Wednesday, February 27, 2013
TMM had another bout of road rage this morning. Fortunately the cause and target of the rage wasn't another road user, rather the quality of news reportage emanating from their car radio on the way to work. Don't worry, TMM are calm level headed rational beings who are not inclined to go "Falling Down" on you, but the last 36 hours exposure to mainstream reporting got us pretty close. TMM's poor car radio is beginning to resemble an old dog toy having been bombarded and cratered with any loose object to be found in the door pocket.
We weren't in the best of moods to start with, having endured a day of "Europe is Doomed" being boomed at us from every Orwellian speaker lodged in our hi-tech lives. This was followed on return home by a Channel 4 News story of 17 year olds falling down a legal loophole in UK police stations. A very valid subject and one that needs to be discussed, but preferably discussed by experts. We say experts, because radio and TV news programs have developed the appalling habit of interviewing victims (or the relatives of victims if the victims are deceased) as if they were the experts.
Whilst we understand that victims have certainly experienced the consequences of whatever they have suffered they are rarely expert into the causes (just as if TMM wander into the road after a beer and get hit by a bus it doesn't make us experts in bus mechanics, rubber friction coefficients, traffic law or alcohol/neurone transmission mechanisms). Unsurprisingly such an interview results in an emotion laden, one sided tragedy with little true insight to the issues. But then it gets worse, having used psychological anchoring to pin the listener or viewer to this base norm of expertise, the journalist will then most likely swing to a higher authority on the issue, normally with great gravitas. However, far from being an expert, this is just another journalist, introduced as "our legal/business/foreign correspondent" or some such.
TMM are opined that journalists are there to report, not give opinion as their opinion on non-journalistic issues is of as much or little importance as any other non-expert.
Financial punditry has been full of it too. The BBC have elevated (up their own elevator of self-promotion) the likes of journalist Robert Peston to "financial guru" and their economics editor, journalist Stephanie Flanders, to "Keansian" level. CNBC is also clearly full of anchors quizzing sub reporters and interviewing their own anchors to pad out the usual faces of punditry.
This evening we got around to searching to see if anyone else has remarked on this annoying trend and unsurprisingly found we aren't alone, and found much better analysis of what we are talking about. Interestingly we found this post by blogger George Snell makes the point very well, after he originally commented on the issue here, where he mentions the dangers of the Echo Chamber, "where journalists simply rely on each other for perspectives on the news. The insular mentality of “It must be true because I heard it from another journalist.”"
David Donovan, goes further here citing cases in Australia and points to the high frequency of journalists appearing on Q+A sessions and even analyses journalist's twitter profiles concluding that "Australia’s haughty "hackus majesticus" (with a few exceptions) typically only follow other members of the same, or similar, species."
So why is TMM veering away from markets into the state of journalism? Well because we feel that this style of reporting not only annoys us immensely, it is undermining information quality not only of main stream press but also in markets. We all know how fast a piece of information can go around a market (especially in todays "cut and paste" world) and we also know that each participant in the market, certainly on the sell side, will look for any form of corroboration of a news item, idea or interpretation of a news item before sending it on, reinforced, down the next wire.
Bloomberg and Reuters headlines are never challenged and whilst they stay just facts or quotes all well and good. But the problem creeps in when a market moves and a reason is required. As any journalist, analyst or sell side sales jockey knows, when asked why something has happened a reason has to be found, even if the most apt answer is "I dunno". Of course most market moves are basically down to "some one/people sold/bought a large amount of it" from there on it's normally a guess as to why they did that. Any sensible player in the market that has just sold or bought a large amount will actually be wanting both his actions and his motives kept as quiet as possible so will be reluctant to shed light on the issue. But the game of hunt is on and correlation is the usual weapon employed.
This example of journo-escalation is of course completely fictitious and bears no resemblance to reality or real characters.
Harry Hedge-Fund - "Close my gold short out, I'm off skiing and cant be bothered to watch it".
Soon on US Financial TV -
Rick Spleen - "Gold has seen a big rally today, let's hear from our correspondent Jeff on the floor (note being on the floor implies he works on the floor - wrong) - Hi Jeff I see that gold has gone up today. What's moved it?"
Jeff Epiglotis - Hi Rick yes, stocks fell in europe as the dollar fell as NFP printed low as the sun rose in the east and gold is up. But let's hear more from our economics correspondent, Scott?
Scott Tibia - Hi yes I agree with Jeff, European stocks fell and so gold went up. Here is a graph.
Rick Spleen - So there you have it. Everyone we have spoken to tells us that gold went up because of European concerns.
Next morning on UK's BBC Radio 4 Today program -
John H - Gold has risen overnight, a traditional measure of confidence in governments. Does this reflect on the UK government's economic policy? Lets hear from our own Robert P.
Robert P - Weeeell, It looks as though gold, a traditional indicator of financial stress, has risen overnight in the US and our contacts there tell us it's due to concerns over Europe where the Italian elections are in turmoil with a rise in the popularity of anti-government parties. Which could be considered similar to the rise of UKIP in the UK. But let's hear from our economics editor Stephanie
Stephanie - Yes it's true that UKIP has garnered a greater share of the vote in the UK implying government policy is receiving a resounding vote of no confidence. Gold prices traditionally reflect confidence in both governments and the value of their money, which of course is currently being devalued in the UK through QE. The rally in the gold price is therefore consistent with markets losing faith in Osborne's policies and in the government's current economic policy of cuts and austerity.
And from there on the self-feeding frenzy of speculation/fact conversion picks up with the press quoting the BBC and then sell side cut and pasting these press links on to buy side. "Facts" have grown to fit any particular view without one "expert" being involved.
It is at this point that TMM's car radio receives another packet of mints in the tuner.
* Foot note , they've just done it again - Radio 4 - Rocket launcher found in Northern ireland - Interview with random folk in street "its terrible", followed by an expert - the Sunday Times Security correspondent.