The role of financial media in a crisis & how it’s different in social era
The top financial media outlets are mostly doing great work covering this crisis. Media will always lead with what bleeds, but covering a crisis is more delicate, so here are a few notes on this critical topic.
John Authers of the Financial Times wrote a piece in 2018 that’s worth revisiting now. He tells how he withdrew money from his bank in the eye of the storm in 2008 but didn’t report on it. He explains:
There was a bank run happening, in New York’s financial district. The people panicking were the Wall Streeters who best understood what was going on. All I needed was to get a photographer to take a few shots of the well-dressed bankers queueing for their money, and write a caption explaining it. We did not do this. Such a story on the FT’s front page might have been enough to push the system over the edge. Was this the right call? I think so. The right to free speech does not give us right to shout fire in a crowded cinema; there was the risk of a fire, and we might have lit the spark by shouting about it.
Last week, The Basis Point wrote this headline — Will there be a First Republic Bank run? Here are risk factors and strengths. — and we got comments like ‘bold’, ‘be careful’, and ‘headline was less than entirely responsible’.
The ‘be careful’ comment came from a bank exec connected at the highest levels who was referring to some technicals in the piece. I worked with that person to refine some points discussed and add new information from First Republic financials.
The ‘less responsible’ comment also noted that, headline aside, our full post ‘content was solid’, and here’s what I said in response to that person last night (Friday, March 17):
Headlines are a technique in a game that must be played: cover what SEO tells you people are searching for. But as we try to do in all pieces, the content presents the information at hand, and what’s presented here has held up pretty well as this has played out. As the piece stated, I’m against a bank run. We continue to cover it, including one this afternoon: First Republic drops despite rescue by 11 big banks. Dividend cut or sale rumors?.
The Basis Point covered the last financial crisis daily from November 2007 through 2013, and the gravity feels the same today.
Report facts, but as with all media, do a headline that grabs attention.
The headline part is the hardest part in the social era.
In 2008, the iPhone was just a year old and Twitter was just ramping. Today, all the information is out there anyway.
The Silicon Valley Bank run that set this off was largely fueled by the very VCs it was so loyal to telling their funded companies to panic.
A lot of this played out on social.
So The Basis Point’s approach — and it’s an approach I see most financial media doing — is not to compete with that, but to provide an offset to that.
Quickly offer nuance on developing events rather than spouting hot takes.
Hot take specialists often delete their social misses after the fact (see link below).
Astute financial media will acknowledge and revise misses when things move this fast. This is a critical difference.
The importance of this topic can’t be overstated because social media is free and astute financial media mostly requires expensive subscriptions.
The Basis Point tries hard to be a credible financial market intel source that’s free.
People have always needed this, and that’s what we do.
Please keep the comments coming. We’ve done this before, we take it very seriously — and we listen carefully to your intel, feedback, and topic fine-tuning.
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– In a crisis, sometimes you don’t tell the whole story (FT – paywall)
– iPhone & Twitter were babies when WAMU failed, making SVB first social media bank run (TheBasisPoint)