Is the mortgage insurance business headed for a huge crash?
A recent story in Barron’s would have us think so. Jonathan R. Laing calls private mortgage insurance “the next domino likely to topple” in light of looming foreclosures, and said Milwaukee-based Mortgage Guaranty Insurance Corp. is one of the three companies “most at risk” in the current environment.
As Rich Kirchen first reported for The Business Journal, MGIC wasn’t pleased.
In fact, MGIC took to the Barron’s story’s comments section with a three-part rebuttal to the paper’s claims. “We do not dispute Barron’s right to try to analyze our industry or our company, but we would hope the analysis would be a balanced discourse, well grounded in the facts,” concluded Michael Zimmerman, Senior Vice President-Investor Relations at MGIC.
Ouch.
It was a striking pushback that can be read one of two ways: Barron’s really got it wrong — or else they got it right, and MGIC is in defensive mode.
Pressroom sent four questions last week to Katie Monfre, MGIC’s corporate relations director:
1) Were you aware of the article prior to its publication (e.g., had your firm been contacted for comment)?
2) Was there a debate about whether or not to respond publicly — for instance, did MGIC management consider that responding might have an undesired effect of bringing more attn.. to a story you considered erroneous? Or did you feel you really had no choice given the scope of errors you saw?
3) Prior to your public response did you privately seek a response from Barron’s — correction, retraction, etc.?
4) Has Barron’s responded at all since your public response?
Monfre responded with a note declining to answer.
But analyst Matt Howlett of the Macquarie Group in New York, who follows the mortgage insurance industry, sides with MGIC and says Barron’s “went absolutely too far.”
The story “was very one-sided,” Howlett tells Pressroom. As MGIC pointed out, he noted, it included some incorrect numbers. Moreover, the industry has been working hard to stabilize its condition, and he believes it has done a lot to right itself and position itself for the long term.
“The article’s trying to raise alarm bells among regulators,” he notes. “That’s why MGIC is pushing back on it”…
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A while back, Pressroom wrote about the joint venture between the Journal Sentinel and MedPage Today.
You can see the fruit of that partnership in the recent stories that John Fauber has been producing, following up on problems with Medtronic’s Infuse, a product that stimulates bone growth and is used in spinal surgery. The Senate and a medical journal have taken note as well.
In some ways, the work Fauber has done on researcher conflicts of interest has a potentially greater impact than the paper’s long-running crusade on Bisphenol-A — and because so many of the researchers it hammers are at the University of Wisconsin-Madison, it’s arguably a bit more sensitive.
We suspect this isn’t the last of those stories…
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Speaking of BPA, here’s something we didn’t mention in our previous online column on the subject.
Journal Sentinel critic and BPA defender John Entine says he doesn’t get money from industry to support his work. But his biography describes him as
“co-founder of ESG MediaMetrics, which advises corporations and NGOs on Environmental, Social, and Governance issues, including sustainability and executive leadership, and on brand reputation and strategic communications. Recent clients have included KKR, The Alliance and Mergers Acquisition Alliance, The Bill and Melinda Gates Foundation, P&G, American Greetings, Monsanto, DHL/Deutsche Post, and Fischer Homes.”
Procter and Gamble and Monsanto just happen to be big users of BPA…
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And while we’re on the topic of science… Ed Yong, who blogs on science at the website of Discover magazine (now owned by Waukesha-based Kalmbach Publishing), defends the role of bloggers as legitimate heirs to traditional journalism and fights back against ignorant stereotyping of his colleagues. It’s a smartly written piece worth reading….
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Also in the realm of science, from The Rural Blog, put out by the University of Kentucky’s Institute for Rural Journalism and Community Issues, comes word (via an NPR report) that the public is woefully uninformed about the scientific consensus regarding climate change. Scientists are largely in agreement that change is real and significantly a result of human activity. People don’t know that and are becoming more skeptical.
The media aren’t directly singled out as an underlying cause of this shift. But Pressroom hopes that they would at least engage in some soul-searching on their role in the spread of ignorance…
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Gannett’s layoff of 700 nationwide two weeks ago included only 4 at the chain’s Wisconsin papers. For a full roundup, check out the indispensible Gannett Blog, maintained by Jim Hopkins, who also linked to a Poynter Institute analysis suggesting Gannett’s mistakes…
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Media-reform group Free Press launched a new campaign last week targeting “Covert Consolidation” in TV news operations, which it says is “circumventing consolidation rules at the expense of independent, local journalism.” Among the listed examples are stations in Appleton and Green Bay; the latter is owned by Journal Communications.
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Isthmus — which just hired its former reporter Judith Davidoff back from the Madison Cap Times to be the new news editor at the Madison alt weekly — has published a scathing critique of the Wisconsin State Journal by a reader, Grant Petty, who’s quitting the morning daily. In the whole genre of “cancel my subscription” letters, it sets a new standard for being pointed and articulate both.
(Check the comments, too, for Petty’s account of his exchange with the State Journal’s editor about the letter.
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Finally, watching for forecasts to be proved wrong (or right) is a personal hobby, so it was good to see Salon.com check up on a piece that The Atlantic published last year by Jeffrey Goldberg predicting an attack on Iran by Israel.
Maybe down the road Salon will take a look at that Barron’s story on mortgage insurers.
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