Media Exaggerate Dow Losses as 'Decades Worth of Gains'
If you’re going to hype something, you should get it right. The Dow Jones Industrial Average (DJIA) fell below 10,000 on Oct. 6 for the first time in nearly four years, but the close seems like it hit a decade low to some journalists.
The last time the Dow fell below this milestone was Oct. 25, 2004, less than four years ago. However, CNBC correspondent Carl Quintanilla reported that a “decade’s worth of gains” – not four years’ worth – had been lost.
MSNBC’s Contessa Brewer made a similar mistake on the network’s special coverage of the economy on Oct. 6 with an even more incorrect statement.
“I mean, we’re seeing it down now below the 10,000-mark for the first time in 10 years,” Brewer said.
The Dow has also been in much worse shape, than its low point of 9,525 on Oct. 6 – it closed at 9,955.5. Since the Dow first hit 10,000 in April 1999, the true low occurred in 2002. It fell to 7,181 points on Oct. 10, 2002.
While the drop below 10,000 points can be perceived as a time to panic about the economy, investors don’t feel the same. According to an Oct. 6 Seeking Alpha post, an Investors Intelligence poll show investors aren’t as bearish as they were during other declines earlier in 2008.
“The AAII poll which targets individual investors stood at 55% last week. Unfortunately, AAII sentiment reached more negative levels at the short-term bottoms in January, March, and July of this year,” the Seeking Alpha story said. “The Investors Intelligence poll which targets newsletter writers tells a similar story. As of last week, bearish sentiment was 47.2%. At its highest reading in July, bearish sentiment hit 50% when the S&P 500 was 12% higher!”
The bearish sentiment was advanced most dramatically by CNBC “Mad Money” host Jim Cramer. He told investors to take their money out of the market on NBC’s Oct. 6 “Today.” “Whatever money you may need for the next five years, please take it out of the stock market right now, this week,” Cramer said. “I do not believe that you should risk those assets in the stock market right now.”
However, the same Jim Cramer warned the same thing would happen without government intervention in the form of a bailout – predicting the Dow would go down to 8,200 without it. However, the bailout was passed by the Congress and signed into law by President George W. Bush on Oct. 3 and Cramer has continued to make the claim.