Headlines That Can't Help Themselves

"I do think there are downside risks to the American economic growth, but in spite of those risks, I really think it is quite likely that the U.S. economy is going to pick up steam and revert back to trend growth before 2007 comes to an end," Yellen said.

Got that? She acknowledges downside risk -- any Fed president, with slowed growth (even allowing for a decent revision) and spotty signs of inflation, should be acknowledging this -- at the very least, paying lip service to it.

But she was saying that growth will rise into the year. Which means (even assuming no revision) no economic downturn. Because even if we stay stuck at 1.3% and go up from there as the year goes on, well, that ain't two straight quarters of negative growth, the requirement for an official recession. Dang, dawg, that ain't even one.

But that headline! It said ... aw, forget it. But again: The problem is that totally misleading headlines like this one have intensified as news delivery has migrated online.

As a result, savvy investors must never make a decision -- or even base a thought -- on a headline, no matter how tempting.

Speaking of temptation, don't you want to give in to the thought that the housing market in upscale areas like Manhattan, Los Angeles and San Francisco might skirt any semblance of the downturn? The Business Press Maven lives in a town where the only people who buy are those moving out of New York City. As long as they are buying with monopoly money, our prices will hold pretty well. But when New York City goes, this three-floor beauty I knock around in is toast. As in: burnt.

That is why it is tempting to trust this headline as giving a full picture: "Wealthy Housing Markets Shrug Off Subprime Woes."

Unlike the previous headline, this one is not -- technically -- wrong. For now, these big-money, big-city markets have shrugged off the troubles, though some of the froth has come off the markets, to be sure. But read the body of the article. It mentions the high-wage workers that live in these areas, the Wall Street bonuses and all that good stuff.

But the weak dollar is not mentioned. Foreigners, of course, have been buying up real estate in these cosmopolitan, international cities at bargain-basement prices, a function of the weak dollar. A firming of the dollar can lead to a weakening of prices in these rarified areas, the sort of common-sense complexity not captured in the headline.