Last week we called for the abolition of “the daily market round-up story, the one purporting to explain the latest fluctuation in the marketplace vis-à-vis the collective mood of the world’s investors” — a shallow journalistic staple which, thanks to constant Web updates, “has now turned into an all-day distraction.”
For yet more evidence of the contradictory, uninformative nature of this beast, we turn to a slight variation of the genre: accounts of the twisting and turning fortunes of the dollar, as reflected in CNNMoney’s same-day coverage of Henry Paulson’s nomination to be the next Treasury secretary.
“Dollar gains on Paulson news,” said a Reuters story from London carrying a timestamp of 8:32 a.m. Eastern Tuesday and posted on the CNNMoney site.
“The dollar pared its earlier losses against major currencies Tuesday as President Bush prepares to name Goldman Sachs CEO Henry Paulson to succeed Treasury Secretary John Snow,” Reuters reported. “The dollar had gained against the euro to $1.2829 after the news. It also pared losses against sterling, the Swiss franc and the yen.”
But wait! CNNMoney’s preview of the trading day, published at 9:04 a.m., said something else entirely, warning that “Stocks looked to have a rough start to the holiday-shortened week Tuesday on a lower dollar …” Added CNNMoney: “The dollar was lower against the yen and the euro on news that U.S. Treasury Secretary John Snow will announce his resignation this morning and Goldman Sachs Chairman and CEO Henry Paulson will be named to succeed him.”
Hmmm — was Paulson’s selection good for the dollar or bad for the dollar?
At 9:57, CNNMoney voted again for “bad,” reporting that “The dollar was lower against the yen and the euro on uncertainty at the Treasury Department. Shortly before markets opened, former U.S. Treasury Secretary John Snow announced his resignation and President Bush appointed Goldman Sachs Chairman and CEO Henry Paulson as his successor.”
Got that? Good, because a CNNMoney story with a timestamp of 1:36 p.m. seemed to return to Reuters’ thesis. “In financial markets, the dollar pared early losses Tuesday after it became clear the Goldman executive was taking the job” — a vote for “good” — “only to move lower again after news that consumer confidence fell in May” — or maybe “bad.”
This particular story — a lengthy overview of the potential impact of the Paulson announcement — actually featured a fair bit of reporting and analysis, enabling it to push the broader point that even with Paulson’s qualifications and experience, “the pressure on the dollar will be a major problem facing the Treasury Secretary.”
The story referred to one economist who “said even with greater expertise in the field, he would expect the dollar to continue its recent declines under Paulson, unless there are moves to cut the federal budget deficit and the nation’s trade gap with other countries,” while another analyst “agreed that the dollar will likely be under pressure in coming years, but he thinks the decline could be slower because of Paulson’s selection.”
Ah, clarity and insight — they can be wonderful things. But they rarely last long in the helter-skelter world of financial news.
At 4:26 p.m., CNNMoney reported that bond prices had declined for the day due in part to “signs of weakness in the dollar” — namely a Fed official’s televised worries about inflation, and the fact that the dollar, well, fell a lot. “Investors also backed away from the U.S. currency-based Treasurys after the dollar posted its biggest one-day fall against the euro in six weeks, and slipped against the yen,” reported CNNMoney. Explained one analyst: “You have a number of things working together to weigh on Treasurys here and the dollar getting battered is quite a big part of it.”
What about the “uncertainty at the Treasury Department” that earlier had been blamed for the dollar’s fall? Mysteriously, CNNMoney now backed away from that assertion, stating only that “Treasury investors largely overlooked [sic] President Bush announced Henry Paulson as his choice to succeed current Treasury Secretary John Snow.”
That was CNNMoney’s story, and it darn well was sticking with it.
“There had been speculation Paulson wasn’t interested in the job and the pick came as a bit of a surprise,” the site reported at 5:48, “but [investment officer Michelle] Clayman said the choice shouldn’t rattle investors too much.”
After all was said and done, what CNNMoney could say with certainty about the greenback was this: “The dollar fell.” (Moreover, “The stock market got creamed,” and Treasury bond prices ended the day “little changed.”)
The waste of time, words and journalistic talent is beyond comprehension.
Edward B. Colby was a writer at CJR Daily.