On the Financial Frontlines

By Michael Blumfield

hochsteinWhen your writing is free—as it is with so much digital content today—your readers may not hold you to the highest standards. But when a subscription to your publication costs $1,575 annually, you’d better be a lot more than mildly entertaining.

That’s the position Marc Hochstein ’94 is in as editor-in-chief of American Banker, the New York-based trade publication for the banking industry. He’s helped his organization grow and sustain a strong readership by giving readers the critical perspective they need on changes in their industry and doing so in a fresh, occasionally cheeky manner.

…when the mortgage bubble burst, none of our readers should have been surprised.”
Marc Hochstein ’94

Consider a column he wrote in 2013 about Bitcoin and the way it allows individuals across the globe to find exemptions to government restrictions and do business together. Hochstein talked about using the digital monetary system to buy music from an Iranian composer and pianist just because he could:

“I bought the album, and found it wasn’t to my taste. It sounds like the kind of music you’d hear in the background while getting a microdermabrasion facial treatment with aromatherapy candles burning.”

It’s an excerpt that harkens back to Hochstein’s days at Johns Hopkins, where he served briefly as editor of The Black and Blue Jay (self-described as “Johns Hopkins’ only intentionally funny publication”). While he knew he wanted to be a journalist, he wasn’t too clear on how he’d do so. “There are a lot of very focused and serious people at Johns Hopkins, but I was not one of them.”

Still, he says his time as an undergraduate history major—taking classes with such professors as Orest Ranum, David Harvey, Bill Leslie, and Tristan Davies—refined his ability to do the careful thinking required of good writers.

While he later became known for his coverage of emerging trends and technology, Hochstein’s first job at Dow Jones in the mid-’90s involved grabbing faxes from the Federal Reserve and physically running them to reporters’ desks at the Dow Jones Newswires service.

He was thrilled when his next move swerved from nascent electronic information-sharing to American Banker’s daily newspaper format. A few years later, he was even more pumped to get hired at a high-quality magazine focused on New York real estate called Grid. “While the world was going digital, I was going the opposite way,” he says.

Along the way, he happened to be assigned some subjects that later would bear journalistic fruit. While at Dow Jones Newswires, he covered a little-known financial instrument called “asset-backed securities.” Later, at American Banker, he headed up the publication’s reporting on mortgages in the early 2000s, where knowledge of asset-backed securities and other semi-obscure instruments was handy.

He and his crew of reporters didn’t hesitate to describe the fragile platform on which much of the housing finance industry was built. “We were polite in our coverage, but when the mortgage bubble burst, none of our readers should have been surprised,” he says.

Hochstein’s prescience about trends in the financial and online worlds has earned him leadership roles in some of his organization’s most ground-breaking news outlets. He developed an opinion blog called BankThink that invites contributions from not just the typical leaders of the industry, but opposing views from representatives of consumer organizations and even the Occupy movement. He rose in the early morning to compile the popular Morning Scan newsletter, a succinct summary of the day’s financial reporting from the major news outlets.

And he initiated coverage of Bitcoin, the all-digital currency exchange system that carries much of the promise and the danger of the internet’s speed and power. Hochstein describes the insights he gained from reporting on Bitcoin as being like his “red pill” from the movie Matrix—it showed him the awkward reality of the accepted ways of conducting financial transactions.

For example, with Bitcoin, the seller can receive payment from a buyer in as little as 10 minutes. With banks, it’s often a two- or three-day process. And banks are in no hurry to speed that up. A few years ago, they couldn’t get agreement through their joint operating enterprise—the Automated Clearing House—to agree to same-day transactions, let alone real-time exchanges, he notes. While the world is increasingly moving away from analog systems, banking remains—for a variety of complex reasons—wedded to traditional methodologies, Hochstein observes.

Hochstein was named editor-in-chief of American Banker in July 2014, heading up what had been a daily print publication since 1836. While the forces of tradition and innovation are still in conflict in the industry itself, American Banker has chosen sides. In January 2016, it switched to an all-digital format.