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We Know Exactly Why The Market Did What It Did Today

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There was a moment yesterday when we found ourselves nearly writing the headline “Korea Loves the Shorts.” The idea was to speculate that Korea had launched its missiles in an attempt to drive down shares prices, hoping to reap profits from short-selling funds we speculated its leaders may have invested in.
And by “speculate” we mean “make up.” There were no facts behind the story. Not even the “fact” that Korea missile tests drove down share prices. That is one of those things that business writers write, and television hacks love to say with a knowing nod. And this is what killed our interest in the story. Because, as a rule, we hate those kind of stories. (Except when we love them in a “holy crap are they serious” kind of way.)
There’s a good discussion here about why the financial press is so attached to these kind of stories. We think there are two reasons: one based in the minds of editors and the other, shockingly, almost based in reality. The first is that journalistic conventions ask reporters to not only say what happened but also why it happened. Tell a story. Provide context. Make it make sense. Tie it together. The second is that sometimes folks on trading floors will actually tell reporters what prompted them to buy or sell. (This is only "almost reality" because you cannot always trust traders to give you a unbiased account of why they took the direction they did.)
Why Do They Do It? [The Volokh Conspiracy]