Welcome to the 7th Circle of Hell.
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Don’t believe ANYTHING!
Sigh. I just completed my first cup of coffee and popped up Google News Business Headlines to see where the markets opened and how the GDP downgrade and rise in unemployment claims were going to be treated (more on these two tomorrow). Now I’m the first to admit that I’m old and cynical, but Google outdid me today. Instead of a column on a single subject, today I’m going to look at the headlines, the perception they’re trying hard to create and some brief comments.
AFP – 34 minutes ago
MADRID – The European Union pressed Spain on Thursday to urgently clear up doubts over its mammoth rescue of stricken lender Bankia so as to calm investors fearing a financial breakdown.
Bankia was Spain’s 4th largest bank, got way in over their heads in bad real estate loans and was nationalized earlier this month. It’s just the tip of the iceberg for banks in Spain. Bankia, and eventually most/all of Spanish banks, will need to recapitalize because of real estate losses and Spain indicated that they’d do it with sovereign debt. Well, their interest rates hit near all time highs this week and the European Central Bank (like our Fed) said, “Ummm, NO!” So they’ve cooked up a new plan with “cash” and apparently the Northern Europeans (read Germany) don’t trust them. I wonder why. And keep this story in mind for just a while.
Fox Business – 1 hour ago
US economic growth was a bit slower than initially thought in the first quarter as businesses restocked shelves at a moderate pace and government spending declined sharply.
There was great fanfare in April when Q1 GDP came out up 2.2%. Aside from the fact that 2.2% was and is a lousy post recession growth rate, it was trumpeted by the administration and their media flacks as proof of a rebounding economy. Today, as is the usual practice, the growth was downgraded to 1.9%. Unexpectedly I’m sure. Government spending is “down” even though we’re spending ourselves off a cliff and business spending – the real indicator of the health of any economy – was down because businesses don’t trust this administration’s policies. Not that you’d know that from any of the reporting, of course.
USA TODAY – 1 hour ago
WASHINGTON (AP) – The number of Americans seeking unemployment benefits rose last week to a five-week high, evidence that the job market remains sluggish.
Unemployment claims are up for the 4th straight week and were significantly higher than “expectations”. The rise was “modest”. Tell that to those making the claims in the face of a shrinking economy and a job market that’s not keeping up with population growth let alone putting any of the five million or so people who were working when President Obama took office that can’t find a job or an unemployment check today.
Bloomberg – 1 hour ago
Companies in the US added fewer workers than forecast in May, a reminder the job market will take time to strengthen, a private report based on payrolls showed.
The expectation was for an increase of 150,000 jobs. Missed again. Non-farm payroll report is out tomorrow, it will suck. Not that you’ll know it from the headlines or reporting, unless you read down about eight paragraphs.
Fox Business – 41 minutes ago
By Adam Samson The markets struggled to find direction on Thursday as traders mulled a slew of mostly downbeat economic data, kept a close eye on Europe and remained cautious ahead of the release of the monthly jobs report on Friday.
Heh. They’re not looking for “direction”, they’re looking for distraction.
USA TODAY – 56 minutes ago
By Alex Veiga, AP LOS ANGELES – Homes in some stage of the foreclosure process saw their share of overall US home sales grow in the first quarter even as sales of bank-owned homes fell.
Earlier this week the markets were overjoyed because home sales, even though they were at near record lows and had dropped from earlier reports, was viewed – somehow – as positive news. Yesterday we discover that sales of owner-occupied homes is dropping like a rock and today we see that sales of foreclosures – think “shadow inventory” – are taking a bigger market share. Oh, and that will drive prices down because prices are still too high by about 20%.
Wall Street Journal – 1 hour ago
About an hour before the opening bell, Dow Jones Industrial Average futures rose 42 points, or 0.3%, to 12423. As of Wednesday’s close, the Dow was on track to suffer the largest monthly point drop since May 2010, and biggest percentage decline since …
Remember, way back at the first article I asked you to remember that one? The one about the EU not believing the Spanish about how they’re going to rescue their banking system? And now we find this, U.S. stock futures going up. If I worked for the DEA, I’d mobilize a couple of SWAT teams and air support, those people are doing serious drugs. And, just to drive home the absolute stupidity of this particular headline, if you hit the dropdown, you’ll find this gem:
In Depth: Stocks plunge as outlook in Europe dims BusinessWeek
OK, time for the bottom line. Do not pay attention to headlines. Any of them. In some cases they’re written to attract your attention to a story. In MOST cases, especially in the Muddled Media represented by Google News, they are designed to create a perception and since the MM are nothing but unpaid contractors for the Obama administration and the Democratic National Committee, the perception they are trying to create is that “while we may be going through a “tough spot”, things are under control and all will be well. Add to that, “if things do go bad in Europe, it’s not our fault”.
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