A New Idea: Journalistic Leverage

Another day, another disaster.

Today the New York Times, quixotic but perhaps misinformed, attempts to make like the government and hold someone accountable for the disaster brewing at Freddie.

For sure, whoever vetted the Times’ spreadsheets did a great job. Numbers abound! But it seems as if their sources, much like a hot football player on senior prom night, have been trying to exploit the Times’ naivete.

There are a few doozies in this story. First off, all those unnamed sources?

Financial mavens chide banks for excessive leverage, so let’s practice a little position trimming of our own, here. There should be some sort of margin requirement for ratio of unnamed to named sources. Maybe there is. This story definitely doesn’t meet it. I counted. There are four named sources, not counting publicly released statements by the Fed and a few press relations peons who probably haven’t slept since last quarter.

There’s one mysterious screaming Democrat, hordes of attacking shareholders (attacking with what? Pens? Swords? Plowshares?) and 5 sources who said thanks but no thanks.

Not to mention the two dozen “officials” who, fearing reprisal (or, perhaps, are still piqued that they lost to CEO Syron in last month’s Irish Golf Classic) get top billing but not by name.

So that puts the ratio of anonymous to “mous” sources at: 17:4, not counting the spokesmen, the abstentions and the horde (because how does one count a horde?)

In other words, this entire story is massively leveraged, exposing the Times to a perhaps unprecedented but entirely predictable loss…of credibility.

Ignoring whether Syron’s ex-mistresses, former schoolmates and general haters-on have been using the Times as a convenient mouthpiece, there’s the fact that some of these quotes appear to have fallen upon the ears of babes.

One unknown but high-ranking Freddie Mac official tells the Times “It basically worked exactly as everyone expected — when things got bad, the government came to the rescue. But we didn’t expect it would come at the cost of a new regulator who now has the power to burrow into our business forever.”

They didn’t expect that?? Even though historically bailouts come at the cost of a regulator?

At the end, Syron adds with Napoleonic charm that his main concern is for #1: He wants to “save [his] reputation.” All right then. I shudder to think what his priorities were before this last-ditch, stop-gap, into-the-breach, insert-awful-metaphor-here moment, the type that really separates the boys from the traders.

Reading this story is like playing “Where’s Waldo” only instead of Waldo, we’re searching for the idiot. Was it the official? The writer? Syron? At the end of it all, I’m just not sure.

And also, to be blunt, this whole mess could have been avoided. If banks hadn’t been lulled by easy money and higher collateral value, but instead sat out the subprime siren song, or at least hedged a bit better against losses in home value. If a few people back in 2004 had read a few memos. But honestly. Whoever reads memos?

(Also: I’m not the only one who thought this story smelled off. Arrow over to Calculated Risk, where blogger Tanta politely refers to the article as a “Hit Job.”)