Stock Market

You wouldn't expect the New York Times (Times links usually require free registration) to refer to work by yours truly without getting it wrong, would you? Why, of course not.

The portion of today's "Taking the Bears to Task" brief by Times reporter Dan Mitchell that refers to my Wednesday Pajamas Media column ("Is the Downbeat Business Press Right about the Economy?"; also here at BizzyBlog) doesn't disappoint.

Here is what Mitchell wrote (link is in original):

The mainstream media is also far too pessimistic, according to Tom Blumer, a blogger for Pajamas Media, a right-leaning Web site. On Tuesday, he quoted a routine dispassionate Reuters report about huge drops in stock index futures before the markets opened. The report, which indicated that the coming trading day might see big losses, amounted to “icing the champagne for the late afternoon,” he wrote — a typical case of the media’s seeking to “party hearty on bad news.”

That day, the Dow fell 465 points after the opening bell, then recovered somewhat as it digested the news of the Federal Reserve’s interest rate cut, closing down 128 points.

You've probably heard about the French trader who has managed to stash away $7 billion before going on the lam. What's the big deal with sticking it to some French bank for $7 billion?

This $7-billion loss by the French bank Societe Generale (SocGen) (EPA:GLE) might have caused the sharp plunge in some European stock markets on January 21 - which spurred the Federal Reserve to make an unprecedented emergency 75-basis-point rate cut on January 22.

One economist drew a correlation between the SocGen scandal and the Fed's decision to make the emergency rate cut.

The tone of this week's reporting on the US stock markets would lead you to believe that even though Wednesday and Thursday were pretty good days, the markets are down for the week.

That's completely wrong.

The Dow is up 279 points (2.3%):

How about the broader S&P 500? It's up almost 27 points (or 2.0%):

It's really frightening to imagine that people who get the bulk of their news from Comedy Central's "The Daily Show with Jon Stewart" will be making what they probably think are educated decisions at the ballot box come Election Day.

Stewart, who is now a self-proclaimed economist, said on his January 23 show, "Our economy is tanking." And now you can add financial media critic to Stewart's list of titles.

"For insight, I turned to the two major financial networks to find out what is going on, or as they're known around here, ‘hot ladies talk economy with bald dudes,'" Stewart said.

After the Fed made an "emergency" 75-basis-point rate cut this morning, CNBC's "Mad Money" host Jim Cramer, who has gone from bull market cheerleader to bear market doom and gloomer in the last six months, said it was too little too late.

"[T]his is obviously the kind of action I was most fearful of - which is that they would have to go panic and that they would get way behind the curve," Cramer said on CNBC's January 22 "Squawk Box." "But, you know but once they do it, I'm less ... I can't hammer them as much. This is the kind of action if they had done it three months ago, we would have been safe."

On MSNBC's January 18 "Hardball," Cramer predicted the Dow Jones Industrial Average would decline 2,000 points over the next couple of weeks. However, he was a little less pessimistic after this rate cut.

It's no longer enough to say the economy is heading into or already is in a recession. Invoking the memory of the Great Depression has become the latest way to dramatize the economic turmoil caused by the credit markets.

"[I] think we are facing the worst financial crunch and crisis since the Great Depression," Mort Zuckerman, editor-in-chief of U.S. News & World Report, said on the January 20 "McLaughlin Group."

Zuckerman told viewers we're heading into uncharted territory with this current credit freeze-up.

"You have the entire banking system now that is virtually frozen. And there are, not just this subprime mortgage thing, there are other things called credit default swaps where they will lose as much money, $250 billion on. The banks are frozen. They are not making loans because they have such huge debts that they have to take on to their balance sheets and nobody knows how to deal with that," he continued.

CNBC "Street Sweetie" Erin Burnett revealed what some might have suspected about "Mad Money" host Jim Cramer all along.

"[H]e's crazy - certifiably," Burnett said on the January 18 "Late Night with Conan O'Brien."

Of course, Cramer is a regular on NBC's "Today" and "Nightly News" as an expert on the economy. On December 19, Cramer appeared on "Today" and was very critical of Fed Chairman Ben Bernanke for not cutting interest rates more than a quarter point. In another "Today" appearance on January 17, he declared the economy was in a recession, a 180-degree change from his comments earlier in the month when he declared "sunny skies" were ahead for the economy.

American capitalism - it's so great even the Chinese Communist government loves it!

That's sounds like it ought to be a bumper sticker, but the January 16 "NBC Nightly News" advised it is something we should be cautious of.

Foreign investors have been on a buying spree in the U.S. stock markets - as stock prices have fallen with all the skittishness in the wake of the credit crunch.

"So far foreigners buying chunks of Wall Street has not triggered the same political uproar as a Dubai company's ill-fated effort to take over operations of U.S. ports, perhaps because politicians know the alternative could be painful," NBC correspondent Lisa Myers said.

The headline "The Economy Sucks" might be something you'd expect to see in Rolling Stone or on Slate.com, but certainly not in a reputable news magazine, right?

Yet, the January 21 issue of Newsweek defied expectations by using that for part of a headline for a one-sided, pro-Bill Clinton view of the economy. The article recalled the 1992 "It's the economy, stupid!" campaign as it tore down the current economy.

So, why does the economy "suck" according to Newsweek? It isn't that there's a depression looming or that we're in recessionary times, we're just "perilously close to sliding into a recession."

"Today, the nation is perilously close to sliding into a recession; in '92, the economy had already started growing, though a jobless recovery doomed George H.W. Bush's re-election bid anyway," Gross wrote. "The lesson? Voters' perceptions matter more than whether the economy is technically expanding or contracting."

You might disagree with how he slashed the Fed funds rate during times of economic turmoil as Federal Reserve chairman.

You might have even disavowed him after showing his coziness with the Clinton administration throughout the 1990s. But after 18 years of public service, you can't deny that Alan Greenspan should have a shot in the private sector.

However, despite media accolades through four Republican and one Democratic administration, some in the media think he broke an unspoken rule by going to work as a consultant for a hedge fund. One CNBC report called it "unseemly." The January 15 Wall Street Journal even hinted he may be profiting from the housing crisis, something they suggested he caused.

CNBC “Mad Money” host, resident ranter and stock-picker extraordinaire Jim Cramer can now add “media critic” to his list of duties.

Over the past six months, Cramer has become a YouTube sensation for taking shots at Federal Reserve Chairman Ben Bernanke, including his infamous “They know nothing” rant on CNBC’s August 3 “Street Signs.”

Today Cramer used his “Stop Trading” segment on CNBC’s “Street Signs” to blast Bernanke some more and accused some in the media of kissing up to Bernanke for the “big interview.”

“I guess I should just kiss up and get the big interview with Ben like everybody else wants,” Cramer said to “Street Signs” fill-in host Melissa Lee. “Sorry, I could care less.”

Cramer obviously wasn't impressed with Bernanke's comments yesterday where he said the Federal Reserve stood ready "to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks."

This is worse than a case of calling a glass "half-empty" when it is "half-full." This is like taking the glass and pouring it out.

Deirdre Bolton, an anchor for Bloomberg TV, appeared on CBS's January 9 "The Early Show" to report on a survey of economists Bloomberg conducted January 3-8 about whether or not a recession is in the immediate future of the U.S. economy.

"[W]ell, as you said the economy certainly is front and center," Bolton said. "And in fact in the latest survey of Bloomberg economists, economists putting the odds of developing a recession at about 40 percent. Jay Bryson - he's a global economist at Wachovia - he says we are skating on the edge of recession, but it's all going to come down to the consumer. Another economist that we spoke with said that consumers right now are really hanging on by their fingernails. And of course it's not really a surprise."

However, Bolton completely distorted the message of the survey - based on how Bloomberg's Web site reported it. An article by Shobhana Chandra and Alex Tanzi said the U.S. will escape recession, according to the economists in the survey.

Got some hot stock plays for 2008? CNBC's David Faber thinks you should factor in the recession that hasn't yet happened when you adjust your portfolio for this New Year.

CNBC "Squawk Box" contributor Faber warned investors on the January 7 "Squawk on the Street" that stocks reliant on business spending could hurt since a recession, he said, is imminent.

"Business spending, concerns about business spending overall. I think Anne Mulcahy [CEO] at Xerox (NYSE:XRX) may have said something about business spending," Faber said. "I'm hearing business spending slowing. That's the concern - what happens to the stock market in a recession because we're heading into one it looks like."

It wasn't good news by any means, but it also wasn't the end of the world.

The Bureau of Labor Statistics of the U.S. Department of Labor reported January 4 the unemployment rate rose to 5 percent in December, but if you're paying attention to the media coverage, you would think it's time to whip up some shoe leather stew and play "Brother Can You Spare a Dime."

A January 4 Associated Press story by Jeannine Aversa pointed to the job data as one of the "problems in the economy" that has "elevated fears about a recession." But even with all these "problems" - housing woes, the credit crunch, high oil prices, weak job numbers - the criteria of the economy being in a recession still haven't been close to being met.

CNBC's ticking time bomb Jim "Mad Money" Cramer lashed out at the Federal Reserve again on January 2 for not cutting interest rates. This time he suggesting the Fed was intentionally doling out punishment to reckless investors.

"I have to tell you that I look at this situation and I say to myself, ‘They [the Federal Reserve] want it. They want a recession.'" Cramer said on CNBC's January 2 "Squawk on the Street." "They're Puritans. They want to punish the people who were reckless in their eyes and the punishment has still not finished being meted out."

Cramer was called into a discussion about the Fed with CNBC's David Faber and "Squawk Box" co-host Joe Kernan.

The economy is about to dive off a cliff and it's all President George W. Bush's fault, according to The New York Times editorial board.

A January 2 Times editorial was pretty pessimistic about the economy in 2008, mocking Bush and forecasting doom.

"As 2008 begins, house prices are still skidding, bank losses are still mounting, oil is again flirting with $100 a barrel and consumers are buying less as prices rise," the editorial said. "To many, the wheels appear to be coming off the economy. To others, including President Bush and his aides, the economy is fundamentally sound and resilient."

Are you a little skeptical when an economist or a financial strategist appears in the MSM, warning for the worst?

A look back at the Dec. 25, 2006, “Where to Invest” issue of BusinessWeek gave us a measuring stick to see how frequently cited “experts” shaped up in 2007 – including New York Times regular Ian Shepherdson, Moody’s Economy.com economist Mark Zandi and Standard & Poor’s Chief Investment Strategist Sam Stovall.

BusinessWeek surveyed 80 investment strategists about where the stock market would be at the end of 2007, and 58 economists on where gross domestic product (GDP) would be at the end of 2007.

NewsBusters and affiliate The Business & Media Institute have been reporting for many months the continuous, bearish assessments of economic gloom and doom by America's press.

Of course, this all comes despite 24 straight quarters of Gross Domestic Product growth, 50 consecutive months of job gains, higher wages for virtually all Americans, and last month's consumer spending explosion.

Ignoring all this Sunday morning were panelists on "The Chris Matthews Show" who demonstrated such a deplorable lack of economic acumen that maybe they shouldn't be allowed to comment on such matters when cameras and microphones are on.

Host Matthews set this segment up:

Since the stock and credit market turbulence began in July, NewsBusters has been informing readers that media continually predict recessions that never happen.

On the sad flipside, bearishness in the press can become so pervasive that an economic downturn ends up being an unfortunate self-fulfilling prophecy.

NewsBusters affiliate the Business and Media Institute made this very point in a late-November article by Amy Menefee entitled "Talking Ourselves Into Recession."

This concern is shared by business leaders like Craig Hester, CEO of Hester Capital Management, who during an interview with CNBC's Erin Burnett and James Cramer Friday spoke an inconvenient truth about media's impact on the economy that folks in the press sadly don't recognize as they disseminate pessimistic after pessimistic predictions often leading to people unnecessarily losing their jobs - or worse:

That's right folks, it's that time of year. There was plenty of economic bias in 2007 and the Business & Media Institute had a hard time whittling it down to just a top 10 list, but we did it.

10. Airlines are solely to blame for the unfriendly skies.

Media myth: Blame the airlines for all those flight delays; never mind the obsolete government-run agency creating the gridlock.

9. Consumer spending is the be-all, end-all of the economy.

Media myth: Without excessive consumer spending - especially at Christmastime - the U.S. economy will collapse.

8. The stock market is trouble, whether it goes up or down.

Media myth: One day the stock market can't sustain growth; the next, we're just one drop away from another crash.

Investors and the business media are piling on the anti-Federal Reserve bandwagon after they cut the Fed funds rate only 25 basis points on December 11.

Immediately following the announcement of that cut, the Dow Jones Industrial Average (DJIA) tumbled down to close nearly 300 points and that fueled outcries about the Fed.

CNN senior business correspondent Ali Velshi criticized the decision on December 12:

Hillary Clinton's performance in her interview with Maria "Money Honey" Bartiromo of CNBC last week was so bad that she must have sent a double (stop shivering at the thought, will ya?).

After all, the genuine Smartest Woman in the World couldn't possibly have said the things she said, as noted at Rush Limbaugh's site last Thursday. It got so bad that Bartiromo, who seemingly has barely cracked a smile since George Bush became president, felt compelled to challenge her.

Here is one of the choice offerings Mrs. Clinton served up:

(There are ) lots of people who come on your show who, you know, are gung-ho, protect the tax cuts for the wealthiest of Americans, that will not work if the economy slows down. You need to get money in the pockets of tens of hundreds of millions of Americans, and that's what I intend to do.

This time CNBC "Mad Money" host Jim Cramer wasn't screaming at the top of his lungs "they know nothing" when he appeared on the "Street Signs" to discuss the Fed's decision to cut rates only a quarter-point.

In fact, there was no screaming at all.

"I'm no longer fiery," Cramer said. "They had their chance," he said four months after the big tirade.

On the December 11 "Street Signs," Cramer's mood swung 180 degrees the other way after the Federal Reserve cut interest rates only 25 basis point to 4.25 percent - viewed as a disappointment by the shock stock picker.

Steve Fraser might look mild-mannered, but when it comes to economic doomsaying, he is the Rocky Marciano of recession, the Tiger Woods of turndown, the David Beckham of depression.

Speaking of bending one, Fraser's LA Times column of today, "Symptoms of an Economic Depression," twists U.S. economic data into a harbinger of impending doom. Fraser begins by falsely claiming that "no one wants to utter the word 'depression.'" In fact, Fraser himself, a left-wing labor historian, wants not merely to utter it, but to bellow the word with a 10,000 megawatt bullhorn. Why? Because, as he gleefully predicts in that same column:

This perfect storm [of a bad economy] will be upon us just as the election season heats up, and it will inevitably hasten the already well-advanced implosion of the Republican Party.

The Robin Williams movie "R.V." may be obnoxious but it was nothing compared to an "NBC Nightly News" story last night.

Tailgating the New York Times, "Nightly News" worried on December 3 that America is traveling down the road to recession, because R.V. sales are projected to decline by about 5 percent in 2008.

"Nightly News" anchor Brian Williams honked his horn saying, "when R.V. sales go down, the U.S. economy often follows."

Correspondent Lee Cowan explained "that Wall Street has been tailgating [the R.V. industry] for signs of a possible recession."

Was that Mike Huckabee on "Morning Joe" today -- or John Edwards? The former Arkansas governor found an odd way to refute charges he's not a true conservative, indulging in some class-warfare rhetoric that would have been the envy of the former North Carolina senator.

Mika Brzezinski hit Huckabee with an excerpt from Bob Novak's column of today. Here are the opening paragraphs from Novak's False Conservative:

Who would respond to criticism from the Club for Growth by calling the conservative, free-market campaign organization the "Club for Greed"? That sounds like Howard Dean, Dennis Kucinich or John Edwards, all Democrats preaching the class struggle.

*****Update at end of post includes detailed response to unhappy e-mail messages concerning this subject.

As someone that has done a lot of economic writing and financial media analysis, I'm used to gloom and doom from journalists.

However, Saturday's Associated Press article concerning the credit crunch and how it's impacting the mortgage market could be the worst example of economic and financial misreporting and exaggeration I've seen since the press universally forecast an economic downturn after Hurricane Katrina hit New Orleans.

Entitled "Have We Seen the Worst of the Mortgage Crisis," Joe Bel Bruno's piece actually suggested that a depression could be looming, and that housing prices in some areas could decline by 40 percent (emphasis added):

The media have been riding every ebb and flow of the stock market trying to determine what it indicates for the U.S. economy.

Even with volatility over the last four months, the Dow Jones Industrial Average is still up a little more than 5 percent for the year.

But Suze Orman, host of CNBC's "The Suze Orman Show," told viewers on NBC's November 13 "Today" that if you're investing for retirement, a lower stock market is exactly what you want.

Those wondering why circulation at the Washington Post has dropped over 15% in the past 2-1/2 years will get a large part of their answer at Sunday's Page B01 column by William Lerach ("Loser CEOs, Raking It In"; HT Rory Miller).

That's Bill Lerach. Yes, THAT Bill Lerach. The self-styled, one-time "King of Torts," and former partner at the once-untouchable Milberg Weiss law firm. The now criminally convicted Bill Lerach.

For those who are unfamiliar with the story of Bill Lerach and Milberg Weiss, here's a relatively quick synopsis, courtesy of a subscription-only editorial at the Wall Street Journal excerpted by yours truly in May 2006, when Milberg Weiss and two of its partners were indicted:

Leave it to resident CNBC loose cannon Jim Cramer to take it upon himself to call a spade a spade or a red a red.

Cramer, host of the CNBC’s “Mad Money” called liberal Democratic New York State Attorney General Andrew Cuomo as “communist” on CNBC’s November 7 “Street Signs.”

“[W]itness the fact that right now, the most important man in America for the stock market – the most important man and I mean it negatively is this guy Andrew Cuomo, the New York State Attorney General,” Cramer said. “I’m getting tired of the New York State Attorney General being the most important man in America.”

See YouTube video below.