Financial Journalism

[mkz]

I know that to some extent the horse has already bolted, but I thought it would be worth enquiring about this. The Editors' Code of Practice is here:

http://www.editorscode.org.uk/the_code.html

I wrote to the secretary of the Editors' Code of Practice Committee, Ian Beales, to ask whether the section on financial journalism included investments in property, and if not why not. He has given me permission to copy our conversation here. I would appreciate some opinion on how to reply to the questions in his email of 11:47 today? Read from the bottom, obviously.

From: Ian Beales [ianbeales@mac.com]

Sent: 31 October 2010 12:15

To: $ME

Subject: Re: Financial journalism

Please do. But I'd rather not engage with the forum myself! The

annual Code Review will be announced in December, and suggestions are

invited, so people couold respond to that, if they wished.

Ian Beales

On 31 Oct 2010, at 12:04, $ME wrote:

> These are all very fair questions, to which I do not have the

> answers. Would you mind if I were to copy this conversation to an

> internet forum I frequent, so that I may gather some opinion before

> I reply?

>

> Regards,

>

> $ME

> ________________________________________

> From: Ian Beales [ianbeales@mac.com]

> Sent: 31 October 2010 11:47

> To: $ME

> Subject: Re: Financial journalism

>

> What would constitute a significant interest in the UK housing

> industry, and which journalist could possibly have such an interest?

> Also isn't it a question of intention to influence the market? And

> how do you identify cause and effect in a market that is so

> unpredictable? And over what term?

>

> Of course, we are always open to suggestions on how the Code might be

> improved but, unless there is a provable offence, it is difficult, if

> not impossible, to police it.

>

> Best

>

> ian Beales

>

> On 31 Oct 2010, at 11:31, $ME wrote:

>

>> Thank you, that is helpful.

>>

>> I would not expect the ownership of one's own home to constitute an

>> investment in UK residential property. However, as I'm sure you are

>> aware, many people do own more residential property than just their

>> own home, for investment purposes. I do not understand why you

>> believe that journalists cannot affect, and have not affected, the

>> residential property market. It is a slower process, of course, and

>> perhaps a little less direct, but the intent and effect is the

>> same. On that basis, would you consider widening the scope of

>> clause 13ii to include this type of investment?

>>

>> Regards,

>>

>> $ME

>> ________________________________________

>> From: Ian Beales [ianbeales@mac.com]

>> Sent: 31 October 2010 11:09

>> To: $ME

>> Subject: Re: Financial journalism

>>

>> Clause 13ii is framed to ensure that compliance with the Code would

>> reflect compliance with the requirements of the Financial Services

>> Act, which as I understand it would normally relate to shares and

>> securities.

>>

>> The object, of course, is to prevent the ramping of shares for

>> personal gain. I'm not sure that could happen in the same way for

>> property investments not involving shares or securities. I don't

>> think it would normally cover an investment such as a mortgage on

>> one's own house.

>>

>> I hope this helps.

>>

>> Best wishes

>>

>> Ian Beales

>>

>>

>> On 27 Oct 2010, at 14:13, $ME wrote:

>>

>>> Would it include property investments that were not made via shares

>>> or securities? For example, would it be acceptable for a journalist

>>> who has an investment in UK residential property to be able to

>>> write about UK residential property without disclosing their

>>> interest?

>>>

>>> Regards,

>>>

>>> $ME

>>>

>>> -----Original Message-----

>>> From: Ian Beales [mailto:ianbeales@mac.com]

>>> Sent: 27 October 2010 14:02

>>> To: $ME

>>> Subject: Re: Financial journalism

>>>

>>>

>>> Dear $ME

>>>

>>> I'm not sure I fully understand your question - property investments

>>> via shares and securities are would be included. Could you

>>> elaborate,

>>> please?

>>>

>>> Yours sincerely

>>> Ian Beales

>>>

>>>

>>> On 27 Oct 2010, at 12:43, $ME wrote:

>>>

>>>> Dear Mr Beales,

>>>>

>>>> May I ask why clause 13 (ii) of the Editors' Code does not include

>>>> property as well as shares and securities?

>>>>

>>>> Thank you,

>>>>

>>>> $ME

[porca misèria]

> What would constitute a significant interest in the UK housing

> industry, and which journalist could possibly have such an interest?

Answers:

1. Any beneficial ownership or part-ownership of residential property other than the journalist's primary residence is a significant interest. An exception could perhaps be made for property that is involuntarily owned (e.g. through inheritance), but that exception should be time-limited to six months - in other words, a grace period to dispose of an interest before it becomes reportable.

2. Indirect interest (e.g. a family member's ownership) should be treated on exactly the same basis as with any other investment. So for example in circumstances where you'd have to declare your wife's shareholding, you would have to declare her property on exactly the same basis.

Supplementary note: since property is often a highly-geared investment (because it is commonly mortgaged), this is correspondingly more important than un-geared shareholdings.

[roger196]

I know that to some extent the horse has already bolted, but I thought it would be worth enquiring about this. The Editors' Code of Practice is here:

The present discussion on the cap for housing benefit has an impact on rent levels and house prices. I think a journalist should disclose if he has a BTL property as his own financial position is effected by these price movements. The public should be able to distinguish between someone who is financially disinterested and one who is not.

[cabbagepatchkid]

I know that to some extent the horse has already bolted, but I thought it would be worth enquiring about this. The Editors' Code of Practice is here:

http://www.editorscode.org.uk/the_code.html

I wrote to the secretary of the Editors' Code of Practice Committee, Ian Beales, to ask whether the section on financial journalism included investments in property, and if not why not. He has given me permission to copy our conversation here. I would appreciate some opinion on how to reply to the questions in his email of 11:47 today? Read from the bottom, obviously.

Really good point/idea and nice one for contacting this chap and posting here. However, isn't there a danger that if journos actually declared their interests as suggested by HAM above, it would actually be perceived as a buy signal by many (ie make the problem worse)?

The point made by roger196 re the housing benefit issue is a very good one.

Edit to add surely HAM suggestion should also include purchase date of each property (or price) and also inventory including twigs in vase and other info

Edited October 31, 2010 by cabbagepatchkid

[Tired of Waiting]

I know that to some extent the horse has already bolted, but I thought it would be worth enquiring about this. The Editors' Code of Practice is here:

http://www.editorscode.org.uk/the_code.html

I wrote to the secretary of the Editors' Code of Practice Committee, Ian Beales, to ask whether the section on financial journalism included investments in property, and if not why not. He has given me permission to copy our conversation here. I would appreciate some opinion on how to reply to the questions in his email of 11:47 today? Read from the bottom, obviously.

Very good point. Well done!

However, IMHO, you lost 90% of the argument here:

"I would not expect the ownership of one's own home to constitute an investment in UK residential property."

Hotairmail already made above some valid points about that. I second them.

And I would add that owning or not one's own home is one the most important and strongest emotional engagement with property, or any asset for that matter. It is instinctively a family nest! OF COURSE journalist should disclose their interest related to it. :angry: And BBC EDITORS TOO !

Edited October 31, 2010 by Tired of Waiting

[Tired of Waiting]

I know that to some extent the horse has already bolted, but I thought it would be worth enquiring about this. The Editors' Code of Practice is here:

http://www.editorscode.org.uk/the_code.html

I wrote to the secretary of the Editors' Code of Practice Committee, Ian Beales, to ask whether the section on financial journalism included investments in property, and if not why not. He has given me permission to copy our conversation here. I would appreciate some opinion on how to reply to the questions in his email of 11:47 today? Read from the bottom, obviously.

Any update on the case?

This issue is really very important. British financial journalism failing to warn the nation properly regarding the credit bubble was one of the main causes of this crisis. Politicians were not scrutinised enough by them, and in democracies they are supposed to be society's "watchdogs". They've failed miserably.

Perhaps only the "The Economist", was on the case, IIRC, warning about a property bubble. But even they didn't realise the full implications of the bubble.

The BBC and the "quality papers" failed completely. This issue is really very important. And your route is very promising. Brilliant idea. Well done. Don't give up. Keep it up!

.

Edited November 1, 2010 by Tired of Waiting

[mkz]

Any update on the case?

No, I was waiting for some more feedback before I replied. Anyone else got anything to add?

[Vested Disinterest]

I'm not against your idea at all. I frequently write to editors about their bias and ramping. However, where would you stop? What about other high value commodities, such as race horses, antiques, art, old cars, etc. Most people writing about these in the media will probably have invested in them.

[Tired of Waiting]

I'm not against your idea at all. I frequently write to editors about their bias and ramping. However, where would you stop? What about other high value commodities, such as race horses, antiques, art, old cars, etc. Most people writing about these in the media will probably have invested in them.

If someone is writing an article, and they have an interest related to it, they have to declare it.

[South Lorne]

....good approach ...also there should be some declaration from broadcasters TV / Radio ....and if they are quoting VIs such as Estate Agents, Surveyors , Builders, Lenders , Brokers ...they should state their interest link...so that the people who are less aware... are made aware.....transparency and disclosure should be the name of the game .....

[gravity always wins]

Very good point. Well done!

However, IMHO, you lost 90% of the argument here:

"I would not expect the ownership of one's own home to constitute an investment in UK residential property."

Hotairmail already made above some valid points about that. I second them.

And I would add that owning or not one's own home is one the most important and strongest emotional engagement with property, or any asset for that matter. It is instinctively a family nest! OF COURSE journalist should disclose their interest related to it. :angry: And BBC EDITORS TOO !

The author is a highly leveraged "homeowner" that would give a good idea of a potential Vi.

Mind you highly leveraged homeowners really shouldn't be writing about property as they clearly know f**k all about it!

TIMBER!!!

[Tired of Waiting]

The author is a highly leveraged "homeowner" that would give a good idea of a potential Vi.

Yes, that would do.

Mind you highly leveraged homeowners really shouldn't be writing about property as they clearly know f**k all about it!

TIMBER!!!

Good point.

.

Edited November 1, 2010 by Tired of Waiting

[erranta]

The present discussion on the cap for housing benefit has an impact on rent levels and house prices. I think a journalist should disclose if he has a BTL property as his own financial position is effected by these price movements. The public should be able to distinguish between someone who is financially disinterested and one who is not.

It goes far beyond that.

Nearly all the provincial town/city local papers must get a huge proportion of their revenues from local EA's (thus a massive vi/cozy relationship develops)

Loads of smaller formerly independantly owned newspapers went bust in the recessions and got bought out by massive conglomerates like 'Archant' who pull the strings and steer the 'insular ideology' in the press reports!

A spate of takeovers in recent years has greatly concentrated British regional and local newspaper ownership.

Less than twenty publishers now account for almost 90 per cent of all regional press titles in Great Britain.

Some national daily newspaper publishers also own regional weeklies and other local news titles.

The Trinity Mirror group, for example, accounts for 155 regional titles, mostly in Scotland and Wales, and in the North of England.

Rivals Johnston Press have 160 titles.

Newsquest owns 300+ newspapers and has a network of 160 local Web sites, which includes Glasgow's The Herald, The Northern Echo (Darlington) and Telegraph Argus (Bradford), together attracting more than 5 million unique users and over 50 million page impressions per month. All the Newsquest 'ThisIs...' news sites and other titles are listed here.

Regional publisher Archant owns 75 newspapers, including 42 'free sheets'. There are some 1,200 local/regional newspaper Web sites in the UK (March 2009).

You can see for yourselves how much a small group of the Elites have taken over total control of our media and influence our everyday 'ways of thinking'! :angry:

[yokel]

The Housing benefit arguing seems to be flushing out the property investors in the media and is an ideal context for every interviewer (if not a vi themselves) to ask every politician, charidee spokesperson and journalist if they own and rent out property.

Will Hutton was the first I heard insisting the HB cut would lead to `Highland style clearances'. It made me half remember a thread from a couple of years ago about him saying his wife owned a string of BTLs. Don't know if that's still the case but if so the questions are:

1. Would you and your wife evict an HB tenant if the HB still meant you made a profit? - i.e. become one of the `clearers'

2. Would you actually be able to find a private tenant able to pay the same amount?

3. Why don't you state your interest.

But: OP : an excellent initiative.

Y

[mkz]

> Also isn't it a question of intention to influence the market? And

> how do you identify cause and effect in a market that is so

> unpredictable? And over what term?

Anyone got any ideas for answers to these questions?

[Tired of Waiting]

Anyone got any ideas for answers to these questions?

IMO there is absolutely no need to identify cause and effect, or intention. Just one liners would be enough. Hotairmail post above ( # 4 ) exemplified it very directly. I think you are overcomplicating things. As I said before, if a journalist is writing an article, and they have an interest related to this article, then they have to declare it. It is very straightforward.

[porca misèria]

Anyone got any ideas for answers to these questions?

Intention is a red herring, just as for shares.

A journalist who writes an article comparing our listed supermarkets (tesco, sainsbury, morrison) will not, in most cases, have any intention of manipulating the market in supermarket shares, but still has to disclose any position they may have. Same principle should apply to housing.

[Tired of Waiting]

The Housing benefit arguing seems to be flushing out the property investors in the media and is an ideal context for every interviewer (if not a vi themselves) to ask every politician, charidee spokesperson and journalist if they own and rent out property.

Will Hutton was the first I heard insisting the HB cut would lead to `Highland style clearances'. It made me half remember a thread from a couple of years ago about him saying his wife owned a string of BTLs. Don't know if that's still the case but if so the questions are:

1. Would you and your wife evict an HB tenant if the HB still meant you made a profit? - i.e. become one of the `clearers'

2. Would you actually be able to find a private tenant able to pay the same amount?

3. Why don't you state your interest.

Good post.

But: OP : an excellent initiative.

Y

+ 1

Edited November 2, 2010 by Tired of Waiting

[Tired of Waiting]

Intention is a red herring, just as for shares.

A journalist who writes an article comparing our listed supermarkets (tesco, sainsbury, morrison) will not, in most cases, have any intention of manipulating the market in supermarket shares, but still has to disclose any position they may have. Same principle should apply to housing.

+ 1

[Redcellar]

IMO there is absolutely no need to identify cause and effect, or intention. Just one liners would be enough. Hotairmail post above ( # 4 ) exemplified it very directly. I think you are overcomplicating things. As I said before, if a journalist is writing an article, and they have an interest related to this article, then they have to declare it. It is very straightforward.

+1

You were spot on. Any interests should need to be declared irrespective of what type of object is being discussed.

[Tired of Waiting]

But: OP : an excellent initiative.

+ 1

A change in standards in this area would have a very lasting effect in this country. In all areas. For ever.

It would be a very important structural change.

We should keep this issue alive, until a positive outcome.

[europbaron]

Good thread and kudos for pursuing it. To answer your questions directly, here are my initial responses. Undoubtedly they'll need further consideration and refinement and you may even completely disagree.

What would constitute a significant interest in the UK housing industry, and which journalist could possibly have such an interest?

With houses comprising such a large proportion of the assets of most of the population, any interest is significant, at least to the individual. This includes full or part ownership of residential property or having securities for loans on property. Furthermore, any person whose income is wholly or partially derived from property related business, such as rental agencies or estate agents, also has an interest in the housing industry.

Also isn't it a question of intention to influence the market? And how do you identify cause and effect in a market that is so unpredictable? And over what term?

Intention is irrelevant, as is identifying cause and effect. What is important is influence, which journalists have through the simple acts of being published and read. It is common for media to be prevented from publishing details about upcoming court cases, not because they intend to affect the outcome, nor because the effects of their publishing cannot be measured, but simply because publishing may influence opinion.

Of course, we are always open to suggestions on how the Code might be improved but, unless there is a provable offence, it is difficult, if not impossible, to police it.

This provides excellent justification for having simple and all-encompassing rules. If you wish to publish on any financial matter, then you must declare any relevant interests. The offence would then be easily identifiable and provable.

[Tired of Waiting]

Good thread and kudos for pursuing it.

+ 1

(...)

With houses comprising such a large proportion of the assets of most of the population, any interest is significant, at least to the individual. This includes full or part ownership of residential property or having securities for loans on property. Furthermore, any person whose income is wholly or partially derived from property related business, such as rental agencies or estate agents, also has an interest in the housing industry.

Intention is irrelevant, as is identifying cause and effect. What is important is influence, which journalists have through the simple acts of being published and read. It is common for media to be prevented from publishing details about upcoming court cases, not because they intend to affect the outcome, nor because the effects of their publishing cannot be measured, but simply because publishing may influence opinion.

This provides excellent justification for having simple and all-encompassing rules. If you wish to publish on any financial matter, then you must declare any relevant interests. The offence would then be easily identifiable and provable.

+ 1

Good post.

It is a pretty straightforward issue, common in may other areas of investment or interest, and many other discussion fora. I would even suggest that anyone trying to complicate matters, and create red herrings, should be viewed with some suspicion.

We shouldn't let this issue go. It is structural. Media is crucial in democracies. One of the main causes of the current crisis was that the financial media failed to warn the nation of the risks brought by the crescent credit bubble. Politicians and banks'directors have a very short term interest horizon. It is the media that should have warned the nation of its long term risks.

[mkz]

http://www.editorscode.org.uk/downloads/press_releases/CodeReview2011PR.pdf

Please support my suggestion (in your own words, of course!)

The deadline is 21st January 2011.

[Pauly_Boy]

http://www.editorscode.org.uk/downloads/press_releases/CodeReview2011PR.pdf

Please support my suggestion (in your own words, of course!)

The deadline is 21st January 2011.

What do we need to do? I'm too tired to think!