NPR on Media Maneuvers, Fannie, Freddie and its knickers

Just explain:

what was "dumbing-down?" What?

That Fannie Mae and Freddie Mac are closely tied into the US-China financial infrastructure? that was dumb?

Explaining how complex and difficult the global economy has become? That's just light fun?

I don't know. I don't see how you've made your case.

I think you've had a knee-jerk response because I went to Coney Island. I dont' see why that's such a bad thing to have done.

Oh, and I do understand your articles. I just think they're boring.

"And the fact that these two worlds don't communicate is a real problem. - Yvette Kantrow"

Yvette, I'd be interested in know what you think could be done to fix that real problem. I understand that you are writing for professional, people in the industry, how should Adam address people who don't have the industry background, especially when if someone doesn't know what Freddie Mac does, the first minute or so of his report has to get them up to speed? (Given that he generally doesn't have much more than a couple of minutes in any given report?)

How do you raise a large population's IQ about this stuff, especially when they 1. might not be all the interested and 2. really don't have the vocabulary to start. I think that is what Adam was shooting for. Baby steps. Do you have a better way to suggest? I'd be surprised if he wasn't willing to listen to your suggestions.

Yvonne:

As a professional communicator, I can tell you that NPR is on the right track. If you really believe that everyone is now going to be responsible for their own investment, it is very important to help them understand the rather arcane world of finance with whatever method works. Analogies are, in this case, very helpful. People are not stupid because they don't understand finance - or physics or oncology or engineering. No one can understand everything - the world is too complex. Any expert in any field is so far into their own world that they usually don't even realize they're using jargon. That's why it's fine for you to communicate in your way to your audience, who will understand jargon and nuances, but you have to allow other people to communicate with their audiences in a different manner. Relax. You're a specialist. NPR is a generalist. It makes all the difference.

The condescending elitism in this response is exactly why these two worlds lack communication. The wall of obtuse, specialized terms creates an impenetrable barrier for even the most rudimentary understanding, and this lack of understanding permits the ignorance and deception that is at the very core of the world economy, which affects a much broader audience than the high lords of Wall Street in their ivory towers who care to read The Deal.

For better or for worse, "financial professionals" are in this situation sleeping right next to people who couldn't spell mortgage if you paid them, and who wouldn't know Warren Buffet from Jimmy Buffet.

It's fine if The Deal doesn't particularly care to elucidate their own arcana. However, the bogeyman of "a little knowledge is a dangerous thing" is ludicrously baseless. If you feel NPR is being dangerously inaccurate, as the educated experts, you should correct them and assist them. It is your responsibility to the people you are in bed with. As long as your activities affect the "common rabble," you will have to communicate to them. Because The Deal fails, NPR tries to help. If you don't want NPR to help, stop failing.

Yvonne,

I suppose it's understandable that a professional would object to any comparison of such a significant part of our financial system to a carnival game. Unfortunately, the situation we're in makes the comparison inherently credible. What's conspicuously lacking in your piece is any statement that suggests the analogy is in any way inaccurate. Especially when you consider (and you didn't) the lengthy introduction to the Coney Island visit which, among other things, discloses the connection between trade deficits (especially with China) and an MBS. That's Mortgage Backed Securities but you knew that - sort of rolls of the tongue, doesn't it?.

For my money, and it is, NPR is an incisive source for news and they even have fun on occasion. Adam Davidson's piece no doubt enlightened many non-financial types.

Yvonne, lighten up and enough already with the arcane nooks and crannies. Remember, your career should be a LIBOR of love (sorry, couldn't resist).

Near as I can tell, everyone's ignorant about something, so the more interest and discussion we can create--on any level--the better. I'm up for anything that can help "un-numb" Americans--Americans on any level.

I'm particularly fascinated by how readily we've sold our country, our children--everything we can come up with--down the river in exchange for (what we think are) "cheap" consumer goods, so my current favorite rant is "Dollar to the Giant" on YouTube:

http://www.youtube.com/watch?v=TUj8leZxmK8

It's a song, of all things. The lyrics are not dumbed down enough to reach the biggest audience, but the people this song is reaching are having powerful emotional experiences connecting them, finally, to the reality of our situation.

Hey, whatever gets the job done. . . .

"Suddenly, "a broad lay audience" feels empowered to make complex financial decisions, from taking out a ridiculous mortgage they can't afford to playing in stocks they have no business being in because a "fun and compelling" piece on NPR on some other mass-media outlet explained it all to them -- and made it all seem so simple! "

Sadly, this is exactly what happened to me. I heard that NPR report and immediately went out and heavily invested in Lehmann,
AIG, IndyMac, the Zimbabwe Dollar and the Astroland Amusement Park. Most of these investments have cratered, but i do get to ride the cyclone for half price, or until my tummy hurts. Damn you popularizer of arcane finance, you leave me ruined, with vertigo, and in possession of Robert Mugabe's face on all my currency.

Yvonne-

I am a financial professional who listens to NPR and understands the debt, equity, and credit markets intimately.

If your article were a portfolio of subprime MBS it would be analagous to the most subordinate tranche in the capital stack: essentially junk paper that needs to be marked down to market and taken as a loss on your books. Most Wallstreeters that I know would focus on the lessons to be learned from NPR's piece instead of its presentation.

Was it articles that made people take out ridiculous mortgages or the fact that mortgage bankers were giving loans to anyone with a heartbeat? Get real. Americans are going to take credit if it's offered to them. We are a credit-driven society. Just turn on the TV or look in your mailbox and tell me how many solicitations for credit you receive. Loose credit is good to a point, but credit markets ultimately need to be restrained lest we end up in a crisis.

Furthermore, mortgage bankers knew that once they sold the loans off to Wall Street it was off their shoulders. In fact, once the crisis hit most of the subprime mortage bankers filed BK and closed up shop, but only after top management bilked millions out of their companies and stashed it in offshore accounts. And would the market be there if Wall Street wasn't buying the paper in the first place? Bottom line: Wall Street and the rating agencies had poor due diligence practices and made bad bets on the impact that diversification would have on the overall performance of MBS pools.

Its seems as though Wall Streeters often times can't make complex financial decisions either. How many professional investment managers held stock in Bear Stearns, Fannie Mae, Freddie Mac, or Lehman Brothers? Or hold stock in Goldman Sachs, AIG, Citibank, etc., etc. A lot of these so-called "professionals" often play in stocks they have no business being in.

It's hard to communicate with professionals that equate the priciples of rugged individualism, free markets, deregulation, and pure capitalism with government bailouts.

Here is my favorite part:

"Suddenly, "a broad lay audience" feels empowered to make complex financial decisions, from taking out a ridiculous mortgage they can't afford to playing in stocks..."

Yeah, that's how we got into this mess....too MUCH knowledge.