Gasparino: The business press did not blow it

CNBC‘s Charles Gasparino, in an interview with Lawrence Delevingne of The Business Insider, argues that the business news media is not to blame for not seeing the clues to the economic upheaval of the past two years.

Gasparino states, “No, and that’s the whole thing. Listen, I’ve been an investigative reporter my whole life. Generally, when you have a story of magnitude, like a Watergate or something like this, you have someone on the inside that knows something is wrong, that there’s something wrong with the balance sheet. What’s interesting about everything that I’ve uncovered about this is that there was almost nobody on the inside that thought anything was wrong, that anybody was wrong…They all thought AAA was AAA and that’s the scary part.

“So, on top of the fact that you really couldn’t read the balance sheets on these things because they were so obtuse, on top of the fact that you had no real whistle-blowers because no one really thought anything was wrong, it was really hard for the business person to figure this out; it was almost impossible.

“And there’s a scene in my book where Jamie Dimon, who should be able to figure out a balance sheet better than anybody, is trying to figure out how Citigroup is making so much money, and he can’t. And he’s not turning around and saying, ‘Listen, I know they’re taking enormous risk,’ he’s just baffled. It’s just interesting that it never dawned on anybody from the inside that this was a problem, and I think that’s one of the problems here – there was lousy disclosure. And when you put it all together, I think it was almost impossible for the press to figure this out.

“People blame the press — I’m not giving anybody a free pass, it would have been nice to call the warning signs early — but it is interesting, as soon as we found out about this… nobody should have been surprised about this in 2007. We were reporting on it everyday in 2007. But the question is, should we have known about this in 2006, 2005? And, I’ll tell you, there’s a reason why no one knew, why the press didn’t make a big thing about this: because it was impossible to see on a balance sheet, and the people internally that were putting it on the balance sheets, they were just so drunk on their own euphoria on making money.”

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