Is the Media Harmful to Your Wealth?

At least some of our viewers think CNBC is culpable alongside the banks, the ratings agencies and the politicians for spreading too much pessimism.

family watching tv
family watching tv

Is it true, as some claim, that we, like the mainstream media, turn every "discomfort into a crisis"? We try and take a balanced approach on every news story or piece of data.

We acknowledge the trend, rather than creating it.

We report the story and through our guest analysts, economists and strategists attempt to work out its relevance, and impact on the markets - for good or bad.

Although I do agree so much of the news flow these days appears to be on the negative side of the ledger; I can’t control the news.

And the elephant, or elephants, in the room aren't pretty! There’s the sovereign debt crisis, and French and German government attempts to limit the markets' ability to respond to reckless public spending by banning some aspects of short selling.

BP’s oil leak stands on its own as an environmental disaster – with wider implications for investors.

And the fact the US economy isn’t adding jobs quickly enough to confirm a sustainable recovery is increasing risk aversion.

These are just three of the "bad" news items that are roiling capital markets, and attempting to paint any of these as other than negative in the short term just wouldn’t be responsible.

If anything, I have some sympathy with the argument that the media didn’t get on to some of these stories quickly enough.

Surely the regulators had a responsibility to call foul when they saw loan officers lending recklessly, or ratings agencies giving triple ‘A’ ratings to debt that was anything but top quality.

And if those with legal oversight dropped the ball then surely the journalists close to the markets should have shouted from the rooftops ‘the Emperor has no clothes’! No excuses, no one was able to see the whole picture or just how many institutions were engaged in delusional activity.

The Jekyll of globalization has turned out to be just how many organizations around the world, public and private, were gorging on sub-prime debt.

Everyone has learned a harsh lesson. Too much group think and not enough of the cleansing sunlight of transparency.

But we are where we are! Certainly we don‘t want to talk ourselves into decades of austerity Japan-style – that wouldn’t be good.

But didn’t we just find out that not facing up to the bad news is part of what brought us to this.