Opinion – In the advent of social media and fake news, people are starting to recognize the impact that viral news stories can have in the political realm.
What is less surprising is how Internet news stories can influence financial markets. The news has always been a trigger for the general public to buy or sell stocks. However, today’s news sources are more democratized than ever, meaning that there is a fierce war being waged in publishing rooms for readers attention.
The fiercer the competition for attention, the more salacious the headlines become, and the more incentives are provided to publish stories that make enough noise to influence the markets.
Business Insider recently reported that financial news site Bloomberg has been paying some of its reporters explicitly for publishing “market-moving” stories.
This is a metric that is factored in when calculating reporters’ annual bonuses. What’s more surprising is that a Bloomberg company spokesperson admitted that the company engages this practice (though in less plain language):
“It isn’t news unless it’s true. At Bloomberg News, the most important news is actionable. That means we strive to be first to report surprises in markets that change behavior and we put a premium on reporting that reveals the biggest changes in relative value across all assets.”
So what they’re saying without is that news must be ‘true,’ but they place more value on news that moves the markets than news that doesn’t.
Well, ‘true’ can be very subjective, and if a premium is placed on market-moving stories, what’s to stop Bloomberg from stretching the truth to achieve a market moving story? Base on the spokesperson’s statement, there are no criteria for determining if an article that features nine truths and one exaggerated truth (or outright lie) can still be considered a ‘true’ article. As long as that article can move markets, it will be published.
Should there be ethical guidelines or free market?
The beauty of the Internet and free markets is that there are generally no restrictions over what type of stories can be published. In fact, there are really no restrictions placed until after the content has been published, meaning that if anyone with good or bad intentions wants to make an impact with their story, they can post it, and it could be read and copied by thousands of people before the site responsible for hosting the content decides to take it down.
Another dilemma created by the free market is a monetary incentive. In an industry like journalism, where it’s hard for anyone to make money, why should writers not pursue the opportunity to earn more than their peers by stretching the truth to produce market-moving stories?
These issues are complex and warrant a real in-depth discussion amongst those in the publishing industry about what is considered ‘good journalism.’ Ultimately, it’s up to readers to decide how to react to news stories, but in a chaotic space like crypto market, where the majority of readers are buy/sell trigger-happy retail traders, we can’t expect them to do the work of deciphering what is true or false when their hard earned money is on the line.