The problem with economic stories is that they often take a long time to play out. Here is a piece from last June on Chinas shadow banking system that warned of the problem developing: erikhare/2013/06/21/cold-currency-war/ That crisis is only now coming to a head as the Chinese economy slows, but its becoming a big issue rapidly: thediplomat/2014/02/when-chinas-trust-credit-does-not-equal-gold/ But heres where things get even stranger - the only people covering this are the small outlets and blogs of bond traders and ForEx mavens. This story, like so many others, has a life cycle of almost a year before it hits the mainstream media. It goes something like this: 1) Initial warning - 1 year out - when the problem is noted as potential risk by bond /ForEx traders 2) First pickup - 10-12 months out - people like me start to write about the growing alarm as data comes in showing the market reaction to #1. 3) Second warning - 7-10 months out - the market in question sends a clear signal that risk is getting out of hand or related, often out of the blue (ie, the stock market falls for what appears to most as no good reason) 4) Hand wringing - 4-7 months - the traders start to really fret about the situation and combs over every official pronouncement. Their blogs light up with the fear of the moment. 5) Big Pop - 2-4 months - The markets really move in reaction 6) The Story - 0-2 months - over a few months the story is finally written, starting with Bloomberg / Forbes / CNN Money / WSJ and then moving gradually into more mainstream outlets Ive only recently become aware of my position in this chart because Ive been taking a lot of risks on picking stories very early that I think are going to blow up. This is one of them. But the time it takes before it all hits the mainstream is so very long that Im often writing about the event a full year ahead! No one remembers me by the time it breaks in most peoples daily diet of news. Keep in mind that this only happens because Ive found the right sources to read. Most of them are very dense and full of jargon, so most of what Im doing is to simply translate them into plain English. And Im also wrong sometimes - a story that seems like it might become big simply doesnt. I dont know quite how to capitalize on what Ive discovered, but Im thinking about it. Several important stories that I was a full year ahead of the mainstream include the financial crisis of 2008, the widening Income Inequality in the US, the Greek Crisis moving Euro-wide, the improvements in the job market in 2013, and the decline in workforce participation. Not all of them are crises, but the signs are there and the way they worked through the food chain of financial writing was similar. My meandering point is this - by seeking out primary sources like the good lil researcher I was taught to be I have stumbled on a nasty problem with financial reporting, namely that there is about a year lag between the start of an event and its reporting in the mainstream press. Thats terrible and completely unacceptable in a market driven free economy. Ordinary people cannot intelligently participate in the stock market without much more timely information! And by stumbling onto this I think I may have discovered something that should be considered extremely valuable - but hasnt been recognized by conventional media yet.
Posted on: Mon, 03 Feb 2014 16:15:33 +0000
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