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Media Again Fail to Meet Expectations

The continued failings of the knights of the keyboard could hit investors where it hurts.
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It is the Business Press Maven's ever-shattered dream to wake up one morning and find no loathsome effort by the business media to write about. I dream of a world in which investors are forever informed by the business media, instead of frequently misled.

Well, as they say, if you don't have dreams, you got nightmares.

Today's horror: I am profoundly troubled trying to even figure out where to start, and I'm going to have to hop from topic to topic more than unusual. Hold on to your wig.

When reading press releases, I always play a little game with myself. When I run across the worst piece of public-relations spin -- the most self-justifying piece of jargon-heavy nonsense -- I sit back and wait to see the exact same words seen in the press release leach into articles on the subject. Bad stenographers, bad!



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, in a whole lot of mortgage trouble, announced that it was cutting future earning numbers and, more centrally to its future, exiting or restructuring all its businesses (such as mortgages) that do not have to do directly with its retail investor customer.

This is, of course, potentially dangerous news.

The retail consumer business in investing is highly cyclical and dependent upon public comfort with the financial markets. In other words, financial results are in the hold of economic circumstances and public whim. Risky businesses, both. It's the reason that well before and after The Business Press Maven was a retail stockbroker, firms have done everything in their power to broaden their appeal. With the mortgage trouble, though, E*Trade's hand is forced. It is, long term, narrowing its appeal.

So how, in the wide world of self-justifying jargon, does it describe this dangerous shift it was forced into? Check out this gem of a topper to its

press release:

"E*Trade Financial Corporation Announces Strategic Plan to Better Align Balance Sheet and Operations with Retail Growth Opportunity." Mitchell H. Caplan, the CEO, is soon quoted saying the same thing.

Now I guess -- provided that E*Trade doesn't believe its own nonsense -- that companies have some sort of cosmic right to spin reality their way with tortured word-plays. But that's where the business media come in to set the record straight, right? Right? Oh-so-wrong.

Smart Money

, for one, ran the disingenuous quote from Caplan, giving the nonsense way too much credence. The magazine further trafficked in the "analysis" that while it's bad news now that E*Trade has to cut numbers, it's good news to be exiting the troubled businesses. True at some level, but how about the larger issue of moving beyond the business of retail trades?

Lost, in part, when you swallow the nonsense of a cleverly ridiculous press release.

From investors getting the shaft, let's now move on to a poll. Too bad

The Wall Street Journal

did not comment immediately and directly on

this poll. The stock market went insanely bullish on yesterday's

Federal Reserve

rate cut, but this poll has 60% of respondents answering that the 50-basis-point slash was too aggressive. Cause for concern? Could more investors than traders participate in these

Wall Street Journal

polls? Or is there another explanation? Please email me. I'm a bit at a loss.

When something


happens to a


company, it has to have


consequences that garner an immediate and


headline, right? Well, not always. As best as I can see it, one of Europe's highest courts dismissed most of


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appeal of a European Commission antitrust case, but it shouldn't be a big deal. Microsoft already dealt with something similar in the U.S. -- it has recourse and experience in adjusting to such rulings, and the financial impact should not cause a fuss.

The hundreds of millions in fines? Chump change.

Debatable points? Perhaps. But again, this was a court case against a company that already creeps a lot of business journalists out, so as soon as it came down the pike, we got some stories that all but buried Microsoft and threw other American technology companies into the grave.


serves up a big case of panic with a headline:

Microsoft suffers stunning EU antitrust defeat.

But the news was not stunning in any way. It was not a surprise (this was an appeal, and a similar thing already happened in the U.S.). And it would not stun Microsoft into submission (see how it dealt with the thing that happened in the U.S.).

As for the U.S., it is going to see a lot of carnage because of the ruling, at least according to an alarmist and expansive



Microsoft loss is bad news for Apple, Google.

Anyhow, while looking around for a more muted reaction, I ran across another example of how the business media never understand the prospect that price cuts might have consequences. I had just gotten done examining how


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was largely taken at its word that its price cut was merely a strategy to put more iPhones in people's hands,

without a potential downside.

That's when I began to read the business media taking

The Wall Street Journal


New York Times

at their word that giving away their product for free online will end up making them more money. Could be.

But by about 10 to one, the articles I've seen have not examined this central point: When you charge $500 or so for your product under one form of distribution and give it away free as air on the other ... how many people eventually switch?

The question is tantamount to the survival of these companies, since, any way you slice it or cross your fingers, newspaper readers are worth so much more (to advertisers) than online readers. Has anyone ever prospered by giving away the same product they were selling for a lot of money at another place? I can't conjure one up ... but since the business media failed, maybe you can educate me.

Please email


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, 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;

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to send him an email.