The carnage on the financial markets has produced some great reporting.
On Monday, the Guardian‘s coverage was excellent in parts. Nils Pratley and Jill Treanor rattled off a sold blog-like resume of Monday’s events here.
Pratley went for the mysteries of Lehman Brothers’ balance sheet fearlessly. In the middle of another long piece, he put his finger on one of the reasons for the bank’s demise in terms everyone could understand:
Now take a look at Lehman Brothers’ balance sheet. On page 62 of last year’s accounts, under the heading “off balance sheet arrangements” you will find a staggering figure. Lehman had derivative contracts with a face value of $738bn. The notes, fairly, make the point that the fair value is smaller than the notional amount – Lehman believed the figure was $36.8bn. Even so, “mind-boggling complexity” perfectly describes Lehman’s accounts. How can you hope to sell such a business over a weekend?
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At the Times, Suzy Jagger supplied great colour from New York. And associate editor Anatole Kaletsky started to change his mind about the magnitude of the crisis.
In print, Kaletsky now sounds almost as spooked as Ambrose Evans-Pritchard at the Telegraph. By the time he reached Newsnight‘s studio last night, the donnish economics guru from Wapping sounded positively bleak.
Talking of Newsnight, it’s fairly clear that business stories aren’t Jeremy Paxman’s strong point. Now and then during the discussion with Kaletsky & Co., The Great Inquisitor sounded somewhat naive. But perhaps this is a minor point at a time when most experts can’t predict what the next 48 hours might hold.
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At the Telegraph, Jeff Randall was to be found spitting blood at the Masters of the Universe. (“Nobody said that capitalism was devised to provide soft landings for hopeless losers.”) There was also some fine comedy:
What little faith I had in financial wizardry was blown away 10 years ago when Long Term Capital Management, a hedge fund set up by a couple of economists with Nobel Prizes in the cupboard, went pop. Lehman, I’m afraid, went the same way: bamboozling itself.
Over lunch at its Canary Wharf offices, you could feel the heat from all those first-class brains, working out how to make billions from financial products that only an expert in nuclear fusion could comprehend. I didn’t have a clue what they were talking about. The trouble is, it turns out, neither did they.
The Telegraph‘s political correspondent James Kirkup also found time to write up “Gordon Brown’s curse“.
Brown apparently opened Lehman’s swish offices in London in 2004. He’s also got a habit of turning up to football and rugby internationals — only to see Scotland or England lose. Oh, and he also sent Andy Murray a good luck letter before the final of the US Open. The Scot went on to lose in straight sets.
It figures.
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