This week’s stock market gyrations and encompassing media frenzy surrounding it brought back fond memories of my glory days as a business journalist, specifically a markets reporter. My job, every day and multiple times a day, was to talk to people on Wall Street and Bay Street and find out what was behind the stock, bond and currency markets going up, down and sideways.
It was nothing short of fascinating; a never-ending dialogue with people directly involved in buying and selling securities, gauging the direction of the economy and interest rates, and deciding whether to buy U.S. dollars or sell yen or euros – or all of the above. On my journalistic end, there was but one rule: never, ever attribute any market activity to “momentum.”
Fast forward nearly two decades, and my instinct to slap a label on the market’s gyrations came back with a vengeance this week: After a near-decade long bull run and an unprecedented march to consecutive records for stocks, the urge was overwhelming: Find out precisely what caused investors and machines alike to hit the sell button en masse and slap a label on it.
As a markets reporter, that was my job – to go through my rolodex (back then, an actual rolodex) and find sources who could explain the market action in a coherent, understandable, sound-bite way.
Dead-Cat Bounce, and other banned phrases
Often it was easy; other times it was more, well, challenging. A quiet day in the bond and currency markets still required a pithy quote from at least two or three people in the know. Phrases like “traders are taking a pause,” or “investors are still digesting last week’s employment numbers” were stock fill-ins for my thrice-a-day market stories and updates.
The explanations would ebb and flow around certain events: economic numbers, for sure, but also comments from central bank officials, from CEOs, from analysts, from companies, particularly after announcing results or other news, and at various times, from politics.
But no matter what, an explanation was required – a headline, a “nut graph,” a summation, and at least a few quotes from investors, traders and other talking heads that neatly packaged up and defined why and how the markets were up, down or “little changed” at any given moment.
Today, I’m on the other side of the proverbial telephone; our job, among many other things, is to make our clients available to journalists to provide the explanations, the quotes, the “sound bites” that conveniently explain what the markets are doing and have done, any why.
On Monday, as the Dow Jones Industrial Average was in seeming freefall, the old instinct and adrenaline kicked back in: which of my clients could I tee up to give the soundbites? Who could and would provide the all-encompassing one-liner that explained why, today, now, the markets turned south with a vengeance?
One such client, a brilliant, staid veteran investor who has been a part of Wall Street and Bay Street far longer than most and requires little guidance when it comes to speaking his views on markets with the media, jolted me back to reality.
“650 Dow Jones points ain’t what used to be…” he wrote on Twitter, “…but you can be sure the media will sensationalize it like it was.”
And there it was: the battle between the media and its relentless, albeit honest pursuit to summarize, encapsulate and explain, and those who feed that machine, who for better or worse are oftentimes just as in the dark as the rest of us, yet are pushed and prodded to provide that one, memorable, interesting line that illuminates the rest of us.
At the end of the day, a journalist’s job is to tell the truth, but ultimately to catch the eye, ear and general attention of the audience she or he is serving. As most editors and producers will plainly attest, the more drama, chaos, and sensationalism in a headline, the more likely the story will catch the eye of a potential reader or viewer.
“Biggest single day points drop in DOW’s history” is certainly more attention-grabbing than, the maybe more honest, “112th biggest percentage drop since 1896.” Both headlines are factual; neither is truer than the other. But in a business where clicks and readership are everything, the former is more eye-catching than the latter.
For both sides, there’s a lesson: The media should not be blamed for sensationalizing any more than one might blame a candy manufacturer for packaging their wares in bright and appealing colors. They are simply plying their craft as they always have and always will – looking to provide information, explanation and analysis to the widest audience possible.
For those who feed the machine – and those who roll their eyes and grind their teeth at the talking heads and sound-bite at those who do – the lesson learned is to take it all with a grain of salt, and know that everyone involved in one form or another is simply doing their job.