Writing and reporting on Wall Street firms in these troubled recent days have generally fallen into one of several categories -- all lame. But understanding the categories, by looking at those we have seen and will soon see, can help you accurately gauge what might happen to these reeling behemoths, which has become the financial parlor game of the age.
The first category is one The Business Press Maven calls "Now You Tell Us." It is epitomized by an article in this morning's
Wall Street Journal
In Citi Shake-Up, Broader Troubles." You don't say. But talk about news coming better late than never. And if this is merely a shake-up, by the way, The Business Press Maven is the Queen of Sheeba. But I digress.
Then there is the category that must be dubbed "Firm Grasp of the Obvious." Its standard bearer is a
Another Wall Street Chief Falls." It's essentially your boilerplate summary of the disaster that is taking place, from the monstrously large write-offs to the CEOs falling like leaves. Or
The New York Times
with: "Fixing Citigroup Will Test Rubin." Uh, I'll say. Nothing risked, nothing added.
Thrown in for good measure is a comparison category, which points out how goofy the business media can be, why you should never rely on one article andhow, even in disgrace, an incompetent CEO forced to walk the plank can save face.
The London Times'
eminently reasonable and accurate: "
Citi boss Charles Prince deposed as credit crisis deepens " against WCBS 880's needlessly apologetic: "
Citigroup CEO Charles Prince resigns." Lest you think this headline did not adequately capture the underlying article, the lede talks about how he had "retired." Let's hope he's not hung, drawn and quartered by shareholders at his retirement party, where he'll presumably be handed an (exploding) gold watch. Check that: an exploding gold-plated watch.
Here are two categories we basically haven't seen yet. The first, less important, is: "Why We Didn't See This Credit Crunch Coming and the Financial Supermarket Failing (Again), While We Spent Our Time Deifying Charles Prince and Sandy Weill." The Business Press Maven, as ever, blazes the path for journalists showcasing their own stupidity, most recently with an article called: "
I Was Wrong About Intel."
magazine, in a nonbusiness but important effort, took this to a new level with an article in its current issue called "Second Draft."
The magazine had done a kiss-kiss, soft-core feature on Michael Vick four years ago, which read like a lot of what we see written about CEOs before they run up billions in losses and are ridden out of the corner office on a rail. To
credit, however, it ran the same article, with red marked corrections, wry stabs at its own assumptions and the like.
This accomplishes two positives. One, it holds journalists accountable. They are less likely to write misleadingly worshipful puff-files of anyone -- from CEOs to quarterbacks -- if they are held accountable should their flowery act of verbal fellatio be proved wrong by the facts. Investors are held accountable, as they have to put money on the line. When journalists are allowed to ignore their mistakes and can, in fact, write both sides of a story -- Vick, savior of mankind; Vick, latter-day Charles Manson -- it means that they are working at cross purposes with investors and sports fans alike.
But a public accounting of mistakes, whether about Vick or
, also teaches people how to read critically, an essential skill (especially for an investor, who has more at stake) in an age in which so much information is available.
Which brings us to the final category, one we will presumably see emerge this week. This category is called: "It Ain't So Bad, Actually." In the predictable do-si-do that is business media coverage, this always comes after a few days of tribulations.
These articles will make the case for winners emerging in the bruised and bashed financial field and/or the fact that
are not as bad off as they might appear.
Let us collect these articles as they appear this week and analyze them closely. There will probably be little middle ground here. The reasoning for picking through the wreckage will either seem laughably bad -- a leap of faith off a bridge to nowhere -- or worth considering. Just know that the bull case on these stocks (what remains of it) will be laid out in these articles this week. If the arguments have more holes than a sieve, stay clear. If they start to make sense, well...
Anyhow, the first effort in this regard crossed my notice this morning.
It is from
The Financial Times
, a piece called "
Smart survivors of the carnage."
are clean, the story posits, and may be in a position to buy their troubled competitors. Do you believe that they are clean? Do you believe there are circumstances under which enough fear and unknowns will lift that Merrill and Citigroup will become attractive to a responsible party if, in fact, there were responsible parties? Or is another shoe or boot due to drop?
The business media often run with Good Witch/Bad Witch story lines, right out of children's fiction. Reality is more complicated -- where do you stand? Email me. Right now, obviously, I am taking the tack of all savvy investors in a time of trouble. Rather than thinking in the absolute and restraining terms of "buy" or "sell," I'm opting for a third category. "At this point, who knows? I'm staying clear until I am more certain."
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial Web site twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children. Fuchs appreciates your feedback;
to send him an email.