Ryan Chittum at the Columbia Journalism Review’s Audit blog puts the final nail in the cofffin of the absurd Wall Street Journal story about hedge funds conspiring to bring down the Euro.
The main problems with the story were:
- The Euro was in sharp decline before the “secret” meeting ever took place.
- It wasn’t secret at all. It was tape recorded and turned into a research report.
- It wasn’t mainly about the Euro.
- It vastly over stated the influence of hedge funds on global capital markets.
Here’s how Chittum begins:
Last week, The Wall Street Journal ran an odd story on its front page headlined “Hedge Funds Pound Euro”—something Felix Salmon saw as the latest evidence of “the sensationalist WSJ.” I did, too.
That was because the headline implied that the euro’s fall was being caused by hedge funds who, it’s hinted in the second paragraph, are colluding at exclusive dinners at private homes. But the piece was a mess, as I noted:
The thing with this story and its headline is that the piece details how the euro started falling in December, continued to fall in January—all well before the hedge-fund dinner, which happened less than three weeks ago. Indeed, since the meeting the euro’s rate of decline against the dollar has eased. So “Hedge Funds Pound Euro” just doesn’t make sense when juxtaposed with the February 8 meeting. But hey, it’s above the fold and I’m sure helps sell newsstand copies, so who cares if it’s accurate?
It turns out the story is messier than that, with a couple of errors that made the dinner in question seem more sinister than it apparently was.
He goes on to note that the WSJ reporting has already had real world consequences. A Justice Department inquiry is underway.