With gasoline prices going up, Diane Sawyer worries they will continue to rise. With stock prices going up, the same Sawyer worries they will experience a crash of historic proportions.Sawyer's guest on Good Morning America today at 7:15 AM EDT was Mellody Hobson, a GMA financial contributor. Here's how Sawyer kicked things off.
GMA CO-HOST DIANE SAWYER: Will runaway gas prices keep soaring, and did you know that the stock market has hit a milestone reminiscent of what happened before the big Crash? Let's start with gasoline prices. On Monday the average price of gasoline hit $3.05 per gallon, just two cents less than the record. . . Is this going to keep happening, keep going up?After Hobson expressed concerns about the market, describing it as having defied gravity, Sawyer was quick to draw a gloomy inference: "So once again, Mellody says it cannot go on forever. Beware, and be aware out there."Story Continues Below Ad ↓
GMA FINANCIAL CONTRIBUTOR MELLODY HOBSON [trying to calm Diane down]: Well, gas prices are basically a story of supply and demand. Demand has been consistent and very strong. Supply has been interrupted because about a dozen refineries around the world have had problems. It's just basically a case of bad luck, all at the same time. That's decreased supply and that has led to prices being up. . . But before anyone panics, I would say, calm down. We've had a one time case of bad luck here, even with the wildcard of the Middle East out there. I would suspect things will settle down from here and even thought we're entering the peak driving season with American families taking their vacations, I don' think we'll see a lot more in terms of prices rising from here.
SAWYER: OK, but what about the stock market? Even with the rising gas prices the stock market is still going crazy, and as we said 1929 was the big crash, and this is reminiscent of what happened before that.
Oddly, though Sawyer twice alluded to the current market exhibiting behavior "reminiscent" of the Big Crash of 1929, neither she nor Hobson ever told us what that behavior is.
Meanwhile, what would explain Sawyer's predilection to imagine the worst: gas prices continuing to rise, stock markets crashing? Do you think she's be so gloomy if a Dem were in the White House?
Contact Mark at mark@gunhill.net—Mark Finkelstein is a NewsBusters contributing editor and host of Right Angle. Contact him at mark@gunhill.net.
Editor at Large
Comments Policy
Today Show
May 8, 2007 - 10:27 ET by PawpawNToday Show showed prices in SF as $4.55 for lowest grade. Did not make any mention of Calif state taxes, etc. In Va prices are stuck between $2.79 to $2.89, no change in 2 weeks now. Our highest last year was $3.29 to $3.39. Why so much doom & gloom from libs? Thought they always accused conservs of that! No mention on Today, while I watched, of the new DOW records, of the lowered decifit, of the record tax intake, etc. Only bad news and Bush gaffe-which I thought was probably a little playful thing for the Pres. The Queen actually looked pretty good-guess the air in USA is better than Britian. But David Gregory looked like he still was getting over his WINE & whatever from the WH meal!!
The analogy brought up by Saw
May 8, 2007 - 10:28 ET by Gat New YorkThe analogy brought up by Sawyer is so incredibly inane the only way to respond to it is to ask her directly exactly how this stock market is reminiscent of the 1929 stock market? After doing research she should have done before making such an unintelligent statement she would realize that the only similarity is that the NYSE is still located on Wall Street.
She may have been referring t
May 8, 2007 - 11:14 ET by Prester JohnShe may have been referring to what happened in 2000 - 2002 as a result of the popping of the Clinton era bubble but I doubt if she is aware that today's market is based on actual earnings and not on the speculation of people in 1999-2000 who didn't know what they were doing.
She was specifically referrin
May 8, 2007 - 11:26 ET by Gat New YorkShe was specifically referring to 1929. But I do agree that the Clinton economy was a house of cards built entirely on speculation. When that house of cards fell on his watch, a lot of people lost their savings and retirement money.
Here's what a little basic re
May 8, 2007 - 11:42 ET by dscottHere's what a little basic research gets you. Use the dialog box below the chart to compare to the US Treasury Bonds. The bottom line here is as long as interest rates remain consistent current market valuations are not out of line. Given that the 20 year bonds are being discontinued due to lower borrowing needs by the US government, a story which the MSM has totally skipped, this means interest rates will not be increasing, remember it's all about supply vs demand.
“The object of life is not to be on the side of the majority but to escape finding oneself in the ranks of the insane.” – Marcus Aurelius
Anything but positive...
May 8, 2007 - 10:31 ET by triton63I watched that show this morning and it didn't suprise me that Sawyer was only going to see a negative in the stock market's record setting performance. Of course, if it was a dem in the White House we would hear nothing but praise about the president "leading" our country into a great economic period. She hopes the market crashes so they can try and blame that on Bush, too.
DEMS in control
May 8, 2007 - 10:50 ET by PawpawNSomeone should say-"All of this is now occurring with the DEMS in control of both the HOUSE & the SENATE. They told us they were going to fix everything". See I thought after the mid terms the MSM would give credit for STOCKS UP to Dems, EDUCATION BILL to Dems, BETTER WEATHER to Dems, you name it good it weas the DEMS, etc. All this negativity still surprises me. They are so DUMB, don't they realize BUSH IS NOT RUNNING again, at least not this BUSH!
I can't wait for Diane to gri
May 8, 2007 - 11:35 ET by jdhawkI can't wait for Diane to grill a string of dimocrats about the high prices at the pump. After all, they are in charge now, aren't they?
I see her pleading with the dimocrats to lower gas taxes to give "working American families" a break.
Meanwhile, don't you think we should limit the profits all can make in the stock market; it is working for executive pay isn't it?
Gas $ - reminiscent of 1999-2000, Ms Sawyer
May 8, 2007 - 11:43 ET by Gary HallGas $ - reminiscent of 1999-2000, Diane - just look closer to home.
Mark, perhaps Sawyer's remark, "reminiscent of what happened before that..," was actually more reminiscent of what happened before the march 2000 "historic" stock market crash. The one that took some $8 trillion out of the equity markets, and resulted in millions of Americans loosing their jobs, their health insurance, and much of their life savings, retirement savings, and their children's education funds. Of course the after-effects (trickle-down economics) of that crash also resulted in 75% to 83% of the shift from projected federal budget surplus to budget deficits (using 2003 year end as the example).
Why do I suggest this? Well, in the year preceding the March 2000 crash, regular gasoline retail prices had risen from approx. 89 cents to $1.51 - a walloping 41% shock to consumers.
Shhh - Bush was not president then. Bush was not yet even close to winning the nomination of the Republican party then. Bill Clinton was president then, not Bush. This was the period of time in which the liberal economist, Dean Baker, noted that the financial leadership of the administration was the worst since Herbert Hoover, Ms. Sawyer.
Karl Rove
May 8, 2007 - 11:58 ET by PawpawNOh, but KARL ROVE was just beginning to perfect his MACHINE and he caused it all!!
Oh absolutley. And Governor B
May 8, 2007 - 12:19 ET by Gary HallOh absolutley. And Governor Bush was meeting with the Taliban laying out plans for a pipeline across afghanistan. Mmm Mmm. (;~> gary
and the contractor is Hallibu
May 8, 2007 - 12:44 ET by Gat New Yorkand the contractor is Halliburton.
Gat, here's an interesting read.
May 8, 2007 - 13:21 ET by Gary HallGat, here's an interesting read. Bursting Bubbles - "In These Times" is a progressive anti-corporate magazine. The writer, Dean Baker, is as well. Just the same, not only did he predict the crash, and in advance, laid blame at the foot of Clinton's bed, he continued to explain, in his view, what it was about and the results of the bubble and it's subsequent crash. In the piece, "Bursting Bubbles, " Baker makes intelligent fun of the view that all was well under Clinton, then Bush came into power and destroyed all. Then he goes on to describe how much worse it will get because of Bush. Along the way, he makes a glaring error in stating that the events of what occurred is "widely understood." Technically, amongst intelligent folks he maybe correct - but amongst the masses of the voters (notably the entire left - and much of the right), they never had the opportunity to hear from the media what took place. Voters widely heard the fable that Baker dismisses as fantasy. To the left, the fable is on the straight.
In reality, all Baker did is call a duck a duck. The bubble was bad. The result of it would be bad. It would hurt the country and the people. He was right.
The mainstream media, which loves Dean Baker (like Paul Krugman), censored his views on the crash - the cause, the fallout. The mainstream media, of course, agrees with Baker, however, their larger cause (Clinton's legacy) would be violated by allowing Baker's simple and concise analysis to have become well known. It's rather odd, because, in the end if the MSM were to fully vet the facts of the crash, the very temporary nature of the "feel good" late 90's, and the great damage caused to our economy (and to the little people) it would result in them having more evidence for less corporate free-wheeling. Fools they are - can't see their own forest for their own trees.
Gary - That was a great link.
May 8, 2007 - 16:15 ET by Gat New YorkGary - That was a great link.
I had a professor a long time ago who has passed on. Michael Harrington was an avowed democratic socialist but he would make some remarkable statements that you would not expect from someone with his views. The one thing I do remember was about history. Harrington said: History is never written on the day, or the week, or the month it occurs. It is only written many years later long after the political banter is filtered out and only the facts remain.
I think Bill Clinton knows that and has been desperately trying to revise history to secure what he wants as a legacy: from the economy to the roots of 9/11. I believe that his administration will be credited with the corporate corruption in boardrooms and on wall street that created this house of cards that caved in on his watch and cost people their savings and retirement.
Did or did not ABC run a disc
May 8, 2007 - 14:39 ET by rwesleyDid or did not ABC run a disclaimer prior to Sawyer's comments on this topic? It seems to me that she is breaking all sorts of laws with regards to disclosure that she is not a trained professional dealing with stocks and commodities trading.
Good point. And the stock
May 8, 2007 - 19:30 ET by BlameTheMediaGood point. And the stock market, especially just looking at the dow jones, is not the only indicator for the economy. Gov. debt, foreclosures, construction, unemployment, etc.,... these things should also be taken into account.
Too much speculation from laymen.