Leitura para o fim-de-semana: quando o cão de guarda não morde

Nos anos que conduziram à grande crise económica de 2008, os meios de comunicação que cobrem Wall Street conseguiram falhar a maior história de todas. Num excerto do livro The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism, adaptado pela Columbia Journalism Review, Dean Starkman explica como e porquê.

@Christopher Anderson via Magnum Photos

@Christopher Anderson via Magnum Photos

The great story

In the run-up to the Great Recession, accountability journalism saw the story that access journalism missed

By Dean Starkman

The US business press failed to investigate and hold accountable Wall Street banks and major mortgage lenders in the years leading up to the financial crisis of 2008. That’s why the crisis came as such a shock to the public and to the press itself. ¶ And that’s the news about the news.

The watchdog didn’t bark. What happened? How could an entire journalism subculture, understood to be sophisticated and plugged in, miss the central story occurring on its beat? And why was it that some journalists, mostly outside the mainstream, were able to produce work that in fact did reflect the radical changes overtaking the financial system while the vast majority in the mainstream did not?

This book is about journalism watchdogs and what happens when they don’t bark. What happens is the public is left in the dark about, and powerless against, complex problems that overtake important national institutions. Few need reminders, even today, of the costs of the crisis: 10 million Americans uprooted by foreclosure with even more still threatened, 23 million unemployed or underemployed, whole communities set back a generation, shocking bailouts for the perpetrators, political polarization here and instability abroad. And so on and so forth.

Was the brewing crisis really such a secret? Was it all so complex as to be beyond the capacity of conventional journalism and, through it, the public, to understand? Was it all so hidden? In fact, the answer to all those questions is “no.” The problem—distorted incentives corrupting the financial industry—was plain, but not to Wall Street executives, traders, rating agencies, analysts, quants, or other financial insiders. It was plain to the outsiders: state regulators, plaintiffs’ lawyers, community groups, defrauded mortgage borrowers, and, mostly, to former employees of financial institutions, the whistleblowers, who were, in fact, blowing the whistle. A few reporters actually talked to them, understood the metastasizing problem, and wrote about it. Unfortunately, they didn’t work for the mainstream business press.

In the aftermath of the Lehman bankruptcy of September 2008, a great fight broke out over the causes of the crisis—a fight that’s more or less resolved at this point. While of course it’s complicated, Wall Street and the mortgage lenders stand front and center in the dock. Meanwhile, a smaller fight broke out over the business press’ role. After all, its central beat—the one over which it claims particular mastery—is the same one that suddenly melted down, to the shock of one and all. For business reporters, the crisis was more than a surprise. There was even something uncanny about it. A generation of professionals had, in effect, grown up with this set of Wall Street firms and had put them on the covers of Fortune and Forbes, the front page of The Wall Street Journal and The New York Times, and the rest, scores of times. The firms were so familiar, the press had even given them anthropomorphized personalities over the years: Morgan Stanley, the white-shoe wasp firm; Merrill Lynch, the scrappy Irish-Catholic firm, often considered the dumb one; Goldman, the elite Jewish firm; Lehman, the scrappy Jewish firm; Bear Stearns, the naughty one, etc. Love them or hate them, there they were, blessed by accounting firms, rating agencies, and regulators, gleaming towers of power. Until one day, they weren’t.

Critics contended, understandably, that the business press must have been asleep at the wheel. In a March 2009 interview that would go viral, the comedian Jon Stewart confronted the CNBC personality Jim Cramer with the problem. Stewart said, in effect, that business journalism presents itself as providing wall-to-wall, 24/7 coverage of Wall Street but had somehow managed to miss the most important thing ever to happen on that beat—the Big One. “It is a game that you know is going on, but you go on television as a financial network and pretend it isn’t happening,” is how Stewart framed it. And many understood exactly what he meant.

Top business-news professionals—also understandably, perhaps—have defended their industry’s pre-crisis performance. In speeches and interviews, these professionals assert that the press in fact did provide clear warnings and presented examples of pre-crisis stories that told about brewing problems in the lending system before the crash. Some have gone further and asserted that it was the public itself that had failed—failed to respond to the timely information the press had been providing all along. “Anybody who’s been paying attention has seen business journalists waving the red flag for several years,” wrote Chris Roush, in an article entitled “Unheeded Warnings,” which articulated the professionals’ view at length. Diana Henriques, a respected New York Times business and investigative reporter, defended her profession in a speech in November 2008: “The government, the financial industry and the American consumer—if they had only paid attention—would have gotten ample warning about this crisis from us, years in advance, when there was still time to evacuate and seek shelter from this storm.” There were many such pronouncements. Then the press moved on.

It is only fair to point out that, beyond speeches and assertions, the business press has not published a major story on its own peculiar role in the financial system before the crisis. It has, meanwhile, investigated and taken to task virtually every other possible agent in the crisis: Wall Street banks, mortgage lenders, the Federal Reserve, the Securities and Exchange Commission, Fannie Mae, Freddy Mac, the Office of Thrift Supervision, the Office of the Comptroller of the Currency, compensation consultants, and so on. This kind of forensic work is entirely appropriate. But what about the watchdog?

In the spring of 2009, the Columbia Journalism Review, where I work as an editor, undertook a project with a simple goal: to assess whether the business press, as it contended, did indeed provide the public with adequate warning of looming dangers when it could have made a difference. The idea was to perform a fair reading of the record of institutional business reporting before the crash. We created a commonsense list of nine major business news outlets (The Wall Street JournalFortuneForbes,Businessweek, the Financial TimesBloombergThe New York Times, the Los Angeles Times, and The Washington Post) and used news databases to search for stories that could plausibly be considered warnings about the heart of the problem: abusive mortgage lenders and their funders on Wall Street. We then asked the news outlets to volunteer their best work during this period, and, to their credit, nearly all of them cooperated.

The result was “Power Problem,” published in the spring of 2009. Its conclusion was simple: The business press had done everything but take on the institutions that brought down the financial system. The record shows that the press published its hardest-hitting investigations of lenders and Wall Street between 2000 and 2003, even if there were only a few of them. Then, for reasons I will attempt to explain, it lapsed into useful but not sufficient consumer- and investor-oriented stories during the critical years of 2004 through 2006. Missing are investigative stories that directly confront powerful institutions about basic business practices while those institutions were still powerful. The watchdog didn’t bark.”

O artigo completo está aqui.

Leitura para o fim-de-semana: o verdadeiro lobo de Wall Street

Até há pouco tempo poucos em Portugal terão ouvido falar em Jordan Belfort. Tudo mudou nos últimos dias com a estreia de O Lobo de Wall Street nos Estados Unidos e com a chegada aos ecrãs nacionais marcada para a próxima quinta-feira. Realizado por Martin Scorcese e protagonizado por Leonardo Di Caprio, conta a história de um corrector que ganhou milhões de dólares em Wall Street até ser preso, acusado e condenado por fraude e lavagem de dinheiro. Nesta reportagem, a Bloomberg Businessweek acompanhou o verdadeiro Jordan Belfort que conta o seu passado, fala da escolha entre Di Caprio e Brad Pitt, recorda os dias na prisão, a escrita do livro e a forma como agora ganha milhares de euros a dar palestras.

Foto: Jeff Brown para a Bloomberg Businessweek

Foto: Jeff Brown para a Bloomberg Businessweek

Jordan Belfort, the Real Wolf of Wall Street

“Jordan Belfort, aka the Wolf of Wall Street, hates it when people describe him as a criminal. “‘Convicted stock swindler’—it’s like it hurts my heart,” he says, practically shuddering. “I know it was true, but it’s not who I am. I say to my son, I say it to everybody who I try to mentor: We are not the mistakes of our past. We’re the resources and capabilities that we glean from our past. And it’s so true.”

It’s a delicate argument for Belfort to make. He will forever be associated with Stratton Oakmont, the Long Island penny-stock boiler room he ran in the 1990s. Stratton employed more than 1,000 brokers at its peak, before the Securities and Exchange Commission shut down the company and the FBI arrested Belfort, in 1998. Convicted of money laundering and securities fraud in 2003, he received a four-year prison sentence—he served only 22 months—and was ordered to repay $110.4 million to a victim compensation fund. Other terms for the kind of outfit he built and ran are “pump and dump” and “chop-shop.” The words “fraud” and “crook” come up frequently as well. “It chokes me up a little when I think about it. … I was a bad guy. And it wasn’t like I started that way,” he says, his voice becoming tight. “You can get desensitized to your own actions—it’s easy on Wall Street. Before you know it, it’s like everyone’s just a number.” He goes on: “I shouldn’t really care what people think of me. … I know I’m good. But of course I do care.”

Belfort, 51, is in Fort Worth for two days in October speaking to the Young Presidents’ Organization, a secretive networking group for CEOs and other senior executives under the age of 45. His theme, as usual, is what he’s learned from his experiences about how others can avoid the pain he caused and suffered. Sporting a John Boehner-caliber tan, Belfort delivers a slick, self-deprecating performance describing how he drove his life into the gutter with greed and drugs and excess, how he stole millions from people and went to jail for it, and how he reinvented himself as a legitimate businessman. He’s a natural performer, and in spite of his tarnished background—or more likely because of it—audiences appear genuinely moved by what he says. It doesn’t hurt to open appearances with a trailer for The Wolf of Wall Street, the movie based on his story, which is due to open, after some editing hiccups, on Christmas Day.

“To my shock it got picked up, with this bidding war between Leonardo DiCaprio and Brad Pitt,” Belfort says, “and I chose Leo and Martin Scorsese.” In addition to several million dollars that have flowed from book and movie deals, Belfort gets paid in the neighborhood of $30,000 for a speech—not bad for an hour’s work, although it requires him to spend the night in Fort Worth. A portion of his income will go to repay the investors whose money he lost.

Belfort makes a very good living, but it’s crumbs compared with the millions he says he once generated every day, pushing crappy $4 stocks on retirees in Orlando. In addition to traveling the world speaking, he works as a consultant to individual companies, talking about business ethics or teaching his sales techniques—the same ones that fueled his brokerage firm—which he argues can also be put to good use. Belfort says he’s been hired to do work for Delta Air Lines (DAL), Symantec (SYMC), Virgin Airlines, Wyndham (WYN), Telstra (TLS:AU), Deutsche Bank (DB), Fairfax Media (FXJ:AU), Southern Cross Austereo, and Absa Bank, among others. So far, almost all of his corporate clients have been abroad; in the U.S., the baggage of his criminal case may have created too much of a minefield for him to navigate, although he hopes this will change.

“From the letters and things we get, I think a lot of people in the U.S. think Jordan is thrilled about what he did, and that he partied hard and all that,” says Belfort’s fiancée, Anne Koppe, who runs his business with him out of Hermosa Beach, Calif. “He’d love [the U.S.] to be his main market, but he wanted to make sure that his message was pure and that people responded properly to it.”

Belfort says he doesn’t want to profit from his crimes, but of course without them there would be no Wolf of Wall Street, no notoriety, no redemption story, no one paying him to talk about his life, and no fraternizing with Leo, about whom Belfort sounds a little star-struck. “You can’t change what you’ve done, you can only learn from it and try to be a better person for it and embrace it and grow. I’m not saying I’m Gandhi or I’ve discovered the cure for everything that ailed me emotionally or my insecurities. But, you know, I try really hard to be the best person I can be every single day.”

Belfort’s $30,000 atonement speech is very earnest. His books, The Wolf of Wall Street and its sequel, Catching the Wolf of Wall Street, revel in crime and the high life. They recount in loving detail every pill he popped, every Concorde flight he took, and every prostitute he hired as he built his empire of sleaze, Stratton Oakmont, into “one of the largest and by far the wildest brokerage firms in Wall Street history.” The over-the-top antics depicted in the books read like submissions to Penthouse Forum: A young female sales assistant takes turns servicing the men at the office, like a shoeshiner; there are drugged-out helicopter rides and blitzed trips on private jets; Belfort goes hooker shopping with buttoned-up Swiss bankers. All of it happens against a backdrop of Belfort’s specially trained brokers making millions selling worthless stocks to gullible investors. “F-‍-‍- this and f-‍-‍- that! S-‍-‍- here and s-‍-‍- there! It was the language of Wall Street,” Belfort writes, describing the din inside his firm’s cavernous, crowded office. “It was the essence of the mighty roar, and it cut through everything. It intoxicated you. It seduced you! It f-‍-‍-ing liberated you! It helped you achieve goals you never dreamed yourself capable of! And it swept everyone away, especially me.” Consistent throughout is shameless bragging about how much money he was making and how ostentatiously he was spending it.

O artigo completo está aqui.

Stockton, a cidade que faliu

Stockton, na Califórnia, foi a maior cidade norte-americana a declarar falência. Aconteceu em Junho de 2012, motivada pela queda do sub-prime e pelo colapso do mercado imobiliário (entre 2006 e 2007 o valor das casas caiu 44%). O documentário “Who Took Down Stockton?” conta a história das decisões que levaram a este desfecho – e dos seus responsáveis. Surpresa: o rasto chega a Wall Street.