Update at end: NBC5's Bob Sirott responds to this post
Persuading Americans that Barack Obama is an effective president won't be easy. So local news outlets are lending a hand when they can. This was obvious last night on Chicago's NBC5 News at 10. Anchor Bob Sirott reported:
And now to a sign the president's economic stimulus is working. Bank of American today announced a $2.8 billion profit for the first quarter. That report was much better than expected and followed positive results from other banks. It also comes after a loss of more than $2 billion for the last three months of 2008. Bank of America received $45 billion as part of the financial rescue package.
Sirott's positive assessment of Obama's plan isn't justified. The big profits he touted are largely illusionary. Andrew Ross Sorkin explained why in "Bank Profits Appear Out of Thin Air," which appeared in yesterday's New York Times:
This is starting to feel like amateur hour for aspiring magicians.
Another day, another attempt by a Wall Street bank to pull a bunny out of the hat, showing off an earnings report that it hopes will elicit oohs and aahs from the market. Goldman Sachs, JPMorgan Chase, Citigroup and, on Monday, Bank of America all tried to wow their audiences with what appeared to be — presto! — better-than-expected numbers.
But in each case, investors spotted the attempts at sleight of hand, and didn’t buy it for a second . . .
Sydney Finkelstein, the Steven Roth professor of management at the Tuck School of Business at Dartmouth College, also pointed out that Bank of America booked a $2.2 billion gain by increasing the value of Merrill Lynch’s assets it acquired last quarter to prices that were higher than Merrill kept them.
“Although perfectly legal, this move is also perfectly delusional, because some day soon these assets will be written down to their fair value, and it won’t be pretty,” he said.
Investors reacted by throwing tomatoes. Bank of America’s stock plunged 24 percent, as did other bank stocks. They’ve had enough.
The truth is there's scant evidence that Obama's taxpayer-funded efforts are having much of a positive impact. Spending our way out of financial distress isn't really a solution to anything. Still, hesto-presto, even local newscasts are finding slivers of hope. Perhaps it's part of the magic of Obamamania.
****NBC5 anchor Bob Sirott has reacted to this post. His email to me:
just read it. you know what.....i remember reading that story, and rewriting it a bit, but i should have changed the first line, which i did not write, because that was more along the lines of editorializing, and although i do that on the 5pm nbc5 news (one more thing) that particular story was part of the first section of the ten o'clock newscast and should have been reported without comment. it didn't need that first line. some may think it was an example of the stimulus package working, others may not..but that's beside the point. thanks for pointing it out.
It's not often that those in the media respond to criticism. I appreciate Mr. Sirott's thoughtful appraisal.