CNBC Protects Jim Cramer

In the following clip, which doesn't seem to be available on CNBC's website, a guy named Sylvain Raynes had the audacity to suggest that CNBC's previous guests had been acting as PR guys for Goldman. This provoked outrage from Jim Cramer and a firm admonishment from Erin Burnett. No doubt he will never be asked again.



Unfortunately the clip doesn't show all of Cramer's comments which were critical of the suckers who bought the CDO's. Cramer referenced his days as a hedge fund manager and said the the buyers should have understood that there was someone on the other side of the trade who might not be interested in the buyer's welfare.

This is of course bullshit. As a professional trader, I understand that when I trade options or futures the guy on the other side of the trade is hoping that I will lose money on it. However, this is not the case with all investments. When I buy a stock, the guy on the other side may be completely indifferent to whether I make money on the purchase since he is simply selling the stock because he needs the money for something else. If I purchase a mortgage backed security, the guy who is ultimately on the other side is the guy who borrowed the money to buy a house and he is hoping that I will get my money back.

This case is completely different though. This is like a case where I buy shares in a mutual fund and the guy who is managing the fund, i.e., the guy to whom I am paying a fee to pick the stocks that the fund will buy, is shorting those same stocks in his personal account. Anyone who defends that kind of conduct rightly deserves to be considered a shill for Wall Street

Erin Burnett: CNBC's Twit of the Day 3/10/09

Erin Burnett gets my vote for CNBC’s biggest twit today although her twittiness was on display on NBC’s Today Show rather than her usual gig on CNBC’s Street Signs. Burnett appeared with CNBC’s Jim Cramer who was struggling to defend himself against another beat down from Jon Stewart on The Daily Show. In a column on MainStreet.com, Cramer had accused Stewart of taking his comments about Bear Stearns out of context. Cramer said that he had not been encouraging viewers to buy Bear Stearns stock one week before it collapsed as the clip played on The Daily Show implied; he had merely assured viewers with accounts at Bear Stearns that the money and securities in those accounts were safe. Stewart acknowledged the error, but the Daily Show’s researchers found that Cramer had recommended Bear Stearns stock at $69

Ever Cramer's loyal side kick, Burnett piped in with “Just to defend you Jim: Jim has to go out everyday and make these calls.”

Apparently, for Erin Burnett, the fact that Cramer gets paid to go out and shoot off his mouth about stocks everyday absolves him for any responsibility for pretending to know more than he really knows. I suppose that same logic would absolve all the mortgage brokers who sold subprime loans to unqualified home buyers. After all, they had to go out and recommend negative-amortization/interest-only/no-down-payment/teaser-rate loans to fools because that was what they were getting paid to do.

Burnett’s logic is actually quite consistent. Nobody should complain about China selling poisonous products because people are willing to pay for them. Nobody should complain about Cramer talking out of his ass because CNBC is willing to pay him to do it.

CNBC: Dumber Than a Bag of Hammers

The gutting that the Daily Show gave CNBC last Wednesday inspired me to look for what I had recalled as the stupidest thing I had ever heard from one of its on-air infotainers. Amazingly, when I watched the video, it was even stupider than I remembered.



Here is what Burnett had to say:

I think people should be careful what they wish for on China. You know if China
were to revalue its currency or China is to start making toys that don’t have
lead in them or food that isn’t poisonous, their costs of production are going
to go up. That means prices at WalMart here in the United States are going to go
up, too. So I would say China is our greatest friend right now. They’re keeping
prices low and they're keeping prices for mortgages low.

In my mind, I recalled that this was the implication of whatever comments she had made; I suppose because I could not believe that she would have been so stupid as to say it explicitly. She did though.

I was originally going to title this post "The Stupidest Thing I Ever Heard on CNBC," but Burnett is disqualified on a technicality: she made the statement to Chris Matthews on MSNBC.