Bloomberg reported in October that Blackstone lent money to a Spanish gambling company on the condition that it default on other loan payments in order to trigger a credit-default event, giving Blackstone a sure profit on credit-default swaps.
The Daily Show’s Jon Stewart compared it last week to Goodfellas, where the mafiosos buy insurance on a restaurant and burn it down.
It’s an analogy that makes intuitive sense but doesn’t really work, as Felix Salmon and Dan Primack write. The default engineered by Blackstone actually allowed the private-equity giant to put more money into Cordere, helping save it—at least for now—from bankruptcy.
Tway it went about it certainly was unfair to whomever wrote the CDS insurance policy/gambling contract for Blackstone and thus had to pay out to them. No one’s crying for these people, believe me. But The Daily Show is right that what Blackstone did was sleazy.
My problem with the segment was how Samantha Bee used Gretchen Morgenson of The New York Times as a punching bag for a weak business press not following Bloomberg’s scoop.
BEE: Whyyy didn’t you cover this storyyy?
MORGENSON: You know, we are busier than one-armed paper-hangers, covering the miscreants that we identify. This is just another day on Wall Street.
BEE: so a front-page headline for you would be, ‘Hedge fund with evil-sounding name didn’t do anything terrible today.”
MORGENSON: I am drowning in material.
There’s no business reporter anywhere who has done more, week after week, year after year, to expose Wall Street wrongdoing than Gretchen Morgenson. Period.
Getting cheap yuks at her expense for not following someone else’s nice-but-not-world-shattering story is just lame. Morgenson isn’t the type of reporter who really does a lot of follows. She breaks her own news.
While it would have been nice if someone else on The New York Times’s business staff had covered the news, it’s hardly a journalistic sin that they didn’t.
Obviously The Daily Show is comedy and can take a lot of liberties in cracking wise. But this joke just wasn’t funny.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 email@example.com. Follow him on Twitter at @ryanchittum. Tags: Bloomberg News, Gretchen Morgenson, Samantha Bee, The Daily Show, The New York Times