The Press That Cried Wolf

I’m in the investment business, so I was particularly alive to the market correction of last week in belated response to news about the corona virus.

Excursus: Normally, I give the daily just so stories of the media talking heads about what has moved the market not the slightest credence – it’s all necessarily, and obviously, complete speculation, an exercise in ex post psychological projection of the commentators (not that I am immune from that sort of thing, for it is only human, after all; what else can we do, forsooth?) – but this time it seems to me obvious that it was news (or rather, “news”) of corona that moved investors – or no, not investors, but chumps (the technical, proper term) – to dump stocks.

Naturally I was concerned for my clients – and myself. Market turbulence roils the innards, no matter how sanguine and adamantine the intellects that, for investment success, must rule the day (nor ever, ever rue it (for, to rue is to fail to rule)).

So, my guts were churning a bit last week as I worked, despite what I know (our clients seem not to be too worried, if the absolute dearth of anxious inquiries from them may be taken as an indication; I suppose we must have taught them well). Nevertheless I have been sleeping like a baby. Because why? Well, partly because I have been through so many of these crises. After a few decades of professional involvement in such uproars, they eventually start to seem like nothing more than routine weather. A big summer thunderstorm in Indiana, with tornadoes; why is it, pray, that we are surprised about this? But partly also because I have come to think that almost all of them are not crises in the real world, but only in the imaginations of our hearts.

Circumspect as I am, and indeed, cynical through and through, I’ll not exempt myself from such imaginations.

But I’m old enough to have learned to see through most of this short term stuff as the product of error terms – as, precisely, just noise. That’s one of the reasons I have clients, who pay me.

Market efficiency lies not in the elimination of the imaginations of our hearts, but in their efficient corrections. It proceeds upon imaginations as its raw material, and product. Market sentiment consists always and entirely of such imaginations. The market operates upon itself, ruthlessly.

In that way, it is far more rigorous than science.

Here’s the question then. How much of last week’s volatility was motivated by information, and how much by noise?

It was almost all noise. The data coming out of China are obviously cooked. They are simply not reliable. Sure, YouTube shows us videos of the Chinese cops welding thousands of people into their apartment buildings, and that looks pretty doggone dire. The Chinese appear to think this is the end of the world as we know it. On the other hand, those cops were implementing policies informed by … politically correct mendacity. There is no reason to think that the Chinese authorities ordaining the actions of those cops were informed by anything other than lies, uttered to save face.

And that brings me to the heart of the issue. We have no way at all of knowing, right now, whether the corona virus is a new Black Death that will kill billions and usher in an epochal Dark Age, or is on the other hand a normal sort of seasonal flu that is slightly more lethal than most, and will soon vanish with the cherry blossoms that now wonderfully adorn the tree outside my dining room window.

Excursus: if it were indeed the former, the DJIA would presently be trading at about 2,000. The financial markets are not omniscient, and can err wildly for a time, now and then; but they instantly discount, net, and integrate all the information available to the entire human species. So they correct their errors more quickly than any other human institution.

If a new Dark Age were now really in view, we would not be looking at a 20% correction, but a 90% collapse.

So, relax. Untwist your panties, and get back to work.

The news media are not helping us get through this radical uncertainty. They are not helping us figure out what’s what. Sure, they are hamstrung as much as we are by the manifestly bogus “information” coming out of China. But, on the other hand, they are not telling us what they know about the ethnicity, age, sex, or pre-existing conditions of the poor souls who have succumbed to corona virus outside of China. Yes, this may be due in part to the difficulty they face in discovering such data themselves. Reporting is not child’s play, to be sure.

But it ain’t rocket science, either.

Obviously, the media are exploiting this thing for all it’s worth, to earn clicks. I don’t blame them. That’s their business.

Theirs is not the business of news. This is the key thing to understand. Theirs is the business of engendering anxiety and fear, so as to generate clicks. Information of the public works to the detriment of the business profits of the media, which are driven by the anxiety of their viewers. With a few exceptions, extraordinary for their honesty, their business then is to mislead us, to dismay, and to disconcert.

Meaning that things are probably a lot better in the real world than the media would lead you to believe.

Someone or other is always going to fill the niche of purblind, stupid, petty, vindictive, mostly wrong but nevertheless pretty interesting neighbourhood gossip. It’s a law of nature. Right now, that office is falling to CNN and its ilk. If it wasn’t CNN, it would be someone else. Lord knows, there are lots of them out there, vying for the office. The competition to be the supremely nasty, shitty little gossip is intense right now.

It is in the essential nature of journalism that it should be yellow. The only control on the jaundice of the media is the jaundice of their auditors.

Perhaps that is why the vests in France are yellow.

OK, down to brass tacks. Do you know whether the corona virus patients in California now so widely bruited are Han Chinese? Do you know their age, or their pre-existing conditions, so that you can gauge their risk to the general population, and thus to you and yours? No. You do not. And the media will not tell you, ever. They conceal these plainly important facts from us. This, in just the way that they will never ever tell you the ethnicity of roving bands of youths wreaking havoc in Oakland or Chicago; or that journalists and “public servants” in Britain would never admit or tell what sort of man it was, exactly, that was raping young British girls.

In respect to the corona virus, then, as with so many other issues of the day, the press are simply misleading us. It’s not just that they are like Chicken Little, who was honestly mistaken, albeit stupidly (as are those who believe the Narrative). No. It is much worse. They are crying wolf.

The media might do well to remember that, in some versions of that fable of Aesop, the wolf when he actually comes devours the boy. The men of the town, so often deceived by the deceitful boy, let him die.

Corona virus may yet be the very wolf. But the press are not helping us discern the answer to that all too pressing, and indeed ultimate question. Instead, they muddy the waters, and run about after their pathetic human interest stories. It’s absurd. It’s stupid. It’s evil.

First thing we do, let’s kill all the journalists.

I exaggerate, of course. But not as much as they do.

16 thoughts on “The Press That Cried Wolf

  1. Your knowledge of finance, Kristor, is much greater than mine, but you have articulated my intuition. There was a bad day a few months ago — and an almost immediate recovery. The Left desperately wants an economic crisis, but, despite the propaganda ploy of so-called journalism, I doubt that any such is in the offing. I also suspect that a large segment of the voting population understands exactly what MSLSD and the other venues of continuous falsehood are doing and that the attempt to confuse judgment on a national scale is less and less effective.

  2. Perhaps we should say that journalists are simply filling the demand for despondency and alarm. Boredom is a big problem in our engineered world, so there is a big market for the frisson of imitation danger. This struck me when I read your line about anxiety, which caused me to think that many college courses supply anxiety about climate change or the plight of some poor beleaguered outcasts. Before 1950, a lot of smut tried to pass itself off as sociology or public health studies. Thrill-seekers nowadays feel better if they can call their thrill-seeking “keeping up with current events.”

    • I think you are right that there is an appetite for the feeling of emergency. The presence of a general catastrophe enables us to turn our attention away from our own defects and focus on the emergency – and, what is more, on the defects of others, such as the Orange Man who is the source of the plague, and is to be destroyed in a cleansing holocaust that shall purify the polis and all her people, including oneself. So the press serves up a constant stream of urgent general catastrophe, the response to which can require no moral reformation. They wouldn’t do so if there were no market for their products. But we can say the same of drug dealers.

      A catastrophe that requires of us no sort of moral effort is not really a catastrophe at all, any more than watching sports is athletic.

      The real catastrophe that we all face is this: thou art dust, and to dust thou shalt return. It is up to us each one alone whether that inevitable return be for us a dyscatastrophe or an eucatastrophe.

  3. Pingback: The Press That Cried Wolf | Reaction Times

  4. Kristor, are you familiar with Epsilon Theory? I’m naught but a probably-not-talented amateur when it comes to the world of finance, but I find their analyses of the Nudging State (as they call it over there instead of Mordor) to be interesting and insightful.

    This isn’t a plug for the blog; they’ve been writing about COVID-19 and its effects on the market and why it has (and should or shouldn’t have) the effects that it does, and I’m curious how it stacks up to someone with significantly more financial literacy than myself.

    • Thanks for the tip, Rhetocrates. I’m not familiar with Epsilon Theory. I’ll poke around a bit over there and if I have any thoughts in reaction I’ll share them. Might take a while though, for me to really get their angle.

      • It will probably take even longer because I think they have a limit of something like two long-form articles a month unless you subscribe; they’re trying to make a cultural/tribal thing of it in, I think, the best possible way.

        In any case, I’m just glad to point you to something interesting.

  5. “If I were a father and had a daughter who was seduced, I would not despair over her. But if I had a son who became a journalist and continued to remain one for five years, I would give him up.” – S.A.Kierkegaard

  6. It’s not the size of the pin, it’s the size of the bubble that counts, as one financial commentator has said. We have been experiencing the biggest financial bubble in the history of the world, with concentrated efforts by all the central banks in the world to suppress interest rates. The stock market would have crashed anyway sooner or later, now the virus has been given as the reason for the crash, and also to blame it on external factors that can supposedly be managed. Then, the real instigators of the bubble and the subsequent crash, the central banks, can deflect the blame.

  7. This is also the reason that the news will report on the Dow. First because a 300 point drop is always going to sound worse than 30, in spite of the fact that the S&P is a broader market metric. And second because as a statistical rather than financial or economic entity, it can hide the reality of company’s real fundamentals and the economies actual health.

  8. While the market decline may have started as a response to corona virus fears, it has transitioned to Democratic victory fears. The media have so successfully parlayed corona hysteria that an economic recession is now almost certain in the coming months. The market is calculating that Trump will likely not recover, irrespective of the doddering fool he has as an opponent.

    We’ve seen this picture before. The corona virus is this election cycle’s version of the Lehman Brothers collapse. If the timing may seem off, consider that the worst of the economic impact may hit us in the fall months.

    • Yeah, that could happen; yeah, that is certainly what the media want to have happen, and are trying to make happen.

      I think we are almost bound to have at least a short, sharp recession due purely to such factors as disruption in the global supply chain and a massive reduction in demand for travel. That’s the optimistic scenario, under which corona virus plays out fairly quickly one way or another, and people start getting back to normal – albeit a new normal, with suitable changes to daily habits respecting crowds, washing, and so forth.

      On the pessimistic scenario, the recession could last 6 to 24 months or so, as we work through all the death.

      On the really really bad scenario, in which corona virus is something like the Black Death, we are not going to have an election, but martial law.

      On all three scenarios, my hunch is that Trump survives, nay prevails. The man has an uncanny knack for taking the lemons life throws at him, making lemonade, then selling it, and in the process making a killing.

      There is also this: corona virus might have been unleashed intentionally by our adversaries, in a bid to stop Trump. But as Scoot pointed out the other day, quarantine under martial law, with check points and inspection stations and the like, is a great cover for taking out all sorts of bad guys summarily, quickly, and with little fuss.

      • As one of your adversaries, let me assure you that our biological weapons labs are hard at work on viruses that are targeted specifically at conservatives. The current one is regrettably not so specific, but what the hell, we released it anyway because a global pandemic is a small price to pay to influence an election.

      • Many a truth is told in jest. I feel sure that if it were possible to devise a virus that killed only conservatives, there are quite a few Social Justice Warriors who would deploy it if they could. Not you, of course, my dear a.morphous.


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