ABC Hypes IndyMac Panic For Third Day Straight
ABC was full of contradictions on July 16. “Good Morning America” told viewers not to panic over the IndyMac bank failure, but listed a handful of banks its experts suspect are troubled.
The show criticized investors for buying into the “doom-and-gloom” reporting in between making its own doom-and-gloom predictions. The July 16 broadcast made three days in a row of IndyMac frenzy for the ABC morning show after hysterical reports July 14 and 15.
Correspondent Bianna Golodryga suggested the economy needs confidence considering optimism is at its lowest point in 27 years. “[I]f the investors can focus on these [earnings] reports instead of panicking about doom-and-gloom scenarios such as further bank losses, Chris and Deborah, today will be a relatively good day on Wall Street,” she said.
ABC investigative correspondent Brian Ross then added his own litany of contradictions to the show. Ross acknowledged that the Federal Deposit Insurance Corporation’s (FDIC) list of 90 or so troubled banks is kept private to avoid scaring account holders.
“And the banking industry says such lists of troubled banks should not be shared with average Americans who may be unduly frightened,” Ross reported just after listing 10 “troubled” banks.
A graphic listed five banks that have already been taken over, not mentioning how long ago the takeovers occurred. The show named five more banks it claimed are troubled, complete with city and state.
So much for avoiding undue concern that could spark another “run on the bank.”
Edward Yingling, president of the American Bankers Association, even told “Good Morning America” it was a bad idea to single out “at-risk” banks. “Frankly, we do think it’s irresponsible to be circulating these lists with names on them as though they really mean something,” he said, adding that the ratios people have created to rate the health of the banks are “incredibly simplistic and misleading ratios.”
Ross even hinted at the uselessness of the ratings by noting that IndyMac had a ratio of 50. He had earlier reported that banks considered in “trouble” had numbers more than twice that.
Host Chris Cuomo then spoke with contributor Mellody Hobson, president of Ariel Investments. She appeared to be fed up with the panicking herself. “I think there’s a great deal of speculation and innuendo going on here. The only list that matters is the list that’s kept by the Federal Deposit Insurance Corporation, the FDIC.”
She continued, “90 names on that list right now. But here’s the thing to keep in perspective. A decade ago, back in 1994, there were 575 troubled banks. This is a normal part of the business cycle and the economic cycle in this country, and I feel that we are sparking some fears here that may lead people to do things that would then lead the banks to fail.”
Hobson questioned lists produced by private groups. “I’m suspect about where the lists are coming from and the motives of some of the people putting the lists out here,” she said.