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The shaky state of Bear Stearns, the Wall Street financial firm, was the unanimous choice for Story of the Day. All three networks led off their newscasts with the Federal Reserve Board's emergency line of credit extended to the suddenly illiquid brokerage house. The funds were made available for the next month via Bear Stearns' rival JP Morgan. The Great Depression was the last period that the Fed extended such financing to an investment bank. ABC and NBC again used substitute anchors, as they have all week: Ann Curry in New York for NBC; George Stephanopoulos anchored for ABC from Washington DC, where he hosts This Week on Sunday mornings.

ABC covered the Bear Stearns story in the most straightforward style, assigning John Berman to translate financialese--"our liquidity situation has deteriorated"--into ordinary language: "They did not have enough money to pay off their lenders, customers and partners." CBS had anchor Katie Couric handle the story with a combination of her own reporting and an interview with Art Cashin, the director of UBS' operations on the trading floor at the New York Stock Exchange. Cashin detected "a sense of urgency, maybe emergency" among market traders. NBC chose a couple of financial reporters from its sibling cable channel CNBC. Carl Quintanilla noted that Bear Stearns "made some of the biggest and costliest bets on subprime housing." If the firm goes broke, Quintanilla imagined that "other banks would likely get nervous, hoard cash, cut back on lending and charge higher interest rates." CNBC's David Faber followed with an explainer for anchor Ann Curry. When dealing with a crisis of confidence such as this "it does not necessarily matter whether it is based on fact or fiction," he shrugged. Investment banks, unlike commercial banks, are highly leveraged, "in other words they have a lot of debt" so are vulnerable to a sudden withdrawal of credit.


Andrew Tyndall 3/17/08 10:10:48 pm

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