I Want Real-Time Market Updates From Lower Magoola, NOW!

And no one has been hit harder than Argentineans.

In the last two weeks, Latin America's major stock markets have dropped over 16 percent on average, the Associated Press reported Wednesday. And the reasons have little or nothing to do with the countries themselves.

"The day was pretty bad for Latin America," Argentine fund manager Horacio Buenavia of Portfolio Investment told the AP, after Wednesday trading ended at a 32-month low. "There are obviously some fears that China or Hong Kong will devalue and of more problems out of Russia."

It's important to note that the Argentine economy is not remotely linked to China or Russia.

"If China devalues its currency, what is the impact on the economy in Brazil? Very small or zero," explained Daniel Tassan-Din, head of analysis at Deutsche Bank Securities in Argentina, according to the AP. "But there would be a big psychological impact. Unfortunately, that is what the market reflects."

The market in theory reflects the most efficient ways for capital to flow toward profitable investment, which in turn can be predicted fairly well by what the jargonists call "fundamentals," or basic data about the company and the environment in which it sells its goods. In practice, the recent "market" has referred to people who think -- despite stacks of evidence on their desks -- that all "Emerging Markets" are the same.

They're not. Unlike Russia and Japan, Latin American economies are robust, with growth in 1997 averaging 5.3 percent, inflation down to 11 percent (from 335 percent just four years ago) and once-putrid banking systems by and large cleaned up. The main blips on the economic radar are huge current-account deficits in Brazil, Argentina and Mexico, and savage inequalities between the Yacht Club Rich and the Third World Poor.

As bad as such conditions are, they do not compare to the institutional (and meteorological) misery of Russia, nor the ineptitudes of China's Communism.

"It doesn't matter how strong your banking system is or reforms are, you are still lumped as one type of investment," Tassan-Din said. "That's how funds work."

Your Newspaper, Sir

International investment-fund managers are the best-informed people on earth. I once spent two months asking these people what they read and what information they're missing, and the experience left me paralyzed with info-jealousy.

A guy who runs a $40 million Emerging Market fund will have at his disposal a Bloomberg terminal -- a terrific little box that can tell you minute-by-minute trading results of the Mauritius rupee, as well as at least six years of articles and data on any business cross-subject you can possibly dream up -- plus a Reuters terminal, perhaps a Bridge News terminal for commodities news, plus subscriptions to The Economist, the Financial Times, the Wall Street Journal and a dozen other specialized newsletters and Web sites.

Then there's access. If the fund manager is wondering about a listed company's strategy, he calls the CEO and the secretary puts him right through. If he wants to visit a country and talk to the finance minister, he hops on a plane and charges up a week at the Kempinski. And if he works for an investment bank, chances are he has a diligent team of 10 polylingual researchers down the hall writing 74-page reports and compiling 4x1 stochastic graphs.

Giving this man things to read is a huge and competitive industry. If your information is vital enough (like a Reuters terminal, which can transmit trades in real time), he will pay any price. A friend of mine has spent much of the last 18 months traveling to Kazakhstan, the Baltics, Turkey and the like just to "check things out" for his fund manager brother, who argues that one single good trade based on this information more than covers the airfares and prostitute bills. There are thousands of stock newsletters around the world that successfully charge $1,000 a year on this same principle, even if their content is limited to clumsily re-written local wire copy.

Advertisers also want to reach this man, because he can afford new sports cars and vacation homes, and because he might want to choose a new accounting firm or lobbyist. Newspaper publishers want to tell advertisers that this man reads their paper, so they double the size of the Business section and produce supplements on technology, personal finance and "executive living." Whatever information source the fund manager doesn't pay $1,000-$10,000 for, he gets for free, much in the way a successful rock band gets free guitar strings.

The intensified courtship of the fund manager, and of his potential client base of 40 million Americans who have now plowed their money into the stock market, has changed the face of journalism. Editor & Publisher is filled with want ads from the Portland Oregonian and the Riverside Press-Enterprise looking to beef up their business and technology sections. The Investor's Business Daily is the fastest-growing paper in the country, if you believe company hype. The lookalike Business Journals that can be found in any city from Long Beach on up have grown faster in ad revenue and circulation this decade than their general-interest counterparts.

Internationally, traditional wire services from UPI to AP (which is now partnered with Dow Jones) have scrambled to follow the Reuters example of business and markets news first -- other news last. And only a handful of U.S. dailies bother with foreign bureaus anymore, so reporters who insist on living in faraway lands have few choices but to cover business.

I have seen the effects of this shift all around me. Five years ago, I worked with the editors of TABLOID at a wild and smart newspaper in Prague called Prognosis, where "business" was something best discussed (and scorned with juvenile righteousness) over a jar of cheap wine and very loud Nirvana.

Now many of us are working at Business Journals, others at business desks of dailies. One is writing company reports, another has applied to become a broker. Prognosis' sister paper in Hungary, Budapest Week, has spawned reporters who now work for the Economist's "Intelligence Unit," Bloomberg, Reuters, AP/Dow Jones, Bridge News, Business Week, and any number of industry publications like Ad Age.

"I feel I've paid my dues and now understand important things about economic policy-making and how the financial world works (sort of)," one of my friends wrote me recently. "So now I've had enough. I should be using that knowledge writing about governments and policies and real people. Too bad no one else who happens to be the editor or foreign editor of a prestigious English-language publication agrees."

Business and market news is so shrouded in jargon that it's normal to glaze over when the newsreader starts babbling about the "Dow losing 37 points as traders took profits in advance of next week's expected correction."

Wade through the MarketSpeak and you discover that the reporters are actually rooting for your life to get worse.

Rents going up all over Los Angeles? Then National Public Radio -- weren't those people supposed to liberal? -- giggles about the "booming recovery of the rental market." Gas prices going down, making it cheaper to live and work in Los Angeles? Then KNX-AM talks somberly about the "depressed oil and gas market."

Along the way the public has wrongfully been given the impression that the "stock market" equals "business." Just yesterday a CNN Headline News reader led off the financial minute with: "It was a good day in business today, as the Dow Jones went up by ..."

Just once I'd like to hear the announcer say "It was a good day for stockbrokers, for those people who owned gaining stocks before the trading session began, for executives at companies whose share prices rose, and maybe for whatever company held an Initial Public Offering." For the other 230 million Americans, who the hell knows what kind of "business" day it was?

There is clearly too big a business news-hole to fill, chased by too few reporters who understand business. But what is more damaging, ultimately, is the daily pounding of NASDAQ scores, box-office reports, and luxury travel tips. For those hundreds of millions who do not own stocks or worry about management theory, the message is clear: fuck you, you're not rich enough.

There is no way to measure the damage caused by the massive diversion of journalism talent from the streets to the boardrooms. For one-newspaper towns, at least, it has meant that households from the lower middle class on down have no reason to read the daily paper besides the sports section, the classifieds and the teevee listings. Suburban reporters are occasionally parachuted into blighted parts of town when a news event has enough "symbolism" to be played into a 5,000-word feature, and that's it.

This is not what Joseph Pulitzer had in mind, when he wrote in his 1912 will that journalism "Will always fight for progress and reform, never tolerate injustice or corruption, always fight demagogues of all parties, never belong to any party, always oppose privileged classes and public plunderers, never lack sympathy for the poor, always remain devoted to the public welfare, never be satisfied merely with printing news, always be drastically independent, never be afraid to attack wrong, whether by predatory plutocracy or predatory poverty."

If Pulitzer's ideal is ever realized, it will not come from the city newspapers or international wires. It will be from the Internet, from tough-minded little community dailies, from Weeklies not submerged in their own political spasms, and from family-owned papers, like the New York Times, that still insist on greatness.

Meanwhile, the massive energy being spent on servicing the fund manager is largely going to waste.

The best fund managers are a ferocious and entertaining lot, fluent in world affairs and literature, wired on competition and money-lust. They know how to read a newspaper, or an agency terminal, or a speech by a central banker.

The lesser of the breed has just as difficult time separating Paraguay from Portugal as the rest of us, a fact which becomes embarrassing whenever the global markets experience a serious shock. They will mumble some excuse about "inexperienced investors" and "market psychology" -- but don't be fooled.

With Japan diddling, Russia collapsing and the American bubble beginning to deflate, it will be grimly amusing to watch these fattened caretakers attempt to explain the blood on their ledgers. And it will be interesting to see whether the rest of us can become newsworthy again.

Matt Welch is TABLOID's news editor in the Los Angeles bureau. He knows many rich people, but this hasn't necessarily helped matters.

Golf, God's Wrath and the New Depression
(OCT. 20, 1997)