Rebutting Kathy Kristof

On Friday night’s NewsHour, syndicated business columnist Kathy Kristof (Los Angeles Times) claimed that being attacked by bloggers was one reason that business writers avoided toxic mortgage stories:

Well, you know, I think all of the major publications had done a number of stories about toxic mortgages, about companies that were going way off the rails on what they were approving.

The problem is, is kind of what the other two have been just nipping at, is that we were early. And we kept on, you know, being the voice in the wilderness, the voice in the wilderness, the voice in the wilderness. And pretty soon, you say, “OK, how many times can I do that story?” And so you stop.

And we also got incredible flak toward the end of the bubble when we would write stories about toxic mortgages, because there were all sorts of bloggers who were trying to keep this fraud going. And they would just attack you, attack the people who you had quoted. They would do all sorts of things in order to stop you from publishing.

This sounded odd to Jay Rosen (which is what tipped me to the transcript).

And it sounded really odd to me when I read it, because it reads like Kristof is accusing bloggers of perpetuating mortgage fraud. Google is my friend (sorta):

I tried, without success, to find an archive listing all of Kristof’s columns by title for 2007 and 2008. Then I tried searching on the string: “Kathy Kristof” toxic mortgages. That’s what led me to the LA Times blog post below. Then I tried various searches, looking for any blogger who was either diss’ing Kristoff or diss’ing the idea of toxic mortgages. I didn’t find any. Instead, I found business press collusion (Barron’s) and the exact opposite response from readers of a BusinessWeek real estate blog.

I realize that three anecdotes aren’t conclusive. But Kristof’s remark was an off-the-cuff generalization. If I find something that matches her description, I’ll add it. But my half-hour with Google suggests any blogger pushback to investigative stories about the banking crisis either wasn’t widespread or was not credible enough to get to the top few pages of a Google search.

  • July 2007:
    The LA Times blog L.A. Land reports that “real estate blogs are being sued by the companies they cover.” Not for trying to cover up toxic mortgages, but for “reporting dubious appraisal and property valuation tactics.”
  • August 2007:
    Business Week HotProperty blog estimates that D.C. property values will continue to decline. Only one commenter argues.
  • December 2008:
    CondeNast blog MarketMovers takes a shot at — not bloggers — but at Barron’s (Barron’s!) for “giving credence” to research based on the “crumbliest of foundations.” The research in question relates to a sub-set of sub-prime mortgage holders, “self-employed entrepreneurs.”

Please shout out if you know of examples of bloggers diss’ing investigative coverage of the banking meltdown.

By Kathy E. Gill

Digital evangelist, speaker, writer, educator. Transplanted Southerner; teach newbies to ride motorcycles! @kegill

One reply on “Rebutting Kathy Kristof”

Here’s a great Tweet from @Tim_W2JIG

@kegill My Kristof results: & & &

Check out the links. He has far better GoogleFoo than I had on this topic.

Here’s just one headline, from BusinessWeek: “Surprise: ‘Toxic’ Mortgages Are the Best“, Sept 2007

according to a new study by professors from Columbia and New York universities, the “optimal” mortgage in a perfect world is precisely that kind of loan—an adjustable-rate mortgage with an option for negative amortization and a ban (or at least severe restriction) on prepayment.

… The key, according to professors Tomasz Piskorski of Columbia Business School and Alexei Tchistyi of New York University’s Stern School of Business, is that this kind of mortgage is optimal only in a perfect world—namely, one in which borrowers are fully rational and always do what’s in their own best interest.

Gotta love economists. (I am educated as one, so I know of what I speak.)

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