A Chat With Howard Kurtz
Sept. 6, 2000 -- “Financial journalism is the only part of the business I’ve ever seen where it’s considered okay to report rumors — even bogus rumors — because they move the market,” says media writer Howard Kurtz.
For eighteen months, Kurtz shadowed the most influential people in business and journalism. In his new book, The Fortune Tellers, he exposes the inside stories of the highly paid financial players whose words provide huge windfalls for some investors and crushing losses for others. Who among “the fortune tellers” can investors really trust? And how can investors find out about the conflicts of interest “hidden in broad daylight?” Kurtz joined a live chat today on ABCNEWS.com. Look below for a transcript of the chat.
Moderator at 12:01pm ET
Welcome to ABCNEWS.com's live chat withWashington Post reporter Howard Kurtz. In his new book, The Fortune Tellers, Kurtz raises disturbing questions about America's most prominent financial reporters and analysts. He joins us now.
Moderator at 12:01pm ET
Howard, who are "the fortune tellers?"
Howard Kurtz at 12:01pm ET
The fortune tellers are the money managers, highly-paid Wall Street analysts, media commentators, prognosticators and other all-knowing gurus who parade their opinions on television and the Internet, and are selling the notion that you too can get rich if you only listen to their sage advice. Unfortunately, much of this advice turns out to be wrong, contradictory, or biased, in part because some of these analysts have hidden agendas that are not always made apparent to readers and viewers.
Moderator at 12:01pm ET
Just how powerful are reporters like Maria Bartiromo — inevitably referred to in the tabloids as "The Money Honey?"
Howard Kurtz at 12:03pm ET
Maria Bartiromo is a stunning example of the clout of financial journalists in this real-time manic stock market culture in which we now live. As money manager Jim Cramer told me of Maria, "She can make stocks dance." Far more than in any other realm of the news business, financial journalists have immense clout to boost or bash a stock in a matter of minutes, and that creates intense competition and incredible pressure because their words are so influential.
Bobvestor from eds.com at 12:03pm ET
Does Maria Bartiromo know when an analyst is trying to manipulate a stock price through her? Or, does she simply report every tip she gets?
Howard Kurtz at 12:06pm ET
Maria's actually very savvy about the varying agendas of the people who feed her scoops. I've watched her work the phones in her little booth above the floor of the Stock Exchange, and no one is better at vacuuming up the daily upgrades and downgrades of these Wall Street brokerages. But Bartiromo doesn't see it as her place to tell CNBC's viewers when the analysts she so frequently quotes turn out to be wrong, or whether, as is often the case, their firms have investment banking relationships with the very companies whose stocks the analysts are talking about to her, and that often leaves viewers without a scorecard or any way of evaluating the accuracy or the agendas of these Wall Street hot shots.
Mike Adams from dialup.mindspring.com at 12:06pm ET
You have made the point that there are conflicts of interests among analysts and the companies they cover. Can't a similar case be made with the national media and advertisers? After all, what media organization is going to do a harsh story on a major advertiser?
Howard Kurtz at 12:08pm ET
Good question. There are in fact plenty of news organizations that have done exposes on the local supermarket chain or car dealer, although some do shy away from that sort of hard-hitting material. But it's much less likely that a major department store, for example, is going to pull its advertising from the local paper over one unfavorable article. But big corporations can and do threaten to yank their investment banking business from firms that they believe are being too critical. There are case studies in The Fortune Tellers of analysts being pressured or even fired by their own Wall Street firms for being too critical — which is to say too honest — about the company's clients, and that is a harsh reality that gets too little media attention.
