Wednesday, 18 May 2011

Drowning in stupid

One definition of stupid is having very strong views about a subject that you do not understand. Like a mob attacking the house of a paediatrician, or Microsoft launching a social networking site.

In my life, the primary exponent of stupid is the British newspaper. Like that other factory for idiocy, Big Brother, these brightly-coloured comics of made-up-stuff are funny to watch for a bit but after a while become really quite annoying. With politicians you can tell when they are lying by when they move their mouths, with newspapers you can tell they are bullshitting when they print an edition.

Some of the newspapers make it pretty clear that they are talking shit. Like a tree frog in the Amazon, they carry warning colours to alert you of the danger. If you see red at the top, you know not to take seriously anything written inside. But not all are so clear; the real danger comes from those newspapers that give the appearance of not being stupid, while still churning out crap like a sewerage farm on overdrive.

The easiest way to test this is to look at what the newspapers have to say about an area you know about. My area of professional expertise is debt and restructuring; I have plenty of material to wade through.

Take this article from the Telegraph, “Alliance Boots will have to refinance debt in a very different world”. Given that it’s written by City Editor Richard Fletcher we should be able to trust what it says. However, as it turns out I’ve listened to more convincing dogs than the claims in Mr. Fletcher’s article.

The main thrust of the piece is that Boots will struggle to refinance its debts as they come due for repayment in a few years’ time. Mr. Fletcher warns that “unless debt markets improve dramatically” the company is likely to be left 1 billion euros short when it seeks to refinance its debt. However, this is imaginary; no-one in the debt markets would agree with this. Yes, they would recognise that Boots has a lot of debt, but they would start by pointing to the large number of other companies who have been able to refinance debts, particularly in recent months, that have been in a much worse state. Even Gala Coral, which was forced to restructure (ie not repay) much of its debt just last year, just borrowed a load more cash from banks and bondholders.

Over in the Guardian, economics editor Larry Elliott declares that Greece is certain to be the next Lehman Brothers, and this will have the same impact on the wider world, if not more. But it says much about Mr. Elliott that he can’t (won't?) tell the difference between a massive investment bank collapsing overnight at the height of the credit panic and the slow-paced, well-signalled (but bloody difficult) reordering of a country’s debt. Mr. Elliott claims the comparison is valid because of “the structure of modern financial markets, with their chains of derivative trades and their pyramids of debt”. But that’s not good enough. On these terms, pretty much everything in the financial world for all time could be “the next Lehman Brothers”. It’s the equivalent of saying “stuff”.

And given that the headline, sub-headline and opening two paras are so catastrophically loose, it’s hard to take the rest of Mr. Elliott’s article particularly seriously. And maybe it is not a coincidence that the only journalist at the Guardian who understood debt and restructuring left the newspaper a few months ago and has not been replaced.

Sometimes I wonder if this is some kind of project to see how much stupid can be injected into the body politic. Certainly it is insidious, this creeping nonsense. And influential. Who do you think attention-seeking politicians listen to? Newspapers with readerships of millions, or experts with less sensationalist views? (This may explain why when they arrive in government, politicians change their tune so much.)

So, what to do? How do you avoid stupid? How do you find where the jewels are in amongst the crap? Or do we have to accept that the British newspapers are generally rubbish and turn to other sources for information? I don't know the answers to these questions but as someone who works in information I can share some of the solutions that I have come up with. First up: assume newspapers are written by idiots who are repeating verbatim the last thing they heard.

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