The Business Press Maven rarely gets spiritual or metaphysical on you, but I will here. Please keep in mind these days -- because the business media never do -- that not everyone comes back from the dead. But most do.
During the last difficult time in the market in the early 2000s, the business media was sick in the head with articles about how everything had changed forever and how online businesses were completely over, finished and done for. Dead.
Then the expansion came, and guess what? Many online businesses came back from the dead and flourished, and the business media was filled with articles about how, in fact, everything had changed forever. This meant that gravity no longer applied to sectors such as real estate or large financial companies. They could be considered invincible.
Then the current difficult time came, and guess what? Industries are not just troubled and struggling. Nope. Everything has changed forever, which means that industries such as financials and real estate are not just troubled. They are dead.
If history has taught us anything, it is that nearly all financial strength and weakness is cyclical. Good times don't last, and neither do the bad.
The problem is that in both good and bad times, the business media are king of the hyperbole. Journalists are short-term-oriented to begin with, which makes anything in-the-moment feel defining.
Add that to the fact that if you are writing about a seismic shift, you are writing a bigger story, and guess what? You tend to go from one overreaction to the next.
Investment Dealers' Digest
recently came out with a big article on private equity. Know what the title was?
The Wall Street Journal
, for its part, just got finished with a three-part series called "
The End of Wall Street
." Private equity, brokerage firms, banks -- they're not simply changed, altered and chastised. They're over. Dead. Joined the choir invisible.
The New York Times
was busy this weekend in an article called "
," talking about how the mall could -- and should -- disappear completely. It even referenced The Business Press Maven's favorite patron saint, Jude, the one of lost causes.
(Jude was actually mentioned in reference to real estate, and we don't even have to waste time talking about how real estate is cyclical in the extreme.)
Notice, in this and all other articles how downtrends are considered permanent changes:"The economic crisis has caused shoppers to go into an essentials-only mode. But the mall has never trafficked in essentials. You can't, for instance, fill a prescription at the Mall of America, because it doesn't have a pharmacy."
Who can argue with that? Well, no one. It means that malls will probably be weak for a few quarters. And then guess what? They'll come back. But the article, like many, extracts great significance from random anecdotes like the one they saw fit to end with:
"Ms. Ertresvaag says she doesn't know when the store will actually close, or even what is moving in to replace it. There have been rumors of a restaurant; someone else claims that a labyrinth for children is planned. She is just relieved to have another job lined up, one outside the mall.
"Come March, she'll manage a gas station."
So one worker went from a mall job to a gas station, and that rises to the level of something to close on? Yikes.
Speaking of the impermanent being seen as permanent,
The New Yorker
this week depicted Florida not as a widely overvalued and overbuilt area that will, as a result, take several years into the next expansion to work through excess inventory. No. It spoke about Florida as a brick-and-mortar Bernie Madoff.
Look at this headline: "
It also ran a piece about the
OK, OK. Some end-of-the-world articles are not overdone. But start thinking about whole industries forever pushing up daisies, and it'll alter your thinking on companies such as
General Growth Properties
(GGP) and many others.
No, not everyone comes back from the dead. Only most.
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven� column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
to send him an email.