Nearly four months after the collapse of Bear Stearns, media voices are still debating what led to the failure of the 85-year old investment bank that had survived years of previous turmoil, including the Great Depression.
After JPMorgan Chase’s CEO concurred with an August 2008 Vanity Fair article alleging that CNBC reporting could have been part of Bear Stearns’ downfall, the cable channel’s on-air editor rose up to defend CNBC.
“Well, you know, he [Dimon] said one thing that I’m just – listen, I didn’t watch it,” CNBC’s Charlie Gasparino said, “I’m just going by what appears to be a transcript here: ‘Where there’s smoke, there’s fire.’ Oh really? Sometimes where there’s smoke, there’s no fire, Jamie. I’ve got news for you.”
Gasparino’s July 8 “Power Lunch” rebuttal slammed comments from JP Morgan Chase CEO Jamie Dimon who complained about CNBC’s reporting in an interview aired on PBS’s July 7 “The Charlie Rose Show.” Vanity Fair also issued a story in its August 2008 issue blaming Bear Stearns’ situation on CNBC and three other companies.
But according to Gasparino, assertions that rumors were responsible for Bear Stearns’ collapse are the product of “ill-informed writers and reporters” and that the company had several fundamental flaws – including its leadership – which caused the investment bank’s failure.
“I mean, what he [Dimon] was essentially saying is that he believes that rumors brought down Bear Stearns,” Gasparino said. “I know that’s become popular among some ill-informed writers and reporters lately – that rumors took out a firm that had bad management, which earlier in the summer, the CFO got on a conference call and said this was the worst financial debacle he’s ever seen and the stock went down like 10 bucks in three minutes, a same firm where, you know – the CEO was playing golf while Rome was burning.”
“You could name a million problems with Bear Stearns that kind of gave the impression that there was a problem there – a real desperate problem,” said Gasparino. “And it ain’t rumors; I got news for you.”
The August 2008 issue of Vanity Fair narrowed Bear Stearns’ (NYSE:BSC) demise down to four specific culprits – CNBC, SAC Capital Management, Citadel Investment Group LLC and Goldman, Sachs &
In 2002, Business & Media Institute advisory board member Don Luskin said that Gasparino had played a role in rumor mongering for then-former
Luskin said Gasparino was “formerly an uncritical and dutiful conduit for Eliot Spitzer's leaks at The Wall Street Journal.” The claim was an attempt to connect Salomon Smith Barney telecom analyst Jack Grubman’s upgrade of AT&T with improper influencing from Citigroup chairman Sandy Weill according to Luskin.