“The whole tidy ecosystem of cause and effect — the belief that there is something rational and meritocratic about high finance — has burned away along with the billions of dollars spent to bail out its chief practitioners. When the reporter on the radio says, “Stocks were down 2 percent on news that the jobless figures were worse than expected,” is there any reason to believe him?
“The headline that you will never hear is ‘The market was down 110 points, a random fluctuation in a very complex system,'” said Eric Schurenberg, the former managing editor of Money magazine who is busy building — get this — a financial Web site for CBS. “No one has ever known what was going to happen, but there is this temptation to act like you did. But that fantasy has been exploded.”
To engage their audience, business journalists need to act like things are changing all the time. As it turned out, what didn’t change much was the fundamental lessons: have a diversified portfolio, don’t buy more house than you can afford, don’t take on more debt than you can support, or trade on the margin.
But that’s not what we want to hear from the experts. “You aren’t doing your job right if you don’t have an in-box full of hate mail,” said one financial columnist who didn’t want to be identified. In this market, who does?
What he said.
Bonus link: Also in the NYT today, a round-up of New York-focused economists peer into their crystal balls and predict everything from something worse than the Great Depression to a point of view that New York is much better prepared for this recession than those that hit the city especially hard in the 70s and 80s. In other words, you might as well not read it.