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Moneybeat: Critiquing financial journalism


WORLD Radio - Moneybeat: Critiquing financial journalism

A headline misses the mark

American flags fly outside the New York Stock Exchange, Friday, Sept. 23, 2022, in New York Associated Press Photo/Mary Altaffer

JENNY ROUGH, HOST: Next up on The World and Everything in It: the Monday Moneybeat.

NICK EICHER, HOST: Time now for our weekly conversation on business, markets, and the economy with financial analyst and adviser David Bahnsen, head of the wealth management firm The Bahnsen Group. Good morning!

DAVID BAHNSEN, GUEST: Good morning, Nick, good to be with you.

EICHER: David, I’d like to begin with a story from the financial wire, and I have to say, it was very typical of the reports carried virtually everywhere when the September jobs report came out last week. And I’ll ask about that report in a minute.

But what I’d like you to comment on is this headline story showed up in all the news feeds, just this lead sentence, quoting here: “The Dow fell almost 600 points as September’s solid jobs report likely keeps the Fed on track to approve another large interest-rate increase.”

It’s unremarkable in the sense that we get these kinds of reports all the time, these cause-and-effect stories, where jobs, in this case, are positive, but that’s bad because of how the Fed will react, and that’s what caused the stock market to fall that day.

And I’d like you to talk about that kind of reporting from the perspective of a financial-markets professional.

BAHNSEN: I work in finance and you work in journalism. And I think I’m out of my lane to say what I’m about to say. But here’s what I would say: If I were in charge of the person who wrote the story, I’d fire him. If I was in charge of the person who wrote the headline, I’d fire him.

But the problem is that—most likely—the person who is in charge is the one behind it all. And I don’t know how they [don’t] get fired, but I’d fire everybody because it is so reckless—and so stupid—that it is offensive. The Fed was absolutely 100 percent going to be raising rates the same amount they were before the jobs report as after.

We thought 250,000 jobs were going to be created, and it came out to 260,000. The Fed is now going to raise rates; the futures market had a 100 percent chance priced in for the last five weeks that they were going to raise rates. So these reports serve only to create drama and sensationalism around this inevitable rate increase as to which the whole world had already been informed, and it is really, really maddening.

And this sensationalist characterization only exists in journalism; in financial markets, it has never been doubted that the Fed was going to be raising rates. The debate right now in financial markets is about whether or not they raise 50 or 75 basis points at the next meeting. It's about whether they’ll get to 400 or 425 by the end of the year, and whether at the end of next year they’ll hold steady, or go higher, or cut—and then there’s debate about other things that are further out. But there’s no debate in the financial world that they will be raising the rates at the next meeting. There’s no debate that the jobs report was a non-factor in this increase.

EICHER: OK, candor I always count on!

David, about the jobs report—263,000 jobs added, unemployment rate now at 3.5 percent for September—was it a good jobs report?

BAHNSEN: It wasn’t a really good jobs report, it was an exactly in-line jobs report. Some of the private sector payrolls from prior months were revised down by about 62,000. Overall—on average—hourly earnings are up about 5 percent from a year ago and they rose 0.3 percent in September alone: I think that’s good. You want to see wages going higher. And the distribution of the job increases with 83,000 in leisure and hospitality and 60,000 in healthcare coming into the fall all sounds about right. But again, with our population size, we should be creating 250,000 jobs every month, and so that’s not a great number, but it isn’t a bad number.

And that’s the world we’re living in right now: We’re supposed to believe that what is bad would be good and what is good would be bad. The narrative is that if we could just get really high unemployment and really get a lot of job losses that would be great, in that it would indicate inflation is coming down. And this is about as poor of an understanding of economics as one could have, and it isn’t true. Job growth is not inflationary. But the framework we are living in puts forth these two things as if they’re at odds against one another.

EICHER: On to OPEC+, the organization of petroleum exporting countries, we got word last week OPEC, despite protests from the United States made a decision to cut oil production by 2 million barrels per day. Big deal, isn’t it?

BAHNSEN: It’s huge. It was the biggest story of the week. It is an act of belligerence against us, albeit one that we deserve. But yes, there is no question that Saudi Arabia is basically telling the U.S., “We kind of have Russia’s back a little.” And it’s Saudi saying, “We’re going to protect our own economic interest over any diplomatic concerns the United States may have.” But we deserve it because we don’t need them to be the marginal producer that is dictating price control. We can do that if we would just take care of our own production. So the administration asking OPEC+ and also these authoritarian, autocratic, non-democratic regimes to do their dirty work for them is politically, economically, and morally insane first of all.

But second of all, I don’t understand why it even makes the environmentalists happy. I don’t know what I’m missing: The environmental argument is we must not be doing oil production in Texas, but somehow oil production becomes okay if it’s done in Saudi Arabia. I thought that it was all one Earth. And so I’m very confused about what the atmospheric implications might be for oil production in Oklahoma that wouldn’t also be relevant to Saudi Arabia.

But regardless, it’s 2 million barrels of production cuts per day for next month, and we’ll see where they go after. But I think it was a shot across the bow, I think it was Saudi saying we want to keep oil up around $90. They don’t want it at $120, where it starts to erode demand. But now as it was creeping down into the $70 range, they say, “Look, you’re manipulating with your strategic petroleum reserve release, we’re gonna manipulate by controlling production.” And this tit for tat is basically what our own administration has begged for, and now they’re getting it.

EICHER: Now they’re getting it, do you think that’s going to bring enough pain to cause a course correction and ramp up petroleum production?

BAHNSEN: Yeah, I think that is happening to some degree, I mean, we definitely are exporting more. We’ve increased our capacity for LNG exports—largely because we simply have had to—but nowhere near to what our full potential is. I mean, there’s still a cultural movement—a social movement; a leftist movement—that doesn’t want this. To increase our capacity further you would need far more approvals, far less red tape, and you need an entirely different White House because so many of the obstacles reside in the executive branch. But I think that’s going to happen at some point, and the United States will have to take control over its own energy market sovereignty.

But in the meantime, I have a hard time believing that oil prices can get back into the 70s and stay there, which is what would be needed to appreciably move prices lower at the pump. Because you have to remember, not only is there a supply factor here with the OPEC+ restrictions alongside our own legislative limitations on production in the States, but also our administration’s commitment to oil producers to buy back the oil necessary to refill the Strategic Petroleum Reserve. And they haven’t said when they’re going to do it, but they’ve drawn down hundreds of millions of barrels. We’re back to 1983 levels in our SPR. So there’s a lot of factors that are going to represent a floor to oil and upward pressure on oil prices for the years to come.

EICHER: Also this week, we saw that Elon Musk decided to go ahead after all on his acquisition of Twitter. What did you think all the back and forth was really about? Was it just Elon Musk’s way of negotiating? How do you read that?

BAHNSEN: Well, in fairness to Twitter, which is not something I say often, there wasn’t back and forth. It was just Elon, and he changed his mind and then re-changed his mind. We know very much what’s going on. He wasn’t likely to prevail at court, and so he kind of threw in the white towel. Why did he want to get out of the deal? Because he’s dramatically overpaying. And we just happen to be dealing with one of maybe three or four people in the world who can afford to overpay by $20 billion for a company.

And so I think the odds are very high that the deal will end up closing. But no, I don’t think it’s a done deal. How could anyone think anything’s a done deal with all of the volatility in Musk’s decision-making so far? He’s saying he wants to join the board, that he doesn’t want to join the board; he’s doing the deal, then he’s not doing the deal, then he’s threatening to sue and making different arguments to get out of it.

But at this point, he’s pretty well stuck. Unless his lenders show up at court and say they won’t provide the $12 billion of the $44 billion they agreed to pay, his money is now stuck and he has to perform. If the lenders say, “We won’t loan,” then he gets out of the deal. But for them to say that they have to come up with an incredibly strong argument against their own interest, because it doesn’t look good for lenders to renege on financing. So I expect this deal’s gonna close. But no, I would not say it’s 100 percent.

EICHER: Alright, very busy week. I keep promising listener questions and we will get to that, so please do send your question for David Bahnsen to, we will make time. Ask anything that’s on your mind around business, economics, and finance:

David Bahnsen is founder, managing partner, and chief investment officer of The Bahnsen Group. His personal website is

David, talk to you next time. Thanks again!

BAHNSEN: Thanks so much, Nick.

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