With a headline like “New York Times, Gretchen Morgenson Dazzle Us With Their Ignorance (Yet Again),” it’s obvious that the Stone Street Advisors econoblog is having a lot of fun at the Gray Lady’s expense:
Earlier today, Twitter user (and good follow!) Taste_Arbitrage alerted us – his followers, that is – an egregious error in Gretchen’s latest article, wherein she attempts to inform us that – news alert – municipalities and other government entities dabble with derivatives. Apparently, she’s been hiding the past 16 years since the Orange County debacle, as her article presents this information like its some sort of secret conspiracy, which it obviously is isn’t.
Like the credit default swaps that hid Greece’s obligations, the instruments weighing on our municipalities were brought to us by the creative minds of Wall Street.
As Taste_Arbitrage (and others, including Felix Salmon) noticed quite immediately, Greece’s current predicament has been described largely as the result of Currency swaps, not credit default swaps. Even if she was attempting to compare the two types of derivatives, that’s still a ridiculous claim. Saying the former is like the latter is like saying a top fuel dragster is like a monster truck; sure, they both have engines and four wheels, but no one would EVER confuse the two.
If the FAIL stopped there, it’d be one thing, as Gretchen has a long and well-documented(by myself, and others) history of completely mangling – intentionally or otherwise, it matters not – even the most simple financial concepts. Unfortunately for the Times, it gets worse. Much, much worse. The hyperlink on “Credit Default Swaps” at the beginning of the second paragraph in Gretchen’s article links to the Times’ “home page” of sorts for all things CDS. Here, we find further evidence that the New York Times Business team (or at least the editors) are completely and utterly out of their league.
These instruments played a pivotal – and controversial – role in the financial crisis in the United States. Now, these swaps are emerging as one of the most powerful and mysterious forces in the crisis shaking Europe.
One word, and one word alone captures reaction upon finding this page: Facepalm. Taste_Arbitrage actually put my confusion/outrage quite succinctly, when I pointed out the above, pondering on the New York Times Business section:
Sweet fancy moses, it’s like a bunch of monkeys banging on keyboards over there
Seriously, how THE HELL does anyone with half a brain, let alone anyone who actually works in Finance, read this drivel anymore? For crying out loud, even the New York Post has better Financial reporting! With apologies to Phil Falcone and Carlos Helu, someone needs to put the Grey Lady out of her misery already.
If only the New York Times had a Nobel Prize-winning economist on their payroll as a technical advisor, there would be no way that they’d make mistakes such as these!
(H/T: Walter Olson.)
Related: At Power Line, “Financial Incompetence at the New York Times.”