The financial reporting bubble

First published in the Telegraph on 12 February 2010

Sorry, but I’m afraid I’m about to embark on a rant. I’ve tried to hold this one in, but I can no longer contain myself. Two particular features of financial (and other) journalism irritate me on such a regular basis that I’m afraid I have to vent my spleen about them. So if you get offended by those “I’m mad as hell and I can’t take it any more” moments, look away now.

1. I saw it coming

Throughout this crisis, one increasingly irritating aspect is the cassandra trope. You’ll probably be familiar with this: “Markets were completely wrongsided… only a few canny economists and financial journalists really saw it coming [naming no names, but you who I mean]… what this crisis exposed was how few really knew what was going on etc etc.”

About this, I only have two questions: 1. Really? and 2. Who cares? Almost every financial commentator I know and read and respect did, at some point before the crisis, express some concern about the build-up in credit. Almost every economics writer warned about the likelihood of a housing crash. No-one, and I mean no-one, saw precisely what would happen. Honestly.

The only correlation I’ve noticed following the crisis is that the ones who are widely deemed as being the ultimate cassandras also happen to be the most adept at self-publicity. I am not naming names here, but I think you know who I mean, both from economics and from journalism. And if you go back and look at his or her articles what you’ll in fact find is that there were plenty of warnings but also plenty of provisos (that of course the credit bubble need not create a crisis).

In the meantime, a number of economists and writers, who issued precisely the same warnings but were modest enough not to go on about it afterwards, are forgotten, at least by the mainstream press (and, no, I’m not talking about myself – though I realise some of you will naturally assume that). The problem, of course, is that the most compelling narratives behind the crisis are black-and-white – (“he alone saw it coming”) rather than shades of grey (“innumerable journalists sometimes issued warnings, and sometimes they didn’t”). History, it seems, is not written by the victors, but by the biggest self-publicists.

And does anyone (I mean anyone outside the financial media and the small circle of City analysts) really care? I doubt it. I don’t think people are so prone to snap black-and-white judgements that they will only read a columnist or economist because he or she was right about one particular thing. One of the problems in financial media in the wake of the crisis is that there has been rather a lot of gesticulating about having been more prescient than each other and less concentration on moving on and trying to explain why the crisis matters to people and how it may impinge on their lives in the future.

There is a broader debate (an interesting one) about how the weight of public opinion made it difficult for those with contrarian views to make themselves heard, and about how bubbles in thought can be self-fulfilling, but that is less about individuals than the wisdom of crowds – about sociology and ontology rather than this or that oracle (why do we always seek out oracles?).

1. EXCLUSIVE!!

When I started off in journalism, scoops tended to be big, exclusive stories gleaned after hours of work and squeezing contacts; stories which simply wouldn’t have broken were it not for one or two journalists’ prowess. No longer. Now, apparently, it is acceptable to slap a great big “Exclusive” strapline on a story even if it was, effectively, merely a tip-off from a financial PR. I can’t tell you how much I see this nowadays.

The apotheosis is when a company is about to make an announcement, and the PR decides to leak it to a chosen journalist an hour or two beforehand (or a day before). Cue: EXCLUSIVE!! But of course, these stories don’t involve much in the way of work, investigation, probing, campaigning or any of the other aspects one would usually associate with good Watergate-style journalism.

And I ask the same question I did of the “I saw it coming” trope: who really cares? I don’t believe that readers do. They want information, to know what is happening, and analysis that helps them understand it. Whether that story gets to them five minutes earlier on one source than another is far less important than the standard of the information. I realise this is probably mildly sacreligious for a newspaper journalist (who himself tries to seek out scoops) to say, but let’s not get carried away. I also realise that if I’m right, this rant is likewise just as irrelevant to the average reader, but there you go.

In both cases, the problem is that the financial press has become rather self-obsessed in recent years – perhaps it’s a sign of an inherent bubble in financial reporting – an ego bubble. But these two issues are both endemic in newspapers, television and internet reporting and – while they are of no fundamental importance to our everyday lives, they are (to me at least) severely irritating.

This is not intended to be an attack on anyone in particular – I have probably occasionally been guilty of similar sins in weaker unguarded moments. But I wish financial journalists would start to clock onto the fact that it’s not about them – it’s about the story.

Anyway, rant over. I’d be interested in your comments. Am I alone in thinking this? Have I misjudged our readers? If you’re still reading by now, I hope not.