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Financial crisis done
1. Max Collins, Brent Petrone, Stephanie Steinberg, ElyTwiggs, Lauren Zobl
NPRâs News Coverage of
the Financial Crisis
2. What is important to the average
NPR listener?
1. Useful knowledge for an average listener
2. Explanation of terminology
3. Relating to the audience
3. News Coverage Before
September 7th, 2008
â˘Positive
⢠NPR seemed to be informed of the subprime mortgage crisis and were
reporting from âoutside the bubble.â
⢠Coverage was very fair and did not point fingers.
⢠Brought in contrasting and expert perspectives.
⢠Used personal stories.
⢠Lacked sensationalism.
⢠Did not use complex financial terms.
â˘Negative
⢠Lacked coverage during first half of the decade.
⢠Coverage needs more financial advice for the individual.
4. âSubprime Lendingâ
September 3rd, 2001
Morning Edition
ď This was the first coverage that NPR had that featured Subprime lending.
ď The bubble is beginning to grow.
ď Afterwards, there is no coverage on this financial issue until 2005.
ď This was useful for the average listener because the broadcast talked about how there was an âeasy availability of
creditâ and âpeople could obtain mortgages through subprime loans that carry higher than normal interest rates.â
ď Subprime mortgage loans have tripled since 1995, and have hit the big banks.
ď Americans owe more than $5 trillion on their mortgages.
ď The terminology was clear and simple except when defining the terms:
ď Refinancing.
ď Predatory lending.
ď Perspectives from the following sources made the broadcast easier to understand:Â
ď David Gibbons: Deputy Comptroller for Credit Risk with Comptroller of the Currency.
ď âThe growth in the subprime marketplace really has been sort of a wild west in our marketplace,
motivated by people seeking quick profits.â
ď Robert Leighton: Economist from the Brookings Institute.
ď This broadcast relates to the audience because:
ď Relationship between banks and borrowers are told:
ď âIn some instances banks and finance companies are simply taking advantage of borrowers: Hiding
punishing interest rates and other fees in complicated loan documents.â
ď Future Homeowners/Borrowers:
ď âLoans are too risky-That could make it harder for consumers with blemishes on their credit records, to
get a mortgage.â
5. âMortgage Failures Rise; So Do Risky
Loansâ
February 9th, 2007
Morning Edition
ď Useful Knowledge:
ď Adjustable Mortgages.
ď Payments increase from year to year, and defaults have risen.
ď MoreAmericans defaulting on mortgages than at any point in last 5 years.
ď Defaults most prevalent people with Subprime mortgages.
ď Possible solutions from both sides:
ď âMartin Eacks told the Senate banking committee this week, banks and brokers should be required to make certain that borrowers
can repay a home loan in full, not just the artificially low teaser payments. He also says mortgage brokers should be required to
act in the best interest to their clients, just like stockbrokers, lawyers and real estate agents.â
ď âDoug Duncan argues there's no need for new regulation, since mortgage defaults are not threatening overall economy. Duncan
admits many of the risky loan types made popular in recent years have not been widely tested. But he says the market will adjust
on its own.â
ď The terminology was simple.
ď Perspectives from Experts:
ď CEO Martin Eacks, Center for Responsible Lending:
ď âBrokers and subprime lenders are not bad people, but their financial incentives are different than what we saw just 20 years ago. Now,
their financial incentives are to close as many loans as possible as fast as possible, regardless of risk.Whether the borrower can repay
the loan is really not of their financial concern.â
ď Fairness.
ď Chief economist Doug Duncan of the Mortgage BankersAssociation.
ď Relates to the audience:
ď Real life example of anAmerican affected by these high interest rates.
ď Dolores King.
ď What is being done now:
ď âBanking giant HSBC says it's already getting choosier about the loans it buys.And other investors are also pushing banks and
brokers to be more careful in the loans they makeâŚâ
6. âThe Mortgage Market: What
Happened?â
April 26th, 2007Â
ď Useful knowledge:
ď Uses many different statistics and facts:
ď Nearly 23 percent of all mortgages taken out in 2005 were interest-onlyARMs, and more than 8
percent were payment-optionARMs, according to First American Loan Performance.
ď Subprime loans expanded to 20 percent of the mortgage market in 2006, from 9 percent a decade
earlier.
ď Terminology
ď Explains terms like adjustable-rate mortgages (ARMs) and subprime mortgages but does not explain
refinancing.
ď Use of perspectives from experts:
ď Federal Reserve executive RogerT. Cole.
ď Kathleen Keest of the Center for Responsible Lending:
ď "They took the riskiest of products and sold them to the weakest borrowers to compound risk.â
ď Relating to the audience:
ď Provides an example of a person and how their montly mortgage payment has increased.
ď Provides solutions/what is being done now that this problem exists.
ď âSeveral lenders are taking steps to curtail the rising tide of foreclosures.â
ď Washington Mutual
ď Citigroup and Bank of America
ď Freddie Mac
ď State of Ohio
ď âRenegotiating loans â lowering the interest rate or extending the payment period â may be more
attractive than foreclosing.â
7. News Coverage Between
September 7th, 2008 & October 3rd,
2008
â˘The news surrounding the financial crisis was well reported.
â˘NPR brought in a variety of different sources to cover the story:
⢠Editors of economic sections in newspapers.
⢠NPR correspondents.
⢠Government officials.
â˘Previous knowledge is not required to understand a story and the coverage teaches
the listener.
â˘The stories provide alternative perspectives.
â˘Sources and/or journalists admit when they do not know the answer to a question.
â˘Most of the news segments we found we broadcasted in the beginning of each show.
8. âAIG Gets OK to Borrow from Subsidiariesâ
September 15th
, 2008
All Things Considered
ďThis article has some useful knowledge for the average reader including
facts aboutAIG and its possible bailout. It spells out what they need
and why they need to be saved.
ďStock is down 90% this year and fell more than half today.
ďThe women being interviewed (Diane Brady, BusinessWeek) uses some
confusing terminology that is not clarified:
ďâCredit derivative portfolioâ
ďâRampant short-selling of stockâ
ďâSovereign wealth fundsâ
ďThe article only relates directly to the audience in this one quote:
ďâThey do not want this company to fail. It's in too many areas, it's too big,
and the ripple effects would just be too profound.â
9. âFinancial Giants Falling: Lehman, Merrill
Lynch, AIGâ
September 15th
, 2008
Morning Edition
ď This has useful information for the average listener because it informs them of what
President Bush is doing to take action.
ď This broadcast does not use any confusing terminology and thus the average reader
with no background information can understand it.
ď This relates to people on Main Street (people outside of the financial markets).
ďOne option: âThe willingness and capacity of financial institutions to lend to
consumers and companies will decrease.The economy may stall.â
ďOther option: If we get past the next few days and lending doesnât decrease âthen we
may get through this with just a period of rough growth, but not a very deep
recession.â
ďâThe key is how much lending goes into the economy.â
ď Sources in the article rely their doubt about what will happen with AIG and are
completely honest with the listener.
ďWSJ Economics Editor, DavidWessell.
ď He admits that he does not have the answer to whether the financial crisis is getting worse.
ďPresident Bush.
10. âForeign Investorsâ Exit Causes Lehman Woesâ
September 10th
, 2008
All Things Considered
ďThis broadcast completely explains as much asAdam Davison (NPRâs
global business correspondent) knows about Lehman Brothers and
why it is not being bought by foreign banks.
ďThe interviewer asks if Lehman Brothers will be bought by a foreign bank
and he says:ânot that weâve seen but who knows what is happening in
secret.â
ďThis article does not have any confusing words and is very easy for any
listener to understand.
ďDavison makes sure that the audience knows that the US government
is has their best interest in mind:
ďThey will not let the foreign banks get a controlling share (more than 5-
10%) of Lehman Brothers.
11. âUnder Pressure from Bailout, Lawmakers in Quandaryâ
September 25th
, 2008
All Things Considered
ď This article is useful to the average reader because it describes how the bill impacts
legislators and their constituents.
ď The article is very balanced.
ďInterviewed both Republican and Democratic Congressmen.
ď This article does not have any confusing terminology. It is even too simplified at
times which makes it informal.This is not necessarily a bad thing.
ďâI want to make sure that there aren't individuals somewhere sitting on a yacht
eating shrimp and drinking champagne that have taken advantage of theAmerican
people.â- Representative Jon Porter (Republican, Nevada)
ď This article is entirely related to the average listener because it explains the
importance of the bill but also the drawbacks to it and the Congressman's hesitancy
about it.The article concludes with:
ďâDoing nothing at this point will bring those same uncertainties into the
marketplace and could start a run on banks and cause failures that end up hurting
Main Street.â
12. News Coverage After October 3rd,
2008
â˘Even after the crisis ended, NPR continued to break down
terminology to help with listener understanding.
â˘Articles included historical context about other recessions.
â˘Comprehensive one year anniversary coverage recaps key events
of crisis.
â˘Explained what the government should do to prevent future
financial crises.
â˘A variety of sources from universities, investment firms and
economic research institutions.
13. Recessionâ
October 24th, 2008
Useful Knowledge Terminology
ď The story gives useful knowledge for
the listener than makes it easier for
them to understand by relating to
other financial crises in history:
ďGreat Depression
ď1973-1974
ď1980-1982
ď1990s = Japan
ďHarvard Economics Professor
Jeffrey Frankel on Great
Depression and Japanâs recession:
âBoth were ushered in by the crash
in real estate and stock markets.
Hopefully, the difference is we
know how to handle it better this
time.â
ď Overall the story used simple
terminology and even defined the
word recession:
ďâ(Economists) say a recession is
âa significant decline in economic
activity spread across the economyâ
that lasts for more than a few
months and that manifests itself
in real gross domestic product,
real income, employment,
industrial production and
wholesale retail sales. The term
ârealâ refers to figures that have
been corrected for inflation.â
ďâTwo consecutive quarters of
decline in real GDP growth.â
Photo gallery from this article.
14. âTIMELINE:
A YEAR OF FINANCIAL CRISISâ
â˘Interactive timeline
outlining financial crisis from
Sept. 2008-Aug. 2009.
Provides the viewer with a
key events and is very useful.
â˘Provides details about
beginning of crisis leading
through the passing of
Obamaâs stimulus plan and
its short term effects which
have important affects on the
American citizen.Timeline
15. âSeries Overview: Examining The Financial Crisisâ
September 7th, 2009
ďBreaks down crisis into different segments.
ďOffers comprehensible and quick explanations of these
segments with links to more detailed stories.
ďConsolidates the financial crisis coverage into one
comprehensive page for the online reader to use.
16. âThe Bailout And Fallout: Adding Up The
Costsâ
September 15th, 2009
All Things Considered
ďKnowledge for the average reader: explains what determines if the
governmentâs actions will be a success.
ďHow fast the economy recovers.
ďHow many banks pay back theTreasury'sTARP money.
ďHow much the Fed will get for dicey mortgage-backed securities it
bought from Fannie Mae and Freddie Mac.
ďWhether Chrysler sinks or swims.
ďRelates to the audience: puts the financial damage into perspective.
ďThe bailout could cost taxpayers around $600 billion.
ď"In this new world â what we call the new normal â economies will
grow less rapidly,â says investing firm Mohamed El- Erian. "It's going to
take us a long time to work our way out of this crisis.And therefore, the
ability of the U.S. economy to create jobs is going to be less than it has
been in the past.â
ďErian explains the next generation will face increased taxes and inflation.
ďImpact of loss of confidence in American market.
17. âWill The Global Economy Learn Its Lesson?â
September 17, 2009
Morning Edition
Terminology: Relates to the Reader:
ďPinpoints the problem.
ďMakes a complex issue
simple:
ďâThe world economy was out of
balance. Countries with the big
trade surpluses, like China and
Germany, had too much money
to spare. They lent it to
countries with big deficits. The
lending and borrowing got
reckless.â
ďOffers suggestions on how to
prevent a future financial
crisis:
ďEconomists: The U.S. needs
to sell more goods abroad
and import less.
ďBorrow less money from
China and other countries.
ďReduce government
spending.
ďOpposite of solution to crisis.
24. What was their approach to financial
reporting?
ďNPR attempted and succeeded and at simplifying complex issues
for the average listener who may not understand economics.
ďThe short segments (especially from Morning Edition) helped to
not flood the listener with too much information at one time.
ďNPRâs broadcast transcriptions were in a reader friendly layout.
ďBullet points.
ďHeaders.
ďIntroducing sources.
ďOverall, throughout the coverage NPR brought in a variety of
different sources several credible institutions.
25. What could they have done better?
ďNPRâs coverage before hand was somewhat limiting although
they did cover it briefly in 2001.
ďNPR could have included more average citizens.
26. Overall, was NPRâs coverage effective?
ďNPR had useful knowledge for average listener:
ďIt had information that the average listener could understand and
relate to their life.
ďExplanation of terminology:
ďThe terminology was generally understandable for anyone that
did not have any prior knowledge of the topic.
ďRelating to the audience:
ďThe articles normally tried to relate back to how the crisis would
affect Main Street and the average citizen.
ďOverall, we concluded that NPR was effective at covering the
financial crisis.