The Audit on Bad Business Journalism
Columbia Journalism Review‘s The Audit, which features all the editors of The Best Business Writing 2012, not only celebrates excellence in business journalism but also criticizes its failures.
One fault, detailed in a 2009 piece by Dean Starkman , is the “CNBC-ization” of business journalism. Starkman and other contributors to The Audit have argued “that business-news outlets have in the past decade or so increasingly narrowed their focus toward the narrow interests of investors and away from the much broader interests of readers.”
In a recent post on The Audit, Felix Salmon shows how the CNBC-ization of business and economics reporting continues at CNBC.
Discussing a recent appearance by Martin Wolf (whose article Time for Germany to Make Its Fateful Choice is included in The Best Business Writing 2012) on CNBC, Salmon points to how the show’s host Andrew Ross Sorkin failed to ask the right questions regarding the Greek financial crisis. Instead of allowing Wolf and Ryan McCarthy, another journalist who appeared on the show, to analyze what is known about the present, the focus of the program was to speculate on the future. Compounding the problem was CNBC’s use of a confusing graphic.
But CNBC is a place for heat rather than light, so instead of an interesting conversation between two smart journalists, we got shown the graphic … twice. It purports to show a real-time quote for the Greek 2-year bond, which currently seems to be yielding 349.152%. (I love the idea that they know this number to three decimal places.) According to the chart, the yield on this instrument has been rising steadily until now: there’s no indication that there was even a dip after the bond restructuring in –
Hang on a sec. Check out that x-axis! You can’t be expected to grok this in the amount of time that the chart appears on CNBC — just a couple of seconds. But the chart stops in March, when the restructuring took place and the Greek 2-year bond ceased to exist. No wonder the yield is “unch”!
CNBC has more than its fair share of meaningless graphics, but this one is especially stupid: it’s a chart of an instrument which ceased to exist three months ago, showing what the yield on that instrument did in the run-up to its default.
Of course, CNBC’s viewers can’t be expected to understand that. The one thing they will understand is the yield, which is shown at 350%. CNBC is sending a clear message, here, that Greek debt is about to default, and it’s using a made-up measure to do so. There’s no such thing as the Greek 2-year bond yield, but Bloomberg has done its best to come up with an approximation of what such a thing might be trading at — and their best estimation puts the Greek two-year benchmark at 8.98%. Which means that CNBC is only off by a factor of, oh, 340 percentage points. Well done that channel!