In our information-soaked age, it is shocking to see how little our newspapers know of money. Yes, newspapers are hardly advertisements for financial acumen, as they lose both money and readers at a quite astonishing rate, but one would have thought that finance was one area of our newspapers immune from distractions such as celebrity culture and sensationalist reporting. Surely, money would be too important to trivialise and surely people couldn’t make mistakes over simple numbers.
A general reader glancing through The Financial Times - the high point of London’s financial journalism - would be forgiven for thinking that readers of the finance pages are treated with a certain respect. It might be not be very entertaining, but it looks pretty solid, what with lots of numbers and graphs, and clever-looking men staring out from columns full of weighty-sounding economics talk.
But it was out of these pages that emerged the single biggest crisis the world has seen, certainly in the last decade, maybe even the last half-century. Somewhere in those boring pages lay the causes of the biggest economic crisis since the Second World War, a crisis that came close to tipping the western world into depression and collapse, that loaded taxpayers with hundreds of billions of pounds of debt, and longer-term ramifications that are only just starting to be felt.
As a financial journalist reporting on the world of credit throughout the build-up to the crisis, I had a remarkable vantage point to understand the credit boom, and also to get a sense of what would happen if the house of cards came tumbling down. During this time I started - but never finished - a book about debt, because people did not seem to see it for what it was, and what it could do. I regret never completing that book - which would have been called IOU - though I suspect that even had I finished it, I would have struggled to sell it to even the most enlightened of publisher, because during the credit boom no-one wanted to hear the prosaic truth of how things would all end soon.
It is damning criticism of my business, financial journalism, that we failed to stand up, look at the credit boom, and call it for what it was, and what it would mean. Instead, what happened, was we stood up the day after it happened and pointed to all the reasons why we knew it would have happened, and highlighted the small number of examples were we mentioned it in passing. Then a few months passed, and we forgot everything we might have learnt from the biggest disaster our industry has known in recent times, and reverted to populism.
Blame the banker was an easier game to play than the intellectually difficult, and quite worrying, truth: that ignorance was central to the crisis, that a profound and systematic intellectual failure undermined almost every one of the world’s financial and government institutions. And while it was not journalism’s fault that credit boomed, and assets bubbled, and banks tweaked structures, and governments’ took advantage, it was journalism’s responsibility to tell the world what was going on.
Monday 19 July 2010
Friday 16 July 2010
spinning the good spin
Politicians come under all kinds of criticism for 'spinning', but really it is journalists who are the experts at overplaying a story. Indeed, it is an essential part of the occupation. "I didn't get into this business to write small, boring stories," a former colleague used to say. Given these skills, it should not be a surprise to remember that both Tony Blair and David Cameron came to power with ex-tabloid newspaper editors at their side.
Remembering the Blair government's injudicious and often disturbing use of simplification and exaggeration, particularly during time of war, it is easy to see why cherry-picking supportive evidence is problematic. However, cherry-picking is a key skill of the journalist; if they did not select the best parts of the juiciest stories, their articles would be uninteresting, book length and published days after the event. The need to entertain as well as inform disciplines the successful journalist to steer towards those issues and events that people want to know about, in a style they would want to read.
Moreover, simplification is not inherently a bad thing either. Again, simplification is a core part of the job of the journalist. It is difficult to think of an area of public life - outside of sport - where to tell the whole story does not require some degree of dramatic simplification. Indeed, good journalists sweat blood and tears writing the perfect first sentences, as these are the ones that lead the reader from the simple grab at the top of the article through to the detail in the body of the piece.
The approach taken by the Economist magazine is said to be "simplify, then exaggerate", and when one reads the magazine (though by some odd convention The Economist calls itself a newspaper) it is easy to see the virtue in this approach.
Picking up a copy at random, the 17 July edition contains a short article on the UK online food delivery business Ocado ("Keep on Trucking"), which shows the magazine's approach at its best. Opening with an arresting description of Ocado's "eerily sentient" warehouse, the article asks whether the sector can make money, introduces the reader to the industry, its recent past, Ocado's competition and draws to a close with some sense of where both Ocado and its rivals may be heading - "supermarket chains and online outfits will gradually come to resemble each other".
In just a few hundred words, the reader has learned a lot. More importantly, the article's compression has not come at the expense of truth, the facts are used judiciously, and opinion is carefully measured. Clearly, there is much that has not been said - and indeed Ocado's potential listing on the stock markets has generated thousands of words of comment in the newspapers - but as a general starting point into the industry it's not bad. It does no harm. However, it's a bit tepid. The company has put a value of itself at close to a billion pounds, and it has never made any money. Unsurprisingly, many of the newspaper comments have been somewhat sharper.
Remembering the Blair government's injudicious and often disturbing use of simplification and exaggeration, particularly during time of war, it is easy to see why cherry-picking supportive evidence is problematic. However, cherry-picking is a key skill of the journalist; if they did not select the best parts of the juiciest stories, their articles would be uninteresting, book length and published days after the event. The need to entertain as well as inform disciplines the successful journalist to steer towards those issues and events that people want to know about, in a style they would want to read.
Moreover, simplification is not inherently a bad thing either. Again, simplification is a core part of the job of the journalist. It is difficult to think of an area of public life - outside of sport - where to tell the whole story does not require some degree of dramatic simplification. Indeed, good journalists sweat blood and tears writing the perfect first sentences, as these are the ones that lead the reader from the simple grab at the top of the article through to the detail in the body of the piece.
The approach taken by the Economist magazine is said to be "simplify, then exaggerate", and when one reads the magazine (though by some odd convention The Economist calls itself a newspaper) it is easy to see the virtue in this approach.
Picking up a copy at random, the 17 July edition contains a short article on the UK online food delivery business Ocado ("Keep on Trucking"), which shows the magazine's approach at its best. Opening with an arresting description of Ocado's "eerily sentient" warehouse, the article asks whether the sector can make money, introduces the reader to the industry, its recent past, Ocado's competition and draws to a close with some sense of where both Ocado and its rivals may be heading - "supermarket chains and online outfits will gradually come to resemble each other".
In just a few hundred words, the reader has learned a lot. More importantly, the article's compression has not come at the expense of truth, the facts are used judiciously, and opinion is carefully measured. Clearly, there is much that has not been said - and indeed Ocado's potential listing on the stock markets has generated thousands of words of comment in the newspapers - but as a general starting point into the industry it's not bad. It does no harm. However, it's a bit tepid. The company has put a value of itself at close to a billion pounds, and it has never made any money. Unsurprisingly, many of the newspaper comments have been somewhat sharper.
Wednesday 14 July 2010
why do it at all
A few years ago, The Guardian made a bold decision and brought its financial pages forward, ahead of the comment and opinion section. However, few other newspapers followed suit and for most – other than the Financial Times - the financial pages are stuck, unloved, at the back, like an embarrassing relative at a big family occasion. For tabloid papers, such as the Mail and the Express, even finding the finance coverage is a significant task. (That said, the Mail on Sunday's financial coverage is surprisingly good, and of its rivals is probably second only to the Sunday Times in the range and detail of its output.)
However, where newspapers place their stories is usually not a good indicator of their wider importance. Finance rarely generates a good front page splash, in journalism speak. Partly this is because financial stories are almost always complex and technical, partly because it is so difficult to inject human interest and scandal into them.
Newspapers that do try to go big on a financial story can end up with burnt fingers. A memorable - and probably worthy - attempt by The Guardian to tell the story of corporate taxation backfired rather spectacularly when it made several inaccurate accusations against Tesco relating to tax avoidance.
Overall, the paper wanted to show how big corporations in the UK dream up highly complex schemes to cut their tax burden, usually in partnership with the big accountancy firms. With these types of stories the devil is truly in the detail, and if you try to take on the big names - ie those your readers will actually have heard of - then these are exactly the same companies who have sufficient money to defend their reputation loudly and aggressively.
So every detail has to be right, and the conclusions have to be precisely in line with the evidence. So when The Guardian ran the headline: "Tesco's £1bn tax avoiding plan", the story had to back this up 110%. Unfortunately for the newspaper, the story didn't. It went some of the way there, but not enough. As a result, Tesco did what any large company would do after such a major challenge to its reputation: made a huge legal complaint and forced a front page apology from The Guardian, and a near-complete retraction (or a "revised assessment", in the words of its media commentator Roy Greenslade).
I remember speaking with a Guardian journalist about the Tesco story a few months after the newspaper made its apology. The journalist - not one that worked on the piece - said the Tesco story hadn’t put the paper off digging into corporate affairs that others might not like, and anyway the story had been ‘basically right’, but for a few technicalities.
This latter idea was a worrying thing to claim. The Tesco story led to the Guardian issuing a front page apology, printing that "revised assessment", and cost the paper vast amounts of money. For a journalist, a 'basically right' story that would bankrupt all but the largest newspaper is not right at all.
It is not just the economics though. A story that is partly wrong, even if that part makes up a relatively small percentage of the article, is still wrong. A 70% right story should never get anywhere near the pages of any newspaper; its only destination is back with the journalist that wrote it with a note attached saying: 'confirm sources and details'. Unfortunately, we will meet the 70% story on these pages time and again.
However, where newspapers place their stories is usually not a good indicator of their wider importance. Finance rarely generates a good front page splash, in journalism speak. Partly this is because financial stories are almost always complex and technical, partly because it is so difficult to inject human interest and scandal into them.
Newspapers that do try to go big on a financial story can end up with burnt fingers. A memorable - and probably worthy - attempt by The Guardian to tell the story of corporate taxation backfired rather spectacularly when it made several inaccurate accusations against Tesco relating to tax avoidance.
Overall, the paper wanted to show how big corporations in the UK dream up highly complex schemes to cut their tax burden, usually in partnership with the big accountancy firms. With these types of stories the devil is truly in the detail, and if you try to take on the big names - ie those your readers will actually have heard of - then these are exactly the same companies who have sufficient money to defend their reputation loudly and aggressively.
So every detail has to be right, and the conclusions have to be precisely in line with the evidence. So when The Guardian ran the headline: "Tesco's £1bn tax avoiding plan", the story had to back this up 110%. Unfortunately for the newspaper, the story didn't. It went some of the way there, but not enough. As a result, Tesco did what any large company would do after such a major challenge to its reputation: made a huge legal complaint and forced a front page apology from The Guardian, and a near-complete retraction (or a "revised assessment", in the words of its media commentator Roy Greenslade).
I remember speaking with a Guardian journalist about the Tesco story a few months after the newspaper made its apology. The journalist - not one that worked on the piece - said the Tesco story hadn’t put the paper off digging into corporate affairs that others might not like, and anyway the story had been ‘basically right’, but for a few technicalities.
This latter idea was a worrying thing to claim. The Tesco story led to the Guardian issuing a front page apology, printing that "revised assessment", and cost the paper vast amounts of money. For a journalist, a 'basically right' story that would bankrupt all but the largest newspaper is not right at all.
It is not just the economics though. A story that is partly wrong, even if that part makes up a relatively small percentage of the article, is still wrong. A 70% right story should never get anywhere near the pages of any newspaper; its only destination is back with the journalist that wrote it with a note attached saying: 'confirm sources and details'. Unfortunately, we will meet the 70% story on these pages time and again.
Friday 9 July 2010
why not get it wrong
Of course there will be mistakes, journalists will say, because that is an inevitable part of the process of getting to the story fast and first. And the mistakes are usually small, and in the details. Overall, they are telling the story right, or so the claim goes.
Another strand of defence takes the view that journalists have to write for a paying audience, so the first priority is not strictest standards of truth. Journalism is always partly an entertainment business - it is not science or law - people have to want to read it.
Few journalists go into the business to set the record straight, and whatever they
might say, few readers ignore a big or entertaining story just because it might not be true. At present the media is full of stories about 'Paul the Psychic Octopus', able to pick the results of World Cup football matches. Is Paul really psychic? I suspect not, and that's not the point. The story is too much fun to talk about truth.
Moreover, every journalist has their own take on what is and what is not important. Filtering the mass of information flowing into the modern newsroom and then picking the handful of stories to follow up that day is as much art as science, and every journalist will have a different set of priorities.
Another strand of defence takes the view that journalists have to write for a paying audience, so the first priority is not strictest standards of truth. Journalism is always partly an entertainment business - it is not science or law - people have to want to read it.
Few journalists go into the business to set the record straight, and whatever they
might say, few readers ignore a big or entertaining story just because it might not be true. At present the media is full of stories about 'Paul the Psychic Octopus', able to pick the results of World Cup football matches. Is Paul really psychic? I suspect not, and that's not the point. The story is too much fun to talk about truth.
Moreover, every journalist has their own take on what is and what is not important. Filtering the mass of information flowing into the modern newsroom and then picking the handful of stories to follow up that day is as much art as science, and every journalist will have a different set of priorities.
Saturday 3 July 2010
what they are not telling you
There is so much going on in the world, and the well-trained journalist knows that within each event lies a thousand stories, and within those a million different articles. No-one is able to tell all those tales. As such, journalism is a flawed occupation; destined always to fail. But the mistakes are interesting, and only by understanding them can understand their impact.
Financial journalism is certainly one flawed part of this error-strewn business. Indeed, because of the importance of finance and money in our world, the failures of financial journalists have a particularly large impact, not just on their readers - misled about how to manage their finances and hence much of their lives - but also upon opinion-formers and policymakers, who introduce bad laws based on poor information.
Moreover, even professionals in the world of finance, who really should know better, can find themselves herded into decisions by journalists and newspapers who in the search for the big story often generate a climate of crisis out of nothing, or sometimes just blunder on through mistakes and misunderstandings.
This is why I instinctively reject conspiracies. Nothing in the world that I have seen has ever been as perfect, as neat, as the stories told by conspiracy theorists. The things they are not telling you are usually secret not because there is some massive conspiracy generated by an all-powerful elite. No, what they are not telling you are the things they don’t know, or don’t think you need to know, or they can’t be bothered to tell you about.
Financial journalism is certainly one flawed part of this error-strewn business. Indeed, because of the importance of finance and money in our world, the failures of financial journalists have a particularly large impact, not just on their readers - misled about how to manage their finances and hence much of their lives - but also upon opinion-formers and policymakers, who introduce bad laws based on poor information.
Moreover, even professionals in the world of finance, who really should know better, can find themselves herded into decisions by journalists and newspapers who in the search for the big story often generate a climate of crisis out of nothing, or sometimes just blunder on through mistakes and misunderstandings.
This is why I instinctively reject conspiracies. Nothing in the world that I have seen has ever been as perfect, as neat, as the stories told by conspiracy theorists. The things they are not telling you are usually secret not because there is some massive conspiracy generated by an all-powerful elite. No, what they are not telling you are the things they don’t know, or don’t think you need to know, or they can’t be bothered to tell you about.
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