Bianna Golodryga is apparently Washington DC’s favorite “money honey.” The former CNBC reporter moved over to ABC last year. But her appearance at the White House Correspondents’ Association Dinner is garnering her a lot of attention. “She’s smoking,” a Bush administration official tells Paul Bedard, who writes the Washington Whispers gossip column for US News & World Report.
“I was walking around with her, and all the big shots were coming up and introducing themselves. They were gaga over her,” a “financial industry source” tells Bedard.
The New TV Money Honey [US News]
Business Hacks
While we’re on the topic, we might as well mention that Ben Stein also seems to have an inflated view of the role of economists at investment banks, and perhaps in the world. Most traders and brokers we know tend to regard their economists as irrelevant at best and hazardous at worst. They are used to economists taking positions that are unhelpful to their book or to their sales efforts. But they don’t mind that much because they don’t think many people listen to—much less follow the advice of—their economists.
“These guys are talking heads for us. Part of brand promotion on a grand scale. They might as well work for the PR department. They get the firm’s name out there but, internally, no one really trades on what they say,” one equity trader with over twelve years experience tell us.
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A Report From The Financial Follies: Everyone Was Too Blacked Out To Leak To DealBreaker
By John CarneyThere are very few rewards for being a financial journalist. You don’t get rich, unless you are a pretty girl and use your access to wisely marry well (or, at least, wealthy). It doesn’t impress girls much. And your relatives quickly lose their enthusiasm about your job when they realize you can’t pick stocks for them. Even worse, you might get invited to the Financial Follies.
Just as the city hall press crew gets to have it’s Inner Circle follies and the Washington press corps throws the famous Gridiron dinner, New York’s financial media has an annual rubber chicken dinner of its own. Each year, on the Friday before Thanksgiving, the Financial Writer’s Association throws something called “the Follies.”
[More on this after the jump]
Should the New York Stock Exchange put Paul Krugman on retainer? That’s the conclusion of Paul Greenberg writing in today’s Washington Times.
Surely another dip in the market is bound to come — so long as there’s a business cycle — but Paul Krugman’s magic touch keeps delaying it, turning every down into still another unstoppable up. It’s positively unnatural. The man is a kind of walking, talking, and, best of all, writing version of Al Capp’s poor little jinx of a character, Joe Btfsplk — only in reverse, leaving not disaster but good fortune wherever he goes. The New York Stock Exchange ought to put him on retainer. If only Paul Krugman would just keep writing about the coming End of It All, prosperity might be assured.
But it isn’t just Krugman as a contrary indicator of the direction of the financial markets that has caught Greenberg’s attention.
Then there’s the language in which Mr. Krugman sends out his jeremiads. It is, in a word, hilarious — if unintentionally so. He has to be the country’s leading practitioner of purple-as-a-bad-bruise prose. Mrs. Malaprop might have spoken like that if only she’d had a Ph.D. in the dismal science.
I’ve saved my favorite Krugmanism of all time for those occasions when I may need a bit of cheering up: “And when the chickens that didn’t hatch come home to roost, we will rue the days when, misled by sloppy accounting and rosy scenarios, we gave away the national nest egg.”
As prose, that’s a lot of poultry. Try to visualize those chickens that didn’t hatch coming home to roost, if you can stop laughing. Why, that’s almost Zen, like the sound of one hand clapping. His reference to the national nest egg is just lagniappe.
One note to Greenberg: if you are going to criticize the writings of others, avoid the word “lagniappe.” We have no idea what that word means and no intention of looking it up. In fact, we couldn’t read any further after we saw that word because it made us feel nauseated. It sounds like something we drank at Mardi Gras once and we’re afraid to find out what they put in it.
Sound of one man weeping [Washington Times]
At the beginning of the month a dispute broke out between CNBC’s Charlie Gasparino and DealBook’s Andrew Ross Sorkin. Gasparino had reported that Apollo was considering going public, following the footsteps of the Blackstone Group and the map laid out by Fortress Investment Group into the public markets. Sorkin declared that CNBC had simply got the story wrong. “It’s not true. Apollo is not going public next month, nor the month after that — and probably not the month after that either,” Sorkin wrote.
As the story progressed it seemed that Sorkin was at least half-right. Reports were published indicating that Apollo was not yet getting ready for a public offering of shares. It was said to be considering a private offering of equity instead. Since these privately sold shares would probably come complete with registration rights that would allow them to be sold on the public markets eventually, the CNBC story didn’t look quite as far off as Sorkin’s item made it seem.
But the reports coming out from the Milken Institute’s annual Global Conference indicate that Sorkin may have overshot in his takedown of Gasparino’s report. Apollo founder Leon Black stopped short of commenting on his firm’s plans for an equity offering, but it seems clear they are at least considering a public offering.
Here’s how Business Week describes Black’s remarks at the conference:
But Black did build his case for public ownership of the businesses. He said publicly traded shares would allow him to retain top managers and recruit new ones by offering them stock in the firm. He also said such an offering would give him currency to acquire other, smaller firms. One of the ways Black said he’s been able to achieve superior returns was by hiring investment managers with experience in specific industries. He said he’d like to expand that expertise, noting that health care and energy were two areas in which his firm was weak.
Does that sound like someone who isn’t considering a public offering?
The Predator’s New Ball [Business Week]
As a way of saying thank you for the Pulitzer, the Journal has opened up its backdating archives. You can read all about the scandal, starting from the very first story published thirteen months ago. (Has it only been 13-months? It seems like we’ve been writing about backdating forever. Oh, right. That’s because DealBreaker started just eleven days later.)
This video–which we found thanks to Barry Ritholtz–is actually a good introduction to backdating, and good background on how the Journal discovered the story and pursued it. In many ways, it is superb journalism, and congratulations are due to the reporters who performed it. Rather than purely old-school investigative journalism—the kind that relies on leaks, anonymous sources and (possibly) manipulation by government agents—the Journal’s backdating coverage was a new style of investigative journalism. They took the work of academics and applied it to the real world of business and individual corporations and corporate leaders. As academics increasingly note the costs of Sarbanes-Oxley and the dangers of criminalizing agency-costs, there might be hope that this kind of investigating the arguments of academic reporting may help enlighten the public rather than add more confusion and ignorance.
And there is little doubt that a lot of the reporting on backdating was poorly reasoned and misleading. The worst of it came not from the Journal but from reporters and editorialists who tried to make up for what they lacked in original findings by adding more outrage and inferring even more criminality. There still are many out there who believe that backdating somehow proves that corporate is under-criminalized.
“Much reporting has made it sound like backdating was the equivalent of executives taking erasers and white-out to their paychecks to add a couple of zeroes — and public understanding still suffers from this bum steer. But all that backdating comes down to is a nonmaterial accounting irregularity (yes, readers, accounting rules should be obeyed!) involving a defective judgment about whether ‘in the money’ options needed to undergo expensing,” Holman Jenkins wrote in an article that all but indicted his own paper’s coverage.
Why did the backdating story get reported like this? The outcome was probably over-determined. Scandal sells papers whereas reports about nonmaterial accounting defects do not. It also wins prizes. But something more than that was in play, as well. And that something is a political agenda. It is clear from the video is that the Journal reporters see the backdating story as just a smaller part of the struggle for truth, justice and reducing executive compensation.
But don’t take our word for it. Listen to leading Wall Street Journal backdating reporter Charles Forelle.
“Besides the individual who may face jail sentences or SEC sanctions, there’s the broader issue of executive compensation being thrown into the limelight again,” Forelle says around the five minute mark in the video. “Companies are starting to show at least a glimmer of thinking more carefully and more intelligently about how they give options to CEOs since options are by far the instrument that’s caused the majority of the rise in CEO pay over the last couple decades.”
A Pulitzer for A Perfect Payday [Wall Street Journal]
The earliest reviews of Conde-Nast’s Portfolio are coming in. We probably should be doing things like reading the actual magazine. And we’re planning on getting to that as soon as we get up the courage to lift its 300-plus pages from the place where we dropped it. (Bess Levin’s desk, with a note: “Summarize all relevant data—Thks-JC.”)
But fortunately lots of other people are reading Portfolio so we don’t have to. Here’s a quick round-up of the early reactions.
Portfolio arrives to a somewhat testy Going Private, who thinks the magazine gets it wrong even before the first page. Even the cover is wrong, the acid penned mistress of the private equity world says. What’s wrong with the cover? According to Going Private it depicts “a bunch of hideous downtown rooftops bathed in the caustic acid of sodium lights on a business magazine cover that doesn’t even have a feature article on the financial performance of local roofing contractors or sodium light distributors.”
DealBook comes in with two items today on Portfolio. The first notes that the magazine wants to bring some glamour to world of business magazines.” And by glamour you get feeling that what they really mean is “women.” Indeed, as we noted a long, long time ago, Portfolio is aiming at being something of a business magazine for women. Most business magazines have readerships heavily tilted toward the male. Portfolio predicts that it will have a much more balanced readership. And apparently it hopes to achieve this by re-imagining corporate board rooms as a sort of red carpet or awards show where “business executives treated like celebrities,” according to DealBook.
After the jump we give Portfolio‘s readers the full treatment.
Women’s Wear Daily reports that Conde Nast’s new business magazine has hired bloggers.
…portfolio.com has added three bloggers to the fold: Lauren Goldstein Crowe, who helped launch Time Style & Design, will blog about fashion; Felix Salmon will blog on finance, and Tim Swanson, formerly of Premiere, will have an entertainment news blog. The magazine will appear on April 16, and the Web site will go live the same day.
Portfolio Patrol [WWD]
We mourned when Larry Ribstein gave up his weekly eviscerations the Sunday ramblings of Pulitzer Prize winning New York Times columnist Gretchen Morgenson—better known to DealBreaker readers as Gret-Gret.. This week, however, even Larry couldn’t stay away (as Joe pointed out this morning in Opening Bell). And the errors of this past Sunday’s column on the subprime mortgage “meltdown” shone so brightly that they are attracting critics like moths to a flame.
(Whoa. That’s the wrong metaphor. Because the moths get burned by the flame when what we mean is that they’re burning Gret. Hmmm. Let’s try that again.)
And the errors of this past Sunday’s column are attracting critics like bees to honey.
(Wrong. Bees like honey. Honey is sweet. Why don’t we just quit it with the clichés? One more try.)
And the errors of this past Sunday’s column seem to have provided a bright target for the slings and arrows of outraged critics.
(That will have to do.)
One our favorite business writers is called Felix Salmon. (We’ve known him for years and that’s his real name.) His take on Gret-Gret gets right to the heart of what’s wrong with so many of her columns: she doesn’t seem to know what she’s talking about.
The world is full of people desperate to know what Gretchen Morgenson thinks about the market in mortgage-backed securities, or MBSs. The problem is that her column last week on the subject is hidden behind the Times Select firewall. So we can all be very grateful that she has now rewritten it, at even greater length, and republished it under a “News Analysis” slug. (No firewall!) The headline? “Crisis Looms in Market for Mortgages”.
Or, you know, we can ignore it, on the grounds that Morgenson adduces no evidence whatsoever that any crisis is looming at all. For one thing, she doesn’t seem to understand the difference between two entirely different types of investment: equity in subprime mortgage originators, on the one hand, and debt backed by pools of subprime mortgages, on the other. It’s certainly true that originating subprime mortgages does not seem to have been a very good business to invest in over the past year or so. But Morgenson never connects the dots and explains why that means that the market in subprime MBSs is likely to implode.
But, you know, understanding your subject matter or clearly explaining it to readers is apparently not a qualification for a Pulitzer.
Is there a looming crisis in the mortgage market? [FelixSalmon.com]
Is all not well in the house of CNBC? We’ve mentioned again and again the love that CNBC executives, and their bosses at GE, have for Maria Bartiromo. But is their love unrequited? San Antonio Express-News business columnist David Hendricks writes that Maria didn’t even so much as mention the network at a recent speech in San Antonio.
Curiously, it was difficult to know from her speech Tuesday who employs Bartiromo: I don’t remember her mentioning CNBC even once. She was busy instead dropping the names of the people she has interviewed, from President Bush to Bill and Melinda Gates and the heads of high-powered private equity firms.
So is Maria giving CNBC the cold-shoulder?
Actually, that excerpt is probably unfair to Maria and Hendrick’s column, which makes it abundantly clear that she’s “an asset to business journalism” who understands the financial world better than many “award winning” business journalists, including “how private-equity acquisitions of public companies boost the value of U.S. corporations.” He just wishes she’d cut-out the “corporate promotional appearances”—which is the most polite way of describing all that time she spent with Citigroup executives we’ve seen in weeks.
Bartiromo avoids the difficult questions in San Antonio [San Antonio Express-News via Talking Biz News]
You might have noticed that we’ve been hammering away today at the backdating reporting of the Wall Street Journal. In fact, we’ve been beating up on Friday’s front-page story so much that we’ve haven’t even had time to get to the breathless reporting in today’s Journal.
So what’s got us all hot and bothered? Well, to be frank, it’s the news that the Journal‘s reporters are winning awards for their reporting on backdating. We’re not picking on lightweights here. We think the public is entitled to a little better from prize winners.
But it’s not really the news that a few fellas at the Journal won something called a George Polk Award that has us up-in-arms. It’s the possibility—perhaps even the probability—that the Journal’s reporters might win a Pulitzer for their reporting on backdating. There’s little doubt that the Journal is gunning for a Pulitzer here. And before the awards are handed out, the laurels placed on brows and the round of congratulations start, we thought we’d try to put things in perspective and correct a few errors.
Once they give the boys a Pulitzer it’ll be even harder to get the real story of backdating out.
Reporters for Journal Win George Polk Award [$$] [Wall Street Journal]
