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Société Générale trader, Jérôme Kerviel, 31, was accused by the Société Générale, Paris of implementing an elaborate, year-long fraud that involved betting billions of dollars of the bank’s money on European stock index futures. Michel Histel, 62, a French retiree who is closely following the story argues that it is common knowledge that the Société Générale’s has played a leading role in financial derivatives products. Jérôme Kerviel was employed by the Société Générale and in his role as arbitrageur he was expected to hedge large bets on index futures. In a sense what he was doing is a logical conclusion of the irrational process of betting on potential but risky, uncertain and unguaranteed future stock values prices. The value gaps may be intelligently guessed but the risk of unforeseen socio-economic structural, geopolitical and/or environmental changes, is always there so that even real financial transactions are more virtual that really real. In this risk society there is a chance for (even and often) very young people with an intuitive grasp of gaming to win big on their wagers. But this is not the logic of a marketplace. Impatient money contributes hugely to the growing inequality between the ultra-rich who can afford to gamble and the deterioration of the quality of life in the lower quintiles especially those who are most vulnerable to social exclusion.

Folksonomy cloud

impatient money, hedge funds, private equity funds, arbitrageur, arbitrage, value gaps, financial instruments, fictitious trades, fictitious sales transactions, virtual, real, risk management, auditors, audit, futures contracts, index futures, one-way bets, “long” positions, very high total nominal amounts, real portfolios of stock index futures, European stock index futures, Dow Jones Euro Stoxx, DAX, FTSE, speculation, financial derivatives products, repackinging of risky investments, transparent versus veiled financial dealings, current crisis in confidence in the banking sector, interconnections between banks, hedge funds, high risk investments and pension and mutual funds, group think, market will correct itself, learned incompetence,

Timeline of events related to the Subprime Market

1965-2005 Between 1965 to 2005 there was no national US real-estate bust as home prices surpassed inflation by a percentage point or two on average. However local reversals have taken place and some cities have never recovered (Christie 2005).

1970s “The additional grades or risk have arisen from the willingness to underwrite mortgages for more risky borrowers, encouraged by the democratization of credit since the 1970s. Lending to more risky borrowers is, by definition, more risky. More loans to risky borrowers increases the total amount of risk to be sold in the marketplace” (Mason and Rosner 2007).

1973-5 US investors in the S&P 500 lost 14% in 1973 and 26% in 1974 but gained 37% in 1975 (Mann 2000).

1975 Foreign competition made its inroads into the North American economy. Corporations panicked with a knee-jerk reaction by implementing the first major layoffs which eventually spread and multiplied, in time destroying the notion of job security and the dignity of work in North America (Uchitelle 2006; Uchitelle 2007).

1983 Australia’s benchmark ASX 200 index experienced a long losing streak which would be unparalled until 2008-01-21 (BBC News 2008-01-21).”

1985 In Peoria, Ill. a more traditional area the average home price fell from $60,800 in 1981 to $51,400 in 1985 partially because of strikes and lay-offs at Caterpillar, the city’s biggest employer (Christie 2005).

1986 The “total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average(Leary 1998:265).”

1987 Canadian families saved 20 percent of their take-home pay (Ed 2007).

1987 Oliver Stone’s and Stanley Weiser’s fascinating but soulless film entitled Wall Street about a young stockbroker, Bud Fox’s entanglement in white-collar crime through his mentor and hero, Gordon Gekko (Michael Douglas), an extremely successful businessman and Wall Street broker. in a speech by Gekko to a Teldar Paper shareholders’ meeting, a company he planning to take over, Gekko, and by extension, the Wall Street raiders he personifies, justifies his actions. He argues that he is liberating corporate America’s from its slothfulness and waste accumulated through the postwar years. He argued, “Greed is good” a slogan which symbolised the ruthless, profit-obsessed, short-term corporate culture of the 1980s and 1990s. These values became associated with neoclassical, anti-union economic policies that made slash-and-burn capitalism possible. Wall Street refers to the symbolic and geographical location in Lower Manhattan, the first permanent home of the New York Stock Exchange, center of New York’s financial district and the financial industry.

1987 Stock market crash

1987-19-20 London’s FTSE 100 experienced one of its worst days down 10.8% (BBC News 2008-01-21).

1987-10-20 London’s FTSE 100 experienced one of its worst days down 12.2% (BBC News 2008-01-21).

1987-10-21 London’s FTSE 100 experienced one of its best days up 7.9% (BBC News 2008-01-21).

1987-10-22 London’s FTSE 100 experienced one of its worst days down 5.7% (BBC News 2008-01-21).

1987-10-26 London’s FTSE 100 experienced one of its worst days down 6.2% (BBC News 2008-01-21).

1988 In “oil patch” cities like Oklahoma City prices plummeted 26 percent from 1983 to 1988. They only returned to 1983 levels in 2003 fifteen years later. In Oklahoma City, the inflation-adjusted price in 1983 was $196,600. Today, it’s just $135,100 (Christie 2005).

1988 Houston home prices fell 22 percent from $111,000 in 1983 to $86,800 in 1988 rebounded only in 2003. Counting inflation, the average Houston home, which cost just $159,700 in 2004, is actually worth less [in 2005] than it was [in 1983]. When, adjusted for inflation, a home cost about $219,000 in 1983 (Christie 2005).

1988 – 1990s Real estate prices fell in Northern California first followed by the rest of the state “as employers fled, incomes dwindled, quakes rumbled, sales fell and prices slipped. [. . .] Silicon Valley’s housing market crashed into recession along with the state’s economy (Perkins 2001).

1980-1990 In Los Angeles real estate was turbocharged for nearly 10 years (Christie 2005).

1989-90 The notorious price bubble of 1989-90 was linked to central banks specifically the Bank of Japan. “The Japanese economy continued to suffer during the early 1990s, and remained in recession until the end of 1993. Nominal GDP growth rates, which had been around 7 percent during the bubble period, fell beginning in 1990 and by 1991-93 were close to zero. Profits in the manufacturing sector fell 24.5 percent in 1991 and 32.1 percent in 1992. Bankruptcies began to rise starting in the latter half of 1990; by 1992, bankruptcies with debt more than Y10 million totaled 14,569 cases. Failures of real estate firms or of firms engaged in “active fund management” constituted more than half the corporate bankruptcies in 1991 and 1992 (Miller 2001).”

1991 Inflation-adjusted take-home pay in Canada froze to this level (Ed. 2007).”

1992 A new car in Canada cost $20, 000.

1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

1992-04-10 London’s FTSE 100 experienced one of its best days up 5.6% (BBC News 2008-01-21).

1996 There was a housing market reversal in Los Angeles with average house price dropping from $222,200 in 1990 to $176,300 in 1996, a loss of 20.7 percent. “Furthermore, those are nominal prices, not real values. To calculate the loss more realistically you would have to figure in the cost of inflation: $222,200 in 1990 would have been worth $266,700 in 1996 dollars, which means the actual loss for homeowners buying in 1990 and selling in 1996 was closer to 34 percent (Christie 2005).”

1994- 1996 “In 1994, [Japanese] banks wrote off non-performing assets of Y5.7 trillion, exceeding the previous high of Y4.3 trillion in fiscal year 1993. As yet, no major bank has failed, although a number have reportedly encountered serious difficulties. In December, 1994, the Bank of Japan supervised the takeover of two credit cooperatives, the Tokyo Kyowa Credit Cooperative and the Anzen Credit Cooperative, through the creation of a bridge bank with government support. The Bank’s decision not to let these institutions fail and pay off depositors under the deposit guarantee program was based, largely, on concern for the potential systemic effects of a deposit payoff on public confidence in the banking system in general. The “jusen,” or housing finance banks, suffered the most serious problems; these institutions, which were typically organized and sponsored by major commercial banks and staffed, in part, by former officials from the Ministry of Finance, lost tens of billions of dollars as a result of the collapse of the price bubble, and became one of the most contentious political issues of the day during 1995-86 (Miller 2001)”.

1996-12-05 “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? And how do we factor that assessment into monetary policy? We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in balance sheets generally, and in asset prices particularly, must be an integral part of the development of monetary policy.” Alan Greenspan (December 5, 1996)**

1998 There was a market correction in the United States in October of 1998.

2000 In Tampa Bay Florida, high risk adjustable-rate mortgages (ARM) made homes “seem affordable when wages stagnated as prices soared. They were just the ticket for cash-out refinancings and home equity credit lines that bought cars and swimming pools and paid off credit card debt. “What happened in a lot of expensive real estate markets is that first-time home buyers who felt they could not afford a home otherwise, took on a loan that had lower monthly payments than a traditional mortgage would have,” said Allen Fishbein, director of housing policy for the Consumer Federation of America. “They weren’t being underwritten on the basis of the borrower’s reasonable capacity to handle these loans.” The payments started out manageable, especially since many loans offered teaser rates. But borrowers are getting a lesson in what the word “adjustable” means. More than $130-billion in mortgages payments were reset in 2006″ In 2006 nearly a third of Tampa Bay mortgages were the high-risk varieties, up from 10 percent in 2003 (Huntley 2006).1992 – 2000 “Japan remained pretty stagnant in the last eight years, with the majority of the loss coming in the first two, when it eventually fell by more than 60%. There was never a big drop, just a constant and inexorable drift downward. Real estate prices plummeted, almost no Japanese company ended 1992 higher than it started 1990. In the interim, banks have failed (and if it weren’t for the financial props of the Japanese government, many more would have), and companies have had to reassess some of their basic assumptions, such as lifetime employment and large benefit packages” (Mann 2000).

2001-09-11 London’s FTSE 100 experienced one of its worst days down 5.7% (BBC News 2008-01-21).

2002-10-15 London’s FTSE 100 experienced one of its best days up 5.1% (BBC News 2008-01-21).

2002-07-02 London’s FTSE 100 experienced one of its best days up 5.0% (BBC News 2008-01-21).

2003-03-13 London’s FTSE 100 experienced one of its best days up 6.1% (BBC News 2008-01-21).

2004 British Columbia graduates from university have an average debt of $20, 000.

2005 Real-estate investing spiked, pressuring prices upward. In Phoenix, according to Bill Jilbert, president and COO of the Coldwell Banker brokerage there, investors from Nevada and California have invaded the Arizona market, and “affordable housing has been pushed to extremes (Christie 2005).”

2005 Market analyst Winzer (2005 cited in Christie 2005) warned that the housing market was high-risk as the boom has already gone on longer than expected. Low interest rates which means cheap mortgage rates extended the cycle of the real estate boom artificially creating higher demand and higher prices as all market levels (Winzer cited in Christie 2005). “Winzer assesses local market risk by taking into account economic and population growth, construction costs, vacancy rates, and, especially, income. He also considers such factors as density and access to open land. Prices in densely settled New York have always been higher than those of cities with lots of space for new housing (Christie 2005).

1991- 2005 “[I]ncreased complexity from increased grading of risk can also result in increased opacity. Risk that is more difficult to see, by virtue of complexity, is risk just the same. There are plenty of reasons to believe that the amount of risk in the marketplace has increased. Figure 3 shows that defaults on ABS and residential mortgage-backed securities (RMBS) increased substantially between 1991 and 2005″ (Mason and Rosner 2007).

2006-06-12. “Canadian Executives Indicate Human Resources and Rising Canadian Dollar are the Major Business Challenges.” CTV. June 12, 2006.

http://www.ctv.ca/servlet/ArticleNews/show/CTVShows/20060611/ctv_release_20060611/20060612

2006 Fitch Global Structured Finance 1991-2005 Default Study revealed that, “the overwhelming majority of global structured finance defaults over the 1991-2005 period were from the U.S., accounting for more than 97 percent of the total. While the 1,000 U.S. defaults were mainly concentrated in the Asset-Backed Securities._ (ABS) sector, the 27 international defaults were primarily from the collateralized debt obligations (CDO) sector.” See Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1.

2006 In Florida millions of homeowners were warned of the mortgage meltdown in which they will “face a financial nightmare brought on by a combination of higher interest rates, risky mortgages and a housing market gone cold (Huntley 2006).

2007-05-10 Desmarais, Paul Jr. 2007. “Private equity, public interest.” National and Global Perspectives . May 10, 2007. p. 16. Paul Desmarais, Jr., Chairman of Power Corporation of Canada warned of the structural impact on the industrialized world caused by the meteoric rise of private equity and hedge funds in the financial markets in a an article (2007) published in the Canadian Council of Chief Executives journal National and Global Perspectives. The current crisis in confidence in the banking sector is a direct result of the meteoric rise of private equity and hedge funds which transformed the mortgage market.

Is it not ironic that the principal investors in private equity and hedge funds – large institutional investors – are happy to put massive amounts of money in the hands of people who do not register with any securities commission, or have few, if any, governance regulations to adhere to and report on? (Desmarais 2007:16).

2007-05-10 Desmarais, Paul Jr. 2007a. “Chairman’s Address to Shareholders.” Power Corporation of Canada. May 10, 2007.

2007-06-14 Gandalf Group. 2007. “C-Suite Survey On The Role of Private Equity.” Report on Business. Globe and Mail. June 14, 2007. http://www.dwpv.com/images/C-Suite_June_2007.pdf In May and June, 2007 the 150 C-Suite executives from the top 1000 corporations interviewed by the Gandalf Group were generally optimistic about the Canadian economy (Gandalf Group 2007:4). Some expressed concerns about the increasing levels of foreign ownership in key sectors and about private equity firms hollowing out corporate Canada. 23% have concerns that private equity firms engage in too much short-term thinking (Gandalf Group 2007:32). Most executives now favour restrictions in strategic industries. “The strongest areas of consensus about the negative impacts of private equity relate to keeping the company Canadian owned and about the debt burden of the company. A substantial percentage of executives believe that private equity also has a negative impact on the economic contribution the company will make to Canada and to the community it operates in, on the labour relations of the company and on the governance of the company (Gandalf Group 2007:28 ).”

2007. “C-Suite Survey.” Globe and Mail, Report on Business. 18 June 2007: B5.

http://www.theglobeandmail.com/servlet/Page/document/video/vs?id=RTGAM.20070619.wvcsuite0619&ids=RTGAM.20070619.wvcsuite0619&hub=search

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007].” [T]hey caution that “structural changes in mortgage origination and servicing have interacted with complex residential mortgage-backed securities (RMBS) and highly volatile CDO funding structures to place the U.S. housing market at risk. This [. . .] could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructuring and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007-06-27 “In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June, 2007 two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market [. . .] Those hedge fund investment managers create investments that are bought by our pension funds and mutual funds. Charitable foundations are invested in these. It’s a broad investor base, and it’s not the rich versus the poor.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).” See Democratization of Debt: Bear Stearn and Mortgage Meltdowns

2007-09-06 The U.S. subprime mortgage meltdown “Only 5% of mortgages in Canada are subprime compared to 20% in the US. And Canadian financial institutions are more prudent than their American counterparts insisting on mortgage insurance when appropriate and separate appraisals of a home’s purchase price to ensure they are not financing more than 100 per cent of a home’s value. In the US by late 2006 subprime lenders were going bankrupt and as many as 1.5 million Americans could lose their homes before the panic is over. In this under-regulated US industry, lenders partnered with hedge funds to make quick returns on investments then called in debts to avoid losses. Since we are all in some way linked to these investment portfolios, either through mortgages, pensions or insurance, we end up contributing to processes that are fuelled by high-risk, short-term, fast-profits thinking that enriches a few while causing havoc for most of us. See also http://www.cbc.ca/news/background/personalfinance/mortgage-meltdown.html

2007-11-27Staggering poverty report has province listening: A United Way report Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City claims almost 93,000 Toronto, Canada households are raising children in poverty. That’s 30% compared with 16 per cent in 1990.” OECD, Policy Development, Public Policy, child poverty, del.icio.us, digg story, digg.com, economic efficiency model, how to be poor in a rich country, policy research, social exclusion, vulnerability to social exclusion

2007 Since 1991 inflation-adjusted hourly wages rose only 10 cents (Ed. 2007).”

2007 A new car in Canada cost $32,000 a 60 percent increase from 1992 (Ed. 2007).”

2007 Canadians collectively owe three quarters of a trillion dollars in personal debt. Canadian families not only have no savings, they draw on pension savings to make ends meet.

“The result of the easy credit is that an average family now owes far more than it takes in. That means we remain solvent only so long as the book value of our assets — things like our home, pension funds or investments — continue to increase (Ed. 2007).”

2007 British Columbia graduates from university have an average debt of $27, 000.

2007 It is now acceptable for Canadian families to pay 60 percent of income to pay monthly payments of their home mortgages (Ed. 2007).

2007 The British Columbia government will allow home owners who are over 55 to defer property tax payments for as long as they live. The government will claim unpaid taxes after you die or sell effectively placing the tax burden on the children (Ed. 2007).

2007 “The number of corporate failures in Japan rose for the third month in a row totaling 896 cases in December up 18.2%. November flops were up 6.5% and the number of companies going belly up in October were up 7.8%. The amount of debts the insolvent companies left behind were up 30.6% to 463.09 billion yen (Belew 2007).

2007 In March Bob Lawless reported in his blog that, “The folks at Automated Access to Court Electronic Records or AACER regularly collect data from all the bankruptcy courts for creditors and attorneys. They have a wealth of information that does not show up in the mainstream media. Most recently, they tell me that there were 58,640 total U.S. bankruptcy filings in February 2007 as compared to 55,088 total U.S. bankruptcy filings in January 2007. OK, that looks like a slight increase, but looks are deceiving. It’s actually a fairly hefty increase. The February filings were spread over only nineteen business days while the January filings were spread over twenty-one days. On a daily basis, the February filings were up 17.7% as compared to January (Lawless 2007).”
2007 Jayson Seth analysed data in National Association of Realtors (NAR) June 24, 2007 report. Seth argues that “America’s easy-credit, quick-flipping, borrow-now-and-forget-the-consequences lifestyle is coming to an increasingly painful, grinding halt” and the “confidence of homebuilders is at a 16-year low (Seth 2007).”

2007 Lawrence Yun, National Association of Realtors announced that the real estate market is softening due to psychological factors, tighter credit for subprime borrowers. NAR’s Lawrence Yun explained that since late 2006 housing sales have slowed as buyers double up with family, friends or just mortgage helper units in their homes to be able to pay for higher-priced homes.

2007 Mason and Rosner (2007) warn that risk continues to increase, as ratings agencies revise their loss expectations to account for the dynamics of the mortgage meltdown. For instance, on March 27, Standard & Poor’s raised its expectation for losses on 1. “Residential mortgage-backed securities (RMBS) market has experienced significant changes [from 1997-2007]” Furthermore they caution that “structural changes in mortgage origination and servicing have interacted with complex RMBS and highly volatile CDO funding structures to place the U.S. housing market at risk. Equally as important, however, is that housing market weaknesses feed back through financial markets to further weaken financial instruments backing today’s CDOs. Decreased housing starts that will result from lower liquidity in the MBS sector will further weaken credit spreads and depress CDO and MBS issuance. This feedback mechanism can create imbalances in the U.S. economy that, if left unchecked, could lead to prolonged domestic economic implications for U.S. standing in the world economic order [. . .] The potential for prolonged economic difficulties that also interfere with home ownership in the United States raises significant public policy concerns. Already we are witnessing restructurings and layoffs at top financial institutions. More importantly, however, is the need to provide stable funding sources for economic growth. The biggest obstacle that we have identified is lack of transparency.” (Mason and Rosner 2007).

2007 In a Marketplace interview Amy Scott asked interviewees about the disturbing consequences of the interconnections between banks, hedge funds, high risk mortgages and pension funds. In June two major hedge funds managed by the investment bank Bear Stearns, who purchased securities that were essentially a “repackaging of all kinds of risky mortgages” to tap into the subprime mortgage market are now verging on collapse as the number of borrowers defaulting on these mortgages increases. Joseph Mason explained that “this isn’t just a Wall Street problem. Your 401k or pension fund may be invested in similar mortgage-related securities.” The investor-base is broad and it is difficult to know who is at risk. “Investment managers don’t have to report their holdings. And unlike stocks, these securities aren’t quoted on an open market.” Mason has been a firm proponent of more transparency in financial dealings (Scott 2007).

2008-01-12 Should banks avoid investing in carbon-intensive projects? “Ceres is composed of and works with investors ($4 trillion) and environmental groups to address sustainability challenges. In their report Corporate Governance and Climate Change (2008) they argue that the banking sector needs to become aligned with GHG reductions.” read more | digg story

2007-01-20Globalization and the Rise of Inequality: The extremes of wealth and poverty threaten globalisation. North American companies lose jobs to the Chinese Special Economic Zone (SEZ) where factories often employ rural women to work in 19th century conditions to keep their costs low. Meanwhile the total pay of top managers in North America has increased from 1986 through 2006 to roughly 40 times the average and from 1966 to 110 times the average. Globalization “refers to the current transformation of the world economy the reduction of national barriers to trade and investment, the expansion of telecommunications and information systems, the growth of off-shore financial markets, the increasing role of multinational enterprises, the explosion of mergers and acquisitions, global inter-firm networking arrangements and alliances, regional economic integration and the development of a single unified global market. The phenomenon of globalization is accompanied by increasing international mobility, the migration of workers, the growth of tourism and the increasing ease of international travel (Leary 1998:265).”

2008-01-19 The Bush administration announce they are seeking “a stimulus package of as much as $145 billion”. However the stock market did not respond positively as investors were concerned that the looming American recession would trigger economic crisis that will span the globe. See (Jolly and Timmons 2008-01-21).

2008-01-21 Société Générale trader, Jérôme Kerviel, 31, was accused by the Société Générale, Paris of implementing an elaborate, year-long fraud that involved betting billions of dollars of the bank’s money on European stock index futures. Michel Histel, 62, a French retiree who is closely following the story argues that it is common knowledge that the Société Générale’s has played a leading role in financial derivatives products. Jérôme Kerviel was employed by the Société Générale and in his role as arbitrageur he was expected to hedge large bets on index futures.

2008-01-21 “Global stock markets tumbled, with European indexes set for some of their biggest losses in recent years, amid growing fears of a recession in the US (BBC News 2008-01-21).”

2008-01-20 “Global stock markets plunged on Monday as fears spread that the turmoil in United States mortgage markets is spreading. Indexes in Europe fell as much as 7 percent after a huge sell-off in Asia. “There’s something approaching panic in the market,” Holger Schmieding, the chief European economist at Bank of America in London, said by telephone. “There’s been a reassessment in the market of the U.S. economic outlook, with most people now thinking that there will be a recession,” and investors are starting to reconsider the idea that the rest of the world “will remain aloof from U.S. problems [. . .] The selling began in Sydney, with Australian stocks falling nearly 3 percent for an 11th consecutive decline. Major markets in Asia followed suit, with the benchmark Nikkei 225-stock average in Tokyo falling 3.9 percent, the Hang Seng in Hong Kong falling 5.5 percent and the benchmark mainland Chinese index falling more than 5 percent (Jolly and Timmons 2008-01-21).”

2008-01-21 London’s FTSE 100 index fell 4.5% to 5,637.3 (BBC News 2008-01-21).

2008-01-21 Hugues Rialan of Robeco France says we are in a panic mode and a crisis in consumer confidence as the banking sector’s reassurances that they were not overexposed to US mortgage-related investments, prove to ring hollow and false. The banking sector lost consumer trust when they lost of “billions of pounds on investments linked to the US housing and mortgage markets (BBC News 2008-01-21).”

2008-01-21 “Australia’s benchmark ASX 200 index closed down 2.9%, or 166.9, points at 5,580.4”, amid growing fears of a recession in the US. This is ASX 200 index’s “lowest level for a year. It was also the 11th consecutive negative day for the index, the longest losing streak in more than 25 years (BBC News 2008-01-21).”

2008-01-21 “There may be more downturns in store for Asia, particularly as banks report the fallout from their investments in the United States mortgage market. Companies “have not announced their year-end numbers yet,” Schuller, of Moody’s, said, and if they are holding subprime assets, they may need to write-off their value, she said. “They are going to be taking these 25 to 30 percent haircuts we’re seeing on Wall Street,” she said. “I think it is going to shock people.” [This article which appeared in the New York Times was written by David Jolly reporting from Paris and Heather Timmons from New Delhi. Tim Johnston contributed reporting from Sydney, and Martin Foster from Tokyo (Jolly and Timmons 2008-01-21).”

“Mustier explained that Kerviel’s role on the trading desk was that of an arbitrageur, which meant that he was entrusted to purchase one portfolio of stock index futures and at the same time sell a similar mix of index futures, but with a slightly different value. The object of arbitrage is to try to make a profit from these differences in value. Because the value gaps between similar financial instruments are usually very small and temporary, this type of activity typically involves trading in very high total nominal amounts. Kerviel’s fraud, according to the bank, consisted of placing sizeable, real purchases in one portfolio but creating fictitious sales transactions in the second, off-setting portfolio. This gave the impression to risk managers that the risks in the first portfolio were hedged, when in fact they were not. As a result, the bank wound up exposed to massive, one-way bets, or “long” positions. Instead of hedging, which was his job, Kerviel was effectively speculating with the bank’s money. Mustier said a review of Kerviel’s trading records showed that he first began creating the fictitious trades in late 2006 and early 2007, but that these transactions were relatively small. The fake trading increased in frequency, and in size, during the course of the year, he said, but the largest fictitious trades – involving futures contracts on the Dow Jones Euro Stoxx 50, the DAX in Germany and the FTSE index in Britain – were entered in early January. “Our controls identified from time to time problems with this trader’s portfolio,” Mustier said, although he declined to say when the first questions were raised by risk managers, saying that the bank’s auditors were still investigating. Each time one of Kerviel’s trades was questioned, Mustier said, Kerviel would describe it as a “mistake” and cancel the trade (Clark 2008-01-27).”

2009-01-21 Analyst Mike Lenhoff at Brewin Dolphin Securities predicts that the prospect of falling US interest rates announced by the US administration will have a positive effect on the market by January 2009 and the crisis mode of January 2008 and the drop in global indexes based on fears of a US recession will be proven to be a panicked knee-jerk reaction (BBC News 2008-01-21).”

Bibliography and Webliography

BBC. 2008-01-21. “Global shares tumble on US fears.” BBC News on-line. Uploaded 2008/01/21 16:10:48 GMT. Accessed 2008-21. http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7199552.stm http://news.bbc.co.uk/2/hi/business/7199552.stm

CBC News. 2008. “TSX plunges 500 points.” Last Updated: 2008-01-21:13:26 ET.

Clark, Nicola. 2008. “Société Générale reveals more details of €4.9 billion fraud.” >> International Herald Tribune. www.iht.com Uploaded January 27. Accessed January http://www.iht.com/bin/printfriendly.php?id=9534514

Jolly, David; Timmons, Heather. 2008-01-21. “Stocks Plunge in Europe and Asia on U.S. Recession Fear.” New York Times. http://www.nytimes.com/2008/01/21/business/22stox-web.html?_r=1&ei=5088&en=f84e22b0fa01257e&ex=1358658000&oref=slogin&partner=rssnyt&emc=rss&pagewanted=print

Leary, Virginia A. 1998. “Globalization and Human Rights.” In Symonides, Janusz (Ed.) Human Rights: New Dimensions and Challenges: Manual on Human Rights. Aldershot, UK: Ashgate Dartmouth Publishing Company Ltd. / UNESCO Publishing. pp. 265-276. 2007.

“Rich man, poor man.” The Economist. Jan 18th 2007. Accessed January 18, 2007.


Flynn-Burhoe, Maureen. 2008. “Risk Society: Unintended Consequences of Subprime Market.” >> Google docs. January 21. http://docs.google.com/Doc?id=ddp3qxmz_505grfcrtgjFlynn-Burhoe, Maureen. 2008. “Societe Generale: a Logical Conclusion of Impatient Money, Unregulated Hedge Funds and Private Equity Funds.” >> Google Docs. Uploaded January 28. http://docs.google.com/Doc?id=ddp3qxmz_510gwkhvrcs


Without an informed civil society there can be no robust conversations in a renewed democracy.

“(A) democracy cannot function unless the people are permitted to know what their government is up to (Commager, Henry Steele).”

Citations from Hackett and Zhao’s useful publication (1998 ) entitled Sustaining Democracy? Journalism and the Politics of Objectivity 1

The regime of objectivity refers to an “ensemble of ideals, assumptions, practices and institutions” that is tied to concepts of democracy, public responsibility, public life and public good. There is an assumption that interest groups, social movements, politicians and the media operate under a regime of objectivity (Hackett and Zhao 1998:1).

Mass media has become the leading institution of that realm of social life called the public sphere, “where the exchange of information and views on questions of common concern can take place so that public opinion can be formed (Hackett and Zhao 1998:1).”

Liberal-democratic capitalist mode of governance is the dominant mode of governance in Canada. Quebec has a stronger history of advocacy and participant journalism (Hackett and Zhao 1998:12).

“These recent shifts in media ownership and policy might be seen as the equivalent of a non-violent coup d’etat, a metaphor evoking the inherent link between media power and state power — between the colonization of the popular imagination and the allocation of social resources through public policy and market relations. Communications scholar Herbert Schiller suggests that what is at stake is “packaged consciousness”: the intensified appropriation of the national symbolic environment by a “few corporate juggernauts in the consciousness business.”” (Hackett and Zhao 1998:5)

“The late French social theorists Michel Foucault, during the 1970s, wrote of “discursive regimes” — of how power is imbricated with knowledge, not by directly imposing censorship or coercion from outside, but indirectly and internally, through the criteria and practices that “govern” the production of statements (Hackett and Zhao 1998:6)”

“Scott Lash’s concept of “regimes of significance” is composed of a cultural economy and a specific mode of signification. A cultural economy is comprised “of relations and institutions by which cultural objects are produced and consumed.” Mode of signification is a “typical way by which cultural objects become meaningful to those use them.” “Lash and other theorists make distinctions between discursive and figural, modernist and postmodernist, and cognitive and aesthetic ways of seeing and knowing (Hackett and Zhao 1998:6).”

Foucault collapses all truth claims into power, self-interest and the internal validity rules of particular discourses (Hackett and Zhao 1998:7)

Canada’s Charter of Rights and Freedoms enshrined “freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication,” subject to “such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.” Legal scholar Harry Glasbeek “predicted that the Charter’s freedom of expression clause could be used “to defend individuals generally and the media in particular from state controls, but not individuals or their defender, the state, from private interests,” thus helping the private press “to retain its sovereignty as a purveyor of information and opinion.47” In effect free speech is interpreted as a property right of corporate entities, not as a human right of individual citizens (Hackett and Zhao 1998:80). “Subsequent court rulings seem to bear out this prediction. Because freedom of the press includes the freedom to be biased, the print media (by contrast with broadcasting) are not legally required to be objective or balanced. Nevertheless, these concepts are often viewed as professionalistic criteria to be respected and relied upon in court decisions protecting media owners’ property rights. Canadian or U.S. citizens have sometimes sought court-ordered access for their opinions or rebuttals in the pages of newspapers or magazines. The courts have consistently refused such a right of reply or access, citing the integrity and responsibility of journalists in producing “balanced” and “objective” reports. ”

Market liberalism describes the right-wing movement that upholds a faith in the market mechanism. “It advocates minimum government, deregulation, privatization of public services, and more economic freedoms for the private sector. It espouses an extreme version of individualism. It displays hostility towards unions, collective bargaining, and the progressive social movements that struggle for economic and social rights for various disadvantaged groups. Market liberalism is also called neoliberal, neoconservative, and the new right. Preston Manning, Ralph Klein, Mike Harris and Newt Gingrich are champions of market liberalism. It is basically a revolt of the rich — the upper middle class — in a crusade against the poor. It is presented as a commonsense revolution. The shift towards market liberalism began in 1980 (Hackett and Zhao 1998:151).

Canadian press has media blind spots. This includes “…tax breaks for the wealthy, Canada’s cosy trade-and-aid relations with regimes, such as Indonesia, that violate human rights and Canada’s substantial participation in the international arm’s trade, contrary to its self-image as a peacekeeper (Hackett and Zhao 1998:182).”

“In 1995, according to Project Censored, the U.S. press underplayed or ignored these stories, among others: the massive deregulation of telecommunications; $167 billion in annual subsidies to business, whose elimination could enable the U.S. government to balance its budget without slashing social programs; lax enforcement of U.S. child labour laws, resulting in thousands of injuries and even death of children in the workplace; $100 billion or more lost annually in medical fraud; ABC’s cancellation of a hard-hitting documentary on the tobacco industry at the same time as a tobacco company filed a $10 billion libel suit against Capital Cities/ABC; the U.S. chemical industry’s fight to prevent the banning of methyl bromide, a toxic zone-killing pesticide; the death through error or negligence of up to 180,000 patients in US hospitals each year (Hackett and Zhao 1998:182).”

Timeline

1700s Jean-Jacques Rousseau and Thomas Paine were pioneers of social thought of the Enlightenment. Reason can control nature. All men have natural rights. Rousseau described nature as God’s creation. Rousseau described nature as rational, benign and inherently harmonious.

1700s Thomas Jefferson was one of the early promoters of democracy.

1835 A jury acquitted editor/politician Joseph Howe accused of criticizing the authorities. The law of seditious libel was effectively struck down (Hackett and Zhao 1998:15).

1800s The press was both partisan and sectarian. It did not present the news with honesty or accuracy (Hackett and Zhao 1998:15).

1815 – 1836 The English working class used newspapers as a vital way of contributing to an unfolding class consciousness (Hackett and Zhao 1998:27).

1800s Independent penny press papers were published heralding the age of independent, non-partisan and socially responsible journalism. (Hackett 1998:16)

British Stamp Duty is a government tax on newspaper sales.

1800s The labour press began to publish. (Hackett and Zhao 1998:16) The labour press described a social landscape in which the rights to justice, equality and property of artisans, mechanics, trades people were impeded (Hackett and Zhao 1998:21).

1800s Utilitarianism advocated the goal of the greatest good of the greatest number instead of democracy based on natural rights and reason. Utilitarianism was better accepted by the ruling order, the middle class. They were concerned that democracy would lead to mob rule (Hackett and Zhao 1998:19) Utilitarianism and democracy are held in a long-standing tension in the United States.

1820s – 1830s Craft unions developed in some Canadian cities (Hackett and Zhao 1998:21).

1830s United States entrepreneurs launched daily newspapers in the 1830s. The popular commercial daily papers took full bloom in the 1870s (Hackett and Zhao 1998:24).

1850 – 1867 “Both the Leader and the Globe in their views of democracy expressed the central position of mid-Victorian liberalism. Both declared for a wide, popular electorate but still wanted a qualified franchise to recognize property and intelligence, and to prevent the rule of ignorance and mere numbers…. There was in this mid-century Canadian press little of the spirit of American Jeffersonian or Jacksonian democracy with their faith in the natural worth of the common man.”

1850s – 1900 The trade union movement developed in Canada.

late 1800s The popular commercial daily papers emerged as the first version of journalistic objectivity (Hackett and Zhao 1998:18).

late 1800s Herbert Spencer’s social Darwinism foreshadowed the competitive, exploitative laissez-faire market economy. (Hackett and Zhao 1998:18).

1872 The Ontario Workman was founded. The labour newspaper expressed Enlightenment sentiments: “Co-operation is a principal that has shone upon the world through the progress of intelligence, and that it will gradually grow with the intelligence of the masses we have no doubt. It, or some like system, will gradually supersede the serf system of the past(Hackett and Zhao 1998:21).”

1880s The US founded Knights of Labor was spreading across Canada (Hackett and Zhao 1998:28).

1891 T. P. Thompson was Canada’s most prominent labour journalist. He was forced to close his newspaper when his readers turned to the commercial dailies. “It is much to be regretted that the wage earners are so stupidly blind to their own interests that they cannot see the advantage of having a live outspoken journal to plead their cause (Hackett and Zhao 1998:28).”

1917 The Russian Revolution

1920 Walter Lippman and Charles Merza accused The New York Times of reporting the Russian Revolution by “seeing not what was, but what men wished to see (Hackett and Zhao 1998:40).”

1930s Great Depression

1935 Leni Riefenstahl’s documentary Triumph of the Will celebrated the Nazi Regime. It is the classic propaganda film.

1935 The American Newspaper Guild’s code of ethics upheld the value of objectivity: “The newspapermen’s first duty is to give the public accurate and unbiased news reports (Hackett and Zhao 1998:40).”

1937 Quebec’s “authoritarian premier, Maurice Duplessis introduced the Padlock Act to shut down what it considered to be “Bolshevik or communistic” publications. The Supreme Court overturned the Padlock Act in 1957 (Hackett and Zhao 1998:79).”

1950s Alberta’s Conservative Premier Ralph Klein described the 1950s as a Golden Age when Canadians “looked to the newspapers for their information, and … to governments for answers.” Klein and many others were convinced that in the 1950s “The news simply reported on “reality,” and political journalism treated politicians and authority figures with enough respect that they could communicate with their publics without worrying about the distorting lenses of the media (Hackett and Zhao 1998:136).” This cognitive certitude was pervasive. It existed in academia as well.

1958 The C.D. Howe Institute’s origins go back to Montreal in 1958 when a group of prominent business and labour leaders organized the Private Planning Association of Canada (PPAC) to research and promote educational activities on issues related to public economic policy. Under the leadership of Robert M. Fowler, and with a small but dedicated staff, the PPAC soon became the Canadian co-sponsoring organization for the Canadian-American Committee (CAC), which had been established in 1957 to study and discuss the economic factors affecting the bilateral relationship between Canada and the United States.

1960s Conservative think tanks, business, politicians and media scholars describe the 1960s news media as left-liberal and anti-authority. A new breed of journalists was branded as adversarial, “gotcha”, disruptive and cynical (Hackett and Zhao 1998:136).

1960 A French language CBC journalist complained that the CBC reporting was “objective to the point of being virginal (Hackett and Zhao 1998:39).”

1960s Third world national liberation struggle.

1970 Prime Minister Pierre Trudeau invoked the War Measures Act during the October Crisis. 450 activists, journalists and writers were arrested under suspicion of being sympathetic to the separatist movement (Hackett and Zhao 1998:79).

1970s “The Royal Canadian Mounted Police placed left-wing groups and periodicals under surveillance (Hackett and Zhao 1998:79).”

1970 “The Davey Commission sparks debate on media ownership vs. freedom of the press (CBC Radio 1970).”

1971 New York Times Co. v. United States Decided June 30, 1971.

“I can imagine no greater perversion of history. Madison and the other Framers of the First Amendment, able men [403 U.S. 713, 717] that they were, wrote in language they earnestly believed could never be misunderstood: “Congress shall make no law . . . abridging the freedom . . . of the press . . . .” Both the history and language of the First Amendment support the view that the press must be left free to publish news, whatever the source, without censorship, injunctions, or prior restraints. In the First Amendment the Founding Fathers gave the free press the protection it must have to fulfill its essential role in our democracy. The press was to serve the governed, not the governors. The Government’s power to censor the press was abolished so that the press would remain forever free to censure the Government. The press was protected so that it could bare the secrets of government and inform the people. Only a free and unrestrained press can effectively expose deception in government. And paramount among the responsibilities of a free press is the duty to prevent any part of the government from deceiving the people and sending them off to distant lands to die of foreign fevers and foreign shot and shell. In my view, far from deserving condemnation for their courageous reporting, the New York Times, the Washington Post, and other newspapers should be commended for serving the purpose that the Founding Fathers saw so clearly. In revealing the workings of government that led to the Vietnam war, the newspapers nobly did precisely that which the Founders hoped and trusted they would do.”

1971 Ben Bagdikian predicted that “more independent channels of communication to each information corporation and into each home will end the homogenizing of news that now occurs because it must be prepared for such a wide spectrum of consumers” (Bagdikian 1971, 20).

1973 A bloody military coup, with U.S. connivance, overthrew Chile’s elected Marxist president Salvador Allende…. The new military regime unleashed a reign of terror that saw thousands of Chileans arrested, tortured, murdered, and/or exiled. Political parties were banned, the press was censored, and freedoms of speech and assembly were restricted. The junta pursued decidedly free-enterprise economic policies, but it took sixteen years for some semblance of liberal democracy to be restored (Hackett and Zhao 1998:166).”

1974 The Fraser Institute was established. The Fraser Institute is a pro-business think tank and lobby group.

1978 The Business Council on National Issues was established. The Business Council on National Issues is a pro-business think tank and lobby group.

1980 Canada’s competition law watchdog sparked a federal inquiry into a corporate takeover of two newspapers companies (Hackett and Zhao 1998:5).

1980 – 1981 The Tom Kent Royal Commission on Newspapers reported that “The great majority [of Canadians] believe that newspapers and the mass media in general, have responsibilities to the public different from those of other businesses.” The mass media is expected to function in public interest, not just economic self-interest. (Hackett 1998:1) “It is those newspapers with a large advertising market to protect and with a readership all social classes of society that have taken the initiative of setting up existing press councils…. The various press councils established in Canada until now are seeking to perpetuate the social consensus which has ensured the success of the so-called omnibus newspapers …. Whose formula is specifically designed towards advertising led consumer patterns and whose basic unit is the traditional family (Hackett and Zhao 1998:92).”

1982 Canada’s Charter of Rights and Freedoms enshrined “freedom of thought, belief, opinion and expression, including freedom of the press and other media of communication,” subject to “such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.” Legal scholar Harry Glasbeek “predicted that the Charter’s freedom of expression clause could be used “to defend individuals generally and the media in particular from state controls, but not individuals or their defender, the state, from private interests,” thus helping the private press “to retain its sovereignty as a purveyor of information and opinion.” In effect free speech is interpreted as a property right of corporate entities, not as a human right of individual citizens. (Hackett and Zhao 1998:80).

1983 REAL Women organization was created.

1984 Brian Mulroney elected Prime Minister of Canada.

1984 Robert Hackett wrote an article in 1984 on the limitations of using objectivity and bias as evaluative standards for journalism. He worked with Newswatch Canada (then called Project Censored Canada) that covers blind spots in the media.

1988 Brian Mulroney elected Prime Minister of Canada.

1989 Yuezhi Zhao’s 1989 MA thesis was on the discourse and politics of objectivity in North American journalism. Zhao grew up in a peasant family in rural China.

1992 Barry Mullin’s column criticized his own paper, the Winnipeg Free Press, for its coverage of the Los Angeles riots. The continent’s major news story was carried on the back pages while front page carried soft stories. Mullin had been an ombudsman for the Winnipeg Free Press. But the new Thomson appointed publisher disagreed with Mullin’s level of independence (Hackett and Zhao 1998:93).

1994 The response of the Mexican government to the Chiapas rebellion may have been more moderate because of the Zapatistas’ use of the Internet to communicate with their sympathizers world wide (Hackett and Zhao 1998:191)

1995 Sovereignty Referendum in Quebec

1995 “In 1995, according to Project Censored, the U.S. press underplayed or ignored these stories, among others: “In 1995, according to Project Censored, the U.S. press underplayed or ignored these stories, among others: the massive deregulation of telecommunications; $167 billion in annual subsidies to business, whose elimination could enable the U.S. government to balance its budget without slashing social programs; lax enforcement of U.S. child labour laws, resulting in thousands of injuries and even death of children in the workplace; $100 billion or more lost annually in medical fraud; ABC’s cancellation of a hard-hitting documentary on the tobacco industry at the same time as a tobacco company filed a $10 billion libel suit against Capital Cities/ABC; the U.S. chemical industry’s fight to prevent the banning of methyl bromide, a toxic zone-killing pesticide; the death through error or negligence of up to 180,000 patients in US hospitals each year (Hackett and Zhao 1998;182).”

1995 – 1996 There were unprecedented multibillion-dollar-mergers in North American media.

1996 The US Congress passed The Telecommunications Act that “raised the ceiling on the size of national TV networks and virtually removed restrictions on the ownership of different types of media in the same market (Hackett and Zhao 1998:4).”

1996 Hollinger took over Southam, Canada’s largest newspaper chain.

1996-05 “The Winds of Change conference, which took place in Calgary in May 1996, brought together approximately 70 leading right-wing thinkers and activists in an effort to bring unity to conservative forces before the next federal election, expected in 1997. The goal, according to organizer David Frum, was to discuss the prospects for a merger between the Reform and Progressive Conservative parties. The stark reality facing Conservatives is that a continued fracturing of the right-wing vote is likely to ensure not only a victory for Jean Chretien’s Liberals in 1997 but that the Liberals remain in power indefinitely. Frum believed that a vigorous airing of views behind closed doors, steps to develop a common agenda, and the bon amie of personal contact would create the momentum that was needed. . . . First, in the 1980s and 1990s the corporate community has funnelled considerable resources into so-called think tanks. The Vancouver-based Fraser Institute (1974), the C. D. Howe Institute in Toronto (1958), and the Canada West Foundation (1970) in Calgary are among the most influential policy-oriented research institutes. They often make headlines with timely and sometimes controversial reports on public policy issues, do contract work for governments, hold conferences and seminars, and do their own community outreach and media liaison work. Right-wingers might argue that the left in Canada has its own think tanks in the form of some university-based research centres. Of course, even the most objective scholarship might seem threatening to those who hold strong ideological views. These centres lack both the financing and the muscle that is available to the corporate-sponsored institutes. Indeed, as university budgets and federal funding for basic research have been cut back, corporate money has become more important in financing research. Corporations tend to support projects from which they can benefit directly (Taras 1996).

Late 1990s The Federal Government cut the CBC budget dramatically. CBC cut its workforce by a third.

2000 The Sarejevo Commitment At the beginning of the 21st Century men and women of the media register their commitment to integrity and public service. This document was launched at a World Media Assembly, SARAJEVO 2000, and signed by participants on 30 September 2000.

We, men and women of the media – professionals at all levels, from publishers and producers to cub reporters and students of journalism; from the print and digital media, television and radio, book publishing, cinema and theatre, advertising and public relations, music and the performing and creative arts – met here in the bruised, historic and beautiful city of Sarajevo, pay our homage and respect to the millions of humanity whom we inform, entertain and educate.

2001 In the wake of 9/11 there was a dramatic increase in the number of blogs.

2001 The producers of the series West Wing created a pivotal episode entitled Isaac and Ishmael where real, virtual and everyday embodied real were inextricably linked. The series exists in the liminal space occupied by docudrama, fictionalized journalism, news as fiction, psychodrama, realpolitical analysands, flesh and blood real and the imaginary real. The series reveals behind-the-scenes ethical sell-offs of the fictional (or nearly real) political epicentre of the planet. The Democratic President capable of blinking has a real world Ivy League CV . He is an economist trained in the London School of Economics.

2006 in An Inconvenient Truth, directed by Davis Guggenheim, Al Gore described how the mass media provides misinformation about consensus in the scientific community regarding climate change 2004 showed. He contrasts the findings of 928 Science magazine survey of all peer-reviewed scientific studies of climate change in which there were no articles questioning the fact that global warming caused by increased carbon dioxide in the earth’s environment is occurring at a rate and speed greater than any climate event in the past. Concurrently 53 percent of articles, etc in the mass media articles concluded that there is conflicting and/or inadequate evidence regarding global warming. Until Gore’s film was released consumers of the mass media who relied solely on them for information regarding climate change received deliberate misinformation preventing them from responding democratically to environmental risks.

2008 Guardian journalist Nick Davies published Flat Earth News: An Award-winning Reporter Exposes Falsehood, Distortion and Propaganda in the Global Media in which he critically examined the changing face of journalism in the UK since the 1970s. This reporter with a distinguished record in investigative journalism claims that “the British newspaper industry, its regulators and the PR machine that supplies it” accept, report and spread “lies, distortions and propaganda” in a culture of “churnalism” not objective, investigative reporting (Riddell 2008). “Il documente les règles permettant à n’importe quel rédacteur d’usiner une « information » sans chair, sans risque et parfois sans vérité — mais respectueuse des principes du marketing : privilégier les enquêtes au rabais, éviter de froisser les institutions, se porter au devant des désirs supposés du lecteur, alimenter la panique morale… (Davies 2008-07).” He revealed how the public has come to accept misinformation (the presence of weapons of mass destruction in Iraq) as it is so widely spread by a mass media culture in which fewer journalists are hired and those that remain are discouraged from taking the time to verify the credibility of sources.

Webliography and Bibliography

Bagdikian, Ben H. 1971. The Information Machines: Their Impact on Men and the Media. New York: Harper & Row.

Bagdikian, Ben H. 1997. The Media Monopoly. 5th ed. Boston, MA: Beacon Press.

Barlow, Maude; Winter, James. 1997. The Big Black Book: The Essential Views of Conrad and Barbara Amiel Black. Toronto: Stoddart.

Bird; Roger?; Winter, James. 1998. “The End of News: How the News Is Being Swamped by Information, Manipulation and Entertainment. And How This is a Threat to Open, Democratic Society.” Canadian Journal of Communication [Online], 23(4). January 1. Available: http://www.cjc-online.ca/viewarticle.php?id=493.

CBC Radio. 1970. “How free is Canada’s press?” March 23, 1970.

CBC. 2007. “Media Ownership in Canada: a timeline.”

Chomsky, Noam. 1989. Necessary Illusions: Thought Control in Democratic Societies. Toronto: CBC Enterprises.

Davies, Nick. 2008. Flat Earth News: An Award-winning Reporter Exposes Falsehood, Distortion and Propaganda in the Global Media. London: Chatto & Windus.

Davies, Nick. 2008-07. “Qui veut en finir avec le modèle de la BBC: L’émotion n’existe pas? Alors, inventez-la!Le monde diplomatique.

Franklin, Ursula. 1990. The Real World of Technology. Concord, ON: Anansi.

Grant, George. 1969. Technology and Empire. Concord, ON: Anansi.

Hackett, Robert. 1991. News and Dissent: The Press and the Politics of Peace in Canada. Norwood, NJ: Ablex.

Hackett, Robert; Gilsdorf, Bill; Savage; Philip. 1992. “News Balance Rhetoric: The Fraser Institute’s Political Appropriation of Content Analysis.” Canadian Journal of Communication. 17:1: 15-36.

Hackett, Robert A.; Zhao, Yuezhi. 1998. Sustaining Democracy? Journalism and the Politics of Objectivity. Toronto: Garamond Press Inc.

Hackett, Robert A.; Gruneau, Richard. 2000. The Missing News: Filters and Blind Spots in Canada. Ottawa: Centre for Policy Alternatives/Garamond Press Inc.

Hallin, Daniel. 1989. The “Uncensored War”: The Media and Vietnam. Berkeley, CA: University of California Press.

Herman, Edward, and Noam Chomsky. 1988. Manufacturing Consent: The Political Economy of the Mass Media. New York: Pantheon.

Herman, Edward, and Robert McChesney. 1997. The Global Media: The New Missionaries of Global Capitalism. London, UK: Cassell.

Kellner, Douglas. 1992. The Persian Gulf TV War. San Francisco, CA: Westview Press.

Ligaya, Armina. 2007. “Media monopoly: Media consolidation: Can Aussie model stop the moguls? CBC News in Depth. September 19.

McQuaig, Linda. 1995. Shooting the Hippo: Death by Deficit and Other Canadian Myths. Toronto: Viking.

Menzies, Heather. 1996. Whose Brave New World? The Information Highway and the New Economy. Toronto: Between The Lines.

Postman, Neil. 1985. Amusing Ourselves to Death: Public Discourse in the Age of Showbusiness. New York: Penguin.

Riddell, Mary. 2008-02-03. “Failures of the Fourth Estate: Flat Earth News by Nick Davies turns the spotlight on the workings of the press.” The Observer.

Silva, Edward. 1995. More Perishable than Lettuce or Tomatoes: Labour Law Reform and Toronto’s Newspapers. Halifax, NS: Fernwood.

Taras, David. “The Winds of Right-wing Change in Canadian Journalism.” Canadian Journal of Communication. 21:04.

Tichenor, Phil. 1970s.

Winter, James. 1996. Democracy’s Oxygen: How Corporations Control the News. Montreal: Black Rose Books.


Flynn-Burhoe, Maureen. 2002-. “Media Objectivity: a Timeline of Social Events1.” >> Speechless.

Flynn-Burhoe, Maureen. 2007. “Media Objectivity: a Timeline of Social Events 1.” >>”Google Docs. November 29. http://docs.google.com/Doc?id=ddp3qxmz_362fxcz5h

[1.] This is a personal teaching learning and research tool using my EndNote 8 and Zotero bibliographic databases compiled over a 14-year period, current events articles from various on-line and print sources. It is available for use under the Creative Commons license which is a license requiring any one who uses copyrighted work to attribute the work to its author, to not use the work commercially, to share any derivative work with the same license as this. For the sake of expediency I am uploading a timeline I developed in 2002. The vast majority of the entries come from a provocative, extremely concise, well-written publication by Hackett and Zhao (1998). For anyone teaching urban studies, critical ethnography, sociology, anthropology, economics, human rights, communications, public policy, history, political science not to mention journalism, this book is a must. It is entirely readable and its logic is impeccable. This has been uploaded in December 2006 to my WordPress blog and it will be updated in slow world time. Last updated July 2008.

I began this particular timeline while teaching First Nations and Inuit adult students in Off-Campus programs. One of the first questions asked of me during an information session on course content was put forward by the grandson of Jessie Oonark. The life and times of Jessie Oonark (1906-1983) Inuit artist, Order of Canada, Royal Canadian Academy member has been a part of my everyday life since the early 1990s I first began to investigate how understanding of her deceptively simple but content-rich work could be enhanced. By the time I met her daughter, a colleague teaching at Nunavut Arctic College in Iqaluit, Nunavut, had dinner at the Frobisher Inn in Iqaluit, NU with her son, cultural activist, father, political worker, William Noah in Iqaluit and her nephew, I was already confused, ashamed and angered by the stories of social injustice that I had collected. Her progeniture asked me, “Will we be examining the way the mass media portrays Inuit?”


Patrick Watson (1980) vs CTV (2007): the case of Conrad Black: The Canadian Establishment and governance.

Throughout the trial of Conrad Black I wondered why Patrick Watson‘s articulate and well-researched CBC documentary entitled the Canadian Establishment (1980), was not viewed on CBC. Conrad Black was known for a strong and effective offensive tactics when dealing with his image management in the press and until the guilty verdict became publicized the media was discouraged from entirely objective coverage. This may change now that the jury has revealed to their decision. CTV coverage reveals a pro-Black bias describing him as stoic, proud, even …onian, in the face of this trial, almost agreeing with Conrad Black that he is somehow above the law. However, he did glare and skowl at the jury when they gave their decision. They describe how he helped every community he was a part of. They admire his rise from his university education to an emerging career with the press to the circle of the uber-wealthy. They expect him to stand up to this and continue to argue for his own innocence. He was found guilty of obstruction of justice where he removed evidence from his Toronto office and of email fraud which hold a combined possible sentence of 10 to 65 years. Charges of racketeering were dismissed. Nonetheless he stole millions of dollars from Hollinger, and continues to feel no remorse. There appears to be a strong empathetic response to the potential of his doing his real jailtime in an American jail where he is actually going to have to do work such as laundry. There is speculation and some relief that since he is so ‘astute’ in terms of money that he will have provided for himself and his family, Barbara Amiel, their son and daughter, Alanna in some ‘legal’ fashion. CTV journalists are comparing the American and Canadian legal systems in terms of fairness and approaches to access to jury information. They mused about whether American courts would be harsher on Black and his co-accused than their Canadian counterparts who would be more influenced by Black’s position of power, wealth and prestige. They seem to admire Black for his intelligence and his ability to write and do research and imagine him using his minimum security prison to study and write. Although others argue that an American minimium security prison is not an exclusive club prison like those in Canada and Black will not have access to a computer. CTV interviewees describe Black as someone very concerned with his place in history. CTV journalists look for ‘silver lining’ in his situation. They wonder how Black will survive from now to his sentence hearing by Judge … in November. He is no longer a Canadian citizen since he abandoned it to become a British Lord. This means he has no rights to go to Canadian jails which are considered to be friendlier to the uber-wealthy. Black is expected to begin quickly to appeal the jury’s findings. This will not be stalling the sentencing hearing.

What makes Watson’s (1980) revelations so compelling at this time is the way in which he reveals Black’s roots as outsider on Bay Street until he was able to take advantage of widows of Establishment members to get his toe in the door. While Black’s father had some wealth through his brewery, his family lacked the prestige and power of the Canadian Establishment. According to Watson, it was during the era of Conrad Black that the Establishment shifted towards an even more self-serving attitude of entitlement. His business ethics predates that of the mean-spirited arrogance of the financeers in the 1990s. He seems to embody that which is dysfunctional and unsustainable in a social world corrupted by extremes of wealth and poverty.

My own concern with Black was the role he played as media mogul in obstructing access to an objective press, a keystone of democracy. Like the the New Brunswick-Bahamas Irvings prior to their ethical turn, mass media moguls adopt Friedman’s motto that their sole responsibility is to make money. Black claimed that he hoped to provide more of a pro-business, economic efficiency viewpoint to counteract the perceived social justice bias of the media (Flynn-Burhoe).

Do we secretly admire white collar criminals and their brilliant lawyers? Conrad Black and three others are accused of stealing $60M from shareholders to fatten their 5- and 7-figure salaries. Prosecutor Jeffrey Cramer claimed in his opening statement that media mogul Black failed to provide the public with objective accounts of world affairs.

read more | digg story

CTV News. 2007. Conrad Black. July 13, 2007.

Flynn-Burhoe, Maureen. 2006. “Media and Objectivity: a Selected Timeline of Social Events.” >> papergirls. December 6.

Flynn-Burhoe, Maureen. 2007.

Is the Mass Media Coverage Biased in Favour of Conrad Black?”>> papergirls. May 9, 2007.

Watson, Patrick. 1980. The Canadian Establishment. CBC.

Patrick Watson.” Museum TV Archives.