
Bloomberg News Pays Reporters More If Their Stories Move Markets - Jerry2
https://www.businessinsider.com/bloomberg-reporters-compensation-2013-12
======
JumpCrisscross
As a former trader, this doesn’t strike me as heinous. “Moves the markets”
means “contains new and salient information.” That’s a good benchmark.

The risk—that reporters will make things up for short-term gains—can be
addressed through a tighter-than-usual editorial process.

In the end, Bloomberg makes its money selling terminals. The organisation, as
a whole, is strongly incentivised to police against crap. Perhaps too much so.
This policy may serve to counterbalance that inbuilt conservatism.

~~~
makomk
No, "move the markets" means that the reporters have convinced readers their
article contains new and salient information. That's not quite the same thing.
For example, this gives Bloomberg reporters a direct financial incentive to
portray their information as more solid and well-founded than it actually is
and downplay any hint that it's not in fact new.

~~~
plouffy
I'm not convinced. If you only cared about the short term then yes you would
do as you described. But both Bloomberg and the author are pursuing long term
strategies. If you publish misleading/inaccurate articles consistently, then
people will ignore you. The author and Bloomberg will both loose credibility.
This is bad for the author who wants people to read what he writes, and is bad
for Bloomberg.

~~~
unstuckdev
>> _" If you publish misleading/inaccurate articles consistently, then people
will ignore you."_

I can't find it now, but someone made a site to score opinion piece writers
and see how many were right. Few were, but they still had jobs. You give
people too much credit.

------
wging
There was no editorializing here by the poster of this article, but given
recent news I have to suspect it's obliquely a claim that there may be certain
incentives at play in the recent reporting of the SuperMicro issue
([https://www.bloomberg.com/news/features/2018-10-04/the-
big-h...](https://www.bloomberg.com/news/features/2018-10-04/the-big-hack-how-
china-used-a-tiny-chip-to-infiltrate-america-s-top-companies) and
Amazon/Apple/gov't-agency denials).

I don't feel that I know enough to make claims about how justified (or not)
that is, just pointing out why a story dated "Dec. 11, 2013" might have been
posted.

~~~
JumpCrisscross
> _just pointing out why a story dated "Dec. 11, 2013" might have been posted_

And in the intervening years, Bloomberg News won itself a Pulitzer [1].

[1] [https://www.bloomberg.com/company/announcements/bloomberg-
wi...](https://www.bloomberg.com/company/announcements/bloomberg-
wins-2015-pulitzer-prize/)

------
doctorless
Why is this surprising? Their entire business model for having a news wing is
to funnel traders into their terminal. Being the first to break market-
relevant stories sounds like a plus, not a negative, even if the
incentivization model is potentially encouraging to write stories with a bias
towards moving markets.

~~~
akhatri_aus
Because the incentives can create stories that are untrue or corrected later.

~~~
ccostes
I think this is where editors would come in who (presumably) don't have the
same incentives.

~~~
philipov
that's quite a presumption

~~~
PeterisP
That's a reasonable presumption - Bloomberg makes its money selling access to
reliable information, the people buying their services are not reading
Bloomberg for entertainment but in order to make financial decisions. The
editors know where their paycheck comes from and, unlike most other news
sources, have a strong incentive to avoid speculative clickbait.

~~~
philipov
Speculative clickbait is not the same as market-moving stories, and this isn't
an article about Bloomberg paying reporters for clickbait. Market-moving
stories are the ones valued by traders in making decisions, almost
tautologically since trader decisions _are_ the market. I don't see why the
editors would have different incentives than the reporters.

------
parhamn
"move markets" seems highly correlated with juiciness and high view counts
which are standard practice. In fact, I can't think of many examples where
they're not... have any good ones?

I can also see a finance focused media outlet using that jargon internally to
describe the underlying metrics (moving market's isn't really easily
measurable directly anyway). To me, this doesn't seem like news. This seems
like a bad jab at Bloomberg's credibility, which has been really important
recently.

There's probably a discussion to be had about for-profit media and reach
optimization. But that's been done many a times over the discussions of
public/gov't/nfp news sources.

------
JauntTrooper
They've stopped this practice, in part due to this article (note the date -
2013). I have friends who were journalists there at the time who told me about
it.

~~~
panic
The Register's article on Super Micro (written a few days ago) mentions this
incentive:
[https://www.theregister.co.uk/2018/10/04/supermicro_bloomber...](https://www.theregister.co.uk/2018/10/04/supermicro_bloomberg/?page=3)

 _> Bloomberg reporters receive bonuses based indirectly on how much they
shift markets with their reporting. This story undoubtedly did that._

~~~
onetimemanytime
I guess the bonuses are not handed the day after, so there's time for the
response and to see if the story was legit. Otherwise there's a incentive to
write "XXXX Co to restate earnings since 2007, major fraud suspected" and to
get it past editors one way or another.

Linking the story with market moves can be legitimate, they are a business
news org and market is moved by major investigative stories.

------
paulpauper
Unless the story is really, really bad, it seems headlines barely budge the
market these days, possibly due to the market becoming more efficient and an
overall strong economic and buy-the-dips backdrop . I stopped paying attention
to headlines years ago. volatility is in the toilet. It also depends on how
one defines 'move'. A move of 1% can be attributed to other factors, and if 3
or 4 financial outlets are reporting the same story at once, it's hard to
attribute it to Bloomberg.

If you look at the example of Walmart they gave, the stock was already down
1.5% when the story broke, so it only fell 1.5% instead of 3%:

[https://amp.businessinsider.com/images/52a755546da811c04aecd...](https://amp.businessinsider.com/images/52a755546da811c04aecdb04-960-720.jpg)

------
keyle
If a journalis sells short a company stocks before printing a story that will
shock shareholders, is that insider trading? What's the legality of that?

~~~
landr0id
If they got information from an insider, it could potentially be insider
trading. Something somewhat similar happened when MedSec shorted St. Jude
before publishing some security research about some hardware:
[https://arstechnica.com/information-
technology/2016/08/tradi...](https://arstechnica.com/information-
technology/2016/08/trading-in-stock-of-medical-device-paused-after-hackers-
team-with-short-seller/)

I don't believe that case was considered insider trading but I may be
mistaken.

~~~
abstractbeliefs
Buying a product, realising it's trash, shorting it, and then telling people
why you shorted it isn't insider trading.

The giveaway in this case is that MedSec/Muddy Waters were not in any way
insiders, they were simply smart enough to investigate a company and find out
it was overvalued before anyone else did, and then pointed it out when they
had their financial ducks in a row to benefit from it.

------
_Codemonkeyism
Classic article structure, click bait title, two thirds exploring the
headline, near the end reveal the click bait headline conned you - and be
secure from being sued.

"To say that people are getting a big $5,000 bonus for some market-moving win
is completely wrong."

------
zerof1l
Surely this piece of news coming after SuperMicro report by Bloomberg is just
a coincidence. Surely Business Insider wrote that piece of news from their own
initiative.

~~~
lovich
It's dated 2013. Someone brought this exact article in another thread and now
it's been brought up to so doubt about the hacking article.

Seeing situations like these has led me to an intellectual predicament.

In the past year or two I have seen a massive amount of propaganda and now I'm
left with a question that I hope others can answer.

How can we have free trade when every trade is weaponized? How can we have a
dissemination of information when any single group who wants power uses every
post on the internet as a way to insert their own ideas? We make fun of anti
vaxxers but then we see that a government used a vaccination program to find
their enemies[1]. We make fun of the paranoid, but then a Snowden comes out
and we discover that they werent actually paranoid. How does a society
function when any given transaction, whether in physical goods and services or
information, is used as a weapon against another group?

I dont see how we get out of this without reverting to a super tribalist set
of societies that calls out everyone who is different from the default group.
Whether that's based on ideology, race, geography, etc we are all losing out
because we have reached a point where there is no trust between anyone anymore

[1][https://news.nationalgeographic.com/2015/02/150227-polio-
pak...](https://news.nationalgeographic.com/2015/02/150227-polio-pakistan-
vaccination-taliban-osama-bin-laden/)

~~~
robbiep
It’s a long draw of the bow to go from the US tracking Osama under the guise
of a polio campaign to your regular anti science anti vaccine westerner being
justified in their pseudoscience.

The answer to your question is the same way trust has always been built (and
lost) - micro transactions establishing credibility and mutual trade and
dependence, not in paranoia and closing doors, which is sure to only
antagonise things

------
brownbat
> recent reports that Bloomberg killed a China story to avoid irritating the
> Chinese government

They don't mention which reports. Anyone recall the spiked story?

Search results about Bloomberg and China are pretty crowded, given recent
events.

~~~
JdeBP
[https://news.ycombinator.com/item?id=18148037](https://news.ycombinator.com/item?id=18148037)

------
openplatypus
So that's how Apple and Amazon plans to discredit Bloomberg?

------
EGreg
Wait, can Bloomberg get a butterfly spread or put/call option ahead of a
story? Or is that insider trading?

------
creaghpatr
Is that legal?

~~~
Lazare
Paying people more for doing their job well? Yes, it's legal. :)

(I'm sorry if the answer comes off as flippant, but really, there's nothing
particularly odd or unsavoury here. Journalists are paid to break stories that
get attention or are otherwise important, and this is a perfectly valid metric
for "important". Why would it be illegal?)

------
Bud
This should instantly decrement Bloomberg's credibility, for all major
stories, by at least 50%. I know it does for me.

They are incentivizing sensationalism. This doesn't seem like a good
journalistic practice.

~~~
airstrike
> They are incentivizing sensationalism.

As opposed to all the other media outlets who aren't?

~~~
make3
something is not right just because because others also do it

------
Cypher
isn't that just the definition of click bait.

------
ndesaulniers
Surely, this isn't abused. /s

------
anilshanbhag
Their hit piece on SuperMicro is a prime example. With zero hard evidence,
they posted a multi-page hit-piece on them permanently damaging their brand
developed over past 25 years. The stock is down 45%, added some more salt to
US-China tension and the authors are happy with their paycheck.

Libel laws need to be improved to hold shoddy reporters accountable for their
work.

~~~
whoopdedo
SuperMicro is also embroiled in an accounting scandal that arguably is more
important to investors.

~~~
tfehring
Did any new information about its accounting irregularities come to light on
Wednesday or Thursday? If not, why would they have driven the stock price
decrease on those days?

