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WSJ Jumps the Shark

ritholtz.com

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Re: WSJ Jumps the Shark

#51

Post by tortilla »

SamAtt wrote: post #47
tortilla wrote: post #44

Earlier quoted context omitted.

And here he's calling Obama a sellout or close to it: http://www.ritholtz.com/blog/2009/12/did-obama-sellout-to-wa...

That just makes my point. Follow me here... The original comment was saying "this guy is partisan and that's why he doesn't like the article". You tried to refute that by saying "He dislikes both sides" I'm saying he doesn't really dislike both sides. He dislikes one side and agrees with but is disappointed in the other. Those are vastly different things.

Yeah, I see your point.

I probably shouldn't have said, "He dislikes both sides" when I should have said, "He attacks/criticizes both sides." My intent was to show he's not some blind partisan hack.

I'm not sure if he's a leftist either. Some people accused him of being a libertarian in the past.

Re: WSJ Jumps the Shark

#52

Post by DanielBMarkham »

steveplace wrote: post #18

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…

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.

Re: WSJ Jumps the Shark

#53

Post by steveplace »

mynameishere wrote: post #45
steveplace wrote: post #18

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…

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. No, this is rubbish. When the government seeks to regulate huge profit-makers at banks, it's completely rational for those banks' values to fall. This is the consensus view of bullish and bearish commentators alike, and I have no idea why anyone would disagree. The blogger po…

When the government seeks to regulate huge profit-makers at banks, it's completely rational for those banks' values to fall.

You're assuming markets are rational, and that the short term change in market structure was directly caused by a speech.

Again, the point I was trying to make was not that the sentiment due to the speech had shifted, but that the analysis by the WSJ was very politicized and intellectually dishonest.

The blogger points out that commodities fell harder. That and a nickel and a time machine will get you a cup of coffee.

And the real question then is, did the overall markets fall because of Obama's comments, or because of dollar strength and the widening of Greek CDS spreads? Since materials have a higher weighting in the market, would we not assume the latter?

There is a near-perfect inverse correlation between the value of the dollar and the market

That correlation started around 2H2008. Correlation running about -.5... nowhere near perfect; however, historically we have a positive correlation. Source: http://bit.ly/spycorr The liquidity infusions that the market has seen has very little to do with U.S. politics.

You can creepily see this happening on a tick-by-tick basis. I don't know why this is so perfect, but I suspect it almost has to be algos doing it. This is the kind of thing that the government (may) start regulating.

This happens due to capital inflows/outflows from different markets. If capital flows out of bonds, it most likely goes into stocks, which gives us this "creepy" movement... but there's nothing sinister behind it. Algorithmic trading has little to do with this, if at all.

One quick note: UUP is probably the worst tracker of dollar strength. It's an etf that is structurally damaged and has contract rollover issues due to it's exposure in front month dollar future contracts. I would suggest DXY or looking at a basket of currencies.

Re: WSJ Jumps the Shark

#54

Post by steveplace »

DanielBMarkham wrote: post #52
steveplace wrote: post #18

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…

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…

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.

Re: WSJ Jumps the Shark

#55

Post by barrkel »

DanielBMarkham wrote: post #52
steveplace wrote: post #18

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…

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…

And BR is saying that he is moving WSJ from "essential" to "infotainment" pile, so you're not particularly disagreeing (ISTM). BR's point is that in the past, WSJ wouldn't indulge in this kind of speculation outside its opinion ("cartoon") pages.

Re: WSJ Jumps the Shark

#56

Post by rayval »

tjic wrote: post #38

The author basically retracts his point here: http://www.ritholtz.com/blog/2010/01/wsj-another-view/

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

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.

Re: WSJ Jumps the Shark

#58

Post by rayval »

SamAtt wrote: post #39
jonstokes wrote: post #36

Earlier quoted context omitted.

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…

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.…

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".

Re: WSJ Jumps the Shark

#59

Post by steveplace »

SamAtt wrote: post #33

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…

Granting Boskin an editorial is a problem because he was a direct cause in the financial collapse, and it was a followup to a few other posts he'd made.

There are brokers on the trading floor, you can ask them why they're selling

Traders on the floor and in the pits trade in reaction to price, not the news. News can be bad and price still go up-- just watch the futures market when jobless claims are reported in the mornings...

Re: WSJ Jumps the Shark

#60

Post by DanielBMarkham »

steveplace wrote: post #54
DanielBMarkham wrote: post #52

Earlier quoted context omitted.

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…

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…

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.

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