I’m writing this article today out of anger, yes, anger. Here’s the latest offering of a steaming pile of cow dung that passes for financial journalism that I stumbled across the other day:
“The headlines say the financial crisis is behind us. The Dow is back to pre-financial crisis levels. Layoffs are the slowest since the financial crisis, and car sales the highest since the financial crisis. So why are Americans still too scared to get back in the stock market?… A broad measure of the stock market, the Standard & Poor’s 500 index, is up more than 20 percent from last October. The index has more than doubled since March 9, 2009, the low point for stocks during the Great Recession.”
Every time I read lies like the ones above, I get angry. I get angry at the irresponsibility of the journalist spreading such lies. I get angry at the possibility that ignorant financial consultants may read that journalist’s quotes and wrongly beg their clients to dump money into the US stock market now. I get angry at the journalist’s blatant deception in quoting that the S&P 500 has doubled recently as a means of trying to trick people into thinking they are getting left behind in a new powerful bull stock market, and I get angry at the blatant baiting of the journalist whose statement above is likely meant to bait people into move their idle hard-earned cash into the broad US stock market indexes at an inherently dangerous time to do so. But mostly, I’m angry that such tripe and lies are even allowed to pass as investigative journalism. It’s funny that the author of this article is merely listed as the Associated Press and that this article doesn’t even have a specific attributed author. Perhaps the author knows that he is writing such rubbish that he does not even want to be identified for writing it. I don’t get angry if a journalist writes insightful, critical financial journalism and just happens to offer an opinion that is wrong. I’ve been wrong, you’ve been wrong, and we’ve all been wrong about our predictions in the past and will continue to be wrong about our predictions in the future at times. It is when I suspect that financial articles are written as pure propaganda and with the deliberate intent to deceive the public that I get mad.Let me deconstruct every lie in his paragraph above.
“The headlines say the financial crisis is behind us”. Yes, the mainstream media headlines do say that the financial crisis is behind us but this is pure fantasy. The only reason the headlines state this is because financial and banking shills are the ones that are writing them. The reality is that we are just moving into the second phase of this global monetary crisis right now and that those that don’t adequately prepare now may spend the rest of their lives trying to recover. I will explain some of the reasons why this is reality and why the journalist’s view is not.
“Layoffs are the slowest since the financial crisis, and car sales the highest since the financial crisis.”
As British Prime Minister Benjamin Disraeli was fond of saying: “There are three kinds of lies: lies, damned lies, and statistics.” Statistics can be distorted to deceptively prove a point and this is exactly the journalistic crime this author has committed. While layoffs may have decreased to the slowest rate since the financial crisis, this statistic is a relative one and certainly is not indicative of a recovering economy as the journalist implies. In fact, the unemployed and underemployed rate in the US is 23% (Source: Shadowstats). Zerohedge recently reported that U.S. youth unemployment is currently about 46% — the same as Greece – making this figure the worst in 64 years and 7% worse than when Obama took office. But the economy is recovering and stock markets are rosy, right?
“Car sales [were] the highest since the financial crisis.”
Light car sales for 2011 in the US totaled 12.8 million units. But wait, didn’t the author say that car sales in the US were the highest since the “financial crisis” in 2008? The facts? Total light vehicle sales in the US in 2008 were 13.2 million units, considerably higher than 2011 year totals. But if you change the year that the financial crisis started until 2009 or 2010, then one can make the claim that US vehicle sales are now the highest since the “financial crisis”. Furthermore, the author makes no mention that the “stellar” 2011 auto sales in the US were still a near staggering 25% lower than the nearly 17 million in annual vehicle sales that were the norm in auto sales in the US from 1997 — 2007. But who are we to spoil the “recovery” message of the bankers with the truth and facts?
And what about the author’s comment that the S&P 500 index has more than doubled since 2009? Yes, one can tell the truth and still be unbelievably deceitful. You can take any low and any high from any index to really twist the truth of the overall larger picture and the real picture that affects most investors. Since most commercial investment firms find holding cash to be highly distasteful since they only earn fees from money that is invested and not money that is sitting in cash, it is highly doubtful that most financial consultants had their clients sitting in 100% cash for more than 20 months since the peak of the S&P 500 in July 2007 of 1555 until it bottomed at about 666 in March of 2009. Thus, the likelihood that people invested in the S&P 500 index actually doubled their money from March 2009 until present day and had a net 100% gain is nil.
And though the author states that the US indexes are back to pre-financial crisis levels, this hardly tells the real story. Go back to March of 2000 when the S&P 500 level peaked at 1552.87. If you diversify and buy & hold, the two hard-sell mantras of the commercial investment world, you ALWAYS make money, right? Wrong. Today, 12 years later, at 1371.09, all 12 years of buying and holding and diversifying would have earned you is a hole in the pocket and a net loss of -12%. However, even this negative figure still doesn’t tell the complete story. Price the US indexes in gold and silver, that is in real money, as you can see here, and since 2001, the S&P 500 has lost more than 85% against BOTH silver and gold!
If this journalist that wrote the article “PSYCHIATRIST: Here’s The Real Reason Everyone Is A Doomer These Days” ever identifies himself, I’ll be happy to put up my public track record against his any day of the week and see who comes out on top for accuracy over the past 6 years. I am positive that this journalist would disparagingly, and with derision, label me as a “doomer” although I know that my views are more realistic than the views of all the fluff analysts in the world combined. Back in April 28th of 2008, I wrote an article, “Will US Markets Crash Now or Later?” that, at the time, contained a realistically negative view of US markets at that point and time, a view for which mainstream financial journalists derided me due to all the signs that pointed to a continuing economic recovery according to their shoddy version of financial journalism. Less than 18 trading days later after I wrote this article, the S&P 500 began a descent that didn’t stop until it shed about 50% of its value, thereby validating my realistic view and invalidating the fantasy views of mainstream financial journalists.
Despite all the “recovery” nonsense being promoted by banking shills in the media today, and despite trillions of virtually free money being thrown at EU banks and US banks, western stock markets are NOT stable today and have NOT risen recently on any fundamentally sound principles. In fact, western stock markets are just as “at risk” now as they were back in April of 2008, though the recent more than 1 trillion Euro QE execution, courtesy of the ECB LTRO program, may now push this risk further out than I anticipated before this latest QE injection. In conclusion, I leave you with two videos that should place the final nail in the coffin regarding the main point of this article — that authors that pen pieces like “PSYCHIATRIST: Here’s The Real Reason Everyone Is A Doomer These Days” are a complete joke and an embarrassment to the profession of journalism. A minimum of fact checking and modicum of investigative journalism would easily prevent this journalist from offering an unrealistic spin on the economy. But today, almost every financial journalist that is published in the mainstream media prefers to be steered by their controlling interests into being a “cleaner”, scrubbing clean the facts and hard evidence of every financial crime scene and instead, opting to present a rosy, unrealistic, fantasy outlook of stock markets and the global economy. These journalists that have no respect for their profession should all be rounded up and forced to participate in a “fantasy” finance league, because this is where they all belong. The “real reason” everyone is a doomer today is not because people are more negative today, as the journalist of that article claims, but it is because, thank God, people are finally awakening today and realizing that most financial mainstream reporting is heavily censored tripe by banking controlling interests.
The first video is a trailer for a new movie called “Unraveled” in which a prominent NY attorney was caught perpetuating a massive financial fraud by, in his own words “borrowing new money to pay off old money.” Is this not EXACTLY what nearly every Central Bank of every major economy is now doing, with the slight twist that Central Banks are creating new money out of thin air to pay off debts on old money they can’t afford? And if this created disaster for a one man Ponzi scheme, and was, as admitted by this NY attorney, patently and blatantly fraudulent, why does not a SINGLE financial journalist employed by the mass media condemn Central Banks for committing fraud, but instead laud the “fake” recovery that borrowing new money to pay off old money creates?
The second video below is self-explanatory for the revelations of an economic “pundit” that the media always lauds for his “recovery” declarations that have now been laughably wrong for six years running.
About the author: JS Kim is the Founder & Chief Investment Strategist of maalamalama, a fiercely independent investment research & consulting firm that aims to expose the fraud of Wall Street while informing his clients of the truth of investing and the best ways to build wealth with gold and silver every year, using strategies that are in direct opposition to the deceitful marketing campaigns of Wall Street. To learn more about his flagship Crisis Investment Opportunities newsletter, a newsletter that has returned more than a cumulative 202.88% gain from inception in 2007 until March 5, 2012, please click here.