Submitted by Edward Harrison of Credit Writedowns.
I just read a CNBC story which fails to mention CNBC’s involvement in the apparently erroneous report that Nouriel Roubini has suddenly become more bullish. Is this omission justified?
The controversy centers on statements Roubini made regarding the timing of a technical recovery in the United States. Yesterday, it was reported on CNBC and elsewhere that Roubini had made a ‘change’ to his market view and was essentially more bullish on the U.S. economy. Many market participants believe this was a major factor in the rise in shares yesterday.
However, Roubini issued a statement after markets closed repudiating the view that he had changed his view on the U.S. economy at all (see statement here). And since that time, many in the financial blogosphere have taken CNBC in particular to task for its role in spreading the belief that Roubini’s economic outlook was more favorable.
- CNBC Report on Roubini; Denninger Response – Barry Ritholtz
- CNBC: You Owe America An Apology – Karl Denninger
- Roubini: "My Views Were Taken Out Of Context." – Zero Hedge
- Denninger accuses CNBC of falsely goosing market on Roubini’s back – Credit Writedowns
- Roubini Denies He Said "Recession Will Be Over This Year," Despite Bullish Media Reports Otherwise – Yves Smith
Clearly, this story struck a nerve in the blogosphere. Now, CNBC has acknowledged the original thesis that Roubini is a bull was false. But, the media outlet apparently does not see itself as culpable for their part in this. Below is part of a story they ran on their website. Notice the parts I have highlighted in bold.
Several business news outlets, picking up on a report initially from Reuters, earlier Thursday cited Roubini as saying that the worst of the economic financial crisis may be over.
The New York University professor was quoted by Reuters as saying that the economy would emerge from the recession toward the end of 2009.
Reports of his comments helped trigger a late rally in the stock market.
Roubini added late Thursday that he sees no economic growth before the end of 2009.
So, I guess Reuters is to blame? I see this exchange on CNBC in the video below as part and parcel of this story.
You tell me: Is it Reuters or CNBC here?
Note: Reuters has now amended its story to reflect the new non-bullish story line. The original story is nowhere on the web.
Sources
RPT-UPDATE 2-Worst behind us but more stimulus needed-Roubini – Reuters
Roubini: Views on Economy Unchanged Despite Reports – CNBC
13 comments
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So they went with the ol' trusted: Make your statement a quote so it becomes true. My contact at GS, told me that he read in WSJ that CNBC is about to spin off this planet
Well the original reuters story has gone, but in the article below it looks like reuters picked it up from another news agency.
http://www.reuters.com/article/businessNews/idUSTRE56F5TS20090716?feedType=RSS&feedName=businessNews
Timings of the various articles seem to point back to CNBC.
Seeing as we have clearly already stepped into Alice and Wonderland world, do it really matter?? I mean apparently "less bad" news is now bullish news…
At some point this funny money world will face reality. When that point happens, I dont think that even the gold bugs will be safe.
This is typical echo-chamber ultra-lazy-mainstream-media shite. Pick a misleading headline, quote it on your own media venue as if it's credible, and never–ever–call the original source to VERIFY THE STORY. Then the next echo-chamber-ultra-lazy-mainstream outlet picks up YOUR story and the whispers get repeated all the way around the news cycle until it is embedded in the conciousness of viewers as "truth."
It is CNBC's fault for not verifying with the original source–ROUBINI–that it was true before running the story. Reuters ran a really stupid story to begin with, but who saw it until CNBC ran with a half-baked rumor as if it were "news."
Jesus. Steve Liesman should have to apologize on air for his reckless and irresponsible reporting of rumor as fact.
The internet is the CHRIST SPIRIT. It was said a Looooong time ago that the "Christ Spirit would return, and it would be found in the homes of almost every human" — It was thought this was the TV.
But, no, the internet has set the information stream free and this is all the CHRIST SPIRIT is, in reality:
FREEDOM OF INFORMATION.
Why? Because imagination is power and those who have stolen imagination (TV, technology, poisons – pharmaceuticals and street drugs too),
THEM who control the masses in evil fashions and brands, are a far cry from any GOD of earth.
Thus the so-called "MAINSTREAM MEDIA" is SATAN | EVIL | DEVIL, which uses the internet to feed ITS' greed, but not the cause:
INTERNET = CHRIST SPIRIT.
So, it truly is a fight between good and evil, positive and negative and the dark and the light.
LIGHT = freedom of information
DARK = information not free
CHRIST SPIRIT = internet, freedom of information
SATAN | DEVIL = mainstream media, corrupted/distorted/manipulated/EVIL information to enslave imagination and therefore, yoke humanity into capitalISM, but any ISM will do.
Just say no to ISMS, and keep the Christ Spirit free!
I was just watching CNBC and the big blonde woman repeated her false thesis, that Roubini had said that the economy "might have seen the worst"
The black haired porn star agreed.
Hardly matters who was first with the distortion. Roubini's comments were available for all to read. These are the kinds of excuses one gets – or once used to get – from small children.
OT: $20 Oil by XMAS
“China is in a real desperate situation,” said Verleger, who publishes the Petroleum Economics Monthly. “We’re in a situation where U.S. consumers aren’t consuming and Chinese manufacturers get hurt. Economists are looking for growth in all the wrong places.”
Verleger Sees $20 Oil This Year on ‘Devastating’ Glut (Update1)
http://www.bloomberg.com/apps/news?pid=20601087&sid=auTu3RI8WC1A
To be continued: See what you can in this and connect the dots to Santa and The reindeer:
A historical recession
(Part 2: The « green shoots »)
Philippe d’Arvisenet June 2009
http://economic-research.bnpparibas.com/applis/WWW/RechEco.nsf/ConjonctureByDateEN/3A8BE4F807DBD48AC12575CC00470B5C/$File/C0906_A1.pdf?OpenElement
For the time being, the explosion in the monetary base (up 89.2% year-on-year in February) has brought absolutely no excessive move in money supply, with M2 up by only 9.7% year-on-year. In other words the money
multiplier has fallen and the ratio of M2/Base has dropped, in one year, from 9.1 to 5.3 under the influence of the preference for cash.
The question then is when is the Fed likely to return to conventional policy, i.e. raise its Fed Funds target?
Taylor's rule, assuming underlying inflation of 1.5% (in the middle of the Fed's comfort zone), suggests that the ouput gap will require the Fed Funds rate to be raised in a 'mere' four years. However, we would not rule out
some action well before this in response to a fall in unemployment, even though econometric estimates of “augmented” Taylor rules including GDP growth or the
change in the rate of unemployment do not exhibit significant coefficients for these regressions, nor do they alter the coefficients associated to key variables (inflation and output gap).
>> Ok, so where The F does this point??? Huh? Higher unemployment, lower oil, greater debt, homes sales dropping, foreclosures increasing and Santa planning on what…. deflation and a replay of The Great Depression? Oh Rudolf, oh, oh … oh
This discussion presupposes that CNBC’s raison d’être is to provide objective information to its viewing audience. But anyone who applies even the slightest bit of cynicism to this situation will quickly realize that CNBC, as with all media, exists to push public opinion in a direction favourable to their owners/sponsors. This is nothing new. What is somewhat new is the naive view that media outlets exist as some sort of public service designed to enrich the general public by disseminating thoughtful and useful information. As if! But that is the premise of any outrage against the lies and manipulations of media outlets.
So hearing that CNBC is spinning information in a market-positive way is as just about as stunning as finding out that the scantily-clad woman so often seen of that dingy street corner is actually trading sex for money.
Of course media outlets are more than happy to cloak themselves in a chimera of virtue; a patina of being fair and balanced. But this quest is only in service of their primary mission – that of pushing public opinion in the desired direction. Just like a hooker is often willing to dress up in respectable attire in order to pull in higher status customers.
It is not the job of the critic not to be outraged when the media’s chimera of virtue ends up being false. It is far more effective to classify them correctly from the get-go. CNBC is simply a mouthpiece for various financial money/power nodes. Anyone who is aware of this fact and still spends time being manipulated by CNBC deserves the results. Just as anyone who believes in the objective media fairy tale also deserves the results of such ignorance. Call it survival of the most cynical.
Kevin de Bruxelles
We're here because we know CNBC cannot be trusted, but this example makes a concise case. If CNBC was interested in being a financial news organization, they could have fact-checked with Roubini.
Things must be bad at GE's business channel, though, because they seem to be going into the porn business. That must be the only way they can increase ratings.
Bottom line: If you trade or invest based on CNBC (or any TV coverage) you do so at your own risk. The networks are primarily there for entertainment. There isn't enough actionable news to keep them occupied and they can't, or won't, fill the time with serious analysis. Watch CNBC if you need background noise while you do more useful things. Personally, I just find it annoying.
THE M.O.
What is said matters little, as long as there is any type of even mildly bullish news story to use as a reason to pump up the market. The data is referred to AFTER the ramp up.
The gov't, c/o Goldman, will ramp up the market b/c they want to. This engages other algorithms to join the wave. Shorts start to cover and away we go.
After the fact the media does its job and says the reason for the rally is 'X'. Roubini, whitney, or misinterpreted housing data (read Ritholz).
'X' matters little as long as there is something to refer to to explain the madness (ramp job).
Does anyone believe Joe Q public is sitting at his laptop buying like mad when a 'less bad is the new good' data point is published?
Are money managers doing the same?
This market is a bunch of mindless computers buying or selling based on the momentum ceated by the government.
How hard is it to check Roubini's website (RGE) and see that this is nothing different then what he has been saying for the last three months? Gee, you think CNBC could afford a subscription although Roubini puts out a lot of free stuff?