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Fox is Having a Hard Time Getting Its Spin Together Over the Subprime Crisis

Reported by Melanie - August 10, 2007 -

Today (August 10, 2007), in response to the subprime and credit crunch crisis, the Federal Reserve "bought over $35 billion in morgage-backed securities," (as CNBC put it), making it the "largest liquidity injection" since immediately following the 9/11 attacks. This huge bailout of the banking, mortgage, and credit industries is no small thing. It indicates that the Fed is extremely concerned about what is going on in the economy. There is talk that much is still unknown about how deep this problem goes and "some say" that the worst of it may not come until as late as this time next year.

But if you listened to Fox's "premiere business news" program today, you wouldn't know which way was up, whether there was a bailout or not, or whether this is even anything to worry about.

Cavuto opened his show by telling his audience that the Federal Reserve, "not just once, not just twice, at least three times today, throwing tons of cash out today." He said the, "White House, monitoring but not panicking. Insisting the economy is strong, the need for a bailout is not."

Fox's Dagen McDowell followed, saying, "Clearly Neil, all that money flooding in from central banks brought some confidence back to the markets. What the Fed did, those three infusions, and what it says, that it will keep money available to make sure this banking system, this financial system continues to run smoothly..." Translation: The Fed is standing by to bailout the bankers and mortgage lenders with even more cash.

Later, Cavuto said, "Only 2% of the mortgage investment market is deemed what they call high risk. That means 98% is not. So you're hearing a lot of talk about the 2% that could be worrisome and very little about the 98% that thus far is not." Translation: The media is blowing the 2% out of proportion. If it's nothing more than the "liberal media" going crazy because they want to see Bush fail (as if he hasn't already) why did the Fed pour "tons" of money into the system today Neil?

Fox's Cheryl Casone said, "if there were that many creditworthy borrowers out there who couldn't get loans right now, we would have seen the Fed act earlier and we didn't see that. We saw those infusions but that was actually more of a normal occurrence than I think people realize." Question: So, since creditworthy (read: affluent) borrowers weren't suffering, the Fed didn't act, until they began to suffer this week, and then they acted, so that means we should relax? And just how often does the Fed infuse "tons" of money into the system?

Terry Boyer, a Cavuto fave, said, "We're basically at a .5% foreclosure rate in the United States of America...this is a sliver of a sliver of a sliver and not worthy of the level of panic attributed to it." Question: Didn't Cavuto just say that the level of foreclosures was 2%? And if this isn't worth the level of panic attributed to it, why did the Fed pour "tons" of money into the system today -- the most since 9/11?

Cavuto kept bringing up his Wednesday interview with George Bush. He said the President told, "me we have great productivity. We've got companies doing very, very well and those underpinnings are gonna save us, not government intervention." Comment: Reality based community Earth to Cavuto. Less than 48 hours later, there WAS government intervention. Hello! You know your audience, don't you Neil? You know they don't pay attention and instead of informing them, you play them like a drum.

Back to Casone: "A lot of people are saying that Bernanke [Chairman of the Federal Reserve] needs to act and then people say, you know, it's not the Fed's job to bail out the market that made these risky bets." Cheryl, the Fed bailed out the market today, okay? Got it?

Tracy Burns, a reporter for the Murdoch-owned New York Post: "It's because it's all over the news. Maybe people should shut off their TV's and go to the beach." Tracy -- if this is just a "liberal media"-driven event, why did the Fed do what it did today, huh?

Comment: This is just a bit of the crazymaking reporting today on Fox's "business news" show. Fox will hold a two hour live special tomorrow morning beginning at 10:00 a.m. ET titled, "Fear v. Fact." Wonder if they'll have their spin together by then. There was concern about the housing bubble bursting but the speculation was that it would happen in 2009 -- after the election -- but alas, it's happening on Bush's watch so I'm sure the lines between the White House and Fox are burning up tonight.