Wednesday, June 24, 2009

B.S. & Genuine B.S.

This is another thing which pisses me off royally - i.e. how the media would twist the same fact/issue to suit the trend of the moment. Just read the recent headline from Bloomberg, following the recent sell down in shares globally.

"Oil, Gasoline Tumble as World Bank Predicts a Deeper Recession"

Weaker oil prices now seems to be a convenient excuse of a sell down. The same argument can be used to explain a market rally, in that weaker commodity prices would ensure a good non-inflationary environment suitable for growth.

The dampened economic outlook from the World Bank, a global lender based in Washington, also weighed on the prices of oil, metals, and other commodities. Those price drops in turn sent energy and metal producers' shares falling. The downbeat economic prediction provided a convenient excuse to sell or take profit on a market that had been on quite a tear for the last few weeks.
Hence, for those in the media who taught that the World Bank's assessment was a CRITICAL point of view that led to the sell down... think again... the World Bank report is more like a convenient excuse to sell - there is a world of difference, and the mainstream media always seem to fail to pick these things up. Markets do not jump from one scenario to another within weeks, especially when economic data has been giving the same picture day in day out (green shoots and bottoming data).

Let's look at another example of the diatribe:

"Investors have gone from enjoying a string of better-than-expected economic data to trying to manage a list of worries about the economy. Stocks have lost ground several times in the last month on fears that rising interest rates and inflation would upend an economic recovery. Many analysts also say the relief that erupted in early March about the economy then led to outsize expectations for how quickly a recovery could occur. Other economic news has hit stocks since May. A disappointing government report last month on retail sales suggested the economy remained fragile, and the Federal Reserve reined in its expectations for how the economy will fare this year."

Events searching for reasons??? At any point in time, you can make a good argument for a bear or a bull market in place. We need to decipher between bullshit and genuine bullshit... one of them really tastes like shit.

p/s photos: Joe Chen Qiao En


Richard Cranium said...

So, what's your take on the stock markets now?

Was the recent uptrend from March 09 a start of recovery (green shoots, they called it)?

Or is it a dead cat bounce, and we are in a bear rally?

You are right in that one of them tastes like shit. The problem is, which one? I don't know, so I just take trading positions, not long-terms ones.

Everyone has 20/20 hindsight, or as you put it, "if you are bearish or bullish long enough, you will eventually be right".

Jimmy Tham said...

Well.. the chief editor can't just accept a report that stock price is dropping. It has to come with a reason.

When there's an unexplained upward tick, we'll see this in the news "Bargain hunting drives stock price up". When it drops and no one can explain it, the creative reporter will write it this way "Profit taking drives stock price down".


see said...

Thot it was funny too. Since when World Bank forecast had big impact

Wenger J Khairy said...

There is enough economic news due out this week for the market to either rally or sell down. Take your pic - I am calling BUY!

solomon said...

When there are no news flowing, the chief editor asked you to write something. This is the something lah.....

Of course, excuse maybe co-incidental too because the market had run up so much. If this news appears 2-3 weeks ago, I don't think it had any impact at the market at all. Correct or not?

But I am impressed with this line "how the media would twist the same fact/issue to suit the trend of the moment". While papers report the number of new H1N1 cases everyday, can I ask why schools are not closed for H1N1like Hong Kong, do you want to see mortality before doing so? What have the airliners or cruise liners done in their sanitization process??

DanielXX said...

Robert Zoellick was just doing his prime mission at the World Bank: helping the US to sell Treasuries by issuing bearish statements when they're having big auctions.

bOcy said...

Please comment/advise effects to local economy if h1n1 worsens and what small medium enterprises can do to survive?

Kris said...

B.S = Boleh Semua :P

clk said...

The perennial philosophical problem of cause & effect, which is the cause remains the ultimate answer.

Usually the cause or causes to be precise is manifold, but somehow it's always convenient to pinpoint one cause as it is also common to find one scapegoat.