This blog post at Freakonomics makes a point I've often pondered: how the hell do we know what "the market" is doing or thinking, anyhow? Why do we anthropomorphize "the market," as if it was a distinct thing, or as if stocks had motivations?
I think the honest answer is that collective ignorance about markets and economics leads the press to a herd mentality in which we all just repeat what a handful of business writers tell us.
Is what we write and publish about stock markets useful?
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Two related books: The Halo Effect and Fooled by Randomness.
ReplyDeleteBoth make the point that most (all?) business reporters don't know what the hell they're talking about. They pay attention to the wrong things, draw the wrong conclusions, and create stories where nothing really significant or meaningful has happened.
One example is the daily "the market reacted TODAY to ... "
A completely bunk story, because the market is about trends and very complex inteweavings of events and issues.
Just think about how much you know about McClatchy, and how many stories you read about McClatchy that are completely clueless.
Such bad reporting is one of the things that makes me fret about the future of our industry.
I think that's metonymic, not anthropromorphic.
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