USA Today’s third-rate clickbait

Trolling for pageviews à la Business Insider, but without the panache

What happens when America’s Newspaper tries to go Business Insider?

Something like this:

That’s the America’s Markets section of USA Today’s website, which puts business journalism on the Hamster Wheel—I counted 12 bylines in one day from one reporter—with predictably poor results.

Like this headline:

Is a 1987-type market crash 37 days away?

Betteridge’s Law says if a headline is framed as a question, the answer is always “no.” As it is here. This is Newsmax-level clickbait:

If it does, the market could be in some serious trouble in 37 trading days. In 37 trading days, the ongoing bull market would be 1,311 trading days old, says Jim Paulsen of Wells Capital Management. That is a scary date because it was on the 1,311 trading day after the start of the 1982 bull market that the Standard & Poor’s 500 suffered its biggest one-day crash in history on Oct. 19, 1987. That crash snuffed out what had been a powerful market rally starting in 1982.

USA Today might as well run a story breathlessly touting an astrologer’s predictions on the stock market, and then stuff the “to be sure” at the bottom, as the paper does here.

But the paper has a thing for spurious correlations in the stock market. See this story headlined, “Stock rebound could hinge on ‘Turnaround Tuesday’”:

Stocks rose Monday, putting its worst week since June 2012 behind it, at least for a day.

Next up: Tuesday. And that has a certain bullish ring to it.

Here’s why: Tuesday is the only trading day of the week in 2014 that has posted average gains, with the Standard & Poor’s 500 rallying and closing higher on 12 of 14 Tuesdays this year, according to data compiled by Bespoke Investment Group.

This is statistical noise, or as USA Today itself put it back in 2006, when it wasn’t in such a race for cheap clicks: “while some days may outperform others periodically, there’s really nothing to attribute this to, other than chance. And I wouldn’t bet my portfolio on that.”

Here’s another one, this time on personal finance:

Ask Matt: To live well in old age, invest $82.28 a day

This kind of short, context-light personal finance advice is worse than useless. It makes it harder for people to figure out what they really need to do. And it’s not what USA Today suggests.

First, there are very few Americans who can save $30,000 a year for retirement. The median household income is $51,000, which would require a savings rate of 60 percent. There aren’t many households making three times that much that can save $30,000 annually. That would be more than a quarter of their after-tax income.

Investors might be surprised to hear that for the average, typical person making a number of back-of-the-envelope assumptions, $82.28 a day may be what you should be shooting for, based on an analysis done for USA TODAY by investment management firm T. Rowe Price. If you save $82 a day and invest it in a fairly aggressive but not crazy portfolio, in 30 years you could amass enough wealth to generate the U.S. average household income for 30 years, even after adjusted for inflation

The “average, typical person” gets and will get more than half their retirement income from Social Security, two words USA Today doesn’t mention. The average benefit is about $15,500 a year, and retired households need much less money than younger households—80 percent is the rule of thumb. The upshot: $82.28 a day, fortunately, is way too high.

Plus, USA Today says you could continue investing that same $82.28 a day for 30 years, despite inflation. It would be great if everybody could save a bunch of money early in their careers to take advantage of the glories of compound interest. But in the real world it doesn’t work like that. People tend to make much less money early in their careers than they do as in their later years. They’re able to save more later, which is why it’s nuts to suggest that the average 25 or 30 year old with kids needs to save far more in real terms than they will when they’re 45 or 50.

This is just bad financial advice. But it sure makes a good headline.

That failure is compounded by this piece:

Report: 85% of pensions could fail in 30 years

USA Today gives all of 247 words to this apocalyptic story, based on outlandish assertions by a hedge-fund billionaire trying to gin up pension-fund investments. But that was enough to spread it far and wide on the internet, mostly in the right-wing swamps:

You might have thought your public pension was on shaky ground, but you’re likely still being too kind.

Influential and well-regarded hedge fund Bridgewater Associates Wednesday warns public pensions are likely to achieve 4% returns on their assets, or worse. If Bridgewater is right, that means 85% of public pension funds will be going bankrupt in three decades.

Better get to saving that $82.28 a day!

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,