Consumer confidence hit a six-year high in July, a widely watched gauge of sentiment showed on Tuesday, as Americans shrugged off falling home prices to focus on a healthy jobs market, instead.
The New York-based Conference Board said that its Consumer Confidence Index, rebounded to 112.6, its highest level since August 2001 when it recorded a 114.0 reading. That compared to a revised 105.3 in June. The July 24 cutoff for the preliminary survey of 5,000 U.S. households was before last week's stock market tumble, however.
It has to. A six-year high is bad enough; we surely can't afford to let the index get to an 8-year high, or someone might get the mistaken idea that the current economy is as good as or (heaven forbid) even better than the Golden Age of the 1990s (even though by a couple of respected measures it is).
Nets Barely Notice Surge in GDP as They Focus on Dow Plunge
The ABC, CBS and NBC evening newscasts on Friday all devoted full stories to the fall in the stock market, touted as "the worst two-day point drop for the Dow in five years," but barely had time for a sentence about the 3.4 percent second quarter jump in the GDP, the biggest in over a year. In fact, neither ABC nor NBC cited the specific 3.4 percent rise in the Gross Domestic Product, the measure which the AP on Friday described as the "best barometer of the country's economic fitness." Not one of the three evening newscasts mentioned how the Dow is still well above the 13,000 level it broke through in April and none noted fresh good news on inflation.
Not even reporting what second quarter GDP growth actually was (repeat: 3.4%) is flat-out negligence.
Last week's economic report couldn't have been much rosier. The economy grew at a faster-than-expected rate, faster than any time in over a year. But far from sparking runaway prices, inflation actually moderated.
But that didn't stop the Axis of Gloom, AKA the New York Times and its Beantown subsidiary the Boston Globe from publishing op-ed items this morning finding the cloud on the silver lining. A lugubrious Times editorial laments:
By the end of last week, any lingering hope that the housing downturn would be contained had vanished. As this week begins, signs of contagion seem to be everywhere . . . The fallout of housing-related turmoil is also likely to extend beyond financial markets.
The editorial ends with a call for closer monitoring of hedge funds.
Over at the Globe, liberal economist Robert Kuttner [pictured here] emits a sky-is-falling column "The crash that could come."
And that's exactly how the mainstream press treated it. What goes down, must go down further. Even with the sour coverage on NBC and CBS on July 26, there were voices of reason that warrant commitment to the markets.
"So this is not a crash, if anything, it's a correction," said CNN "American Morning" business correspondent Ali Velshi. "It might not even be a correction; it might just be a stop on the way."
Wow, good news, even on CNN.
Others experts point at signs our economy is still in tact and still moving in the right direction as evidence not to panic.
Colorado journalists and politicians who fell in line and attempted the bogus "Food Stamp Challenge" probably didn't anticipate that a Colorado blogger would call them out, and then call their bluff. But that is exactly what happened.
In June, Colorado Freedom Report's Ari Armstrong challenged those in that state's media and political class who swallowed the claim that Food Stamp recipients can't get by on $21 per person per week (even though, as syndicated columnist Mona Charen and yours truly noted back in April, the right number is between about $27 and $36, depending on family size) to pay $10 to a charity of Mr. Armstrong's choice for every dollar under $1,080 ($6 a day for 180 days) that he and his wife combined spent on food in a six-month period.
(Picky, picky -- The Armstrongs were even tougher on themselves than they needed to be, as there are 184 days in the six-month August 2006 - January 2007 time period involved. They could have used $1,104 as their benchmark.)
When Matt Lauer introduced a segment on the booming stock market by asking "is the rising tide lifting all boats?" I braced myself for another MSM excursion into class warfare. But surprise, surprise . . .
CNBC's Erin Burnett narrated the segment, and her opening also made me figure we were in for more bash-the-rich rhetoric. "Another day, another record on Wall Street . . . As stocks rise, it is time to finally ask, who is really making all the money? Who are the winners of the global economic boom?"
Cut to clips of the Dem presidential contenders, including Hillary offering up this bit of class warfare at its pandering worst: "while productivity and corporate profits are up, the fruits of that success just hasn't [sic] reached many of our families. It's like trickle-down economics but without the trickle."
But then came the surprising shift of gears.
CNBC'S ERIN BURNETT: But while the rich are getting richer, you may be too. Here's why: more than half of Americans are invested in the market, whether through a 401(k) plan or buying stocks or mutual funds, and many of those investments are surging. The Dow Jones Industrial Average is up 12% so far this year, and if your retirement plan invested in oil, that alone is up 21%. It's also worth noting that while politicians talk about "two Americas" [get ready to duck, John Edwards] virtually all Americans are seeing wages rise, and unemployment is at an historic low.
The segment, called "Hidden Charges," did not include comment from the banking industry and it also ignored the risk taken by banks by offering overdraft protection service – which can be a benefit to consumers. Bouncing a check is costly too from what I've heard.
What do you get when you add a liberal think tank study, another liberal “expert, and CBS “Evening News?” You get a doom-and-gloom story about baby boomers remaining in the work force as “an economic necessity” that ignores relevant information.
“The 78 million baby boomers are starting to think about retirement, but for many of them, that’s all they’ll be able to do. Think about it. Two new reports out today show many will have to retire much later than they thought,” said anchor Katie Couric.
Couric also said, “While boomers may be better educated and better paid than their parent, they’re not necessarily better off.”
Now don’t despair boomers. There is something Couric and correspondent Nancy Cordes didn’t tell you.
As Al Gore and his band of not so merry global warming alarmists in buses and in the press try to convince Americans that they need to alter behaviors in order to save the planet, an inconvenient truth is being cynically withheld: this is going to cost a lot of money.
Of course, one of the delicious hypocrisies is that these are the same people who decry the current economic boom as only helping the rich, and state regularly and fervently that the poor and middle-class are being left behind.
At the same time, such mid- to lower-level wage earners should be saddled with exorbitant additional expenses to shelter them from a wolf that might never come knocking at their doors.
Makes sense, right?
With that in mind, the Chicago Tribune’s Laurie Goering wrote a fabulous piece recently exposing some of the potential costs of this exercise that most media don’t want you to know (emphasis added throughout, h/t Benny Peiser):
As the stock market has continued to regularly make new highs in 2007, how many times have you heard or read a media report carping about how the rich are getting richer?
Quite a bit, right?
If you feel bombarded with such inanities, consider that a completely unaudited LexisNexis search of major American media outlets identified 234 reports which included phrases like “rich get richer,” “income inequality,” “wealth disparity,” etc., since January 1.
Add it all up, and that’s almost two a day.
A fine example of this nauseating mantra was demonstrated by CBS’s Charles Osgood on “Sunday Morning” April 15:
Here’s an extraordinarily inconvenient truth the press will likely not report: a “cap-and-trade” program designed to curb carbon emissions in order to "solve" global warming will negatively impact the poor the most.
Think Charlie, Brian, and Katie will do a story on this tonight?
Regardless of the answer, the reality is that as folks like soon-to-be-Dr. Al Gore and his sycophant devotees recommend solutions to a conceivably nonexistent problem, few care to address the negative economic impact of such strategies.
Towards that goal, the Congressional Budget Office released a study on Wednesday that didn’t paint a very pretty picture of the financial ramifications of a cap-and-trade program proposed by Democrats (emphasis added throughout):
Producer of an MSM morning news show? Got a few minutes to fill at the end of your first half-hour? Why not resort to a tried-and-true winner: a bit of good old class warfare?
That was the "Today" formula this morning. Matt Lauer introduced the segment, enviously entitled "Share the Wealth?: The Rich Get Richer," fanning the flames of envy and resentment with this opener:
TODAY CO-HOST MATT LAUER: Do you feel like you're working harder and harder nowadays just to stay financially afloat while fat cats get richer and richer? It's not just a feeling, and you're not alone. The story now from from CNBC's Scott Cohn.
"There's many simple, even money-saving ways that we can actually give our little bit of help in our own lives and in our own homes and make a little bit of a difference," said weatherman Sam Champion on April 19 "Good Morning America."
But when it came to cost, the April 19 USA Today contradicted Champion:
“Products that help people use less energy – or leave a smaller ‘environmental footprint,’ as green advocates say – often are more costly than their alternatives, causing some to argue that going green is only for those who can afford it,” said USA Today.
Champion's segment focused on a special energy-efficient home built by BASF The Chemical Company that is 80 percent more energy efficient than other houses.
CNN reporter Christine Romans agreed, but then took the conversation a step further smearing drug companies in the process.
“And when you look at sort of the business plan, you look at what some of the allegations are in this – in this industry scandal, you see that these sound like drug companies. ‘Let’s get our representatives into the financial aid office, let’s give gifts, let’s get people owning stock, let’s get them on our boards, so that our student loan can be right up there, preferred student loan for students, whether or not it may be the best fit for students,’” said Romans.
Scratch a radical environmentalist, find a radical, full stop. Case in point: Boston Globe columnist James Carroll. In his New thinking to save the earth [is that all?], Carroll calls for nothing less than the end of the United States as we know it, and a yours-is-mine socialism.
Carroll claims that "if the earth is to survive as a human habitat," the meaning of four subjects "must be transformed." Among the things Carroll wants to redefine are "nation" and "property." Ominous enough, but getting down into the details is even more chilling.
Never ever blame the victim, isn't that what people say about crime victims?
Apparently no one told CNN, because this morning on "American Morning" Soledad O'Brien and Stephanie Elam attacked TJX Cos., the parent of T.J. Maxx and Marshalls among other stores, accusing the company of dishonesty after the company suffered massive data theft by hackers.
"None of these companies are ever forthcoming about it," O'Brien said in a huge generalization. "You always have to uncover it, investigate it, dig and dig and dig and then eventually they come up with a number which is probably a little on the low side."
"Minding Your Business" reporter Stephanie Elam agreed, complaining about the length of time it took TJX to disclose that 45.7 million credit and debit card numbers had been stolen affecting nearly 500,000 customers.
The top right-hand corner of Monday's Washington Post sounds like the return of Hurricane Katrina. "Foreclosure Wave Bears Down on Immigrants" is the headline. Reporter Kirstin Downey begins: "Immigrants are emerging as among the first victims of a growing wave of home foreclosures in the Washington area as mortgage lending problems multiply locally and across the country."
But the "victims of a wave" line fails to ask the question: at what point are people who make bad financial decisions responsible for their own fate? The heart-breaking individual stories Downey tells could have been avoided if the struggling homeowners had stared harder at the numbers.
Something rather extraordinary occurred last December which had extremely ominous implications for stock investors around the world, but got totally ignored by the media.
In fact, if not for a recent video posting at YouTube, and a March 20 article in the New York Post, these spectacular revelations would still be well under the radar.
On December 22, CNBC’s James Cramer did a web interview for TheStreet.com TV. In it, he told TSC’s executive editor Aaron Task about how he used to manipulate stocks and the market when he was a hedge fund manager, and explained how such people today can’t “do anything remotely truthful” if they want to make money (video available here).
As TSC reported in a recap at its website the same day (emphasis added throughout):
Citing the investigator and one student who "says he trusted NYU, but now he wonders if his trust may have been misplaced," ABC's "World News" on March 18 attacked universities and lending companies and did not include representatives from either.
Anchor Dan Harris only presented New York State Attorney General Andrew Cuomo's view that students are being taken advantage with the practice of preferred lending. Cuomo faulted schools and lenders for "illegal, deceptive business practices."
Harris did not include an on-air interview with any college, university, loan company or industry expert, rather he only said several major lenders "all denied wrongdoing."
Given the recent gloomy reporting about the industry, you may not know that housing prices nationwide actually went up a bit more in the fourth quarter (1.12%) than they did in the third (1.07%). Though there are certainly problematic metro areas, it would appear that the sky was not falling on home prices.
In fact, based on the press's coverage of the housing industry during the past year or so, you might think that OFHEO Director James B. Lockhart was blowing smoke in the News Release on Page 1 that introduces the report:
“These data show that, on the whole, prices are still rising, albeit at a much slower pace,” said Lockhart. “This suggests that house price appreciation is, for now, more in line with historical norms.”
He's kidding, right? Wrong (from page 4 of the report):
The 2006 Real (after Inflation) Increase in Household Net Worth Was Greater Than 2005's -- But You Wouldn't Know That from Reading the Associated Press's Accounts. And this is not the first time AP has ignored what's "real."
Net Worth of U.S. Households Skyrockets in Final Quarter of 2006
The net worth of U.S. households climbed to a record high in the final quarter of last year, boosted mostly by gains on stocks, the Federal Reserve reported Thursday.
Net worth — the difference between households' total assets, such as houses and bank accounts, and their total liabilities, such as mortgages and credit card debt, totaled $55.6 trillion in the October-to-December quarter.
That marked a 2.5 percent growth rate from the third quarter, the previous quarterly record high. Stocks gains helped fuel the increase in net worth, although real-estate gains played a role, too.
For all of last year, households' net worth rose by 7.4 percent, a slower pace than the 7.9 percent increase registered in 2005.
AP made 2006 look worse than 2005, when 2006 was better. "Really."
With the Democrats now in charge of Congress the media is joining them in bringing back some favorite of their favorite boogeymen and on this morning's Today show that boogeyman took the form of the credit card companies and their "abusive" practices. Teasing a Lisa Myers report NBC's Ann Curry charged that credit card companies are "...accused of making it difficult for the average person to pay off that bill. We're gonna show you some of the tactics they allegedly use to keep the dollars flowing in." To which Today host Meredith Vieira piped in: "It's pretty awful."
Throughout the segment the credit card companies were portrayed in almost loan shark terms that had them taking "advantage" of unwitting customers. In her report NBC's Lisa Myers told the story of mild-mannered Charlie Bassham's struggle against the credit card companies and then brought on Democratic Senator Carl Levin as the proverbial hero to the all the Charlie Bassham's across America.
Plugging her monthly "Color of Money Book Club" entry today, Washington Post finance columnist Michelle Singletary made a gratuitious reference to Al Gore, comparing consumer debt to global warming:
James D. Scurlock, author and director of "Maxed Out," hopes to do with the overselling of credit what former vice president Al Gore has done for global warming -- elevate people's consciousness about a terrible threat to our existence. In this case, it's our financial well-being.