Fear-Mongers keep us in recession

[BBSA]

Most of us have jobs; most of us are not behind on house payments. So what is keeping the economy from getting better? According to CBS it's people who constantly say how bad things are.

The media has a role in how quickly we recover from this recession. They can report the news, both sides without all the extreme adjectification of economic conditions or they can continue the type of reporting that’s adding fuel to the recessionary fire.

 

[boramk]

Obviously, the economy is run from confidence, no confidence no economy...

 

[Balstrome]

Put a towel over your head ?

 

[PCW]

The media has a role in how quickly we recover from this recession. They can report the news, both sides without all the extreme adjectification of economic conditions or they can continue the type of reporting that’s adding fuel to the recessionary fire.

The media are reporting the facts. What do you want them to say ? Everything is rosy ? The media are saying confidence has gone and needs to return but the markets are punch drunk just waiting for the next screw up. I cannot see how the media are fueling a recession.

 

[BBSA]

The media are reporting the facts. What do you want them to say ? Everything is rosy ? The media are saying confidence has gone and needs to return but the markets are punch drunk just waiting for the next screw up. I cannot see how the media are fueling a recession.

From the article:

People at every level are afraid to spend because they fear conditions will get worse and they're going to need the money in the future just to survive. So they don't spend it. One of the big contributors to fear is the big goombahs in the society saying how bad things are and fueling the recession.

The media is suppose to report the facts but they love to overstate bad news. There is a tremendous herd mentality in the mainstream media as well as a tendency to overstate the negative. The sky is falling.

What we need, as Bill Clinton aptly pointed out recently, is more cheerleading and less fear-mongering

 

[killadoob]

Yea i think this whole recession thing is as bad as it is because people are going on about it so much, making people think it is so bad.

The fact they are going on about it so much is making it 100x worse.

 

[boramk]

The media are reporting the facts. What do you want them to say ? Everything is rosy ? The media are saying confidence has gone and needs to return but the markets are punch drunk just waiting for the next screw up. I cannot see how the media are fueling a recession.

What you don't get is, the whole recession is BECAUSE people feel crap.
Thats really it, if people didn't feel crap, they would spend money, which would create jobs, people will have more money, more money is spent, the economy goes round and round. Heck, someone says something positive, wether it be Obama or a billionare, market shares go up.

People getting told of job shedding, bad economy, more people spend less, firms get less revenue thus less profits, jobs are let go to compensate, less money is spent, more negative media coverage etc.

 

[Morgoth]

people expect a recession and then spend less, but if they use their money the economy will still be going as usual, but getting everyone to cooperate wont be possible.

What you don't get is, the whole recession is BECAUSE people feel crap.
Thats really it, if people didn't feel crap, they would spend money, which would create jobs, people will have more money, more money is spent, the economy goes round and round. Heck, someone says something positive, wether it be Obama or a billionare, market shares go up.

People getting told of job shedding, bad economy, more people spend less, firms get less revenue thus less profits, jobs are let go to compensate, less money is spent, more negative media coverage etc.

Not really derivative trading did rip the world apart, the economy is smaller then portrayed on the financial statements, when reality clocked in banks realized they geared up money for companies that never existed, these companies cant pay back , banks close down, people lose jobs , these people cant pay their debt back and everything goes into a flat spin. I agree the Media isn't very positive about the whole situation but to be honest why should they? I won't spend any money knowing that I might lose my job tomorrow. Everyone sees it this way and the economy goes back even further.

 

[Morgoth]

What we need, as Bill Clinton aptly pointed out recently, is more cheerleading and less fear-mongering

Bill Clinton didn't lose his job yet or his nice pension fund.

 

[DJ...]

Good news just doesn't sell as well as bad news.

Of course they're fuelling the fire - it's their job and it's not unique to the global financial crisis at all. However it's overall market sentiment amongst traders, portfolio managers, brokers etc that is having more of a negative impact than the overall joe-soap sentiment. Moreso, they're taking short positions due to the recession which is like investing in a self-professed prophecy...

 

[metalcore]

I think the media are defnitelly fueling the recession at least the international part of it. Sure the USA really is in hot water but I didnt even know the world was in a recession until people on the radio and on the internet started telling everyone the worlds economy is fscked up.

How does this fuel the recession? Well people who do have money start getting cautious when they hear that things are fscked and a knock on effect starts from there. Not to mention the fact that companies use this gloom and doom talk to lay people off when they don't really have to. Or they use it as excuses not to take on new staff when they do have capacity and resources to do so. I have heard company bosses saying on the radio that they won't do this or that, or prices are going up because of the "global economic crisis.

I even find myself talking negatively about the gloom of the global crisis all the time, because I heard about it through the media. Gloom causes more gloom and eventually noone invests.

Sure some industries are down like the motor car industry but that has been a long time in the making and the New Credit Act had a major influence on that.

Perhaps its a bit extreme to say the media is causing the recession, but they are definitely dropping morale and confidence and making it worse and last longer than it should.

 

[waynegohl]

is this the same as Market Speculation?

i don't much understand this stuff but if its only words that cause such problems for us can it not be reversed and the words that are spoken in a positive would therefore contribute to a better environment?

 

[PCW]

From the article:



The media is suppose to report the facts but they love to overstate bad news. There is a tremendous herd mentality in the mainstream media as well as a tendency to overstate the negative. The sky is falling.

What we need, as Bill Clinton aptly pointed out recently, is more cheerleading and less fear-mongering

But media advertising revenue is plunging , so it's in their interesting to be upbeat. But the media is not because of what's going on. It all comes down to facts and editorial. The editorial would love to report otherwise I'm sure

 

[BBSA]

But media advertising revenue is plunging , so it's in their interesting to be upbeat. But the media is not because of what's going on. It all comes down to facts and editorial. The editorial would love to report otherwise I'm sure

The media thinks short term. Bad news sells and that is how they think.

You are correct in one respect; that the media is actual harming themselves.

 

[StrongTurd]

"People at every level are afraid to spend because they fear conditions will get worse and they're going to need the money in the future just to survive. So they don't spend it. One of the big contributors to fear is the big goombahs in the society saying how bad things are and fueling the recession."

The media is suppose to report the facts but they love to overstate bad news. There is a tremendous herd mentality in the mainstream media as well as a tendency to overstate the negative. The sky is falling.

I'm sorry but I'm not buying any of that. You've got to question the sanity of anybody that looks at the cold, hard facts pertaining to the current state of the world economy and then go out and buy as much stuff as their credit card can bear figuring: "Hey, I've still got a job that pays well. None of this affects me directly. In fact, it is my patriotic duty to buy a big screen TV and a new BMW in order to stimulate the economy to get out of recession."

No, seriously, how can one look at any of the stats that are currently making headlines and then carry on as if everything if fine? Just a random example that I've just posted on the doomer thread:

It has just been calculated that the UK's debt to GDP ratio will reach 500 percent some time next year (if unfunded liabilities are added). This would be the highest it has ever been in the history of the United Kingdom. How could anyone not feel inclined to at least wait and see before indulging in another orgy of credit-based spending?

 

[PCW]

From http://www.independent.co.uk/news/u...he-personal-cost-of-the-downturn-1645727.html


£40,000 each: The personal cost of the downturn

By Sean O'Grady, Economics Editor

Monday, 16 March 2009

The worst economic slowdown in three-quarters of a century has wiped £40,000 from the wealth of every adult in the United Kingdom, a national total of almost £2 trillion; that is £2,000bn, or £2,000,000,000,000.


The research into the destructive effects of the recession by the accountant PricewaterhouseCoopers for The Independent shows that the fall in the value of property and shares owned by British households between July 2007 and February 2009 has reached the equivalent of 18 months-worth of national output – a colossal destruction that will take many years to recover from and threatens the retirement plans of millions of Britons.

The total value of shares and homes owned by British households has fallen from £6.8trn in 2007 to £4.9trn now – a decline of £1.9trn, or 28 per cent, the PwC figures show.

During the credit crunch, houses have lost 20 per cent of their value (or £800bn) and equities 40 per cent (or £1.1trn). Thus, each adult Briton has lost on average £17,000 from the property slump and a further £23,000 in the value of shares, held either directly or indirectly though pension plans. The losses are likely to rise, and there could be a further fall of about 15 to 20 per cent in property values.

John Hawksworth, head of economics at PwC, said: "The knock-on effect of this level of wealth destruction will result in significantly more belt-tightening and reduced spending by households over the next year. The situation could be exacerbated by expected further falls in house prices over the period."

Economists fear that the fall in the value of houses, pension funds and shares will further depress the economy, damaging confidence, reducing spending and prompting more sell-offs in stock markets and by homeowners, risking a vicious cycle of decline and deflation.

The authorities are concerned that the sort of deflation that took hold of the economy in the Great Depression in the 1930s – where prices and output continually fell – could happen again unless the vicious cycle is broken. This week, the Bank of England will inject a further £2bn into the economy, part of its £75bn programme of "quantitative easing", more commonly called printing money.

The PwC analysis suggests that the loss of wealth felt by households and individuals is contributing to the slump in spending in the shops, by about £45bn, or 5 per cent of total spending, relative to what might otherwise have been the case. Traditionally "equity release" from homes and the knowledge that the value of a household's assets are rising strongly, as was seen in the property boom, fuels optimism and consumer spending. But that is being thrown sharply into reverse.

PwC say that the UK's GDP will be 3 per cent lower purely as a result of the credit crunch's destruction of wealth. Mr Hawksworth added: "The estimated loss of wealth of £1.9trn would equate to about £40,000 on average per adult [aged 18+] in the UK, although clearly, these losses will vary considerably across the population."

As recently as last September, the total losses had been limited to £600bn, a serious situation, but moderate compared to the haemorrhaging of wealth since, as stock markets around the world have crashed and banks have been nationalised.

As in previous recessions, the losses and pain from this recession will be unevenly spread. For those fortunate to hold on to their jobs the loss in wealth may be temporary (although lasting years) and notional if they do not have to sell their homes or cash in investments.

But for others, those who lose their jobs and have their homes repossessed and see them disposed of at firesale prices, the recession will mean a 100 per cent loss of personal wealth. On Wednesday, official figures will show that unemployment has climbed above the two million mark, with a peak of more than three million expected by this time next year.

 

[DJ...]

There is some good news. Markets are up 8% overall and the media is reporting a possible end to the bear market, which usually ends 60% of the way through a recession. It's not all bad news. I think the reason why there is so much reporting around the crisis aspect is that most people still to this day don't understand what caused it - yes, most know it was dodgy lending, but very few understand why this was ultimately such a disaster and how the US was able to be in a position where the banks felt safe to lend on such an unsecured basis. The journalists eat that kind of thing up for breakfast and average-joe's fascination will drag out for as long as the media want it to.

Such as the press reporting that AIG is paying out millions of USD in bonuses for YE2008 after receiving a $165bn bailout. Only towards the end of most of those articles do they state that these were contractual bonuses that were unavoidable without facing even larger lawsuits; that even the AIG chairman of the board has sacrificed his bonus; and that AIG has agreed to restructure it's bonus scheme in accordance with Treasury requirements for 2009...

 

[Albereth]

Things are bloody marvellous - now give me money.

 

[BBSA]

From http://www.independent.co.uk/news/u...he-personal-cost-of-the-downturn-1645727.html


£40,000 each: The personal cost of the downturn

By Sean O'Grady, Economics Editor

Monday, 16 March 2009

The worst economic slowdown in three-quarters of a century has wiped £40,000 from the wealth of every adult in the United Kingdom, a national total of almost £2 trillion; that is £2,000bn, or £2,000,000,000,000.


The research into the destructive effects of the recession by the accountant PricewaterhouseCoopers for The Independent shows that the fall in the value of property and shares owned by British households between July 2007 and February 2009 has reached the equivalent of 18 months-worth of national output – a colossal destruction that will take many years to recover from and threatens the retirement plans of millions of Britons.

The total value of shares and homes owned by British households has fallen from £6.8trn in 2007 to £4.9trn now – a decline of £1.9trn, or 28 per cent, the PwC figures show.

During the credit crunch, houses have lost 20 per cent of their value (or £800bn) and equities 40 per cent (or £1.1trn). Thus, each adult Briton has lost on average £17,000 from the property slump and a further £23,000 in the value of shares, held either directly or indirectly though pension plans. The losses are likely to rise, and there could be a further fall of about 15 to 20 per cent in property values.

John Hawksworth, head of economics at PwC, said: "The knock-on effect of this level of wealth destruction will result in significantly more belt-tightening and reduced spending by households over the next year. The situation could be exacerbated by expected further falls in house prices over the period."

Economists fear that the fall in the value of houses, pension funds and shares will further depress the economy, damaging confidence, reducing spending and prompting more sell-offs in stock markets and by homeowners, risking a vicious cycle of decline and deflation.

The authorities are concerned that the sort of deflation that took hold of the economy in the Great Depression in the 1930s – where prices and output continually fell – could happen again unless the vicious cycle is broken. This week, the Bank of England will inject a further £2bn into the economy, part of its £75bn programme of "quantitative easing", more commonly called printing money.

The PwC analysis suggests that the loss of wealth felt by households and individuals is contributing to the slump in spending in the shops, by about £45bn, or 5 per cent of total spending, relative to what might otherwise have been the case. Traditionally "equity release" from homes and the knowledge that the value of a household's assets are rising strongly, as was seen in the property boom, fuels optimism and consumer spending. But that is being thrown sharply into reverse.

PwC say that the UK's GDP will be 3 per cent lower purely as a result of the credit crunch's destruction of wealth. Mr Hawksworth added: "The estimated loss of wealth of £1.9trn would equate to about £40,000 on average per adult [aged 18+] in the UK, although clearly, these losses will vary considerably across the population."

As recently as last September, the total losses had been limited to £600bn, a serious situation, but moderate compared to the haemorrhaging of wealth since, as stock markets around the world have crashed and banks have been nationalised.

As in previous recessions, the losses and pain from this recession will be unevenly spread. For those fortunate to hold on to their jobs the loss in wealth may be temporary (although lasting years) and notional if they do not have to sell their homes or cash in investments.

But for others, those who lose their jobs and have their homes repossessed and see them disposed of at firesale prices, the recession will mean a 100 per cent loss of personal wealth. On Wednesday, official figures will show that unemployment has climbed above the two million mark, with a peak of more than three million expected by this time next year.

Now how does this prove the media is not fueling the recession? In fact I think it actually proof my point.

 

[BBSA]

I'm sorry but I'm not buying any of that. You've got to question the sanity of anybody that looks at the cold, hard facts pertaining to the current state of the world economy and then go out and buy as much stuff as their credit card can bear figuring: "Hey, I've still got a job that pays well. None of this affects me directly. In fact, it is my patriotic duty to buy a big screen TV and a new BMW in order to stimulate the economy to get out of recession."

No, seriously, how can one look at any of the stats that are currently making headlines and then carry on as if everything if fine? Just a random example that I've just posted on the doomer thread:

It has just been calculated that the UK's debt to GDP ratio will reach 500 percent some time next year (if unfunded liabilities are added). This would be the highest it has ever been in the history of the United Kingdom. How could anyone not feel inclined to at least wait and see before indulging in another orgy of credit-based spending?

No, you are correct we should all stop spending so your prophecy can become true.
BTW, you do realise that you can buy stuff with cash, right?