Home Store In Memoriam Deborah Newsletter Forum Topics Blogfeed Blogroll Facebook MySpace Contact Us About

Fox Fails in its Attempt to Cover the Dive in the Dow Like a Grownup

Reported by Melanie - February 27, 2007 -

I couldn't wait to see how Fox's "premiere business news" program, You World w/Neil Cavuto reported today's (February 27, 2007) stock market dive. Unfortunately (or fortunately, depending on how you look at it), Neil Cavuto was off today so David Asman, a yeller and screamer, substituted and sure enough, he yelled and screamed during the entire show while simultaneously vibrating in his seat.

Despite Asman's talk show-like behavior, Fox seemed to be acutely aware that the dive in the Dow offered an opportunity for the show to presents itself as a real business news program, what with the pending debut of its "business news channel," so it brought in some new faces, i.e., some grownups. The standout grownup guest was Joe Battipaglia of Ryan Beck & Co. Anyone who watches business news shows knows that Battipaglia has been around for years.

The first half hour of the show essentially consisted of a roundtable discussion between Fox employees and Battipaglia. Battipaglia brought more honesty and realism to the show than I have seen in years, all while the Fox people were scrambling to spin what he said.

Here's how it went down:

After running down the numbers and talking about China and Cheney (was this a result of the "assassination attempt" on him?), Asman turned to Brenda Buttner, the host of Fox's "Bulls & Bears," and asked whether today's fall represented an opportunity. Buttner said "Absolutely. Opportunity. Stocks today are a better value than they were yesterday."

Gary B. Smith was next. He said China was "just an excuse today" and that traders were saying "maybe I should take some profits."

Scott Bleier followed. He said that, "since July, the market has rallied 2,000 points!"

Tobin Smith went next. He urged viewers to, "Take a deep breath. There are going to be some great buys here because nothing did change."

Back to Bleier who said that money managers, "all go for the door at the same time, whether it's in or out. It just so happens it's out today."

Buttner: The thing to remember is that "any time there has been a correction or a big drop in one day, if you bought that day, you made money overall, so that's important to remember."

Tobin Smith again: "You don't sell in panic. You get greedy in panic."

Enter Battipaglia. Asman's first question to him was what he would advise his clients tomorrow, "or tonight, for that matter."

Battipaglia said, "Well, we've been defensive on the stock market for several months now so we're advising people to stay away and the reason is that the fundamental condition of the economy is in a deteriorating mode here. The housing market is..."

(Comment: Cavuto has been nothing but positive on the markets so I'm sure his viewers were, well, listening intently. After all, hey, this is new, fresh stuff to them. They're used to days and days of, "This is a FOX NEWS ALERT! The Dow reached a NEW ALL-TIME HIGH today...")

Asman interrupted of course, hoping to stave off any negative talk: We know that "the problem [with the housing market is] with people leveraging too much on mortgages" but what else is wrong?

Battipaglia said that, "People's homes are worth less. The burden of their mortgage is higher because interest rates are up. Cars and trucks don't move off the lots as quickly as they did before and retail sales start to slip. That leads companies to be more defensive and that's why durable goods...[were] off more than expected at 6%." The housing number, "looked like a good number" but the "truth was that the inventory of unsold homes continues to mount. ... Consumer confidence at a record, everyone knows that's a contrary indicator. When we're at a record in euphoria on confidence, it's time to sell."

Gulp. Cavuto's audience has never heard so much blunt talk or so many facts all in one sitting. Had Cavuto been there he'd have interrupted Battipaglia six times during that paragraph but instead, Bleier came to the rescue: "We're going to slow enough to create a soft landing and an ideal environment. Yes, housing is a problem and it has been but it's not the problem it was in '91 when the S & L's blew up."

Wonder why, after monitoring Your World for three years, I've never seen Battipaglia on the show? His response offers a clue: "Scott, that's a fairy tale!," because "the Federal Reserve has never been able to engineer a soft landing."

(Emphasis in original.)

Buttner chimed in to back-up Bleier and talked about how good our employment rate is. We've "got good inflation," she said, and Asman added that "tax levels are still low." The Fox folks talked about specific stocks and China a little more before letting Battipaglia speak again: "Let me just say that the Bush administration, unfortunately, has a terrible record on supporting the U.S. dollar [Ouch! This guy must be a New York Times-reading, Hollywood-loving, liberal commie!]. They can't do anything about taxes because they're in a bind with congress and that leaves the Fed [inaudible] in this fantasy about a soft landing so they're not going to move on rates fast enough. So the market has been...moving up without the economy and now you see the economy fall out under it and I think the stock market follows it." OUCH!

Bleier to the rescue (paddle, paddle): People are talking about recession, but, "I don't think that happens. I think this is a long overdue correction. You let the dust settle and there you find your bargains."

Buttner, bringing up the rear (paddle, paddle, paddle, paddle): "The market was up 140% the last twelve months! Isn't it time to sell off a little bit?!"

Comment: On Your World, "fair and balanced business news" means bringing in an outside guest once every three years and throwing him or her up against five - that's five - brainwashed employees. Don't look for much more than that on the new Fox News "business news" channel.