Did Fox Business Ruin the Market?

Now, I'm not crying out against conservative journalism or anything. Heck, I won't even go so far as to say that Fox News is a conservatively biased network. They are what they are.

And the facts are what they are as well.

Before Fox Business launched the stock market was hitting all time highs. We had taken a hit from the subprime mortgage debacle in July 2007, but bounced back on the wings of Ben Bernanke's surprise 50 basis point rate cut. Everything was zooming up. Especially large-cap tech like Google (GOOG) and Baidu (BIDU).

And then on October 15, 2007 Fox Business began its first broadcast. On that day the S&P 500 was at 1,550. Today it stands at 1,260.

Possible reasons for this correlation?

• Fox Business claims that it takes on a "pro-business" stance. Investors see that it's ratings are low. Therefore people must not like business right now. Sell!
  
• China doesn't like Fox Business. Investors there had nightmares of Bill O'Reilly from Fox News incessantly arguing irrationaly, and decided to sell. The collapse of the Shanghai market then spread over to the U.S.
• CNBC's Erin Burnett and Maria Batiromo felt threatened by the "Foxes" on the Fox Business like Alexis Glick and Jenna Lee. Thus, they are now embittered and are very negative toward news and guest CEOs. Investors see this negativity, interpret it as a lack of optimism. Burnett and Bartiromo are consumers, so consumers must not be optimistic. Therefore, the economy is going to tank. All the mutual funds proceed to sell.

Any other possible reasons for this correlation? We need to get to the bottom of how Fox Business tanked the market!



Disclosure: Correlation doesn't equal causation.