Is media contributing to financial crisis?

BusinessWeek examines the impact of 24-hour media coverage on the financial crisis of 2008. 

From the story:

The sheer quantity of information available raises the question: Could the media actually be contributing to the very crisis it is covering? During past crises, average investors needed to wait until the evening news or the next day's newspaper to learn how their investments had done. This year, the financial panic has unfolded minute by minute in front of investor's eyes. Meanwhile, online tools allow investors to make rash decisions, buying or selling stocks with the click of a mouse. It's a media environment that seems like a recipe for panic. 

The pubic has been bombarded with pessimism by the media in recent months. CNNMoney.com actually told readers to "Turn off CNBC" in order to preserve their sanity. But industry experts suggest media may not be adding "unnecessary fear" or panic to the market. According to Richard Sparks of Shaeffer's Investment Research, "The facts themselves are scary enough...and it hasn't needed any embellishment from the media." 

But Christopher Smith of the University of Southern California's Annenberg School for Communication said media coverage can have a dramatic impact on public perception and cause "huge swings in optimism and pessimism by investors." 

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