Did someone leak the fact that the Wall Street Journal was working on a major story about Federal Reserve policy — or did traders just make one helluva guess?
Here’s the time line. You tell me.
Late last Thursday in financial circles, isolated whispers turned into a full-on rumor that Journal reporter John Hilsenrath would be publishing a story later that day about the Fed’s plan to ease back on its quantitative easing bond-buying program.
Stocks, bonds and gold prices all fell on the rumor.
I don’t know Hilsenrath, even though the Journal and The Post are owned by the same company, News Corp. But he is known to have particularly good sources at the Fed, so Wall Street tends to pay attention to his stories — especially those forecasting the Fed having a plan to ease off its $85 billion a month bond-buying spree.
A source of mine in Chicago called me at about 2:30 p.m. and told me about the rumor, which he had just heard. To document the gossip, I mentioned it immediately to one of my editors, and we waited to see if it would come true.
At around that same time, a financial website called Zero Hedge was running the following item: “S&P 500 futures are currently experiencing the largest intraday drop in May — seemingly set off by this [sic] which was largely a joke uttered about an hour ago.” It then quoted a 2:12 p.m. tweet that said, “over/under on a 3 p.m. Hilsenrath article hinting tapering [of QE] is coming sooner than later.”
After that, Zero Hedge added, “which promptly escalated into a full-blown rumor that Hilsenrath is about to issue an article heralding the end or tapering of QE. Sigh.”
More than 11,400 people read the Zero Hedge item, and 231 commented on it — so the rumor had legs.
But Thursday came and went, and there was no such article by Hilsenrath. But after the market closed on Friday, the Journal carried an article on its website that was headlined “Fed Maps Exit From Stimulus.”
That story, under Hilsenrath’s byline, was also the lead article in the Journal’s print version on Saturday.
Traders are known to be incredibly intuitive. But the fact that they guessed — in the middle of a lackluster Thursday — that Hilsenrath was working on this particular story requires a little too much extrasensory perception for my taste.
That leaves us with the possibility of a leak of some sort.
I suppose someone at the Journal could have a big mouth. And there is also the possibility that people found out that Hilsenrath was making calls about the Fed, put two and two together and came up with the correct angle.
It is pretty common knowledge that a growing number of Fed members are unhappy with the effect of QE on the economy and think it’s time to pull the plug. And the stock market’s unimpeded ascent into bubble territory has to be making the Fed’s governors even more nervous.
If the Fed actually made an announcement that it was considering a rollback of QE, there could be big market repercussions. That’s why planted stories are necessary. (And, by the way, I am available if Fed Chairman Ben Bernanke wants to plant a story in this column. It’s good for business.)
The Journal wouldn’t comment on why the story didn’t run until after the markets closed on Friday and wasn’t in the print edition until Saturday. Those are typically times when you’d publish something that is unimportant — or something so important that financial markets need time to digest the information.
“The Journal publishes news articles when they are ready,” was the only statement I could get from the paper. In the piece that ultimately appeared, Hilsensrath wrote that he conducted interviews with Fed governors on Friday.
So what did we learn from this experience? That if you are investing in this stock market you had better be paying attention all the time — to the news and to rumors of news. And good luck with that.
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Do we really need ObamaCare? Let’s just let Groupon run the nation’s health-care system.
ObamaCare is also known as the Affordable Care Act. It’s supposed to make health care cheaper for everyone, but it has stirred up lots of controversy. (And the minute someone figures out what this act is all about, please get in touch with me so two of us will understand.)
Groupon, of course, gives people discounts on goods and services. I bought a few watches through Groupon a while back, and all of them are still ticking.
But the other day I saw a discount that made me wonder: “Checkup and Bloodwork” discounted from $200 to $59. “Health screenings are a more accurate alternative to asking carnival barkers to guess how many blood cells you have. Step right up for physical assessments with Groupon,” said the pitch.
It goes on: “Doctors examine bodies for about 45 minutes during the general physical, looking for telltale signs of sickness or extra fingers.”
So, if Groupon can get you cheap medical care — and humor to boot — why do we need the Affordable Care Act? Let’s just log on, wait for the procedure we need to be discounted and grab it.
I won’t give you the name of the medical group that’s offering such a steal. But I think this is something both political parties can get behind, or they should have their heads examined — which Groupon probably has a deal on.