Robert Teitelman has a heartfelt essay defending financial journalists from accusations that they were in dereliction of their duty to call the bubble and the subsequent bust:
Many of the folks who argue that financial journalism "failed" believe in some sort of single trigger or cause for the meltdown. They focus on personalities and explicable, if often fantastic, conspiracies. They see in black and white. And they read history, and the markets, backwards. The fundamental relativism of the markets unsettles them, even if they reject free-market politics. If we could just have investigated adequately, we could have ferreted out that cabal (of evil bankers, traders, lenders) that brought the innocents down. If we could have stamped out subprime, the rest of the system would have been fine. How could we miss American International Group, which was "clearly" a scam?
This is absolutely true. It's not the job of financial journalists to predict the future: it's not the job of any journalists to predict the future. So insofar as financial journalists didn't predict the meltdown, that's not prima facie evidence that they weren't doing their job. And in fact financial journalists are nearly always more bearish than the market as a whole.
I do take issue with three throwaway words of Teitelman's, however:
Finance has grown dramatically more complex, opaque, global over the past few decades. And despite that complexity, the rise of financial television and financial blogging has simplified coverage to an equity horse race, with an omnipresent pressure to predict.
The rise of financial television? Yes. The rise of financial blogging? Absolutely not. Blogging is the best medium yet when it comes to embracing the complexities of the financial markets and the idiocy of trying to make date-and-level predictions. And indeed nowhere has the criticism of CNBC mindlessness been more forcefully put than in the blogosphere (at least until Jon Stewart came along).
In the financial press, certain franchises, foremost among them the FT's Lex column, struggle daily with what Teitelman calls the "pressure to predict". Do you go for the simple up/down, buy/sell note? Or do you write something intelligent instead? In the blogosphere, however, I can't think of a single blogger who has a great reputation on the strength of making correct equity-market calls: this stock's going up, that stock's going down. We bloggers are part of the solution, not part of the problem. And yes, I include The Deal's own bloggers in that. Different media have different levels of sophistication: radio will nearly always be smarter than TV, I don't know why, and blogs in general are definitely at the smarter end of the spectrum, if only because it's generally the smarter blogs which tend to gain traction.
So by all means pile on to CNBC -- god knows they deserve it. But leave the blogs out of it.