With all the media noise many of you have seen John Stewart's Cramer episode. The accuracy and ethics of Cramer's analysis for CNBC was a large part of the interview; what I'm interested in is the larger framework - what is CNBC?
CNBC touts itself as The Financial News Network, there are others but they do seem to have the market share. If financial news network means running stock tickers then I suppose their track record qualifies them. The problem with this is that a lot of news organizations run tickers and don't claim to be financial news. CNBC's claim is based on their analysis shows and reporting. Fox also claims to be a news organization, rather than the Republican infomercial it is.
It is not news reporting to simply commit stenography. Any power center has its agenda and wants that point of view propagated and that is the line they will give. The media failure in the run up to the Iraq war was of this nature and demonstrably so. While the media in general cheerleaded GWB's agenda Knight-Ridder (now McCaltchy) got it right by asking those without power what was going on. Not simple opposition, asking what is going on is real. Being sceptical of those exercising power is not opposition, it is an acknowledgement that desires and facts do not always coincide.
The people who report or analyse on CNBC had to be aware of the degree of leveraging of mortgages that was going on. The CNBC people also had to be aware that housing was a bubble market and that bubble markets end and values fall. If they were unaware of these things neither the words news or finance belong in their description. Because it is almost impossible to feature an organization that size with that degree of ignorance the alternatives are that they considered it immaterial or it didn't match their agenda to report it. What they have managed is to get some of their personnel on other news programs as credentialed opiners on financial issues and political issues. They are, of course, entitled to whatever opinion they might have, the credentials are the question.
There honestly is little available on financial new channels that is very relevant to ordinary Americans. Playing about in the market with small numbers is foolish, ordinary Americans would see any gains eaten by fees. The little guy will only see real gains by holding long term and even then there are points at which investing is foolish - one year ago, say. If real reporting had been done there might have been an awareness that the market was topping out, a bad time to buy anything. What we got was cheerleading passed off as news on CNBC and others and their appearances on regular shows carrying the same water. That isn't what the infomercial hosts on shopping channels get - evidently more honest brokers.
1 comment:
The biggest problem, though the financial press IS in the tank for their corporate owners, their brokerage advertisers and "insider" peeps is that, when bad financial news starts to percolate, their willingness to report it falls in inverse proportion to how bad the news is.
There is a deeply ingrained aversion to bad news throughout the brokerage community:
If you tell a customer to SELL, and the stock rises, then you are an idiot in the customer's mind, so they find some happy-talker.
If you tell a customer to BUY and the stock tanks, well, you got it wrong, but LOOK HOW MUCH YOU GET RIGHT.
That's endemic to brokerage houses, and to the financial press, many of whom straddle the fence ... like Jim Cramer.
But the reporting on the meltdown, beginning with Bear Sterns one year ago has been punctuated by hot air from happy talk brokers, and damn little actual reporting.
But that's the psychology.
Good piece, Chuck.
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