Thursday, March 5, 2009

Gloomy media business forecasts often aren't right

Arizona Republic, The (Phoenix, AZ) - Saturday, March 1, 2008
Author: RICHARD KELLEHER , The Republic

The federal government is about to hand out your tax dollars to fix a bad economy. Politicians are claiming they can solve the bad economy. Media are reporting 17,000 jobs lost in January, "the first such reduction in more than four years."

Sorry, but I don't see a bad economy in 2008.

Charlie Baumgartner, executive director of Arizona Centennial, noted Phoenix is floating on a sea of green. He wasn't referring to all the golf courses prospering right now, but dollars in circulation. Especially since we just witnessed a Super Bowl, P.F. Chang's race, FBR Open, Barrett-Jackson auto show and more. We are now just entering the "high season" of springtime tourists.

Bob Mayo, managing partner at Roy's in the Desert Ridge resort, said his restaurant had the best January it has ever had and is going steamrollers for February.

Northeast Phoenix resident Bob Morgan, a board member of United Methodist Outreach Ministries, said the non-profit for homeless had its greatest December ever.

One thing that has always boggled my mind is that high-powered business leaders, those making millions each year, base their opinions and decisions on what they see in the media, written by reporters sometimes making only $10 per hour. Here is an example from the first week in February:

"Experts: Recession on horizon for Arizona."

More economists now believe Arizona is already in a recession -- or will be by the end of the year -- because growth in consumer spending is anemic and fewer jobs are being created. A survey of Arizona's top economic forecasters found that 35 percent believe a recession has begun in the state, and three-fourths believe a recession will be at hand by the end of the year."

Business leaders see this and institute plans of layoffs, ignoring the fact that Scottsdale Fashion Square had more cars in its parking lot on the last day of January than during the Christmas season. I saw a man with 10 shopping bags going through a very busy mall that day. Rows of buses lined Marriott Desert Ridge Resort in recent weeks.

The same day The Republic reported "Recession on horizon," here were a couple of overlooked stories:

* "Palo Verde: Now hiring."

* "Dollar rallies against 15-nation euro."

Scottsdale author Robert Kiyosaki said in his Yahoo blog, "As Warren Buffett has said, it's important for society to have accurate and informed sources of information. While I agree, I sometimes wonder about the many financial journalists, both in print and the electronic media.

"The problem with much of the financial news in print and on the Web, radio, and television is that it comes from journalists who may not be investors. When I listen to most journalists whine and cry about the subprime mess, the slowdown in the economy and the volatile stock market, I can all but tell that they're not really investors." I would add, or business-minded.

When it comes to business news, I always felt media are usually six months behind what is happening. If we do have a bad economy this year, it won't be from the rising price of crude, which should have impacted our economy more than two years ago, but had little effect.

A bad economy will occur because business leaders listen to the media and create a recession. There seems to be a group-think going. Group-think works for business decisions, too.

Relatives and friends are telling how two weeks ago businesses had help-wanted signs in their windows. When the bad economy was announced, those signs were removed. Business is still at the same level as when those signs were placed. Budgets are the same. The only thing that has changed is businesses listening to media claiming there is a bad economy.

Forget the news about a recession. There's an adage, if you're working, it's a good economy. If not, it's a bad economy. Where do you stand?