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More Bull Than I Can Bear

Reported by Marie Therese - October 9, 2006 -

On Saturday October 7th, FOX News aired another two-hour block of financial shows which they've dubbed "The Cost of Freedom". The four shows - Bulls & Bears, Cavuto on Business, Forbes on FOX and Cashin' In - have a coterie of regular experts who navigate their way through the minefields of investing and offer a fountain of economic wisdom to the FOX viewers. Or do they?

Each show is divided into three segments, with the first two being devoted to the "hot button" political talking points that the GOP wants to hype and only the last few minutes devoted to stock picking. During the politically driven segments, a lot of very loud opinions are expressed, frequently with several experts talking at the same time, so no one person can be heard. Politically conservative analysts outnumber politically liberal analysts with the ratio generally being 4 Republicans/libertarians to 2 Democrats/moderates.

In the closing stock advice segment, like clockwork, one analyst will recommend a stock and another will jump in and disagree. Rarely is there consensus on a stock pick. Of course, "the cavuto" is on prominent display as host after host makes outrageous statements, ending in a question mark, so that FNC can't be sued. ("The cavuto" is a term Jon Stewart coined to describe a rhetorical device wherein one can say virtually anything - good or bad - and simply end it with a question mark, thus absolving oneself of the need to take responsibility for the content. Since Stewart first introduced the word into the lexicon, I've noticed that FOX News has used far fewer cavutos in their lower banners. Exclamation points have replaced the question mark in some instances.)

This week I've chosen Bulls & Bears to illustrate the point that FOX News' idea of a financial show is designed to inflame its audience about the GOP talking points or to strock FOX's own ego, not to inform them about the ins and outs of the stock market.


BRENDA BUTTNER, Host, Bulls & Bears: "FOX News Channel turning ten years old today. The stock market doubling during our decade. Why it could do even better in our next one!!"

TOBIN SMITH, Changewave Reseach: "If they [the North Koreans] put a bomb out, you know, Sunday, sure we'll be down 100 points. Those will be traders just cashin' in. ... Most people realize, if they actually used a nuclear bomb, they would turn the entire country into dust, and, frankly, from an economic standpoint, we wouldn't miss [them] a bit."

GARY B. SMITH, Exemplar Capital: "First of all, thank god no one said this is a stock picker's market. And Pat [Dorsey, Morningstar.com] did not to refer back to earnings, you know, and inflation!"

COMMENT: Gasp! Why on earth would a FOX viewer want to bother his or her head with silly things like earnings and inflation? After all, this is a FOX business show. I pity the poor fool who tunes into to these programs expecting to get actual, real financial advice. They will be sorely disappointed.

JOE BATTIPAGLIA, Ryan Best & Company: "The United States is the world's policeman - a benign policeman. He's (sic) being put to the test in Iraq. We're being pushed around by the Iranians and we've been pushed around by the North Koreans. If we are perceived to be unable to stop the progression in either of those countries - which are, admittedly, very small countries with a very focused program - what does it say about our ability to protect our allies around the world? I think it sends a dangerous message which will rattle markets because it reduces confidence."

CHARLES PAYNE, WSTREET.com: "... We are the policeman - not benign. We are THE policeman of the world and that's a role we've taken on, but what allies want us to protect them anymore? Everyone wants us to get rid of the programs, not to fight in Iraq, to give it all up, to let these people build these nukes! I don't know which one of our allies is standing with us, outside of England. You know, a lot of people compare America to Rome. You know, they should compare America to Julius Caesar, because all of our friends stabbed us in the back!"

BATTIPAGLIA: "... This is a very material issue. It's not about the French anymore. Now it's a global situation. We can't contain North Korea and Iran. What does that say? It says the U. S. is a paper tiger. That's a very bad situation to be in."


BUTTNER: "Charles, another double during FOX's next decade?"

PAYNE: "Absolutely. ..."

G. B. SMITH: "I'm a little more bearish in the short term. In the long term I tend to agree with Charles. ..."

BATTIPAGLIA: "One thing we know. Don't bet against America and if you go with America on this one, what you'll see over the next ten years, I think, is the U. S. benefitting greatly by globalization. We will exploit the opportunity of capitalism outside the United States for those companies who are heads up and have made the investments now to get the returns later."

COMMENT: Huh? Let's see if I've got this right. America is going to benefit by investing in other countries, including, one assumes, shipping our jobs to those countries and building factories in those countries and buying stock in foreign companies, etc.. To my feeble little brain, it sounded here like Battipaglia was actually telling FOX's super-patriotic viewers to invest all their money outside of this country, which, loosely translated, means bet AGAINST America rather than for it!

SCOTT BLEIER, Hybridinvestors.com: "I think we're gonna have a good ten more years, but I don't think we're gonna do what we've done in the last 10 years. I think we can go 50% over the next 10 years, not 100%. That's a little too optimistic. So I'm optimistic on America and American markets and the long-term trend certainly shows that stocks are the place to be, but 50%."

T. SMITH: " ... The 50-year-old boomer - the 50 to 65 stretch - has three problems. They (sic) haven't saved enough money. Bonds aren't gonna do it for them and stock growth is the only way they're gonna get a semblance of a retirement. So we are in the golden age - we haven't even hit the golden age yet. Probably, maybe, you know, double or triple from here."

PAT DORSEY, Morningstar.com: "I think an important thing to remember here actually is inflation. The Dow actually has not hit a record, because your dollar today is worth 20% less than it was worth in 2000. (off camera snickering from a couple of guests) And if you look at doubling in ten years, that's a 7% annualized return, so, after inflation, what? 3% a year? So, let's not get too thrilled. (offscreen snickering becomes muted laughter) I think the next 10 years are going to be good, but we're starting from a higher valuation point and I think that's an important thing to remember."

BUTTNER (cutting him off): "OK."

T. SMITH: "Patrick, what a way to bring us down!!!

BUTTNER: "Alright, let's, let's put on our party hat!"

G. B. SMITH: "Thank you Mister (indecipherable) (Note: FOX cut away from his face so I couldn't get help by reading Smith's lips)

BUTTNER (bubbly, smiling): "OK. OK. The balloons are goin' up!! Here's to 10 more good years for FOX, for the stock market and for these individual stocks. Which ones, you ask? Get the best names to own for the next decade!!"

COMMENT: Patrick Dorsey gave a reasoned, thoughtful, statistically accurate assessment of the actual growth of the stock market - and FOX's so-called financial "experts" laughed and complained that he was raining on their parade. FOX News' financial shows pander to the investor who wants pie in the sky, not real information.


In the third segment, the following stocks were suggested: Markel (MKL) which sells specialty insurance to niche markets; Japanese car manufacturer Toyota (TM); General Dynamics (GD, smallest of the U. S. defense contractors, 2/3 of its sales are to the U.S.); Invitrogen (IVGN), a genetic testing and services company; LabCorp (LH), no description given other than it does something aimed at the "aging population"; and finally suede-shoe salesman Tobin Smith offered his selected stock tip by saying: "Here's what you want to own - and I CAN tell you the future. In ten years we're not gonna have many light bulbs. We're gonna have white light LEDs. Cree's gonna make 'em and you're gonna want to own it. Probably goes up 5 to 10 percent from here. I guarantee." Thankfully, Patrick Dorsey gave Smith's hyperbole exactly what it deserved, saying "My crystal ball's cloudier. We may have LEDs but Cree may not make them. Too much technological risk."

The panel ended the show by making predictions, one of which was that the Dow will hit 25,000 by FOX News' 20th birthday!

And what, pray tell, will the value of a dollar be if that comes about?