Categories: OLD Media Moves

A former Goldman Sachs banker on spotting a clueless biz reporter

An anonymous former Goldman Sachs banker has posted an item on Business Insider on how to spot a clueless financial journalist.

The ex-banker writes, “Here’s a hint for anyone who follows financial news but who has never worked  in the industry: Markets never move in response to a rating agency change.

“Never.

“Ever.

“Markets move in anticipation of news, months or weeks ahead of a change in  credit quality.  Often the ratings agencies observe a market move which  prompts a query on their part, and possibly the rating agencies often have an  inkling of the change in credit quality on their own.

“But the ratings agency review process itself also takes days or weeks.   Which, in the continuous feedback loop of world markets, may itself prompt a  market response.

“Markets are forward-looking, anticipating credit quality changes, as well as  ratings agency changes.  Markets never respond to credit ratings changes.

“Want to spot a journalist who doesn’t know what he’s talking about?

“Look at the one ascribing a market move to a rating agency change.”

Read more here.

Chris Roush

Chris Roush was the dean of the School of Communications at Quinnipiac University in Hamden, Connecticut. He was previously Walter E. Hussman Sr. Distinguished Professor in business journalism at UNC-Chapel Hill. He is a former business journalist for Bloomberg News, Businessweek, The Atlanta Journal-Constitution, The Tampa Tribune and the Sarasota Herald-Tribune. He is the author of the leading business reporting textbook "Show me the Money: Writing Business and Economics Stories for Mass Communication" and "Thinking Things Over," a biography of former Wall Street Journal editor Vermont Royster.

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