Media circus surrounds lenders

The Deal executive editor Yvette Kantrow slams business media outlets for their hysterics surrounding the financial troubles of lenders, including Fannie Mae and Freddie Mac.

Kantrow writes, “Just ask CNBC’s Jane Wells. When Wells reported last week that RBC Capital Markets had a list of 300 banks that could potentially fail, the firm quickly corrected that it had no such list; it simply believed up to 300 banks could fail (while apparently having no idea which ones they were). RBC also supplied Wells with a list of five banks that could be at risk, which she also reported. Later, RBC clarified that while it did give Wells that list, it was based on analysis done by SNL Financial LC using a ratio designed by an RBC analyst. ‘SNL named the names, not RBC, and RBC wants you to know that,’ Wells commented on her Funny Business blog. What a relief.

“With the exception of Burrough’s Bear piece, the media has managed to steer clear of blame for fanning any financial flames, but that’s not likely to last. After all, others might engage in rumor and speculation, but it’s the media that reports it. And fingers are beginning to point. Howard Glaser, a ‘media go-to guy’ on Freddie Mac and Fannie Mae whom Politico revealed to be on the mortgage companies’ payroll, has accused the Bush administration of making up stories about the lenders and leaking them to the press. Glaser was particularly incensed by a page 1, July 11 story in The New York Times that said the government was considering a takeover of the two mortgage giants. ‘That was an extraordinarily damaging story, and it wasn’t true,’ Glaser told Politico.

“It’s curious that Glaser would go after what was clearly a catchup story for the Times. One day earlier, the WSJ had its own front-pager on the government making contingency plans for Fannie and Freddie.”

Read more here.