"If you don't read the newspaper you are uninformed, if you do read the newspaper you are misinformed." - Mark Twain
Monday was a tough day for the financial press, as most volatile days are. These headlines are from AP (via Yahoo.com) after the mid-day reversal:
Which is it? Did "Housing Woes Buoy Wall Street" or did "Weak Housing Market Scares Away Buyers"? Neither, market activity created both stories, and it's a sure bet that housing data had nothing to do with Monday's market action.
The financial reporters have it backwards, and run around finding reasons why the market is up or down. They feel compelled to match a news story to market activity.
AP/Yahoo are not alone. Television and radio carry similar stories, and embellish them with bylines like "everything you need to know" or "we'll tell you why."
Reporters should stick to reporting - report market action, and report the news, but don't credit a popular story with creating the market.
I wonder what Mark Twain would think of the internet?