Ever wondered why financial reporting is so shit?

Here an ex-Reuters market reporter tells us the sources we should use:

That would involve using multiple sources. Hypothetically, they could include the Telegraph\’s Ambrose Evans-Pritchard, the Guardian\’s Seumas Milne alongside Russia Today\’s the Keiser Report and the Baseline Scenario by ex-IMF chief economist Simon Johnson. There are plenty of others. People could turn off their radio and TV news and turn instead to websites such as the New Economic Foundation and Positive Money. They might also read books by the likes of Ha-Joon Chang and watch documentaries such as Client 9 and Inside Job.

Ha Joon Chang\’s interesting, certainly. Although he does have his faults and there\’s one huge one in what people think he says. For he does indeed say that for a developing country then infant industry protection and government picking winners is a very good idea indeed. Which his readers take as being an indication that we should have infant industry protection and government picking winners.

But actually, his academic work says that these are good for developing countries: he explicitly states, on free trade for example, that already rich countries benefit from free trade, at the expense of those developing ones. So, even if you do follow his arguments, we should be free traders.

Ambrose is great of course: one of the very few who has been pointing to the declining money supply.

But the others? Milne\’s a Stalinist, Keiser (who I\’ve had a few online contacts with) is a paranoid fantasist, Johnson\’s OK, but seriously? Positive Money are frothing lunatics about fractional reserve banking and nef, Dear God, who would use them as an example of anything other than economic illiteracy?

No, if financial reporters really are listening to Keiser, nef and PM then we\’ve our explanation for the entire shiteness of financial reporting right there.

10 thoughts on “Ever wondered why financial reporting is so shit?”

  1. If you can analyse markets and finance, is journalism the best gig you can get?

    On the other hand, wine columns are worth reading – if you’ve got a good nose, wine journalism is probably as good a gig as anything.

  2. All reporting on things I know about is of poor quality. I suppose this is because technical competence is not a major requirement for gaining employing as a journalist. To satisfy most consumers of journalism, it’s better to write something pithily wrong than tediously right.

    I’d expect this argument to apply to wine columns: few readers are going to do a blind tasting to check up on you, so it’s much more important to write entertainingly than to have an exquisitely refined palate.

  3. So Much For Subtlety

    I have no idea how people get gigs on newspapers writing about things they are experts in. I guess that Ambrose Evans-Pritchard was hired because (I am guessing the relationship again) his Father was an all round good egg sort of chap. Sound. Seems to work.

    I only mention this because the veil was ripped from my eyes by the Telegraph of all papers. They had one of those asinine “10 Greatest Film Scenes” things. This one involving deaths. The 10 Greatest Death Scenes in cinema? An easy gig one would think. They had one, just one, that I would consider better than mundane. I certainly hope someone is someone else’s son-in-law or is providing really depraved sexual services to the Editor-in-Chief because the idiot they got clearly knows f*ck all about film. I bet that if we all lined up and named our Ten Greatest Deaths in modern film, all of us, not even three of them would be on that moron’s list.

    Some how people get these jobs even though they have nothing useful to say at all. Truly the Deadwood Media wants to go the way of the Dodo. On the plus side, I suppose, at least they are not as bad as the BBC. Didn’t they name a former member of the SWP as their chief economics correspondent? Or is that just a vicious rumour?

  4. PaulB,

    Trouble is, I can’t think of any wine columnists who aren’t knowledgeable about their subject. People might disagree, but you won’t see them making a faux pas that’s as bad in their subjects as “jobs are a benefit” in economic thinking.

  5. “If you can analyse markets and finance, is journalism the best gig you can get?”

    Some people evidently don’t want to spend 14 hours sitting in front of a Bloomberg screen all day.

  6. Well, bearing in mind it was financial reporting rather than journalism you were describing as excremental, probably there’s very little of it goes on. The journalism’s pretty well all comment pieces & often completely ignores actual events if they refuse to correspond to the writer’s prejudices. Hence “Euro summit breakthrough” can easily refer to complete & utter stalemate.

  7. I can see why smart people are dubious about fractional reserve banking. The whole “maturity transformation” line that defenders of FRB come up with only works if you are prepared to take the risk that, in the event of a crisis, you won’t be able to get your money out of a bank when you want it. That is why, in a real free market, not the rigged charade we have now, FRBs would have to be clearly advertised as such, and without the moral hazard-machines of state deposit insurance and a central bank acting as lender of last resort, printer of funny money, etc. In such a laissez faire world, FRB might persist, but it would be a lot more restricted than now, and its capacity for causing booms and busts reduced. Like I say, it should not be illegal so long as everyone knows what it is.

  8. R Richard Schweitzer

    It is not obvioous that most “financial reporting” is for the purpose, let alone has the function, of informing.

    The formats in the field(s) vary by media and motives.

    For many it is the simple need to attract (and/or hold) attention; to sell stuff (advert time, subscribers) or themselves (as personalities).

    However serious the academic or technical status my be, once it is out there as presentation, the quality of analysis becomes subject to contamination.

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