Entertainment Value in Stockmarket reporting

``One area that does show some significance correlation with accuracy, meanwhile, is the frequency of an expert's contact with the media. Unfortunately, that correlation is negative. You read that right: experts that tend to appear regularly on TV tend to make forecasts that are even less accurate, on average, than their camera-shy peers.”-Matt Stichnoth, Bankstocks.com

A recent headline attempted to justify the excruciating developments in the domestic market on the premise of “in anticipation of a rise in United States interest rates.” Citing several ‘experts’, the following attributes were mentioned consequent to such “anticipations”; namely “make dollar investments attractive”, “perceived to be overvalued” and “everybody was poised to see interest rates lower...but this was reversed”.

As usual, such account can be construed as deliberate efforts to oversimplify explanations from a rather abstruse dimensional framework. The public hardly realizes that it is media’s job to get your attention or to ‘entertain’ rather than to provide for a thorough exposition on the thereabouts. Yet in most instances, people fall for these ‘entertainment values’ which are not only diversionary and insipid but most importantly toxic sources of information.

Why toxic? Just consider, except for the US dollar, as measured by the Trade weighted index, US major stockmarket benchmarks and bonds have been mainly DOWN, does this then qualify as “attractive dollar investments”? How could negative returns be reckoned as attractive? Could the synchronized liquidations in the broad asset class worldwide be equated to being “overvalued” across the diversified asset spectrum? Should one take present conditions to mean that it should perpetuate well into the future? And lastly, why has our ‘experts’ been reticent about what seems to be the apparent ‘subordination’ to, (or have been passive about) the relative all important ‘connect’ between the unraveling events in Wall Street to the local financial markets?

``Causality can be very complex. It is very difficult to isolate a single cause when there are plenty around. This is called multi-variate analysis” wrote mathematician trader Nicolas Taleb in his insightful book Fooled by Randomness (emphasis mine). Yet in the eyes of media causality looks so simple.