Financial Journalism II
Yesterday I read: “Oil prices posted their biggest one-day gain on Monday, jumping more than $25 a barrel as investors dashed into commodities on concerns about the government’s plan to bail out the financial system.”
Then I wrote:
But of course if crude oil prices had gone down, we’d be “explaining” this as “concerns about the government’s plan to bail out the financial system” driving pessimism about growth. The truth is, none of the people writing this stuff have any real idea of why things are happening.
And now today:
Crude oil futures prices fell Tuesday as declining stock prices and the soft dollar signaled some investor concern over the United States government bailout of Wall Street and the market moved on after technical factors provoked a surge on Monday.
I find it amazing that this stuff gets published.
30 Responses to “Financial Journalism II”
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September 23rd, 2008 at 1:25 pm
FROM: http://news.yahoo.com/s/csm/20080923/ts_csm/apaulson
For the most part lawmakers aren’t grumbling about Paulson himself.
“We’ve got the right man” to deal with the problem now, said Sen. Christopher Dodd (D) of Connecticut, chairman of the Senate Banking Committee, in a broadcast interview on Monday.
Right. A Republican Secretary of the Treasury, former CEO of Goldman Sachs, who stands to profit enormously from the bailout. He’s just the right guy for the job.
Chris Dodd – uber whore. The perfect symbol for what the Democratic party has become.
September 23rd, 2008 at 1:27 pm
I find it amazing that this stuff gets published.
Yup.
September 23rd, 2008 at 1:32 pm
Nice catch Yggy! I’m gonna forward this post to Mssrs Mouawad and Saltmarsh and ask them to cite the sources of this “concern”. I didn’t see any in the articles. Of course it’s possible that 2 different people sincerely believed this, but for the sentences to be in the lead graph, I want names.
September 23rd, 2008 at 1:33 pm
It’s the fluidity of “as” that gives such statements the patina of plausibility. If you read “as” as “at the same time as” instead of “because,” it’ll at least help keep you from losing your mind.
Still, it’s inane how many articles confuse correlation with causation and still are appear in “respectable” publications.
September 23rd, 2008 at 1:42 pm
As any Larry Kudlow watcher knows, when the market goes up it’s because of Bush’s economic policies and when it goes down it’s because the market is afraid Bush’s economic policies are being threatened by Democrats.
September 23rd, 2008 at 1:54 pm
Things must be explained and published. You too can write a financial column! Most are as worthless as tip sheets outside a greyhound racing park.
September 23rd, 2008 at 1:56 pm
I find it amazing that this stuff gets published.
Well, to be fair, what’s the alternative? ‘There was noisy, meaningless trading in the markets today, and observers expect that to continue tomorrow.’
max
['Wanna tell a story when you're a bored on the financial desk.']
September 23rd, 2008 at 1:57 pm
For those who would like to know…
Yesterday was the cut-off for the October monthly contract. When you get a sharp change in either direction on the last day, you get a sharp change back the next day.
September 23rd, 2008 at 2:04 pm
Once heard a comparison of these kinds of market explanations to “Just So” stories.
September 23rd, 2008 at 2:10 pm
Couldn’t it just be that people that owned oil as it went up outrageously yesterday thought to themselves “well that’s not going to happen again, let me sell this stuff”
September 23rd, 2008 at 2:16 pm
Of course, this is how financial reporting is always done. You always have to have a reason for fluctuation, no matter how absurd. Presumably, the alternative (”really, we don’t have a clue”) is far too terrifying.
Actually, the rhetoric and stratagems are very much like play-by-play in sports, where the sportscasters come into a game with a number of (contradictory) narratives to cover the contingencies and then jump recklessly from one to the next as the game progresses.
September 23rd, 2008 at 2:22 pm
What about Andrew Ross Sorkin’s explanation that the monetary policy-currency effects of the bailout are driving up prices?
http://www.pbs.org/newshour/bb/business/july-dec08/newwallstreet_09-22.html
Don’t know if that’s true, but at least it’s an explanation not built on vague psychology.
September 23rd, 2008 at 2:30 pm
The only thing you forgot was one of these photos accompanying it:
http://tinyurl.com/4erjzn
“Trader Joe Smith reacts to the (rise, fall, stalemate) on Wall St. today…”
September 23rd, 2008 at 2:32 pm
Njorl is correct. Traders had to cover short positions, so they dove back in.
But given the concomitant boost in gold prices, I think a fair argument can be made that people are trying to “hide” large sums from financials and stock markets in general, leading to a boost in commodities futures.
Thoughts?
September 23rd, 2008 at 2:49 pm
MY: I find it amazing that this stuff gets published.
When I think of daily business news writing, I think of Hunter S. Thompson’s take on sports writing: there are only so many ways to objectively describe the beating some poor slobs take in the ring week in and week out, so if you want to sell copy, you’d better get creative.
September 23rd, 2008 at 5:55 pm
I’m kind of ignorant about how stocks and commodities work; is the problem just that journalists say idiotic things to explain price changes, that economics doesn’t have the tools (theoretical tools, or just enough good data) to explain price changes, or that price changes are basically meaningless expressions of herd behaviour?
September 23rd, 2008 at 5:56 pm
Basically I’m asking if I should be a non-cognitivist about CNBC.
September 23rd, 2008 at 8:40 pm
For any business TV, I think anything other than statements of facts (GM has built xxxx cars this month, Google is at $xxx.xx) should be considered entertainment.
December 9th, 2008 at 9:50 pm
My EX Girlfriends Pics
December 10th, 2008 at 2:42 am
Hamlets, towns and cities — all across America — have Big Three dealerships. At each one a dozen or more people usually are employed. One in 10 American jobs is directly or indirectly related to the auto industry. So it is disturbing to
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