Data Doldrums And The Futility Of Financial ‘Journalism’

On rare occasions (usually on slow Fridays and on the weekends), I’ll extricate myself from my desk chair, throw my rapidly aging MacBook into my weathered messenger bag and venture out into the real world for a couple of hours.

I always promise myself I’m going to find new spots to work from, but invariably, I always land at one of three picnic tables at what counts as a “bustling” harbor here on the island. There’s decent WiFi, which means I don’t have to burn through my phone’s data plan to connect and my generally unapproachable demeanor helps ensure that only the bravest of passersby try to engage me in conversation.

One of the most interesting things that happens to me on these brief excursions is the strange feeling I get when I juxtapose the language that we – as a community of people who write about markets, economics and finance – employ to write headlines against the backdrop of open air and real people going about their daily lives.

Friday offered a couple of particularly poignant examples in this regard. Here’s a headline from Bloomberg’s piece documenting this morning’s read on Q4 GDP in Canada: “Canadian Dollar Slumps on ‘Gruesome’ GDP and Sliding Oil Prices“.

Now, look: I get it. The Canadian economy expanded at an annualized 0.4% in the final quarter of 2018, a grievous miss versus consensus (1%). Things were made worse by the fact that somebody up there screwed up and published the data at least 26 minutes early, confusing markets. Apparently, all that separated the economy from a Q4 contraction was a buildup in inventories (inventory accumulation jumped by C$8B during the period, adding 1.53 percentage points to growth).

The loonie of course plunged. I doubt if you need me to annotate the following chart.

A slowdown was expected (Q4 was rough for crude) but the internals were bad. “It’s a much bleaker picture than anyone anticipated with weakness extending well beyond the energy sector”, Bloomberg wrote, adding that “consumption spending grew at the slowest pace in almost four years, housing fell by the most in a decade, business investment dropped sharply for a second straight quarter, and domestic demand posted its largest decline since 2015.” Obviously, this raises questions about the relative wisdom of the BoC’s policy bent and it only adds to concerns about the global economy more generally.

As I read about all of this from the harbor on Friday morning, I chuckled at the thought of what would happen were I to beckon to the next person walking by (pssst) and, when they got close enough, whisper that Q4 GDP in Canada was “gruesome” and just “all around bad” (to quote one FX strategist at TD).

In all likelihood, that theoretical civilian would have recoiled, but not because of how bad the data was – rather because the weird guy in the red Givenchy hoodie at the picnic table is whispering to random people about Canadian economic statistics.

And the same thing goes for Friday’s ISM print in the US. 54.2 was the worst read since November 2016 (or, more to the point, since the election) and represented a marked decline from 56.6 in January. It was just six months ago when the gauge was parked at its highest level in nearly a decade and a half.

I don’t even have to look to know that somebody, somewhere (whether it was a mainstream financial media outlet, a blogger, or both) characterized that as a “crash” or a “plunge” back to where we were in December – that’s relevant because if you recall, December’s print represented the worst MoM drop since October 2008.

And there were other lackluster data points on Friday (the final read on U. of Michigan missed too, for instance), that seemingly underscore the idea that the US economy continues to decelerate despite Thursday’s better-than-expected GDP read and in line with the global slowdown narrative.

But again, regular people don’t care about any of this. There is something profoundly absurd – and wholly bizarre – about squinting at a laptop screen and parsing the internals on all of the above while real people, doing real people stuff bustle about just yards from where I’m sitting.

On the rare occasions when I actually do engage in conversation with real people and they ask me what I do, my current “occupation” (if that’s what you want to call it), is wholly uninteresting for the listener. It’s only when I get into stories about my previous life or bring up broader topics that are tangentially related to what I write about in these pages that folks’ interest is piqued.

And yet we (and again, “we” refers to my membership in the community of people who write about markets, economics and finance on a daily basis), spend most of our waking hours penning stories, spinning narratives and applying bombast to every single data point that crosses the wires, in a never-ending quest to pretend like what we do has meaning.

The irony, of course, is that this data, when taken as a whole, ostensibly represents the economic reality that in many ways shapes the lives of the everyday people who only care about it when something bad enough happens that it manifests itself in outcomes dramatic enough to materially alter their quality of life.

That, in turn, gets at the heart of why it is that concepts like MMT and the policy initiatives pursued by the new breed of progressives like Alexandria Ocasio-Cortez are getting so much attention.

These are ideas with the potential to bring about real change in the lives of everyday people and, importantly, on a dramatic enough scale that if I were to reach out and grab a passerby by the arm and strike up a conversation about it, that person wouldn’t question whether I might be unhinged as they would were I to start talking about a disappointing read on Canadian GDP or the worst ISM print stateside since the election.

A testament to all of this was a conversation I had recently over Twitter DMs with a reasonably well-known financial journalist. As much time as I spend poring over sellside notes and delivering long-winded, overwrought takes on anything and everything market related, you’d think the most engaging discussions I would have with journalists and analysts would center on markets – even if only for them to disagree with what I write. But what captivated this particular journo was my take on the misappropriation of the word “hustle” in a New York Times article called “Why Are Young People Pretending to Love Work?“

The overarching question in all of this is whether financial journalism has devolved into little more than an effort to see who can sensationalize things that nobody outside of a very small circle actually cares about.

Nobody worry, though. The apparent futility in documenting every twist and turn in the incoming data isn’t going to stop me from doing it everyday.

But maybe it should. After all, it wasn’t “markets” (in the sense that we talk about them here, anyway) that bought me this Givenchy hoodie.