Tuesday, August 25, 2009

Sprouts of Positive News

The mainstream media in US and India is full of stories of Economic Recovery, while in reality nothing has changed yet.

CBFE Economics writes

1. A lot of people are very thirsty for any kind of positive economic news. If you read any of these articles you'll see that conditions for most of these corporations are pretty dreary. Most are actually seeing declining sales and earnings. About the only positive thing to report is that they beat analyst expectations.

2. Many of these media organizations are clearly suffering in this downturn as well. A recovery would greatly benefit them. So its in their interest to promote as much positive economic news as possible, possibly in an effort to shift public opinion and promote more economic confidence (regardless of whether it is warranted or not).

3. Many of these media organizations want to paint a positive picture regarding the financial situation of these corporations because they have ties to them. For example, remember the story about Macy's I linked to up top? The retail sector is one of the biggest advertisers in just about every form of media.

4. Its the predominant thinking on Wall Street and these media groups don't want to rock the boat. Call it inertia, if you will.

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