The Stock Market's Stock Phrases

Gar Smith
Friday February 26, 2016 - 04:57:00 PM

We'll know our disinformation program is complete when everything the American public believes is false."

—Attributed to CIA Director William Casey in 1981 *

With the global economy once more teetering on the brink collapse, it is useful to remind ourselves that we live in a country where everyday life is defined by disinformation, misdirection and euphemisms.

Today, people who used to be known as "employees" or "workers" have learned not to expect better wages or benefits. Instead, they are flattered with empty, honorific titles. Yesterday's big-box "wage-slaves" are now addressed as "associates." Low-paid, part-time academics are called "adjuncts." CostCo employees have become "partners." (And once you've been granted the title of "partner," wouldn't it seem rude to ask for a raise?)

A few months ago, Crate and Barrel employees were expected to feel better when their massive layoffs were announced in a letter that read: "We are grateful to our departing associates for their hard work and service." [Emphasis added.]

And the folks who are still lucky enough to have jobs now flock to corporate outlets to spend their money on coffee, fast-food, and gadgets, flattered by the notion that they are no longer mere customers or cash-cows: They are now "guests," "customers," and "patrons."

At the same time, the corporate-owned mainstream media (which has been dominated by major Wall Street players including General Electric, Comcast, Westinghouse, and Viacom) perpetuate the confusion by draping their offerings beneath brightly branded veils. 

Watch Out for these Watch Words 

As the new "economic-collapse comedy," The Big Short reveals, Wall Street has created its own obscure lexicon of euphemisms to better flummox the public by making it difficult for outsiders to understand what the speculative tribes are really doing from day to day. "Credit-default swaps," "collateralized debt obligations," "tranches," "mortgage-backed securities," "synthetics"—all impenetrable terms invented to conveniently bounce off the average brain. 

At the start of 2016, Wall Street found itself in the grips of the greatest first-week declines of any year in its history. While investors were widely described as "scared," the corporate-owned media invited selected stock pundits to reassure their radio and television audiences. They inevitably recited the same familiar patter: 

"The stock market goes up and it goes down but the market always bounces back." 

"The important thing to remember is: Don't panic." 

"Stick with your plan." 

"Just sit tight." (And do nothing while major investors are busy shedding stocks like there's no tomorrow). 

"Don’t try to time the markets," Washington Post money manager Barry Ritholtz advised, "The odds of you jumping out on time and getting back in are stacked against you." 

Meanwhile, Wall Street continues to be protected by a wall of euphemisms, endlessly intoned by the monied media. Let's take a look at a few of the leading examples of misleading Wall Street lingo. 

Taking Stock of Some Stock Phrases 

When panicked investors start selling their stocks to avoid further loses, this is called "profit-taking." (A nice, positive spin on the process of losing your 401k savings.) 

When the market crashes, that is called a "correction." (Synonyms for "correction," by the way, include "improvement," "righting," and "reparation." 

So, when the opposite occurs and the market is soaring, shouldn't we call this a "mistake"? Or a "blunder"?) 

When the value of the dollar shrinks, that's called "inflation." (And inflation's a good thing, right? You always want your car tires to be properly inflated.) 

When the market claims irrational and unsustainable levels of profitability, that's described as a "balloon." How merry. And when a balloon "pops," no big problem: You simply inflate a new one. 

And when the market is in a tail-spin and your $10 shares are suddenly worth ten cents, well, that's simply a good time for "bargain hunting." 

Henry Blodget of the Business Insider http://www.businessinsider.com/meaningless-phrases-that-sound-smart-on-cnbc-2011-6>has noted that Wall Street relies on a basket of "market phrases that sound intelligent but don't mean anything." In addition to making the speaker sound "as wise as Warren Buffett (who, to his great credit, never speaks this way)," they have the added benefit that "no matter what happens, the analyst can always be 'right' and never be 'wrong'—because they didn't actually say anything." 

Here are some excerpts from Blodget's blog on market-speak: 

"I'm cautiously optimistic." A classic. Can be used in almost all circumstances and market conditions. 

"We're constructive on the market." It sounds generally optimistic, which everyone will like, but it doesn't commit you to any specific recommendation or prediction. 

"The trend is your friend." It sounds pithy and wise. . . . It sounds calm and confident. . . . Alas, knowing what stocks have done — the trend — tells you almost nothing about what stocks will do. 

"There's lots of cash on the sidelines." A classic way to suggest that the market will eventually go up. 

"We're in a bottoming process." A classic way to describe a stock or market that has fallen a lot and might do anything from here. Also known as: "Forming a base." 

"Take a wait-and-see approach." A perennial favorite. It sounds prudent and cautious. . . . It sounds appropriately skeptical. It means nothing. How long are you going to wait? What are you waiting for? 

In November 2015, Jason Zweig (prompted by concerns that the cash-trading industry "abounds in euphemism, doublespeak, myth and mendacity") authored a book called The Devil’s Financial Dictionary. Here are a few of Zweig's specimens of specious market-speak: 

Apology: A Wall Street apology always purports to take responsibility, but usually omits contrition, shame, a desire to make good on what went bad, or the willingness to make sure the same behavior never happens again. 

Bull Market: A period of rising prices that leads many investors to believe that their IQ has risen at least as much as the market value of their portfolios. After the inevitable fall in prices, they will learn that both increases were temporary. 

Potential Conflict of Interest: An actual conflict of interest. 

Regulator: A bureaucrat who attempts to stop rampaging elephants by brandishing feather-dusters at them. Also, a future employee of a bank, hedge fund, brokerage, investment-management firm, or financial lobbying organization. 

Rumor: The Wall Street equivalent of a fact. 

Sell: What Wall Street analysts say investors should almost never do, regardless of a stock’s price or market conditions. 

And finally, here's George Carlin, railing righteously about the corporate criminal class in 1988: 

These are the Law and Order people! These are the people who are against street crime! They want to put street criminals in jail to make life safer for the business criminals! Yeah! They’re against street crime, provided that street isn’t Wall Street. 


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* This quote continues to be argued by people who weren’t there and apparently cannot believe a CIA Director would ever say such a thing. But spreading disinformation is precisely what the CIA does.