Stock selloff? It’s the same old story with financial news networks: much ado about something
EDITOR’S NOTE: Almost exactly four years ago in a previous incarnation of my blog, I wrote something after a big stock selloff. Like a preacher who keeps a file of his previous sermons, I’m hauling this one out of mothballs and not changing a thing. That’s why you’ll see dated references to President Bush, Barry Bonds approaching the home run record, (which he officially reached on August 7, 2007) and others. The more things change, the more they stay the same.
Financial news networks: much about something?
In the olden days, it was pretty much bankers, brokers and grumpy old men who read the Wall Street Journal and paid attention to stocks, bonds, commodities and such. Now, lots of people pay attention. Nobody else is doing the thinking for you for things like retirement anymore. So like everyone else noting the value of his or her holdings shrinking last week, I tuned in from time to time to witness the carnage. With millions of people tracking their 401(k) plans, plenty of insecurity in Social Security and the occasional heavy hitter being frog-marched to federal court, you’ve got the makings of cable TV programming that can hold its own with the Cartoon Channel and the Home Shopping Network.
Morning Mammon anchor, Lance Lucre, appears in the window in the screen. It’s the part not consumed by red, downward pointing arrows and green, upward pointing arrows in the lower right showing ever-changing numbers for various global indexes every two seconds as triple crawlers stream along the bottom of the screen at carefully mismatched speeds. One provides real-time ticker information on individual stocks. Another shows commodity futures prices and the third has one-line slugs about The Simpsons, O.J. Simpson, IEDs in Iraq, Rupert Murdoch, Britney Spears, President Bush, James Bond, Barry Bonds, Warren Buffett, Jimmy Buffett, etc. It’s all very busy and interesting, unless you happen to be looking for something in particular.
“Today, the market seems to be focusing on housing starts, unemployment figures, oil prices, weakness in the credit markets, the core inflation rate, oil inventory, unrest in Moldavia, the upcoming fed meeting and the PTA elections in Poughkeepsie,” Lance tells us. “Investors are buying, selling, standing on the sidelines, rebalancing their portfolios or hanging out in the Hamptons. Let’s go to the floor of the New York Stock Exchange, where Candy Cleavage is standing by with Frederick Fatcat of the Avarice Millenium Contrarian Hedge Fund.” The representative bull appears on the screen…
“We see this as a good buying opportunity,” says Fred. “Corporate earnings continue to look strong going forward – particularly in the financial sector.” The speaker is well tanned and has no worry lines. Why would he worry? He’s living off your portfolio management fees and subscriptions to his overpriced newsletter – all reliable money that shows up right on time, whether the market is up or down.
“Thanks for taking some time out with us, Freddy — we know it’s a busy day for you,” says Candy. “My pleasure,” beams the oracle of the moment. (He’s just preparing to head down to Grand Cayman to make a deposit in his private bank and play a round of golf. No worry about missing the plane; he owns it.) “Of course, not everyone is cheering,” Candy grins. “A little earlier, I talked with Charles Chickenlittle of the 21st Century Apocalypse Fund.” The token bear appears on the screen…
“We’ve been predicting this correction for quite some time,” states Chuck, in the gravest of tones. (Yes, he’s been consistently predicting it since the Ford Administration and even a stopped watch is right twice a day.) “We’re taking a cautious approach going forward and being very selective.” (Cautious? That nerdy little weasel commutes in from a bomb shelter in rural New Jersey stocked with gold bars, canned food, a large flashlight, a crank-type radio, 20 cases of Sterno, a loaded AK-47 and a two pound Swiss army knife.)
“Thanks, Candy,” says Lance. “Let’s head over to the Chicago Board of Trade, where Peter Principle has been watching the bumpy ride in the pork belly pit.” Looking like he’s been up all night in a street fight, Peter stares blankly into the camera holding his microphone from the midst of a crowd of men in colorful, ugly, unmatched blazers with numbered badges, waving their arms and hollering at something off camera. The cameraman is finally able to cue Peter that he’s on air…
“It’s pandemonium here, Lars,” Peter screams, as his IFB earpiece falls out in the jostling crowd. “It all started with a rumor before trading opened that Alan Greenspan’s housekeeper bought an extra package of bacon at a convenience store and some traders read that to mean that the former fed chief might be stocking up,” Peter breathlessly relates. “Things spun even further out of control on speculation that it was actually a soy protein bacon substitute. The bean pit was forced to close for 30 minutes before order could be restored to the market.” (What we’re seeing is order?) “A lot of traders panicked, after selling short late last week on comments from an unnamed source about aging customers at Chinese restaurants beginning to favor sweet & sour sauce over soy because of the sodium content. They’re now forced to cover those positions.”
“Well, Peter, it sounds like another crazy day in the Windy City,” Lance winks. “We don’t know where this is heading yet, but as that report was airing, we noticed Denny’s stock was getting slammed on the prospect of higher prices for those popular breakfast plates. The company has since put out a statement that their bacon supplies have already been purchased at fixed prices through the end of the year,” he continues. “Let’s go back to Candy in New York and check that out.”
“You’re exactly right, Lance,” chortles Candy. “I talked with Denny’s CEO just a minute ago and he says there’s nothing to worry about. So you might say Denny’s customers will be dining on hedge hogs until at least mid-February.” (Thousands of lattes simultaneously spew on screens in 20 different time zones. “Or you might NOT say that,” muses an attorney in Denny’s legal department, as he picks up the phone. Meanwhile, a PETA official begins composing a fundraising letter. )
“Okay, we’ve got lots to look at when we come back,” says Lance. “We’ll have an interview with the lawyer who took down the Beardstown Ladies, the inside scoop on whether The Deathly Hallows is really the last word on Harry Potter and why you should have sold your South Beach condo six months ago. Tickets for $20 bleacher seats in left field for the next three San Francisco Giants games are scalping for $800 and up. What can you can expect to get if you catch the record-breaking baseball that Barry Bonds hits out? Stay tuned!”