04 11 / 2013
Nick Lemann, the former dean of Columbia Journalism School, has a monster 10,000-word profile of Mary Jo White in the latest New Yorker, which has the most legendary fact checkers in the business. So why does it contain pretty basic errors of fact?
In 2004, the commission permitted the big brokerage houses to take on a much higher level of debt. The firms quickly began borrowing at possibly ruinous levels, which made them feel the effects of the crisis even more acutely.
The first sentence is arguably true, but the second sentence absolutely is not.
“Dark pools,” private unregulated markets, enable banks to execute undisclosed trades.
Dark pools are not unregulated. They are very regulated, as anybody who runs one will tell you. And all trades in dark pools are disclosed and recorded, just like trades on any other exchange.
And then there’s this doozy:
In 2000, the S.E.C. permitted stocks to be traded in pennies or fractions of pennies, rather than the customary eighths or thirty-seconds of a dollar. That made it easier for traders to make money by placing very large orders for very small variances in the price of a stock.
Nothing trades in fractions of pennies, at least not if it’s trading at over a buck a share. And decimalization didn’t make it easier for traders to make money, it made it harder for traders to make money.
I’m not sure what to make of all this, except to say that the New Yorker really doesn’t get finance. And/or, Lemann gets special dispensation to be a tourist in worlds he doesn’t really understand, and that because of his stature, he doesn’t get the extra scrutiny that such writers require.
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