Category Journalism and media

Getting it right: Is the internet killing good journalism?

freshlyworded 2 Comments

A story appeared on the front page of The Age (Melbourne’s only broadsheet newspaper) last week written by one of Australia’s most respected and well-known journalists, Adele Ferguson.

The story was about the death of the former chairman of a collapsed mortgage lender called Banksia, which has left thousands of small investors (families and pensioners) out of pocket with $660 million owed.

Ferguson reported that the Banksia chairman – Ian Hankin – had died in a head-on collision with a truck just three months before Banksia went bust.

“Ian Hankin, 59, died on August 8 when his BMW and a truck collided on the Western Highway at Burrumbeet, about 25 kilometres west of Ballarat.”

The story then went on to say that three weeks earlier, “on July 18, Hankin drove his Mercedes-Benz into the path of an oncoming truck on the Midland Highway near Scotsburn, 18 kilometres south of Ballarat”.

In the first crash Hanking escaped with minor injuries though the car was written-off.

Clearly, what was being implied was that Hankin had taken his own life after learning that Banksia was heading into financial failure and having failed the first time, he did a better job of it the second time.

Except, as was later pointed out by rival Melbourne newspaper the Herald Sun (owned by Rupert Murdoch) Hankin had stepped down from his role as chairman of Banksia three years ago and had no association with the company, making it highly unlikely his death and the previous collision was in anyway related to the mortgage lender’s sudden collapse on 25 October this year.

The chairman of Banksia is Peter Keating, who is very much alive.

The Age did print an update to the story, but only to add the word “former”  in front Ian Hankin’s title of ‘chairman’. (I have since discovered that The Age apologised to Ian Hankin’s family, but the story remains unchanged except for the addition of the extra word)

The error was reported in the media section of The Australian (another Murdoch-owned paper, but a broadsheet, with more gravitas than the Herald Sun) under the heading “Page one howler”

The Australian pointed out that “The Age ran a correction on Saturday on page two, one strangely lacking any apology to Hankin’s family who are understandably distraught.

“Journalists are not infallible. But the correction does appear buried and insubstantial given the size of the error,” The Australian went on to say.

Hankin’s colleagues at the law firm where he worked until his sudden death have spoken out against the insinuations in the article, though this hasn’t stopped controversial radio DJ Derryn Hinch (famous for naming convicted sex offenders on air against court orders) from labelling Hankin’s death a “coward’s exit” on his own website.

The Age’s error was indeed a bad one  (made worse by the lack of an apology)  and should have been avoided by some simple fact checking, something you would have thought would have been given extra priority, since the story was destined for the front page of the newspaper.

But this should all be put into the context of the challenges facing Fairfax – publisher of The Age and rival newspaper publisher Rupert Murdoch’s News Limited as well as other newspaper groups all round the world.

Fairfax is currently in the process of getting rid of 1,900 employees, many of them journalists, in an effort to cut costs and deal with a loss of print advertising revenue as readers shift to getting their knews online and via mobile devices (where advertising revenues are much smaller).

Fewer journalists mean fewer sub-editors checking articles before they go to print and less time spent by journalists themselves reasearching their articles.

Making things worse is the fact that Fairfax has outsourced most of its sub-editing to an external company called Pagemasters.

A sub-editor is not just a spelling and grammar checker. A good sub-editor understands the subject matter they are reading and the context and history behind the article.

A good sub-editor would have asked the question: Was Ian Hankin the chairman of Banksia at the time of his death?

These sorts of mistakes are likely to become more frequent as publishers scramble to find a way to scrape a profit.

In the online age of the 24 hour news cycle, smaller teams of journalists must produce more content at a faster rate with less time for research and few pairs of eyes to check facts and ask important questions.

Out of curiosity, I took a look at the jobs currently advertised on the New York Times media group website, publisher of the venerated New York Times, International Herald Tribune and Boston Globe.

There are currently 54 jobs advertised.

Not one of them is a journalism role.

The terrible boredom of the rich

freshlyworded Leave a comment

For those of us who are not very rich, the idea of having great wealth is very appealing and the focus of many a day-dream along the lines of: “If I had $100 million I’d….”

No mortgage to worry about, no tightening of the chest everytime an envelope stamped with “your bill enclosed” arrives in the mailbox, no having to fight with the person next to you for the shared arm rest on economy flights, and on and on it goes.

But the thought occured to me that perhaps being very rich can also be very boring.

I was struck by the idea while attending a commercial property auction (I wrote this story about it) as I found myself sitting next to one of the bidders in the River Room at Crown Casino.

Without meaning to sound to mean-spirited, I’ll say the bidder looked like a toad with fat lips and fatter jowls and liverspots, though I may be embellishing.

Up for grabs was a petrol station on a busy road in the outer suburbs of Melbourne, a dull, but valuable piece of real estate.

Bidding started around the $5 million mark and the price rose rapidly in $100,000 jumps with my toady bidding friend lifting his hand every thirty seconds or so to up the ante.

When it reached $7 million, he stopped and simply said to his rival bidder, like he was ordering a drink beside the swimming pool, in a lazy, nasal drawl:

“He can have it.”

Like spending or not spending $7 million was like deciding whether to buy an ice-cream from the vendor on the beach or deciding between a cappucino and a latte.

But what if this is what life is really like for the super-rich?

Where things lose their value, no matter how much they cost, be they petrol stations, mega mansions, luxury cars, or overseas holidays – because if you’re super-rich you’ve already tried everything on the menu and there’s nothing left to buy.

And then it occured to me that maybe that’s the reason why billionaires keep on working until they’re one foot in the grave and seem never satisfied no matter how many zeroes are on their bank accounts.

And why they’re always trying to reduce their tax bill.

Or denying their children their inheritance.

Or just keep complaining about everything (and making cheap looking preachy videos).

Perhaps, we with less should appreciate that fact that a good bottle of red wine, a new car (or even a second-hand one), or a holiday one street up from the beach rather than on the beach can be celebrated and cherished.

Even if we drop dead the next day from worrying about the size of the gas bill…

The “nonsense’ behind the Commonwealth Bank’s $270 million Storm payout

freshlyworded Leave a comment

I never thought I’d find myself laughing (in a cynical fashion) at a press conference on a Friday evening just before clocking-off time for the weekend (I was grumbling when I picked up the phone).

But that’s what happened when I tuned in to listen to ASIC chief Greg Medcraft tell the media the Commonwealth Bank had done the “right thing” by agreeing to increase its payout to Storm Financial investors by $136 million taking the total compensation to around $270 million.

Briefly, Storm Financial provided bad financial advice to mom and dad investors on a variety of mortgage and other investment vehicles, the Commonwealth Bank provided them the money, then the GFC hit, Storm went bust and investors lost billions.

The agreement between the Commonwealth Bank and ASIC was reached “without any admission of liability” by the bank.

Enter Business Day journalist Paddy Manning who asked Medcraft if it were not a “nonsense” that the Commonwealth Bank was agreeing to pay out investors to the tune of $270 million, while at the same time admitting no fault.

Medcraft did not enter into a debate on this point – probably he was legally prevented from doing so – but I bet he privately agreed.

Which is also why I found myself laughing (cynically), because yes it really does sound absurd given the scale of the payout.

The use of the words “without any admission of liability” is a fairly common legal term and has been used by other organisations – from church groups to big businesses – to protect themselves from further financial claims.

It is usually always the outcome of a mediated solution with aim of bringing costly legal proceedings to an earlier end.

Essentially it’s like a plea bargain – privately you admit you’re guilty and stump up the money, but publicly you keep your reputation.

It also means the “guilty party” does not have to make any sort of apology, as this would, in effect, make the “without liability” clause null and void.

Most recently agricultural chemicals supplier Nufarm agreed to pay shareholders $43.5 over allegations the company failed to keep them informed of the impact of the declining glyphosate market on its business. Despite deny the allegations, Nufarm paid up without admitting liability.

In 2004, as reported by The Age, the Salesian Order of Catholic priests and brothers paid around $80,000 to a to a Melbourne man who launched a civil case against convicted paedophile Father Frank Klep “without any admission of liability”.

In 2005, retailer Barbeques Galore and a sister company surrendered about 900 BBQs for destruction and agreed to make payments for 2,200 they had already sold after legal action was threatened by Danish homewares firm Bodum, reported The Sun Herald. The agreement was made with “without admission of liability”.

And back in 1996 a Sydney hospital settled a case involving a woman who died soon after being admitted “without admission of liability”.

Clearly there are some benefits for those who seek compensation. They get an early payout and can get on with their lives, or at least try too.

As for the payee (or guilty party) – they get to draw a line under the whole affair.

For those Storm Financial investors who invested via a Commonwealth Bank loan they will have to be content with 55% of their money being repaid four years down the track.

But I wonder how many investors, would have hoped for a lot more – and an apology?

When a mining town is not just a mining town…

freshlyworded Leave a comment

An interesting piece I filed for Property Observer.

In a nutshell, Westpac has taken Broken Hill and Kalgoorlie– to remote mining towns synonymous with mining – off a list of what the bank calls “single industry” towns and making it easier for investors to get a loan.

The bank is saying, these towns are no longer just mining towns, they offer more and are hence not reliant on mining to keep up the demand for accomodation and keep property prices and rents buoyant.

(All the policy details are in the story by the way).

At the same time the bank has added a number of other mining towns in WA and Queensland to its list of “single industry” towns effectively ruling that it is a far more risky to buy an investment property in places like the Pilbara, than somewhere like Geelong or Bendigo, where there multiple industries driving the local economy.

There are some mining towns were property prices are rising at something like 30% a year and with investment yields around 16% (the average is around 5%).

What you have to keep in mind is that most of these towns are heavily subsidised by mining companies, who pay most of the rent for their workers.

I had a search through the census 2011 data and found that in another mining town – Moranbah in Queensland – rents are around $80 per week – that’s because they mines are paying 90% of the rent.

We’re talking thousands of dollars a week to rent a plain, often ugly house in a non-descript, dusty town that would be lucky to get $200 a week on the outskirts of Melbourne or Sydney.

Here’s an example. $3,000 a week for this depressing little number, with no garden out front and as much charm a warm glass of beer.

Of course were the mines to pull back their activities, there’s no way anyone would pay $3,000. It’s an entirely artificial price.

Now, the risks of the mining boom going bust are small, but not insignfiicant, given how reliant we are on China demanding our coal and other natural resources.

And remembering that the growth of Chinese economy has slowed down of late.

But this risk, albeit a smallish one, is being reflected in banks’ mortgage lending policies.

Westpac are not the only ones not keen to lend in these riskier locations, and property investors should be wary too!