Financial Podcast Buys A Toxic Asset To See How It Works

from the reporting-by-getting-your-hands-dirty dept

I've written in the past how wonderful NPR's Planet Money podcast is. During the "dark days" of the financial crisis, it was one of the true beacons of light explaining in easy-to-understand detail what was happening, and exploring aspects of the story that the mainstream press glossed over completely. In the process, they broke some stories, highlighted some key aspects of the debate, and really brought a lot more people into the discussion about how we deal with the economic situation of the day. I still listen to every episode on the day it comes out, but in the last few months there really hasn't been that much going on in the economy that needed a really thorough breakdown.

Given that, it seems like the Planet Money crew has hit on a rather brilliant idea. Back when this whole thing started, of course, much of the focus was on the so-called "toxic assets," the derivatives made up of slices of mortgages that had been packaged and repackaged together in creative ways -- in theory to minimize the risk, but in reality, often putting all of the risk in one big basket made to look artificially safe. The focus on toxic assets has mostly fallen off the mainstream press radar, but the folks at Planet Money decided to check in on those toxic assets and dig into what a toxic asset really means. But they were having trouble getting their heads around what a toxic asset really is, how it functions and how to best explain it to their audience.

So they bought a toxic asset.

Literally, the four reporters on the team, along with their producer, each pooled about $200 of their own money, in order to buy $1,000 worth of toxic asset. They'll be tracking whether or not they make their money back, and if they make anything on top of that as well (any profits will be donated to charity). The podcast itself is fascinating, as two of the reporters spend a couple days with a company called Mission Peak Capital, based out in Kansas, which has been analyzing and buying up toxic assets. They go through the whole process of analyzing and bidding on a few of these things until they find the one they wanted. Mission Peak bought the whole asset for $36,000, marked down from $2.7 million, and then sold a $1,000 sliver to the team at Planet Money.

The Planet Money folks have set up a detailed interactive website that goes into great detail about what's in the asset -- probably a lot more detail than most previous owners of the asset knew about themselves -- as well as how much they've made and how long they have until the asset runs out for them (as more of the houses whose mortgages are included in the asset get sold, they get closer and closer to being kicked out of getting any of the remaining revenue).

The story itself is fascinating, but what really drew me to it is what a great example of modern reporting this is. This goes way beyond what we normally think of as reporting, and breaks down that mythical "impartial reporter" barrier in a very effective and useful way. Some people have suggested that the reason why journalism may be struggling these days is that people can go directly to sources themselves (or sources can broadcast themselves) without needing an intermediary to "write the story." Of course, that doesn't mean the role of a journalist goes away, but it changes drastically. In this case, the team at Planet Money has realized that in order to "report" on this story, they need to become the source themselves, and open that up wide to their audience. It's a fascinating and incredibly effective modern form of journalism, and I can't wait to see where they take it. They're already planning to try to track down some of the mortgage holders whose mortgages are in the asset, as well as homeowners and former holders of the asset. Even if you're not that interested in the details of a toxic asset, it's hard not to find the whole thing incredibly compelling. It's useful and educational interactive storytelling at its finest, which is what true journalism should be.


Reader Comments (rss)

(Flattened / Threaded)

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    Anonymous Coward, Mar 16th, 2010 @ 9:19am

    As someone who spent the entire weekend reading the 1,200 page "Ernst & Young's Financial Planning Essentials" available at
    http://lehmanreport.jenner.com

    I believe that reform on one level or another is necessary. A loophole in another country should not be shunned by the auditor in place.

    Thing is that this is E&Y's Enron.

    Secondly, derivative and CDO swaps should be seen as "Gambling" and regulated by both state and federal authorities as such.

    Perhaps healthcare, specifically healthcare insurance should be seen as the same.

     

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    Freedom, Mar 16th, 2010 @ 9:25am

    Details Details Details...

    One of my pet peeves with traditional journalism is the lack of details or in-depth reporting.

    If this is the new trend of highly detailed reporting with tons of details along the way - that's awesome.

    By the way, take Health Care. Any real reporting on what's in it? I hear the talking points all the time, but no real substance. Heck, even Nancy Pelosi effectively says don't worry yourself over the details - you'll like it. I don't know about you, but as someone in the IT field, EVERYTHING and I mean EVERYTHING is about the details in my world!

    While this was a more traditional news outlet (although maybe you could make arguments otherwise) ... love him or hate him, it was truly a nice experience last night to see that Glen Beck on his late night TV show do some investigative reporting on one of the heart felt cases brought before the cameras by the democrats to justify health care. Once you heard the "real" details of the case, it was definitely an eye opener, and more importantly a great example of why we DON'T need the current health-care insurance reform. However, before the details ... it was just a tear jerk where you were a heartless bast*rd for not wanting insurance reform.

    By the way, shame on the democrats for basing a major shift in the America way of life on emotions. We got the same cr*p with Bush and 911. I expect more out of my representatives!

    Freedom

     

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    Anonymous Coward, Mar 16th, 2010 @ 9:28am

    Serious Business

    Moody's recently threatened to lower both the US and Brittan's credit rating from AAA.

    Question of who gets their credit restored to AAA is who will prosecute Lehman first.

     

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    Flakey, Mar 16th, 2010 @ 9:34am

    Reporting side

    This is where the newspapers fail. It's what they did good that got them where they are before papers were monetized by book keepers into cash registers more than anything else.

    As people were laid off seeking the holy grail of profit, they no longer have the staff to do the in depth reporting they used to do. Often investigative reporting isn't very in depth nor does it reveal to the same levels as it once did.

    Because of this, news isn't very valuable when ever paper reporter is taking syndicated feeds, rewriting them to avoid copyright problems, and regurgitating the whole mess back up.

    What has been left other than local news, is news a day old that you've already seen, rehashed to death, and served to you as an ad carrier. Not exactly what you would pay premium prices for news over.

    The real news reporting, where the reporter goes out and digs up the dirt, lays it out as it is and what is good or bad about it, pulling no strings in the process, is nearly dead. That's what people that read the news really want and their not getting it because it is deemed too expensive to do.

    Rupert wanting payment for news to levels that it was before isn't going to happen unless he can provide what is worth paying for.

     

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    Richard Corsale (profile), Mar 16th, 2010 @ 9:59am

    Typ-o

    During the "dark days" of the financial crisis

    should be:

    During the "dark days" of the "financial crisis"

     

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    Anonymous Coward, Mar 16th, 2010 @ 11:12am

    coolest reporting concept ever

     

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    Ben, Mar 16th, 2010 @ 11:14am

    First, I'm glad that Techdirt is calling out the myth of the objective reporter. That's important. Debunking this idea is critical as we move into the future, and our information comes from a greater number of sources. Inevitably, the objectivity argument is rolled out to support traditional mainstream journalism, and it it fundamentally flawed. If you are a reporter, and you have chosen a story to follow, you can no longer claim objectivity.

    Second, I applaud the Planet Money crew for doing what they are doing. The sad thing is that they had to put up their own money to do it. I worked for an NPR affiliate for several years, and while it's true that all public media constantly struggles with money, the NPR behemoth routinely throws thousands of dollars into projects that return virtually nothing when compared to what this podcast is accomplishing. I hope someone notices...

     

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