Journalists who make up the financial news are basically clueless. There is a saying about teachers: If you can’t do, teach. In the case of journalists, it should probably be: “If you can’t trade, become a financial journalist.” I would like to say to them, “Let me see your portfolio; how well are you doing? Not so good? Then, stop making up stuff that you don’t know what the heck you are talking about.”
Here is an example:
Every day similar headlines are posted at Yahoo Finance and other financial news sites. But you know, markets fluctuate; they may react to news and they may not. Maybe one day the market goes down just because traders are taking profits or some other thing. But most of the time I just shake my head when journalists say that there is a cause and effect relationship between events of the day and minor day to day gains or losses in the market. The equation is never that simple. Why wasn’t it yesterday’s news that the Chinese are buying $5.4 billion in Canadian natural gas interests? I can say for sure that that news is far more monumental to me as trader than the news that maybe Mubarek might resign in the next few months, maybe he won’t. How the heck does that effect me as a trader any way? Now the Chinese spending another $5.4 billion on Canadian natural gas, that affects me, and it should also have a detrimental effect on the bond market, and a lowering of confidence in the US dollar because the Chinese have made yet another decision not to buy US treasuries. Perhaps US investors see that bonds are a bad investment and have decided today to tip the balance towards stocks, in aggregate. But last I checked, the markets were down anyway, and so easing of pressure due to news of Mubarek didn’t last very long. Oh well.