Audit Notes: Meredith Whitney’s press, Steve Forbes, revolving door

An aversion to the press, proclaimed amidst a press tour

Michael Aneiro of Barron’s watches Meredith Whitney, the discredited Cassandra of the municipal-bond market, on CNBC. Whitney has been popping up again now that Detroit has gone bankrupt.

Maria Bartiromo tosses her the softballs, naturally, asking a silly question about why the WSJ wrote a negative piece about her firm. Aneiro:

“I don’t want to be in the press,” Whitney said, with a straight face, DURING A SEGMENT ON CNBC. With said TV appearance coming on the day that she WROTE AN OPINION PIECE FOR THE FINANCIAL TIMES. And that opinion piece reiterating similar claims to those she made in a TELEVISED INTERVIEW ON 60 MINUTES in December 2010.

None of this faux publicity shyness would matter if Whitney’s hadn’t caused such real damage to the muni market two years ago, with six months of severe muni-fund outflows following her erroneous default predictions despite no related pickup in actual defaults. Whitney has certainly received her share of criticism over the past couple of years, but - despite her protestations to the contrary - she most certainly seeks publicity, and with that comes criticism, and fairly so. Let’s hope muni investors approach Whitney’s advice with an appropriate bit of skepticism this time.

Don’t miss this delicious Whitney takedown by the FT’s Lucy Kellaway.

— Steve Forbes, the self-proclaimed Capitalist Tool, writes one of the worst paragraphs of post-crisis financial journalism (emphasis mine):

Another disturbing thing about the British news report is its reflection of the naive belief that more regulation means a safer, less risky financial system and economy. Big Government here and in Europe has perpetrated the astonishing myth that the recent financial crisis was caused by reckless and greedy private-sector bankers. No wonder the public howls for bankers’ heads. The real villains here were governments, particularly central banks.

Yeah, those Wall Street guys and all their credit-default swaps and CDOs and MBSs had nothing to do with it. Nothing at all.

And, oh, by the way, New Deal regulations prevented financial crisis for nearly fifty years until they were diluted and done away with.

— Slate’s Matthew Yglesias tosses off a #Slatepitch on the revolving door:

The SEC’s Top Cop Is Cashing In as a Wall Street Lawyer, and You Should Feel OK About It

Never mind the particulars of Khuzami’s tenure: Yglesias will generalize for you:

If you manage to unplug from the revolving door narrative for a second, you can see why this makes sense—if you spend your time as a government lawyer being extremely lackadaisical in your prosecutorial efforts that’s going to make you look like a bad lawyer who people don’t want to hire. If you want to cash in some day, you want to have the reputation of being someone who’s really smart and tough and effective and who understands how to make cases. That’s the kind of lawyer who the private sector wants to hire.

I’ll say it again. Does anyone think that Wall Street was scrambling to give folks like Elizabeth Warren and Neil Barofsky—two extremely “smart and tough and effective” lawyers—multimillion-dollar salaries?

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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. Tags: , , , ,