
WSJ Jumps the Shark - tortilla
http://www.ritholtz.com/blog/2010/01/wsj-jumps-the-shark/
======
steveplace
I'm surprised this actually made it to HN.

I've read Barry's blog and have met him in person. He's one of the brightest,
most realistic financial commentators out there.

We've seen an increase in media politicizing market movement. The example he
cites was Obama coming out and making comments about financial regulation, and
then the market takes a dump.

So you'll see on Marketwatch, Y! Finance, Motley Fool and others about how the
president's comments caused the market to drop. This is rubbish.

Short term noise in the market happens. We were due for a pullback and this,
combined with Greek CDS spreads and China's rates, prompted some weakness.

The same thing happened during the inauguration, how the market flew further
south. And then the pundits came out and proclaimed how the new administration
would be terrible for equities-- and then we rallied. A lot. And those pundits
who thought there was some correlation between politics and markets
disappeared.

Same thing here. The WSJ has increased it's politicization of it's content,
when it has been known for the best financial news source out there. It may
sell more papers, but they are significantly compromising the intellectual
integrity of the staff and the brand.

~~~
DanielBMarkham
Without RTA, I don't think I agree with your comment. For two reasons.

First, markets move on information. Maybe one piece of big, important
information, like a war, or more generally millions of bits of information.
But it is a reasonable observation to note the correlation between big news
stories and market moves.

Second, most times markets don't move on big news. In that case, the trend
that I've seen for over a decade is for people to simply speculate on why the
market moved one way or another for a particular day. It's not science, it's
not news -- it's informed speculation, or entertainment.

I think serious investors let this type of entertainment roll off of them --
after all, people like to chat, and media forums like the WSJ (or HN) provide
them a forum to do so.

Separating the noise from the signal is the entire purpose of becoming a good
investor. Thinking it's all signal or all noise is a good way to never be one.

~~~
steveplace
_First, markets move on information._

That's half true. Markets move from capital flows of institutions on much
larger timeframes-- those flows are what create trends. There is an underlying
auction process that facilitates trade and capital flow-- the auction process
is the short term noise that is dominated by the larger money about 30% of the
time.

Yesterday was a great example. Yes, the market had a big move on the news, and
capital flows moved quickly out of domestic equities. But we also had rate
problems coming out of China and weakness in European credit markets. To say
that the brunt of the market movement was caused by a political speech does
not correspond to reality.

 _it's informed speculation, or entertainment._

Yes! And the WSJ generally avoided that, until recently.

 _I think serious investors let this type of entertainment roll off of them_

That is not reality, unfortunately.

~~~
DanielBMarkham
If you're saying that markets do not move on information alone and then
several sentences later saying that serious investor _do_ let this type of
information affect them? Looks suspiciously like self contradiction.

And I'll bet the WSJ has always done this. Pick up an issue from 1950 and see
if it isn't tying current news stories to the market. It was the same then.

This seems to me to be another version of "things were so much better way back
when and now it's all garbage"

But I'll bow out. I didn't RTA. Just found your comments popular yet (to me)
seemingly uninformed.

~~~
steveplace
* Just found your comments popular yet (to me) seemingly uninformed.*

I do this for a living, and I was watching the market movements for this
particular event-- the Obama speech was not the true catalyst.

~~~
DanielBMarkham
"uninformed" in the sense of failure to understand the role of media. Not
uninformed in the sense of failure to read easily digestible pieces of the
market.

All media (that I know of) have engaged in a mix of news, speculation, and
opinion for my entire life -- and probably centuries before I was born.

This article seemed to me so much like restating the obvious that I was very
underwhelmed.

------
utnick
so I guess the new york times jumped the shark too?:
<http://www.nytimes.com/2010/01/22/business/22markets.html>

Almost every news organization has had the same headline today

~~~
argv_empty
I'm not sure NYT had quite the same reputation for reliable market reporting.
While it may have been better than papers for whom this is "business as
usual," NYT didn't have as far to fall as WSJ did.

------
ellyagg
It's not like there are alternatives. The Times has let blatant editorializing
sneak onto the front page and throughout every section for as long as I've
been reading it, and its the paper of record. Read The Economist.

~~~
RyanMcGreal
> Read The Economist.

The Economist produces good content, but it's all editorializing, all the
time. Articles aren't even attributed to their authors - they just spring
fully formed from The Economist's notional forehead.

~~~
hop
The articles likely have multiple authors that contribute to making them high
quality and very concise. Nothing I read comes close to The Economist, so
whatever they are doing, I works well. Also, being much more expensive than
other magazines, they can afford to hang on to talent when others are shedding
it.

~~~
RyanMcGreal
The downside is potential for groupthink, which was clearly in evidence in the
run-up to the Iraq War, which The Economist cheered on alongside the rest of
the mainstream media.

------
bitdiddle
In this case I really hate to say I told you so, but I cancelled my
subscription the day the Murdoch deal was done precisely for this reason.

I was a daily reader since 1977. It was an awesome paper for investors and
business folks with a clear line between the editorial content and the
remainder. Even the editorial page always published opposing views.

It was interesting that when I cancelled, the lady I spoke with me told me
that under the new ownership it was going to be free, which was irrelevant to
me. She mentioned that many said the exact same thing, $100/yr. was peanuts
for such a high quality tool of the trade.

I recommend Bloomberg online for reasonable quality and good numbers.

------
RyanMcGreal
This judgment comes several years after the fact.

~~~
hop
Its only been 2.5 years since he bought it. And it was awhile after that it
started changing.

~~~
mortenjorck
I know some people who would put the date as far back as 2002, the year they
unintentionally created a certain, unfortunate class-warfare neologism.

<http://en.wikipedia.org/wiki/Lucky_duckies>

~~~
dagw
But that was in an editorial op ed piece. Their op ed pieces have always been
political, but they always used to do a good job to make sure the politics
doesn't leak out from there.

------
SamAtt
This is just an ad hominem attack as far as I can see. He links to two things
to support his point but neither actually do

1\. "Boskin's Obama Crash" But when you follow that link you find the article
he was pointing to was an opinion piece so it doesn't support his point (which
was that he'd always thought the OpEd page was crazy but that he now feels
that's bleeding into the reporting)

2\. "New Bank Rules Sink Stocks". His problem with this article, in his own
words, is "we know that day-to-day action is mostly nonsense". He goes on to
say "Assigning a definitive causative factor is at best a guessing game, at
worst an exercise in futility." That's just foolish. There are brokers on the
trading floor, you can ask them why they're selling and every news outlet
reported it was because of proposed banking regulation so the logical
assumption was that there is an overall sentiment on the floor. This isn't the
WSJ. ABCNews, BBC, et al. reported the same thing
([http://blogs.abcnews.com/theworldnewser/2010/01/dow-
drops-20...](http://blogs.abcnews.com/theworldnewser/2010/01/dow-drops-200-on-
obama-plan-to-crack-down-on-banks.html),
<http://news.bbc.co.uk/2/hi/business/8473720.stm>)

~~~
jonstokes
This is a really, really naive response. There isn't really anyone on the
trading floor anymore. ECNs have taken over, and account for 97% to 100% of
trading volume on any given day. No one trades from the floor anymore. So no,
there's no group of people who are "the market" whom a reporter can poll for
sentiment. You are completely and utterly wrong, and the only data you cite in
support of your opinion is the fact that lesser outlets--outlets of the type
that Ritholz has already said he files under "infotainment"--have glommed onto
the same bogus explanation and run with it.

Ritholtz knows more than you will ever forget about what moves markets. He is
spot-on, here.

~~~
SamAtt
Well first, and I mean this with minimal disrespect, but you clearly have a
hero worship thing going here (see your last sentence). So you really have a
bias of your own.

On your point, there are still people on the floor if you don't believe me
turn on CNBC and you can see them. But even in a virtual floor it isn't like
people don't keep in contact. The market lives and dies by social interactions
and it always has. That's why the guy on his computer using e*trade isn't as
effective as the guy in the brokerage house.

The point still remains that every news institution I can find reported this
the same way (Dow drops because of Bank Regulation). So using it to attack the
WSJ individually is ridiculous.

~~~
rayval
The point remains that the WSJ was unique in providing rock solid objective
financial journalism, and now it is sliding down to the same level as "every
other news institution".

~~~
SamAtt
But that's only true if the facts aren't true. If the Dow did really fall
because people are worried by the new regulations than the title isn't
sensationalist it's just factual reporting. So the question is this: Was it
impossible to find out the motivation of investors? I don't think it is
(especially when you have big time investors like Warren Buffett coming out
against it)

------
tjic
The author basically retracts his point here:

<http://www.ritholtz.com/blog/2010/01/wsj-another-view/>

~~~
rayval
No he doesn't. He provides nuance, as follows:

<blockquote> This isn’t a politicization of the Journal, it is more accurately
described as a tabloidization of it.

....

I am willing to give the Marketplace and Money & Investing sections the
benefit of the doubt. But it seems weird to me to say that I am now
sequestering the OpEd pages AND much of the A section. Once the political
motivations of the owner leave the Opinion pages, it is a slippery slope down
towards yellow journalism. </blockquote>

------
korch
As a long time reader of the WSJ, it definitely has become a Fox-ish paper
under Murdoch. What's tragic is that right now the investing public's need for
objective, non-politicized, long-term financial information has never been
higher, but now the primary journalist institution is no longer providing it.

~~~
markpercival
I cancelled my subscription a year ago because of this. It's really a shame
too, as it was one of the best papers out there. The frontpage always had one
really interesting article and the rest(barring the op-ed) was really solid
reporting.

~~~
waterlesscloud
I think people are dramatically overstating the degree to which the WSJ has
increased its political content. There's a slight swing, but I believe
people's perceptions are exaggerated because of what they expect from Murdoch.

I also think it's rare to talk about economics in a way that's free of
political bias. I think most of the time the bias is just subliminal, and
people are more likely to notice on WSJ at the moment due to Murdoch.

The bigger problem for me with the WSJ is that it seems to include more and
more "soft" economic news (lifestyle, human interest, etc) and less "hard"
news. I don't have hard data on it, but it feels that way. Could be my own
version of Murdoch awareness.

~~~
matrix
The reason I canceled my WSJ subscription had nothing to do with ideology. I
used to read the WSJ for the in-depth stories about topics that aren't
necessarily in the headlines right now or that are otherwise not especially
mainstream. After the Murdoch acquisition, the WSJ has increasingly focused on
shorter stories about more populist topics. I can get that anywhere, so I no
longer have a reason to read the WSJ rather than any other paper out there.
I'm sure many others feel the same way.

------
tjic
The article boils down to one thing: "Obama is floating a bill the author
likes. The general consensus is that the reason the market is down is BECAUSE
of Obama's bill. The WSJ dares to report that the market is down BECAUSE of
Obama's bill. Therefore the WSJ is are a bunch of no-good right-wing
authoritarian fascists, and I'm going to stick my fingers in my ears and
pretend that they don't exist".

~~~
tjic
My comment (above) has gotten three down votes in 5 minutes.

Has anyone READ the article?

I think that my summary is dead-on accurate.

If you disagree, please post WHY you disagree.

~~~
tjic
Nice.

Two calm comments of mine, both down voted to 0 or lower.

...and yet someone making no points and calling names (below) still has a
positive score.

You down voters ought to be ashamed of yourselves - this is a marketplace of
IDEAS, and yet you're just lashing out. Very mature. Very much in the spirit
of HN.

~~~
mquander
Your comments are not calm, they are flamebait; and your opinions don't appear
to have any connection to the actual article, in which the author describes
specific reasons why he thought the Journal's coverage was poor (e.g. their
failure to distinguish between financial and commodity markets, their failure
to mention China's announcement.)

