Editor's Note: Welcome to 'The Business Press Maven,' the alter ego of Marek Fuchs. With humor and a unique eye for the interplay between Wall Street and the press, The Business Press Maven's column seeks to help investors make money (or avoid losing it) by better understanding what they read, hear and watch.
Investors, if you take only one thing the Business Press Maven says as gospel, let it be this: Daily journalism is not long-form thought. If reporters only have one day to chew on a breaking issue -- while they also answer love letters from readers and assure Mom that they wore their scarf -- what even the best of them write should be read with a critical eye. But as news cycles shorten, there is even less brainpower used, and that leaves investors at the mercy of quickly formed conventional wisdoms.
Like the one about how everything is fine now in the market because of a groovy
meeting. The Business Press Maven was going to offer to do a fandango on the desk of the first reporter who wrote otherwise in a fun way. Then I read Gene Epstein's Economic Beat column in the Jan. 9
and knew I found my man (and desk).
Mr. Epstein opened with a joke involving a tuna fish can and then went on to cast aspersions on what started as a news alert and became a quick article of faith among reporters and then investors -- that minutes from a Federal Open Market Committee meeting gave something close to a guarantee that interest rates would hold here.
Nonsense, said Mr. Epstein, who noted that Ben Bernanke, the not-yet Fed Chairman, was not in the house during the meeting. And the new Fed Chairman, posits Epstein, ain't a hold-it-where-it-is guy. In sum: Epstein says the fed funds rate, now at 4.25%, will hit 5% by summer.
After complimenting Epstein, the Business Press Maven needs to go back to the familiar territory of mournful sighs.
News Alert: News Alerts Stink!
The conventional coverage of the FOMC minutes is emblematic of the groupthink (or thinklessness) that often grips the financial media, especially as reporting time becomes increasingly replaced by constant deadlines.
Nowhere is this more evident than in the phenomenon known as "news alerts," those little lines of email or text messaging that announce to us in a sentence or two that an event of import has just taken place. Because we are so busy and inundated and all that, of course, there is no time and space to offer this old-fashioned thing called perspective -- which takes a few minutes to gel in a right mind. And when you take perspective away from writing, you get something put out by the world's (second) oldest profession: a press release.
In short, news alerts too often read to the Business Press Maven like abstracts from press releases. Yes, although ancient civilization once thought it impossible, modern society has actually found a way to dumb down a press release. Where does that leave the average reporter and investor?
News alert: Up the creek. (Do I have space to say "without a paddle"?)
Take a butchered little gem I got this week from
The Wall Street Journal
It read: "
announced plans to slash prices on most of its models as part of an effort to more accurately reflect what consumers are willing to pay and move away from the heavy incentives that take a bite out of the automaker's profits."
This roundabout sentence delivers just what the folks at GM want: reassurance to investors that everything in their troubled world is peachy, thanks to this cleaver maneuver. But when you eliminate heavy incentives by lowering prices, aren't you basically right back where you started from? Does the bite out of profits disappear just because you are simplifying your pricing? And even assuming you somehow lose a little less money, won't you sell a lot less cars?
This is why news alerts can stink.
There is no room for questions, much less answers. Moreover, once an issue starts getting reported in simplified fashion, misperceptions and thin thinking can gather momentum. Reporters get these things too. And when reporters read information written without an arched eyebrow, it too often means that they then, in turn, write about the same issue with less critical thought. Coverage of the issue becomes a clown parade.
Missing the Mark
Speaking of confetti,
reported on "Dow 11,000" this week in some of the same sort of cheerleading manner that the entertainment press used to hail
The Phantom of the Opera's
record-setting 7,486 performance, also this week. The breathlessness left the Business Press Maven with a philosophical question: If a rotund business anchor disappeared from his normally scheduled program and there was no one left to comment on it, did he really disappear?
Why has Mark Haines, who, for a television guy, could ask good questions, essentially been demoted to the 9 a.m. to 10 a.m. slot, and why haven't I read too much about it -- besides on Wikipedia, which reported that there have been hundreds of complaints?
A question the news alerts won't have time or space for: How many of the complaints came from the combined forces of the Business Press Maven and Mark's family?
A journalist with a background on Wall Street, Marek Fuchs has written the County Lines column for The New York Times for the past five years. He also contributes regular breaking news and feature stories to many of the paper's other sections, including Metro, National and Sports. Fuchs was the editor-in-chief of Fertilemind.net, a financial website twice named "Best of the Web" by Forbes Magazine. He was also a stockbroker with Shearson Lehman Brothers in Manhattan and a money manager. He is currently writing a chapter for a book coming out in early 2007 on a really embarrassing subject. He lives in a loud house with three children.