The sky is falling

TheDeal.com’s Yvette Kantrow writes that the business media has suddenly turned bearish on covering the markets, but wonders if the analysis is a bit too simplistic.

Kantrow wrote, “So what do the big mags make of our current situation? BusinessWeek, for one, is out to point fingers and lay blame, as its main piece dredges up bullish quotes uttered months ago by Carlyle Group‘s David Rubenstein, hedge fund manager John Devaney and Henry Kravis. It’s a ham-fisted attempt to prove the issue’s populist premise: that we’re in this mess because ‘the pros forgot that the party can’t last forever.’ The cover photo says it all: It’s a businessman wearing a big red clown nose. Sophisticated, it’s not.

“Look, we don’t mean to carry water for ‘the pros,’ who for the past few years ignored the risks in everything from mortgages to junk bonds that now seem so painfully clear. But come now; when was the last time you heard a real Wall Street titan proclaim that good times would last forever or that market cycles had ceased to exist? Rubenstein, for one, was warning that the PE business was in danger of contracting ‘bubble amnesia’ back in February in remarks that the press pretty well covered. Funny that BusinessWeek would single him out as a symbol of the ‘boasting and bluster’ that it says ‘marked the just-ended era of easy money.’

“For a better, more nuanced take on what went wrong, a reader would do better to turn to Fortune. It, too, explains that banks, hedge funds and leveraged lenders all showed an indifference to risk over the last few years that is now coming home to roost. But, unlike BusinessWeek, it doesn’t imply that the people who run these places are therefore stupid or clowns. ‘In some sense, all financial bubbles are alike,’ Fortune observes. ‘They begin with abundant cash and sound economic fundamentals. People start racking up gains, and more players pile in, eager to grab a share of the loot. Then they get carried away. It always ends in tears.'”

Read more here.