It is a curious phenomenon - the way the media have handled the economy since President Barack Obama has taken office. Generally the coverage has been on the optimistic side over the last 18 months. But could this blind optimism come back to haunt people that trade on economic metrics?
According to CNBC "Mad Money" host Jim Cramer, it will and in a big way on Aug. 27, when the new gross domestic product numbers are released. On CNBC's Aug. 26 broadcast of "Street Signs," Cramer predicted dismal numbers during his "Stop Trading" segment, which has been contrary to the way the market reacted.
"Look, I'm going to give you my forecast right now - I think we're going to get 0.5 percent GDP, OK?" Cramer said. "But, let's say we get 0.5 percent GDP. Everyone's going to say it's horrible. We're going to go track down economists, Nobel winners who think it's a double dip. And it'll be like shocker - 0.5 percent. And I'm telling you it's going to be 0.5 percent. It's like the housing number. On my show I said it's going to be declined 50 percent. We get 30 percent. It was like shocker. Whoever is making these estimates is just so wrong because you know, you piece these pieces together on a daily basis like I do and come up with something between zero and 1 percent growth."
"So when it comes out as 0.5 percent - other people are - I don't know who those people are," he continued. "I don't know who they're listening to or talking to. But it's very clear that we're going to have no growth. Why is that shocking?"
"Street Signs" fill-in host Amanda Drury asked Cramer if this was already baked into the market, to which Cramer said it wasn't and predicted a panicked reaction in the market.
"No, it's not. Tomorrow I'm predicting mass panic tomorrow morning," Cramer said. "[M]ass panic, market looking down 15 ticks. It will be that way because it will be like, ‘Oh, my.' And how can it be ‘Oh, my?' We're on a national TV show right now, OK? We're watched by everybody. I'm telling you it's going to be 0.5. How when it comes out and 0.5 [percent] is that shocking to people? Are you not watching? What are you watching? ESPN? Are they talking about 0.8 percent on ESPN? Maybe that's it. Maybe on the YES Channel they're using 2 percent. I don't know what they're watching."
On Aug. 26, the Dow Jones Industrial Average closed below the 10,000-point mark. And while there have calls by prominent economists that say a double-dip recession is more likely, Cramer still showed his astonishment over the rosy attitudes of some.
"I don't know what network they're - you know, if you listen to everybody here, everyone's looking for 0.5 percent. So when it comes out at 0.5, I want to know who is still surprised. What planet are they on?"
Later in the segment, the "Mad Money" host revised call even lower - to 0.3 percent, then to 0.2 percent. But stuck with the call it would come in between zero growth and 0.5 percent growth.