When Bad News Really is Bad News

One of the first things you learn in business news is that good news can often be bad news and bad news can often be good news.

Let me explain.

Say a strong economic number that comes out. That’s good for the economy, right? Right. But, here's the rub. It can almost be too good. It may bring on too much inflation. And maybe after that, too high interest rates. So that good number could mean bad things for you and me.

Now, take a bad number. That’s not so good for the economy, right? But very good for inflation worriers. After all, interest rates don't go up when the economy's going down. So, we're off the hook.

I don't buy it. And lately, apparently, neither does Wall Street.

Take all these layoff announcements.

It used to be if you announced you were getting rid of more people at your company, you would find more buyers for your company stock. After all, it's supposed to show investors you're serious about your money and saving it. But not anymore. If that were the case, Lucent would be sky-high.

I mean, take a look at this sad-sack-stock story. Lucent announces it's laying off another 20,000 people on top of 10,000 already jettisoned. That's more than a third of its workforce.

And, the company’s reward? Nada. Zilch. Zippo. The stock is lower today than where it was yesterday and but a tenth of what it was a year ago. The same with scores of other Fortune 500 and other companies that are finding out getting rid of workers doesn't get you in cozy with investors.

Most of the companies that fire and fire again, just get fired themselves. I think I know why. Shrinking your business might be a start, but growing your business had better be your end, or you're going to get kicked in your end.

Most of these guys haven't a clue how to do that. So they cut, cut, cut. And Wall Street sells, sells, sells. Convinced these guys are the Great Oz, standing behind the curtain, pulling a crank, but in the end, only getting the shaft.

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Neil Cavuto serves as senior vice president, anchor and managing editor for both FOX News Channel (FNC) and FOX Business Network (FBN). He is anchor of FNC's Your World with Cavuto - the number one rated cable news program for the 4 p.m. timeslot - as well as the FNC Saturday show Cavuto on Business. He also hosts Cavuto on FBN weeknights at 8 p.m. In addition to anchoring daily programs and breaking news specials on FNC and FBN, Cavuto oversees business news content for both networks and FNC's weekend business shows, including Bulls & Bears, Forbes on Fox, and Cashin' In. Click here for more on Neil Cavuto.