November 27, 2009

The Coming Global Collapse, Sponsored By British Airways


citizen kane snowglobe.JPG
if you can supply the prose I can supply the crystal ball

If you're even moderately interested in the financial news, you've probably seen this:

telegraph-soc-gen.jpg
Wow.  What makes it scarier is that this is in the Telegraph, which, in June 2008 reported:


telegraph-rbs.jpg
I remember this story so well that when I needed today to find the link, I remembered the full title.  Same newspaper, same author.  I'm sure I'm not the only one who saw the similarity.  And, of course, two months later the freefall started, and the S&P lost half its value.

II.

Maybe it's my... perspective... but when I saw the story, something else caught my eye:

soc gen.JPG
The 2008 article had 293 comments.  The average Telegraph story gets 20 comments.

My first, cynical thought was: they wouldn't make up a story to generate traffic and ad revenue (British Airways), just because they know it worked the last time, would they? 

I mean, "global collapse" is in quotes, right?  Soc Gen had to have said it, right?

III.

A look at the actual report shows something a little different: Soc Gen outlines 3 possibilities-- Bear, Central, and Bull scenarios, each detailed with unnecessarily complex graphics. 

They don't think the "Worst Case Scenario," will happen, they are just describing it.  Their actual belief is stabilization in 2009, and recovery in 2 or 3 years.

IV.

So why report it it this way?  Why write a news story about something Soc Gen doesn't believe is going to happen?  Before you answer, consider that they only wrote about the "worst case scenario," not the Central and Bull scenarios.

It's bad enough that the story is misleading, and that it provides no useful news.  What makes it dangerous is that it is misleading precisely to draw readers; and by becoming popular it then causes things to happen.

Newspapers are not objective informational resources, they are blogs.  The sooner you internalize that comparison, the sooner you will be free.

----

http://twitter.com/thelastpsych










Comments

1. Who is 'they'? There's... (Below threshold)

November 28, 2009 2:00 PM | Posted by Anonymous: | Reply

1. Who is 'they'? There's an author listed.
2. "[T]hey only wrote about the "worst case scenario," not the Central and Bull scenarios." Inaccurate. In paragraph 4, the journalist specifically qualifies that he is about to discuss "the French bank's "Bear Case" scenario (the gloomiest of three possible outcomes)."
3. As to your blog insight, if you follow this stuff a big more --heck, if you google the name of the author, you will see that the Telegraph is fairly upfront about Mr. Evans-Pritchard being, in fact, a blogger. "Ambrose Evans-Pritchard – Telegraph Blogs," 3rd entry when I googled his name.
3.a. He's been writing consistently critical and gloomy pieces for ... years.
3.b. You do realize the Telegraph is an English news organization, yes? Have you heard of the term "Fleet Street"? Do you think any actual full-grown adults were significantly and fraudulently moved from any pre-dispositions by this piece? Really?
4. "It's bad enough that the story is misleading, and that it provides no useful news. What makes it dangerous is that it is misleading precisely to draw readers; and by becoming popular it then causes things to happen." This is a serious charge and deserves consideration in detail.
4.a. Misleading. How? Before you answer, re-read my previous points. My view, unless it's still unclear, is that the essay was fairly noticed as an opinion piece, that it fairly and accurately included reports of recent enough facts --a report by a major financial institution discussing implications of recent government bailouts and how, if at all, those bailouts will ramify through the economy; and that, while some cherry-picking may have occurred in this 7 or so paragraph blog piece, all in all, it was neither fraudulent, as you seem to be implying (see, I too can use the weasel-word "seem"), or even irresponsible.
4.b. "What makes it dangerous." Yes, do tell. Baited breath here for why the rubes can't hear anything about the months-old reports of financial institutions --months-old of course because they're embargoed 'til the premium customers get a chance to read them and make their moves.
4.c. "... to draw readers..." Yes, such a crime to report things that people might find useful, such, as, oh, per these trends and exacerbated by these policies, that such and such a thing will have less value in the future while t'other will have more.
4.d. "; and by becoming popular it then causes things to happen." Punctuation included on purpose. All you have to support your insinuation of fraud or, at the least, irresponsible opinion journalism, is post hoc ergo prompter hoc. More please.

Coda: Why would an Airline pay payola for collapse journalism? Wouldn't they want the opposite? If I'm British Airways, what's my motivation? Even without any accusation or insinuation re ethics, wouldn't collapse journalism be simply more naturally tempting or even logical for venders of things like gold, guns, canned goods, camping gear, etc. (e.g. http://www.lifeaftertheoilcrash.net/BreakingNews.html) while cornucopia journalism would probably have more hopeful adverts, like the latest cell phone, camera, gatchets... and travel (e.g. http://www.wired.com/medtech/drugs/magazine/16-04/ff_kurzweil)?
That it's British Airways, as you write, actually bolsters it's credibility as a sort of admission against interest.

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That's me, BTW, above, with... (Below threshold)

November 28, 2009 2:01 PM | Posted by CC: | Reply

That's me, BTW, above, with the longish comment there.

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Oh, God, I love this stuff.... (Below threshold)

November 28, 2009 5:07 PM | Posted, in reply to Anonymous's comment, by tomrac: | Reply

Oh, God, I love this stuff. CC, I'm not sure but I think you proved his point for him.

Point #2 that "they specifically qualifies that he is about to discuss the bear case". That's true, but there's nothing in the article that lets you know about the other two cases, or that the bear case isn't the likely outcome. Alone's point in "IV" is that.

And you have totally proven Alone's point in 3: why would he need to google the author's name? Why would he need to know anything about "fleet street?" I saw this article in MSN frontpage a week ago I think-- it stands as is. Whatever happened to journalists simply reporting the news?

How would anyone know this guy was a blogger? (and why do you think that anyway, I couldn't find anything about that.) So when Alone said the newspapers are blogs, he was literally correct?

Your 4a isn't sound. You're coming at it from the perspective of one who is very interested in the backdrop of a news story, who wrote it, where it appears, but the average reader would never know that. "Full grown adults would be moved by this piece?" Of course, there are 229 right there. why wouldn't this article make some people more angry at bankers, or the president? Why wouldn't it make you hesitate before moving your money back into the market? I guess what I am saying is that if the article made clear that this wasn't the likely scenario, I might be tempted TO put my money back in the market.

Though all of this is besides Alone's point, I think-- why should we have to work this hard for our news?

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I know. I kill myself some... (Below threshold)

November 28, 2009 7:09 PM | Posted, in reply to tomrac's comment, by CC: | Reply

I know. I kill myself sometimes.

Large point first: Alone's point is that it's hype, gossip, unreliable, unfair, inaccurate. Thesis last, concluding sentence: "Newspapers are not objective informational resources, they are blogs. The sooner you internalize that comparison, the sooner you will be free."

Exhibit A? The only exhibit?

A newspaper?

No. We're on the net, silly.

A newspaper's web site? Like the Times website?

No.

Oh, yeah, that wouldn't be representative of the news as a whole then, so it's got to be, if it's one and only exhibit, a news aggregator, like Google News, or Yahoo.

No. The other way.

I don't get it?

....

Of course you don't. Alone, why don't you just tell your listeners how you found this page?

***
Specific to your complaints.

You wrote: "but there's nothing in the article that lets you know about the other two cases,"
Wrong. There is. See my 2 again. Or the source material. Gloomiest of three possible outcomes.

You also wrote: "or that the bear case isn't the likely outcome." Well, duh. Who knows? That's the whole point of the article. These guys at Soc. Gen are talking worst case scenarios, one of them is such and such. It's a report of an analyst essay. "It is an exploration of the dangers, not a forecast."

MSN front page. And the apparent inability or unwillingness to google sources. You got me there. Let's arrest the author.

I mean, really, what do you want, egg in your beer?

I'll just say I still see my 4a as sound. And Alone's post here as unsound. And your criticism as fair enough. I need to pick up some Chinese food and can't slog through 229 comments to survey it's effect (selection bias), but then again it's not like anyone's likely to cite anything to the effect that the new media --websites, blogs, etc., is doing a worse or more misleading job than the old --MSN excluded of course.

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Ambrose Evans-Pritchard a b... (Below threshold)

November 28, 2009 7:43 PM | Posted by ambrosen: | Reply

Ambrose Evans-Pritchard a blogger?

All I know about him is that he writes for a newspaper I have no interest in and he shares a first name with me, but I know he's been a journalist for a long time.

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CC, Evans-Pritchard is both... (Below threshold)

November 29, 2009 11:14 AM | Posted by Matt P: | Reply

CC, Evans-Pritchard is both a journalist and a blogger for the Telegraph. His blog pieces appear under the blogs.telegraph.co.uk domain, while his reportage appears under the main www.telegraph.co.uk domain. It looks like he also writes an opinion column for the paper, those pieces appearing under www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/ .

The Telegraph has three distinct areas in which pieces by Evans-Pritchard appear. One is news, one is a blog, and one is (presumably) sanctioned op-ed. The article under consideration was placed in the news area.

Your notion "that the essay was fairly noticed as an opinion piece" seems to be supported by nothing more than a misinterpreted Google hit. That's weak, man.

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Matt, Hey you're r... (Below threshold)

November 30, 2009 12:32 AM | Posted by CC: | Reply

Matt,

Hey you're right. It is weak. Please omit what you just quoted. What changes? Not much. I didn't have to go so far as to defend it as an opinion piece; it was superfluous and distracting from my argument: that the cited article is a fair and accurate report.

Interesting that you were able to do some digging too.

Which is really my whole point. Because the only argument I see in LP's post is that the selection of that report by the journalist to ... er, report on, and the publisher to publish, demonstrates a bias.

"Newspapers are not objective informational resources, they are blogs. The sooner you internalize that comparison, the sooner you will be free."

But he's talking apples and orangutangs. ("You're living in the past, man! You're hung up on a clown from the 60's!) Be serious. What are the odds that Last Psych's primary, main, and only morning read is the home page of The Telegraph? 100:1? 10,000:1? He probably came across this story from an aggregator --Google News, Drudge, or someone else's blog. So what he really means, by his own exhibit, is, blogs are blogs.

The question then is, is it a fair and accurate blog? With some integrity? Blogs have been catching the major media out on errors left and right. Who even reads the paper anymore --I mean a real, actual newsprint paper? It's over.

So don't go pedantic on me Matt. Take it from the top. In the 20's or so, there were lots more papers and everyone but the most naive didn't sweat the fact that the papers were all more or less partisan, biased, slanted, etc. etc. Then things whittled down to a few, a sort of consensus where lots of people were both figuratively and literally 'on the same page.' Walter Cronkite. _That's_ when pointing out that there was, in fact, a bias, was really a profound, interesting, courageous and useful thing. Now it's, again, a "Duh, what else is new?" type of comment. Which wouldn't be so much worth me commenting on but for the fact that Last Psych is doing _exactly_ what he's accusing The Telegraph of doing! It's fascinating. He's using innuendo and selection bias to accuse them of selection bias, hype, innuendo --fraud even.

Only they didn't because we're on the internet now and unless you're some sort of retard and totally incurious, just a click away is a raft of alternative views, fact-checking, the whole works.

But forget me, this guy does it better: (It's fiction, set in the future.)

"Hackworth picked up a large sheet of blank paper. "The usual," he said, and then the paper was no longer blank; now it was the front page of the Times.

"Hackworth got all the news that was appropriate to his station in life, plus a few optional services: the latest from his favorite cartoonists and columnists from around the world....

"A gentleman of higher rank and more far-reaching responsibilities would probably get different information written in a different way, and the top stratum of New Chusan actually got the Times on paper....

"That the highest levels of the society received news written with ink on paper said much about the steps New Atlantis had taken to distinguish itself from other phyles.

"Now nanotechnology had made nearly anything possible, and so the cultural role in deciding what _should_ be done with it had become far more important than imagining would _could_ be done with it. One of the insights of the Victorian Revival was that it was not necessarily a good thing for everyone to read a completely different newspaper in the morning; so the higher one rose in the society, the more similar one's Times became to one's peers'."
--Neal Stephenson, The Diamond Age.

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Isn't that crystal ball a f... (Below threshold)

November 30, 2009 11:36 AM | Posted by Jack Coupal: | Reply

Isn't that crystal ball a frame from "Citizen Kane"

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Investment firms are starve... (Below threshold)

November 30, 2009 6:37 PM | Posted by KD: | Reply

Investment firms are starved for capital right now. Investors are wary of the market (seen the price of gold lately?). So these firms have to show they're "ahead of the curve", that they "get it", that they somehow see what's coming and can prepare for the most disastrous scenarios.

These are publicity grabs, as you very well noted. But they serve to froth up ever more fear, so investment brokers must show they understand ever-more dire possibilities.

(By the way, what are they planning for investments in case of global collapse? Canned goods?)

-deeply disillusioned MBA

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yes, another one of TLP's c... (Below threshold)

December 1, 2009 12:41 AM | Posted, in reply to Jack Coupal's comment, by Anonymous: | Reply

yes, another one of TLP's cryptic jokes-- the ball is actually a snowglobe from Citizen Kane, and the phrase is from that movie ("you provide the prose poem, I'll provide the war") which is actually a reference to real-life newspaper publisher Hearst who, upon hearing from his Cuban correspondent that there was nothing going on in Cuba, replied, "you provide the pictures, I'll provide the war." TLP's message appears to be the media makes the news, not reports the news.

May favorite was from the Don Draper post, where a haggard Betty Draper looks at the cool Donald, and the caption reads "one of these is Dorian Gray, and the other is the portrait" meaning that one person's ugliness is manifested in the partner, and it could go either way.

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