Posted by
Mike Bates on Tuesday, April 21, 2009 1:36:23 PM
Persuading Americans that Barack Obama is an effective president
won't be easy. So local news outlets are lending a hand when they
can. This was obvious last night on Chicago's NBC5 News at 10. Anchor
Bob Sirott reported:
And now to a sign the president's economic stimulus is
working. Bank of American today announced a $2.8 billion profit for
the first quarter. That report was much better than expected and
followed positive results from other banks. It also comes after a loss
of more than $2 billion for the last three months of 2008. Bank of
America received $45 billion as part of the financial rescue package.
Sirott's positive assessment of Obama's plan isn't justified. The
big profits he touted are largely illusionary. Andrew Ross Sorkin
explained why in "Bank Profits Appear Out of Thin Air," which appeared in yesterday's New York Times. An excerpt:
This is starting to feel like amateur hour for aspiring magicians.
Another day, another attempt by a Wall Street bank to pull a bunny
out of the hat, showing off an earnings report that it hopes will
elicit oohs and aahs from the market. Goldman Sachs, JPMorgan Chase,
Citigroup and, on Monday, Bank of America all tried to wow their
audiences with what appeared to be — presto! — better-than-expected
numbers.
But in each case, investors spotted the attempts at sleight of hand, and didn’t buy it for a second . . .
Sydney Finkelstein, the Steven Roth professor of management at the
Tuck School of Business at Dartmouth College, also pointed out that
Bank of America booked a $2.2 billion gain by increasing the value of
Merrill Lynch’s assets it acquired last quarter to prices that were
higher than Merrill kept them.
“Although perfectly legal, this move is also perfectly delusional,
because some day soon these assets will be written down to their fair
value, and it won’t be pretty,” he said.
Investors reacted by throwing tomatoes. Bank of America’s stock
plunged 24 percent, as did other bank stocks. They’ve had enough.
The truth is there's scant evidence that Obama's taxpayer-funded
efforts are having much of a positive impact. Spending our way out of
financial distress isn't really a solution to anything. Still,
hesto-presto, even local newscasts are finding slivers of hope.
Perhaps it's part of the magic of Obamamania.
****NBC5 anchor Bob Sirott has reacted to this post. His email to me:
just read it. you know what.....i remember reading that
story, and rewriting it a bit, but i should have changed the first
line, which i did not write, because that was more along the lines of
editorializing, and although i do that on the 5pm nbc5 news (one more
thing) that particular story was part of the first section of the ten
o'clock newscast and should have been reported without comment. it
didn't need that first line. some may think it was an example of the
stimulus package working, others may not..but that's beside the point.
thanks for pointing it out.
It's not often that those in the media respond to criticism. I appreciate Mr. Sirott's thoughtful appraisal.