Newsletter – June / July 2006 – The Day the Reporter Called Me

The Day the Reporter Called Me

Newspaper reporters are an interesting lot. Their job often is to make something that is really boring sound like something that is really interesting.

What a difficult job!

In late May, a financial reporter called me to ask how I interpreted the sharp decline that had just occurred in the stock market: Was this the beginning of a big down turn, or just a small correction within an up trend? Interesting question: financial reporters love to entertain their readers with brilliant quotations from eccentric experts. Then they add their own spin, and cook up an intellectually tantalizing morsel of financial journalism. Fun, fun, fun.

One expert said he thought it was the beginning of the end because interest rates were going up, the central bank was tightening, and all this was going to cool off the economy and the stock market. The next expert said it was merely a correction in an on-going bull market because demand was so strong. The Chinese demand for base metals was so strong. The American demand for oil and gas was so strong. And the central banks of the world were about to buy tons and tons of gold: the demand for precious metals would continue to be strong. And with all this demand, stock prices were going even higher.