Is The Media's Manipulation of Market News to Blame For The Current Market Meltdown?

Markets need full disclosure and transparency if the benefits of the "invisible hand" are going to be distributed to the widest possible cross-section of the population. Inconveniently, this interferes with the current agenda of America's copyright and news monopolists and the bankers who support them.

The problem is that Big Media in America has, over the past fifty years, consolidated into a copyright cartel. Disclosure, transparency, and accountability as these concepts should be applied to business, are ignored by business in large part because they are ignored by the news organizations that report on business. Why should Big Business adhere to any standards of fiduciary fidelity when they know that just about any lie they tell will be reported as truth by dutifully embedded reporters on Wall Street. False GDP numbers, false employment numbers and false inflation numbers have become the daily grist for CNBC and Fox Business. It stands to reason that Americans making economic decisions for themselves and their families are making bad decisions based on the bad information fed to them by the MSM.

Ironically, the true numbers and true causes for the crash of the US dollar and skyrocketing oil prices (on its way to $160 as I mentioned in this column a few weeks ago) have been revealed to a global audience, but kept hidden from the American public, via the U.S. banned AlJazeera English; a network that Bush and Rumsfeld were bombing when I started making films for them on the subject of the US dollar crash, oil price spikes, and the faltering US economy.

I've made ten films for Al Jazeera English over the past 2 years that explain in detail the dollar and oil crisis including; Death of the Dollar, Peaked, Rigged Markets, Money Geyser, and Death of the Dollar 2. No U.S. MSM distributor will go near these films for fear an informed and very angry American mob would storm the palace gates in Washington and demand economic justice. The USSR had 'Command and Control,' the U.S. has 'Coerce and Entertain.' Manipulated Market Consent has taken over from Noam Chomsky's "Manufactured Consent" as the new Capitalist Tool to keep the masses quiet.

I also see this same duplicitous trend appearing in virtual markets, betting exchanges, and hybrids like InTrade and other political 'prediction markets' such as the Iowa Electronic Market. Whether it's real money or fake money it doesn't matter. Perceptions precede prices and in a fiat currency economy like America's - driven by Coerce and Entertain - perceptions have become the gold standard, but without any gold. Betting exchange BetFair in the UK has come under close scrutiny for alleged insider trading corruption, for example. And even the innocent sounding Hollywood Stock Exchange is prone to media manipulation as I mention in this recently published letter in the Financial Times.

Here's the story covered in Variety back in 1999: [PdF]

What started as an online game now has studios playing hardball.

Several studios claimed a minor victory over the weekend after being told that a weekly segment airing on NBC's "Access Hollywood," called "Battle @ the Box Office," may be pulled after only one airing.

Studios had threatened to boycott the syndicated strip by denying it access to talent interviews and film footage.

The segment in question featured Hollywood Stock Exchange founder Max Keiser forecasting weekend B.O. totals based on opinions of internet users playing the game.

Studio execs blasted the idea of an online analyst predicting B.O. tallies on national TV. Doing so on Friday is far more dubious than the already inexact but common practice of estimating weekend grosses on Sunday, they said.

The truth vacuum in financial news reporting is why I argued against the Pentagon's use of 'Prediction Markets' (they created one called PAM, the Policy Analysis Market) in their so-called 'War on Terror.' They don't need another way to deceive the public and cook their intelligence. Pointing to media manipulated price action on their 'prediction market' as 'proof' of the market-righteousness of their war-profiteering amounts to a subtle form of terrorism itself with prices on these markets being martyred for the Pentagon to support an unjust, unholy war.

America's financial house of cards is coming undone, in large part, because the media has overridden the ability of markets to send out reliable price signals. They do this by using their monopoly position to manipulate consent. The so-called 'Wisdom of Crowds' cannot counteract the effects of a corporate-monopolized media that has an interest in moving prices in ways that do not benefit society or the economy as a whole. The 'Wisdom of Crowds' can quickly become the 'Complicity of Crowds.'

The true legacy and tragedy of U.S. media-market-manipulation is that Peace is trading at a discount. War prices are in a bubble. Fiscal sanity in Washington is off the balance sheet and America's reputation around the world has become bankrupt.

Comments

[CharlesMac]

Bernard Lo.... Bloomberg Live 7-9 PM EDST on the Bloomberg Channel.

It is the best 2 hours of REPORTING, old fashioned reporting. Lo and the production team move quickly and to the point. They have to transition from the close of the US financial day and setup for the AstralAsian markets. You will learn more in two hours about the unknowable global markets than a month watching the titillating financial pornography on CNBC, FOX, or financial reporting on any of the "news" stations.

All I ask is that you watch it once for a half hour.

Lo is brilliant, steady paced, and has no corporate preference, ideologue position, or punditry. He is on no side. The content is stunningly rich with what you need to know.

He has people from the (worldwide) financial industries on, but Lo is not a stenographer or cheerleader. He asks the tough questions, but is not a thug. And you can't BS him. He has no problem reeling off a bunch facts and asking why the facts don't seem to meld with the guest's position.

If you want an informed and coherent reporting of the financial news (and a few quick snips of important news in general), Bernard Lo is your man.

I swear, just try it for a half hour, fifteen minutes, 5 minutes.... you will grab on because it is clear, crisp, and solid.

You will know it and feel it.

[ProfessorDuh]

This is just another consequence of what happens when marketing values, and not the professional journalistic mission of providing accurate information to the public, dominates the news media. It all adds up to a form of societal suicide, like walking along a cliff's edge with your eyes closed.

[ndem]

Max, you are right on media and market manipulation-wise...I grew up in Texas and live in Paris (in the 5th as well) and I have seen this all before...interesting that it was the same with studio films, as entertainment is our biggest export, and oil used to be (and for those in power at the moment with all of their oil connections, the word "recession" is a joke)...the former head of the MPAA, the late Jack valenti, was previously the PR guy for the oil companies...

[boogieandjive]

As if on cue, Max, . . . the BBC headline today:

http://news.bbc.co.uk/1/hi/world/americas/7445343.stm

Danger of US downturn has 'faded'

Quote: "The US economy may have avoided a major decline, US Federal Reserve Chairman Ben Bernanke has said.

Mr Bernanke said the risk of a substantial downturn had "diminished over the past month or so".

Playing down recent unemployment rises, he said a series of interest rate reductions combined with tax cuts was helping the US offset its difficulties."

[zizyphus]

The global corporations won't stop until they have sucked every dime out of every American pocket, then on to Dubai. Then foreign countries can come in and buy up everything, and employ us at below minimum wage, but we will be so glad to have jobs by that time we won't care.

We had anti-trust laws to prevent just a scenario. When did we stop enforcing them? In what otherworldly realm was it deemed wise to allow one corp to swallow another, and another, until lumbering crazily across the American landscape it begins to consume the peasantry?

[joebhed]

Great post.
Keep it up.

You're getting close.
Every word the truth, but off the main point.


Media are the force used by the corporations to get their wants, which are euphemistically called growth, but which are in fact, MORE.

More money.
More assets.
More power to make more money.
To make more power.

You opine briefly on what I call free enterprise.
You call for things like transparency and full-disclosure, so that
"....the benefits of the 'invisible hand' are going to be distributed to the widest possible cross-section of the population."

Dear Max.
The purpose of capitalism is the opposite, to prevent just such a broad distribution of interests and benefits.
As a result, the business of bankers is to see that they themselves are on the winning side.
They 'use" the money supply of the country, acting through their 'fractional-reseve" lending policies to do nothing less than concentrate the wealth created by all Americans into hands of the fewer and fewer, the richer and richer.
There oughta be a law.
The priority use of the money supply of the United States of America ought to be to create MORE private property owners, not fewer.
The priority use of the money supply.
Either for concentration, or for democratization, of wealth.
Take that right away from the bankers, who corporately control the media, and the media just might start informing Americans about things that matter.
I don't believe it will happen otherwise.

[rugbyliz]

The huge problem with mainstream media and business news is the same regulators face: Outmanned by lack of education and lack of transparency.
There are few journalists who understand what a credit derivative is and how it works, let alone the knock-on effects.
CNBC, self-proclaimed no. 1 in business news, set off a stock-market slide last fall when Steve Liesman reported a money market fund was going belly up and had appealed to the CFTC for help. First, money funds aren't regulated by the CFTC. Second, the fund in question wasn't a money market fund.
Then there is the lack of transparency. If reporters did their job, they'd question the talking heads about position size and direction.
Hedge funders talk their positions with glee, chat about mortgage markets while betting against them, yet nobody knows the size of the bets: hedge funds and the derivatives they use are unregulated. Hedge funder John Paulson, of Paulson & Co., took home $3.7 billion shorting Bear Stearns stock, betting against the firm in the credit derivatives market, betting against the mortgage market in the over-the-counter derivatives market and sending letters to the SEC about the evils of structured finance and the rating agencies. How big was his bet? Who knows?
The media is too stupid to manipulate. Reporters are being manipulated by financial professionals into reporting positions as if they were gospel, and then it all becomes a self-fulfilling prophecy.

[xtown]

So true. And if components of the media are the mouthpiece of dredge funds et. al., what is the motive
for tanking the markets?

May I suggest sanity check.com. It is a link I followed from Max Keiser.com.

[joebhed]

Nicely said.

[tompoe]

The acronym, MSM, lost all relevance when consolidation exploded across our country, years ago. Corporate media (always spelled out, to inform) is the appropriate form, today.

Nightly Business Report has firmly taken over first place for putting out the most ludicrous PR and "spin" possible. Can't wait until they implode on their own garbage.

[GJMandinka]

Thank you for shedding light on this subject. We can't begin to solve any of our other problems in a meaningful way until we tackle the public information problem. The merger of News, Entertainment, and Marketing has had a devastating affect on this vital feedback system. Without good information, we all better be prepared to look on in surprise as system after system collapses without warning. I sure hope America is not able to effectively export this particular disease to the rest of the globe.

[joebaggadonuts]

The failure of government in the US to do its job and provide economic safety for its citizens has turned the invisible hand into the invisible middle finger. That the corporate press was complicit appears to be correct.

[Cathexis]

I think you have a good point. A large portion of the economic "pundits" seem to believe that they can spin themselves out of a recession, or other economic downturn. If only they keep cheerleading, things will be OK (or at least, not as bad as it might be).

Already, the "numbers" we're fed seem to be baked as if provided by Rachel Ray. We no longer get good reporting, but since any decision is only as good as the information upon which it is based ...

Seems like an overall bad situation.