If you have been following Wall Street news the past two weeks, you can't have missed Jon Stewart's trashing of CNBC, video clips and all. On Thursday, Stewart dragged James Cramer into the fray, showing various video clips of his blatantly bad calls.
Stewart has been roasting CNBC mercilessly and for good reason. The business news channel has been been a great promoter of all that is Wall Street with nary a criticism, and ignored investigative journalism altogether. This is not leadership in business news; it's cheerleading disguised as journalism.
While I do not think that Cramer's Mad Money show is to be lauded for its great investment advice, Cramer has admitted that entertainment comes first on his show. And that's an important part of the story. Cramer and CNBC simply have a conflict of interest in their work. Their job is to maximize viewership and advertising rates, just like Jon Stewart -- remember they are all snake-oil salesman in a way.
In any event, Cramer has not always been wrong about the market and has made some bold calls that have been accurate as well. James Altucher, a Cramer associate, points some of these things out in a video on TheStreet.com.
One call that Stewart and others have highlighted was Cramer supporting Bear Stearns shortly before the company totally collapsed. But he was not alone in this call. Barron's recommended the stock, and I wrote about it too. Unfortunately, I had to eat my own cooking on that one, as did many others.
Given the fact that the stock tanked from $60 to $30 in no time flat and was "rescued" by JPMorgan Chase (JPM) for $10 per share, I'm not sure anyone except those who shorted the stock knew anything until it was too late. One Thursday they had $19 billion in the bank and the next day they had nothing. If the company did not know their own fate how could outsiders? I have criticized Cramer myself from time to time, but I think in this case it was not the bad call but how strongly he delivered the message that he is at fault for.
The bottom line from all this for me is, will we learn our lesson? As we unwind all the leverage and toxic financial instruments that we have created, will we also stop creating contorted, distorted and ill-reported news about business?