Each morning I turn on the TV news for a few hours and hear phrases like, ‘green shoots’ or ‘not as bad as they thought it was’ and ‘recovery’.  Countless news “gals” all day long say with a smile, ‘it looks like the market could be bottoming out’ or ‘another up day for wall street’. Who can you believe?

To my immediate viewing right of the TV is a 22 inch monitor. Each day, for 12 hours a day my LCD screen flashes financial facts, figures, charts, text, Skype chats, Twitters, emails and the occasional porn web site which of course was stumbled upon by accident.

Now…both devices, the TV and the PC exists in the same world (Earth May 2009) they are powered by the same wall outlet and are watched at the exact same time. Because of my bird’s eye view, I can often watch both at precisely the same time and compare facts.

So if both news sources exist in the same universe, if only one news event is being reported on…how is it possible that the TV news has one set of facts and one particular attitude but the Internet offers a completely different set of facts and opinions? It’s like that parallel Star Trek universe with the evil Captain Kirk. Why is the TV news so cheerful and the Internet news so gritty & ugly? Who can you believe?

I just watched a report by CNN financial news gal Christine Romans. I like this gal a lot, she’s got a brain in her head and a nice smile. Today she was really cheerful and upbeat. On this segment (Friday AM), she explained that the country’s first quarter production numbers for this year, which were reported earlier this month as showing a slump down over 6% had been revised and, well great news, these new government numbers just out today were now showing that things were not that bad. Today’s updated new crop of numbers were showing only a drop of 5.7% in GDP not that ugly and evil 6% which was reported previously. That’s much better!!

Economy’s decline not as steep in revision: The nation’s gross domestic product fell at a revised annual pace of 5.7% in the first quarter of 2009 – less than initially reported.

The first quarter of 2009 marked the third quarter in a row that the economy has contracted. It was the second worst drop in the measure in 27 years, behind only the fourth quarter of 2008, when GDP plunged at an annual pace of 6.3%.

However, with today’s news, Christine Romans was not only describing the change in numbers, she was almost praising the economy for being so strong, portraying to all us ignorant viewers that “it’s not as bad as we thought!”

Wow I feel relieved.

In a one minute segment, she attempted to show how the smaller number was very good news and that something positive had taken place during the government’s re-review of that quarter’s numbers. It was ‘good news’ for the economy! Things were not as bad as we had thought! Could this be the start of that big turnaround the American public has been waiting for, things were now improving….and yesterday another TV news economist predicted the recession would end late in the year 2009, just months away. Hooray, TV land is wonderful but who can you really believe?

Earlier this week, another news gal had been demonstrating how conditions with the U.S. economy ‘could’ be improving. Her reasoning was that this month, only 620,000 new claims for unemployment had been filed compared to last month when the government numbers showed 660,000 new people lost their jobs. The 40,000 less people signing up for government assistance showed improvement. She determined that this was a ‘green shoot’, a ‘sign of recovery’ and soon things would be better. As the news gals so often say ‘we are seeing signs of improvement’. All the bad stuff you have been hearing about, well, that’s almost over, the US economy is getting stronger –see the numbers are supporting this fact.

Don’t you feel better?

Are these truthful statements? Who can you believe? Certainly it’s true the unemployment claims fell but what does that indicate? A tiny one month change up or down with almost 8 million people out of work? Is this a real trend? It must be true because I heard it on TV. Who do you believe?

At the same time the TV gals are chattering away, I am seeing very different facts across the Internet. No improvements here. No upward trends anywhere.

Is the stock market turning around and heading back up?

The TV news is saying RALLY RALLY and we have ‘upward momentum’. Is that true? Is the bear market over? I love TV land.

Does the Internet world agree?

Charts posting the earnings for the S&P 500 show a drop of 90% in earning.

While the average PE ratio over the past 60 years has generally bounced between 20 and 40, the PE ratio for the stocks of the S&P 500 is now pushing 120. It would seem to me that the Internet facts and opinions show the market is still VERY overpriced and that any attempt at higher prices would be throwing good money at over priced equities. Does anyone besides the news gal feel this is a genuine market turnaround?

From 1936 into the late 1980s, the PE ratio tended to peak in the low 20s (red line) and trough somewhere around seven (green line). The price investors were willing to pay for a dollar of earnings increased during the dot-com boom (late 1990s) and the dot-com bust (early 2000s). As a result of the current plunge in earnings and the recent 2.5 month stock market rally, the PE ratio has spiked to the low 120s – a record high.

Even if you had several billion dollars in your hedge fund, why would you buy into a market with price earning ratios well over 100? This is 4 to 6 times the average of previous decades?  Doesn’t that still seem overpriced? When it comes to equities, I’d say the Internet facts seem a bit more accurate than TV land.

In many communities around the United States, the “shopping mall” is often considered the center of town. People from all over journey to the mall for food, drink, movies, shopping and just general hanging out. You know the kind of good ole USA shopping mall with a Macy’s, Sears, JC Penny’s, Theatres and the big food court with several dozen fast food restaurants. Many malls are also located near office parks or large buildings so the mall restaurants will also receive generous traffic from office workers during their breaks.

Yesterday, for the fist time in several years (I don’t get out much) I went shopping at a large popular US shopping mall. Since I had been traveling in this same area 3-4 years ago, I was familiar with the area’s big mall and believed I was returning to what I had previously known as a popular shopping and eating destination.

Since this mall was also surrounded with office buildings, the mall food court was always packed, especially at lunch hour when office workers came over to gorge themselves on fast food. I arrived at the mall about 11:30am just before lunch thinking I’ll be waiting in line for my turkey sub.

Well despite all the TV news talk of ‘green shoots’, I was absolutely shocked and amazed to find NO ONE shopping or even strolling around the mall. The parking lot was so empty, pulling up to the stores I remarked to my friend, “is the mall closed?”  Besides the lonesome and almost needy store clerks who raced over to us upon entering Macy’s, the giant stores and wide mall spaces were empty. There were not even any office workers visiting during the lunch hour. There were NO LINES at the food court, no people in the stores and no cars in the parking lot. This place was a ghost town. We were shocked. This was not the mall I had known from 3 years ago. On my last visit you could hardly walk around there were crowds of people eating, shopping and mall walking.

I was shocked because just earlier that day and all of the prior week those CNN news gals had been telling me all about this terrific economy and the big turnaround which was obvious for any TV viewer to see….

I had heard that unemployment was improving, the stock market could be turning around the the recession was ending later this year, just a few months from now!

The recession, the banking crisis, the downturn for the global business world had all been explained away by my cute news gals in neat two minute segments at the top of each hour.

But, who can you believe?

“It’s not as bad as we thought” had become almost a news chant, every quarter hour on CNN, eerily similar to something the Harry Kirschner‘s had been repeating every minute throughout the 1970′s. Had I been brainwashed into a TV cult?

Is reality what they tell me on TV it is or what I can see with my owns eyes. Had Baghdad Bob become a CNN news producer. Can you believe anything they say?

If you want the truth, turn off your TV set and go out into your community. Talk to your friends and neighbors. Ask them who is working, who expects to buy a new car, house or even a washer/dryer this year, who is happily going off to college with that new low interest student loan, how many people are retiring early because their 401k accounts are just overflowing with profit…..who can you believe? Believe what you see and hear in person, not what is pumped into your home via the news.

Green shoots? My ass…

Go to your nearest shopping mall and see for yourself, is it crowded with cars and happy shoppers?  Ask around how many car dealers are closed, how many of your neighbor’s houses are in foreclosure, how many small businesses are now gone, how many people are shopping or eating out…who do you believe now?

Don’t join the TV cult they are grasping at financial straws and the white lies are getting bigger and bigger.

Don’t drink the Kool-Aid !

Mark Herpel