CNBC Reporters Draw 'Scary' Comparisons Between Lehman, Bear Stearns
In light of their reporting on the failure of investment firm Bear Stearns Companies Inc. (NYSE: BSC), it seems CNBC reporters aren't "tip-toeing around on eggshells" when reporting about problems at Lehman Brothers Holdings Inc. (NYSE: LEH).
On CNBC's "Squawk Box," reporter Charlie Gasparino told co-host Joe Kernen, "I will say this about the Bear Stearns thing when you compare that [Lehman] with this. I think our reporting was incredibly responsible. It was so responsible ... and you know we went out of our way with Bear Stearns ... We just report on how feckless management is and I can't help that Bear Stearns was feckless. [Lehman] was feckless too and that is the scary part."
"They're going to parse every ‘is' that a journalist said," said Kernen. "We don't hammer the stock. We watch the stock get hammered and then we talk about it."
Gasparino and Kernen were referring to the questioning of CNBC reporters' journalistic ethics raised in an article by Bryan Burrough for Vanity Fair magazine's August 2008 issue. Burrough suggested that short-sellers may have spread rumors about the firm's demise and story hungry CNBC reporters may have picked the rumors up as news - pushing Bear Stearns over the edge.
Gasparino was mentioned in Burrough's story:
At a little after one CNBC correspondent Charlie Gasparino, an especially aggressive reporter who for months had been suggesting Bear's possible indictment on criminal charges in the hedge-fund collapse, joined an on-air roundtable to discuss the rumor. Gasparino was the bane of Bear Stearns; more than once he had predicted that the firm would go under. "I don't believe there is a liquidity problem at Bear Stearns," Gasparino said on-air. "Bear Stearns has a problem with whether they should exist or not in the future in this sense.... What do they have left? A clearing business, a second-rate investment bank?"
If the credit crisis continued, Gasparino said a few moments later, "I don't see how they could survive independently. They don't have enough horses out there."
Sitting on a stool beside him, Bill Griffeth appeared startled at the strength of the statement.
"You're on record, then," he remarked.Gasparino laughed. "Wouldn't be the first time I was wrong," he said.
Burrough called Gasparino "an especially aggressive reporter" who was "the bane of Bear Stearns" because Gasparino suggested top employees should face possible criminal charges and "more than once he had predicted that the firm would go under."