CONFUSED about the stock market rout heard ‘round the world earlier this week? Don’t make the same mistake I did and turn on your TV.If anyone can reduce events to their lowest common denominator, it’s the TV pundits. (I assume they are more successful in their day jobs because if they weren’t, there would be no demand for their pithy punditry).

Imagine my surprise when I learned that it was all Alan Greenspan’s fault. The former Federal Reserve chairman, speaking via satellite to a conference in Hong Kong on Monday, mentioned the “R” word, saying “it is possible we can get a recession late this year”, according to a Dow Jones newswire story posted on the Wall Street Journal online. The time stamp was 5.37 a.m. on February 26, and the news was strictly third-hand.

The Dow Jones Industrial Average fell 15 points, or 0.1 percent, on Monday following Greenspan’s Delphic utterances. The broad Dow Jones Wilshire Index lost less than 0.2 percent. So much for Greenspan fanning recession fears.

Besides, Greenspan was never a good forecaster. (He excelled at mop-up operations.) With the exception of his intuition about an increase in trend productivity growth in the late 1990s, his track record was dismal.

He pooh-poohed the idea of a recession in late 1990 even though the economy was already contracting. He failed to recognise companies were in trouble in 2000 until his “sources” (technology CEOs) told him they had enough fibre-optic cable to go to the moon and back and no spacemen to buy it.

Him Again?

Corporate profit margins, which peaked in the third quarter of 1997 and were collapsing in 2000, did not seem to concern Greenspan then the way they do now. (He told his Hong Kong audience that the current stabilisation in profit margins was “an early sign we are in the later stages of a cycle”.)

Greenspan judged a financial market event (Russia’s default and the near-collapse of hedge fund Long-Term Capital Management) to be a macroeconomic event, cutting the funds rate by 75 basis points in the fall of 1998 and dragging his feet taking it back.

And this short list doesn’t include his Whip-Inflation-Now campaign as part of the Ford administration in 1974 in the middle of what proved to be one of the longest and deepest postwar recessions.

But, hey, aside from that, Mrs. Lincoln, his forecasting record is sublime. Tuesday’s sell-off started in China and worked its way around the globe. If Greenspan’s comments were in any way responsible, then one has to conclude that, stateside, investors needed them filtered through China’s stock market to react.

Enough about Greenspan. The TV pundits revived one of my favourite Wall Street staples: The correction was “healthy”.

Right. I was bullish, I lost my shirt, but all things considered, it was healthy to see $1.34 trillion of global stock market capitalisation turn to pixie dust in 24 hours.

Some stock market strategists were quick to find the silver lining in the fall in Treasury yields. Low long-term rates are going to stimulate the economy and help the stock market.

Let’s see if I can get this straight: Treasury yields fell because stocks were tanking, and lower Treasury yields are going to help stocks.

In general, lower long-term rates are a positive for stock prices because they are used to discount future earnings to present value.

But if rates fall because economic growth is sagging — think Great Depression — those low long rates aren’t going to help either the stock market or the economy as long as short- term rates are higher.

The yield curve has been inverted for seven or eight months, depending on which short rate one uses (fed funds rate or three-month Treasury bill). In that time, real GDP growth has averaged less than 2.3 percent. Capital spending (investment in equipment and software) has declined in two of the last three quarters. And the outlook isn’t exactly rosy.

New orders for non-defence capital goods excluding aircraft, a barometer of future investment, fell 6 percent in January and declined from a year ago, the first year-over-year decline in three years.

So those low long-term rates aren’t offering much solace.

I heard a lot of other nonsense on TV, too. One pundit told Fox News anchor Brit Hume that expectations of slower fourth-quarter economic growth, to be reported the following day, unnerved the markets.

Surely the GDP revision — to 2.2 percent from 3.5 percent reported initially — wasn’t breaking news.

“When random things happen, you look for some logic, some explanation,” says Jim Glassman, senior US economist at JPMorgan Chase & Co.

TV may have some good attributes, but logic isn’t one of them.

(Caroline Baum, author of “Just What I Said,” is a columnist for Bloomberg News. The opinions expressed are her own.)