Bloomberg Thumbs its Nose at FDIC

On Thursday, I criticized a Bloomberg story by David Evans which seemed to be unnecessarily alarmist about the FDIC’s finances. Later that day, Jeff Bercovici ran a letter from the FDIC to Bloomberg, complaining that the story "does a serious disservice to your organization and your readers by painting a skewed picture of the FDIC insurance fund".

How did Bloomberg respond to this criticism? Not by addressing it directly. Instead, their PR agency, Rooney & Associates, sent out an incendiary email to journalists on Friday, which kicked off with this highly misleading line:

The Federal Deposit Insurance Corp. (FDIC), the largely unseen government agency that backs the deposits in banks that earn their keep by writing mortgages, will likely run out of cash.

Has Bloomberg not heard of the maxim that when you’re in a hole, it’s a good idea to stop digging? Evidently not: and maybe the reasons is that Evans’s story is actually a 14-page article in the November issue of Bloomberg Markets magazine, which Rooney & Associates represents. Clearly a huge amount of time and effort has gone in to this story, and Bloomberg will be reluctant to accept much if any criticism.

Even so, you’d think that they would tone down their rhetoric a little in the wake of the FDIC letter, instead of ratcheting it up.

I called Terry Rooney, of Rooney & Associates, and asked him whether he had any response to the criticisms of the article which were made by the FDIC (and me, and Chris Whalen, who’s quoted in the article). He was not willing to say anything substantive — weirdly, given that he’d engaged me in the first place — and instead said that I should talk to Evans directly. Predictably, I never heard back from Evans or anybody else at Bloomberg.

Of all the news organizations covering the present crisis, I think that Bloomberg has been one of the very best: it has remained sober throughout, it has avoided publishing unconfirmed rumors, and it has generally been extremely reliable.

On the other hand, Bloomberg is dreadful when it comes to correcting errors or responding to criticism. They can’t even seem to correct erroneous headlines: they’re still running that story from February saying "Hirst Cabinet Fetches $6.2 Million for Bono AIDS Sale", when the actual hammer price was $6.5 million and the actual total price was $7.15 million.

In the case of the Evans story, I suspect that what’s really going on here is that Bloomberg Markets, the magazine, is operating at a far remove from the wire. The magazine is focused on its own business, and its PR agency might well have been utterly unaware of the response to the wire story. Back in June, Terry Rooney sent me a similar pitch, about another David Evans articlethree weeks after I’d originally blogged it. Clearly, the monthly Markets magazine is having difficulty keeping up with the speed at which news moves these days.

Maybe Evans didn’t call me back on Friday because he was still smarting from my criticisms of his article back in May. It’s possible: reporters have notoriously thin skins. But one word of advice to the team at Markets: don’t let your PR people start pitching magazine articles until they’ve digested the response to the story when it first appears on the wire. Otherwise you risk exacerbating existing problems.

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