Recipie for Economic Disaster: Greed and Stupidity
Keynote speaker David Faber talks with Press Club member Pam Snook about the economic crisis
David Faber’s seen greed up close. A financial journalist for 23 years and a 16-year veteran of CNBC TV, Faber has interviewed the financial world’s famous and infamous and chronicles it in his book, “And Then the Roof Caved In: How Wall Street's Greed and Stupidity Brought Capitalism to Its Knees.”
What caused the crisis? Several factors, said Faber, keynote speaker at this year's New York Press Club Journalism Conference. He recalled that details of complex investments were never fully revealed by companies, which “sewed the seeds of demise.”
Annual reports as late as 2006 failed to mention the details of collateralized debt obligations (CDOs) and mortgage backed securities.
And he said he remembers talking to hedge fund managers and wondering if they had a full grasp of the true nature and risks pending before the avalanche in 2007.
Should media share the blame? “There’s a lot of criticism of the media now,” Faber said, “That we did not do enough, that we missed raising the red flag on the greatest credit bubble. Perhaps there was more we could have done to shed light, but the companies did not make it easy to understand what they were doing.”
Will Wall Street ever change? Good question, Faber said. We’re back from the brink of the financial crisis and things look like they're getting better, he said, but questioned whether the debacle will lead to lasting reforms. “I’m not optimistic that pay practices will change,” he said. “Lobbying arms are strong…memories are short…and it may take years to resolve. We need significant changes in regulation.”
Faber said what is different now is the way he looks at and covers news. When he started in financial journalism in 1987, he wrote on a typewriter and remembered feeling that the language of finance seemed to be designed to keep people out. At 23, he wrote for an Institutional Investor newsletter and felt that scoops were everything, especially if he could beat the Wall Street Journal. And when he started at CNBC he found it was harder to get people on TV.
He’s a better interviewer now, he said, learning from his mistakes like forgetting to ask Bernie Ebbers key questions during the WorldCom scandal. Today, Faber holds Emmy, Peabody, and DuPont awards, is the anchor and co-producer of CNBC's documentaries and a contributor to CNBC's Squawk on the Street. Faber also blogs at FaberReport.cnbc.com
Pam Snook Public Relations provides strategic media relations counsel to financial, environmental and technology businesses.
This month's underwriter is Con Edison, Inc.
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