As NewsBusters has been reporting this week (see this and this), as the stock market hit new all-time highs, the media have been dour Nervous Nellies carping and whining about gas prices, the low value of the dollar, the housing slump, and the rising trade deficit.
Yet, there are a variety of issues that press outlets have conveniently ignored during this record bull run that not only explain rising stock prices, but also give a more accurate view of what is going on in the global economy.
For instance, Bloomberg was one of the only major media outlets Tuesday which reported record purchases of U.S. securities by foreigners in May (emphasis added):
On Friday evening, the CBS Evening News and ABC's World News with Charles Gibson offered opposite views on whether the recently released inflation figures for May should be viewed as good or bad. While CBS News anchor Russ Mitchell referred to "inflation alarms" going off, leading to higher interest rates that are "hitting [home] buyers hard," ABC News anchor Gibson characterized inflation as "under control" as he conveyed that the report "eased worries" and set off a stock market rally.
Below are transcripts of relevant portions of the CBS Evening News and ABC's World News with Charles Gibson from Friday June 15:
That's right. Bubble, shmubble, despite this picture from Matt Drudge, who got snookered on this one:
Fire sales, schmire sales.
The Chief Snookerer in the latest search for the elusive housing bubble is Martin Crutsinger of the Associated Press, with a significant assist from the Commerce Department (link is to a PDF), which inexplicably did not, and apparently does not, report the regional sales data needed for a more detailed look.
Crutsinger took Commerce's housing report showing a significant decline in the nationwide median selling price of a new home, both in the past month and year over year, and ran with it at an all-out sprint (bold is mine):
Although the Kelo v. New London Supreme Court ruling almost two years ago caused an outpouring of outrage that still resonates nationwide, what has happened in New London itself in the wake of the decision has, with rare exception, received relatively little coverage outside of the state of Connecticut or, in a few instances, New England.
It isn't as if there haven't been many noteworthy developments after the decision was handed down. To start, here is a rundown of events that ultimately led to last summer's settlement:
Within a month of the decision, the New London Development Corporation (NLDC) notified the Kelo holdouts that since they had been living on land that they didn't own during the duration of the lawsuit, they were liable for back rents during that entire time, in some cases amounting to hundreds of thousands of dollars. This outrage, originally noted in local Connecticut weekly whose article link is no longer available, got no national attention until bloggers took note of it (here, here, and here, to name a few) and percolated it to the higher levels of the blogosphere (examples here [f-bomb warning] and here). Even then, Old Media, with few exceptions, one of them being this USA Today editorial, gave this shocking example of bureaucratic chutzpah little notice.
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:
In Sunday’s paper, the L.A.Times has a piece that mourns a downturn of a portion of Mexico’s economy and, naturally, the Times blames the USA for it. How is it that the USA is responsible for this downturn? New home construction is down in California and illegal Mexicans have found themselves out of work because of it. This means that these out of work Mexicans cannot send US dollars to Mexico and, therefore, Mexican families back home are finding less money in their family incomes.
So, according to the L.A.Times, the US is unfairly hurting Mexican families because of a downturn in new home building in the USA. Why are we Americans so darn mean to those innocent illegals, anyway? For shame you selfish Americans!
Leave it to NBC's Today show to find the downside of a booming stock market. Playing the class envy card Today co-host Matt Lauer teased a story on a widening gap between rich and poor as he incredulously asked the audience: "Do you feel like you're working harder and harder these days just to stay financially afloat while fat cats get richer and richer?" Lauer, not exactly a pauper himself, then threw it to CNBC's Scott Cohn who claimed: "Not only are the rich getting richer they're leaving everyone else behind. In fact the last time the rich were this much richer than everyone else was the Great Depression."
Cohn did mention the wealthy are giving more to charity but only highlighted liberal billionaire Bill Gates' good deeds.
The Dow Jones Industrial Average soared past the 13,000 level on Wednesday, but the CBS and ABC evening newscasts reported the good news in the media's all-too-frequent “yes, but” framework. CBS Evening News anchor Katie Couric fretted that “even as investors are making money in the market, Anthony Mason reports there are concerns tonight about the rest of the U.S. economy.” Mason talked with a celebrating stock trader before turning downbeat: “But Wall Street and Main Street appear to be headed in different directions. While the stock market's been racing ahead, the economy has been slowing down. Housing is mired in a slump.” Liz Ann Sonders of Charles Schwab confirmed bad news for the overall economy, citing how “we have seen economic growth get cut in about half in the last year, so clearly the economy is not as strong as it was a year ago.” Mason ominously warned: “Rising gas prices, up 70 cents already this year, could slow the economy even more.”
ABC anchor Charles Gibson teased World News: “Tonight, the Dow moves into uncharted territory, zooming past 13,000 for the first time. But is the economy as hot as the market?” Gibson set up his lead story by contrasting how “the rise in recent months has been steep, despite less-than-inspiring news on the economy overall.” Betsy Stark featured pleased investors before cautioning how “there were fresh signs today of trouble in the housing market” and “oil prices shot up another dollar today, which will only add to consumers' woes at the pump.” Gibson stayed on the negative, proposing to Stark: “We've had four years of a straight bull market. Doesn't just the timing of this suggest that there might be a correction?” Stark agreed: “By historical standards, Charlie, we're actually overdue for a correction.”
"Well you know I wish I had better news, but the numbers this week were just horrific," said CNN correspondent Gerri Willis.
The numbers she referred to were home prices and new-home sales, which were down. After briefly mentioning the increase in existing-home sales (which make up a larger share of the housing market), Willis dismissed it.
With the help of CNN's Allen Wastler, the duo played up fears of recession on the March 3 program.
Wastler and Willis wrapped up the housing segment playing on viewers’ fears of a recession after an up-and-down week on Wall Street. Willis said the question wasn’t simply what happens in the housing market, but in the overall economy.
“The conversation about recession this week isn’t just bad for the stock markets; it’s also bad for housing,” Willis said. “When people lose their jobs, we know what happens.” You can read the Business & Media Institute article here.