Tag Archives: ProPublica

Alternative News, The Lens, and Hope for the Future

New Orleans For some time I had been getting a fairly regular email from something in New Orleans called The Lens. It was something like a web newspaper without being on paper and normally being slim pickings of just a couple of stories.  They seemed to have some stories worth a look on the Orleans Sheriff’s operation and I passed on a couple.  More often, it was one of those emails I just left unread and passed over.  More recently they hired Jed Horne, the former city manager of the New Orleans Times-Picayune, and a respected – and known – reporter and author in the city, who I had always found fair and straight up, so The Lens worth a closer look, and when they announced a public event of sorts only blocks away from me, all excuses were gone, and it was time to check it out.

Along with about 50 to 100 folks I slipped to the back of the sweltering art space and sweated out the presentation and question and answers.  The Lens people seemed affable and enthusiastic.  The web-paper seems to have been founded by Ariella Cohen and Karen Gadbois, whose names I did not recognize, but Ms. Cohen jumped up to answer several questions and seemed energetic.  They placed themselves along with ProPublica and other alternative sources among about 50 efforts around the country that were trying to independently gather news or offer alternatives on a regular, perhaps even weekly basis like The Lens. They were huge fans of the local Fox affiliate which was hard to follow though it seem more about the space and occasional air time than any kind of political affinity.  They spoke of partnerships with other outlets that appealed to special and historic interests in the city like the Louisiana Weekly and the local Spanish paper.  They seemed to see their mission as filling gaps that the larger outlets either were not able or uninterested in filling.   A card passed out joined them to the New Orleans rebuilding project as “media watchdogs.”  There was goodwill in the room, and best wishes for their success.

Listening the questions from the crowd was worrisome.  Too many were looking for too much, and certainly more than they could offer.  Many seemed to want a one-stop solution or competitor for the local paper, which Lens folks were sympathetic too, but correctly tried to dampen with a focus on their smaller niche.  It was troubling that many looking for more, might not find enough in the niche to develop their support, and though the Lens people were careful to deflate (“interested in who is reading, not how man y ‘clicks’”), to survive there has to be a significant base of readers and real sustainability.

Sustainability seemed the Achilles heel of this great effort.  They were excited and proud of their foundation funding, which seemed to be mostly, if not all, from larger foundations in Miami, New York, and elsewhere, but god knows foundation funding defines short term and unsustainability.   Hopefully they have a plan, since the work seems so valuable, though I wonder if this is not more of the ongoing media crises in our country.

Not long ago talking with the Patch.com folks who have been expanding rapidly around the country as a piece of AOL and have an interesting model as well, but when I talked to their top dogs, they were clearly stretched to the gills trying to push the money in the door and the product to eyeballs.

The wonder of the web is the easy and cheap access, but the bridge we all seem still searching to cross successfully is how to achieve even support and resource sustainability to match the ambition of the project to the value of the dollar.  As newspapers become more fragile and segmented, it is unclear that any of us have found the secret sauce to really serve as alternatives, much less to take steps beyond the meager efforts we are already chafing to read as the local papers downsize steadily and surely.

It was all good vibes and love in the room along with all the sweaty brows on a New Orleans night, but it was hard not to see the clouds everywhere around and wonder how long The Lens and others like it might last without finding the answers to the bottom line.


Bank’s Hustling AGs and Consumers on Second Mortgages

Newwells-fargo-advertising Orleans Way back in the New York Times business section in sort of a snarky article by a ProPublica report (a nonprofit NYT outsourcer) a dangerous curtain was raised on the supposedly tough negotiations between the state attorneys general and the big banks about mortgage loan modifications.  Seems on an okey-doke, wink-and-a-nod, the deal might allow banks to pretend that second mortgage liens were not wiped out in a modification, so that they could protect their fragile balance sheets, which have led some outside experts to call many of these institutions “ghost banks” since they are mirages for money rather than holders of real assets.

I was crushed to read this.  First, I had touted the deal, based on the few emerging details, as finally providing real relief to desperate homeowners trying to hold onto their homes in the face the continuing recession.  Secondly, I had thought the unbought and unbowed AGs were finally breaking the co-dependency cycle of Wall Street-White House – Treasury Department, which has led to so little reform, so little relief, and now soaring bank stock prices and executive paychecks and dividend awards.   Finally, it is a terrible deal based on an agreement to call black white essentially, since all of the banks have long recognized that in reality these secondary liens were already wiped out.   I can remember a meeting with HSBC, a huge 2nd mortgage holder and financier in the suburbs of Chicago in late 2007 before the full level of the crises was front page news, and listening to them tell us they were going to have to wipe out the 2nd and were willing to do so to protect the firsts for themselves and others.  Those were gallant comments probably long forgotten as the red ink started flowing in rivers, but it was based on the “old school” understanding that you couldn’t keep an asset that was clearly not collectable.

Essentially what this report indicates is that the “deal” would allow banks and their servicers to keep the 2nd mortgages on their books and only reduce their value by the same proportion that they had written off on the first mortgage.  Clearly, this does NOT make the 2nd anymore collectible, especially because part of this reduction of the loan is conforming to the level that home prices are underwater, and may stay underwater for years, if not decades.

Does it matter?  Hell, yes!  Look at the prize the banks are wresting here:

“The top four banks now have about $408 billion worth of second liens on their balance sheets, according to Portales Partners, an independent research firm specializing in financial companies. Wells Fargo, for instance, has more money in second liens than it has tangible common equity, or the most solid form of capital. If banks had to write these loans down substantially, acknowledging the true extent of their losses, they would have to raise capital — and might even teeter on the brink of insolvency.”

The only good thing about this report is that now that it’s hit the light of day, hopefully there will be enough of an uproar to send the negotiators back to the table, because this is a too big of a bank holiday giveaway.

These second mortgages are history.  Let them blow away like the dust they are worth.