I love reading press reports about daily fluctuations in the stock market. No other journalists strive so sincerely to provide a false sense of security.
It’s false because at the heart of every story explaining the day’s stock market trend is the idea that markets are explicable by a sound bite reason. The idea that a 100 billion dollars in turnover and millions of transactions can be explained in aggregate by a slight change in some exchange rate or a small change in underlying consumer demand. The problem is markets don’t have reasons: just the collective actions of thousands, each with dozens of institutional and personal reasons, played out in real time.
It’s security because people need to hear why markets behaved the way they did to feel comfortable with their investment choices. People have a firm belief in linear causation, formed in a simple physical world, and geared to tell simple tales: “she struck the match against the side of the box, the match burst into flames therefore striking the match against the side of the box caused the match to ignite”. If there is no causation chain to follow they feel cheated by a random system. The business press prevents this void by assigning a short succinct reason to explain the market.
The business press tells us a simple tale every day. It explains today’s winners and losers in the game of stock market dice to subdue the sensation of being cheated by a random world. I believe this to be a highly commendable service.