Headlines That Can't Help Themselves

With its natural tendency toward oversimplification and misrepresentation, this spells more danger for investors. Or opportunity, for investors who can recognize when a market or stock has overreacted to an errant headline. Take a recent Reuters headline that got a lot of play ... puh-lease. "Fed's Yellen says economic downturn possible," yelled Reuters.

The headline is at once declarative and incredibly weak. San Francisco Federal Reserve President Janet Yellen said this weekend that a recession was possible. But, of course, anything is possible -- and possible is a long way from probable.

But The Business Press Maven, who is anything but subtle, is not here to parse words. Besides, we just went through the whole possible/probable debate, thanks to Alan Greenspan's rantings and recantations. I'm looking at the big and undeniable spread between what Yellen said and what Reuters yelled in the headline.

Yellen did say that there was "potential" for a downturn, which Reuters put near the top of the article right next to the -- oy, there they go again -- contention that the economy grew at a 1.3% rate in the first quarter, without mentioning the fact that this number is due to be revised twice and that, in the past, these frequent revisions have raised this first estimate by a factor of 50%.

But I digress.

Here is Yellen's main point, far beneath the alarmist headlines, the tush-covering mention of that "potential" for a downturn (duh!) and that deceitfully incomplete GDP number: