ADRIAN MICHAELS: FINANCIAL JOURNALISM- BAD NEWS BLUES

Do you think that financial journalists could be partially blamed, for not being able to see the financial crisis coming?

Yes I think financial journalists do have certainly some of the blame. I think that the blame is very much wider than that. There are awful lots of people that are paid more money than most financial journalists who missed the problems as well. Regulators, lawyer’s accountants, bankers, politicians, and everybody was taken by surprise. But it is clearly true that financial journalists could have done better.

Looking back, do you thing that they have managed to do what they were supposed to do on reporting the crisis?

Yes, I think so. I think that they were slow , at the beginning , again just like everybody else , So the first problems that were in the housing market in the United States , took at least a year before it became the collapsing of investment banks and everything else .But nonetheless I do think that financial journalist did a very good job in the end of dissecting the problems and explaining what was going wrong and they have done a pretty good job in follow up of what it is that we need to do to fix the problems.

In Greece where I actually come from, we still feel the consequences of the financial crisis and we feel the power of the media have to our finances. How can readers or even governments can get protected from all this flow of information?

It is easy for governments that have made bad decisions or are in trouble to blame the media, for at least part of those problems. And the Greek government is no exception .You saw this also when western governments were trying to bail out their banking system .Short sellers in the market were getting all the blame, where in fact short selling was a tiny percentage of the amount of the financial activity that was going on, and in any case was probably providing liquidity in the market. And I am afraid I feel the same think about the media discussion of the Greek financial crisis. Is probably 99% either positive coverage of what is going on or at least accurate? To blame the media, to blame media rumor for a spread in the price of Greek bonds , or the German bonds is ridiculous .The reason why the spread is there is because market investors think that Greek bonds , need to pay higher rate of interest than German bonds.

What about the citizens that they hear all these rumors? Can they be protected? Can the media help?

Yes, I don’t read Greek newspapers but I do think that the media certainly has a job to explain what is going on and to explain it in terms that everybody can understand. And if they are not doing so, they certainly that is a failure of the journalists that they are doing it. In the English language, newspapers at any rate I think that they have done a pretty reasonable job of explaining what are going.

This brings us to my following question, since due to the financial crisis more people started to read financial newspapers and news in general. Do you think that the way of financial news is reported has changed because of this?

Yes I am absolutely sure that this is the case. There is obviously has been an explosion of financial news for a very long time and many more people are reading financial stories. I have a very good perspective on that because when I moved from the Financial Times- which obviously does not have to explain the very very simple basics every day, because its readers are generally a little bit more knowledgeable about these issues -but at the Telegraph, which is a serious news paper , with intelligent readers , but nonetheless readers who are not following financial stories every day, most of the time ,for example when Lehman Brothers was in trouble or other banks was in trouble, those stories were covered in the business section but in the main part of the newspaper everyday if a story was on the front page there would be a commentary at the bottom of front page by a business reporter who was answering what the big question of the day was for a general reader. We did that every single day and every single time there is financial or economic news which is making the front page of the main newspaper there will always be some explanatory commentary in there which shows you that news papers , at least my newspaper –but you see it everywhere ..in fact I think in England I know remember that in the Guardian and the Times , which are our two major competitors they would have business editors writing commentary in simple English , in the main parts of the news papers ,every day ,right through the crisis.

So what did the crisis change in the way financial journalism is practiced? What did the journalists started doing differently?

I am not sure that they have changed very much what they are doing on a day to day bases, and we had an interesting discussion here today about that ,about whether they will start to question their reporting of companies ,unquestionably , in a sense that everyone has assumed probably too much that a good company is one that makes money , and if you are not making money , therefore by definition you are a bad company. I think that everybody knew that this was not true, but it is easy to get sucked to in an environment where those are the only things that you are writing about. At the moment I still think that that debate about the foundation of capitalism and markets is growing but it still hasn’t changed very much. But you see a lot of at the moment, with Greece in terms of the Euro, was the Euro a good thing, how is it constructed, is the European Economy running properly, should Germans be paying for Greeks, etc. All of these questions are quite philosophical but not just philosophical they are very important and they are relevant today for real people. So that sorts of debates are everywhere, and these are the sorts of the things that we weren’t doing before the crisis.

Here, there was also an interesting debate about citizen journalism and how much is actually affecting the financial journalism; can you tell us your point of view on that? Is citizen journalism useful for financial journalism?

As far as financial journalism is concerned I don’t think that we have seen a lot of citizen journalism that is useful. I don’t think we have seen a lot (financial citizen journalism), at all. There are always people out there who are writing on the internet about market rumors, they are trying to make the shares go up and down, and that is because they are trading and buying shares themselves. There hasn’t been a lot of responsible, intelligent, commentary about markets from people who are not, in some way experts. Not like we have seen in politics and in other areas.

Tania Georgoupli