Biz media tries to explain market drop — and fails
Mark Gimein of The Big Money writes Friday about the struggles that the business news media had on Thursday afternoon in its attempt to explain to readers and viewers what exactly was causing the stock market to drop so fast.
Gimein writes, “This is likely to turn out to be a story about a market made ever-more treacherous by traders with ever-more-powerful computers, many of them relying on ‘momentum’ strategies that buy stocks as they rise and sell them as they start falling, prepped to make massive trade.
“As the market responds ever more quickly to the noise from its own echo chamber, it becomes ever harder for the press to explain. Whatever we end up learning about the causes of the day’s slide, one lesson that is clear here is about the inadequacy of explanation machine of the business press.
“Forced to produce explanations at ever greater speed of the workings of a market that is ever harder to understand, the press ends up only amplifying the sounds in that echo chamber. That’s something you probably won’t see the press itself discuss much—and in the long run, it may be a lot more worrisome than anything else we learn in the next days.”
Read more here.