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High finance continued to hog headlines. For the seventh straight weekday--every newscast since the Vice-Presidential debate between Joe Biden and Sarah Palin--all three networks led with the global financial crisis. ABC chose the action on Wall Street after last week's relentless selling as the Dow Jones Industrial Average rebounded with its largest daily point gain ever, closing up 936 at 9387. At 11%, it was the index' biggest daily percentage gain since a dead cat bounce during the depths of the Great Depression. NBC and CBS both led with the Story of the Day: the Treasury Department decided to part-nationalize major commercial banks.

"A bit of an about-face here," NBC's Tom Costello understated, as a Republican administration decided that the United States should invest $250bn in part-ownership of the private banking sector. Only a few weeks ago, mused CBS' Anthony Mason "free market libertarians…would have screamed bloody murder at this." Treasury Secretary Henry Paulson summoned the bosses of Bank of America, JP Morgan, Citigroup and Morgan Stanley to Washington to tell them about the new arrangement. Infusing capital by buying stock "can be done in days," Mason explained, "far more quickly than buying up the banks' toxic mortgage loans, which will take weeks." ABC's David Muir consulted a panel of top economists as to the wisdom of the buyout. Each "emphasized that this will be a short-term boost but the banks will still have to clean up their books."

Paulson "follows the European lead," explained NBC's Costello as Germany and France both announced plans over the weekend to back their banks. From London, CBS' Mark Phillips pointed to Prime Minister Gordon Brown as the first politician to put his government into the banking business. Brown "has gone from being the man without a plan to the man whose plan everyone is now following." Phillips teased Brown with the ethnic stereotype of the dour Scot, "no one has ever accused him of unnecessary charisma" before crediting his "no-nonsense manner and a lot of money"--$63bn in nationalization funds--with producing the first break in the "cloud of doom that has enveloped London's financial center." Phillips, meanwhile, showed us literal London fog literally enveloping its banking center. When Paul Krugman of Princeton University and The New York Times was awarded the Nobel Prize for Economics, NBC's Costello quoted the professor as praising the British Brown as acting "most decisively to save the world's financial system."

ABC's Betsy Stark was astonished at the reaction from traders on Wall Street to the European financial developments. She called the single day's rise in stock prices an "astounding about-face," sensing "euphoria as extreme as the despair we witnessed last week." She warned that bullishness can only last if the bailout works: "The key measure of that will be the credit markets. Do banks start lending again?" NBC anchor Brian Williams consulted Michelle Caruso-Cabrera from his network's sibling financial news cable channel. "Historically when you see explosive moves like we have seen it often means a bottom for the stock market," the CNBC anchor hypothesized, before warning that it "does not mean a bottom for the economy. We think the economy definitely gets worse from here."


Andrew Tyndall 10/15/08 4:00:10 pm

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