Reporting stock market changes after tragedies

I don’t know whether this is a common occurence in other parts of the world, but watching my local news reports tonight that headlined the London terrorist attacks, it amazed me that it was followed immediately by the stock and economic indicator changes.

Like, it’s all very well that people have died, but let’s now get to the IMPORTANT news…how rich or poor we are going to be after this tragic event. :confused:

I didn’t put this in the pit, 'cos I wasn’t sure if it is really pitworthy, or whether I should be really upset or whether the rest of the world is actually waiting to find out how bad things are before they ring their stockbroker to trade shares.

I just don’t get it.

Can someone put my poor confused soul at rest here? Is it THAT necessary to report on the financial effects of a major attack while people are still possibly dying in hospital?

I know what you mean. I have to wonder what a strange system we’ve put together here… when traders are thinking, “Oh, my God! People are dead! I could lose money on this!”

I don’t blame them, exactly, because that’s the way the system works. But it does make me wonder what sort of creatures human beings are, that we not only constructed this system but thrive under it…

i don’t blame them either flodnak, and I’m sure that people who rely on their investments to survive are keen to know about world affairs in order to capitalize on opportunities.

I’m more concerned about the local news reports describing the changes in the market and the economic effect upon stocks after such a tragedy. I’m sure most of the viewers of such TV are not immediately affected by the ups and downs in the market, and (to me and you at least) it seems like a gross trivialisation of the devastating events that have transpired. If someone relies on the telly to tell them whether they are rich or poor, I reckon they should go stick their head in a dunny.

Meh. Thirty-seven dead in London, but Media-Corp shares are up 4.5%. All is not lost folks?? :rolleyes:

The newscasters are very concerned about their portfolios.

What, would you prefer them to spend the entire newscast with filler about London? I’d much prefer that they cover real news than listen to talking heads repeating the same information over and over again(which is generally that they don’t really know anything yet).

:rolleyes:
You know, generally the newscast has the important news first, and then the less critical stuff. That’s why sports news usually comes at the end of the broadcast.

I find it strange that our economy is heavily tied to the actions of a bunch of Chicken Little lemmings. Wall Street is just a frickin’ casino.

I was one of those people who waiting to hear what affect the attacks had on the London markets. And not because of my own personal portfolio, but part of the goal of these attacks is to hurt other countries financially. I was holding my breath, hoping their market wouldn’t drop, meaning the attack didn’t cause as much harm as the terrorists would have hoped.

As it turned out, the overseas markets didn’t take a big hit like they might have. So the reports on the markets were good news.

So to me it wasn’t that reporting of the markets trivialized the deaths. The causualties and fatalities were one set of victims that were targeted. I am sure the terrorists were hoping to inflict damage on the financial structure of England, and could claim another set of victims.

What else would an economy would be tied to, but the actions of the humans who comprise it? The stars?

Terrorism is murder on the economy. People worried about being attacked spend less money, go on fewer trips, and generally take fewer financial risks. Businesses and governments are forced to spend more money on security. Investors are more stingy with their cash. Companies are less likely to launch new projects.

I don’t see what’s strange about it.

Of course, humans, but why not base it on real value rather than speculative value. Why should those people be the arbiters of success in our economy? They (and their customers) encourage negative behavior in companies. Why is this valuable?

And you know what, I think the economic effects of terrorist attacks are more important news than whatever the death toll is. People die every day: almost 2.5 million people in the US alone died last year. Even the 3000 or so people killed by the 9/11 attacks are merely drops in the bucket compared to how many die every day from cancer, car accidents, heart disease, and so forth. The attacks were horrific, barbaric, tragic, and all that, but they didn’t directly affect 99% of the population.

On the other hand, nearly everyone in the US was touched by the economic slowdown that the attacks produced. The potential economic effects of any disaster are a lot more relevant to me than human interest stories on people who were killed or injured. What am I supposed to do, cry about it? Millions of people die every day, often in horrific and violent ways. What’s so special about the fifty or so people who had the dubious distinction of being killed by a terrorist bombing? It may sound cruel and uncaring, but people killed by terrorists aren’t any more deserving of my sympathy the hundreds of thousands of children dying of starvation in Africa, who you only hear about on late-night commercials on PBS.

There’s nothing unique or especially newsworthy about people dying. What is newsworthy is a terrorist attack that has the potential to cripple the economy. Hell, the only reason it’s worth reporting the death count from these attacks at all is because that’s an indicator of their severity, and their severity is what affects the economy.

News on the stock market and economic indicators is far more relevant than morbidly harping on the death count, because the response of the stock market is a good prediction of what the response of the economy will be (or at least, the best we have available). Even if you don’t own any shares directly, if there’s an attack and the market tanks, you will most definitely feel it. Economic news is not solely relevant to fat capitalist pigs who greedily clutch their stock portfolios.

I read an article lately about how US culture is turning mourning into a recreational activity. I wish I could find the link, because I think it’s absolutely correct.

I’m confused, who are “those people” that you’re talking about?

Are you talking about stockholders when you say “Chicken Little lemmings”? If so, I don’t understand your complaint. Investment is the driving force behind pretty much all economic growth in this country, and really in any free market. That’s the way things have been for centuries, if not millenia. If investors get nervous and are stingier with their cash, growth slows.

It’s not that the economy is tied to the stock market - they’re just similarly affected by the same factors.

Someone mentioned “reporting on economic news” in the pit thread.

This is basically what I said: I don’t know any of the 40 people dead. I do own stocks.

The news isn’t a funeral home running a wake for grieving visitors. They report news.

40 people dead in a bombing is an event. How does that event affect me personally? Through my investments.

Whether it’s a hurricane, a terrorist attack, a war, or the Superbowl, one aspect of the story is always the economic impact.

I’m talking about stock traders and their customers both. They are ridiculously hair-triggered in their approach. Look at what happened yesterday. Stocks dropped due to the news. Now today, they’re doing just fine. So, did everything get all better between yesterday and today? Was it really that bad yesterday, financially? The companies that lost “value”, did their bottom line actually change that day? No, the idiots are just too quick to sell at the slightest hiccup. They were wrong. Smart people stepped in and took advantage of this gift from the idiots who think the sky had fallen, bought the undervalued stocks and are probably sitting pretty.

That’s easy for you to say, since we now know that the attack will pretty much be shrugged off (economically speaking). But yesterday, it wasn’t that clear. Stock traders and mutual fund managers sold some of their holdings in vulnerable stocks just to hedge their bets in case the market didn’t recover, but instead spiralled downwards. It would be just as easy to call them idiots if the market crashed and they missed their opportunity to sell early. And besides, would you like the person who manages your money to say “Terrorism! Bah, who gives a shit! Do nothing, it’ll all work out.” That would be a special kind of stupid.

Hindsight is 20/20, especially when it’s coming from the peanut gallery.

And I would hardly call that attack a “slight hiccup”.

This statement is astoundingly naïve.

No. Naive is accepting something unquestioningly.

Absolute

I don’t expect them to be perfect, but real people lose real money due to their mistakes and it happens all the time for things less significant than a bombing.

Hey, I’m not trying to run down the foundations of capitalism or anything, I just think our agents have a hair trigger, and there are negative consequences as a result.

Yes. Naivity is “characterized by a lack of sophistication and critical judgement” typically from a lack of experience with the subject (whether you lack experience or just didn’t learn from your experience, I can’t say).

To suggest that a stock price shouldn’t be based on speculative value doesn’t even make sense.

I concede that speculation is how it’s done; a necessary evil, however, when reality doesn’t bear out the speculation and the speculation encourages negative behavior, we should be looking hard at improving this discrepancy.

Not exactly. The very fact that you consider this a mistake is an indication of what your problem is.

In this case, they heard news of the terrorist attack, and so they sold some of their holdings in order to minimize their losses if the shit really hit the fan. This was not a mistake. They did it on purpose. The goal was to minimize the risk to them and their customers. Once things began to settle down and the situation became more clear, they probably put the money back in the market. Sure, it may have cost them some money, but they traded that money for a decrease in risk.

Let’s look at this alternative scenario. They hear news of the attack, and they do nothing. It turns out that dirty bombs were set off, not ordinary explosives. All of London will be uninhabitable for sixty years. The market tanks. Their customers lose more money than they should’ve, because they made a mistake and did not take preemptive action to minimize their risks.

Are you the type of person who, after going a year without getting in a car accident, says “What a mistake it was to pay for car insurance all year, I didn’t use it once!” If you are, we can’t help you.

Overestimating the effects of the bombing was a mistake, well-intentioned and accepted-practice as it was. The result was not what they had predicted, they were wrong. You can do everything “right” and still be wrong.

And in your scenario, everybody would be screwed, regardless of whether you sell a few quid worth of stock or not. The investors would have way more to worry about than their money disappearing. Irrelevant example.

I understand about hedging, how it’s the safe thing to do. However, stockbrokers are not disaster experts, and they were wrong in their speculation. If I did something wrong and cost my customers money, they would no longer be my customers. These people make money whether their clients win or lose. But where else are you gonna go?

And of course I wouldn’t cancel my insurance. Nice strawman.