This weekend, I decided to pay my folks a visit, and my father was completely giddy in the car ride home from the train station. He asked me if I had seen the Jon Stewart show Thursday, trying to contain himself. I hadn't. He started to tell me about it, but stopped, not wanting to spoil it for me. We could watch the re-run on Saturday.
In case you didn't get a chance to see the show, you can watch Jon Stewart interview Jim Cramer in three parts, courtesy of the comedy network.
If you don't know Jim Cramer or his show, Mad Money, know this: he hosts a surreal investment advice show where he reveals trade secrets to investment aficionados. He fields phone calls, has more sound effects than morning radio, says "boo-yah" way too often, and is constantly yelling although he's the only one in the studio.
I could not believe how small and ashamed he looked on the Daily show. With the truth shoved in his face, one of the loudest TV personalities withered away before our eyes. It was a horrible public relations move for Cramer (and CNBC) to make this appearance. We'll always remember the way Jon Stewart carved Cramer up, reducing his trademarked nonsensical yelling to a guilt-ridden whimper. You can't help but feel you're witnessing justice.
I happen to follow American stations much more than the average Canadian, and perhaps even more than the average American. This is partly because of a personal fascination with the US, but also because the quality of their field reporting is exceptional. I find CNN as annoying as the next person, but they're often the first to break a big story. The quality of PBS Frontline makes it quite simply one of the best in-depth news programs I've seen (check out their free podcast and you'll be hooked).
But you get both ends of the spectrum. The garbage that some American networks produce is unprecedented as well. Fox and CNBC compete with each other, showcasing an amazing commitment to TV personalities that are loud and unaccountable.
But don't you wonder - who watches this crap? In this piece, Time magazine pinpoints the Jim Cramer audience: Day Traders
"When ordinary people think about the economy, they think about jobs, college, retirement. Sure, the stock market affects them in the long run — but so do job security and the threat of getting wiped out by health-care bills. When CNBC considers the economy, it means Wall Street's numbers that day, that hour, that minute. CNBC may pay lip service to the long term, but it has the time horizon of a fruit fly."
Cramer's Day Traders might benefit from a little perspective. There's something to be said for how much the investment industry just shrank. It's very tough to make money in equity trading right now. Professional equity traders that still have jobs are struggling to justify their existence.
I've personally seen several hedge funds slash their equity research and trading departments. These were talented equity veterans (day traders that worked for companies). Unfortunately for them, things just got a whole lot simpler. People are only going to invest in companies that are not in distress. And when they find one, they'll leave the money there. The Corporate Cowboys, as well as their stay-at-home counterparts, are no longer in the plan.
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4 comments:
I watched this interview, and you're right that Cramer comes off looking wheedling and beaten. He was also-- like most folks Stewart decides to really go after-- woefully unprepared for the confrontation. You're probably right that this was a PR disaster for Mad Money (a show who's existence I could never understand anyway), but maybe not. I think people want to see some humility from market 'authorities' these days and he looked more like a snivelling brat in detention than a sneering expert who knows better what you should do with your money than you do-- perhaps exactly what his public wants right now. I was also gratified by the deal struck for more responsible financial reporting-- but am too cynical to actually expect results.
Honestly, I’m as skeptical as you when it comes to actually seeing change. But there’s a very real possibility that investments funds like pension plans, endowment funds (basically a whole lot of money that has been pooled by the public) won’t be allowed to invest in risky securities, or invest in hedge funds that specialize in risky securities. If this were to happen, I would be out of a job. But there’s no denying it’s the best course of action if we don’t want to go through this again.
Umar,
Your comment above strikes at something I've been thinking about while idly watching this shitstorm from my rented chair. Those who champion market regulation have a pretty receptive public to pitch their ideas and ideologies at right now, but most of the things being pushed through seem totally reactionary. Take the 'uptick' rule-- well, allowing people to short sell rampantly led to trouble, so we'll make some complicated rules that basically say you can't flip a stock and then buy it back cheaper (for a while). 'Cos that sort of behaviour leads to trouble. And we'll say that funds like those you described can't invest in risky securities or hedge funds that specialize in risky securities. Again, basically trying to create anti-stupidity regulations. I'm not saying that either of these changes would be a bad idea right now-- I'm just wondering how long it will be before those handcuffed by this sort of legislation find some more creative but equally damaging way to be stupid. How much of the regulation that directs the market in a more controlled economy (?) like ours here in Canada is actually based on some sound model of how the market ought (arguably of course) to run, and how much of it consists of these more-or-less arbitrary market "by-laws" which only crop up because somebody made trouble by acting differently?
Not sure if I phrased my question lucidly, but I'm going to stop here before my descent into ramble quickens.
Why get angry at Cramer? Just cos he has a show? Stewart said it himself in part 3 of the interview, it's an infomercial.
Am I to believe that people who listen to Cramer's advice and are pissed that their investments have tanked have reason to be angry with him? Should an investor not do his or her own research and invest with no one but themselves to blame?
People are supposed to be honest? What? Give me a break.
Call me naive. I'm certainly not very knowledgeable about the financial sector. But maybe someone can explain to me why a comedian is attacking an infomercial artist like he's some supposed holder of Truth and Wisdom.
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