of the program were smothered in lies and wishful thinking.

3) Perhaps not the financial media, but the more populist reporters were completely in the tank for Barack Obama. Hence, anything that looked like it would show the Democrats in a bad light (like the truth) was underplayed. Anything that could make W look bad was blown out of proportion. Hence, the congressional hearings warning of these problems years ago were only covered to the extent of Nancy Peloci et al saying it was working great. Meanwhile, BO gets away with the brilliant (sic) analysis that this is the worst economy since the great Depression. One might forgive him for not remembering the Carter economy, as he may well have still been an Indonesian citizen at the time, but the media continually allowed this lie to go unexamined for the entire campaign. Hell, he’s STILL saying it. At any rate, talking heads on TV are listened to my the great unwashed. A soundbyte by some annointed blathermeister gets heard while financial analysis requires attention and thought. Those two things are becoming a vanishingly small portion of politics today.

which brings me to:

4) For whatever reason, civics is no longer taught in school. There are millions out there who don’t know who is responsible for what. Most could not even name the three branches of government. Add to that the millions who are here illegally from dictatorial nations and one can see why so many people who vote think the President is to blame for everything and that the purpose of a Congressman is to bring pork home. (How many people realize that Senators are Congressmen, too?)

The reason why real financial news does not get ou to the public is because it is not sensational or sexy, it can not be put to a hip hop rhythm, and rarely shows democrats in good light. Hence it does not get past the editors. That covers supply. The demand is not there because people have been told for decades that financial news is the news of the evil rich Republicans who are out to steal the food and belongings of the “little guy”. Hence the people who watch mainsteam hype media do not want to see financial news. Those who have any interest or are educationally prepared to understand financial news have long since found more credible outlets than Katie Couric.

Financial reporters ought to understand supply and demand, eh?

Fair enough. If you don’t have a clue about anything except following the breaking news and getting access and be called on at the press conference, it’s pretty hard to write an insightful interesting story about anything important.

Face the facts, journalism, with a couple of exceptions has always been pretty awful. There was no golden era that is now slipping away because of the Internet or globalization or blablablab…

For those of us old enough to have been reading in 1964,1965,1966, we know that the best reporting was done by IF Stone. “Blogging on paper.” The next best reporting was in Le Monde. the NY Times and the Washington Post. LOL.

Now of course the great revisionist history is that Watergate was the high point of heroic journalism. Ok, it was pretty good. But without deep throat it was not going to happen. Meanwhile, while Nixon was obviously lying, spinning and creating the Imperial Presidency version I, where was our noble four estate.

Please, enough of this self important bs. Newspapers sell real estate. The journalists lived off the rent. Every once in a while some great reporting happened.

The buyers were all institutional buyers. The interesting thing is that all those institutional byers did not get suspicous as they all have large departments for macroeconomical forecasts and risk management units.

By the way: I am just reading your book and like most of your analizes but I will write more on that later.

“Toxic assets” are not toxic – they are worthless (or worth less). Pricing them at current market value, that is offering them for sale in open auctions, would reveal that much of banks remaining assets are of little value. Anyone who discusses “toxic” assets has no idea what they are talking about. Ask them to define it and see.

“Socializing” banks is another term. Banks are already owned in part by the government, what is being discussed is whether the management of the bank should be chosen by those currently in control or picked by the government. Fannie and Freddie are now run under government supervision, they seem to be doing OK, given what they have been ordered to do.

Yesterday a financial writer on “Now” stated that putting the government in charge of running the banks would be a bad idea since the government has a poor record of running things. Apparently she has never heard of the TVA, the Defense Department and the entire military infrastructure, the VA or Medicare/Medicaid. The government is also running dozens of banks taken over by the FDIC. I’ve not heard any complaints about how they are being managed.

I’m not sure which is worse uninformed journalists and pundits or such people who are both uninformed and bluffing.

I still see no press reports on the South American economic summit being run as the anti-Davos. On the other hand the amount of blather from Davos continues unabated. In the many years of its existence name one solid accomplishment that has come out of the meetings. A glorified ski holiday pretends to be a substantive meeting and the press falls for it.

Even if it would be reported, people are always looking to get rich quick and most would dismiss the reporting

Just a note on the last part of your comments.

What is being labled as “socializing” some U.S. banks has nothing to do with socialism. It is indeed an approach based on the best traditions of capitalism: Privatize what is left of the carnage done by capitalists and burden the public with the massive losses and let the “reporters” and “analysts” call it socialism. So people are screwed twice by the very smart derivatives-inventing capitalists: once when they lost their life savings, and another time when they have to pay for the privatization of what is left. You know, the “Good bank” vs the “Bad bank” game.

Finance is not a neutral game as we all know. There are losers and gainers. Unlike what is advertized, there is no such thing as a win-win scenario here. The whole system is set up to allow some to win big at the expense of the vast majority. This is excatly what is being played out.

We should live our lives without dilussions if we do not want to end up disillusioned. Journalists are not a bunch of “independent” truth-seeking, corruption-fighting machines. They are part of the system. They must function as the power centers of the system require. If they dont, they are out. It is very simple. They are simply human beings. They just work there!

The problem is that some of this early dissident voices didn’t get the front pages or covers of our newspapers or magazines.

What we had was, remember, FORTUNE presenting ENRON as one of the most innovative companies of the world!

That’s the problem.

I once got a story in the Business pages of a British Sunday newspaper and was astonished when my story appeared, libellous and inaccurate, and that it appeared to have been traded to get a scoop from the company in question the following week. I was very upset, as it was a personal matter. But the journalist blamed me for the inaccuracy and I got no support from the Press Complaints Association in the UK, a self-regulatory body.

That is, the occasional item in scattered traditional media sources by various reporters will tend to lack the sort of context or explanatory journalism that a news outlet could build online.

Combine that with the fact that most journalists are not only not experts, but frequently hostile to the subjects they are supposed to cover, and it is almost a sure thing that a story as complex as the collapse of the financial sector is going to slip between the cracks.

PS to robertdfeinman: Given the number of stories currently discussing the question of whether the USG will be de jure nationalize major banks (as it is de facto moving towards now), I am sort of amused that anyone thinks socialist approaches to the financial mess are not being discussed, let alone the stories and blog postings discussing prior crises in Japan, Norway, etc.

Open communication makes both success and failure easier to deal with and causes a partnership between all participants.

Learn from each other, why should I invent the wheel if you did last week , we can then go on with our seperate projects.

Bouncing ideas off one anouther , good and bad helps both grow faster as well as more solidly.

bob wyman

The two camps basically differ as to whether direct government spending or tax cuts are the best approach. This may be important, but the legislation is going to include some of both (along with expanded social services), so that they are really only arguing about the degree each approach receives.

What is not considered is that there have been economic crises elsewhere in the world dozens of times since WWII and that a large variety of approaches have been tried with varying success. These historical examples are ignored while the conversation in the US remains over whether the New Deal worked or not.

If a reporter wanted to find out how well the S. Korean bailout or the Thai bailout worked who would he ask? Perhaps there are a few experts in this country, but most of them are elsewhere.

Right now there is a counter-summit taking place in Latin America as an anti-Davos which is discussing “socialist” approaches to economic development. Is anyone covering it? Does a business or economics reporter in the US even know what sorts of questions to ask these people? Everyone in this country sees economics from a capitalist framework.

Can one even study alternative economic systems in the US anymore?

Excessive insularity and a belief in our own exceptionalism blinds us to much of what is going on in the rest of the world. The situation with nationalist movements is probably even worse as far as having expert reporters.

———–

…also, I thank you so very much for for insight and information from places I can’t be!

B.Nelson