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Comment by mmastrac | Hacker News Reader

Event 1 as story 2 happens. This always drives me nuts about financial reporting.

Recently I saw a WSJ article where they surprisingly couldn't find a story 2, and so it said something like: stock prices decline as investors sell risky assets

Which is almost a tautology, so idunno, maybe that's better than the usual thing, but then scroll down the article and it says bond prices were also down as investors also sold their less risky assets

There were an equal number of investors how bought those risky assets, albeit at a lower price than the day before.

I don't have a problem with that part, calling something a sell off, or a buying frenzy. It's used to mean increased/decreased demand, nothing about the number of individual investors (which isn't necessarily equal, btw, but it's not a part of the meaning of the phrase.)

Yes, it's a dark pattern in journalism. They hint at causation while having plausible deniability. Used to bother me too when I checked Yahoo Finance, every other day the market would be up/down "as" whatever happened that day that might have anything to do with the economy.

To be fair, it's usually pretty hard to say why stock prices change. Even with hindsight.

Mostly because anticipation is so important.

So: absent proof don't say anything.

Saying nothing doesn't sell ads and subscriptions.

something something incentives....

The thing I learn early in my career when I was working in finance was that research analysts are pretty useless. There are too many factors that go into why a stock goes up and down including unknown parties executing large trades for their corporate strategy. I used to joke the weatherman has better predictions because at least he has a satellite. There are simply too many parties trading to truly know.

My rule of thumb is that at least 50% of a financial headline is true. The up/down part is safe to assume as true (at least at the time of publication), and the “because of” part is almost always complete conjecture.

Now the drop seemed to happen at 2:45am UTC. Is that when the government seizure was revealed? That might give weight to a causal explanation.

If I had to guess, a better explanation might be that there is going to be downward pressure and regular dips of the prices of cryptocurrencies at least til fall as the covid stimulus programs wind down making less cash available for speculation and as things reopen providing more other places to spend money.

The news business makes no money if there isn't any news. And financial news has a high value audience for advertisers, so there's huge incentives to create drama where it may not exist.

Much harder to get clicks if your headlines are accurate. This would have to be the headline on most days:

"Millions of People Bought/Sold for Thousands of Competing Reasons Again Today, Short Term Randomness Continues"

Would anybody upvote that article on hacker news?

Literally the definition of post hoc ergo propter hoc.

https://en.wikipedia.org/wiki/Post_hoc_ergo_propter_hoc

All news must be in the format of a 'story'.

Not just financial reporting. "Portland burns as Trump golfs" type stories were super common as well over the past 4 years or even "Politician X does Y as covid cases rise" if media wanted to throw shade on Politician X last year

And Portland was never burning to begin with. At least Trump was actually golfing, so there's that.

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