Buzzword: Big bath

Marketplace Staff Oct 5, 2007
HTML EMBED:
COPY

Buzzword: Big bath

Marketplace Staff Oct 5, 2007
HTML EMBED:
COPY

Splishing and splashing bring us this week’s Marketplace Money buzzword: Big bath.

Big bath is Wall Street’s way of avoiding negative expectations by heaping on piles of bad news. Usually, after a bad quarter, a company might report a decline in income that’s worse than it really is. Since most investors are primed for it, they assume the worst must be over.

This week, Bank of America and Citibank reported massive losses related to this summer’s market mayhem, causing stocks to actually go up. But before anyone gets too happy, remember this: Hot water gets rid of dirt, but it can also burn.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.

$5/month special ending soon!

Don’t wait: there’s less than 24 hours left to get (almost) any Marketplace thank-you gift.