Monday, September 15, 2008

Positively Wall Street

As secrets go, "The Secret" seems rather heavily advertised. In case you’ve somehow missed the DVDs, books and "scrolls," here's the gist: Just radiate positivity and you'll attract good fortune the way an open Coke can at a picnic attracts bees.

Some corporate PR people seem to believe in The Secret -- or, as we call it here at Proxyland, The Power of Positive Press Releasing. But, as Floyd Norris pointed out in his NYT column last week, too much positivity can become a negative.

Norris says Lehman’s public statements about its capital situation turned out, over and over, to be way too cheery. He believes this created distrust, scared off possible saviors and left the firm isolated at its ultimate moment of crisis. (Of course, methods for valuing illiquid paper being touchy-feely, Lehman may have genuinely convinced itself its positions weren't really doing so badly.)

These observations prompted me to wonder where WaMu ranks on the positivity index these days.

Well, it sounded pretty perky in its Friday press release, entitled "Update on Expectations for Third Quarter Performance." (At least these guys were nice enough to give us an update; Lehman, by contrast, clammed up between its 10-Q filing on July 10 and its "don't worry, we're restructuring" press release on September 10.) But WaMu did include a warning not found in its earlier releases:

The company expects market conditions to remain volatile during September and therefore the actual third quarter results could differ materially from the third quarter earnings outlook provided above.

Although this looks like the “forward-looking statements” crap everyone sticks in their earnings releases, WaMu's warning is more pointed. It rubs our noses in the uncertainties of this particular quarter, or what you might call “the fierce urgency of now.”

Lehman, writes Norris, was the opposite of the boy who cried wolf. It's left us with a new bedtime story: The Boy Who Held Conference Calls and Said Rumors of a Wolf Were Overblown. The ending, as in many morality tales, is rather gruesome.
Explanatory note/excuse: I drafted this post early Sunday, so it doesn't mention certain newsworthy developments of this morning. On that score, let's just say I'm rethinking my vote in Friday's "what scares you most" poll, especially since Fashion Week is actually over.