Three days on, there is still plenty of disagreement over who is to blame (and for what, exactly) in the low drama that “traders are calling… ‘The Bartiromo Affair’” (per the Financial Times) or, what one analyst dubbed the “Ben/Maria tête-a-tête” (per the Chicago Tribune, registration required).
The facts of BartiromoGate (or BernankeGate, if you prefer) are, in a nutshell, as follows: Last Thursday, Federal Reserve Chairman Ben Bernanke testified before Congress. The markets reacted strongly (upward) to his testimony. On Monday, CNBC’s Maria Bartiromo (aka, The Money Honey) reported —“Scoop!”— that Bernanke made some comments to her at the White House Correspondents Dinner on Saturday night indicating that the markets had misinterpreted his testimony. The markets again reacted strongly — this time in the other direction.
Here is how the blame is being apportioned:
1) There is the “Blame Bernanke” contingent, consisting of bewildered Wall Street economists/strategists/consultants as quoted in assorted media reports and summarized as follows: The new Fed chair shouldn’t have talked out of school to a reporter at a boozy Beltway gathering. Let’s call it a rookie blunder…unless, of course, Bernanke wanted to get a corrective message out to the markets. And in that case, shame on Bernanke for not speaking out publicly himself and instead playing a game of telephone with The Money Honey.
2) Blaming both the markets and the Fed chair is none other than Henry Blodget who chimed in at The Huffington Post yesterday to remind Bernanke (and the rest of us) that Wall Street hears what it wants to hear rather than what is being said. “Last week, Bernanke gave a speech to Congress in which he said, clear as crystal, that, instead of raising rates every meeting, the Fed would now make decisions on a meeting-by-meeting basis,” writes Blodget. “What did Wall Street hear? Rate increases were over. Stocks skyrocketed.” But to Bernanke Blodget scolds, “Don’t explain yourself in plain English to journalists at dinner parties.”
3) Then there are the “Blame Bartiromo” folks who contend that the CNBC anchor should not have reported Bernanke’s comments at all because the White House Correspondents Dinner is an off-the-record event. (See Bloomberg News columnist John M. Berry and Brett Ferguson of BNA Daily Report for Executives).
No conversation is off-the-record unless and until the reporter and interviewee together make those specific arrangements before they start talking. What interests us about Bartiromo’s (and CNBC’s) behavior is how she and her network played what CNBC’s Larry Kudlow called “her important scoop.”
Our beef can be summarized as follows: after hyping an “interesting” scoop and teasing viewers about the “surprising comments” you are about to report, don’t feign surprise when your viewers are actually surprised by what you report — and then don’t take a victory lap on a colleague’s program to further celebrate your “surprising” “scoop,” while still insisting it wasn’t very surprising.
Allow us to explain.
Fifteen minutes before Bartiromo’s show, “The Closing Bell,” began on Monday, she appeared on-air to tease her “scoop” thusly: “Over the weekend I had an opportunity to talk with Ben Bernanke, the Fed Chairman. You won’t want to miss what he told me about the markets and how the markets and media covered last week’s testimony in front of Congress. Interesting comments to say the least.”
(Lumping “the media’s” handling of Bernanke’s testimony last week in with the markets’ handling of it is misleading. Much of the media focused on Bernanke’s oil-prices- related testimony, but those who did cover his comments on raising rates generally did so fully and with minimal speculation — like, for example, the Washington Post’s Nell Henderson who last Friday wrote: “Federal Reserve Chairman Ben S. Bernanke told Congress yesterday that he and his central bank colleagues may pause in the process of raising interest rates to restrain inflation but that would not necessarily mean they were finished.” The markets? They fixated on the “pause” part of Bernanke’s comments.)
Twelve minutes into Bartiromo’s show she ratcheted up the hype, talking about how at “the star-studded event” known as the White House Correspondents Dinner she “had the chance to talk with Fed Chairman Ben Bernanke…and he had surprising comments about the media’s coverage of his congressional testimony last week. I’ve got those details…coming up…”