I’ve beefed several times about the press giving Elizabeth Warren and her Congressional Oversight Panel short shrift.
So I wanted to look at how the major media did reporting on COP’s downbeat report released Tuesday on the “Continued Risk of Troubled Assets”—something we haven’t read enough about in recent weeks, what with all the happy talk about the economy. The verdict: Not that great—with a significant exception.
Warren reports that despite the $700 billion Congress spent on the TARP, “an overwhelming portion of the troubled assets from last October likely remains on the bank balance sheets today.” That’s because there are trillions of dollars of them and because Hank Paulson said “just kidding!” on buying them a few days after getting that $700 billion blank check from Congress.
Warren points out, like many of us have, the obvious, major problems with papering over the problem with accounting-rule changes. Now we have even less of an idea how much gunk is clogging up the system. Plus it means “that if sale price is still too much lower than the book price for these toxic assets then the banks could still face collapse” but we won’t know for awhile because they’ll “carry toxic assets at higher valuations rather than (sell) them at lower prices.”
All this needs to be hammered home by the press. The New York Times gave it a few hundred words inside its business section and the Financial Times put two-hundred words on its page two.
Forbes did a long take-out along with a Q&A riffing off the report. Reuters had a nice piece. And Bloomberg showed that there are at least a couple of news pegs here, leading with COP’s finding that small banks may be undercapitalized and need to be stress-tested, something only the nineteen biggest banks have undergone so far.
Best of all was BusinessWeek‘s Theo Francis (an old WSJ colleague of mine), who laid out by far the most sophisticated and complete rendering of Warren’s report:
A relatively simple change in how banks account for hard-to-value loans contributes to everything from small businesses having trouble getting loans to homeowners having trouble refinancing their mortgages to the federal government’s inability to get toxic assets off banks’ books. Altogether, she says, it threatens not just banks, but also the recovery as a whole.
Go read the entire BW piece.
But don’t go looking for anything in two of the biggest publications: The Washington Post didn’t bother to write about it. Nor did The Wall Street Journal, despite last month finally giving Warren a small profile that called her “an influential force in the administration’s overhaul of financial regulations.”
Investors certainly thought it was newsworthy.
Why didn’t these newspapers? That’s a real miss in their toxic-asset and Washington coverage.
If you’re wondering why I’m harping on this one person, take a look at these interviews MSNBC and CNBC did with Warren. Watch these and tell me whether you’ve seen a more reasonable-sounding public figure in this crisis.
Here she is on MSNBC’s Morning Joe:
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And it always thrills me to see someone take on CNBC’s Larry Kudlow (and while they’re at it, Melissa Francis):
