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A conversation in the Macrodesiac chat yesterday focused on the media and how information is presented to us. Cogs began whirring and it ended up with me pondering how we think about risk.

How things are reported in the media vs 'reality' is a recurring theme. Yesterday's chat centred on the real world trying to move on from the pandemic, while the media just can't let it go.

In real world conversations, most people I speak to believe on some level that it's basically the flu now. If people aren't vaccinated it's by choice, and as long as health systems aren't overwhelmed, then let's get on with it. Some are still more fearful than others, but the direction of travel is clear and the reasons for liberties to be infringed much longer are waning.

In media world, it's all about the RISKS:

“If you’re unvaccinated, Omicron will put you at a significantly higher risk of going to the hospital.”

Define 'significantly'. Is it a 0.01% risk that has now TRIPLED to 0.03%?

How long will I be in hospital? Longer than previous variants?

Then there's Bloomberg's efforts today. We go from this 👇

To this 👇

To this 👇

The stratospheric numbers being posted in the U.S. come even as many Americans are relying on tests they take at home, with results that aren’t reported to official government authorities. That means the record is surely a significant under-estimate.

And finally THIS 👇

So sad when your record isn't actually a record. This isn't to say that everything can just be ignored. It's more of an observation on how the media plays on statistics to present everything in the most negative light.

And we can't really blame them.

It's OUR Fault

It's just how we're wired.

There's an innate negativity bias that's baked into our psyche. It probably kept our ancestors alive by scanning the environment for dangerous predators and taking action to avoid it. Not so useful today, when we're scanning the news and our attention is drawn to all of the worst case scenarios.

Read these two headlines:

  • This is why you'll live to 100
  • This is why you'll DIE tomorrow

Which one triggered the emotional response?

It might have been faint, barely perceptible even, but you probably felt it on some level.

And it's not just negativity bias that afflicts and tortures us. We're also TERRIBLE at understanding risks. If we're emotional, it's even worse.

If you actually stop to consider how deeply flawed our cognition is, it's a miracle society has made it this far. Visual Cap have a lovely graphic to illustrate all of our human shortcomings. 👇

Full Size

That's enough human-bashing for now.

See, it's well-known that people think in stories. If you explain things using statistics, people will rationalise the good statistics away and focus on the negative ones. They'll use stories to explain why THIS statistic doesn't apply, but THIS one definitely does.

According to the NSC, (keeping things nice and upbeat) these are the lifetime odds of death in the United States:

Tell someone they have a 1 in 92 chance of dying from an opioid overdose and they'll roll their eyes at you: "could never be me" 🙄

Tell the same person a vivid story about your friend Pete, who all the ladies loved, the golden boy, excellent student and star athlete in school...Until he met the gorgeous Tammy-Lynn. They tried heroin for the first time together, some other bad and vivid stuff happens, just two years later his decomposed body is found wasting away in a bedsit. Then present the 1 in 92 stat to reinforce the reality of that risk...

"I'll make sure that could never be me" 😨

And the same is true about data. How it is presented (the context and framing) matters far more than the data itself. It's the story surrounding the data that matters.

Take yesterday for example. We looked back at 2021 and this observation:

In theory, the explosion of inflation this year should have driven a big rise in bond yields, and might well have dragged down share prices. Nothing of the kind has happened.

Why was this?

Pick your story:

  • Bond yields as a representation of inflation is erroneous
  • Federal Reserve suppressing interest rates
  • Disinflationary pressures are too entrenched
  • Demographics are destiny
  • High Quality Liquid Asset shortages play a large role in bond demand

It doesn't really matter which of these stories you choose, nor which of them are objectively true. They all had an influence on the bond market last year because people believe them.

Summing up, data and facts exist to reinforce or disprove narratives. Put another way, they are the supporting evidence for how people feel about the market.

That needs a quote to get the message across...


Shoehorning in a reference, the last Matrix film was as terrible as you'd expect, although it had one saving grace.
The Analyst and his observations of human nature 👇

“You don’t give a shit about facts, it’s all about fiction.
The only world that matters is the one in here (points at Neo’s head), and you people believe the craziest shit.”

“Here’s the thing about feelings; they’re so much easier to control than facts.”
“The sheeple aren’t going anywhere.
They like my world. They don’t want this sentimentality.
They don’t want freedom or empowerment.
They want to be controlled.
They crave the comfort of certainty.”

They crave the comforting illusion of certainty.

But that's a topic for another day.

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