Friday, May 2, 2008

The NY Times upbeat about economy today

Perhaps the reporters read my last post, because there is a really cool article today, "Economic Clouds? Wall Street Sees Signs of Sunshine that was quite optimistic by Vikas
Bajaj, that is very optimistic about the economy.
For the record, I implied yesterday that by their post about the latest economic report, the Times seemed to make sure no reader saw anything optimistic about the economy (perhaps for political reasons).
This recent article about the economy has the exact opposite effect, as it makes the economy look good, making up for the last article. That is what you call fair and balanced reporting.
The article started like this:

"Despite a drumbeat of bad economic news, the stock market is up — almost 11 percent in the last few weeks. Junk bonds, those risky corporate I.O.U.’s, are rallying. The value of financial shares, bank loans, tricky credit derivatives — up, up, up.

"Many on Wall Street, the epicenter of the credit mess, seem to think that the worst is over. For the first time in months, analysts and executives sound upbeat again. Many of them see a broad, sustained recovery in both the economy and the financial markets coming in the second half of this year, a prediction some market strategists call hopeful at best."

This article made no attempt to make the economy look bad. I'm very impressed. It actually has a pumped up feel to it.

Non only is the market surging, the article notes, oil prices fell for the third day in a row and the dollar strengthened.

Some experts say this might be a sign of brighter things to come for the economy, as the reporter notes, "It is, of course, not uncommon for Wall Street to run ahead of the broader economy. Investors, after all, make money by anticipating the future. The job market, by contrast, improves more slowly than other aspects of the economy."

"But, "Bajaj continues, "specialists say the two sides will eventually converge. Either the markets will give up their recent gains or, if the optimists are right, the broader economy will show greater strength as tax rebate checks and lower interest rates stimulate the economy."

Now economic experts note that we are not "technically" in a recession after the economy grew at a meager 0.6% in the last period. However, economists contend that a recession is defined by two consecutive periods of economic decline, and that has not happened. So, technically, we are still not in a recession, and there is a possibility that there is hope the economy is improving.

However, we'll still have to be humble about these signs, as they could be premature as "foreclosures are climbing at a strong clip and the decline in home prices has picked up speed in recent months."

Either way, the Times has impressed me today by starting an article with the good news first, and putting the gloomy stuff at the end of the article. This is important, because most people read the first few paragraphs and move on to the next article.

Again, I'm very impressed. Perhaps the Times is making a gallant effort to improve its declining market share by no longer being bias. Then again, let's not get carried away.

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