Forum Archive Index - December 2000

["Ben Dutton" <bendutton@sharechat.co.nz>]

Here's yet another interesting and though provoking article from
TheStreet.com.  This time, it's by Bill Meehan, who has a go at all the
pundits and media that are crying doom and gloom for the U.S. economy.

While I don't agree with everything he says, it certainly does make one
think.

Happy reading

Benjamin Dutton


Stop the Ranting
By Bill Meehan
Special to TheStreet.com
12/1/00 10:25 AM ET

It's getting worse.

No, I'm not talking about the market or the economy, nor am I referring to
end-of-quarter markups or the idiocy and duplicity surrounding the
presidential election. I'm talking about the hysterical comments spewing
forth from an increasing number of economists, self-appointed wise men and
oh-so-wrong market gurus who have discredited themselves and have further
tainted Wall Street's already insalubrious reputation.

If you don't want to hear me rant about hypesters and the media, you can
skip this whole piece. I don't want to waste your time, since I despise
others wasting mine. There was nothing of importance in the market's action
Thursday, and Friday morning's apparent follow-through is likely to be no
more than an oversold bounce. However, I do intend to briefly touch upon
Thursday's economic data, but I can't make any promises, as I am constrained
by the amount of space available.

Their blathering about the state of the economy and stock market is
disingenuous at best and morally corrupt, if not criminal. Many of the very
same characters that touted the Nirvana of a New Economy and spun a tale of
a productivity miracle are now warning that an economic Armageddon is right
around the corner.

In their view, of course, all the pain and agony can be avoided if the most
powerful man in the world, Big Al, will simply take their advice. (Given
their track record, why even the feeblest among us would listen to them now
is beyond my comprehension, but that's another story.)

Just a few words from the Fed Head and his cohorts is all that these folks
think is needed to make things all better. And if the magic words aren't
uttered in 18 days, they're ready to blame him as the one who's entirely
responsible if the dream of easy riches they promoted turns into a
nightmare.

While I have not been in agreement with Abby Joseph Cohen's position for
quite some time, I have always admired her cool, calm and earthy demeanor,
and she's certainly made a lot of money for a lot of people. Yet her
unsurprisingly positive comments Thursday morning did little more than help
traders get out of bad positions taken ahead of Gateway's (GTW:NYSE - news -
boards) bombshell and swap into profitable shorts in the morning. Even she
has lost some of her vast power and luster. I don't agree with her now about
overweighting technology, but I do agree with her that the economy is hardly
on the brink of collapse, as so many cheap hypesters now proclaim.

Almost as bad, and perhaps worse, is the role the media have played in
helping to blow hot air into the technocentric bubble, and is now playing in
trumping up the dark side of its inevitable end. The combination of what's
going on in Florida, which has spread to the big time Supremes, and the
savaging of tech stocks is the best thing that's happened to the media since
OJ. And they're playing it to the hilt, as cable TV ratings have gone
through the roof. Few Americans understand politics and fewer still
understand economics or the stock market, although the latter has come to
occupy an increasing role in their lives and standard of living.

Before I excoriate the media, let me say that CNBC has been running a series
that is perhaps its most important contribution to the public's well being.
The explosive ratings growth over the past few years was obviously a
function of the incredible bull market and the furious pace of trading by
many individuals. So it's much to CNBC's credit that it has been airing a
well-written and unbiased series about the market and gambling addiction.
It's touched thousands, if not millions of lives, and is a major problem tha
t needs to be addressed. I salute them for the public service.

However, the legitimacy bestowed upon so many kooks, fanatics and
know-nothings by the media, particularly cable TV "news," has brought
coverage of the economy and market down to a level just slightly north of
Jerry Springer. It's simply done for money, with little regard for
accountability, accuracy, responsibility, fairness or balance. And
unfortunately, cable TV is increasingly becoming the general public's
primary source of information. The media will respond that they only provide
what the public demands, which is true.

However, the media has a moral responsibility to avoid slanting the news in
ways that could be very dangerous to the public. When it comes to politics
and the economy there needs to be more attention paid to things beyond the
grab for the almighty dollar.

Do I demand that they follow my ideas of fairness, or that the government
should interfere? Of course not: That would be even worse. But I do implore
readers to make their opinions known about the damage of sensationalizing
the news to the media, even if you disagree with my opinion about politics,
the economy or the markets.

I'm going to pick on Bill O'Reilly again (of Fox TV's O'Reilly Factor show),
only because I respect him as an honest man who has built a powerful and
growing presence through his TV show and authoring the top-selling book in
America.

As far as I know, O'Reilly played no role in fueling the technology bubble,
but he is more than doing his part to rile the public about its demise and
the impact it's having on the economy. In an atmosphere of class division,
helped in no small part by Al Gore's campaign tactics, O'Reilly is throwing
fuel on the burning embers of confusion and distrust. His commentary about
the "crisis stage right now economically" Thursday night is very dangerous
in the sense that much of the economy's future is based on the public's
perception and their confidence -- something the Japanese know all too well.

Shouting that Alan Greenspan is "anti-American," and ranting that, "I think
we should go to his house," while threatening to give out his home address
on the air is hardly what working-class Americans need to hear. And as much
as I agree with him about Al Gore and the policy of holding the country
hostage to his personal quest, it is not the cause of the market's plunge.
In fact, the market can hardly be said to have plunged at all. Yes, the
Nasdaq Composite Index plunged almost 22% in November, but the S&P 500
dropped all of 8% and excluding its overpriced tech components, one can see
that most stocks suffered a minor correction or were higher.

To talk about "all the damage done in the past three months" and to paint a
picture of economic distress threatens to make any economic pain ever
greater than might otherwise happen. As to O'Reilly's statement that he has
thousands of letters on his desk from folks whose 401(k) plans have been
wiped out over the past three months, all I can say is, how is that possible
unless they were fully funded by options?

Anyway, I'm over my allotted space already. The major point I wanted to make
is that we are facing a real economic risk. And that risk is that the media
help to turn a slowdown into something much worse. The recent data indicates
that the economy is slowing. It does not indicate that it's falling off a
cliff. Thursday's data showed a strong increase in wages, not a decrease.
Look more closely at the numbers and less attention to the headlines.

And no, the Composite has not made a bottom yet -- so remain cautious now,
but optimistic long-term.

Traders looking to play what looks to be a good pop this morning should
focus on some of the old-timers in techland such as Cisco (CSCO:Nasdaq -
news - boards) and Oracle (ORCL:Nasdaq - news - boards). It's still going to
be dicey in PC land, so I'd continue to avoid the boxmakers and semis.

If you're looking for more excitement, Broadcom (BRCM:Nasdaq - news -
boards) and Juniper Networks (JNPR:Nasdaq - news - boards) fit the bill.

And for all the turmoil in wireless, Ericsson (ERICY:Nasdaq - news - boards)
and Nextel (NXTL:Nasdaq - news - boards) acted very well and might show
further improvement near-term.

However, taking positions home over the weekend isn't advised and, of
course, in this market one should always use tight stops or hedges. Have a
great weekend: Things are far from as bad as the lunatic fringe will have
you believe.



----------------------------------------------------------------------------
----
Bill Meehan is the chief market analyst for Cantor Fitzgerald, a
Manhattan-based institutional trading and research firm, and writes daily
for the Cantor Morning News. Prior to that, he was a market analyst for
Prudential Securities. At time of publication, Meehan was long Ericsson,
Nextel and Oracle and long Juniper Networks common stock and short Juniper
Networks Call Options, although holdings can change at any time. He
appreciates your feedback at bmeehan@thestreet.com Morning News, Copyright,
2000 is a product of Cantor Fitzgerald & Co.("Cantor Fitzgerald"). The
material is based upon information that Cantor Fitzgerald considers
reliable, but Cantor Fitzgerald does not represent that it is accurate or
complete, and it should not be relied upon as such. Cantor Fitzgerald and
its affiliates, officers, directors, partners, and employees may, from time
to time, have long or short positions in, buy or sell and deal as principal
in the securities, or derivatives thereof, of companies mentioned herein and
may take positions inconsistent with the views expressed. None of the
information contained herein constitutes, or is intended to constitute a
recommendation by Cantor Fitzgerald of any particular security or trading
strategy or a determination by Cantor Fitzgerald that any security or
trading strategy is suitable for any specific person. To the extent any of
the information contained herein may be deemed to be investment advice, such
information is impersonal and not tailored to the investment needs of any
specific person. You should consult with and rely upon your own advisors
whether and how to use such information in making any investment decision.


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