NBC Rains on Rate Cut: ‘Beware of the Downside of Any Economic Upturn’

Photo of Noel Sheppard.

In case you were out of the country and missed it, the Federal Reserve on Tuesday surprisingly cut two key interest rates by a half percentage point - twice what most analysts expected - causing one of the largest one-day rallies on Wall Street in years.

Yet, the folks on the "NBC Nightly News" seemed a tad unhappy with the Fed's move, as anchor Brian Williams wondered "is it good for everyone," and correspondent Kevin Tibbles cautioned, "But experts say beware of the downside of any economic upturn."

I kid you not.

The News began Tuesday evening mostly with the positive side of the rate cut, bringing in CNBC's Maria Bartiromo to discuss the day's events on Wall Street. However, as Williams introduced Bartiromo, he foreshadowed the gloom to come (video available here, h/t NB reader Tim O'Donnell):

Story Continues Below Ad ↓

As one market watcher put it today, the Federal Reserve just might have saved Christmas. The Fed today jumped in to try to prevent a recession, to try to keep credit card bills down and mortgage rates down, and just maybe save the housing market. But will it work? The Fed cut a key interest rate today for first time in four years. They cut the rate by a half percentage point. It now stands at 4.75 percent. The stock market loved it, shot up 300 points, because it's good for business. But is it good for everyone, and how soon will we know?

Imagine what Williams might have said if they raised interest rates Tuesday.

Regardless, after Bartiromo's upbeat market analysis, the next segment focused on how lower interest rates will help the soft housing market, and other sectors of the economy impacted by consumers. Unfortunately, correspondent Kevin Tibbles exposed some dry-rot in the floorboards (video available here):

But experts say beware of the downside of any economic upturn. More demand for oil, for example, could make heating homes this winter an expensive proposition.

Tibbles spoke with a futures trader that offered a very gloomy forecast:

I don't want to soft soak it for the people that are paying heating bills. They're going to be probably paying record high prices, especially if you heat your home with heating oil. You're going to be very vulnerable. If we have a cold winter, we could see prices like we've never seen before.

Sadly, Tibbles chose not to share actual heating oil prices with viewers, or how they compared with the previous couple of years since Hurricane Katrina hit New Orleans in 2005. If he had (chart available here), viewers would have seen that in the past two years, heating oil has peaked roughly around this time, and precipitously declined thereafter.

This has been largely caused by speculators running prices up before winter comes in anticipation of a harsh season, and then being forced to sell when conditions ended up milder than they had hoped. As such, given that heating oil prices today are roughly the same as they were the past two falls, it is speculation on this trader's part that "we could see prices like we've never seen before."

Furthermore, Tibbles chose not to address another crucial part of the energy sector, especially as it pertains to winter, namely, natural gas. If he had (chart available here), viewers would have been informed that natural gas prices are entering this winter at the lowest level since 2003.

I guess NBC didn't feel this was important.

Add it all up, and this part of the "Nightly News's" report on Tuesday's discount rate cut was absurdly skewed toward the negative.

What follows is a full transcript of the second segment.

BRIAN WILLIAMS, ANCHOR:

Now to what today's move by what the Fed may mean far from Wall Street on the streets where Americans live. NBC's Kevin Tibbles from Chicago tonight has more on that part of the story.

Mr. CHRIS NEIL: I love the windows.

KEVIN TIBBLES, REPORTER: Today's half percentage point cut makes a world of difference to Molly Smith and Chris Neil, hoping to buy their first home.

Mr. NEIL: Man, there it is.

Ms. MOLLY SMITH: Yeah, the lower the interest...

Mr. NEIL: The better.

Ms. SMITH: The better.

TIBBLES: In anticipation of today's cuts, some mortgage rates have already dropped half a point. Buyers of a $250,000 fixed mortgage would now realize savings of about $82 a month.

While buyers shopping for a mortgage on a new condominium or home still need to qualify, the message from the Fed today is straightforward.

Ms. DIANE SWONK (Mesirow Financial): The Fed's there watching your backside, that--so whatever you buy may not fall in price as much as you're worried about or you may be able to negotiate a good deal now, it might be a good time to go in. That will help the economy.

TIBBLES: The cut is also expected to bring about a drop in home equity loan rates, car loans and credit cards, jumpstarting discretionary spending at theaters and restaurants and jumpstarting purchases. That's what they're hoping for at Cole's Appliance and furniture in Chicago.

Mr. BARRY KRASNEY (Cole's Appliance & Furniture): It will definitely be an advantage to our business, we will be seeing more people, and I think sales will climb.

TIBBLES: But experts say beware of the downside of any economic upturn. More demand for oil, for example, could make heating homes this winter an expensive proposition.

Mr. PHIL FLYNN (Alaron Futures): I don't want to soft soak it for the people that are paying heating bills. They're going to be probably paying record high prices, especially if you heat your home with heating oil. You're going to be very vulnerable. If we have a cold winter, we could see prices like we've never seen before.

TIBBLES: And while rate cuts also signal lower rates on savings accounts, analysts say for now they're looking for signs the fear is leaving the marketplace. And one sure sign of that is if consumers start spending.

Unidentified Woman: Come right into the living room. Really take it all in.

TIBBLES: Kevin Tibbles, NBC News, Chicago.

—Noel Sheppard is the Associate Editor of NewsBusters.


Comments Policy

All comments are owned by whoever posted them and are subject to our terms of use. They should not be assumed to represent the views of NewsBusters.

Viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.

I'm so frightened! Hold me,

I'm so frightened! Hold me, NBC!

"But is it good for

"But is it good for everyone, and how soon will we know?"

Just how stupid is raccoon man Williams anyway ? <rhetorical question>. We know the MSM angle here Brian; 

Good for economy; good for Bush, bad for Hillary / Dims

Good for economy; good for capitalism, not good for pushing socialist agenda.

Good for economy; not good for attempting to spread massive economic hysteria resulting from a bad case of BDS.   

  

 

The early bird gets the worm, but the second mouse gets the cheese.  ~ Unknown

...and these guys get paid to say this?...

“But is it good for everyone, and how soon will we know?” – Brian Williams NBC

"...experts say beware of the downside of any economic upturn." - Kevin Tibbles  NBC

 

"It is better to keep your mouth shut and let people think you are a
fool than to open your mouth and remove all doubt." -- Mark Twain

Kevin Tibbles...a.k.a Yogi

Kevin Tibbles...a.k.a Yogi Berra. For more Tibbles' like quotes: http://www.rinkworks.com/said/yogiberra.shtml

The early bird gets the worm, but the second mouse gets the cheese.  ~ Unknown

maybe this one for Tibbles...

"I didn't really say everything I said." - Yogi Berra

vr,

That one would fit the bill for all of them. Your original point about these people making big money uttering statements like that is right on the mark. It's almost surreal to listen to these guys speak.   

The early bird gets the worm, but the second mouse gets the cheese.  ~ Unknown

The sad thing is the people

The sad thing is the people who not only listen to these idiots, but they actually believe them. And there are unfortunately a lot of them, living in blue counties, and voting for the libs who support this cr#p.

v

I thought Liberalism

The disgusting irony is how liberals are supposed to be the ones who question authority etc, and yet they jump over the cliff  like lemmings when it comes to blindly accepting information from Big Media.  It's funny how Big Media need to suddenly get "fair and balanced" when they report on positive data that helps the Republicans.  There's always a rain cloud on the horizon even if the rainbow and sunshine is in your face.  I guarantee you that if Hillary becomes president that all of this talk by Big Media about recessions and bleak  economic predictions is going to vanish.  I guarantee it because this is exactly what happened after Bill Clinton became President.

oil

Typical Northeastern myopia. The folks at the Times, Globe and the nets seem not to know that in most parts of the country, nobody heats their house with oil, which needs a critical mass of users. Also, the news outlets frequently tell heating oil tales of woe by citing some huge sum that someone has to pay to fill their home tank. But they don't provide the critical information of how long a tankful will heat the house. If people bought milk 200 gallons at a time, the sums would be equally "staggering." But then again, we now are seeing stories about families being bankrupted by "record-high" milk prices.

Oh, fer ... If inflation is

Oh, fer ... If inflation is high, debtors benefit.  They pay back the expensive dollars they borrowed with cheap dollars, which is detrimental to the lenders.

If interest rates go up it benefits those who have savings accounts, interest bearing checking accounts, and bond purchasers who can now buy the bonds at a discount.  At the same time it hurts those who have adjustable rate mortgages, corporations with new issue bonds, the government with its bonds, and those who bought bonds at par or at a premium.  If interest rates go down, these two groups switch places in the help/hurt list.

"...beware the downside of any economic upturn."  You know, I don't recall any statement when the economy had any downturn like, " rejoice in the upside of any economic downturn."  Reporters ae such fools sometimes.

"A communist is someone who reads Marx.  An anti-communist is someone who understands Marx."  Ronald Reagan