On the Chris Matthews Sunday show, Matthews asked his alleged journalists what will happen if the stock market is booming before the presidential election. Listen to the answer given by Erin Burnett of CNBC's "Squawk Box On The Street." Here is the show's website.
http://www.cnbc.com/...
Check out below what she said, it's really something to behold!
So, Burnett said:
the stock market doubled in the last 5 years and nobody knows it.
Erin, nobody knows it because it’s a lie, unless you are talking about something other than value, like the number of shares traded. If that’s what you mean, you have no business being a financial journalist because there couldn’t be anything more irrelevant and misleading.
Below is a chart showing the Dow Jones Industrial Average for the five years ending 10/21/2007, thanks to www.bigcharts.com . Take note that the DJIA at 10/21/2002 (five years ago) was 8,538. The DJIA for this past Friday, 10/19/2007 was 13,882. Erin, that's not double. Double would be 17,076
Now take a look at the DJIA for the last ten years and note that when Bush took over the DJIA was 10,881.
I think Erin needs to tell the truth and tell her viewers what has happened during the Bush Administration. According to historical records, real ones, the DJIA went from 10,881 to 13,882. Now let's look at even that misleading analogy.
When the Dow was 10,881 the tax on dividends was 35%. Dropping the tax down to 15% gives a potential buyer of stock an after tax dividend that is 31% higher. In addition, when stock is sold, after holding for a year or longer, the tax rate, via the Bush tax cuts, went down from 28% to 15% or an additional 18% after tax yield.
So, let's say that because of these temporary tax decreases, buyers would be willing to pay 20% more for the average stock, at least the ones that pay dividends. That means the 10,881 Dow at the beginning of the Bush Administration would have to be revalued for comparative purposes at 20% more or 13,057. Now we are comparing the 6 3/4 years of the Bush Administration seeing the stock market go from 13,057 to 13,882. Add to that the stimulus of a runaway Administration spending hundreds of billions of dollars in Iraq and you'll realize there has been no growth. Zero growth.
Then Erin had another misleading this time in support of free trade. She said that Americans purchase on 2 out of every 100 products from overseas. She implied, therefore, that there was no need to worry about the US losing market share.
So, what was Erin talking about when she said that Americans buy only 2 of 100 products from overseas? Is she including in those purchases $25,000 Hondas, Toyotas, Nissans, Hyundais, and $75,000 Mercedes and BMWs? Is she including $5,000 flat screen TVs made by Sony, Panasonic, Toshiba, etc and is she comparing these units to a can of Green Giant Peas.. Is she excluding the Japanese car manufacturers who only assemble cars here?
Erin, what about China and India? Should we be worried? I don't think Erin did us any service and too bad, nobody on the Matthews show was smart enough to pick up on these extremely dangerous and misleading statements. We haven't doubled anything but our National Debt which will have risen by at least 50% thanks to Bush. Gee Erin, what do you think of that? And don't give us that BS about a smaller share of the GDP because 5% debt service on a trillion dollars of Debt is $500 billion a year. I think that’s close to the annual defense budget and Erin, what happens if interest rates go up to 8%. Then our debt service would be $800 billion each and every year and that is assuming that the Reagan/Bush National Debt will be only $1 Trillion Dollars. I don't think we can afford anymore Republicans...ever! I also don’t think we can afford financial journalists who don’t know what they are talking about.