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Fox News Hides Extent of Market's 'Dead Cat' Bounce

Reported by Judy - June 17, 2006

Anyone who relies on Fox News for fnancial insights probably has trouble balancing a check book, but even the most clueless investor probably knows that the market has been heading down for more than a month. On "Bulls and Bears" on Saturday (June 17, 2006), Brenda Buttner had to acknowledge that fact, but she did her best to make it look like the market has recovered its recent losses.

The segment began with yet another attempt to somehow tie Bush's poll numbers, which climbed out of the 30s in Fox News' own poll this week for the first time since February, to an implied turn-around in the market. After noting Bush's uptick in the Fox News poll, Buttner cheerily noted, "Stocks also on the way up, the Dow losing over 1,000 points in a month, but then bouncing back strong this week."

As Buttner prattled on, Fox News showed viewers a big red arrow pointing toward with "1,055," representing the decline from May 10-June 13. But as Buttner spoke of stocks "bouncing back strong" this week, there was no corresponding arrow showing the improvement. The viewer is left with the impression that the "bouncing back strong" equaled the plunge of the previous month.

Of course, it didn't. The Dow Jones Industrial Average was at 10,891.92 when it closed on June 9 and at 11,014.55 when it closed on Friday. That's a gain of 112.63 for the week, meaning the market regained les than 10.7 percent of what it has lost since May 10.

There's a long way to go to get back to even, yet alone show any growth for the year. But Fox News was not about to highland that sad fact as it tries to brag up Bush's poll numbers. So no "up" arrow, no chance for the viewer to do any "am I better off than I was a month ago" calculation. Just more happy talk about how bright the future is.

Gary B. Smith of Exemplar Capital did note that a matter of weeks ago, the "Bulls and Bears" regulars were forecasting a new market high any day. Instead, the market did its swan dive.

One of the dissenters to the new high forecasting a while back was Bob Froehlich, chairman of investment strategy at DWS Scudder. But now, he says, both the market and Bush have hit bottom. He predicted that the Federal Reserve board will not raise intereset rates at the end of the month and the market will skyrocket after that because of double-digit earnings reports, hitting 12,000 by the end of the year.

Others disagreed. Smith noted, "This bounce we’re having now is kind of the dead cat variety, so I think the market needs to experience more pain.” He predicted the Dow will be down another 500 points by Labor Day

Then there was former major league baseball player Lenny Dykstra, a columnist for thestreet.com. He foresaw a bear market, with the Dow hitting 10,000 by World Series time. But somehow, he wasn't too persuasive. Maybe because he sounded punch drunk. He also forecast a 20 percent decline in housing values by the end of the year.

Of course, when the panelists got around to mentioning their predictions on how far the Dow will drop, they no longer will mentioning Bush's name. They know the Fox philosophy -- markets and Bush go up together, but the market goes down on its own.

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