"Save us, Oh FED"

Sat, Dec 20, 2014 - 12:22pm

I was on an anniversary vacation (27 years) in lovely Sedona Arizona yesterday, named after Sedona Schnebly whose hospitality and kindness was renowned in the early 1900s, when I noticed the headline on the USA Today weekend edition praising the FED for saving the stock markets. (ZH has noticed too with a different angle on the headline) I had to stop and read. Two things jumped out at me from the image below: 1) that the images and quotes are lying to the American people, 2) that we have come to expect the Fed to save us!

But wait just a minute... this "correction" started a lot higher! As I look at that newspaper image, it would appear that stocks are now stronger than before the pullback began. A look at the full chart, glancing back five more days, shows that indeed we have only recovered a portion of the losses. Is someone trying to deceive me?

Let’s say I am an investing novice, (“Jerome is an investing novice…”) with my money in a TIAA-CREF mutual fund, and I have been watching the economic headlines, like a diligent mutual fund investor always does, wondering if I should cash out for a while. Then I see this headline. “Wow” I think, “Looks all clear to me. I’m stayin’ in.” Then I look a little deeper at the front page and see that it’s a 709 point gain in two days—best since 2008. “Damn,” I say, “That’s when all the recession began. It really is over. And look at that graph, stocks are going up!” Then I read a bit more. “Wow. This expert says the correction in over.”

And I pay for my mocha latte at the store, go out to the car and continue with my vacation.

But I would miss what anyone who actually watched markets would notice. First, the downturn started with the Dow at 17,986, and fell 1018 points. A 709 rise still leaves us 309 short of a full recovery. So how is this “mini-correction” over, as David Kotok* says? The seasoned investor, might be optimistic, but still wants to see a higher high before saying it’s over. A reader might think that indeed the graph looks encouraging, but we are still 309 points below the highs!

Why did the newspaper select just that range? Was it simply to deceive me, the novice, into thinking markets have moved higher?


USA Today has deceived the careless reader with its graphing practices. (I might add that they regularly, break the charting rules to get a certain look, then add artistic flourishes to the graphs & charts for eye appeal.)

  • Somebody chose to select only the boxed in range, hiding the extent of the pullback.
  • Somebody chose to quote David Kotok rather than another more cautious, chart-watching economist.

And in making these choices, USA Today has continued to promote the grand narrative of “Recovery,” with just a bit of deception here that they could likely weasel out of if put to the question. But they, and all the other mainstream news outlets, cheat their headlines and graphs consistently in favor of the recovery story.

And the hell of it is that in our world, a lie is as good as the truth if people believe it. And the propagandists have figured out that you just have to keep repeating lies to increase the belief level. The wrong stories simply do not get past the editors, who may have a list in hand of what will and what will not be published. We have all seen a story slip through that does not support the recovery narrative, only to see it pulled of the internet before the day is over. We have seen frustrated journalists resign because their investigative work was canned. Edit out the wrong news, Highlight the desired news. Ignore and Augment.

Moreover, they have added in the idea that the FED is supposed to come to our rescue

“Get to work Mr. Chairman.” Now that expectation is becoming the norm. But isn’t this central planning? The Fed is not supposed to let the markets fall? But meanwhile they are simply steering return-conscious investors into a single asset category.

Yes, the news is controlled. Yes, the economic stories fudge, cheat, and flat out lie about what is going on in the economic world. The organizational system is in place to ensure that the majority of news outlets are controlled. The journalists are so absorbed in narrow ranges of writing, that few see the bigger picture. But I am preaching to the choir here, most likely. It just burns me to see news manipulation in action while I am trying to relax.

They didn’t actually change the numbers, they were just selective in how they showed them.

But in this world, that is all it takes to perpetuate the “right” story.

* Sorry for misspelling your last name in that image, David.

About the Author


Dec 20, 2014 - 12:52pm

Very important article

I watch often and I was fooled by the media

Dec 20, 2014 - 1:12pm

AM--great job

pulling back the curtain Silver66

Dec 20, 2014 - 1:44pm

@Silver66 I'll pass your


I'll pass your message on to Dr Jerome !

To Dr J. Nice article!

Dec 20, 2014 - 1:46pm

Lovely picture by your

Lovely picture by your headline. We used it for a family photo backdrop last year. If you want more than just a peek behind the curtain, may I suggest Dimitri Speck's "The Gold Cartel". The scope and scale of the deception is staggering.

Dec 20, 2014 - 1:57pm

Most excellent article Dr. J

Congratulations on 27 years. My lovely wife and I also celebrated that same amount of time together in November. We are two very lucky men to have women that love us and understand the need to prepare.

Dec 20, 2014 - 2:13pm

And the day will come

when Mr. Market will lose complete confidence in the central banks and their 'narrative', and it is at this point that gold and silver will 'shine'

Dec 20, 2014 - 2:41pm

Great job, Doc

Thank you and Happy Anniversary!

Dec 20, 2014 - 3:57pm


Shows you what happens before your first cup of Java in the morning.

What a STUPID i am !

Kudos Dr J


boomer sooner
Dec 20, 2014 - 4:08pm

Congratulations Dr J

You romantic devil ! My wife and I will celebrate #23 tomorrow. All I am doing is taking her to a steakhouse in a little town about an hour away.

As to the Fed saving us. The sheeple drink from that well, deep and often. The media promotes the way of someone else taking responsibility for our inaction. The financial gurus have sold the yarn of set it and forget it. Auto deposit, auto invest, auto pay, auto overdraft protection. My latest battle with "auto" was with Sirius radio last night. Found out that if you take the 6 mos special, you inadvertently agree to auto renewal, no notice required, at a really high rate. The 12 month agreement, they send you notice of renewal and if you do not respond, they keep coverage going and can charge for the delinquint payment. I will not have to deal with their auto anything in the future.

Thanks Dr J

Dec 20, 2014 - 4:15pm

I'm not really sure when the

I'm not really sure when the concept of "the Fed needs to save the markets" became embraced. It seems to be so widely accepted that you might as well have 3 heads to suggest otherwise.

Too many people are vested in the fact. There is no graceful way to end this.

Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

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Key Economic Events Week of 10/14

10/15 8:30 ET Empire State Fed MI
10/16 8:30 ET Retail Sales
10/16 10:00 ET Business Inventories
10/17 8:30 ET Housing Starts and Bldg Perms
10/17 8:30 ET Philly Fed MI
10/17 9:15 ET Cap Ute and Ind Prod
10/18 10:00 ET LEIII
10/18 Speeches from Goons Kaplan, George and Chlamydia

Key Economic Events Week of 10/7

10/8 8:30 ET Producer Price Index
10/9 10:00 ET Job Openings
10/9 10:00 ET Wholesale Inventories
10/9 2:00 ET September FOMC minutes
10/10 8:30 ET Consumer Price Index
10/11 10:00 ET Consumer Sentiment

Key Economic Events Week of 9/30

9/30 9:45 ET Chicago PMI
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/1 10:00 ET Construction Spending
10/2 China Golden Week Begins
10/2 8:15 ET ADP jobs report
10/3 9:45 ET Markit Service PMI
10/3 10:00 ET ISM Service PMI
10/3 10:00 ET Factory Orders
10/4 8:30 ET BLSBS
10/4 8:30 ET US Trade Deficit

Key Economic Events Week of 9/23

9/23 9:45 ET Markit flash PMIs
9/24 10:00 ET Consumer Confidence
9/26 8:30 ET Q2 GDP third guess
9/27 8:30 ET Durable Goods
9/27 8:30 ET Pers Inc and Cons Spend
9/27 8:30 ET Core Inflation

Key Economic Events Week of 9/16

9/17 9:15 ET Cap Ute & Ind Prod
9/18 8:30 ET Housing Starts & Bldg Perm.
9/18 2:00 ET Fedlines
9/18 2:30 ET CGP presser
9/19 8:30 ET Philly Fed
9/19 10:00 ET Existing Home Sales

Key Economic Events Week of 9/9

9/10 10:00 ET Job openings
9/11 8:30 ET PPI
9/11 10:00 ET Wholesale Inv.
9/12 8:30 ET CPI
9/13 8:30 ET Retail Sales
9/13 10:00 ET Consumer Sentiment
9/13 10:00 ET Business Inv.

Key Economic Events Week of 9/3

9/3 9:45 ET Markit Manu PMI
9/3 10:00 ET ISM Manu PMI
9/3 10:00 ET Construction Spending
9/4 8:30 ET Foreign Trade Deficit
9/5 9:45 ET Markit Svc PMI
9/5 10:00 ET ISM Svc PMI
9/5 10:00 ET Factory Orders
9/6 8:30 ET BLSBS

Key Economic Events Week of 8/26

8/26 8:30 ET Durable Goods
8/27 9:00 ET Case-Shiller Home Price Idx
8/27 10:00 ET Consumer Confidence
8/29 8:30 ET Q2 GDP 2nd guess
8/29 8:30 ET Advance Trade in Goods
8/30 8:30 ET Pers. Inc. and Cons. Spend.
8/30 8:30 ET Core Inflation
8/30 9:45 ET Chicago PMI

Key Economic Events Week of 8/19

8/21 10:00 ET Existing home sales
8/21 2:00 ET July FOMC minutes
8/22 9:45 ET Markit Manu and Svc PMIs
8/22 Jackson Holedown begins
8/23 10:00 ET Chief Goon Powell speaks

Key Economic Events Week of 8/12

8/13 8:30 ET Consumer Price Index
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Labor Costs
8/14 8:30 ET Philly Fed
8/14 9:15 ET Ind Prod and Cap Ute
8/14 10:00 ET Business Inventories
8/15 8:30 ET Housing Starts & Bldg Permits

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