The Double Edged Sword Of Double Speak

Life is complicated. Yet, we all know it’s pretty simple. Or, it’s as complicated as you make it. Am I trying to be coy? Well yes, and no. Alright I’ll stop, so I can continue.

The above is to express a point. I can always be right (on the question of life) if you try to tell me I was wrong or, vice versa. Even if you use my own words as proof. I’ve covered all my bases. Same with trying to be funny or, continuing or stopping. What ever you say I did or didn’t say, I can quite easily change or, pick whatever definition suits me as to what I meant. I’m covered.

From politicians, Wall Street, and more one thing is crystal clear. Double speak along with complex definitions for simple terms, (along with my favorite) – responses to yes or no questions in a manner that would make Rube Goldberg blush have become the norm. At one time I could be dazzled in the audacity of the complexity. Now? I’ve moved past frustrated (not collecting $200) going directly to – annoyed.

The problem today is where this was once a limited practice left to highly skilled practitioners of language. It has now taken over the body politic, business, sports, and more. Only thing left to figure is: “Does that dog’s bark or cat’s meow really mean what we think it does?”

There has always been complexity in language. Many times it’s needed to express explicit ideas or intent. However, today it has taken on a life of its own. Again, in shapes, manners, and forms that makes one question if someone saying “Hello” actually means Hello. Think I’m kidding? Need I remind you of the grand daddy in recent history? “”Depends what the definition of “is” – is.” (I’m still in awe of that one.)

One can’t help but watch the political stage today and wonder. “What did he say?” (both sides left or right) Or, better yet, When one is queried on what they said previously while as to make no mistake – is read actual verbatim text.  The response comes back, “Well I did say that but,  you misinterpreted what I said.” Really? I mean….Really?

Wall Street is also notorious for this type of talk. Whether it be the use of jargon, complex models, or down right lying. i.e., “This thing’s a sure bet!” One is hard pressed to get straight answers to pointed questions.

There always seem to be cover or wiggle room (i.e. excuses) between the technical terms, formulations, complex graphs, models, forecasts, and reams of paperwork to show why their prognostications are worthy of (all) your money.

One thing will become crystal clear when it doesn’t work. They won’t mince words to tell you, “Well, there is no guarantee.” Along with everyone’s favorite, “It does state right here in the paperwork I supplied that risk could equal losing EVERYTHING.” (and then some)

Media has fallen into a similar trap. Instead of the telling or reporting on stories, they are in a never-ending quest for “buzz words.” Some form of headline grabbing, SEO encrusted synopses formulated for one thing: Enticing the algo’s of search engines for coverage across social media in all its forms.

Although using crafty double speak, and more has been the tool de jure. There seems to be a new twist.

Where as all this has worked previously. It now may have morphed showing previously unforeseen negative consequences.  Enter – The Machines ( High Frequency  Trading or Algorithmic Trading aka HFT) and the communication strategy between the Federal Reserve and markets.

Wednesday of this week Federal Reserve Chairman Ben Bernanke held his scheduled press conference as to explain the Federal Reserve’s policy meeting actions, while simultaneously answering questions for the press. However, if one was paying attention to the markets. They were doing exactly the opposite of what these press conferences were created to alleviate. Instead of calming markets – they were panicking and, remained panicked throughout the day. Not as an isolated incident rather across all markets. Equities, bonds, etc. Why?

I’m not exactly sure however, I do think I have an answer. (Sorry, I couldn’t help myself.)

For whatever double speak or, linguistic gymnastics the Fed. might use as to offer offense or defense within communications, one thing was a constant. Explanation of what was meant (or insinuated) was relegated to or for interpretation by – human beings. That game has now changed in ways we are just beginning to notice. The effects can be unnerving the closer one looks.

“Fed. speak” as it’s referred to has always been regarded as an art form. Both in interpreting as well as stating policy by the Fed. itself. Legal art, legal ease, and more have been hallmarks of economic academia. Yet, the people who are listening closely today are not people at all. They are HFT computers.

Computers, with awe-inspiring levels of sophistication. While simultaneously dumber than a box of rocks as to interpret intended or hidden meanings within human communication. i.e. “That loan is Bad!”

What’s a headline reading, word actuated, HFT computer to do with that line? Does it engage the Buy program? Or Sell? You and I both know “Bad” (however dated) can mean great. Computers? Not so much.

I believe this, “between a rock and a hard drive” is where the Fed. finds itself. I also believe it can (and will) morph into far more of an issue than the Fed. or markets fully comprehend to date.

If the chairman of the Federal Reserve (and the entire body for that matter) believe increased communication with the markets is a paramount pursuit as to calm (or preempt reactions) when or if policy matters change. How does one anticipate or formulate communication to markets that are now visibly controlled by HFT?

Markets now vulnerable to attacks by algorithmic programs initiating buy and sell orders within nano seconds of a word or phrase used. Whether it be in speech, print, or any other form – 24/7/365 world-wide. This is not something that can be continually ignored by the so-called “smart crowd” throughout the financial media landscape.

Government bodies are filled with academic intelligentsia. Kings and queens of double speak. Many have been elevated to their positions in direct proportion to their linguistic skills. They live and breathe on their literary acumen. This is not a bad thing per se.  Just as a carpenter has their bag of tools. Language, communication, and elocution (as well as confusion and non-communication) are requisite tools needed there. Whether it’s for communicating to the masses, or to each other.

However, today’s listening audience for the Fed. are no longer human – they’re machines.

The real issue here is whether or not the urgency in adaptability will be forthcoming to address the concerns when it comes to how the Fed. continues to communicate with the markets. For as what was expressed on Wednesday, it’s obvious the machines know only one thing.

“Double Speak” means: Speak, Speak.

© 2013 Mark St.Cyr