With the so-called “inverted yield curve” for bonds creeping up on Wednesday, ABC and NBC sprinted to stoke fears that “a recession could be on the horizon”, as NBC White House correspondent Kristen Welker declared.
But over on the CBS Evening News, chief financial analyst Jill Schlesinger was telling viewers to “run your life as if this were just any old day.”
Before getting to the report on World News Tonight, ABC’s sensationalist anchor, David Muir spoke for almost a minute and hit on people’s worst economic fears. “The bottom line here tonight: the last time this happened was in 2007, just before the Great Recession. The Dow plunging more than 800 points down more than three percent in one day,” he dramatically announced.
“So, what does this mean for American families? The prices you pay at the store during this trade war. And what a downturn could mean for 401(k)s and jobs,” he rhetorically asked before handing the report off to chief business correspondent Rebecca Jarvis.
As Jarvis wrapped her report, she seemed to try to scare people by warning that world leaders were not trying to stop a catastrophe. “Remember, we live in a global economy. What other countries do also has an impact here. And unlike the great recession, world leaders are not working together to solve this problem in part because of the trade war,” she proclaimed.
After fretting that a recession was on the horizon, Welker played a soundbite of CNBC senior economics correspondent Steve Liesman talking about how the inverted yield curve was “a very reliable indicator” and “if it sticks around and gets worse. Every time this particular indicator turns negative, it is signaling a recession.”
“The dangers of a recession, likely job losses, 401(k)s and other retirement accounts dropping. And it could be harder for those with credit issues to borrow money,” Welker added to the worry.
But NBC never shared with viewers what economic indicator they were talking about. Unlike Muir who explained that “essentially when the yield on a 10-year treasury is lower than the 2-year note.”
Meanwhile, CBS correspondent Don Dahler reported that the inverted yield curve “doesn't mean a recession is imminent. Historically, it could take 18-24 months to arrive if at all.” Interestingly, he added that with that timetable “a recession could come right around the 2020 election.”
A short time later, Schlesinger sympathized with how people could be worried but seemed to suggest they really shouldn't be. “I know it's tough to look at those 401(k) statements, but look, just stick to that long-term game plan,” she advised.
“For consumers, there's actually a little bit of a silver lining here. As bond prices go up and yields go down, that means the cost of borrowing is dropping,” she touted. She went on to suggest now might be “a very good time to make a large purchase” that could require a loan, she said.
She concluded: “Try to keep very clear here that this is not put in the book yet. Really run your life as if this were just any old day.”
A large part of economic and market activity is driven by perceptions. So, if there’ a lot of fear out there it could hurt both even more.
The transcripts are below, click "expand" to read:
ABC’s World News Tonight
August 14, 2019
6:33:55 p.m. EasternDAVID MUIR: The other major story tonight, the steep drop on Wall Street today, closing down more than 800 points. And the warning, the key indicator that happened today that has foreshadowed recessions before.
Investigators [sic] were rattled by that warning, what’s called an “inverted yield curve”. Essentially when the yield on a 10-year treasury is lower than the 2-year note.
The bottom line here tonight: the last time this happened was in 2007, just before the great recession. The Dow plunging more than 800 points down more than three percent in one day.
President Trump tweeting, “this is not the trade war with China, that we’re winning”. Instead, blaming the Fed.
So, what does this mean for American families? The prices you pay at the store during this trade war. And what a downturn could mean for 401(k)s and jobs? ABC’s chief business correspondent Rebecca Jarvis, here tonight.
[Cuts to video]
REBECCA JARVIS: Tonight, that sell-off on Wall Street. The Dow plunging 800 point, the worst day for stocks so far this year.
Rattling investors an escalating trade war with China. The negotiations stalled. Another factor those protests in Hong Kong, a sign of China’s willingness to dig in its heels.
Tonight, President Trump on the defensive. Insisting his trade war has not caused the market plunge. The President tweeting, “China is not our problem. Our problem is with the Fed.”
But the Fed cut interest rates just last month. And the President has backed off his threat to impose new tariffs on more than $300 billion of Chinese goods.
(…)
JARVIS: Well-- And David, interest rates are already near historic lows. This is not a silver bullet. Remember, we live in a global economy. What other countries do also has an impact here. And unlike the great recession, world leaders are not working together to solve this problem in part because of the trade war.
CBS Evening News
August 14, 2019
6:35:31 p.m. EasternNORAH O’DONNELL: For what it all means, joining us now is CBS News financial analyst Jill Schlesinger. So, Jill, are we headed for a recession and what does this news mean for investors and consumers?
JILL SCHLESINGER: Well, whether or not we get to a recession remains to be seen. But here's what we know for investors: Uncertainty around trade is causing a lot of consternation. I know it's tough to look at those 401(k) statements, but look, just stick to that long-term game plan.
For consumers, there's actually a little bit of a silver lining here. As bond prices go up and yields go down, that means the cost of borrowing is dropping. So if your family can afford it, now may be a very good time to make a large purchase, like a home with a mortgage, or a car with a car alone. So it's not all bad. Try to keep very clear here that this is not put in the book yet. Really run your life as if this were just any old day.
O’DONNELL: All right, Jill Schlesinger, good information. Thank you.
NBC Nightly News
August 14, 2019
7:03:26 p.m. EasternLESTER HOLT: And also breaking, the big sell-off on Wall Street today, the Dow average plummeting three percent, losing 800 points amid troubling new signs the U.S. economy may be inching toward a recession. White House correspondent Kristen Welker has details.
[Cuts to video]
KRISTEN WELKER: Tonight, drama on Wall Street, now deepening fears the economy could be weakening. The Dow plunging more than 800 points, sparked by a key economic indicator faltering for the first time since 2007.
(…)
WELKER: Signaling a recession could be on the horizon.
STEVE LIESMAN: It's a very reliable indicator. if it sticks around and gets worse. Every time this particular indicator turns negative, it is signaling a recession.
WELKER: The dangers of a recession, likely job losses, 401(k)s and other retirement accounts dropping. And it could be harder for those with credit issues to borrow money. While tonight the economy is booming, some Americans are already starting to feel a pinch. Richard Keywheat is a fourth-generation farmer in Iowa watching the price of his corn and soybeans fall, he says because of the President's tariffs on China despite a recent government bailout.
(…)
