Conflicting economic headlines

I feel like I needed to rant today about how we are bombarded every day with conflicting "news" and opinions. Yesterday, for example, Bloomberg carried "Asian Stocks Rise on China Hope" and "Europe Declines on China data".  Then we have reports on "Stocks Cheaper Now Than Two Years Ago- here's why" juxtaposed next to "Stocks Not So Cheap Now". And we have the interminable "Why you should invest in gold" and "Why gold is not a good investment" battle.

I realize that you can find a contrary opinion on just about anything, but when the same source(e.g., Bloomberg, CNBC, Reuters, etc.) simultaneously or in close sequence publish or air them, as they have been doing for years, it provides no insight to the reader/viewer. Which I guess is the whole point of it: plausible deniability and plausible credibility. But what the financial media were doing was minimizing the import of actual news and events, while playing up the contrarian content which served to keep the people where they wanted them. On many days, the content was eerily similar across networks, down to the language being used, like someone was feeding them the talking points for the day.

Prior to the market bottom, every little up day was trumpeted as heralding a recovery, and people were discouraged from selling off.  For almost the entire bull run of the stock markets after the bottom on March 9, 2009, retail investors- meaning people who invest for themselves, in their IRAs, 401(k)s, etc.- were told that there was an imminent return to that market bottom, because it "has to be re-tested in order to be confirmed", even though there was no historical basis for such  a stance. They were thus discouraged from buying in at the market lows. Jim Cramer and CNBC were particularly guilty of that asininity. Cramer's accuracy record, by the way, is worse than a coin toss. See this and this. When the Dow began approaching 9000 again, the mantra changed to "Is it too late to get in the market now?". The result was that people sold off their holdings at or near the bottom, and then sat on the sidelines while the markets rose(or, more accurately, were driven) to unrealistic highs. At that point, when it seemed reasonably clear that the market could not be pushed higher without retail participation, the little people were invited to jump back in, and buy their stocks back on the sound investment principle of "sell low, buy high".

To the best of my recollection, the only person who called the March 9, 2009 bottom was the late Mark Haines, not a week or a month later, but the very next day. He was not an economist or a finance guy, but by whatever methods he used to arrive at it, he made the right call, and was the only high-profile media person to do so as far as I can recall. As a result, that market bottom came to be known as "the Haines bottom" on CNBC. They should have booted Cramer and given Haines his own show on the strength of that!

My opinion on the markets today is that the high levels are completely unwarranted, given the tremendous uncertainly about all sorts of issues, from the European recession, to the Chinese growth contraction, to the uncertain American growth, political and military uncertainty around the world, and the continued trade deficit. And then we still have the overhang of millions of unsold bank-owned homes, the fact that the reduction in US unemployment has come at the expense of wages(thus further reducing purchasing power), and the gigantic US national debt which can only be made manageable through high inflation for many, many years. We are certainly not at that point back in 2007 when optimism built upon completely fraudulent data and assurances seemed to support record high prices for stocks. I foresee an American future when the nuclear family consists of at least 4 adults, because 2 adults cannot survive on their own. That cannot be good for America, and what's not good for America is usually not good for the world.

Postscript:

Why does the market keep its unwarranted optimism, but on a day to day basis seems to show so much uncertainty? Because it is manipulated on the macro as well as the micro level, as this recent(September 2012) chart of the DJIA shows:

 

 Control on this scale, generating hundreds of billions of dollars in guaranteed profit every year, requires enormous capital as well as total control of market makers and market moving news incorporated into a realtime total awareness information handling system which rivals and probably surpasses anything US intelligence services have. Literally perhaps only a couple of dozen people(or private entities) possess the resources to put this together and keep it running.