This isn't fantasy football, this is our life savings, our retirements going under.
It's difficult not to be disturbed when our news comedy (The Daily Show) becomes a source of real journalism and information about our (fantasy) financial entertainment (Mad Money). Many of us have invested a large portion of earnings over our careers into 401ks and pension plans. We're concerned about the forecasts for the American financial future, and some of us are downright angry at the prospect that we were bamboozled.
A few key quotes
- Stewart:"Now to pretend that this was some sort of crazy once-in-a-lifetime
tsunami that no one could see coming is disingenuous at best and
criminal at worst"
- Cramer:"I got a lot of things wrong because I think it was kind of one in a
million shot, but I don't think anyone should be spared in this
- Cramer:"Absolutely, we could do better, absolutely. There's
shenanigans and we should call them out. Everyone should. I should do a better job at it."
- Stewart:"So, maybe we could remove the 'financial expert' and the 'in Cramer we
trust' and start getting back to fundamentals on the reporting, as
well, and I can go back to making fart noises and funny faces"
There are some positives we can take away from this. As an investing nation we want better journalism when it comes to financial reporting. We want the truth about the companies and brands that we're going to support. As future business owners, responsible company employees, or dedicated free lancers, we never have to be afraid of asking ourselves the question, "Can I do better?"
My two favorite articles on this subject are Cramer vs. Stewart The Daily Show showdown was mesmerizing but not quite satisfying by Troy Patterson, and Final Thoughts On Cramer Vs. Stewart by Jason Linkins for Huffington Post for very different reasons. Troy Patterson's perspective was brilliant and lead me to reading up on Habermas' philosophical theories on capitalism and freedom. Mr. Patterson cut to the heart of the matter without mincing words. Jason Linkins came at the interview from another angle. He built up Jim Cramer's visit as a sort of sacrifice. One almost felt empathy for Cramer for taking the heat and walking into The Daily Show grinder, but I don't think Cramer's the type of guy to back down from a good face to face. Jim Cramer's demeanor was apolegitic, I got the sense that he feels responsible (I believe rightly so) for much of the lost wealth of Americans.
Transcript (thanks to Just Fix it!)
Jon Stewart: How the hell did we end up here, Mr. Cramer? What happened?
Jim Cramer: I don’t know. I don’t know. Big fan of the show. Who’s never said that?
JS: Well, many people. Let me just explain to you very quickly one
thing that is somewhat misinterpreted. This was not directed at you,
per say. I just want you to know that. We threw some banana cream pies
at CNBC. Obviously, you got some schmutz on your jacket from it. Took
I think that everyone could come under criticism from it. I mean, we
all should have seen it more. I mean, admittedly this is a terrible
one. Everyone got it wrong. I got a lot of things wrong because I think
it was kind of one in a million shot. But I don’t think anyone should
be spared in this environment.
JS: So, then, if I may, why were you mad at us?
JS: Because I was under the impression that you thought we were being unfair.
No, you have my friend Joe Nocera on and Joe called me and said, ‘Jim,
do I need to apologize to you?’ and I said, No. We’re fair game. We’re
big network. We’ve been out front. We’ve made mistakes. We have 17
hours of live TV a day to do. But I—
Maybe you could cut down on that. –Audience laughs– So let me tell you
why I think this has caused some attention. It’s the gap between what
CNBC advertises itself as and what it is and the help that people need
to discern this. Let me show you…This is the promo for your show.
–”In Cramer We Trust” promo”–
JS: Isn’t that, you know, look—we are both snake oil salesmen to a certain extent–
JC: I’m not discerning…
we do label the show as snake oil here. Isn’t there a problem with
selling snake oil and labeling it as vitamin tonic and saying that it
cures impetigo etc. etc. etc. Isn’t that the difficulty here?
I think that there are two kids of people. People come out and make
good calls and bad calls that are financial professionals and there are
people who say the only make good calls and they are liars. I try
really hard to make as many good calls as I can.
I think the difference is not good call/bad call. The difference is
real market and unreal market. Let me show you…This is…you ran a hedge
JC: Yes I did.
–December 22, 2006 video of Jim Cramer–
You know a lot of times when I was short at my hedge fund and I was
position short, meaning I needed it down, I would create a level of
activity beforehand that could drive the futures. It doesn’t take much
JS: What does that mean?
JC: Okay, this was a just a hyperbolic example of what people— You had a great piece about short selling earlier.
JS: Yes, I was—
have been trying to reign in short selling, trying to expose what
really happens. This is what goes on, what I’m trying to say is, I
didn’t do this but I’m trying to explain to people this is the
JS: Well, it sounded as if you were talking about that you had done it.
Then I was inarticulate because I did– I barely traded the futures. Let
me say this: I am trying to expose this stuff. Exactly what you guys do
and I am trying to get the regulators to look at it.
JS: That’s very interesting because roll 2:10.
I would encourage anyone who is in the hedge fund unit ‘do it’ because
it is legal. It is a very quick way to make the money and very
satisfying. By the way, no one else in the world would ever admit that
but I do care.
Aaron Task: That’s right and you can say that here.
Unknown: Inaudible means I’m not going to say it on TV.
JC: It’s on TV now (sheepishly)
JS: I want the Jim Cramer on CNBC to protect me from that Jim Cramer.
I think that way you do that is to show—Okay, the regulators watch the
tape, they realize the shenanigans that go on, they can go after this.
Now, they did catch Madoff, that’s a shame.
Now why when you talk about the regulators, why not the financial news
network? That is the whole point of this? CNBC could be an incredibly
powerful tool of illumination for people that believe that there are
two markets: One that has been sold to us as long term. Put your money
in 401ks. Put your money in pensions and just leave it there. Don’t
worry about it. It’s all doing fine. Then, there’s this other market;
this real market that is occurring in the back room. Where giant piles
of money are going in and out and people are trading them and it’s
transactional and it’s fast. But it’s dangerous, it’s ethically dubious
and it hurts that long term market. So what it feels like to us—and I’m
talking purely as a layman—it feels like we are capitalizing your
adventure by our pension and our hard earned money. And that it is a
game that you know. That you know is going on. But that you go on
television as a financial network and pretend isn’t happening.
Okay. First, my first reaction is absolutely we could do better.
Absolutely. There’s shenanigans and we should call them out. Everyone
should. I should do a better job at it. But my second thing is, I talk
about the shorts every single night. I got people in Congress who I’ve
been working with trying to get the uptick rule. It’s a technical thing
but it would cut down a lot of the games that you are talking about.
I’m trying. I’m trying. Am I succeeding? I’m trying.
But the gentleman on that video is a sober rational individual. And the
gentleman on Mad Money is throwing plastic cows through his legs and
shouting “Sell! Sell! Sell!” and then coming on two days later and
going, “I was wrong. You should have bought like–I can’t reconcile the
brilliance and knowledge that you have of the intricacies of the market
with the crazy bull— you do every night. That’s English. That’s
treating people like adults.
JC: How about if I try it? (contrite)
JS: Try what?
JC: Try doing that. I’ll try that.
would be great, but it’s not just you. It’s larger forces at work. It
is this idea that the financial news networks are not just guilty of a
sin of omission but a sin of commission. That they are in bed with
we’re not in bed with them. Come on. I don’t think that’s fair.
Honestly. I think that we try to report the news and I think that
JS: A couple of guys do. This guy Faber.
JC: He’s fabulous, Faber.
JS: And maybe two other guys (Jim Goldman and Eric Bolling … oops, Eric left CNBC)
JC: He’s fabulous and he’s done some things that have really blown the cover off a lot of stuff.
JS: But this thing was ten years in the making.
it’s not going to be fixed tomorrow. But the idea that you could have
on the guys from Bear Sterns and Merrill Lynch, and guys that had
leveraged 35 to 1…
JC: I know.
JS: And then blame mortgage holders. I mean, that’s insane.
never did that. –unintelligible—I’m sorry You’re absolutely right. I
always wish that people would swear themselves in before they came on
the show. I’ve had a lot of CEO’s lie to me on the show. It’s very
painful. I don’t have subpoena power.
JS: But don’t—You’re pretending that you are a doe-eyed innocent. Watch. Roll. I mean, if I may…
JC: It’s your show for Heaven’s sake.
JS: Roll 2:12.
JC: No! Not 2:12! (in sarcastic jest)
JC: You can foment. That’s a violation of…
Aaron Task: Ferment?
You can’t FOE-ment. You can’t create yourself, an impression that a
stock’s down, but you do it anyway because the SEC doesn’t understand
it. That’s the only sense that I would say this is illegal…
JS: Now 2:16
Aaron Task: Another stock that you’re focused on right now is Apple (AAPL)
Yes, Apple is very important to spread the rumor that both Verizon and
AT&T have decided that they don’t like the phone. That’s a very
easy one to do. You also want to spread the rumor that it is not going
to be ready for MacWorld and this is very easy because the people who
write about Apple want that story and you can claim that it is credible
because you spoke to someone at Apple because Apple is—doesn’t
Aaron Task: Apple doesn’t comment (Apple generally follows a “no comment” policy to rumors)
JC: You know.
gotta tell you. I understand that you want to make finance
entertaining, but it’s not a f—ing game. When I watch that I get, I
can’t tell you how angry it makes me because it says to me, “You all
know.” You all know what’s going on. You can draw a straight line from
those shenanigans to the stuff that was being pulled at Bear and at AIG
and all this derivative market stuff that is this weird Wall Street
But Jon, don’t you want guys like me that have been in it to show the
shenanigans? What else can I do? I mean, last night’s show—
No, no, no, no, no. I want desperately for that, but I feel like that’s
not what we’re getting. What we’re getting is… Listen, you 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.
But Dick Fuld who ran Lehman Brothers, called me in when the stock was
at 40 because I thought that the stock was wrong, I thought that it was
the wrong place for it to be. He brings me in, lies to me, lies to me,
lies to me. I’ve known him for twenty years.
JS: The CEO of a company lied to you??!! (shock and sarcastic disbelief)
JC: Shocker … stop trading (sheepish grin)
JS: But isn’t that financial reporting? What do you think is the role of CNBC?
I have called for star chambers—I want kangaroo courts for these guys.
I have not seen any indictments. Where are the indictments? Where is
the indictments for AIG? I told the Justice Department, “Here’s the way
you get the indictment.”
It’s very easy to get on this after the fact. The measure of the
network, and the measure of mess. CNBC could act as—No one is asking
them to be a regulatory agency, but can’t—but whose side are they on?
It feels like they have to reconcile as their audience the Wall Street
traders that are doing this for constant profit on a day-to-day for
short term. These guys companies were on a Sherman’s March through
their companies financed by our 401ks and all the incentives of their
companies were for short term profit. And they burned the f—ing house
down with our money and walked away rich as hell and you guys knew that
that was going on.
have a wall of shame. Why do I have banana cream pies? Because I throw
them at CEOs. Do you know how many times I have pants CEOs on my show?
JS: But this isn’t, as Carly Simon would say, this song ain’t about you.
Okay. All right. You’re right. I don’t want to personalize it. I think
we have reporters who try really hard. We’re not always told the truth.
But most importantly, the market was going up for a long time and our
real sin I think was to believe that it was going to continue to go up
a lot in the face of what you just described. A lot of borrowing. A lot
of shenanigans and I know I did, I’ll bring it up, I didn’t think Bear
Sterns was going to evaporate overnight. I didn’t. I knew the people
who ran it, I always thought they were honest. That was my mistake. I
really did. I thought they were honest. Did I get taken in because I
knew them from before? Maybe to some degree. The guy who came on from
Wachovia (new CEO Robert Steele) was an old friend of mine who helped
JS: But honest or not, in what world is a 35 to 1 leverage position sane?
JC: The world that made you 30% year after year after year beginning from 1999 to 2007 and it became—
JS: But isn’t that part of the problem? Selling this idea that you
don’t have to do anything. Anytime you sell people the idea that sit
back and you’ll get 10 to 20 percent on your money, don’t you always
know that that’s going to be a lie? When are we going to realize in
this country that our wealth is work. That we’re workers and by selling
this idea that of “Hey man, I’ll teach you how to be rich.” How is that
any different than an infomercial?
Well, I think that your goal should always be to try to expose the fact
that there is no easy money. I wish I had found Madoff (sp?)—
JS: But there are literally shows called “Fast Money.”
JC: I think that people…There’s a market for it and you give it to them.
and there’s a market for cocaine and hookers! What is the
responsibility of the people who cover Wall Street? Who are you
responsible to? The people with the 401ks and the pensions and the
general public or the Wall Street traders, and by the way this casts an
aspersion on all of Wall Street when I know that’s unfair as well. The
majority of those guys are working their asses off. They’re really
bright guys. I know a lot of them. They’re just trying to do the right
thing and they’re getting f—ed in the ass, too.
True. True. I think as a network we produce a lot of interviews where I
think that we have been—there have been people who have not told the
truth. Should we have been constantly pointing out the mistakes that
were made? Absolutely. I truly wish we had done more. I think that we
have been very tough on the previous Treasury Secretary (Hank Paulson),
very tough on the previous administration how they didn’t get it, very
tough on Ben Bernanke. But at the same time.
JS: But he’s the guy who wrote the rule that allowed people to over-leverage.
I trash him every night. I’ve called him a liar on TV. What am I going
to do? Should we all call him liars? I’m a commentator. We have—and you
can take issues with the fact that I throw bulls and bears and I can
still be considered serious.
I’m not Eric Sevareid. I’m not Edward R. Murrow. I’m a guy trying to do
an entertainment show about business for people to watch. But it’s
difficult to have a reporter to say I just came from an interview with
Hank Paulson and he lied his darn fool head off. It’s difficult. I
think it challenges the boundaries.
Yeah. I’m under the assumption, and maybe this is purely ridiculous,
but I’m under the assumption that you don’t just take their word for it
at face value. That you actually then go around and try and figure it
out. So, again, you now have become the face of this and that is
I wish I had done a better job trying to figure out the 30 to 1 and
whether it was going to blow up. It did. Once it did I was late it
saying it was bad.
So maybe we could remove the financial expert and the “In Cramer we
Trust” and start getting back to fundamentals on reporting as well and
I can go back to making fart noises and funny faces.
JC: I think we make that deal right here.
JS: Mad Money airs on CNBC weeknights at six.