Fox Business....We spin, we hope you buy

I was watching one of those round table 'expert' shows on Fox Business yesterday evening. The topics were a mixture of will this be a short or long recession, have the markets bottomed and wuz up with housing.

There were 5 'experts' on the panel, and each one said the same thing. Short recession, buy stocks and housing has bottomed. For all I know this was a show from April 2007 since these very same people were saying the same thing.

Now the discussion has moved on from will there be a recession to how bad will the recession be. And the Fox Business/CNBC mantra has gone from 'recession, what recession' to 'it will be a mild recession that we'll barely notice'. One of the boobs on Fox actually - with a straight face - said that as soon as the $160B worth of stimulus checks are sent this recession would be over. Where do they find these people? Poll after poll indicates that 70% or so of the recipients will not spend the money but pay off debt or bills. That leaves about $50B to stimulate a $12 T economy.

And let's suppose 100% of the $160B were spent, wouldn't do a hell of a lot. Retailers won't hire anyone since they know it's temporary. What you might experience in May and June are longer lines at Target and Best Buy. But Target and Best Buy won't rush out and hire new employees since they know that in July these new employees will be sitting idle. This is what politicians don't ever get. Businesses and to some extent individuals, make plans long term, and hence short term temporary tax cuts or tax rebates don't have long lasting effects.

One other 'expert' was asked about the effects of dropping home prices. He - again with a straight face - said that he didn't expect that to have a negative effect since people only lose money when they sell and so unless you sell, you haven't really lost anything. At that point I changed the channel. You can only torture yourself for so long.

I think following that brilliant showcase of financial wizardry, Fox Business has the Dave Ramsey show on where Dave will tell you that now is a great time to buy since homes are on sale. The logic here of course being that if a Honda Civic cost $80K at one point and was down to $60K, it would be a great buy since it's on sale. Scary thing is Dave has turned into somewhat of a cult leader / guru. People pay insane amounts of money to attend his seminars where they are given advice on how not to better manage their money.

For anyone reading who is considering sending money to that scam artists here is my free lesson:

Step 1. Don't send money to Dave or any other charlatan like Dave.
Step 2. Don't spend more than you make.

End of seminar.