As already noted on NewsBusters, Diane Sawyer made an absurd comparison on Tuesday’s "Good Morning America" when she linked the current rising stock markets with the period of time before the historic 1929 market crash. The GMA host, talking to ABC analyst Mellody Hobson, fearfully wondered, "Did you know that the stock market has hit a milestone reminiscent of what happened before the big crash?"
Except, it’s not at all reminiscent of the "big crash." From 2000, through 2007, the Dow rose from 10, 577 to 13, 312. That’s an average annual increase of 3.7 percent. In the seven years prior to the 1929 crash, the market spiked from 100 to 381, growing over 40 percent yearly. The rate of increase is over 10 times more than the current levels. So, when Sawyer concluded that "1929 was the big crash and this is reminiscent of what happened before that," her comparison isn't just wrong, it's also nonsensical.
Viewers shouldn’t be surprised over the negativity of Diane Sawyer. In April, GMA featured another segment with Ms. Hobson. During their conversation, an ABC graphic fretted, "Will Dow Hit 13,000 Today? Is Unstoppable Market Good or Bad?"
In other business bias, "Good Morning America" has also slammed "staggering" CEO salaries and aggressively called for more regulation of the insurance industry.
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News Diva Dianne, hoping agai
May 8, 2007 - 12:29 ET by Chris NormanNews Diva Diane, hoping against hope that it will happen again, "Oh, come on, stock market crash, come on, stock market crash. Come to Mama. Maybe, if I keep saying it...".
The dogs bark, but the caravan moves on.
- Arabian Proverb
My resume
May 8, 2007 - 12:35 ET by acumenDiane Sawyer demonstrates she is qualified to fill soon to be vacant Rosie spot on The View.
Except Diane won't need the
May 8, 2007 - 12:43 ET by MightyMouthExcept Diane won't need the double wide gas operated chair that Rosie will vacate.
<had to get my rosie is fat joke in for the day, sorry>
"There are two types of people in this country; those who provide freedom and those who enjoy it." MM says...
MM,Yeah, but she'll need some
May 8, 2007 - 12:46 ET by Chris NormanMM,
Yeah, but she'll need some kind of throne. Besides, can you imagine the royal cat fight between La Sawyer and Queen Babawa? :)
The dogs bark, but the caravan moves on.
- Arabian Proverb
Uh, Mr. Whitlock, I disagree
May 8, 2007 - 12:50 ET by Mr. KafirUh, Mr. Whitlock, I disagree with your characterization of the stock market increase. First of all, the current secular bull market started in March of 2003 when the DJI average was at 8000 approximately. Using your final value of 13312, that is approximately a 16% average annual increase. This is a more realistic indication since Sawyer was talking about bull markets. A 3.7% AAI is not a good model of this current market. However, it clearly is no where near the 40% figure you correctly stated.
Mr. Kafir,The first 2500 poin
May 8, 2007 - 13:46 ET by Scott WhitlockMr. Kafir,
The first 2500 points were a retracement. In other words, that was ground that had already been covered when the stock market had reached over 10, 500.
Well, one can play that game
May 8, 2007 - 14:05 ET by dscottWell, one can play that game all day long, why not pick 2006 instead of 2003, you'll get a higher % increase. But you know the answer why the year 2000 was chosen don't you? That was the high before the Dot com bust of the QQQQ (NASDAQ). How about a little more research like looking at the PE ratio of the Dow 30 Industrials, notice anything of interest to 1929? Now if you had bothered to educate yourself before running the mouth you might have learned something.
“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
Eventually
May 8, 2007 - 15:07 ET by Ten7sEventually, investors always rediscover the P/E ratio, but then the traditional investor is becoming the minority, and program trading doesn't seem to care... BTW speaking of setting records, have you seen the Shanghai Composite? My, my, my...
Because the current secular b
May 8, 2007 - 16:07 ET by Mr. KafirBecause the current secular bull market started in 2003. I think you are running at the mouth without thinking. Yeah, I know all about the P/E ratio. However, Mr. Whitlock did not refer to those numbers, just the AAI.
the P/E ratio for the Nasdaq
May 9, 2007 - 09:54 ET by dscottthe P/E ratio for the Nasdaq Composite reached an average P/E of 245.7, or roughly 6-8 times higher than market-wide averages. It is worth asking if such valuations are indicative of a stock-market bubble.Article written November 14, 2000.
Is there any wonder there was a crash? The crash of the NASDAQ 100 (QQQ) in 2000 rippled through the institutional investors who also owned large portions of the broader indicies like the Dow Industrials and S&P even though their respective PE multiples were not out of line given the rates of the 30 year bond. What basically happened was investors realized too late they were holding way over valued tech stocks (QQQ) based on promises of never ending wealth. Once investors realized the situation they all collectively went for the door, (have you ever seen two people try to go out a door at the same time? Looks dumb from the third party perspective, but not from those involved) hence no one wanted those over priced stocks, the last ones to leave the room were assigned the task to flip off the proverbial light switch.
You can not recind the Laws of Supply and Demand, with no one buying the stock, prices plummeted thus triggering margin calls forcing investors into liquidating other stocks they held in the other indicies to meet the margin call. Once those indicies were flooded with too many stocks to sell with too few buyers, they dropped as well thus causing a cascade of more margin calls on people who had nothing to do with the original QQQ overvaluation. Like I said do a little research before running your mouth.
BTW- IMO current QQQ valuations are too high and 2005 is start of the bull market on the NASDAQ as opposed to the S&P 500 for 2003
“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
As a contrarian. Did Diane ju
May 8, 2007 - 22:07 ET by danboAs a contrarian. Did Diane just give us a buy signal?
"The urge to save humanity is almost always a false front for the urge to rule.” H.L. Mencken
You know; when Sawyer tells u
May 8, 2007 - 23:05 ET by danboYou know; when Sawyer tells us how great the market is. And that it'll keep rising. It's time to get out.
"The urge to save humanity is almost always a false front for the urge to rule.” H.L. Mencken
Mr. Kafir - other retracements fyi
May 8, 2007 - 16:04 ET by Gary HallMr. Kafir - other retracements fyi. You made an interesting point. Just for the record, the media is rather consistent in playing numerous retracements in any light which serves their purpose. We've been bombarded of late with: "top 1 % vs worker's pay gap - largest since 1929 - has increased to a level not seen since the 1920's and " CEO's pay scale vs. workers is out of wack." Roaring 2000's and Fat Cats under Clinton. Good news in the 1990's vs bad news in the 2000's.
The reality is, give a small fraction one way or the other, these trends are simply a retracement of the same during the late 1990's bubble market. Everything ran up - then crashed, and now is recovering to approx. the same level. One may or may not like the disparity - and the media is welcome to debate it openly. The bias is that they celebrated the numbers then, in fact often wonder out loud "oh, if we could just have the Clinton economy again," but now, it's just terrible news.
The return to budget deficits also was simply a retracement (mostly) of revenues gone south, as the bubble economy collapsed.
Any way one slices it up, Scott is right. The MSM is playing games with the souls of the American US voter who is watching and reading the mainsteam news.
I agree with your assessment
May 8, 2007 - 16:12 ET by Mr. KafirI agree with your assessment of the MSM. But people should be aware that timelines make a difference in the way data can be presented. I don't believe in retracement issues in certain cases because they are usually misleading. And I think the 3.7% number is, at least, over the past 4 years. You may disagree, but facts are facts.
Diane Sawyer, in an effort to
May 8, 2007 - 12:59 ET by Darth DutchDiane Sawyer, in an effort to look caring, compassionate and concerned, always seems to look like she's watching a surgery with her face scrunched up, or like she's having a bad bowel movement or something.
My guess is it's a bowel move
May 8, 2007 - 13:28 ET by josephsamuelsonMy guess is it's a bowel movement ... or maybe gas.
Dianne Sawyer : poster-child for intellectual stupidity.
I think they really believe t
May 8, 2007 - 15:11 ET by rimskyI think they really believe that they look, you know, serious and, in the know. Wise.. oh yeah, that's it.. Wise..
and constipated.
Speaking of stocks... I just
May 8, 2007 - 13:03 ET by bigtimerSpeaking of stocks... I just heard Rham Emanuel and others say they now are going to investigate the refineries with hearings...
Ohhhh...goody goody....something their side of the aisle has stopped here in this country along with drilling within our boundaries. WE haven't been able to build a new one in over thirty years.
This is where I get disgusted or better yet disappointed with the conservatives and yes Pres. Bush for not bringing this up right back in their faces...that includes John McCain.
Let alone let's not forget all the regulations, paper-work and taxes in individual states, along with certain mixes for each state too....
I pray the next President better order drilling here and new refineries built by Executive Order using a time of war or some such...or another hurricane, which is what I think the President could of and should of done anyway.
Dianne Sawyer ... another bli
May 8, 2007 - 13:25 ET by josephsamuelsonDianne Sawyer ... another blithering liberal idiot ... for at least 20 years.
How can someone be that stupid for so long?
joseph...One word....Practice
May 8, 2007 - 13:37 ET by bigtimerjoseph...
One word....
Practice.
LOL
May 8, 2007 - 13:53 ET by Jack BauerFunneee BT...
This woman worked in the Nixo
May 8, 2007 - 15:28 ET by Gat New YorkThis woman worked in the Nixon and Ford administrations. What happened to her?
A few changes have occured in the economy and how wall street operates that makes comparisons to 1929 ridiculous.
GAT, isn't it true that che
May 8, 2007 - 15:33 ET by MightyMouthGAT, isn't it true that checks have been put into place so that there can never be a complete 1 day crash like the one in 1929?
"There are two types of people in this country; those who provide freedom and those who enjoy it." MM says...
After the '87 mini-crash they
May 8, 2007 - 15:54 ET by Gat New YorkAfter the '87 mini-crash they put in additional circuit breakers and limits. In 1938 following the '29 Crash they enacted multiple points to avoid another occurence.
i told you this weekend not t
May 8, 2007 - 22:11 ET byi told you this weekend not to link this to '27 else the MSM would be calling for a crash
Supreme Court, National Security, Borders, Fiscal Restraint, my litmus test for President.
The average P/E ratio for the
May 9, 2007 - 02:50 ET by entThe average P/E ratio for the S & P 500 reached about 32.5 in 1929. The average for the last 25 years is about 20.5. The average for the last 50 years is about 17.5.
We are currently around 17. So we are not overvalued at this time, and Diane is utterly clueless on this subject. Big surprise.
The dot-com runup of the late nineties was a true bubble, with valuations reaching a ridiculous 44 or so.
Sawyer expended the last meas
May 9, 2007 - 09:20 ET by GalvanicSawyer expended the last measures of her professional credibility years ago. But I guess when the editors at ABC want to spew out some more nonsense, they hand the assignment to a face the audience is familiar with. Sawyer and Walters --- once hailed as the best in female TV journalists --- are not even shadows of their former selves now (if they ever were).
I belive that a close look at
May 10, 2007 - 18:51 ET by cupera1I belive that a close look at Sawers recent stock trading and find out how many stocks she is going short on?
When in doubt follow the money