The Daily Devil’s Dictionary: One in a “Trillion”
Playing with numbers: How high can you go and how far can you fall?
The stock market suddenly underwent a “correction” at the beginning of February, which took a lot of market experts by surprise. Many journalists, documenting their surprise, reported a “record” drop in the Dow Jones average by citing a figure of over 1,000 points, on two separate days in the same week.
“The U.S. stock market officially fell into correction territory Thursday and now we now the total damage: $2.49 trillion … The total is even bigger for global stock markets with $5.20 trillion gone…”
Here is today’s 3D definition:
A number of such a great magnitude that the media can use it to create a startling effect. It has recently replaced the word billion as the means of catching an audience’s attention.
Understanding reporting on the stock market requires distinguishing between figures expressed as index points, share points or averages. This gives financial journalists considerable leeway to make their stories interesting. It doesn’t necessarily make things clearer for the reader.
The record announced for February 5 was a fall of 1,597, a 6.26% drop. We can compare this to the previous record drop during trading hours of “1,089 points on Aug. 24, 2015, a 6.6 percent drop. But in percentage terms, the worst sell-off in recent years was the “flash crash” of May 6, 2010, when the Dow temporarily plunged 998 points, or more than 9 percent.”
In the attention economy, the first duty of a journalist is to capture readers’ attention. If the percentage isn’t impressive enough, go for points!
In the age of billionaires, the thrill formerly associated with the word “billion” has seriously diminished, just as the sparkle of “million” had worn off by the time Dr. Evil in Austin Powers woke up from his cryogenic sleep.
Stories about trillions lost or won should have a deep effect on the public, but the number is so huge most people have no idea how to react. In the case of the stock market, losses or gains never represent actual money that disappears or is created. They are reflections of the shifting “value” of assets. Value literally means what anyone is willing to pay for an asset at a given moment in time. When it’s the entire stock market — all publicly traded assets — the idea of value loses the meaning it might have for an individual asset, since it is a measure of the “willingness” of countless traders and investors and has nothing to do with intrinsic value.
Another story of trillions appeared in 2016. An auditor discovered that the US Defense Department failed to account for $2.8 trillion. This should have been a blockbuster story, but it evoked little reaction either from the media, the public or legislators. Is it a sign of public indifference to anything that may go wrong with the military, considered to be so essential that all its sins will be forgiven? Or does the number appear to be so bloated — five times the annual defense budget — it no longer makes any sense?
The real question people should be asking is this: If so much money is unaccounted for, what does it tell us about the level of corruption and conflict of interest across the entire military-industrial-financial system? As legal scholar Jonathan Turley points out, in the context of the “war on terror,” “this new coalition of companies, agencies, and lobbyists dwarfs the system known by Eisenhower when he warned Americans to ‘guard against the acquisition of unwarranted influence … by the military-industrial complex’ … The core of this expanding complex … [has] created a massive, self-sustaining terror-based industry.”
The notion of conflict of interest simply doesn’t seem to apply to the military. Anyone who says otherwise will no doubt be accused of the ultimate sin of “not supporting the troops.” Whereas a politician who benefits from an “exchange” worth tens of thousands of dollars will be brought to justice for corruption, the trillions that pass through “military operations” must by definition be serving a great cause. When the amount is measured in thousands or millions, justice will be mobilized. When it’s hundreds of billions or trillions, we don’t even want to know in whose pockets the money ends up.
*[In the age of Oscar Wilde and Mark Twain, another American wit, the journalist Ambrose Bierce, produced a series of satirical definitions of commonly used terms, throwing light on their hidden meanings in real discourse. Bierce eventually collected and published them as a book, The Devil’s Dictionary, in 1911. We have shamelessly appropriated his title in the interest of continuing his wholesome pedagogical effort to enlighten generations of readers of the news.]
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.