Taper: The Latest Overused "Buzz Word" by the Financial Media

Michael Teague  |

According to the Oxford Dictionary of English, the word “cliché” is defined as “a phrase or opinion that is overused and betrays a lack of thought,” or “a very predictable or unoriginal thing or person.”

If one were so inclined, one could feasibly extend the above definition to include any unoriginal, banal, or overwrought form of cultural expression such as a style of dress, a type of music, as well as just about anything related to taste.

But the dictionary definition of the word tells us little about the many rhetorical uses of clichés, and how or why they might be used in a given context. In the world of journalism, for instance, clichéd expressions can serve the ostensible purpose of efficiently and concisely disseminating relevant information to interested citizens.

Two excellent examples from finance journalism’s many cliché expressions are “bull market” and “bear market.” Readers and writers in the finance community have more or less agreed upon the general meaning of these two terms, and they have become common if not indispensable tools of the trade. Cliches like this tend to serve a descriptive purpose, and are a sort of shorthand for market-related events that are common to the finance community.

But clichés can metastasize beyond their descriptive purpose, and financial journalism and commentary are no less replete with examples than any other faction of the media. This is especially evident in instances where a particular turn of phrase has become so in vogue, so thoroughly over-used by so many different people that it almost becomes meaningless.

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Presently, the best example of this is the word “taper”. Shortly after stocks began their epic ascent at the start of the year, investors began to worry that the Federal Reserve would get the idea that the economy was improving, and that the time might well be nigh for it to put an end to its $85 billion-dollars in monthly bond purchases. For the Central Bank to do this all at once would clearly be disastrous, however, and so the end of quantitative easing had to be a gradual process, a “tapering.”

This is not to say that many other terms are not also being used to describe the Fed’s inevitable and unenviable task of weaning the economy off of its support. “Drawing down,” “winding down,” and "pulling back" are all commonly used as well; it's just that "taper" has emerged the official word. And while just about everyone who follows stocks probably knows that "taper" reffers to a process of gradually reducing asset purchases, there is an implicit connotation to the word that makes it particularly suited to its task. Indeed, the word "taper" is often used by addicts to describe the gradual process of reducing one's depedence on a drug.

So it may not be an accident that "taper" has become the preferred expression, as it is a nicer way of saying that that financial markets are going to have to go through a process of withdrawal from their dependence on the Federal Reserve's open wallet. This also puts the pun "taper tanrum" into perspective, as we are likely familiar with that scene in the movie, itself perhaps a cliche, in which a character frantically tears his or her house/apartment to bits looking for their stash, like Frank Sinatra's character in "The Man With The Golden Arm."

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