Stewart v. Cramer: Jon Sums up CNBC and Wall Street, Jim Appears Humbly Apologetic

by Deb Cupples |  When I watched video clips showing CNBC personality Jim Cramer essentially hyping Bear Stearns stocks in the days and weeks before the Bear imploded, I could not help thinking of Jack Grubman, the superstar telecom-stock "analyst" who hyped WorldCom stocks to trusting investors even as that company headed toward bankruptcy. 

(Grubman worked for Citigroup's trading arm, and his hyping of WorldCom stock reportedly helped Citigroup's investment-banking arm continue getting WorldCom's very lucrative business.)

In Part three of Jon Stewart's interview of Jim Cramer (posted after the jump), Stewart said two things that really hit home with me -- and, I hope, with millions of potential stock investors:

"You [CNBC's financial reporters] knew what the banks were doing and yet were touting it for months and months.  The entire network was.  And so now to pretend that this was some sort of crazy, once in a lifetime tsunami that nobody could have seen coming is disingenuous at best and criminal at worst.... [and]

"These guys at these companies were on a Sherman’s march through their companies financed by our 401-Ks, and all the incentives of their companies were for short term profit, and they burned the fucking house down with our money and walked away rich as hell.  And you guys [CNBC's financial reporters] knew that that was going on."

Mr. Cramer did not even try to deny this -- which is telling.  Throughout the interview, in fact, Mr. Cramer behaved in an uncharacteristically meek and apologetic way.

Andrew Sullivan also noticed Cramer's odd behavior:

"The reason he [Cramer] crumbled last night, I think, is because deep down, he knows Stewart's right. He isn't that television clown all the way down. And deeper down, he knows it's not all a game - not now they've run off with grandpa's retirement money."

I've read posts from other bloggers who seem to agree with Mr. Sullivan.  I agree that Cramer "crumbled," but I suspect something other than such generous-spirited explanations. 

First, Mr. Cramer's credibility as a financial commentator started spiraling downward on the day that Jon Stewart began criticizing him. 

Second, CNBC's credibility started spiraling downward on the day that Jon Stewart fbegan criticizing Cramer and other CNBC financial commentators.

Those facts, alone, seem reason enough for Cramer to appear on Stewart's show sporting a humble, mea-culpa attitude.  Admitting mistakes and apologizing is a far better public-relations tactic than going in with guns blazing while lacking substantive ammunition.

In those video clips that The Daily Show ran a few days before the big interview, it certainly seems that Mr. Cramer was hyping Bear Stearns stocks -- especially when Cramer told a woman-interviewer (whose name I don't know) that he was asking audience members to buy Bear.  The video clip was cut off just after the woman-interviewer said "buy Bear" (or maybe she said, "bye Bear," as in, she'd nicknamed Mr. Cramer "bear").

I wonder whether Mr. Cramer (or any company he was associated with)  had interests in Bear Stearns stocks at that time, which makes me wonder if Mr. Cramer (or any companies he was associated with) benefited financially from any effects of Mr. Cramer's apparent hyping of Bear stocks.

If so, I wonder whether Mr. Cramer's apparent hyping violated any securities laws or SEC regulations. 

If so, then Mr. Cramer's performance on Jon Stewart's show on Thursday might have been  an attempt to clean up any evidence against Mr. Cramer that the SEC might collect  -- if Mr. Cramer has given the SEC cause to investigate him.

Incidentally, Gawker recently ran a piece (with links) called The Jim Cramer Indictment: Five More Counts, which highlights five instances from 1995-2006, in which Mr. Cramer seemed to use his media connections to personally enrich himself -- likely at ordinary investors' expense.

Oddly enough, the day after Mr. Cramer crashed and burned on Stewart's show, the CEO of TheStreet.com (Cramer's financial "news" site) quit -- effectively immediately, without publicly giving a reason. 

Media Bistro tells us that the powers that be at MSNBC (CNBC's sibling network) instructed MSNBC personalities to downplay or ignore the Stewart-Cramer interview -- and that the interview was given only two mentions yesterday on CNBC.

Sometimes silence is deafening, as they say.

Unfortunately, some of the people who should have remained silent didn't, which means that some commentary on the Stewart-Cramer video is irrational to the point of idiotic.  By that, I mean some comments obviously came from people who --

1) Didn't watch the entire interview,

2) Did watch it but failed to pay close attention, or

3) Watched it but were forced to twist or omit important pieces of dialog in order to either defend Cramer or attack Stewart.

For examples, see The Atlantic's Meghan McCardle, the New York Times' Alessandra Stanley,  U.S. News' blog Capital Commerce.

As promised, Part 3 of Stewart's interview is below.

The Daily Show With Jon StewartM - Th 11p / 10c

Jim Cramer Unedited Interview Pt. 3

Daily Show Full Episodes
Important Things w/ Demetri Martin

Political Humor
Jim Cramer

Memeorandum has tons of commentary.

Other Buck Naked Politics Posts:

* Real Bonuses Based on Fake Profits

* Report: How Lobbyists & Politicians Caused Financial Meltdown

* Politicians Still dancing for Banks: Citigroup's Repeated Rescues

* Taxes: Media Manipulate People To Speak Against Their Own Interests

* ABC News: Treasury Official Helped Bank Commit Fraud?

* Media Fails to Cover Economists Who Want Bigger Stimulus Package

.

Comments

[billkav]

Deb,

Great post!

Cramer's defenders are going to have a tough time, no matter how little coverage his network gives the Stewart story. It's amazing how much we end up relying over and over on a comedian to speak the truth about how bad our television journalism has become (I harken back to his CNN appearance some years back on Crossfire.)

I would certainly agree with your assessment of Alessandra Stanley's Times piece about the Stewart interview. It essentially tries to sweep Stewart's charges under the rug by saying, "He's angry, not funny."

I hope the whole affair leads to some serious housecleaning at CNBC. Cramer's far from the only one there selling snake oil.

[Deb]

HI bill,

Thanks. It's no surprise that we agree on this. :)

When you get a chance, I hope you'll send an email and tell me how you're doing.

[flowerplough]

Great work, Mr. Liebowitz. Keep breaking new ground like this and you may want to think about using your real name on The Daily Show. Kinda like how Johnny Cougar, over time, became John Cougar Mellencamp, and then just John Mellencamp... And might I suggest Bawney Fwank, D-Massachusetts, Democrat Chair of the Financial Services Committee, first House member to come out of the closet voluntarily, and also the first member of the House to be censured for providing the apartment out of which a gay boyfriend ran a gay prostitution ring, for the next big Gotcha? "These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing," he said in September of 2003. Oughta make another great show. You could splice Fwank's Fannie/Freddie boostering with footage of him refusing to comment on his consummated (yuck!) relationship with former assistant director for product initiatives at Fannie Mae, Herb Moses.

[Deb]

HI Flower,

Interesting points, but none of it has to do with what Mr. Stewart (or whatever his name is) managed to get Mr. Cramer to ADMIT before God and everyone about how ordinary shareholders have been screwed not only by big market players but also by the financial media.

As someone who's periodically studied corporate corruption and securities fraud cases since Enron's fall, none of what happened in the interview was news to me. But most Americans likely don't make a hobby of those topics.

Anyway, if you own stocks or mutual funds, this should concern you -- unless, of course, you're one of the big market players who actually benefited from the shenanigans.

If you're that financially secure, I'm glad for you.

[DAMOZEL]

What is your point, Flower? Why are conservatives always pointing out that his name is Leibovitz? Who the hell cares what his real name is?

I don't imagine you're called Flowerplough really any more than I'm called Damozel. Are you trying to say that it matters in some way that he's Jewish or that Barney Frank is gay?

It might matter to you. It doesn't matter a bit to me.

[Flowerplough]

Deb AND her Dam... the rapid response team. One says hi and the other seems to be screaming at me...

So Jewishness/gayness don't matter, check. Got it. Already knew that. I mean, the guy who christened Barack the "Magic Negro", David Ehrenstein, might well be both Jewish and gay. Barney's gay whorehouse apartment thing, that does bug me a little, I guess, but we does choose our own leaders, don't we? Guess I choose someone besides Mr. Big-Government-Gay-boyfriend-whorehouse-apartment/Gay-lover-working-for-Fannie-whilst-I'm-mandating-Affirmative-action-ARMs.

And thanks for being glad for me and my finances, Deb. I've always viewed stocks and mutual funds skeptically, even as I invested. Kinda like the old "Animal House" frat movie: "You f**ked up! You trusted us!"

[DAMOZEL]

I know how you feel, Flower. I feel the same way about Senator Vitter and Rush Limbaugh.

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