Trustworthy, like Wall Street

No, I"m not joking. Anyone who's anyone in the financial field has heard of the CFA designation. Chartered Financial Analyst (CFA) Charterholders must undergo three incredibly difficult six-hour exams and then have four years experience in the finance field in order to obtain their title. It's worth it though. The difficulty of obtaining a charter is recognized throughout the field and charterholders are routinely offered prime finance positions and the confidence of their investors.

Knowledge of the time value of money and effective portfolio management are not the only things stressed by the CFA Institute upon their potential candidates. An entire section of their level 1 exam is dedicated to "Ethical and Professional Standards." They have these points driven into their heads:

• Place the integrity of the profession and the interests of clients above your own interests
• Act with integrity, competence, and respect
• Improve and maintain your professional competence

They go on to say that a financial analyst's duties are first: to their client, and second: to their employer.

A journalist's client is their reader. Their employer is the advertiser. Integrity in our profession is the reporter's creed of accuracy and honesty. Reporters and financial analysts are under the same kind of pressures. They must report their findings accurately and without bias, disclose any personal entanglements with their material that may color their opinion or coverage of it and submit their findings in a timely manner. They both have a lot of room for error and, at the same time, no excuse for it.

My class fell apart when asked about journalistic ethics. Four people, whom I think should remain nameless because they're students, had disastrous opinions on media ethics and the entire class just seemed unsure of how to answer certain questions about ethical behavior. Is a free concert ticket unacceptable to a journalist? Is one small lunch, paid for by a source, compromising the morals of a reporter? What these students need to find is the reason for the professor's frustration with their answers/ hesitancy. The CFA level 1 exam had a practice question that I think summarizes my point, I'll paraphrase it:

Analyst Bob is visiting Geico to obtain information to complete a research report on Geico's stock. He learns that Geico is wiling to pay all of his expenses for the trip, including meals, accommodations and his plane ticket. Does Analyst Bob?
a) Accept the expense-paid trip and write an objective report.
b) Pay for all travel expenses, including meals and incidental items
c) Accept the expense-paid trip but disclose the value of the services accepted in the report
d) Write the report without taking the trip

Now, I know somewhere my four classmates are treading the fine line of moral culpability with answers a and c, while some may even be thinking answer d is the moral high ground. The correct answer is b. It's b for analysts and it's b for journalists too. Swap Analyst Bob with Reporter Jane and we have a piece for the business section. The answer is b not because a and c are totally wrong but because b is the choice that compromises the analyst's/journalist's integrity the least and that is the best thing for either of them.

Journalists make their money on their word; people trust them to deliver accurate news to them. Every time a journalist compromises their integrity, even in the slightest way, it compromises it for the entire profession. The same goes for finance professionals. Just look at how people treated Wall Street after the housing bubble burst.

Every person has a set of morals. They are our guidelines for good behavior. For some professions though our own moral guidelines are not enough. For finance majors, the CFA guidelines are perfect, for us journalism majors I recommend The Society of Professional Journalists creed:

• Seek truth and report it
• Minimize harm
• Act independently
• Be accountable 

Remember, Wall Street wasn't the only one making headlines for unethical behavior.

End of an Era

The offices are empty. Stale air scatters dust over keyboards while vermin settle into the walls. The sign outside is for a newspaper no one has heard of in years. Out back, on the loading dock, tattered and yellowed copies are stacked awaiting a delivery that will never be made. The date is April 1st 2012.

Is this a bit drastic? Maybe so, but this is the doomsday future our professor is banging into our heads. The newspaper industry is dying. It has an ailment that needs to be remedied. It’s bleeding cash worse than a spoiled kid’s piggy bank. The problem is finding an answer within potential reporters is like searching for the giblets in an uncooked turkey; if you dig down deep enough you’re sure to find something, but it's bound to create an awful mess and might just make a few people sick in the process.

I, however, shall try again.

I believe that reporters are deluding themselves right now. They, or we (if I should be so bold), believe that somewhere exists a happy answer that will bring success, and money, back into our industry and allow us to continue to pump out papers and employ a small army of reporters to pursue every scintillating lede we desire. It’s a happy ending that we need to ax immediately. We’re not in the fiction business.

So, let’s observe this problem of dwindling finances from a financial perspective, shall we?

1) Newspapers are running on a deficit.

2) New forms of revenue are in short supply and venture capital is scarce, therefore

3) Newspapers must look for areas to cut back on spending before their debt threatens to overwhelm them

Yes, cutting spending. It’s the topic that’s routinely greeted with shaking heads and grim smirks. Yet, if we face it, we may find an answer to our predicament.

So, let’s make another list and call it Things to cut!

1) Newspapers.

Yea, I think we’re complete.

Cutting print copies is something that has to be done. Decreasing circulation cuts down on the number of printers needed, labor costs in printing room, delivery costs and the cost of retrieving unsold copies. Let’s face it; it’s the best option as it involves the least amount of reporters being laid off.



Source: Nielsen Media Research, Pew Research Center

for the People & the Press, Audit Bureau of Circulations. 1



Network television doesn’t reach everyone but you don’t see CBS financing the expansion of their television signal so they can reach those 3 people that live in a cave with Kevin Costner and his pack of wolves. So why do newspapers feel an obligation to deliver the news to everyone? They’re practically printing the money out of their bank accounts and delivering it to a consumer that likes to do some of the crosswords on it before they pop it into a bird cage for Polly to poop on.  

 No, it’s time we cut back on print and focused on the web entirely. The world is moving there, and if we don’t follow it we’re going to be left behind. Of course, as the graph below points out, close to 90% of newspapers ad revenue comes from print not online.

So, cut down, cut back but don’t cut it out. We can survive in a world with less print newspapers. Will it be a world with fewer reporters as well? Hopefully not, if technological advances have shown me anything it’s that less computer savvy people are doing more with the little computer know-how they have. They may not be creating perfect web products but they’re passable and profitable, which is more than enough.



Source - http://stateofthemedia.org/

Picture - http://www.fiscalfizzle.com/