Fortune Tellers, Author Howard Kurtz
Reviewed by Paul Entin
It
is no secret the media has gradually lost its credibility. In the never-ending
quest for ratings and readership, the media mortgages its editorial integrity
for first crack at the news on a daily basis. Fortune Tellers tells
you why in striking detail. Author Howard Kurtz, who covers media for
the Washington Post and hosts CNN's media watchdog show Reliable
Sources, reveals how the investment banks, analysts, public companies
and media such as CNBC, CNN and the Wall Street Journal effectively
conspire to dupe individual investors of their money. This behind the
scenes look at the inner workings of today's competitive business media
environment is sure to leave a sour taste in the mouth of everyone funding
a 401(k) plan or college fund. In the race to break top-tier mergers and
acquisitions stories, for example, editors of the Wall Street Journal
- considered the most credible business newspaper - routinely exchange
exclusivity for front page, PR-driven puff pieces. Not only are these
stories given prominent placement, but the editors agree to publish the
opinions of only the analysts provided by the participating companies
- typically their own underwriting firms. This maneuver helps ensure a
healthy jolt to their stock prices. Within days, the editors bury a follow-up
story from industry experts and analysts who offer less favorable perspectives.
Doesn't matter. The insiders have already sold their stock.
Kurtz highlights a series of conflicts of interest among Wall Street, the media conglomerates and big advertisers, often focusing on the rise and fall of Internet stocks as glaring examples. Cheered on by famous (or infamous) analysts Henry Blodget, Mary Meeker and Abby Joseph Cohen on CNBC, Internet stocks that had been underwritten by their respective investment banks always seemed to earn "Strong Buy" recommendations. As their stocks plummeted, the analysts continued to appear on CNBC, touting them shamelessly and rarely downgrading their stocks until operations had shut down and hapless individual investors were left holding the bag. Has anyone seen Henry Blodget on TV since Amazon.com fell under $9.00 per share?
Kurtz reveals juicy tidbits about the people behind the news, too, and chronicles how CNBC became the voice of the bull market. Lou Dobbs of CNN Moneyline was quick to criticize his former protégé Maria Bartiromo when she first reported from the floor of the bustling New York Stock Exchange. But when she and her CNBC pals virtually cornered the market on business news and sent Moneyline's ratings plunging, Mr. Dobbs' show, too, began broadcasting from Wall Street and, later from Space.com.
Very little revealed about the media truly surprised me, however, since after nearly a decade in public relations that included placing my Clients on CNBC, CNN and other broadcast shows, I already knew that media could be a very ugly business. I saw how quickly a single appearance on CNBC Power Lunch could send a stock price soaring. As one who shapes the news, I was impressed by how Kurtz unraveled the money trail that determines what we see on TV and read in the news. This book reads very quickly and you can buy it from Amazon.com -- or better yet, go to your local library. You've already paid for their copy, anyway.
--Paul Entin is president of epr, a full service marketing and PR firm based in Bloomsbury, NJ.
Read Paul's review of a Up The Agency -- a quick, fun and worthwhile read for anyone involved in advertising.
Paul Entin Selected to Review Business and Marketing Books for SAM Magazine