How Misleading Headlines Frame the Narrative

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The Financial Times recently ran a story on pension funds and private credit with the headline, “US public pension funds pare allocations to private credit. Pullback highlights concerns about looser underwriting standards and rising credit risks.”

On the surface, it was about institutional investors growing cautious on the booming asset class. But look closer, and you’ll see something more telling about the way news gets written — and consumed.

The article opens with a small pension fund in Cincinnati that has tapped the brakes on private credit. The narrative builds around skepticism, risk, and pullback. Only at the very end do readers learn that the New York City pension fund — with over $300 billion under management — is fully committed to private credit. In other words, the story’s most significant character wasn’t just positive on the space, but “all in.”

This isn’t just a quirk of editorial choice. It’s a symptom of a larger problem.

Negativity Pays

In media, the old cliché is true: if it bleeds, it leads. Readers are drawn to risk, fear, and danger — far more than to stability or success. Attention drives clicks, clicks drive subscriptions, and so stories are structured around cautionary tales. A headline warning about institutions turning away from an asset class will outperform one that says a $300 billion pension plan is doubling down.

The Distortion Effect

The problem is that this framing distorts reality. A casual reader might walk away believing that pension funds writ large are abandoning private credit. The truth — that the nation’s largest public pension systems remain enthusiastic participants — gets buried. In financial markets, perception matters. And the perception created by negative framing often overshadows the underlying data.

Social Media Supercharges It

This bias toward negativity isn’t confined to traditional media. On social platforms, algorithms reward outrage, fear, and controversy. Posts highlighting risks and crises are shared more widely than posts highlighting steady progress. The cycle feeds itself: consumers engage more with negativity, so producers supply more of it.

What Gets Lost

What’s lost in this cycle is proportion. A tiny pension fund in Ohio isn’t remotely comparable to the NYC Retirement System. Yet the story elevates the smaller outlier to headline status while relegating the much larger player to the fine print. The result is a warped picture — one that fits the negativity mold but obscures the larger truth.

The Bigger Picture

The FT article could have been written the other way around: “NYC’s $300 Billion Pension Fund Goes All In on Private Credit — But Not Everyone’s Convinced.” That version tells the same facts, but leads with the weightiest data point and uses the Cincinnati fund as context. Instead, readers got the inverse, because bad news — or at least skeptical news — makes for a stickier headline.

Why It Matters

For investors, policymakers, and the public, this matters. Media framing shapes how we understand markets, risk, and opportunity. When negativity consistently drowns out proportion, we risk making decisions based on skewed perceptions.

And for society at large, the same forces are at play. Politics, economics, health, culture — the most pessimistic interpretations tend to dominate. Not because they’re always right, but because they’re the most clickable.

Breaking the Cycle

We can’t change media incentives overnight. But we can be more aware as consumers. Ask: What’s the full picture? What facts were downplayed? The truth is rarely as dark as the headline.

The Cincinnati fund might be cautious. But the $300 billion in New York is committed. That tension is reality. And reality is always more balanced than the way it’s presented.

👉 That’s the real story — not just about private credit, but about the way our information ecosystem increasingly rewards pessimism over proportion.

Michael here. Sorry, I didn’t write that, ChatGPT did. Lame, I know. But pretty damn good, right? I wanted to write this story, but still unpacking boxes after the move and, well, I got lazy. Pressed the easy button. Ben and I spoke about this story, which fired me up, and much more, on this week’s Animal Spirits.