Only news is bad news
In these days of Debbie Downers and Negative Neds it’s hard to keep a positive outlook, especially in the financial arena. It seems like we should all throw in the towel and slide from what is possibly the end of a recession to the depths of a depression.
Don’t let that become a self fulfilling prophecy. Most people get what they’re expecting. If you expect the worst the odds are you’ll get it. And what’s worse is if you only expect bad news you’ll interpret any news as negative.
The news media doesn’t report good news. Even if there is an uptrend it’s given a negative spin. For example: the housing market may be slightly better for this quarter than it was in the previous quarter. That would be good news right? Wrong. The media will twist it to say something like this quarter shows the least improvement in the last six quarters, completely ignoring the fact there was an increase.
Here’s an example: “The Consumer Reports Sentiment Index is at the lowest level (38.1) the organization has seen since October ‘08. In the meantime, the Consumer Reports Trouble Tracker continues to creep up to its highest level in the past seven months with almost 38 percent of Americans experiencing at least one major negative personal finance event in the past 30 days.”
Sounds bad doesn’t it? What that news bite doesn’t tell you is that Consumer Reports Retail Index remained stable from the previous month and that big ticket items, such as shopping for a new home or a new or used car looks good for September. That good news is hidden behind a negative headline.
While the sentiment index is a valuable measurement it only tells how consumers feel, it doesn’t tell you how they’re acting. If consumers feel that their financial situation is improving the index would be above 50. If the feeling is that their financial situation has deteriorated the index would be below 50. While the consumers may feel that their situation is worse in reality it may actually have improved.
The feelings may be based on what the media is telling them is happening. And that leads to a self fulfilling prophecy.
Another example would be when a drug company like Advanced Life Sciences Holdings ADLS has received FDA approval that just took a bit longer than expected or projected. The news media reports it as a major shortfall for the company and its stock.
When looking at the news keep in mind that the old saying “no news is good news” is no longer true. Perhaps the new platitude should be “the only news is bad news.”
Tags: bad news, consumer sentiment, newspaper
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