That the establishment press despises New Media isn't exactly breaking news, but a lesser-known subset of that tension has just become more visible. As usual, an Old Media outlet is the smear merchant, and the New Media site has the upper hand on the truth.
Mainstream business journalists really despise the financial and economics blogs which puncture the insufferable "the economy is just fine" meme the financial wires have relentlessly foisted on us during the past seven years. When leading contrarian blog Zero Hedge had a recent fallout among its top authors, Bloomberg News sensed a chance to vilify a site it has had to grudgingly recognize as a genuine competitor. Instead, the wire service committed the types of journalistic errors which explain why only six percent of Americans "say they have a lot of confidence in the media."
Bloomberg couldn't even get past its headline without fibbing:
Unmasking the Men Behind Zero Hedge, Wall Street's Renegade Blog
The veil is lifted on a secretive website.
For heaven's sake. The website is so "secret" that the identity of its founder and the key elements of his background have been known for almost seven years.
Writers Tracy Alloway and Luke Kawa claimed with a link in their fourth paragraph that Dan Ivandjiiski was "long reputed to be behind the site." For cryin' out loud, the New York Magazine article to which they linked clearly identified Ivandjiiski as Zero Hedge's founder and main (though not only) author.
At the time, ZH was beginning to emerge as a leader among blogs which the magazine characterized as "a kind of ragtag insurgency against the financial Establishment and what they view as its feckless lackeys in the government and media." In other words, ZH and several other key financial and economics blogs are to the three main business wires and the Wall Street-DC financial establishment what the center-right mainstream blogs have been to mainstream media outlets and the DC political establishment — except that ZH and others have arguably been even more persistent.
ZH is "secret" in one important sense: Its primary author, using the pseudonym Tyler Durden, lifted from the movie Fight Club, was really three people for some time, so one couldn't know for sure which person published a given entry. (The site also has posts containing financial and political commentary from others which, despite also being carried under the "Tyler Durden" name, clearly identify each item's author.)
Now "Tyler Durden" is just two people, because the third, Colin Lokey, ran to Bloomberg with supposedly juicy and damning information.
One doesn't know whether to laugh or cry. The breathtaking, stop-the-presses claim relayed by Bloomberg reporters Tracy Alloway and Luke Kawa is that Ivandjiiski and Tim Backshall, the other principal, are somehow flaming hypocrites because their blog has actually been successful and profitable (bolds are mine):
Lokey said the other two men are Daniel Ivandjiiski, 37, the Bulgarian-born former analyst long reputed to be behind the site, and Tim Backshall, 45, a well-known credit derivatives strategist. (Bloomberg LP competes with Zero Hedge in providing financial news and information.)
In a telephone interview, Ivandjiiski confirmed that the men had been the only Tyler Durdens on the payroll since Lokey came aboard last year, but he criticized his former colleague's decision to come forward.
He called Lokey's parting gift a case of sour grapes.
... Since being founded in the depths of the financial crisis, Zero Hedge has grown from a blog to an Internet powerhouse. Often distrustful of the “establishment” and almost always bearish, it's known for a pessimistic world view.
... With that in mind, the website has argued that “pseudonymous speech” is necessary amid an atmosphere of stifled public dissent—hence the "Tyler Durden" alias was born.
... Despite holding itself out as a town crier for market angst, transcripts from Zero Hedge internal chat sessions provided by Lokey reveal a focus on Web traffic by the Durdens. Headlines are debated and a relentless publishing schedule maintained to keep readers sated. Lokey said the emphasis on profit—and what he considered political bias at the site—motivated him to quit.
He pointed to the wealth of the Durdens as a factor. Ivandjiiski has a multimillion-dollar mansion in Mahwah, N.J., and Backshall lives in a plush San Francisco suburb—not exactly reflections of Pitt's anticapitalist icon. “What you are reading at Zero Hedge is nonsense. And you shouldn’t support it,” Lokey wrote in an e-mail. “Two guys who live a lifestyle you only dream of are pretending to speak for you.”
... (Lokey) contends that he left because he disagreed with the site's editorial vision. “Reality checks are great. But Zero Hedge ceased to serve that public service years ago,” Lokey wrote. “They care what generates page views. Clicks. Money.”
Zero Hedge founder Ivandjiiski defended the site, adding that it's designed to be a for-profit entity. “Ultimately, the website makes money, and it’s profitable, which is also why we’ve never had to seek outside funding or any outside money—our only revenue is from advertising, always has been since day one,” he said. “Obviously, every publisher’s mission is to maximize revenue and page views, and we think that we do it in a way that is appropriate."
Imagine that. Zero Hedge's principals wants to maximize the site's traffic. Oh the humanity!
They also know that credible content is king, and that they have to work relentlessly to keep it flowing. This makes them smart web authors/publishers.
And — OMG — they make money and allegedly live pretty well.
This has to be the journalistic self-awareness fail of the year thus far.
Lokey's critique was given weight by a website whose owner, Michael Bloomberg, has an estimated net worth of over $40 billion and is, according to Forbes, currently the sixth-richest person in the U.S.
If anyone should be presumptively disqualified from posing as champions of everyday investors and people — and they haven't done a very good job of it — it should be Bloomberg's writers.
They've stood by while the U.S. government has added over $9 trillion in additional federal debt (that we know of) and continues to run annual deficits of at least a half-trillion dollars as far as the eye can see. They've watched uncritically as the Federal Reserve has created over $4 trillion of money out of thin air through "quantitative easing" and a virtually zero interest-rate environment for eight years.
All of these things, according to the Keynesian true believers of the world, should bring strong economic growth. Instead, they've given us the worst U.S. post-downturn performance since World War II while placing intolerable burdens on future generations. A Bloomberg editor's response on Tuesday, when it was clear that the malaise would continue with a imminent report on first-quarter economic growth everyone knew would be weak, was that we must start "lowering expectations."
Meanwhile, instead of telling the world what's really happening, most importantly that the Keynesian emperor has no clothes, Bloomberg's writers, along with those at the Associated Press and Reuters, pretend that lousy economic reports are really okay, that awful ones are just one-offs, that we really need to adjust to a "new (pathetic) normal," and that anyone who questions the road down which we are heading is an ignoramus who would lead us to economic ruin.
We're not done yet.
Note that Alloway and Kawa indicated that Lokey got much of the information via "transcripts from Zero Hedge internal chat sessions." This is clearly proprietary information which was not meant to be shared, but, OK, all's fair in love, war and journalism.
But ZH, in its spirited defense, has credibly accused the Bloomberg writers of omitting "a substantial amount of information Bloomberg has purposefully failed to add," and that Bloomberg was the site engaging in click-baiting hypocrisy (bolds and italics are theirs):
(Colin Lokey) was revealed to be an emotionally unstable, psychologically troubled alcoholic with a drug dealer past, as per his own disclosures.
All of these revelations were made clear to us long after we hired Colin, and unfortunately they were the catalyst that precipitated his full emotional collapse and ultimately led to his abrupt departure. All of these facts were also made clear to Bloomberg as part of its source "fact-checking." Surprisingly to us, Bloomberg had no problems running a sole-sourced piece by a disgruntled former employee who not only admitted he had major psychological problems, a checkered past, was unstable, but had also made clear his motive to "out" this website with hopes of crushing it and even issued death threats to Zero Hedge workers.
In short: in its desire to obtain ad-revenue generating clicks, Bloomberg provided a platform to a deranged person who held a major grudge.
In other words, Bloomberg deliberately hid very important and very relevant truths about the heavily documented instability of its informant.
If an independent blog did this, the establishment press would be running stories by the dozens about lack of journalistic standards, ethics, and the like.
But Bloomberg and its writers apparently get to escape accountability for their cherry-picking — which explains, as noted earlier, why almost no one trusts them and their colleagues in business and mainstream journalism any more.
Cross-posted at BizzyBlog.com.
