Why the media are a hindrance rather than a help in understanding the debt crisis.

Daftest article opening of the week:

‘U.S. stocks rose, restoring the yearly gain for the Standard & Poor’s 500 Index, as economic data signaled the U.S. is weathering Europe’s debt crisis.’ (Bloomberg this morning)

This is a bit like saying that so far the US is doing a great job weathering Hurricane Edna, on account of it’s just devastated Cuba. A large proportion of business and markets in America barely understand the eurozone crisis, let alone how to weather it.

Why is most of the ecnomic, financial and fiscal journalism around the globe so dire? I do realise that the near-universal use of the letters ‘MSM’ in the blogosphere is meant to convey contempt, but I’m not talking here about agendas: I’m referring to, simply, rank bad and ignorant reporting.

I’m sure many Sloggers see a plot in all this, but I doubt that: my money’s on incompetence. The Wall Street Journal, for example, is a Newscorp-owned paper, but its analysis of stuff is nearly always useful enough to add value. I did note that, two years ago, Reuters had been ‘caught’ editing evidence of peace flotilla arms out of a photo series they did on the Israeli boarding party, but then I’ve always thought the Reuters folks a little odd. And OK, fine, while Bloomberg is an Establishment-owned website, I rarely see bias beyond total acceptance of the economic system – but that’s generic too. And the FT is very europhile.

I’m referring not to ‘slant’, but rather to ill-reasoned drivel. Here is the FT’s take on the same story – spot the stupidity:

‘….the US economy is entering the new year on more solid ground. After fears that job growth had stalled over the summer, businesses have created more than 150,000 positions every month on average since September. New applications for jobless claims ticked up this week, but the four-week moving average of 375,000 is the lowest since mid-2008…’

I don’t really care if it’s the lowest since the Civil War, 375,000 welfare applications = 225,000 more than the jobs being created. The writer went on to assert that the economy ‘would struggle’ to lower the unemployment rate on that basis. Dear oh dear oh dear.

‘High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article’, is the message that always accompanies my performing cut and paste to illuminate an argument: there’s no point in nicking FT stuff, because it’s nearly always 24 hours behind the curve, and wrong. High quality global journalism does indeed require investment, FT. So invest already.

Also today – this time at Reuters – is this piece:

‘China’s factory activity shrank again December as demand at home and abroad slackened, a purchasing managers’ survey showed on Friday, reinforcing the case for pro-growth policies to underpin the world’s second-largest economy. The People’s Bank of China is widely expected to lower its requirement for the amount of cash banks must hold as reserves to let lenders inject more credit into the economy to fight headwinds from Europe’s debt crisis and sluggish U.S. demand….’

Deconstructing this, (a) China has been heading towards slower growth for over a year, an inevitable process in the light of Western recession, (b) purchasing managers’ surveys are an indication of intent, not empirical data, and (c) China Bank has been giving out clues on lower reserve requirements for three weeks.

Critiquing what’s mssing from this, (a) lowering the cash reserves required could very easily restart the property boom, (b) while this is an easy way to get liquidity into an economy, it is inflationary, and (c) no amount of liquidity can reverse a structural lack of demand.

The financial  press has emerged, since roughly 2005, as being every bit as lazy, robotic, unquestioning, ignorant, feeble and ill-informed as the mainstream. Some of the best economic and ‘money’ writing over that period has come from the Telegraph and the Mail – because they at least have some journalists prepared to say, “Hang on a minute…”. I cannot, for example, remember the last time I saw a financial scandal broken in the financial specialist press. Yet Money Mail manages it on an almost weekly basis.

Well, my FT subs renewal comes up in March, and I’m not going to renew it. Without a justification of premium, no paywall system is ever going to work. Financial sites and columnists need to up their game, if they are not to be accused of simply reporting rather than interrogating.

48 thoughts on “Why the media are a hindrance rather than a help in understanding the debt crisis.

  1. “Why is most of the ecnomic, financial and fiscal journalism around the globe so dire?”

    I think you can leave “economic, financial and fiscal” out of that sentence and still be right. Sturgeon’s Law and all that.

    Seriously, a threshold for me was when I – as an IT/computing specialist – realised that if specialist IT reporting was so obviously flawed, why should I have any greater expectations of financial or general news reporting?

  2. Managing expectations? They are not allowed to tell the truth. We are to be managed, to be kept quiet and not expected to worry about things that “shouldn’t” concern us, after all, they know best, don’t they?

    • Totally correct Kfc. The few at the top have the knowledge forbidden to the masses, otherwise their structure of control comes crashing down. The whole thing is an illusion of power, it simply does not exist except in the minds of those that are so complicit.

  3. ”……why is most of the ecnomic, financial and fiscal journalism around the globe so dire?…”

    Simply because the world conspiracy between the elites in governments and financial centres includes the press.

    Simple as that, and until the people ”get it” nothing will ever, ever change.

    Regards and have a nice day my friend.

    • Let’s nail this down.

      The self serving political elites have no intention of ever giving up their power and privilege. They are courting the banks with an ultimate view to STATE BANKING giving the duo ultimate and total POWER, with the neutered press being encouraged to be their mouthpiece.

      No wonder revolution is in the air my friends.

  4. Funny you should mention Bloomberg. On their TV channel I’ve noticed how they pose questions to pundits, nod and then move on to the next question. This first struck me whenever green(wash) issues were raised and inevitably the talking head would spout the usual bollocks about how important it is that this investment would save the world etc etc with no cross examination whatsoever. Greenwash.
    The same is true of other accepted economic notions.
    Rival channel CNBC is little better but has at least one journalist who questions the status quo.

  5. I’ve been pondering this myself in the context of the MF Global story which I’ve come to see as one of the biggest global financial news stories around at the moment. I only know about this bankruptcy through following sites like Zerohedge and Max Keiser. Some of the recent coverage is getting apocalyptic, suggesting the loss of confidence it is engendering in financial intermediaries holding assets of investors, could cause a collapse of the financial system through investors withdrawing from paper to physical assets. Yet it is barely mentioned in the British media including the BBC, Mail, Telegraph and Indy. I’d post a link to a Zerohedge piece on this from 27/12 but I haven’t because I don’t want to panic your readership (actually its because I can’t get the link to work properly). I guess most have already read it.

    There are so many strands to it that should be of interest to all of us. Theft of $1.2b of supposedly sacrosant customer funds, under the control of Jon Corzine ex Goldman Sachs CEO, US Governor and Senator and adviser to Obama, the enrichment of JP Morgan at the expense of 40,000 farmers, the dodgey machinations of the liquidator and best of all from the US view the involvement of the City of London regulatory black hole that allegedly facilitated over extended gambling by Corzine on suspect sovereign Eurozone debt. Its an unfolding story that still has a long way to run but I can’t understand why is there no UK coverage and in depth comment. This dearth of coverage (and your own reporting on the Eurozone JW), has led me to realise just how deficient the conventional media is in the UK. The narrowness of reporting of the full financial news spectrum is breathtaking.

    You have to question whether there is a conspiracy of silence when you look at the general hunger of the media to get stories from hacking phones and doing other dirty deeds. I guess the other interpretation is that the MSM think UK public is not interested and it won’t sell papers. I have to confess I haven’t bought a newspaper for over 2 years so I can’t really complain if they don’t cover what I’m interested in. I guess this is where the web leads us. To pick up our own selections of news from wherever we fancy from across the globe. The only difficulty is deciding what is bollocks and what isn’t which is where you come in very handy JW and thank you for all your efforts.

    Do you see any backlash coming from the US over the City’s role in US scandals like MF Global, Lehmans and others? I guess it will take a change of President and this one will do anything he needs to, to keep your predicted Euro collapse at bay, until after November at least!

    • @Phil E

      I posted a link to doom-merchant Tyler’s post on December 8. I guess that along with most Slog commenters you did not read my comment?

      The problem is serious and it is ongoing. Look carefully and there is coverage – this from the Washington Post http://bit.ly/v9s5Mb (thanks to a friend for digging this one out, they are not easy to find).

      The bigger issue of MF Global’s misdeeds – both before its demise and (seemingly) afterwards – is still unravelling. Anne Bernhardt (Bernhardt Asset Management of Chicago) spoke volumes about it, but I can only post one link per comment, you will have to find it yourself.

      Whatever else, it was MF Global’s London arm that got itself into trouble. It was up to things that on Wall st. would be illegal, just as they would be in Europe. The US is dealing with this as we speak, but it is not in the media: just keep your ears to the ground then you won’t be surprised. If you read Durden’s piece carefully, there is real anger in Washington about the antics that London’s banks can get up to.

      • Hi Gemz
        Yes I saw your post and the Anne Berhardt interview, she has clearly taken the dishonesty of the system to heart, closed down her futures business and suggests everyone should pull out of the market. ZH today reports that US investors are pulling funds out of the markets at acceleratingly high rates so perhaps people are taking notice. The whole thing could be calmed down if the feds would do their proper job and take a few bankers on perp walks. It would give people confidence that the regulatory authorities are looking out for punters interests, but the SEC seem to have lost it. Just like in London really where the SFO are nowhere to be seen.

      • Thanks for taking the time to look through. Anne Bernhardt is at least down to earth and honest – and shares my understanding of being able to add value as an advisor. The two really go together in my opinion.

      • The NYT is already preparing the ground for the “this was all just an honest mistake and unfortunate coincidence of unforeseen events” whitewash Newspaper of record, my a**e, the NYT’s an arm of the Ministry of Misinformation, irrespective of who’s got the White House, perhaps it always was.

        The Washington Times article Gemz has posted highlights the problem of US crony capitalism. Here are the dots

        . The EPA is the US Environmental Protection Agency.
        . Its chief is Lisa Jackson, an Obama appointment.
        . Jackson worked for Corzine when he was Governor of New Jersey.
        . Jackson is qualified for the EPA job, Chem Eng with 20+ years in Environment Protect
        . Jackson would have appointed Bradley Abelow as EPA’s financial adviser
        . Bradley Abelow was Corzine’s Chief of Staff when he was Governor of New Jersey.
        . Corzine was CEO of Goldman’s when Abelow worked there.
        . When Abelow was at Goldman’s he was on board of Depository Trust & Clearing Corp
        . Depository Trust & Clearing Corp pops up in the NYT Dealbook article

        Here’s the NYT DealBook article I reference MF Global Scrutinized on Money Move

        I like the Washington Times, but its usually only referenced in Military & War blogs.

  6. It was interesting that the MSM even tried to put a positive spin on the declining participation rate in the U.S. unemployment numbers. This decline in participation indicates unemployed people giving up hope of finding a job and therefore not bothering to register as unemployed.
    The decline from 9% to 8.6% was hailed by many financial journalists as a positive sign and a sign that things were getting better, whereas it actully represents a loss of hope amongst the unemployed once the decline in the partcipation ratio was taken into account.
    Lies, dammed lies and statistics…..well there is an election year in the offing!

    • I concur with all the above, the good journalists are about but only on the internet. Therefore as things get progressively worse as we lead up to next years presidential elections and WW3 is intentionally provoked by the US to make sure Obama gets his second term, I predict this kind of free speech on the net and blogospheres will be abruptly curtailed. I must get round to re reading George Orwells “1984” which is looking like being 30 years to early!

      • I commend every reader of Slogblog to read “1984”…and regularly.

        JW’s analysis of the Financial media is spot on (as usual), and may be partly explained by those well known jobbing journos from Private Eye…”Mr Phil Space” and “Ms Philippa Page” needing to be employed by the publications in question.

        As to Bloomberg TV – isn’t this the business equivalent of a cable shopping channel?

      • Absolutely right as to the attack on the blogosphere.
        Leveson will recommend controls be put in place-it is what he was appointed to do. The suppression of Guidos evidence is but the first step.

    • In the US there’s always an election in the offing, Tom Freidman claims that the only time anything meanigful hapopens in Washington is in the first 100 days of a presidential term, then its on to the mid terms and then the next Presidentials.

      Tom’s not my favourite columnist (woolly headed), but in this case I think he might be onto something

  7. The criticism of the FT is rather unfair. That paper has one role and only one, which is an attempt to justify the fact that its City readers enjoy vastly higher remuneration than the rest of the population. It is worth reading in order better to understand the enemy.

  8. The existence of a branch of journalism called ‘investigative’ reveals – if you already know – that the rest of it is ‘printing’ and ‘broadcasting’.

  9. Like others I frequently shout at TV interviewers here, (watching the Bloomberg and CNBC channels), on some of the most silly questions, (which I suppose not surprisingly), get some pretty silly answers. I don’t think it’s a conspiracy. Most of these hacks simply don’t know, neither do the people they’re asking. But they have to push out 24hr drivel to justify their existence. Best to take things with a pinch of saxa, and rely on your own instincts, once you’ve got the gist of the issue. I’ve only quite recently, (in the last six months), come across your blog, and I enjoy it very well. Thank you! And all the best for the new year. “When it comes”, as my old mother used to say, lest one jinx the good luck that will befall us all. Chok dee, krap.

    • The fact that the hacks simply don’t know is a sure sign of conspiracy, promote and employ people who can be used and manipulated and don’t have the wit to think for themselves and you are free to use your media to push whatever agenda you choose.
      Promote people because they hold the right ideas, not because they have the right stuff, and you have control.

  10. I have been reading this blog for about six months now and have found it very interesting and informative. If I may just put this chap’s name in to the ring as someone who is trying his best in the field of investigative journalism.

    http://daviddegraw.org/

    Happy New Year from a cool wet and windy Yorkshire!

  11. I get most of my leads through South Africa’s ‘Mail and Guardian’ online…a super newspaper.
    I used to get news about problems in France long before there was a tiny paragraph in a French newspaper.

  12. A few months ago I pulled out the cable & stopped watching TV, for various reasons. BBC news was driving me nuts, at the time it could have been called ” What Katy did next “., & judging from the rest of the coverage, you could be pardoned for thinking that there was no financial crisis, a case of ” Nothing to see here folks”. I remember the day when Alessio Rastani announced that Goldman Sachs ran the world etc, causing an effect in the BBC newsroom similar to the scene in the Penrith tearooms from the film ” Withnail & I ” Shock Horror !! at least some of the truth ( Papademos, Monti, Draghi, have popped up since) was shown, followed by a concerted effort to discredit the man. I thought it was what he said that mattered, not who he was, there are people who are supposedly charged with telling us what is going on, but don’t, I wonder if Barclay’s chairman being on the BBC board has anything to do with it.
    If you think the US runs the planet, look at this chart :-

    http://thinkmarkets.files.wordpress.com/2011/12/crony-capitalism.jpg

    Thanks to no TV, I have discovered Thomas Hardy.

    • I always distrust conspiracies that can’t be bothered to spell folks names correctly. Seems to me that the quality of the research is flawed from the outset.

    • @Stevie
      “I have discovered Thomas Hardy” – shouldn’t that be re-discovered?

      I usually re-read the canon every ten years or so. Just enough time for the memory to fudge details and allow the full enjoyment of what is arguably some of the best of modern literature.

      • Gemz,
        I left school at 15 after 9 schools, the last one a pretty terrible 1970s secondary modern. I read a lot after leaving school, Tolstoy, Huxley, JB Priestley, John Fowles & many more, never got around to Hardy, although I spent 2-3 yrs as a child living in Wiltshire & that part of the world is very special to me. My work up until recently was highly detailed & involved a lot of eye strain, so I tended not to read.
        Now I have many treasures to discover & re-discover :)

    • Stevie
      Excellent! Not that keen on peeping Tom myself, but reading is reading. Last year I discovered 19th C. women’s authors. With the exception of Alistair Campbell’s biography, every book has something useful in it.
      Very little television does.

      • May I add Mr Darling’s recent work? That too offers very little insight. Something common to New Labour’s former staff.

    • It can surely only be a temporary reprieve? The root problem is debt and this is more of the same. How is it going to be repaid? What will the Republicans make of it?
      The Dollar is already in danger of losing it’s reserve currency status, this isn’t going to help.
      Also if the Euro goes to parity with the Dollar, the debt will increase?
      More madness designed to save Wall St.
      What happens if the MF Global blows up in the way ZH is suggesting?

  13. Some of you may have read about the role that Target2 money was playing at the ECB in bailing out the ClubMeds and lumping Jens Weidmann at the Buba with the tab, The idea was supported by the likes of Martin Wolf at the FT, Felix Salmon at Reuters and various other media pundits.

    The other day I came across something by a German Economist, Professor Hans-Werner Sinn, as a general rule I like German economists, there’s usually something to learn. I shared Sinns article with a friend and asked what she thought it was about, she said this doesn’t sound right, what else do we know about this Sinn fellah.

    So I found another of Sinn’s pieces which was clearly a precursor to the first one, and it was about this Target2 “thing”, I’d previously decided Target2 “thing” was far too arcane for yours truly. But now I thought to myself, if I’m ever to get my head around what this Sinn fellah is saying, I’m going to have to get on top of this Target2 “thing”.

    So I put some petrol in the Googlemobile and went for a drive on the ‘net. It turns out that this Sinn fellah is the originator of the Target2 “thing”. The best destruction of Sinn’s Target2 bollocks I found was, by another German economist Olaf Storbeck, titled The Stealth Bailout That Doesn’t Exist. He also criticizes Wolf and Salmon for getting sucked into Sinns bollocks. I’m inclined to back Storbeck because

    a) Sinn says Stark & Weber resigned from the ECB over the Target2 “thing”, but everyone else (including Wolf and Salmon) says they objected to the fact that the ECB became a player in the secondary bond market, which in their opinion is outside its charter.

    b) Jens Wiedmann apparently doesn’t think the Target2 “thing” is a problem.

    If the likes of Wolf & Salmon get confused and hordes of economists can’t agree on what it all means, then what chance does your average mug punter have of understanding any of it.

    • RP
      It has long been my view that something you can’t explain to a bright ten year old is either too complicated for its own good, or complete bollocks. Big Bang Theory belongs in the latter camp, contemporary financial economics in the former.

  14. One of the traps one can fall into is thinking one has to be “up with the latest”. For most of us who are not active in the markets every day I suggest this too is bollocks. For most of us tomorrow or next week is more than good enough.

    On the subject of Bloomberg TV, I very rarely bother with it, but a lot of their text stuff is good because its factual. I sometimes watch a bit of the green Russian TV stuff, much of its bullshit, but its good for a laugh..

    My main grievance with the Finance TV presenters is that they don’t know the subject, they might just as easily be interviewing an ornithologist on why petrels always fly anti clockwise. And I throw my toys out of the pram, when the interviewer restates what the interviewee specifically did not say e;g,

    Interviewer : so whats gold going to do over the next year Jack
    Jack : it’ll bump along where it is now, that is it will trend sideways
    Interviewer : so your bullish on gold Jack, now what about China
    Jack : but no hang on, I said …
    Interviewer : sorry Jack we have to go for break, we’ll be right back with Jacks thoughts on China.

    Because the Interviewer sits in front of the camera & microphone all day its their words that the viewer are more likely to remember – Jacks bullish on gold, Google where can I buy some gold.

  15. It seems that most reports that we’re fed through the mass-media are designed to make us develop certain common perceptions on most critical events, & I believe it goes beyond financial news; this trend also entails international issues as well as local news. In my opinion, fear mongering, first & foremost has become the key function of major news outlets in the West today. Why do we need to live in fear? Is the public-in-fear easier to maintain & control? Would it be less difficult to persuade, convince, or simply rule the paranoid public? Is it in the public interest to allow Multinational corps- without any expertise in the field- to have their hands in the business of journalism?

    • I couldn’t agree more with your opening sentence, John Michael Greer said with respect to TV “there is a reason its called programming” and that says it all for me. It depends how you define fear mongering though. It may be true in the US with respect to security but here in the UK the BBC see it as their job to make sure no one panics. Robert Peston’s breaking news stories on Northern Rock a few years back frightened them and now they seem to prefer to engender a sense of complacency with some nervous nit picking to give a slight frisson of fear.

      For instance the other morning on BBC breakfast there was piece about Londoners letting out their gardens for foreign visitors to camp in during the Olympics. All very jolly. They then followed it up with an interview with John Whiting of PWC saying in his most pompous way that of course any letting income would be taxable and would have to go on tax returns. Just to rub it in the presenters chatted about how health and safety would have to be taken into account and of course people should check their insurance. What a load of complete bollocks! This is precisely the stuff that kills any entrepreneurial activity and it drives me mad.

      I don’t have a garden in London, but if I had I would definitely let it out. No doubt the local bankers will rehypothecate their gardens, sorry their customers gardens, a number of times, taking cash up front of course and stuff the consequences.

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