The Consumer Republic: Over Stocked

Last Tuesday, the stock market swooned, and I saw it live on TV. That was the day the market, spooked by the sinking yen, was gripped by fears that the Asian crisis, like a slow-motion tsunami, was finally going to crash on Wall Street's shore. Sellers stormed the market at the opening bell, and the Dow dove 257 points. By now, these results are just a few pixels on the ever-unfolding chart of stock-market trends. But we are once again confronting the unthinkable: The stock market, engine of unprecedented wealth, is not a perpetual motion machine. This is the kind of market that might make the intrepid individual investor, his comfy retirement riding on his mutual funds, feel lonely. In short, Tuesday was the sort of day when CNBC's ratings triple, as close to a million people tune in to watch the market indicators bob and plunge and climb. If they're anything like me, they watch in a semihypnotic trance. To follow the spectacle of CNBC--the phalanxes of up and down arrows, the spinning charts of commodity and T-bill futures, the parade of global indices, the moving hieroglyphics of market tickers--is to be stupefied by information. No matter what else was happening on screen, I found my eyes compulsively drawn to the ever-present Dow box, its numbers jiggering at jagged, split-second intervals, a mesmerizing running tally of good and bad fortune. But then, I made the mistake of actually focusing on the TV. CNBC is best-suited for providing ambience in a cigar bar. You're not supposed to watch it, but to use it as information wallpaper programmed to run in the background while you're otherwise engaged. Of course, CNBC is just one source of real-time market data. Thanks to the Internet, there's a glut of venues offering up-to-the-second access of the market's progress--not to mention the online brokers, chat groups, investment gurus, stock touters and scam artists. It's tough to get through the day without knowing how the markets are doing. These informational and transactional tools, at every citizen's fingertips, have given the movement to privatize Social Security the aura of an idea whose time has come (though at certain hours last Tuesday, one was glad it hadn't come just yet). Yet as I gazed glassy-eyed at the Dow's numbers on CNBC, I wondered what I was actually learning. What if I were an investor trying to make a decision about my life savings? What was this tool of individual empowerment telling me? One thing I learned has nothing to do with the stock market and everything to do with TV. I'm now convinced that all info-television comes from one source, much as the salad-bar fixings at hundreds of Korean grocery stores in Manhattan emerge from a single kitchen. Like The Weather Channel, CNBC's pundits track the comings and goings of the highs and lows. After the market closes, a bull and a bear slog it out over the meaning of the day's events, the way the politicos do on Crossfire. Just like sports TV, the world is divided between winners and losers, with suspense mounting in the final hour of trading, which serves as a cross between the two-minute warning and the final furlong of a horse race. Like sports fans, CNBC viewers call in to ask questions and vent opinions. The main difference between them is that sports fans know a lot more about sports than the average investor does about mutual funds. Within these kabuki-like conventions of info-TV, CNBC's tone last week was a little alarming. Its on-the-spot market watchers looked haggard. The channel traffics in financial news--and news loves nothing more than earthquakes, murders and building collapses. As the Dow's tumble pushed beyond 200 points and the 10 percent "correction" loomed, CNBC was busy promoting its evening feature on "market mayhem," promising info on "safe havens," where investors can "wait out the storm." It wasn't exactly like the gal on The Weather Channel urging tornado-threatened viewers to take refuge in the basement, but it was close. At the same time, CNBC sent the opposite message. Yes, the market is down, the many bullish commentators acceded. Yes, it will probably continue to trend down. But it's just temporary, they promised. Next year loomed bright for millions of average Joes and Janes whose move into the stock market has fueled the wealth explosion and whose exit would spell disaster. The most important thing, they advised, was to keep your eyes on the "long horizon." Simply put, the worst thing an investor can do is spend his or her day watching the Dow float up and down on CNBC. Does it even matter? Data overload has the same impact on consumers as no information at all. Individual investors, without the time or the means to process the information bombarding them, tend to do what comes natural: nothing at all. At the end of my day watching CNBC, I felt prompted to perform a single action: I turned it off.

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The Consumer Republic: Over Stocked

Debra Goldman

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Debra Goldman