Oh, Just Stop!

Many have chided the financial press for the need to write entirely speculative articles about the prior day's market movements. But at least the financial press can be (somewhat) forgiven for their sins on the basis of tradition. What would the FT do with that big space on the back of the first section if it were otherwise?

But now the Washington crowd is getting in on the act and it must be stopped. The Hill's On the Money blog manages to commit two sins of casual empiricism within the first three paragraphs of their piece on the market's reaction to the President's jobs speech. First they say the markets "plummeted" in reaction to the speech, and then, conceding that there might have been other factors at work (say, maybe this), they conclude that "Obama’s speech had little countervailing effect."

So either they are doing a very sophisticated event study here, or they are just making stuff up. How precisely, do we know that the markets did not go down less than they would have without the speech?

Grrr.