Defending Jim Cramer: Don't take entertainers too seriously
Filed under: People
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?
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money.
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Reader Comments (Page 1 of 1)
3-16-2009 @ 1:00PM
Elliot Stein said...
I'm not sure if you are really defending Cramer or not. The reality is that Cramer advertises and promotes his show (and himself) as offering real insight into how to invest (and sometimes) manipulate the market...just like Jim.
On the other hand, Jon Dtewart claims only to cover the news with a humorous twist, and sometimes (like Will Rogers) skewer the pompous with some keen insight into their true agendas.
The bottom line is that CNBC fills its available programming with people that claim to "know what is going on" and even "know what's going to happen". The truth is their pundits are really just "Monday morning quaterbacks" who every once in a while have been turkeys that "flew in a hurricane".
The single greatest take away should be that "free market systems" do not work very well when you have the combination of Greed and Lack of Transparancy.
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3-16-2009 @ 3:01PM
Dave said...
I think you missed the point of the segments and the interview. Stewart repeatedly stated that it wasn't about Cramer himself... It was about who, exactly, does CNBC represent. It was about the network as a whole, not about Cramer, who unfortunatly ended up the fact of CNBC in all of this. I actually felt bad for Cramer first when I saw him on MSNBC, even more so when I heard he was going on the daily show. I watched the interview first on TV and later I watched the full interview on The Daily Show website. Watch it again. It's not about Cramer recommending specific stocks. It's larger than that and sadly, Jim Cramer ended up bearing the brunt of a piece that was not initially directed toward him. I have thought these things for a long time about the finanical news. I am happy to see it get some attention. I was sorry that Jim Cramer took the beating. He seemed to be blindsided by that interview they took clips from though, the one from TheStreet.com. Those were pretty damning.
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3-16-2009 @ 9:14PM
pufftiger said...
I am still amazed that there is so much anger at guys like Jim Cramer and CNBC. Where is the anger with Barney Frank, Chris Dodd,Frank Raines and all of the other Democrats who continuously defended Fannie Mae and Freddie Mac as being sound while the those evil greedy Republicans were trying to sound the warning. It's all over You Tube for anyone to watch. This is what laid the foundation for this entire collapse. Not to mention the US government itself which pressured the banks along with groups like ACORN to make loans to people who could not afford them. Loans that were gauranteed by Fannie and Freddie and then packaged and sold all over the world.Where is Jon Stewerts coverage of that with his humorist twist? Better yet, where is the outrage from the American people. None of the people I have mentioned has been asked to testify in front of congress. None of them have been thouroughly investigated by anybody!! And they are upset with Jim Cramer!! Such is the result of public education, corrupt politicians and a complicit liberal media.
3-16-2009 @ 4:07PM
bob said...
After the fact of Jim Cramers appearence with Jon Stweart,,, I don't see how anyone would think for one bit Jim Cramer was a person of any truth & veracity when it specifically comes to his CNBC show. He was called on the carpet by another noted personality who really did not want to persue this matter. But no one and I mean "no one" in the TV world would touch it with a ten foot pole. However, while Jon Stewart is an ok funny guy doing a funny false news program 4 nites a week with a limited cable audience he in fact did clearly call out the actions of CNBC as a group who promotes wall street as a good guy with no ethical boundarys or care for the millions of mom and pop investors.to whom they a appealing to. CNBC should be a behind the scenes news program and vetting out the dishonest methods of Wall Street and all those associated.
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