October 26th, 2008
06:17 PM GMT
LONDON, England - Grim reading in the Financial Times. Take the headlines this past weekend: "Dire data push anaemic forecasts down;" "Recession concerns trigger turmoil in equities;" "Uphill road back to economic growth;" "Endless calls to the business bereavement line;" "Homeowners forced to sell properties at loss" and "Oil cartel cuts output but price still falls."
Now I don't think the editors of the Financial Times, or any other of hundreds of media outlets are trying to talk the economy down. I think they are reflecting the reality of what's happening in the real economy and markets.
But there are those who are blaming the media for making a bad situation worse. Take Chuck, here's what he had to say in response to my blog on market volatility: "I really believe that the media needs to take some responsibility for the financial fiasco that we are going through. Not the bad loans, not the questionable securities; just for beating without let-up, the drumbeat of despair. The hype and hyperbole are incredible.
"Everyone seems to be trying to out-depress the other, as if there's a Pulitzer for a story of 100 words or less with the most gloom and doom. A constant barrage of cut-your-wrist headlines everywhere. Just look at your main Web page. Horrible but do you really need to keep pumping the bellows?" Chuck asks in conclusion.
I don't think the media is pumping the bellows. The bellows are broken, the money markets had frozen, credit remains tight, investors remain nervous, and the data in the economy remains almost uniformly bad.
Even the headline about "OPEC cuts production but oil price still falls" accurately reflected what happened. OPEC did announce production cuts and oil fell $3 that day on worries about a global recession and less demand.
Anyone who's read my blogs or listened to my on-air comments on CNN knows I've been bearish for a very long time, and I remain bearish. It will take considerably longer to unwind the massive damage done to the financial system. The global recession is gathering pace, not ebbing. I don't take joy in being bearish, I just tell it like I see it and so far, I've been proven right.
As for the media at large, a legitimate question is to ask why weren't more warning of an impending crisis. But even if they had, they would have been accused of being doomsayers. Even if warnings had been more frequent, it's unlikely people would have changed behavior. Few complain when markets and the economy are doing well.
Now that tough times are here, it's easy to blame the headlines, but you can't deny the underlying reality.
Tell me what you think. Do you think the reporting is too negative or does it accurately reflect what's happening in the markets and real economy?
Do you think the media should be blamed for adding to the financial crisis?
Even if more in the media had warned of the impending crisis, do you think investors and the public would have taken it to heart?
Do you think your local media has been reporting responsibly on the current financial crisis?
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