Beholden to trading terminals – the financial news bias
Here’s a little discussed flaw in financial journalism – an area of journalism with the chutzpah to consider itself to be above having a news-skewing bias.
And it is this: if your news service is tied to a trading terminal, you are beholden to the type of journalism that provides value for traders. And value for traders is a simple equation built on increased volumes and increased spreads.
So you go for the market mover EVERY TIME. No matter if it is there or not. No matter if the calm investment story is more compelling than the dramatic trading story. And you make it as market moving as you can. Drama trumps news judgment.
And to make matters worse, you have to beat your competitors for price-moving drama. Because what kind of newswire are you if your competitor offers bigger price movements for their traders than you give yours?
Today I attended the briefing at which bank PKO BP announced the debut of its Eurobond issue on the WSE’s Catalyst bond market. With nothing to offer their traders on that that topic (Sadly, nobody trades on the still-infant bond market), the trader terminal agency journalists offered a question on Q4 earnings, a would-be price mover.
Coverage by Bloomberg:
*PKO BANK `HOPES’ TO MATCH 3Q NET INCOME IN 4Q, PAPIERSKI SAYS
2011-11-22 10:15:55.593 GMTPapierski Says PKO May Match Third Quarter Net Income in Fourth
2011-11-22 10:19:53.714 GMTNov. 22 (Bloomberg) — PKO Bank Polski SA, Poland’s largest lender, “hopes” its fourth-quarter net income will match the result in the third quarter, Deputy Chief Executive Officer Jakub Papierski told reporters today in Warsaw.
Coverage by Reuters as I found it online:
WARSZAWA, 22 listopada (Reuters) – Bank PKO BP SA liczy, że w czwartym kwartale 2011 roku uda mu się wypracować miliard złotych zysku netto, powiedział we wtorek wiceprezes banku Jakub Papierski.
“Chcemy się rozwijać. Miejmy nadzieję, że tak” – powiedział dziennikarzom zapytany o miliard złotych zysku w ostatnim kwartale tego roku.
W trzecim kwartale zysk netto PKO BP po raz pierwszy w historii przebił poziom jednego miliarda złotych, a w okresie styczeń-wrzesień bank zarobił na czysto 2,86 miliarda złotych.
Or, as I found a paragraph in an English language Rueters version, with interesting grammar:
He also added that the bank hopes that its net profit this year would surpass 1 billion zlotys for the second consecutive quarter in the last three months of the year.
Here is the story as I saw it and reread it from my notes:
Asked by journalists at the end of a long Q&A session on the sidelines of a Tuesday briefing if his bank can repeat Q3 earnings in the current quarter, VP Jakub Papierski visibly waved off the question, using it as his excuse to break away from agency reporters in favor of a TV appearance.
“We always try to grow and develop,” Papierski said to end the chat. “We hope to keep growing.”
As I understand it, the PKO BP press office is currently working over what type of correction to possibly demand.
My sympathies. It will be hard to demand the correction that says Papierski doesn’t hope for such earnings in Q4. Such a correction would, however, get dramatic bold headlines in the services. The correction claiming that he just didn’t say that, however, can’t be traded and might fall on deaf ears.
More later.
