Newspapers Take Reactionary and Sensational Approach to Volatile Market

When are the newspapers going to figure it out, the financial news isn't the gain or loss of stocks in a day. The financial news is the overall investor sentiment.

We have had an undeniably volatile few weeks in the stock market, the Dow Jones has slipped below 9000 points and the government is frantically trying to pick up the pieces with a new plan every day to shovel money into the banking system.

What amazes me is that the newspaper headlines and photos are like vaudeville actors when it comes to economic news. When the markets are down it's glum stories of depression and, images of charts sinking and brokers sulking, and of course the inevitable comparison to The Great Depression.

Then the Dow and it sister exchanges shoot up to record levels in one day as buyers pour in on news of government intervention finally freeing up some of the credit crunch and the news is jovial, with headlines of a record comeback and the bottom being hit. Faces of brokers smiling big and giving high-fives to each other.

The next day (Wednesday) we discover that there will be no follow-through on the previous day's big gains and the newspapers launch their sad lineup once again. USA Today runs an article with the headline Investors brace as economy faulters: Dow falls 8%; Fed sees slow recovery. Is the article wrong? No. But are investors only now starting to brace for a faultering economy?