Few headlines have the power to either intoxicate or put the thousand-yard scare into investors as does a headline that includes a benchmark number. But if the number -- say, for instance, Dow 35,000 -- is supported in the body of the article by little more than hope or fear, that anticipated number is likely best placed at the bottom of the bird cage.
Remember all those headlines about Dow 35,000? The articles they headed always seemed to peter out with unsupported evidence in the text.
Same with Oil $200 today. The business media are reflecting conventional wisdom even as they are driving it further to the point of ridiculousness.
Even the normally more staid
Wall Street Journal
trafficked in the fear in a Monday headline and lead, which would have been fine if the column could have supported it. But any attempt to support the headline's claim fizzled in the article's argument.
They Just Don't Get Oil!
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The headline read
, and the lead echoed: "Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year."
The article dutifully reviewed all of the carnage in store if oil were to hit $200 a barrel: Gasoline over 6 bucks a gallon, extreme strain on the U.S. economy, political unrest in Europe, risk of public backlash in Asia and the Easter Bunny would go on strike. The Business Press Maven is just kidding about that last one (though these days, who knows?).
The other predictions about what will happen if oil hits $200 are pretty spot-on, but is oil actually going to hit $200 any time soon?
The article says: "Few oil watchers are willing to bet that oil will hit $200 by New Year's Eve." That's really just a 30% move, though, and if few think this already crazy run-up can't extend another 30% by 2009, are the definitive headline and lead merited? Considering how far oil's climbed in recent months, that's almost a rounding error. And after all, the headline refers to
about $200 a barrel. Don't oil watchers talk? Apparently what they are saying, though, isn't $200 by January.
But, uh, wait. Yikes. Take a look back at that lead.
It says that oil's "historic ascent from $100 to nearly $150 in just six months is leading to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year."
Maybe The Business Press Maven and
The Wall Street Journal
are on different calendars, but I thought the end of the year was New Year's. So, um...
Actually, give me a moment. I have to press a cold compress to my head.
After initally bending like a circus contortionist to justify the flashy headline, the
then eased somewhat with this line about "oil watchers," which is as awkwardly constructed a line as you'll read in a normally concisely written publication like the
"But nearly all are wary of predicting how and when oil's upward stampede will be reversed."
Well, it might just start with the discrediting of fear-mongering articles like this, though the article, in a bit of irony, blames "oil ministers and top petroleum executives" who have "added to the alarm" in "an Italian newspaper." How? In that article, the Italian oil executive (obviously not one of the
oil watchers) said oil will go past $200 this year. At least, that minister said this year and was not straddling New Year's Eve, but even when speaking of China, the
only says that prices might come down if the country has stockpiled oil in the run-up to the Olympics. But, uh, what if China's growth slows, as appears increasingly likely? Isn't that the bigger factor, the greater possibility?
Get me an "oil watcher" who says that. And as for that headline, please, get me rewrite!
At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page. For his "Business Press Maven? column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers. Fuchs appreciates your feedback;
to send him an email.