Tuesday, March 17, 2009
Stewart v. Cramer
I guess I am glad that John Stewart has climbed on the bash Cramer bandwagon. I criticizing that TARP-touting Obama supporter half a year ago.
I have a two or three problems with Cramer's public barbecueing, though.
First, a major beef of Stewart's seems to be that Cramer failed to predict the crash. True enough, but on those grounds Stewart should be skewering all the Keynesean economist who are now advising BHO to spend us rich. As far as I know, the only people who saw it coming, and (more importantly) explained in advance exactly why it would happen were free marketeers like Peter Schiff and theory-free contrarians like Gerald Celente. (For a very recent comment on these matters by Schiff, see this.)
Second, there is Stewart's notion that Cramer's employer, CNBC, doesn't emphasize the down side of the stocks they cover because they are "in bed with" those giant corporations. To this I say, "Close, but no cigar." CNBC is owned by NBC, which is a giant corporation. To be more exact, CNBC is a business, and its business is serving people who invest, mainly in the stock market. This means they have a vested interest in making the stock market sound good. That is, they have a vested interest in enabling speculative booms. This effect is reinforced by the fact that, like other "news" outlets, they are basically storytellers, like the bards of old -- weaving tales to hold their audience spellbound. In their case, the stories are about investments -- ie., about the audience -- so they have to make the stories sound up-beat and optimistic, if they can.
Note that even in hard times CNBC systematically tends to play down investments that are basically downbeat and gloomy, such as gold. As as for short-sellers -- well, no one likes a party-pooper, right?
Here is an interesting article on the Cramer evisceration. The article was published, I notice, by the organ of the John Birch Society, but it seems pretty solid to me.