Grumpy Editor

Media fuzziness prevails with market drop, jobs report

It was a tough two days for stock market investors and those with 401(k) plans as the Dow Jones industrial average ended the week tumbling almost 400 points from Wednesday’s level, notes Grumpy Editor.

With a steep decline of 317 points on Thursday, the White House press corps, busy focusing on other world and national matters, didn’t blink eyes or seek amplification on President Barack Obama’s dual declarations at the beginning (“the economy is getting stronger”) and toward the end (“the economy is better”) of Friday’s press conference. 

In the last 30 minutes of trading after the press session concluded, the DJ industrials fell an additional 40 points to close down 70 points for the day, ending the week at 16493.37 --- wiping out stock market gains for the year.

Meanwhile, media fuzziness showed with the monthly jobs report on Friday.  News reports used such uplifting phrases as “sturdy pace” and “most robust stretch of hiring” as the Labor Department tallied an additional 209,000 jobs in July.

Sounds good.

However, that marked a drop from the previous month’s 298,000 jobs created while 9.7 million Americans remained unemployed as July showed an uptick of 6.2 percent without jobs from the prior month’s 6.1 percent.

An interesting element missed by major media but covered by Ali Meyer, economics reporter at CNSNews.com was that the number of unemployed women 16 years and up rose by 227,000 in July while the unemployment rate for females increased to 6.2 percent from 5.9 percent.

Meyer pointed out there were 4,494,000 women unemployed in July. 

With last week’s sharp drop in the stock market, the Associated Press explained the dumping of stocks was caused partly because “a number of large U.S. companies reported poor quarterly results or forecasts.” 

“Poor” turned brighter several paragraphs later when AP answered the question on if the stock market rally is over:  “Company earnings, one of the most important drivers of stock prices, are still at record levels and are expected to grow by 8.6 percent in the second quarter, according to S&P Capital IQ.”  (The New York-based multinational financial information provider is a division of Standard & Poor's.)  

 

IN CASE YOUR FAVORITE NEWS OUTLETS MISSED THESE…

A report from Human Rights Watch and American Civil Liberties Union concluded journalists have to dig harder to obtain sensitive information because they are aware the government can track their exchanges with sources through phone, email and other records, thus leading to fewer “willing talkers” in government…Of special interest to World War II veterans who fought in Europe:  a German general will become U.S. Army chief of staff in Europe, part of the strategy to internationalize the U.S. Army’s overseas operations…Oops, wrong site: On the front page of The Wall Street Journal, a What’s News brief read, “Investigators failed to reach the crash sight of the Malaysia Air jet for a third day…NewsBusters pointed out “on Wednesday's NBC Nightly News, Brian Williams left out a key detail from his news brief about his network's upcoming live production of Peter Pan.”  The anchor announced Allison Williams will play the role of Peter Pan but omitted mention that the actress is his daughter…Gray Lady pushes pot:  In calling for legalization of marijuana, a New York Times editorial said the war on pot is worse for America than using pot, adding "the social costs of marijuana laws are vast" and "the result is racist," then urged Congress to repeal the federal ban on pot, noting the weed is "far less dangerous than alcohol”…LAObserved.com noted KABC-TV, Los Angeles, in connection with the major water main break on Sunset Blvd. near UCLA, got pranked on air by a caller who identified himself as a Los Angeles Department of Water and Power spokesman.  “He blamed the break on activity in one of the Pauley Pavilion locker rooms --- either a cherry bomb in the toilet or ‘a very large dump.’ While co-anchor Ellen Leyva pressed 'are you 100% sure about this?' a male voice could be heard mumbling 'it's a fake call'"…On the heels of slashing about 1,200 U.S. Army captains from the ranks, the Obama administration continued downsizing the military by informing about 550 U.S. Army majors they must leave the service by next spring…Also shrinking:  Procter & Gamble will jettison more than half its brands within two years, leaving it with about 70 to 80 of its top performers.

A RARITY:  T-storm delays INDOOR baseball game.   Los Angeles Angels-Tampa Bay Rays game was delayed 19 minutes in the third inning yesterday afternoon as a lightning bolt triggered a power outage at the enclosed Tropicana Field, St. Petersburg.  Angels went on to win 7-5.

 

Another scary L.A. earthquake story shakes readers

In a periodic reminder that Los Angeles area residents live in an earthquake zone, the Los Angeles Times produced another shaker piece last week, this time focusing on “more than 1,000 old concrete buildings in Los Angeles and hundreds more throughout the county may be at risk of collapsing in a major earthquake,” observed Grumpy Editor. 

The triple-byline story, based on a Times analysis, pointed out many older concrete structures “are vulnerable to the sideways movement of a major earthquake because they don't have enough steel reinforcing bars to hold columns in place.” 

Earthquake forecasts aimed at Californians seem to be an almost annual ritual to shake up readers and residents who don’t need to be reminded they are in earthquake territory, just as other parts of the country are susceptible to hurricanes, overflowing rivers, tornadoes and blizzards. 

Prior “shake ‘em up” stories by the Associated Press warned: 

+ California faces an almost certain risk of being rocked by a strong earthquake by 2037, citing a seismic forecast by scientists that pointed to a magnitude 6.7 quake (equal to the 1994 Northridge jolt) or larger.

+  A hypothetical model indicated a 7.8 magnitude earthquake would “see Los Angeles and its suburbs shake like a bowl of jelly” in less than two minutes and 50,000 people would be injured. 

+  “Seismic jiggling” via a swarm of small earthquakes near the southern end of the San Andreas Fault has some people wondering if the “swarm is just a warm-up to a major quake,” causing serious damage to the greater Los Angeles region.

Separately, the Los Angeles Times said it will no longer print letters from “climate change deniers.”

The newspaper’s letters editor declared, “Saying there's no sign humans have caused climate change is not stating an opinion, it's asserting a factual inaccuracy.”

In case you missed these…

 

Two contrasting items on Verizon Communications Inc. in Friday’s Wall Street Journal.  In “the good news” portion of its “Stocks in the News” feature, the WSJ pointed out Verizon’s $1.65 gain in Thursday’s trading was attributed to “the phone carrier reported 40 percent growth in third quarter net income.” A few pages away, the headline on a long story read, “Verizon Reports Slowdown In Growth.”  Nevertheless, Verizon’s stock added another $1.11 in Friday’s trading to close at $50.01.

Delayed by the partial U.S. government shutdown, the September employment report from the Labor Department will be released tomorrow while this month’s employment data will be pushed back a week to Nov. 8.  Meanwhile, in a two-week delay, the consumer price index, measuring inflation, was set for Oct. 30 release.

Bloomberg Businessweek veered from focusing on business to slamming the tea party with the cover of its current issue showing Ted Cruz, R-Texas, dressed as the Mad Hatter with the line:  The Tea Party Won.  Ted Cruz and his band of dead enders took the U.S. through the looking glass. Now crazy is the new normal…Also indicating its political stance with the partial shutdown (neutrality used to be emphasized in journalism) was Thursday's NBC Nightly News, with anchor Brian Williams declaring:  “Politically, it's widely agreed to have been a big loss and self-inflicted wound mostly for the Republican Party."

A key reason why young people do not read newspapers and magazines: CNSNews.com reported an international survey from the U.S. Department of Education's National Center for Education Statistics found Americans’ adult skills in literacy were tied in 15^th place (with Germany) among 23 advanced economies. Top three?  Japan, Finland and The Netherlands.  See the tally here…Latest Rasmussen Reports national survey found 78 percent of likely U.S. voters would vote to oust the entire Congress and start over again.

 Bank your dollars.  This is National Save for Retirement Week.

Now that the 16-day partial government shutdown is over, look for the recent days’ overused phrase --- kick the can down the road --- not popping up again until deep into the holiday season...prior to another crisis looming early next year.

 

Tesla regains $18 analyst-linked one-day drop in 8 days; Kansas City Star cites Obama boost in middle class lives

After a Goldman Sachs market analyst’s comments sent Tesla Motors Inc. stock down $18.21 to $109.05 a share on July 16, the buoyant electric car maker steadily regained upward movement, capped by a positive outlook Friday from a Deutsche Bank analyst as the Palo Alto-based auto firm's stock jumped $5.32 to $129.39 a share, notes Grumpy Editor. 

That put Tesla $2.13 above its July 15 close of $127.26, a day before Goldman Sachs analyst Patrick Archambault set a Tesla price target of $84 a share, sending the auto maker’s stock south.  (Interestingly, two months earlier Archambault set a price target of $61.)

On Friday, Deutsche Bank analyst Dan Galves upgraded Tesla, saying the electric car maker “has taken a very large step ahead of the competition” and raised his rating to “buy” from “hold.”  He boosted his price target to $160 --- about double that of Goldman Sachs analyst Archambault two weeks ago. 

Despite a down market today, Tesla jumped to a new high, up $5.23 to $134.62.

Zig-zag comments with opposing analysts’ views are what trigger gray hairs on business writers and investors.  

Deutsche’s Galves told an Associated Press reporter:  "Several unbiased third parties (are) concluding that Tesla's first mass-produced vehicle is the best car they've ever tested.  In the eyes of many consumers and critics, (Tesla has) designed a superior car by taking advantage of the architectural attributes of an E-vehicle (such as battery placement underneath the floor of the vehicle), and using this to (the company’s) advantage (i.e. better handling, quietness, storage, interior volume)."

 

KC Star sees ‘gusto’ in Obama speech 

While many in the media cited President Barack Obama’s on-the-road speeches at two college campuses last week as recycled material --- although it included new remarks on “phony scandals” (such as Benghazi, IRS, and NSA spying) --- the Kansas City Star saw some nuggets that inspired an editorial.

The Star noted glowing pluses in the president’s comments for middle class folks. 

“Obama left the naysayers behind and pledged to spend the rest of his time in office fighting to improve the lives of the middle class,” read the Star editorial.  “He did so with gusto.” 

The editorial in the McClatchy Co.-owned newspaper also beamed, “His template is consistent, reasonable and refreshingly positive:  access to quality education from preschool to college, infrastructure upgrades, good paying jobs, home ownership, secure retirements and affordable health care.” 

The Star’s daily circulation, as of a March 31 tally by Alliance for Audited Media, was 189,283.  That compares with weekday circulation of 206,441 in September, 2010.

 

In case you missed these… 

NBC plans a Hillary Rodham Clinton miniseries timed to precede the 2016 presidential election.  It’s linked to the network’s effort to create "event" programming.  Diane Lane is set to portray the former first lady and secretary of state...More Hispanic adults are consuming news in English from television, print, radio and Internet outlets, according to a Pew Research Center survey.  It found 82 percent said they get at least some of their news in English, up from 78 percent six years earlier.

Bank PR problem:  First National Bank of Wellston (Ohio) has a very irritated female in its community.  The two-office bank foreclosed on the wrong house --- which happened to be hers.  With the action, out went her belongings, with most hauled away, some sold, others trashed…In another problem --- the type that shakes up PR folks --- when San Diego Mayor Bob Filner held a press conference Friday to announce he was undergoing two weeks of counseling, his microphone went dead soon after he started talking.  It was out for about 10 minutes while about two dozen print and broadcast staffers anxiously waited (they expected him to resign).  MSNBC, Fox News and CNN anchors, some depending on a feed from KFMB in San Diego, had to ad lib during the blank period. Meanwhile, a next-day Associated Press story identified Filner as a Democrat --- in the eighth paragraph. 

    Political affiliations usually are indicated at first mention of name.

As Fed chairman Bernanke speaks to media, Dow ebbs

As often happens, when Federal Reserve Chairman Ben Bernanke speaks, the stock market drifts south, as happened yesterday when he faced the business press following the year’s last meeting of the Federal Open Market Committee, observed Grumpy Editor. 

The Dow Jones Industrial Average erased an 81-point rally earlier in the day to close down 2.99 points at 13,245.45. 

It marked the end of a five-day rally. 

Bernanke spoke 12 minutes following the FOMC meeting, then went into detailed answers to media questions for an hour. 

The Q&A session started with the Dow up 42 points.  The average drifted lower as the questions continued seeking input on the central bank’s policy and what lies ahead.  

Also in the air was uncertainly, along with worries, on the looming “fiscal cliff.” 

As for inflation, Bernanke said it “remains well-controlled.” 

He added the Fed plans to keep key short-term rates near zero until the unemployment rate --- which he sees elevated until late 2015 --- reaches 6.5 percent or less, down from the current 7.7 percent.

Fed words, fiscal cliff, sales, prices point to jitters

In efforts to snatch a clue on what lies ahead financialwise, many investors, market observers, economists --- and business writers --- will be keeping ears zeroed in on what Federal Reserve Chairman Ben Bernanke has to say during a news conference at the conclusion of today’s last 2012 Federal Open Market Committee meeting, reminds Grumpy Editor. 

Words will be scrutinized in attempts to sniff out any indication of coming interest rates, near zero for several years. 

A stock market reaction likely will follow, sometime after 2:15 p.m., Eastern. 

Any change in the federal funds rate is destined to trigger a chain of events that affect short-term interest rates, long-term interest rates, foreign exchange rates, the amount of money and credit, and, ultimately, a range of economic variables.

Along with the stock market direction, that includes employment, manufacturing output plus prices of goods and services. 

Also closely watched today will be any development on the “fiscal cliff” out of Washington. 

It all points to what could be a turbulent next two days. 

Due out tomorrow are retail sales and producer prices for November along with the latest week’s initial jobless claims figures. 

On Friday, industrial production for November and the consumer price index are released.

Harry Reid's 'cliff' remarks trigger drop in stock market

Business writers and editors now have to keep a close ear on what Senate majority leader Harry Reid (D., Nev.) says, after his downbeat "fiscal cliff" remarks near the close of the stock market yesterday were credited with sending it to the lows of the day, observes Grumpy Editor.

The Dow Jones Industrial Average, after being in and out of positive territory, tumbled 89.24 points to 12878.13 at the close.

In connection with negotiations between Democrats and Republicans, Reid said, "They talked some happy talk about doing revenues, but we only have a couple weeks to get something done. So we have to get away from the happy talk and start talking about specific things.

"I'm extremely hopeful and I do not believe that the Republicans are going to allow us to go over the cliff," continued Reid, adding he hoped Republicans can agree to tax-rate increases and that Democrats were happy to deal with entitlements.

The tax-rate dispute is the central obstacle to an agreement that would prevent the U.S. from plunging off the fiscal cliff, a convergence of an estimated $600 billion in tax increases and spending cuts.

With key financial matters, media focus on comments by Ben Bernanke, Federal Reserve chairman, at speeches and especially after Federal Open Market Committee (FOMC) meetings.

Bernanke's messages, after being digested, often send the stock market south.

But now, Reid will probably have more business writers at his press conferences.

Grumpy Editor lists FOMC's meeting dates for 2013

Looks like there will be much to talk about in Federal Open Market Committee meetings during 2013, as each of the eight gatherings is scheduled for two days, compared with only four two-day sessions in prior years, finds Grumpy Editor.

Going into 2013, investors, market observers, economists and business writers will be seeking clues on the directions of interest rates --- which, at the current level, have only one way to go: up.

Analysts and business writers will be paying close attention to wording in statements following each meeting.

Any change in the federal funds rate triggers a chain of events that affect short-term interest rates, long-term interest rates, foreign exchange rates, the amount of money and credit, and, ultimately, a range of economic variables.

That includes employment, output, prices of goods and services plus, of course, the stock market direction.

Scheduled meetings in 2013:

Jan. 29-30

March 19-20*

April/May 30-1

June 18-19*

July 30-31

Sept. 17-18*

Oct. 29-30

Dec. 17-18*

* Meeting associated with a Summary of Economic Projections and a press conference by the chairman.

Note:  Dates are tentative until confirmed at the preceding meeting.

Following the conclusion of meetings, statements are released to media around 2:15 p.m., Eastern time.

Burger King revs up to go public, adds bacon sundae

Will New York media ask mayor Michael Bloomberg --- who frowns on sugary sodas larger than 16 ounces served in restaurants, theaters, delis and vending carts --- what he thinks of today’s Burger King unveiling of a 510-calorie bacon sundae, wonders Grumpy Editor. 

The dessert is composed of vanilla soft serve with a mix of fudge, caramel, bacon crumbles, topped with a vertical slice of bacon. 

Along with its high calorie count, the dessert also contains 18 grams of fat and 61 grams of (attention: Mayor Bloomberg) sugar. 

Burger King today also is debuting several pork, beef and chicken sandwiches. 

Meanwhile, investors who remember Burger King on the New York Stock Exchange until it was taken private in October, 2010 by global investment firm 3G Capital, with offices in New York City and Rio de Janeiro, will have an opportunity again to buy into the world’s second largest hamburger chain later this month. 

That’s when 3G Capital expects to take Burger King public on the NYSE --- where traders, in celebrating the event, might be downing bacon sundaes against the mayor’s wishes.

 

Stock market slips: ‘China fears’ or simply profit taking?

Sensitivity of the stock market these days, since the Dow Jones Industrial Average recently moved above 13000, was illustrated when wire and broadcast reports throughout yesterday mentioned stocks slip "on China fears” or “worries over China’s economic outlook,” sending the market tumbling 68.94 points to 13170.19,” observed Grumpy Editor.

So what were those worries over China that sent the Dow lower for the second time in 10 sessions?  

The “China fears” stemmed from a comment Monday in far-off Perth, Australia, from Ian Ashby, president of iron ore operations of Melbourne, Australia-based BHP Billiton, Ltd., the world’s largest mining firm (and listed on the New York Stock Exchange).  He said his company was seeing signs of "flattening" iron ore demand from China.

But then, Ashby went on to say iron ore demand would ''grow strongly'' in the next decade and consumption would advance more than 3 percent globally over the next eight years. 

And what about the softening in China demand?

That would not happen until after 2025, said Ashby.

Yet, what investors heard triggered concern, said news reports, sending the Dow averages lower.

In the past, a drop in the Dow from a series of major gains would be attributed simply to profit taking.

 

Lengthy Medicare paragraph features a load of ( )s

If you think some newspaper paragraphs run too long, just try to follow what’s going on with this Medicare provision, as pointed out in the Wall Street Journal, urges Grumpy Editor. 

As unearthed by WSJ writer Joe Palazzolo in Friday’s WSJ:

"In the case of a plan for which there are average per capita monthly savings described in section 1395w–24 (b)(3)(C) or 1395w–24 (b)(4)(C) of this title, as the case may be, the amount specified in this subparagraph is the amount of the monthly rebate computed under section 1395w–24 (b)(1)(C)(i) of this title for that plan and year (as reduced by the amount of any credit provided under section 1395w–24 (b)(1)(C)(iv) [2] of this title)."

Clear enough?

Nothing simple with many government texts.

Makes one think the writers get paid by the word --- or symbol.

Palazzolo also points out the Dodd-Frank financial law runs 2,300 pages while President Barrack Obama’s health-care law fills more than 900 pages.

Perhaps, in efforts to keep word volume shorter, more former tabloid newspaper staffers --- brought up to “write tight” --- should be called on to assist with authoring legislation.