Clueless in the Capital

Tuesday 11th July 2000

With the event will come the usual brand of newspaper headlines and analyses produced by das capital's business journalists.

Unlike their counterparts elsewhere, Wellington business writers enjoy something of a privileged position when it comes to political influence. Visitors to the parliamentary peanut gallery can see it for themselves. There, during any given debate, one looks down on a sea of MPs' heads buried in the day's edition of the Evening Post and Dominion, invariably opened to the business news or political pages.

But what exactly are they being told? The answer is not very much, at least if the articles accompanying the last "crash" were anything to go by.

In the United States, press coverage given to the losses recorded in mid-April by the Dow and Nasdaq - which dropped 616 and 355 points respectively, their largest-ever one-day loss - was generally sober and well informed. Journalists assessed the event's overall significance (not much, by common assent) and attempted to predict its long-term consequences (ditto). They explained that the fall stemmed primarily from the country's Labour Department's report of a larger than expected increase in the consumer price index.

More importantly, they reassured readers of the basically good news studded in the market's temporary slowdown: that it might give the Fed the economic breather it has been hoping for since last year; that Treasury and bond markets have benefited enormously from the recent sell-off; and, while investors did indeed dump many individual high-tech stocks, they continue to pour unprecedented amounts of money into America's mutual funds.

A few days later, as if to confirm the tone of the stateside commentary, both the Dow and Nasdaq bounced back into life, surging ahead with historic gains along with all of their old momentum.

Where were das capital's business writers during all of this? Auditioning for the next Oliver Stone movie, if the following wrap-up is a reliable guide.

April 15: "Bloodbath on Wall Street" screams the Evening Post's front page lead, noting that the one-day losses in America were greater than those in October 1987, which heralded New Zealand's own stock market crash. True enough, of course, but isn't it also true that the overall position of Wall Street remains more than 30% higher than a year earlier? No matter, writes Dean Bedford, "with the illness spreading to every industry now, New Zealand is bound to catch a cold too".

April 17: "Don't panic" offers the Dominion headline writer, although the accompanying article gives no reason why readers shouldn't. The world's markets "teeter" while investors "brace for shock waves" and the overall state of the financial world is "frightening". Still no real explanation of what's happening and where its silver linings are to be found. The Evening Post leads its own front-page report with the entertaining but quite useless line: "Sell! Sell! Sell!"

April 18: Another day, another bag of melodramatic metaphors. Dominion writer Roeland van den Bergh - an old hand at this kind of thing - writes of meltdowns, hammerings, bloodied noses, fearful plunges and the fact that the share market hasn't been this low since, er, well, the beginning of March. By lunchtime, when the full recovery of the overseas markets is obvious to anyone living outside of Wellington, the Evening Post's Frances Martin asks, again in the front-page lead, "Is it a recovery or a dead-cat bounce?" Apparently the latter, in the journalist's opinion, who confidently warns of prices rallying slightly "before tumbling again even more savagely".

April 19: Volte face! The Nasdaq has gained more than 7% overnight, its second biggest-ever percentage rise and biggest-ever single-day points rise. The crisis, if there ever was one, is finished, and so, too, is the clueless coverage in both the Dominion and the Post, except for the latter's small story stuffed in the business section and headlined, More Than A Dead-Cat Bounce. Still, the piece warns that the "crushing losses" of the previous week plainly mean that it is "premature to assume the worst is over".

But not, perhaps, too premature to make a judgement on the general level of economic literacy among Wellington business journalists?

Kate Wrath is a Wellington gossip. Natter with her at katewrath@yahoo.com

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