The Numeracy The Journalistic Class
For some reason, I happened upon this old WSJ piece on John Paulson, the hedge fund manager who profited most from the financial crisis.
Explaining how Paulson and his portfolio manager Paolo Pellegrini crafted the “best trade ever”, we have this gem:
Late at night, in his cubicle, Mr. Pellegrini tracked home prices across the country since 1975. Interest rates seemed to have no bearing on real estate. Grasping for new ideas, Mr. Pellegrini added a “trend line” that clearly illustrated how much prices had surged lately. He then performed a “regression analysis” to smooth the ups and downs.
Why, yes, we need scare quotes to describe dark, arcane wizardry like “trend lines” and “regression.” Clearly, these guys are rocket scientists!
Le sigh.
The reporter’s web site says, “GREGORY ZUCKERMAN is a senior writer at the Wall Street Journal, where he has been a reporter for twelve years. He pens the widely read “Heard on the Street” column and writes about hedge funds, investing, and other Wall Street topics.”
So I suppose we can’t blame Murdoch for him, though I’d dearly love to. On the other hand, maybe we need to know who edits his stuff.
BTW, on his web site he also refers to himself as a “prizewinning reporter.” One of my journalistic reform proposals has been to get news organizations to fire all journalists who have accepted prizes from other journalists, for reasons similar to reasons why we don’t let people marry their siblings or first cousins.
— The Reticulator · Jan 28, 04:08 PM · #
I’d express shock if I didn’t use to teach at a university with one of the best schools of journalism in the country. The journalism majors were pretty consistently the 2nd worst students.
— arbitrista · Jan 28, 09:21 PM · #
lol
— razib · Jan 29, 12:57 AM · #
I discovered this about financial journalists a long time ago. When some technique is described as “complicated”, we know that it involves more than elementary arithmetic, but it’s impossible to say much more than that. Even relatively smart ones are susceptible — for instance, Felix Salmon :
“What he doesn’t (need to) mention is the way that journalists, myself included, read economics papers: we generally have no ability or inclination to try to understand the details of the formulae and regression analyses, so we confine ourselves to reading the stuff in English, and work on the general assumption that the mathematics is reasonably solid.”
“Regression analyses” are just about the simplest material that ever appears in economics papers; every journalist specializing in the field should be able to understand them, and lumping them in with dense theoretical papers or structural econometrics is ludicrous.
— Matt · Jan 29, 07:07 AM · #
It’s good to remember those in your audience who are reading to improve their knowledge but I agree the quotes are unnecessary. I don’t know what those terms mean but the less distracting punctuation the better.
— Joules · Jan 30, 03:46 AM · #
A financial reporter who writes books about financial prognosticators should know about regression analysis even if the readers don’t. It might even be good for him to understand that regression of time series data (like you might get in that line of work) tends to be dicey due to the auto-correlation of time series data. His readers may not know about that, but a good financial reporter might find it useful for doing his job to know that.
This reminds me of another journalism reform that I have advocated for many years: News organizations should fire all journalists who have accepted a degree from a journalism school. That’s because wannabe journalists should be learning stuff instead of going to journalism school.
— The Reticulator · Jan 30, 07:46 PM · #