More troubling was that the Times listed as Levin’s “memorable gaffe” a post in late 2008 in which she reported what she termed an “unfounded rumor” that a major hedge fund’s prime brokers were threatening liquidation. “It turns out the rumor was indeed ‘unfounded’, so she quickly removed it under pressure,” the Times explained in a condescending sentence that could have only been written by someone who didn’t understand that in 2008 virtually all hedge funds were so massively leveraged—in an effort to amp returns—that the threat of liquidation was perpetually on the table.
This passage lays bare an old-media strategy of dismissing bloggers by policing the permeable walls between news and gossip, analysis and opinion, perspective and attention-seeking. Hedge funds are largely unregulated; “news” about them is often inextricable from “rumor.” It is this disturbing reality that has helped make Bess Levin’s “gossip blog” an important source of information about the financial industry.
So, in this context, her pulling this “rumor” can either be seen as a “gaffe” or, given the obvious power imbalances, an example of a hedge-fund manager trying to save his ass and/or blow off steam by intimidating some kid two years out of college.
Back in 2008, during that week after Lehman Brothers declared bankruptcy and raised the curtain on the global credit crisis that would in short order serve as Nick Denton’s rationale for firing me and eighteen other Gawker staffers, Denton had asked me to write a post blaming journalists for the financial crisis. This idea bordered on lunacy, and I refused, even when he explained the foundation of his argument, which basically amounted to: he had worked at the Financial Times in the late nineties, and he said he’d tried repeatedly to write stories probing the potential dangers of unregulated derivatives and the stunning amount of leverage that went along with their use, etc., but his bosses invariably told him, in so many words, to bugger off.
“I am telling you,” he insisted. “I tried so many times to write those stories. It was always, ‘No, no, no. Don’t you understand? That’s innovation.’”
And he was right; about derivatives but also maybe about journalists, many of whom I had also seen over the years apply their well-honed skepticism to just about everything but the age-old imperative to “follow the money,” as so many trillions of dollars re-appropriated themselves in the tax shelters and tropical holding companies of the super-rich. Maybe Denton’s editors assumed he was just trying to draw attention to himself, like all those photogenic, gaffe-prone gossip bloggers. And to that end, given Gawker’s success, he has certainly gotten the last laugh. Although I think he might even agree with me that it’s not much of an end.