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How to write a news story about a sell-off in equities, following fears over economic growth in China: an eight-point guide, with real examples from newspapers.
1. Don’t call it “a sell-off”.
Far too matter-of-fact. And factual. Even if markets don’t fall by the 10 per cent required for a “correction”, and later recover, there are loads of more dramatic but unquantifiable terms: “rout”, “dive”, “plunge”.
2. Use the scariest number.
£74bn is a lot scarier than -4.67 per cent. So go with the amount temporarily wiped off FTSE 100 companies’ market values, rather than the one-day percentage change. Don’t make the same mistake as Dr Evil in the Austin Powers spy films, and use an anachronistic denomination: “A ransom of one million pounds!” Do what one newspaper did and estimate the fall in companies’ market capitalisations around the world: “Trillions wiped off markets.” Much better. Ignore wealth managers like Mouhammed Choukeir at Kleinwort Benson putting that 4.67 per cent one-day fall in context: “Whilst uncomfortable, [it] is ‘normal’ for equity markets, but probably feels more abnormal given the low volatility of recent years.”
3. Make it an historic.
If portfolio managers now hold 5.5 per cent in cash, you can write: “Professional investors raise cash holdings to highest level since financial crisis.” It doesn’t matter that the increase was only 0.6 percentage points, or the crisis only seven years ago.
4. Prefix the day with an adjective.
Standard practice. Political journalists have long had their “Wobbly Wednesdays” and “Super Tuesdays”. In financial journalism, though, it must be a colour and — to paraphrase Henry Ford — you can have any colour you like as long as it’s black. Hence Black Thursday 1929, Black Friday 1987, Black Wednesday 1992, and Black Monday 2015. Combine points one to four and you get this example from a UK newspaper: “Black Monday: FTSE closes with £74bn wiped off market cap in worst financial plunge since 2008.” Textbook.
5. Convey a physical impact.
A sell-off — sorry, plunge — might only manifest itself in lots of red numbers on a screen (confusingly, green numbers in China), but you can make it feel cataclysmic: “The China slowdown has sent shockwaves through commodity markets.” Better still, mix metaphors and puns: “Dominoes begin to fall . . . the famed Brics . . . are in disarray.” Don’t quote wealth managers like Marc Hendriks of Sandaire Investment Office, saying, “The economic consequences from the Chinese equity market falls are limited.”
6. Incite panic.
Or report it as fact, as in: “China’s ‘Black Monday’: panic grips global financial markets as stocks undergo ‘bloodbath’ of selling.” Don’t quote a calm wealth manager, like Didier Rabattu at Lombard Odier: “I think that worries over a full-scale financial implosion in China are overdone. The Chinese government has significant resources . . . to boost the economy.”
7. Create a sense of doom.
Suggest the worst case might only be days away, as in one paper’s near perfect: “Doomsday clock for global market crash strikes one minute to midnight as central banks lose control.” Don’t let a wealth manager like Tom Becket of Psigma Investment Management critique you: “We’re doomed. Or are we? There has been increasingly hysterical hyperbole across the western media about how China is blowing up . . . From a growth perspective, we are still of the ‘steady but unspectacular’ mindset.”
8. Equivocate subtly.
Slip the conditional tense into your scary historic black plunging, just to cover yourself. Better still, quote a former US Treasury Secretary doing it: “@LHSummers we could be in the early stage of a very serious situation.” Or (ab)use “risk” as a verb: “Black Monday risks a new financial crisis.”
Don’t quote a wealth manager, like Didier Saint-Georges at Carmignac, actually quantifying the risk and offering practical advice: “China continues its efforts to rebalance towards services without killing off its economy. It can still pull this off, but the consequence of failure would be considerable. If you believe there’s an 80 per cent probability your flight won’t crash, would you still feel comfortable getting on the plane? What matters is what is at stake, not just the probability! Consequence: hedge your risks, and hedge them beyond China.”