Have CNBC's Graphics Scared Investors?


I am a retired communications professional who worked in financial direct marketing for many years. During the past several weeks, I have noticed that CNBC is flashing a warning graphic, “Is Your Money Safe?” multiple times a day.

This graphic is typically flashing four seconds on, four seconds off, when major newsmakers such as Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke or President Bush are speaking. This graphic is also flashing at various intervals when other market analysts appear.

You might think that this is insignificant. But consider this: Today [Oct. 15], for instance, CNBC flashed this graphic at approximately 10:30 a.m. for about eight minutes. The market sold off—from minus 100 points to minus 359 points—while this graphic was flashing on the screen.

The primary issues you might consider are:

Is it appropriate for a news organization to create a highly emotional broadcast environment in which to present “objective” news?

Is CNBC aware of the power of these words and colors to cause people to be anxious about their investments?

Is it fair to newsmakers who come on CNBC programming with a message of calm and reassurance to have a warning flashing while they speak?

I draw your attention to this device, as I believe that CNBC is completely unaware of the power of flashing this message.

The human brain is hard-wired. We have been trained all our lives to be anxious and concerned when we see a warning message. It's similar to a flashing yellow light at a dangerous intersection, a tornado warning on a TV screen, the flashing lights at a railroad crossing, etc. CNBC is using a technique that is not normally seen on a regular television broadcast. The daily repetitiveness is exhausting.

As a parallel, would you recommend a flashing graphic with the words “Is This News True?” at the bottom of the CBS Evening News? I don't think so.

I believe this is a very serious matter. While this graphic has been flashing tens of thousands of times in the past several months, the U.S. stock market has made some of the most significant declines since the Great Depression. Fear indicators, such as the VIX, have exceeded all previous modern levels. Wachovia Bank was solvent, until CNBC started talking about it while this message was flashing. In six weeks, $18 billion in assets were withdrawn from this bank, bringing it to insolvency. Experienced market analysts have never seen a sell-off like this, with such enormous intensity behind the selling. I believe something else is at work, and CNBC is partly responsible.

I'm suggesting that you watch CNBC, and look for this graphic to appear. What is its manner and use?

Perhaps an open dialogue should begin about this unusual device, and how it is being used in such an unusual manner when there is enormous financial stress.

This is a very important subject. I'm certain that most viewers are completely unaware they are seeing this graphic flash thousands of times. Yet it could be deeply affecting decisions involving taking risk. My past experience with testing in financial markets tells me this is the case.

Gary Woods

Milton, Fla.

[Woods is a retired journalist and former direct-marketing professional.]