Turn on a 24- hour news program and you'll get a constant update on the market in the corner of the screen. Financial channels have sprung up providing constant news, commentary and insight about markets from Asia to South America, to companies from the agricultural sector to telecommunications. For years, a Kodak picture hung silently in that spot. But, as the quantity of information increases, so does the value of dispensing clear and unbiased advice. That's not what troubles me.
More information is generally good.
What troubles me is what purports to be utterly unbiased analysis could, in fact, be shaped by unspoken pressures between the analysts and the companies they follow. The vast majority of analysts speaking to the public today work for firms that have business relationships with the companies the analysts follow. As the financial services business becomes more concentrated, it is becoming harder and harder to find an analyst whose firm does not have an investment banking or, increasingly, commercial banking relationship with companies the analyst follows. Today, analysts are under increased pressures to look for and attract business and to help the firm keep the business it has. Analysts are expected to be key players in the road show promoting securities to be issued in conjunction with a firm's investment bankers.