The Economist reports that a study released from Irish researchers shows that financial reporters covering the stock market tend to use more similar words in their stories as the market rises.
A story states, “The researchers looked at thousands of articles from the Financial Times, the New York Times and the BBC that were published over a four-year period starting in 2006. They found that journalists’ language became less diverse when stockmarkets were rising, with certain common nouns and verbs like ‘rise,’ ‘fall,’ ‘close’ and ‘gain’ becoming more common still. Like investors, journalists move in a herd when markets are frothy.
“Oddly, the same does not apply when markets are falling: then, journalists’ language becomes less homogenous. The authors have no real explanation for this, although Mr Keane echoes a suitably well-worn Tolstoy quote to surmise: ‘Maybe it’s a bit like happy families are all happy in the same way, but unhappy families are unhappy in many different ways.’ A run-up in markets focuses on a few companies, indices and events, in other words; a crash sends waves of disparate, dismal stories through the economy. Perhaps. Or it may just be that when the consensus fractures, language does, too.”
