By Dan Gifford
22 Mar 20090
Breitbart.com
Every time I have started to write a follow-up to last week’s piece
about the evolving Jon Stewart, Rick Santelli, Jim Cramer CNBC massacre,
new information that altered the narrative slid in over the transom. The
newest part of that story comes from a self described progressive
(leftist) group called “Fix CNBC” which has seized on Stewart’s gold
standard sophomoric schlock attacks to publicly call for CNBC to start
being Wall Street’s watch dog instead of its public relations puppy.
That ain’t likely to happen and some personal disclosure of my own a bit
later will illustrate why.
Stewart Vs. Santelli And Cramer
A week ago, I took issue with the way Jon Stewart took a cheap shot on
his “Daily Show” at CNBC’s Rick Santelli. Today, I have limited praise
for Stewart’s skewering of CNBC’s “Mad Money” guru, Jim Cramer. If that
seems inconsistent or hypocritical (oh gawd, not that), it isn’t. The
difference is that when Stewart blasted Santelli, he blasted a straw man
of his own making. Santelli did not say what Stewart led his audience to
believe he said in order to set up his put-down of Santelli. I did not
comment on Stewart’s general tear down of CNBC that followed his
Santelli snark because I did not know whether Stewart had taken the
video clips he made fun of out of context and still don’t. After that,
Cramer went on the Daily Show for national humiliation by a Stewart who
demanded to know why Cramer didn’t warn people to sell their stocks.
“It’s not a fucking game,” Stewart postured. Cramer could have
challenged that and Stewart’s other crock but didn’t.
Why didn’t Cramer point out the video clip that got played ad nauseum on
practically every network of him screaming about impending doom in the
financial markets on August 3, 2007 before the market bear took hold?
“He [Federal Reserve Chairman Ben Bernanke] has no idea, and these firms
are going to go out of business and he’s nuts, they’re nuts! They know
nothing!!!!” (about the Fed not injecting liquidity into the system).
Why didn’t Cramer talk about his October 5th, 2008 advice on the “Today
Show?”
“Whatever money you may need for the next five years, please take it out
of the stock market right now, this week. I do not believe you should
risk those assets in the stock market.” (stock market 30% off its highs?)
Or this one from October 20, 2008?
“Stop trading these two stocks (Fannie Mae and Freddie Mac) … this is an
outrage … It’s very clear that someone knows what’s happening (and isn’t
telling the public).
I dunno why Cramer didn’t come back at Stewart. On the other hand,
opinions abound about the reason Stewart went after CNBC and Cramer in
the first place.
“Jon went after Cramer because he hates phonies and hypocrisy,”
according to fellow comedian Dennis Miller on Bill O’Reilly’s show.
“I heard people in Stewart’s family lost a lot of money in the market,”
O’Reilly said to Miller. (Stewart’s older brother, Larry Leibowitz, is
head of US Markets & Global Technology at a Wall Street firm)
“His [Cramer’s] real sin was attacking Obama’s economic policies. If he
hadn’t done that, Stewart never would have gone after him. Stewart’s
doing Obama’s bidding. It’s that simple,” MSNBC’s Tucker Carlson told
Politico.com reporter Michael Calderone. “He’s a partisan demagogue.”
The London Telegraph’s Tom Leonard has a thoroughly cynical take: “…
chat show cross-pollination. It’s a heinous practice which, in these
desperate broadcasting times, viewers are going to see more of. The
strategy is simple: keep non-essential guests – film stars, politicians,
anyone with something interesting to say – to a minimum so you can
concentrate on other people with shows. After dipping his proboscis into
[Jon] Stewart’s pollen, Cramer was meant to flutter home with some of
his young viewers, curious to see what the fuss was about. Indeed,
Cramer had just inserted his schnozzle into The Martha Stewart Show
(another NBC show). They pounded some pastry and pretended it was Jon
Stewart. It’s all showbiz, after all.”
Not if some of CNBC’s critics have their way.
University of North Carolina business journalism professor Chris Roush
proposes a Joe Friday change to just the facts: “The more that CNBC
allows its reporters and anchors to state their opinions instead of
simply reporting facts, the more it will hurt CNBC in the long run. When
you state an opinion and you’re wrong, you cause people to lose millions
or billions of dollars. Stating opinion with business news is extremely
dangerous. Stating politics in political news is not as dangerous
because people know that the person is stating their political
viewpoint.” Roush’s point is understandable at a time when so many are
looking for someone to blame for their losses instead of looking in the
mirror. But the people I see on CNBC are educated, informed people with
generally worthwhile points to make about the companies and markets they
cover. What’s more, they challenge each other because the facts are
often in dispute. Turning that off, as Roush recommends, would probably
turn off CNBC’s lights.
“Fix CNBC” wants the lights to stay on for change:
Americans need CNBC to do strong, watchdog journalism – asking
tough questions to Wall Street, debunking lies, and reporting the truth.
Instead, CNBC has done PR for Wall Street. You’ve been so obsessed with
getting “access” to failed CEOs that you willfully passed on
misinformation to the public for years, helping to get us into the
economic crisis we face today. You screwed up badly. Don’t apologize –
fix it!
CNBC should publicly declare that its new overriding mission will
be responsible journalism that holds Wall Street accountable. As a down
payment, we ask you to hire some new economic voices – people who have a
track record of being right about the economic crisis and holding Wall
Street executives’ feet to the fire.”
OK, La Mancha wannabes, mount up. But take it from one who been der,
done dat and knows: Ya can fugget about it! Nobody can be right enough
often enough to satisfy a herd of TV viewers chasing quick profits and
nobody is gonna hold any Wall Street feet to the fire in any real way
that matters. Too negative? Read on — and pay special attention to the
interwoven tapestry of relationships.
Before joining Lou Dobbs’ “CNN Moneyline” (now “Lou Dobbs Tonight”) in
New York, I auditioned for a spot at CNBC in 1989 on the anchor desk
with Sue Herera, who is still there. My agent, the late great Sherlee
Barish, said that all went well except that my reputation for exposing
financial criminality bothered the brass and that they were concerned
about having me in their midst. I may ask questions that would alienate
the Wall Street biggies and business leaders they hoped to curry favor
with. Worse, they were concerned I may find an R. Foster Winans at CNBC,
Barish told me. Winans was The Wall Street Journal “Heard on the Street”
columnist who leaked market moving stories to his stock trading buddies
and inside information peddlers seemed to be everywhere.
In case you weren’t there or don’t remember the 80s paranoia, Wall
Street had crashed, Godzilla market moving “geniuses” like Ivan Boesky
with a “talent” for picking takeover targets that spiked in price had
been unmasked as insider price riggers while lending institutions were
failing because of looters like Charles “Cheating” Keating which, in
turn, caused many businesses to close. Anyway, one particular story I
had done, Barish said, in the midst of all that really bothered the CNBC
boys: My expose on “MacNeil/Lehrer News Hour” that a great many of the
businesses going under at the time were not the result of bad loans made
to bad people who should not have gotten them (where have we heard that
before?), but the result of the Federal Deposit Insurance Corporation
forcing lenders to classify performing loans as delinquent and call them
early. FSLIC Chairman M. Danny Wall demanded MacNeil/Lehrer take that
fact out of the story I had done before it aired, but my editor, Gregg
Ramshaw, said “no” as did his superiors, a principled stand for which I
am still grateful. I was not grateful for the federal bullying that
followed, but that’s a story for another time.
In any case, maybe the CNBC people had a point, because at CNN, I
angered “The King of Wall Street” at the time, discovered that my boss,
Lou Dobbs, had serious journalistic conflicts of interest and found
corruption sludge at the now defunct Financial News Network.
That Wall Street king was Salomon Brothers CEO John Gutfreund of “Liar’s
Poker” fame, and I earned his ire when I asked him about the way his
bond traders, “The Big Swinging Dicks” as they called themselves, were
sodomizing Salomon’s customers (and yes, there is something wrong with
that). He was especially angry that I called him by the German
pronunciation of his name (gootfroind) instead of the English
translation (goodfriend) he liked. Gutfreund was no “good friend” to
anyone, as far as I was concerned, other than his fellow financial
sodomites. Long story short from there: Warren Buffett bought Salomon
and fired Gutfreund, lots of lawsuits were filed, Gutfreund was banned
from ever running a brokerage firm and CNBC still puts the sonuvabitch
on the air as a credible “goodfriend” of investors! I’ve sent CNBC
complained to CNBC, but whatcha gonna do? On to the Dobbs man.
Drexel Burnham Lambert of Michael Milken junk bond fame was in trouble
when I joined CNN. How much trouble before it crashed several months
later never completely got aired, from what I saw, because Lou Dobbs had
a conflict. It was common knowledge that Lou wanted to be CNN’s
president and that he was threatening to resign and take a big salary
job at Drexel if he didn’t get it. Lou’s neighbor was Drexel’s top guy,
Fred Joseph, the source of much reassurance that things at Drexel
weren’t as bad as nearly everyone suspected or knew them to be. On the
night that Drexel finally did crash, Lou told us all after the show that
“Fred lied to me.” Maybe he did and maybe Lou was just doing his part
all along to try and keep Drexel going for his own benefit as a viable
bargaining tool, I certainly don’t know which. But how many people lost
serious money because CNN’s reporting was possibly mollified by
compromise? And this wasn’t the only example.
When I was assigned to do a story about some 1989 earnings at Shearson,
I saw that a big insurance payment gave Shearson a bottom line profit
even though it was losing money on its operations and said so in my
story. The next day, there was hell to pay for saying that and Lou did a
retraction. A week or so later, The Wall Street Journal noted the same
thing I did and several other CNN news people took pleasure in pointing
it out to me on the sly, always wary of Lou’s mercurial temper tantrums.
But why would Lou do a retraction on something that was probably true, I
wondered? Well, it did not take long to discover that Lou was being paid
by Shearson and some other companies we were reporting on for work he
did for them on the side. Lou fired me, but The Wall Street Journal
somehow got hold of the story. Can’t imagine how that happened.
Barish next sent me over to Financial News Network. It was the original
network financial news source and the one the fledgling CNBC wanted to
challenge. Right away, I began noticing some things that did not look
right and soon had confirmations from some in a position to know that
CFO Steven Bolen, among others, was lining his pockets with FNN money
and sending it to secret offshore accounts. FNN is now history.
Rest assured that what I’ve just written is only the tip of the Wall
Street journalistic ethics iceberg that “Fix CNBC” seems to believe it
will be able to melt. To its credit, CNBC has made efforts to eliminate
the appearance of impropriety by forbidding its reporters to own
individual shares of stock and drawing boundaries on the proper
association between reporter and reportee, I’ve been told. That’s a
notable change since the network got a black eye from the friendship
between its star, Maria Bartiromo (an off air producer at CNN when I was
there whose CNBC star status is well deserved, by the way), and former
Citigroup executive Todd Thomson. Thomson flew Bartiromo on Citgroup’s
private jet from New York to Beijing to host a party costing five
million Citigroup dollars in 2007. It’s also a change from the time I
watched Bartiromo coo to JP Morgan Chase Chairman Bill Harrison (my
upper class counselor at Virginia Episcopal School) that she owned 1,000
shares of a certain bank stock. “Maybe you should buy more,” he said.
That may not sound like much, but Bartiromo is married to Jonathan
Steinberg, son of mega investor Saul Steinberg. And a suggestion from
Harrison to “buy more” could be taken as a tip and cause a large
position to be taken. Now, what about those people who are consistently
right and will hold Wall Street executives feet to the fire that “Fix
CNBC” wants hired?
I’ve been closely involved in the markets since 1970, and in all that
time I have yet to see anybody who could consistently tell a mass
audience which specific stocks will make them money. Every generation
has its guru that rides a trend or makes some dramatic right call
(remember Joe Granville?), but they tend to fade away after the
conditions that made them hot stuff change– which they do. There are
simply too many market variables, too many ways of interpreting winners
(today, next week, next year?) and stock calls made on TV are too public
to keep working even if they are correct. The simple reason is that once
too many people start buying the same stock, it tends to stop rising
because there are too few people left to buy and too many already in who
want to sell and protect profits. The bottom line: Jim Cramer probably
does as good a stock picking and market education job as it is possible
to do on TV. As for holding Wall Street feet to the fire, antagonize the
suits too much, and they’ll stop talking to reporters and start talking
to their lawyers about defamation of character, harassment, loss of
reputation, tortuous interference, you get the picture.
CNBC doesn’t want that headache and neither do any other news
organizations I can imagine, especially during these tough financial
times. So take it from one who has been tossed off company premises many
times and dealt with death threats from criminals of all sorts, CNBC is
not going to start burning Wall Streeters unless it has people like my
former news director, Jim Topping (now the retired president of KGO-TV,
San Francisco), who knew exposing financial crime was the right thing to
do, knew I had the goods on the crooks and was willing to stare the
bastards down. I don’t believe CNBC has people with that sort of gut in
management who are willing to give up their Four Seasons table or toni
party invites in order to rake Wall Street. Neither do I believe there
are many reporters around these days with the background or desire to
spot legitimate fraudulent activity and expose it before law enforcement
does. The ability to do that is not learned in business school, a
background shared by most of the bright, articulate faces on CNBC. And
that’s why “Fix CNBC” is probably going to have to be happy with the
police holding Wall Street feet to the fire while CNBC shows the perp walk.
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