The market
By Bernardo Ajzenberg
December 15, 2002
Even those who usually skip over the economic news have gotten accustomed to the large number of headlines and stories that have the market as their subject.
This massive presence returned to show itself on Friday with the repercussions from the announcement that Henrique Meirelles was appointed by incoming President Luiz Incio Lula da Silva as the next president of the Central Bank.
Folha had three headlines: Market says choices lack experience (headline); Lula appoints Cardoso ally to Central Bank; markets react with caution (page A4); and Doubtful market waits for experts (page A8).
But in the end, who is this so-called market?
In general, three types of sources are most often cited in this coverage: 1) traders; 2) analysts and economists at banks and brokerages or consultants; 3) executives (directors or presidents) of financial institutions.
Traders (almost always anonymous) have their hands on the controls: buying and selling bonds or dollars, investing, operating or speculating on a daily basis. Intermediaries by nature, they live the mood of the last five minutes, chase rumors and blow any little thing out of proportion. To earn money, they need things to be black and white, never grey. With nerves on edge, they observe only the short term and speak about their interests of the moment.
Economists and consultants analyze, sketch out scenarios and trends. They dont always reflect or determine the instantaneous action of traders. Nor do they necessarily give the final opinion of the banks in which they work. In theory, the executives (directors or presidents) transmit the official thinking of institutions.
Inversion
When the topic of discussion takes into account a change in the presidency of the Central Bank while a new government is being assembled, it seems obvious that the most relevant question being made in the sector, politically and economically, is what the official impact of the new name was. It means listening, above all, to bank executives.
Then came implications for the economy according to the opinions of analysts. Afterward, there is the immediate, fleeting reaction in the market and how the dollar opened the next day. In other words, it focuses on the players.
There was an inversion of priorities, however, in Folhas stories about the reception of the Meirelles name.
Of the 19 sources quoted, 13 (68%) are analysts or consultants. Officially, only two banks gave formal statements, along with the Brazilian Federation of Banks.
As a counterpoint, for example, the business dailies Valor Econmico and Gazeta Mercantil showed a 44% (8 and 18) and 43% (10 and 23), respectively, presence of executives most quoted in publications without speaking of their importance in terms of opinions of those in the biggest industrial and commercial sectors.
Independent of the results (most skeptical or most optimistic), this last type of repercussion with emphasis on the executives and the widest sourcing by sector tends to have greater political consistency and more proximity to the economic reality than what is based mainly on the opinions (which, of course, are valid and necessary) of analysts or brokers.
Partiality
Folha also ended up producing something that disoriented readers. A story published in the national news section said that the market cautiously received the nomination of Meirelles and reported that the exchange rate for the dollar, after falling in the morning, had closed higher (0.3%).
In the financial section, the newspaper attributed the rise in the U.S. currency to another cause, according to brokers: a decline in investments to the tune of about US $130 million by state-run oil company Petrleo Brasileiro (Petrobrs).
The rise in the dollar could not be interpreted as a disappointment by the market in the announcement of Henrique Meirelles, a second story said. Meirelles pleases investors for being associated with credibility.
The market, you can see, is not monolithic or homogeneous. Nor is it strictly a single entity. Like any other part of the economy, it has different voices, hierarchies, most of them not lacking their own interests.
Besides this, it is a sign of journalistic partiality that the newspaper gives so much space to the nomination of a Central Bank president to the detriment of other sectors and analysts not tied to banking institutions in the repercussion of a relevant fact with consequences far beyond the financial.
Small wave
There seems to be a small wave in the creation of the ombudsman position at news organizations in Latin America.
This was, among others, the impression left by the International Seminar on the Defense of Readers (Ombudsman), in which I participated Dec. 5 to 7 in Guadalajara, Mexico.
The event was organized by the Foundation for New Journalism. In it were 36 people nine ombudsmen and defenders (the name preferred by most), students of communications, former ombudsmen, members of media watchdog organizations, and directors and owners of newspapers.
In all, 10 countries were represented: Argentina, Bolivia, Brazil, Colombia, Ecuador, Mexico, Nicaragua, Panama, Peru and Venezuela. Most of the ombudsmen there have seen their positions created in the past three or four years.
Thats the case of La Prensa of Panama, Milenio of Mexico City and Pblico of Guadalajara. Newspapers in Peru (El Comercio), Bolivia (El Deber), and Argentina (Clarn) sent representatives with the intention of exchanging experiences and to create the position too.
In the case of Colombia, the legislation that allowed the rise of private TV channels included an arrangement that obligated them to create the position of defender of viewers. At the meeting were three defenders (Caracol TV, RCN and Teleantioquia).
As a synthesis of the spirit that marked the seminar and that seems to drive this small wave, I cite a passage from the exposition by Javier Daro Restrepo, 70, the former ombudsman of the El Tiempo newspaper (of Bogot) and currently at El Colombiano.
The idea that the recipient of information is the weakest link in the chain of information and that it should not be this way has been strengthened in recent years. For this reason, legal projects arise in different countries to guarantee the exercise of the right to information.
With or without these laws, the defender guarantees this right, strengthening the voice of the reader that feels tricked or who complains, on the other hand, about abuses of the right to information (by the media) when it invades the intimacy or weakness of other rights.
As happens with awareness, almost silently, the defender makes us at news organizations remember that the right (of the media) to inform, evoked so much during the 20th Century, is an incomplete right and a source for abuses if not complemented and reinforced by the right (of society) to information.
*
In the last column, on Dec. 1, I committed two factual errors. Contrary to what I asserted in the column Stimulating prejudice about a story in Folhas magazine section for young people, the reader I quoted as being a father is not a father. He also clarified that he is 17 years old. My mistake was to transform an assumption into a fact without the necessary checking.
In Confusion at Varig, I quoted a column by Janio de Freitas asserting that it was published on Wednesday, Nov. 27. As the columnist himself pointed out in his next column (Dec. 3) about which I was commenting his column came out on Thursday, Nov. 28.
