Audit Notes: Little Or a Lot, WSJ Hype Fail, Access Problem

The Washington Independent’s Annie Lowrey calls bull on Jamie Dimon:

On the J.P. Morgan Chase earnings call, Dimon promised that there was “almost no chance we made a mistake” with foreclosures. “We think we should continue and get done and make sure we do the right things for the consumers, the investors and the country. So it obviously will increase our cost a little bit and maybe we’ll have to pay penalties eventually to some of the attorneys general but we really think we should just continue.”

But the financial statement itself proved the lie. The bank said it was carefully checking 115,000 mortgage affidavits. It set aside a whopping $1.3 billion for legal costs. And it put an extra $1 billion into a now $3 billion fund for buying back bunk mortgages and mortgage products.

I wish more reporters did that kind of thing. Even on Wall Street, $2.3 billion is real-deal bigtime money.

The Wall Street Journal’s hyped and misleading page-one story on the SEC and Goldman looks even worse now.

The SEC’s inspector general, which the Journal banner page-one headline said “blasted” the SEC, cleared the agency of timing the case to bury a critical report he was releasing on its handling of the Bernie Madoff case.

An internal watchdog cleared the Securities and Exchange Commission of improper conduct in its fraud lawsuit against Goldman Sachs Group Inc., saying there was no evidence the suit’s timing was politically motivated.

No A1 play for this one, though. The Journal stuffs it on C3. It does have a blog post that blames it on the IG: “What Was the SEC’s Inspector General Thinking?”

I’ll leave that response to commenter “anon”:

What was the WSJ thinking when it took that one comment by the SEC IG and turned its lede story on the front page?

Or as Felix Salmon says: “SEC unblasted on Goldman.”

ESPN’s Bill Simmons, of all people, has some good thoughts on journalism’s access problem and says that Twitter has made it worse:

Complicating matters: Twitter, which exacerbates the demands of immediacy, blurs the line between reporting and postulating, and forces writers to chase too many bum steers. With every media company unabashedly playing the “We Had It First!” game, reporters’ salary and credibility hinges directly on how many stories they break. That entices reporters to become enslaved to certain sources (almost always agents or general managers), push transparent agendas (almost always from those same agents or GMs) and “break” news before there’s anything to officially break. It also swings the source/reporter dynamic heavily toward the source. Take care of me and I will take care of you.

Here’s a fun story for you: A few weeks after the Clippers fired Mike Dunleavy last winter, someone called me out of the blue asking for help getting their vacant GM job. I had never talked to this person before in my life. I have no idea how he obtained my number. But that didn’t stop him from lobbying me for the next 15 minutes as I said things like, “You don’t understand, I only do things like that for Daryl Morey.” (Just kidding. I did say, “Sorry, I just don’t do things like that.” Which is true.) Even better, this person was employed by another NBA team at the time. Now, assuming I helped him get the job — and by the way, that’s my favorite part of the story, that anyone thought the notoriously oblivious Clippers could be swayed by an online columnist — what would I get in return? You guessed it … scoops! Breaking news! …

So that’s how it works — not all the time but occasionally, and only because of everyone’s obsession to be first.

Alas, as if to prove the access problem, Simmons doesn’t tell us who this someone was.

(h/t to my father-in-law)

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.