Wall Street meltdown: Media’s third-toughest beat (Video)

Video: The Business News Rollercoaster

One of the toughest beats in journalism has been chronicling Wall Street’s meltdown — and the media have met the challenge of covering a fast-moving world of unending stream of depressing news.

Commentary: Journalists have covered a stream of depressing financial news

NEW YORK (MarketWatch) — Aside from Iraq and Afghanistan, the most demanding assignment in journalism this year has been covering the meltdown of the U.S. financial system.

Talk about a depressing, fast-moving beat. Let’s recap with some headlines from Wall Street:

Financial firms have taken about $380 billion in write-downs worldwide. Subprime problems evolve into a full-fledged fiasco. Proud, old Bear Stearns has to beg for a buyer, while Lehman Brothers teeters. Bear Stearns, Merrill Lynch and Wachovia all fire their top executives. This week, regulators are talking about limiting naked shorting of shares in Fannie Mae and Freddie Mac. By the time you read this, something else entirely may be in the spotlight. Read related MarketWatch column.

“I’ve been doing this for almost 40 years,” said Allan Sloan, a top writer for Time Warner’s Fortune magazine. “What’s been going on is the most dangerous — and weird — [financial] market. And the stock market is the least of it.”

The flow of scary news “just doesn’t go away,” Sloan marveled. “It sends a shiver down your spine. People are losing faith in deposit insurance.”

The seemingly endless stream of gloomy financial news has posed special challenges to journalists. I interviewed two of the best: Sloan and Daniel Gross, who succeeded Sloan at Washington Post’s Newsweek and also writes for online magazine Slate.

Fast news cycle

What has made an impression on Gross is how quickly everything is changing.

For instance, the collapse of Bear Stearns, one of Wall Street’s proudest investment banks, was a major news story for weeks. “Now,” Gross mused, “I walk past the Bear Stearns building and don’t give it a second thought.”

That’s because so many fresh headlines have been written since then. Some Wall Street pundits have speculated that Lehman could suffer a similar fate.

Gross sees bloggers playing a bigger role in reporting on the latest financial woes than in previous Wall Street fiascos.

“This is a story made for bloggers because there are so many manifestations of credit problems popping up: car sales, student loans, foreclosures in California, layoffs at Merrill Lynch,” he said. “The best blogs scour the Internet for bits and pieces that might seem random and then, by aggregating them, seem coherent.”

In addition to newspapers and some magazines, Gross regularly reads such blogs as Irvine Housing and Calculated Risk.

Gross praised Grant’s Interest Rate Observer, long a financial-news bible, by saying that “James Grant was one of the only people who nailed this story in all its complexity, ahead of the curve.” Gross also complimented The Wall Street Journal’s comprehensive coverage of the Bear Stearns and Lehman stories. (The Journal, like MarketWatch, the publisher of this column, is a unit of News Corp.)

For financial journalists, the biggest challenge may be trying to accumulate instant expertise in so many areas.

“You have to get a primer on Fannie and Freddie,” lamented Gross. “Next week, it’s going to be the FDIC. Before, it was the Fed and the discount window. It has been a rolling problem.”

Seeking out the truffles

“I try to write big-picture things and find the truffle on the forest floor,” Sloan told me. Sloan is not only one of the senior observers on the Wall Street scene, but also one of the most forward-thinking of the lot. See related story.

“It’s different for me [because] I have to be three weeks ahead,” he said, referring to Fortune magazine’s demands. “It’s hard to get three minutes ahead of anything because of all competition.”

Sloan, who also writes for Fortune’s Web operations, has the luxury of being able to sit back and do the rarest thing a journalist can do during a crisis: think!

“I try to be dispassionate,” he said, preferring to act “when I see that people have missed something obvious. There is much more pack coverage than ever before. People have the excitement of the moment. People are so hot to be first.”

He does, however, believe the media have done a good job of covering the financial crisis.

Sloan was pleased that the media avoided the temptation of conferring “hero” status on real estate titans, as they so often did in the 1980s, when the stock market roared.

Over the past quarter-century, journalists helped build billionaire capitalists like Warren Buffett and Bill Gates into folk heroes because they were so accomplished at amassing unimaginable amounts of money.

“You didn’t see cover stories about the hero real-estate developer or the genius buyer who has flipped 16 condos in the same building,” Sloan said. “The coverage was much more skeptical.”

Media Web appears on Wednesdays and Fridays. Feel free to send email to jfriedman@marketwatch.com or join the online community of Media Web readers by posting comments directly to the MarketWatch.com site.

Jon Friedman is a senior columnist for MarketWatch in New York.

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