Everybody leads with yesterday’s big DOWnturn. The headlines at USA Today, the New York Times, and the Washington Post all mention that the action erased the Dow’s gains for the year. The Los Angeles Times headline omits that detail in favor of mentioning that high-tech stocks got hit hard. The papers scrupulously avoid the term “crash” and all point out that despite the big raw numbers, in percentage terms, there have been many far worse days. For instance, right away in its story, the NYT notes Monday’s Dow drop was 6.4 percent, whereas the October 1987 crash was a one-day plunge of 22.6 percent.
The papers note that compared to 1987, the markets, although for the moment pessimistic, appeared to remain orderly. And everyone finds it easy to produce individual investors who are not pulling out, and others who are even buying. But basically, the coverage follows the usual pattern: There’s the numbers. There’s the quotes from institutional traders–the NYT has a Merrill Lynch “analyst” saying, “It may be that we are reaching a temporary climax,” but adds that he also said the market was just as likely to stumble further. And from man-in-the-street investors–the LAT has a guy saying that “certain stocks will retain their value. I think the market in general is headed much lower.”
All this cookie-cutting means that certain perennial basic questions don’t get answered. For instance, when papers like the NYT refer to “waves of selling,” they make it seem like there were no buyers. But wouldn’t there have to be for these trades to occur? So why not call this waves of buying? And although there’s a fair amount of discussion about who’s selling, there’s comparatively little about who’s buying–why? Also, although there is some mention of the role computerized trading played in the recent intense action, there’s not much discussion of how such trading differs nowadays from say, the 1987 crash in which it was considered a prime culprit. Are there “circuit breakers” on the books now or not? Today’s papers don’t say.
And it’s bad enough that the papers are full of content-free quotes from the “experts,” but why is it that the experts’ own agendas are rarely mentioned? For instance, in recent times the doyenne of Wall St. expert-talk seems to be Goldman Sachs’ Abby Joseph Cohen, quoted in USAT as saying, “We find very little reason to think stock prices should have declined in the manner in which they did,” and described by the paper as “Wall St.’s pre-eminent bull.” Today’s Post quotes her as calling the current correction “overdone.” But the papers don’t note that Cohen has strong personal reasons to encourage bullishness–namely, Goldman Sachs is about to go public. When Paul Begala or James Carville are quoted in political stories, their spin is always noted. Why don’t financial sources routinely get the same treatment?
One informative bit only the Wall Street Journal has is that CEOs who took a big part of their 1997 compensation in stock options are getting clobbered: The CEO of Mattel has sustained paper losses of $24 million, for instance, the CEOs of Kodak and Oracle nearly as much. We also learn via the paper’s “Work Week” that the new CEO of Sunbeam has been so busy this summer that “I signed up for race-car driving, and I canceled that; I was supposed to play a lot of golf, and I haven’t picked up a golf club all summer.” And the wife of Aetna’s CEO had to, sniff, go on a South America jaunt alone.
The fronts at USAT and LAT report North Korea’s test-firing of a ballistic missile Monday, a test which sent the missile’s second stage clear across Japan and displayed a far greater range than was previously attributed to it. The story runs inside at the WP and NYT.
A story on the LAT front reports further on the increasing difficulties with U.S. intelligence’s explanation for why that Sudanese plant must have been producing components for nerve gas (difficulties first broached last week by the NYT). According to the LAT, German and British officials have quietly expressed the belief that possibly pharmaceutical products were made there. An American chemical expert at Los Alamos is also quoted by name supporting that view. Another American arms expert is quoted saying the current administration account of the evidence is “untenable.” Surprisingly, no mention has been made in the coverage of an eerily similar episode from the Gulf war–the strike against the Baghdad chemical weapons-slash-milk factory.
The letters section of the WP contains a missive from former CIA terrorism official and current TV terrorism expert Vincent Cannistraro. He writes because a recent Post article stated he was aware of intercepted electronic communications regarding Osama bin Laden. Cannistraro denies this, saying he is “not aware of the specific nature of any intelligence information the U.S. intelligence community has” on bin Laden’s role in the recent attacks. You can see why Cannistraro was moved to write this. He makes a nice piece of change from being on TV appearing to know highly cool current spook stuff, but of course, it would be illegal if he did, much less if he spoke about it on TV.
