Daily Show Throwdown: Why Stewart’s Wrath Against Cramer Was Misplaced
Friday, March 13, 2009
by Marc Lichtenfeld, Senior Analyst, Smart Profits Report
With the stock market still merrily rolling through its gut-wrenching days, I need my 8 hours of sleep more than ever these days. For that reason, it’s usually “lights out” in my house before 11:00 PM.
But not last night.
I was more than willing to give up a few winks to watch The Daily Show to see Jon Stewart take on Jim Cramer. Terrific late-night theater.
For the record, I’m not a huge Cramer fan, stemming from some limited interaction I had with him when I wrote for TheStreet.com. But whether he succeeds or not, I do think he genuinely tries to do a good job for his readers and viewers.
Cramer is renowned for being loud, brash, and boisterous. So it was astonishing to see him sitting there like a scolded child, with none of his usual bravado.
He certainly deserves credit for having the guts to show up - it couldn’t have been easy for him. Earlier this week, he even wrote that he was “scared.” And it was pretty evident. It looked to me like he’d come straight from an all-day crisis management media training session, where he was told to apologize, not act defensive, and promise to do better next time.
I’m a big fan of The Daily Show, but in this case, I felt Jon Stewart’s wrath was completely misplaced…
You Want Me To Be Responsible? But That’s No Fun…
We’ve all been offered lots of things that seem great at the time… but which really aren’t good for us. For example, if a friend offers me a double shot of Jameson’s at 2:00 AM, I (usually) have the sense to turn it down.
Whether we’re talking about a shot of whisky, a second helping of dessert, or a zero-down, interest-only mortgage, people have to take responsibility for their decisions and live with the consequences.
Some folks might respond by asking: So why were lenders offering $600,000 mortgages to people who were making $25,000 a year?
Blame the system and the lenders. The system rewarded lenders who made risky loans, which could then be packaged up, given an “AAA” rating and sold off to unwitting investors. Many legitimate institutional investors got burned, thinking they were buying safe securities, when in fact they were junk. And it was the ability to package those loans and sell them off that made it so easy to offer loans to people who clearly could not handle them.
Quite frankly, those ratings agencies are as responsible as anyone for the mess we’re in and it’s mind-boggling that S&P and Moody’s are still able to operate.
But regardless of the systemic issues that led to the financial collapse and the undoubted fact that some on Wall Street behaved badly and contributed to this debacle, most of the fault also lies with homeowners and consumers who became over-extended. If so many people hadn’t got in over their heads, all those loans wouldn’t have turned to junk. Just because you’re offered a $600,000 mortgage doesn’t mean you have to take it.
Nobody Likes A Monday Morning Quarterback
It’s all too easy now for Jon Stewart and others to point fingers while shouting, “You should have known. You should have warned us.” But few were complaining while the party was raging and people were bragging about the killings they were making in the real estate market.
I can’t believe more of us didn’t know that real estate was a speculative bubble when lawyers were quitting their jobs to flip houses and 22-year old mortgage brokers were making six figures. We knew. We just didn’t want it to end.
And when the wheels fall off the party bus, we all want someone to blame.
But in this situation, there were many moving parts. The financial media was certainly played a role, but pointing fingers at CNBC and the rest of the media is misdirected.
Don’t get me wrong… I’m not a CNBC apologist. I can’t stand the direction that the network has taken lately. I really don’t care about their anchors’ opinions, because the majority of them are career journalists. They’ve never actually walked the walk.
So if you want some real clarification…
Tune Out The Talking Heads… Tune Into Accuracy And Profits
There are many sources I turn to for balanced, in-depth, accurate reporting, backed up with real facts, not just throwaway opinions.
In fact, you’re reading one of them right now.
My colleagues Karim Rahemtulla and Lee Lowell are two of the foremost stock market and options experts in the country. After a decade on the trading floor of the NYMEX, , Lee “retired” at 31.
And not only does he and Karim write for the Smart Profits Report, you’ll also find their analysis and recommendations in the Xcelerated Profits Report newsletter and their trading services. Visit this link for a full list of our investment services. I’ll take their read on the market over Michelle Carusso-Cabrera’s any day.
And if you want a more technical take, backed up by real numbers and time-tested analysis, check out Jim Stanton’s work. He’s as sharp a technical analyst as I know. As a card-carrying member of the Market Technician’s Association for many years, I know a lot of technical analysts!
And considering that two of the greatest contrarian investors in recent decades trained me while I was an analyst at a highly regarded boutique research firm, I’ll rely on my own instincts over anyone I see on TV.
The bottom line is that it’s time for the public and investors to stop looking for culprits and instead focus their attention on getting themselves into a better spot. There are lots of tools and resources to help, whether they come from us or others. But you have to go out and get it. You can’t expect Maria et al. to spoon-feed it to you. If you do, you will surely starve.
Have a great weekend.
Marc Lichtenfeld
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6 Responses to “Daily Show Throwdown: Why Stewart’s Wrath Against Cramer Was Misplaced”
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Jim Cramer performs a great service to CNBC’s viewers on his “Mad Money Show”. By watching Cramer and noting his recommendations, one can make a fortune as a “contrarian”. Just do the opposite of whatever Cramer says, and you stand a good chance of making serious money. As MIchael Parness of TrendFund.com calls him, “Booyahead’s” show is the worst of the bad programming on CNBC.
Good comments and I agree with your viewpoint that people are responsible for their own actions but I do support Jon Stewart in this case for taking on Cramer and CNBC as a whole for having played a booster role and actually fanning the flames of irrationality for so long rather than being critical - as journalists usually are by nature. Unfortunately too many gullible people don’t seem to be able to inform themselves properly and believe anything they watch on TV or hear on the radio. Personally I am a skeptic by nature and didn’t buy into the hype or follow the mainstream media for my financial information. I prefer to receive it from experts like you. Having said that, I am also take with a rather large grain of salt what I read on Agora, which often is sold with a style of hype focusing on the major winning percentages and written by very skillful copywriters. It just pays in every situation to remember the principle of caveat emptor.
Saying you are a big fan of Jon Stewart pretty much discredits you. I will no longer take any of your reccomendations. I like to recieve investment advice from adults.
Marc, I usually like your commentary. But wake up! Listen to the commentary. Steward did not profess to be an economic pundit. Cramer likely could have vetoed the ‘In Cramer (God) We Trust’ label presented so often on CNBC. Cramer is no dunce and he is well paid for being a Wall-Street cheerleader. Hmmm, Hank Paulson was placed as Treasury by Bush just before the bust and they repealed the short sell tick rule. Many saw this coming my friend, especially those who were connedted … and I would guess Cramer. I would guess that good ol’ Cramer also let friends and family and likely offshore trusts front run many of the trades he hyped … how else to account for those mystery trades just prior to the stocks being hyped on CRAMERICA. Come on Marc, Cramer is not on your side, except for the brief moment you place your book order.
Should we all have known not to buy stocks the last 2 years???
While I enjoy watching Cramer every night, one must remember the show is primarily entertainment. The financial networks exist to promote their advertisers financial and investment products. Who would expect them to warn about the credit bubble or coming Washington national debt collapse which will destroy much of the remaining private wealth in America today or what this will do to the dollar, the stock market, bonds, gold or the real estate market?
China is now worried about their dangerous over investment in US Treasury obligations. Washington ’s long-term choice is either repudiation or monetization. For monetization to be effective, the depreciation in the dollar would have to be substantial and this in turn would dramatically raise prices of imports for American consumers which would mean a tremendous drop in foreign imports. Debt monetization would cause more disruption to exporting nations than selective repudiation of Treasury debt.
The Campaign to Cancel the Washington National Debt By 12/22/2013 Constitutional Amendment is starting now in the U.S. See: http://www.facebook.com/group.php?gid=67594690498&ref=ts
Thanks,
Ron with 30 plus years in the investment business and banking industry.