OPINION – Don’t blame journalists for the near-death of the fix

Jul 10, 2014 - 4:53 PM GMT
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Opinion pieces are the views of the author: they do not represent the views of FastMarkets

Center Valley, Pennsylvania 10/07/2014 – Covering New Jersey politics for eight years, I learned many important lessons but perhaps the most iron-clad was this: the final gambit of a losing campaign is to blame the press.

In the final days of an election, one candidate would inevitably write a scathing Letter to the Editor lambasting our coverage as biased or inaccurate, while at the same time calling our journalists lazy or unprofessional. Without fail, that politician would lose – and lose badly.

I was reminded of my time as a political reporter while reading Sharps Pixley CEO Ross Norman’s column titled “Lazy Journalists Just Don’t Get It”.

Norman asserts that, with some minor reforms, the London Gold Fix remains fit for purpose. Given my healthy respect for the former FastMarkets director (and joint founder of the company), I have no reason to quibble with his arguments in support of a London-based pricing mechanism.

But Norman goes on to bemoan the fact that he regularly get calls from parachute journalists who have little basic knowledge on how the gold market works and enviably go on to file inaccurate or misleading reports.

But who is really to blame here? I would argue that the proliferation of shoddy editorial copy is a symptom of the disease and not the disease itself.

The authorities who run the fix have done a poor in promoting its safeguards and advantages. Branding, marketing and education are the real problems.

I mean, what Madison Avenue advertising executive dead or alive would ever consider calling a financial product a “fix” in 2014? I assume there will be a new name with any relaunched product but it is unfathomable that a name change took so long.

And moreover, here’s how the general public and many in non-trade press mistakenly view the process: four fat cat bankers (presumably white and male) sit in puffy leather chairs in elaborate wood-panelled rooms to “fix” the price of gold on the telephone.

This is clearly an unpalatable and unsustainable narrative, especially given the rise in populist fervour since the 2008 financial collapse.

But to blame this myth-making on the press would be to ignore the bigger issues, which are years of complacency and the lack of effective communication strategy.

I vividly remember sitting in at booth at the Malibu Diner in Hoboken, New Jersey, in April 1999. It was my second day as a professional reporter and one of the city’s most respected political consultants wanted to be the first to show me the lay of the land.

“The biggest mistake that politicians make is that they assume that journalists have deep knowledge of the topics that they are reporting on. But the truth is that, more often than not, they know very little. It’s up to people like me to tell them that the sky is blue and water is wet,” the consultant told me in a lecture that I’m sure he’s given hundreds of times.

“If a story comes out that paints my guy in a negative light, that’s not the reporter or paper’s fault. It’s my fault because I wasn’t able to educate or persuade,” he said.

The gold fix is on life support because its users and gold advocates have not properly explained to the press, the regulators and individual gold investors why theirs is a better mousetrap. They have failed to educate and persuade.

Yes, the World Gold Council will soon publish a white paper on the reformation of the London Gold Fix; however, that will be based largely on the comments from 34 representatives from bullion banks, refiners, ETF providers and exchanges who attended a recent round-table. But they obviously have a vested interest in the fix and would like to see it survive.

But what is still lacking is an effective public outreach effort. The fix needs a face and clear message that is not only understood on Wall Street but also on Main Street.

Reforming the fix should go beyond a mere move away from the telephone or a tightening of governance rules. What is needed now is a ground-up rebranding that is suitable for the 2014 global economy.

(Editing by Mark Shaw)