Much is being written about the electronic media?s controversial coverage of the Mumbai terror attacks. That debate is confined to the coduct of mainstream news channels. But what about the quality of coverage and analysis offered by business channels on the global financial crisis.? ?
The global financial turmoil is a complex crisis. Consider the coverage on Indian business channels. For example, the coverage of the economic stimulus package announced over the weekend. Over an hour before the Reserve Bank of India?s monetary package became public last Saturday, one channel had already started loudly flashing ?Breaking News?. The news detail was simply that RBI may cut rates. Shouldn?t the slug then have said ?news about to break??
Flip channel?barely seconds after the RBI governor?s speech, an eminent anchor asked the standby analyst to fork out his fresh growth forecast for the economy. He stutters but holds on to his view of 7-7.5% growth.
The anchor gushes in response, ?So it looks like Indian economy may escape with minor injuries in the next two quarters especially since the transport, hotels and restaurants sectors are still doing well and manufacturing doesn?t have a very high contribution to the GDP!?
Obviously, no one on the network read Subbarao?s speech where he somberly noted that the services sector, ?our prime growth engine for the last five years?, is slowing, ?mainly in construction, transport and ?communication, trade, hotels and restaurants.?
About 28 hours later on the same channel, the anchor?s hopes for ?two quarters of minor injuries? are dashed during a ?cutting edge analysis? of the fiscal stimulus package. Asked how long the global pain will hurt the economy, a member of the PM?s economic advisory council tells her, ?At least for the next two quarters, it will hurt very badly.?
Stimulus packages are rare but the stock markets move everyday. ?Thousands of anxious investors wracked by the global tumult interrupting India?s dream bull run rely on television for gauging the market?s direction, often putting their own money in peril.
On November 21, before Dalal Street opened, anchors spooked viewers about how badly stocks would fare that day as the US markets had tanked. The Indian market soared by almost 500 points that Friday?the anchors did an about-turn from their fear-mongering the minute stocks opened higher.
The next day, Sebi chairman CB Bhave found himself being ?moderated? by one prominent market anchor while addressing an audience in the capital. Grabbing the chance, Bhave openly chided the anchor and his peers for their Friday fiasco, stressing that in hindsight, anyone can rationalise and argue why events turned the way they did.
Terror breeds fear. Markets breed and thrive on fear and greed. But Indian market anchors (unlike their US peers) consider it their job to embody the fear or greed at the bourses, smiling gleefully on bullish days and reeking of pessimism on bad days. ?
When even the best minds profess zero visibility about the direction of the world economy, it would be na?ve for investors to believe the broker or fund manager on TV on face value. Even if they believe the markets would tank or rise, it?s in their interest to have the masses believe the opposite?so they find enough suckers entering the market on its way down or dumping good stocks cheap.
In a 2002 book, Merrill Lynch chief investment strategist Richard Bernstein called websites and TV channels unleashing a 24X7 barrage of financial information as ?noise merchants.? Smart investors tune out the noise and focus on the basics?find a good company and invest for the long run, not just the next two quarters.
It?s not easy to see through the noise merchants, especially as some are armed with accolades and awards.
??
vikas.dhoot@expressindia.com