Late last night CNN interrupted its regular drone with a breaking story: Japan Emerges from Recession. They played it up a like an airplane crash or celebrity arrest. They even had to rouse a financial correspondent from sleep to get up-to-the-minute commentary over the phone. Faintly optimistic-sounding news about a government statistic from a foreign economy has become sensational.
Although credit was given to the Japanese government’s stimulus spending, the reporter failed to grasp the (in)significance of figures showing Japan’s domestic demand had continued shrinking. The reported growth was entirely from exports. If anybody’s stimulus is responsible, it must be the Chinese. They’re the only big player still growing demand.
Despite persistent efforts of politicians and pseudo-news organizations like CNN to proclaim the economy has “turned a corner” and is “getting back on track” (someday I’ll have to rant about vapid economic metaphors), the US stock market reacted to this phenomenal news by dropping 186 points (2%).