CNBC and Financial Television: Puppets in the Pre-Meltdown Show

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by Bill Kavanagh:  Last night’s Jon Stewart interview with Jim Cramer should be put in a time capsule for future generations to understand the popular culture leading to the meltdown.  It’s not possible to overstate the insanity required to believe that the financial news networks weren’t merely entertaining little puppets in the game the markets had become before it all crashed and burned.  Cramer tries lamely on air to pretend that he’s there at CNBC to expose the game, but it’s clear, even to Cramer, as Stewart rolls tape after tape in which the former hedge fund manager admits to market manipulation that it’s pointless to deny his role in snake oil sales.  (The uncut version -- in three parts -- is available here.)

 For me, the moment when this crap became too much to bear was when CNBC hugged Maria Bartiromo just that much tighter in the wake of a scandal in 2007.  Bartiromo had been the cause of a business shakeup in which Citigroup executive Todd Thompson was ousted from his position after engaging in a questionable relationship with the financial “Money Honey” and rewarding her with a $5 million Sundance Channel show on Citi’s dime.  While Citi CEO Chuck Prince made his own executive walk the plank for his role, CNBC did just the opposite.   The channel backed Bartiromo, who had been reporting on Thompson and Citi while being offered very special personal perks, including a personal corporate jet flight from China with the executive, who left a gaggle of executives on the ground in Asia to find other flights back to New York. 

 Rather than firing Bartiromo for violating journalistic ethics, the network covered for her, compensating Citi for the flight and downplaying the story, realizing that her association with the CNBC brand was too pivotal to tarnish.  If there ever was a moment to say that the network had crossed the Rubicon and bought the precept that entertainment and profits had completely replaced real journalism, this was it.  Can anyone imagine how acceptable it would be for a political anchor to engage in that kind of relationship with a candidate or public officeholder and then continue reporting on stories that involve that figure?  No matter how far gone mainstream television news is, that still wouldn’t have played as easily there as it did within the corrupt world of financial television news.

 But Cramer and Bartiromo are just the tip of a huge iceberg of entertainment and profit values that lurk beneath the glib surface of financial reporting, particularly financial television reporting.  The hype never stops, making these specialty networks ubiquitous on monitors throughout the offices of financial service companies.  It’s like free advertising for the markets rather than investigative journalism and objective evaluation.  No wonder the companies being reported on feel fine about playing the channels in their workplaces.  

Small wonder these channels never warned of an impending collapse.  They'd sooner have cut off their arms and legs.

 So let’s hear it for Stewart and a little truthtelling about CNBC.  Wouldn’t it be a breath of fresh air to hear some of the same from within the financial television community itself?

(See Memeorandum for more. This post is also available at Bill's Big Diamond Blog.)

Comments

[Laura]

I can't recall the number, but how many stories did John Stewart run about the insane housing valuations? Yet in part 3 of the interview Stewart suggests that CNBC knew this was going to happen and kept it quiet. Was Stewart in on this grand conspiracy as well?

I also can't help but wonder how much of this is tied to Cramer's recent negative statements about Obama. It's no secret that Stewart is one of the leaders of the Obama-can-do-no-wrong fan club so one wonders how much of Stewart's faux-outrage is really about protecting Obama.

[DAMOZEL]

As James Fallows says, Stewart is this generation's Edward R. Murrow. Thank God for him... And I couldn't agree LESS that JS thinks Obama can do no wrong. Who can forget the time he chose Obama for "Dick Move of the Week" (during the campaign)?

[Bill]

Laura,

I don't know if you actually watch Jon Stewart, but he's a comedian, not a stock market or real estate market show host. So, no, I don't recall him doing a show on the runup of real estate and derivatives based on mortgages. Somehow, I'm not sure that would have been funny. But nailing Cramer was entertainment!

I do hope that if you are getting your political commentary from Jim Cramer, you're at least keeping your wallet closed to his market commentary.

I think Jon Stewart's a little pissed off at Obama for not being as hilariously easy to work for laughs as our last President, but he does seem to be able to get at him too. Did you see his piece on Obama the other night after the spending bill? Oh, right, probably not. I forgot, you thought he was anchoring a market program.

[Charles]

Bill, your characterization of Bartiromo is outrageous.

As I posted at the time, the coverage of this was sexist, as is your post.

See phoenixwoman.wordpress.com/2007/02/12/would-they-do-this-to-a-man/

Bartiromo is one of the tougher anchors that CNBC had. Granted, they weren't tough enough. But who in the business press was?

[Bill]

Charles,

That's idiotic. Bartiromo was given a 5 million dollar anchor position by a corporate executive she was covering, doing live interviews with, and lots of great publicity to. There's nothing sexist about noticing there's a lot wrong with that in journalistic terms.

If you are referring to the moniker "Money Honey," that's a name that Bartiromo herself was in the process of patenting for product placement when the Thompson story broke. Call her sexist if you like, not me.

[Charles]

Bill, there was never any evidence, let alone proof that Bartiromo was having an affair. That was a smear, one that never would have been attempted against a man. And, indeed, it looked very much like Citi wanted to get rid of Thompson because he wasn't making his numbers... and used a faux scandal to get him to go quietly. As for Bartiromo, her *job* is to get time with corporate people to see if she can get news out of them.

It is sexist-- and blindly so-- to fail to see that this evidence-free story would never have been written about a man. But because she's a woman and got in a jet with a guy, well, you know *something* must have happened.

[Bill]

Charles,

The interesting thing here is that you are the only one here talking about an affair. I'm talking about the impropriety of Bartiromo taking a $5 million gig from a guy at a company she covers and accepting special favors like an two-person flight from China while covering him. I have no interest in whether she was having an affair.

Were CNBC applying ordinary journalistic standards to their anchor, this would certainly be enough to severely embarrass the network.

Go have an argument about whether there was an affair with someone who cares.

[Charles]

You deny that the following are innuendos: "CNBC hugged Maria Bartiromo"
"engaging in a questionable relationship" and "that kind of relationship"?

Excuse me if I don't agree.

This is what Thomas Kostigen of CNBC competitor Marketwatch says:

"Most reports say Bartiromo did nothing ethically wrong. It takes about a page and a half of text to get to that point -- wily descriptions and intimation and all -- but from a journalism perspective it seems she conducted herself ethically."
www.marketwatch.com/news/story/stop-pressing-citigroup-cnbc-story/story.aspx?guid=%7B39F62485-F7B5-4340-9BDA-FB6FCF6DDFD8%7D

I can see no reason for this story to go on and on except that the standards for criticism of successful women are a h--luva lot lower than they are for men.

This post does not meet BNP standards by a country mile.

[billkav]

Charles,

This is getting ridiculous. You've been busy calling me sexist but not once addressed the financial issues I brought up. There are so many kinds of wrong in the way Bartiromo covered Thompson and Citi that the "relationship" I speak of was clearly ethically challenged. Since you say that "most reports" claim there's nothing wrong with the ethics of her coverage, I'll refer you to Reuters:

"Not only have questions been raised about Bartiromo's impartiality in regard to Citigroup, but there has also been criticism of CNBC in journalism circles for avoiding the story."

You don't have to agree, but really, "this kind of relationship" in which Bartiromo gives Thompson great press, then is sponsored, by Thompson's decision, on a Sundance Channel program to the tune of $5M large, is the "kind of relationship" most investors would be appalled by if they knew it existed.

Let's also address the fact that she admitted to owning 1,000 shares of Citi in an interview with Sandy Weill in 2003. The Wall Street Journal reported that:

"In 2003, Ms. Bartiromo prompted CNBC to institute a new stock-ownership policy for its staff after she disclosed during an on-air interview with then-Citigroup Chairman Sanford Weill that she owned 1,000 shares of the company's stock. Most major news outlets prohibit newsroom staff from owning stocks of companies they cover. Ownership by family members is also strictly regulated. Under CNBC's new rules, staffers are prohibited from owning individual stocks and bonds, including stock in parent General Electric, unless such stock is part of a company plan such as a 401(k) or owned through a mutual fund or blind trust."

Since you simply continue to make the same name-calling charges of sexism, conflating my post with others while avoiding the financial conflict of interest issue at the root of this post, I'm going to leave it there. You can call all the names you like, but it won't paper over the facts.