November 30, 2009

We Have Breaking News: You Don't

breaking news.JPG

a picture is worth a thousand words but a picture of a word is priceless


Michelle: Scott Wapner is our eye on the floor on the New York Stock Exchange. Scott. 

Scott: Thanks Michelle, well, you said it, it's that 1042 level that has me concerned...

There he is, he's not CGI, he's not been digitally enhanced. He's a real person, telling us real facts.

Note the production.  Michelle is in studio surrounded by monitors and newspeople and information. But she's turning it over to someone who is on location. This is a deeper level of truth, he'll have insights and information she/we won't have because he's there.

Listen to the noise; he's talking loudly over the bustle of the traders behind him.  Raw info.

But what's he going to learn?  50-75% of trades are program trades.  Does he speak Bachi?   And it would be an easy thing to have him mic'd and filter out all the background noise.  But the noise is necessary to the drama. It's background music.

Note how he keeps looking to his left, as if the S&P is over there having a sandwich.  But the only thing over there is another monitor telling him the price. He has no more information than Michelle at the studio; which is to say, no more information than anyone else.  In fact after 20 seconds, all he does is show pictures of charts, none of which are at, or are generated at, the NYSE.

"Over at the Nasdaq Market Site" it's even worse:  the entire Nasdaq is electronic. The only guy making money at the Nasdaq market site is the reporter. His anchor could pull the quotes off Yahoo! Finance and it would be the same.  In fact, those screens have less information than Yahoo! Finance.  In the land of one eyed men, we're listening to a blind guy.

All of this isn't to deliver better information, it is to convince us that they have better  information.

Scott Wapner doesn't know why the market went down, but, importantly, the structure of CNBC makes it is impossible that he could ever know.  The simple truth is that in the short term, the market went down because the Machines wanted it to go down.   If you want to know why they wanted it to go down, you'll have to ask them. 


This is the same setup one sees in ordinary news; an anchor leads a story, then hands it off to someone in a different location: closer to the truth.  Sometimes, this on-location reporter will play a snippet of a prerecorded interview, e.g.

I'm John Roberts, live at Capitol Hill, and earlier today I had the chance to talk to Senator Hutchinson...

and then they play the interview. So what's the point of standing on Capitol Hill if the information you have is neither live nor from Capitol Hill?   Because you watched.

Sometimes they'll play a muffled audiotape, and because they are so helpful they will also write the transcript on the screen.  This can always be recognized as a trick. The transcripted words draw your eye and concentration, so you see the words they want you to see, in their context, not in the original context.  Imagine reading vs. hearing the voice message of a surfer dude charged with killing his girlfriend: "come on over, baby, this party is going to be killer..."

This is especially true when the audiotape is transcribed and the transcription is read by a reporter. When you see that on TV, flee the area, your soul is in peril.


Medical journals are CNN.

Everyone has access to published clinical trials.  But nobody reads them, because there are review articles out there which summarize them.  Note the direction of causality.  Reviews don't serve a need, they create a market-- for themselves.  That's also what the press does.  I see you furrow your brow, "wait, what--?"  Read it again.

Listen closely: since you at home have access to all the clinical trials, you could theoretically write a review article and publish it.  But you can't.  Only academics can.  You may have written an excellent review article, but in order to publish it, you have no alternative but to enlist the help of an academic.  That's the news, too.  The only way to tell the world what you know and make it legitimate is it to tell Wolf Blitzer first.

Those reviews will get published in the same journals as the clinical trials themselves, giving them credibility. When I reference a paper, no one asks if I'm referencing a primary source or  a review article.  The existence of the reference is its own proof of validity and objectivity.

No one ever says, "The Telegraph says, 'Societe Generale says, 'prepare for a collapse.' ' " They say, "Societe Generale says prepare for a collapse."  Oh, I didn't know you were tight.   Can you have them call me?


Aside: even Societe Generale does not correct the Telegraph.


No, sorry, yet another typo-- of course I didn't mean "Aside:" I meant to type: "What could be the significance of Novartis not correcting the media's description of the swine flu?  But:"


Sometimes a review article will include a quote or a table from a primary source, just like a news team does.

Bad enough: you don't look up the quote or the table. Worse, the purpose of the quote or table isn't to enhance your understanding of the material but to give credibility to the review. It makes you think that you are seeing a deeper truth; the review has layers to it, the review level and the primary source level.  You have two levels of truth on those pages.

Never mind you could simply read that reality yourself and skip the review level, which is, essentially, one nut's opinion, unchecked by anyone, positioned as truth.  But the presence of that table guarantees you will not do this ever again.  "This review is comprehensive and extensively referenced."  That's true. 


Medical journals are rarely accused of ideological bias, they are accused of financial bias.  The press are rarely accused of financial bias, they are accused of ideological bias.  If you studiously spend one month looking for the opposite bias in both, what will happen is that you will become an alcoholic. 


"Let's get down to our eye on the floor of the NYSE, where we have some breaking news."  But aren't the barbarians in Greenwich?