Time to call a crash a crash

Bob Garfield of “On the Media” interviewed Fortune managing editor Andy Serwer about how the business media has been covering the current Wall Street turmoil, and Serwer notes that sometimes the media needs to let readers know when there’s trouble ahead.

Here is an excerpt:

BOB GARFIELD: We began this conversation talking about the special responsibility that financial journalists have in understanding that what they print or say on the air could move markets up or down, but what about the responsibility for due diligence? It seems to me that over the last few years, there were plenty [LAUGHS] of opportunities for magazines like Fortune to really dig into the balance sheet and the accounting practices of companies like Lehman Brothers. But clearly, media outlets did not unearth how serious the problems were in advance. You know, how plead you?

ANDY SERWER: Guilty to an extent. I think all of us in the financial press are. Having said that, if you go back and you look at our magazine and The New York Times, The Wall Street Journal, we’ve all done stories that say this company or that company or this financial product is a ticking time bomb.

The problem with those stories is that unless the bomb goes off, people forget about them and say, oh, that’s not true. You know, we wrote a story, for instance [LAUGHS], going all the way back to 1994, saying that derivatives were this hidden time bomb that had the potential to undermine our entire financial system. Gee, did it really take 14 years to happen? Well yeah, it did.

There are stories like that. I think that we’re guilty of not doing enough of them, but I think also people are guilty maybe of not paying enough attention a little bit.

Read more here.