Why the media are a hindrance rather than a help in understanding the debt crisis.

Daftest article opening of the week:

‘U.S. stocks rose, restoring the yearly gain for the Standard & Poor’s 500 Index, as economic data signaled the U.S. is weathering Europe’s debt crisis.’ (Bloomberg this morning)

This is a bit like saying that so far the US is doing a great job weathering Hurricane Edna, on account of it’s just devastated Cuba. A large proportion of business and markets in America barely understand the eurozone crisis, let alone how to weather it.

Why is most of the ecnomic, financial and fiscal journalism around the globe so dire? I do realise that the near-universal use of the letters ‘MSM’ in the blogosphere is meant to convey contempt, but I’m not talking here about agendas: I’m referring to, simply, rank bad and ignorant reporting.

I’m sure many Sloggers see a plot in all this, but I doubt that: my money’s on incompetence. The Wall Street Journal, for example, is a Newscorp-owned paper, but its analysis of stuff is nearly always useful enough to add value. I did note that, two years ago, Reuters had been ‘caught’ editing evidence of peace flotilla arms out of a photo series they did on the Israeli boarding party, but then I’ve always thought the Reuters folks a little odd. And OK, fine, while Bloomberg is an Establishment-owned website, I rarely see bias beyond total acceptance of the economic system – but that’s generic too. And the FT is very europhile.

I’m referring not to ‘slant’, but rather to ill-reasoned drivel. Here is the FT’s take on the same story – spot the stupidity:

‘….the US economy is entering the new year on more solid ground. After fears that job growth had stalled over the summer, businesses have created more than 150,000 positions every month on average since September. New applications for jobless claims ticked up this week, but the four-week moving average of 375,000 is the lowest since mid-2008…’

I don’t really care if it’s the lowest since the Civil War, 375,000 welfare applications = 225,000 more than the jobs being created. The writer went on to assert that the economy ‘would struggle’ to lower the unemployment rate on that basis. Dear oh dear oh dear.

‘High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article’, is the message that always accompanies my performing cut and paste to illuminate an argument: there’s no point in nicking FT stuff, because it’s nearly always 24 hours behind the curve, and wrong. High quality global journalism does indeed require investment, FT. So invest already.

Also today – this time at Reuters – is this piece:

‘China’s factory activity shrank again December as demand at home and abroad slackened, a purchasing managers’ survey showed on Friday, reinforcing the case for pro-growth policies to underpin the world’s second-largest economy. The People’s Bank of China is widely expected to lower its requirement for the amount of cash banks must hold as reserves to let lenders inject more credit into the economy to fight headwinds from Europe’s debt crisis and sluggish U.S. demand….’

Deconstructing this, (a) China has been heading towards slower growth for over a year, an inevitable process in the light of Western recession, (b) purchasing managers’ surveys are an indication of intent, not empirical data, and (c) China Bank has been giving out clues on lower reserve requirements for three weeks.

Critiquing what’s mssing from this, (a) lowering the cash reserves required could very easily restart the property boom, (b) while this is an easy way to get liquidity into an economy, it is inflationary, and (c) no amount of liquidity can reverse a structural lack of demand.

The financial  press has emerged, since roughly 2005, as being every bit as lazy, robotic, unquestioning, ignorant, feeble and ill-informed as the mainstream. Some of the best economic and ‘money’ writing over that period has come from the Telegraph and the Mail – because they at least have some journalists prepared to say, “Hang on a minute…”. I cannot, for example, remember the last time I saw a financial scandal broken in the financial specialist press. Yet Money Mail manages it on an almost weekly basis.

Well, my FT subs renewal comes up in March, and I’m not going to renew it. Without a justification of premium, no paywall system is ever going to work. Financial sites and columnists need to up their game, if they are not to be accused of simply reporting rather than interrogating.