Finance hacks read from same book of phrases

Keep at least one eye open for the financial pages of the FT, the New York Times and the BBC, University College Dublin, because if they go low on verbs and nouns you can expect a stock market bubble.

As part of his Computer Science MSc at the university, Aaron Gerow ran 18,000 online posts from the news outlets through computers for closer analysis. He found that verbs and nouns from the finance reporters “converge in a herd-like fashion” just before a stock market bubble. Then, when it’s over, the words resemble Scotch Mist and disperse.

Professor Mark Keane, who was involved in the project, examined three top stock markets.

Looking at the DJI, the NIKKEI-225 and the FTSE-100, researchers noticed that writing trends tend to correlate closely with the indices. 

In other words, it means financial hacks leaf through the same book of phrases: each of the papers repeating phrases independently of each other like “stocks rose again,” “scaled new heights” or “soared”. 

Pre-2007 stock crash the papers were full of the phrases.  Keane says in a statement the phrases “also appear to refer to a smaller-than-usual set of market events – presumably because of an increased fixation on a number of rapidly rising stocks.”

The official terminology for the trends is what Keane calls “verb convergence” and “noun convergence”. Basically, it pin points when financial journalists are agreeing with each other through their use of language.

Keane tells TechEye: “The most common verb phrase in positive language are ones about stocks rising or indices rising.  

“In negative instances, phrases using fall are most common; expect where the fall is a good one for example, inflation.

“Obviously, the verb would be used with a particular stock name or specific index. “