Aug 022011
 
Daily fluctuations of the stock market get high exposure in the US - Why?

One thing I noticed when I moved to the US – and to a lesser extend  when I moved to Australia – was the consistent presence of share market information in the mainstream news in both radio and TV.

Who cares if the Dow Jones Index is up or down a few percent every day? Or any particular stock for that matter? Yes, there are people who trade shares short-term – so-called day traders. It matters to them, a lot. However, these are 0.00..% of the population and they surely do not need the hourly news to know about it.

So why is it even if the news  are only  a  few minutes long, that the daily stock market noise is told to an audience that is not at all affected by it?

I traded shares myself at that time but not daily – I kept positions for weeks typically and sell stops and email/text notifications are in place to automatically respond to anything important. If they really wanted to inform they would show weekly or monthly trends. The daily ups and downs of a stock or the index only annoyed me as I tried hard not to let daily noise  affect my decisions. Perhaps the purpose is to trigger knee-jerk reactions of small traders?  Successful traders know that they need to remove emotions and stick to their tested system no matter what.

Daily fluctuations of the stock market get high exposure in the US - Why?

Daily fluctuations of the stock market are irrelevant to 99% of the viewers but still get free exposure (worth millions of USD) in US mainstream media - Why?

So why do some media throw this useless information at us, every hour, every day?
Why are they showing daily changes of certain stocks in distracting moving banners (tickers) often covering a the top quarter  of the hourly/daily news screen?

The answer is so obvious that I could not see it  first until I asked my wife. She spontaneously  replied: “Perhaps to advertise the share market.”

Bingo! Now that makes more sense than the media sacrificing expensive on-air-seconds for info that is useless to the viewers/listeners.

Obviously it is not useless for the stock market itself.  It is promoting itself. Which CEO  would not  want to occupy this little corner in the screen with his company logo – for free?

By showing the Dow Jones index the entire US share market itself benefits and with it all the major players that rely on it – or are involved. Such frequent exposure on a popular news channel surely makes most people believe that share market is important. Certainly those selected stocks in the eye-catching moving banners are really important.
So who benefits from the free ads? Banks, investment firms, companies floating and  companies who want to float on the stock exchange. In  other words: all companies. Of course this includes the lucrative media business itself.

Even in the business news, hardly interesting daily noise (but effective advertising) dominates the screen

Free irrelevant stock info in regular CNN news

Various shares get free moving advertising space.

Not surprisingly, it seems only mainstream (corporate) news media do that and more so in the US and to a smaller extend Australia and perhaps the UK. I have seen nothing like this  in  other European or South American countries.

Non-corporate media would have no reason to bore/distract their readers with irrelevant noise. Perhaps we have found a quick indicator who reveals the kind of media  we are listening to without needing to research who owns them.

Advertising of the share market is also essential to keep it functioning. Without it  – where would all the gains come from that the big players need for their growth?

An attractive share-market requires legions of individual traders who believe, despite their limited and slow access to information or computing resources,  they could get at least a small chunk of the profits or even carve a decent living conveniently working from home.

To my knowledge, in real life, private traders and casual short-term investors  are the ones who are more likely to lose money. Trading is a zero sum game.There need to be thousands of smaller trading losers to supply the few big players with their gains.

I like to see this otherwise annoying information (daily stock index changes and banners) as a reminder that the highest priority of this information source is to serve first its advertisers and investors and then the customers. It makes it easier to stick to more customer oriented news sources and watch these corrupted channels mainly out of  “zoological” interest. What a waste of human and technological resources many media are. Yet they often make lots of money and are surprisingly popular.

Of course, after many years of this kind of exposure, many of us find it normal and might even miss those numbers if they disappeared e.g. when traveling  to another country. Generally useful? I doubt it.
Advertising consumption, spending, share trading and the continuous-growth-is-healthy myth? Certainly, but also more likely a natural consequence of extreme corporatism rather than a conspiracy by a few media moguls.

Strange things humans do.

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