Tag Archives: Goldman Sachs

The Image of FHFA Lawsuit Against 17 Banks

Posted on by • Posted in Companies, Corp - Bank of America, Rep Issue - Newspapers • Tagged , , , , , , , , , , , , , • 5 Comments

(Note: as Bank of America is in the news for additional mortgage related lawsuits, we put in the frontline this analysis posted before)

The precedent post showed which banks are more present in the media in relation with the multibillion lawsuit of the US Federal Housing Finance Agency (FHFA) against 17 major American and international banks.

Now we show results about the images portrayed by the media when covering the FHFA lawsuit.

This is a new tool of analysis that we present in this blog. It has been developped at our research center MRI Universidad de Navarra, and it has been applied to other studies.

Image analysis show striking results for media reputation analysis. All analysis presented in this reputation crisis blog is entirely based in news content analysis from newspapers. Image analysis is also based in newspapers articles. What we do here is to identify all photos used by the journalists to illustrate the news published about any kind of issue or event.

We collect all available photos used, and we regroup them into relevant categories. The final step is to present the results. We can show the numerical results or a graphical representation of it. The reputation collage is the resulting image emerging from all photos chosen by journalists.

This tool is probably very relevant in terms of reputation analysis. Appearing in the news in a reputation crisis may damage the media perception of the affected people, company or institution. This damage increases substantially if the news appearence is not recluded into the body of the article, but appears in the headlines. But it is probably even more damaging if the indicted actor appears in the photo illustrating the news article.

News photos are many times the result of a hard work of media professionals, as they are picked as means to show the “soul of the article”. In many cases, especially when dealing with reputation crisis or scandals, the image chosen come as a result of a journal editorial decision. The impact of a photo is many times stronger than the impact of the content of the text.

We present the result concerning images showed to explain the FHFA lawsuit. As explained in the precedent post, the case we analyze here is ver nice in terms of reputation analysis, as it concerns as much as 17 different companies. The journalist or the editor needs to take a choice if she wants to show the image of a particular bank. As explained, the bank appearing in the photo of news about the FHFA pays a hard price in terms of loss of media reputation, as it creates an association with misleading business behavior, linked to the present economic crisis suffered by many right now.

First reputation collage refers to photos used in news from US newspapers about FHFA lawsuit, published between September 1 and 7.

Main image reference is a picture of a bank. We have shown a unspecified bank image, but they refer all to specific companies. The next collage will show the details of which banks are chosen as examples in the news. Second image reference in importance are photos about the stock markets, normally showing distress and images of falling stock indexes. They are concentrated in news from Monday September 5, when sued banks suffered substantial losses in European markets (Labor Day in the United States). Third and fourth images used to explain the core of the news are images about housing foreclosures and about Fannie Mae and Freddie Mac. We find also image references to experts/analysts, money, the justice and President Obama.

As announced, we show in the following reputation collage the images concerning the names of banks used in the photo news. This result is the key element concerning the measurement of the reputational impact of the current legal crisis experienced by sued banks. It also answers to the question of which among all banks is paying the reputation bill.

Our empirical answer is quite clear: the crisis is up to now being strongly associated to Bank of America, as it is by far the reference picked by journalists or newspaper’s editor to illustrate the lawsuit. Second bank in terms of presence in news photos is JPMorgan Chase. We find also a significative presence of images about Goldman Sachs. There are only marginal appearences of other banks: Morgan Stanley, Deutsche Bank, Citigroup and First Horizon. Other banks do not even appear as photo news.

This clear result suggest a kind of Winner-take-all rule, that in the field of reputation crises becomes a curse: in a set of several affected companies by an scandal or a crisis, media tend to concentrate image attention to the one appearing as the most exposed to the scandal, in a disproportionate way compared to all other affected companies.

It is true that Bank of America has been sued by the largest amount of sellings to Fannie and Freddie. But while they support less than a third of all eventual sanctions linked to selling mortgage securities, it completely controls media choices as image to be shown to present the FHFA lawsuit news.

American Companies Most Affected by Japan Earthquake, Tsunami or Fukushima Nuclear Crisis, by Media Impact

Posted on by • Posted in Companies, Corp - AFLAC, Corp - Bank of America, Country - Japan, Country - United States, Disasters, Earthquake, Event - Fukushima, Event - Tsunami Japan, Issue - Nuclear Crisis, Debate, Rep Issue - News Content Analysis, Rep Issue - Newspapers, Rep Issue -Media Impact Analysis • Tagged , , , , , , , , , , , , , , , , , , , , , , , , , • 7 Comments

In a previous post we showed the list of top 50 companies in Europe most affected by Japan disaster, in terms of media coverage received in relation with the catastrophe. List was dominated by energy companies and insurance and financial institutions.

In this post we show the list concerning the American companies. We show exactly the same approach and ways to establish the list of companies in Europe. You can refer to the post about Europe or the presenting note about our methodology if you need further explanations. We will show in a future post the list of most affected companies in Asia.

The sample for American companies is elaborated with the companies included in the Stoxx Americas 600. It includes companies from United States and Canada. Official site provides information about the 600 components of the index. This sample was also used to estimate the American companies most affected by Wikileaks in the initial stage of revelations and reactions by some US companies.

We use as unit of reference the same applied to the European case, in order to make it comparable. A Media impact value of 1.0 indicates that this firm has received an amount of news related with the Japanese disaster in an equal number than the average of news received by all Stoxx Europe 600. In the graph we also indicate if the company is more associated to news about the earthquake and tsunami or to the nuclear ongiong crisis in Fukushima.

Period monitored includes news published by newspapers all over the world between March 11 and March 21 2011.

According to our data, the company most affected in terms of media attention received is General Electric, with 37.1 points of media value. This media attention is mainly driven by Fukushima nuclear problems. This result shows the potential harm that the present crisis can generate for General Electric reputation and business interests, as its linkage with the crisis is due to the fact that General Electric was the company that designed the reactors, and that are still in use in other nuclear plants elsewhere. Probably we will identify in the future the impact of this crisis for General Electric in terms of media reputation, as we did with Bank of America or Chevron in relation with Wikileaks revelations.

Second firm in the list is Moody’s. In this case, the presence of this rating agency in Japan related news does not reflect a direct exposure of the firm. It is reflecting the media coverage given to the eventual assessment of the impact of the disaster on the quality of Japanese public debt. Third and fifth positions are also for financial institutions: JP Morgan and Goldman Sachs. These financial companies are present in the news in a similar way as Moddy’s is. They appear in Japan related news not basically as a company affected by the disaster, but as analysts and experts consulted to asses the extent of the economic and financial impact of the disaster.

Fourth place is for AFLAC, an insurance company. In this case, media presence is related with business exposure to the economic impact of the tsunami. For this company, this relationship with the tsunami is also a matter for negative reputation, as a substantial amount of media coverage received is not related with the estimation of the damages, but to the impact of unfortunated jokes tweeted by comedian Gilbert Gottfried, the voice of AFLAC trademark duck. Gilbert Gottfried was fired by March 14. Our results show how relevant are mistakes in times of crisis with massive media coverage.

Following places are taken by industrial companies, like General Motors and Caterpillar. Caterpillar appears as one of the potentila beneficiaries of the disaster, as this construction oriented firm.

Some US companies receive some of their media coverage associated to the tsunami as corportate donors through corporate foundations.

The presence of US automotive and technological (Intel, Apple, National Semiconductor) firms in the media with relation with the Japanese disaster is mainly associated to the problems that the earthquake can produce in terms of production shortages, as some damaged factories in Japan produce key components in the supply chain of these industries.

We find also in the list some US companies highly exposed to the Japanese economy, as this market is responsible for a relevant share of revenues and profits. Examples are Tiffany (position 25), Wal-Mart (position 11) or Starbucks (position 23).

If we compare this list with companies from Europe, we find that the most affected companies in Europe were mainly electric and energy companies and reinsurance firms.

Other posts

Japan XVI. AFLAC Media Reputation: Impact of Jokes About Tsunami in Japan

(NOTE: You can download here a pdf version of AFLAC crisis post, edited by Media, Reputation and Intangibles center, MRI Universidad de Navarra. It contains additional analysis about media reputation of AFLAC rivals, like Metlife, Prudential Financial or Aetna).

Japan XV. Cities Affected by Earthquake, Tsunami or Nuclear Crisis  in Japan, by Media Impact.

Japan XIV. New York Times and Wall Street Journal Coverage of Japan Earthquake and Fukushima Nuclear Crisis (II)

Japan XIII. New York Times and Wall Street Journal Coverage of Japan Earthquake and Fukushima Nuclear Crisis (I)

Japan XII. Japan Prefectures Media Coverage. Relationship with Personnel and Property Casualties by Earthquake and Tsunami

Japan XI. Companies in Europe Most Affected by Japan Earthquake, Tsunami, Fukushima Nuclear Crisis, by Media Impact

Japan IX. Fukushima Nuclear Crisis Media Views in United States, United Kindgom, Australia and India.

Japan VIII. Wikileaks on Fukushima and the Japan Nuclear Crisis. Measurement of the Initial Media Storyline.

Japan VII. Fukushima as a Chernobyl Nuclear Disaster: Media References by Countries