Melissa Lee and the Three Stooges
Melissa Lee is an extremely bright and talented reporter on CNBC. She has a great background and education, and was editor of her school newspaper in college. That means a lot more when the paper was the Harvard Crimson!
Her job is to be the objective source for investors. That means asking the right questions and serving the role of a cue-giver in the investment world’s version of the two-step flow of communications. She is so good at what she does, that her statements reflect the conventional wisdom, an important voice of CNBC. That is why her question, during an interview with Benjamin Pace from yesterday morning’s Squawk Box, was so distrubing:
But Ben, historically, when the Fed is done that hasn’t
necessarily been very good for stocks, if you take a look at the history books,
according to a lot of analysis that have been released lately – -too much
I might be wrong, but I believe that she has never really read the studies to which she refers. She is going by what she heard on some interviews. If she had read them, as a good student of government from Harvard, she would come to the conclusion that any reasonable person would reach. The published studies do not support the stated conclusions, notwithstanding the widespread publicity for them.
I would like to see Melissa Lee interview Ned Davis or his representative and ask why they thought it was important to go back to Fed policy in the Great Depression — the worst cases of "after the Fed" to make their research case. I would like to see her ask why they did not focus on recent Fed actions, like those taken in the era of econometric modeling!
The individual investor is not going to read these studies. Unless a strong and able journalist takes this role, the market’s version of the two step fails. Even worse, her comments reinforce a cycle of negativity.
It is my view that the pervasive pessimism will prove expensive for many investors.