So Citigroup reports a profit, Bernie Madoff gets led away in handcuffs, and the financial markets spend a few days in positive trading territory...and everything is OK again?
I think every financial brand you could name -- from brokerage firms, to insurance companies and banks, and to the markets overall -- is in dire need of an overhaul. No, it's worse than that. Who can trust anything they say? These brands aren't just damaged, theyre effectively meaningless, aren't they?
The G-20 countries are saying as much when they demand regulation before discussing any coordinated stimulus. They just don't trust what they're being told. And with good reason.
Citigroup was on death's door only a few weeks ago, requiring the U.S. government take some multi-double-digit ownership stake. Now it's making money, as are its gigantic rival U.S. banks. AIG plans to pay out over $150 million in bonuses. For that matter, GM doesn't want its $2 billion monthly fix this time around.
This is evidence of our utter inability to see or understand what these businesses are doing, let alone proof of the miracle of the marketplace.
I'm really not trying to be dour, but it's hard not to say the same thing about the stock markets. While the news commentators talk about markets as if they possess consciousness (can you think of any market coverage lately that didn't mention a mood or reactive insight of some sort?), the price movements really defy any obvious explanation. Traders trade based on trader trading -- or on obtuse computer models -- yet even now, in the third month of 2009, we're constantly being told something different...market pricing is related to world events, White House announcements, or the flapping of butterfly wings over Beijing. Or whatever.
There's absolutely no way your average citizen (i.e. yours truly) can fathom what's really happening to (or because of) layoffs, foreclosures, interest rates, trade figures, earmarks, or any other tidbit swirling around the mediasphere. And the proliferation of stories, columns, video clips, blogs, chat rooms, tweets, and every other mechanism of communications has only made it less likely (or even possible) that anything we learn has anything to do with actual knowledge.
This isn't a crisis of finance. This is a crisis of information.
I'm not sure anybody has a clear idea of what's going on, or how what's going on fits into everything else that's going on. So the Information Crisis isn't just remedied with transparency, although that would help a lot. We need to rediscover the sources for objective certitude and ongoing credibility.
The financial brands involved in this soap opera have nothing to add to this equation.
This surprises me. I would have thought that the most egregiously damaged brands -- Citi, BOA/Merrill, or the major stock exchanges -- would have announced massive programs to change the way they:
- Manage their businesses (assess risk, reward work), and
- Communicate that reality to their customers
I also would have thought that the financial media would have announced changes to how the news is:
- Collected (mandates to reporters, involvement with objective third-parties), and
- Collated into conclusions, not just running color commentary
But no. The branding on TV is still focused on the same soft-sell, nonsense message pablum that we were fed before the meltdown. And the reporting is so occupied with presenting debate and driving ratings that there's no sense that we're actually being told what's actually going on.
So stay tuned for more chapters in the soap opera. I hope we learn to enjoy it.
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