Every once in a long while I watch Jim Kramer on CNBC, or sometimes BNN or Bloomberg. They are all well-produced and catchy. Useful? Not really.
These TV shows, and others like The Big Bang Theory or The Super Bowl are presented as entertainment with a view to selling valuable advertising. Begin watching with that idea or you may be lead astray and think there is financial wisdom included. If there is, it is because it coincided with there wish to communicate interesting ideas or maybe exciting ideas. They are first and foremost entertainers. Like Jon Stewart or Jerry Seinfeld.
In fairness they should not try to present wisdom. Your wisdom and my wisdom are different. They should confine themselves to presenting information and let us draw our own conclusions. The problem is that excitement helps their ratings.
This state of affairs has not changed in at least 100 years. George Bernard Shaw has said,
“Newspapers are unable, seemingly, to discriminate between a bicycle accident and the collapse of civilization.”
It is the same for TV commentators. Some company that missed the analysts consensus guess for earnings this quarter is a bicycle accident. It is history. It cannot change the future. It is just information. But excitement adds to its presentation value.
Wisdom on the other hand is not so often discussed. The potential collapse of civilization is a complicated subject. It is more complicated than they believe the average viewer can process. So, little if any coverage.
There are things out there that lean towards catastrophe.
Relative currency values matter especially if they are manipulated. No currency war ever ended well. Sovereign debt propped up is another complicated and invariably adverse condition. See Russia in 1998 or Greece recently. Central banks printing money for political reasons is usually a bad idea. Tax levels, regulation, wage levels, and the relative power of unions and employers are all ambiguous. Sometimes good; sometimes not.
There are many processes that continue without expectation of their being permanent.
Will central bank rates stay low in North America? No. When will they change and how will that affect the finance world? The gold-bugs have one view. Catastrophe! Some others believe it would be a good idea without consequence. One or both are wrong.
Many opinions are from a fact-free zone. In any case the future is unknowable even to well-intended and well-informed people. Try to reserve your thought space for things that matter to you and of those, ones that you can influence how they may affect you. Look for meaning not purported facts.
The rest is entertainment. Bicycle accidents.
Don Shaughnessy is a retired partner in an international public accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.