By Arthur Alpert
Applause, please, for the Albuquerque Journal, which ran a story (Wed., Feb. 6) about the Feds’ civil suit charging Standard & Poors with misleading investors on mortgage investments.
Mind you, it came late; Journal editors first ignored preview stories from the Associated Press and Washington Post, then ignored their same-day accounts.
Also, the AP story the Journal did choose for the Business Page was short on detail; readers of the Wall Street Journal, Washington Post and N.Y. Times savored juicy emails from S&P analysts ridiculing the quality of the packaged mortgages they were passing off as safe.
Also, other newspapers continued to pursue the story Thursday. Some asked why Fitch and Moody’s weren’t indicted, as well. Others wondered what took Washington so long to sue. But the Journal abandoned the subject.
Still, I say, “Give ‘em a hand.” By publishing any story at all, you see, the Journal raised its journalistic game where S&P is involved.
I refer to the daily’s ugly treatment of S&P’s downgrade of the federal government’s debt in August 2011.
To appreciate that episode, we should do a little background.
S&P, like Fitch and Moody’s, is in the business of rating the creditworthiness of bonds and bond packages so customers know what they are buying. Perhaps because their revenues depend on pleasing the packagers, the rating agencies stamped the financial equivalent of Prime and Choice on bonds stuffed with rotten scraps of meat. Bonds likely to default, that is.
The credit agencies’ betrayal enabled Wall Street’s major investment banks and brokerages to do likewise, to sell the contaminated products until real estate cratered, the market imploded and the nation received the gift some call the Lesser Depression of 2008.
OK, flash forward now to August 5, 2011, when that very same S&P downgraded the nation’s credit rating. It was a political blow to the Administration.
The N.Y. Times included in its S&P downgrade story one paragraph reminding readers of S&P’s questionable role in the Wall Street implosion. The Washington Post’s account included only one sentence relating to S&P’s credibility, this one:
“Credit-rating companies’ reputations were sullied during the financial crisis.”
The Albuquerque Journal, as is its wont, reprinted the Washington Post story. Well, except for one sentence. Yes, that sentence.
Why pluck from the body of a story the only words alerting readers to S&P’s lousy record in judging the creditworthiness of debt?
It was my conclusion that “the Journal’s political commissars carefully, deliberately wielded a scalpel to excise the offending sentence.”
If that judgment was correct – and I’ve yet to hear a rebuttal – the episode taught us all we need to know about the quality of journalism perpetrated by Albuquerque Journal higher-ups; everything else is elaboration.
But that prompts a question.
Why? Why act that way? What lies beneath the long, egregious series of insults to professional journalism we have cited at this site for years?
I’m working on an answer for your consideration and hope to post it soon.