Gretchen Morgenson and the subprime mortgage bust
University of Illinois law professor Larry Ribstein, a frequent critic of New York Times business journalist Gretchen Morgenson, takes aim at her weekend column about the impending collapse of the mortgage industry.
Ribstein wrote, “The gist today is that the mortgage market is on the verge of collapse, with serious consequences to the real estate market. Of course it would be bad if the market did collapse, but Morgenscreed has nothing to add to this blindingly obvious observation than more innuendo and speculation.
“This, of course, is Morgenscreed’s usual game of grabbing attention at any cost (see my Morgenson archive). Unfortunately, this time she’s tainting a market that, by reducing the transaction costs of borrowing, has enabled many people to realize the dream of home ownership. Of course that shouldn’t give the market a free pass to engage in fraud â€“ but again, this is a pretty sophisticated market. I doubt Morgenson will have much effect on investors.Â More likely, if she’s lucky, she’ll be able to generate a Senate hearing or two, and maybe some unnecessary and costly regulation.
“Finally, there’s no excuse for letting an opinion piece, nearly identical in tone and approach to her column just a week ago, pass as a front page news story.Â How ironic that a rant about the next Enron should be misleadingly packaged and presented. What exactly is this “news analysis” thing, when Morgenscreed’s opinion is elsewhere in the same paper.Â Is she getting two “opinions” or what?Â This is not the first time for this questionable practice. Is it too much to expect the NYT to follow the usual standards of the business and demand clear separation between opinion and news?”
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