A story on October 8, “The Two Faces of Lehman’s Fall,” (10) established facts of unquestioned value.

The ailing securities firm quietly tapped the European Central Bank and the Federal Reserve as financial lifelines. On Sept. 10, one day after Lehman executives calculated the firm needed at least $3 billion in fresh capital, the firm assured investors on a conference call it needed no new capital at all. Lehman said its massive real-estate portfolio was valued properly, but Wall Street executives who have seen it say it was overvalued by more than $10 billion. As hedge-fund clients began yanking their money from Lehman, the firm assured them it was on solid financial footing.

None of those sentences was easy to pry loose. Each represents a scoop in itself, and all carried a degree of risk for the paper.

The Journal broke the news that Lehman executives were under federal investigation for possibly misleading investors about its financial condition (see footnote 10), just as it reported the feds were probing AIG executives for the same reason. (11)

Ah, well. It’s not easy being the global financial news leader in a time of global financial crisis.

And I’m not even going to mention the not-getting-it pieces, like the not one but two stories this year on “shopaholism” (12, 13) that recycle hackneyed myths about middle-class debt woes.

If you’re keeping score—and I’m afraid that’s what this is about for some—the Journal has been beaten on Citi, Goldman, Paulson, the Federal Reserve bailout, and AIG; it has won on the SEC, Lehman and Bear Stearns, and held its own on Fannie, Freddie, regulators and Greenspan.

But even if I’m wrong about a story here or there, no news organization in the world has reach, resources, and prestige to match up to this crisis, this particular moment in history. If Murdoch wants to be a great newsman, it is getting late.


1. Deal Fees Under Fire Amid Mortgage Crisis —- Guaranteed Rewards Of
Bankers, Middlemen Are in the Spotlight
By Liam Pleven and Susanne Craig
17 January 2008
The Wall Street Journal
A1

2. How Goldman Won Big On Mortgage Meltdown —- A Team’s Bearish Bets Netted Firm Billions; A Nudge From the CFO
14 December 2007
The Wall Street Journal
A1

3. Banks Owe Billions to Executives
The Wall Street Journal
31 October 2008
A1

4. New AIG Rescue Is Bank Blessing —- Buyers of Insurer’s Default Swaps Would Recover Most of Their Money
By Serena Ng and Liam Pleven
12 November 2008
The Wall Street Journal
C1

5. AIG Faces $10 Billion In Losses On Bad Bets
By Serena Ng, Carrick Mollenkamp and Michael Siconolfi
10 December 2008
The Wall Street Journal
C1

6. SEC Chief Under Fire as Fed Seeks Bigger Wall Street Role —- Cox Draws Criticism for Low-Key Leadership During Bear Crisis
The Wall Street Journal
23 June 2008
A1

7. Anatomy of the Morgan Stanley Panic —- Trading Records Tell Tale of How Rivals’ Bearish Bets Pounded Stock in September, by Susan Pulliam, Liz Rappaport, Aaron Lucchetti, Jenny Strasburg and Tom McGinty.
The Wall Street Journal
Nov. 24, 2008:
A1

8. Lehman Finds Itself In Center Of a Storm
By Susanne Craig
The Wall Street Journal
18 March 2008

9. Two Big Funds At Bear Stearns Face Shutdown —- As Rescue Plan Falters
Amid Subprime Woes, Merrill Asserts Claims
By Kate Kelly, Serena Ng and David Reilly
20 June 2007
The Wall Street Journal
A1


10. The Two Faces of Lehman’s Fall —- Private Talks of Raising Capital Belied Firm’s Public Optimism
By Carrick Mollenkamp, Susanne Craig, Jeffrey McCracken and Jon Hilsenrath
The Wall Street Journal
6 October 2008

11. Behind AIG’s Fall, Risk Models Failed to Pass Real-World Test
By Carrick Mollenkamp, Serena Ng, Liam Pleven and Randall Smith
The Wall Street Journal
3 November 2008

12. Hi, My Name Is Fred, And I’m Addicted to Credit Cards —- In the Debt-Soaked Economic Slump, Americans Find Solace in Support Groups
The Wall Street Journal
10 June 2008

13. This Year, More Than Ever, It’s Tough to Be a Compulsive Shopper
The Wall Street Journal
15 December 2008


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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.