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The Freeware Hall Of Fame

The Econ-babble industry
Home of fairy tale capitalism
"What isn't bull shit, is bear shit."

What is a hedge fund? A Ponzi scheme with better management.

Page last caressed June 22, 2019

10-Second Investor Aptitude Test. Take it now?

Rey Barry's observations:
The second most effective inoculation to keep ethics from infecting business is the IPO;
The most effective is an investor takeover.

Corrupt is when earning a dollar is more important than how.

Wall Street is where bad people drove out good, as the good predicted.

John Maynard Keynes' real-life words of comfort:
"In the long run we are all dead"


If the devil incorporated, she'd be GE. Will NBC undergo a change - better or worse - under Comcast control? Sorry for the bad news, but Comcast demonstrates less regard for attention to detail than GE. And where GE was willing to pay for technology, Comcast is, to coin a phrase, cheap as shit.


One thing to be said about the CNBC and Bloomburg econ-babble industry: it is never non-plussed. These folks will speculate till the cows return about what happened, why, and might. They spin their wheels going nowhere but they aren't being paid to get anywhere. They are paid to babble.

A well-known fundamental difference between feminine and masculine thought patterns is that females enjoy discussing problems while males focus on solving them. The econ-babble industry invites feminine, and what began long ago on the Financial Channel as an all-male specialty is now close to swinging completely the other way. Bloomberg especially verges on being not only all female, but all Asian-American.

So long as people are well-paid and feel appreciated, they will run on an endless treadmill.

In this era when, for the public, ALL uninsured investments involve non-tolerable risk, econ-babble is sit-down comedy. Channel hosts niggle about what separates a bad choice from a worse one. Guests have but one aim: to downplay, even ridicule, near-term expectations.

In desperation to keep a commissions stream alive, they sell hope, not value. Salesmen know the stock we buy today will drop in price in the short term. Customers must wait for a reward, if it ever comes. Brokers will not. They insist on the commisson up front before the wisdom of the investment is known.

Like Popeye's friend Wimpy, brokers will gladly pay us Tuesday for a hamburger today.

In desperation, hosts like limey Simon Hobbs whose specialty is asking pointless speculative questions generating pointless responses ("What do you think will happen next week?") was moved from cameo reporter in the UK to a host desk in the US.

In a recession, no less than in other times, CNBC's guest Wall St. analysts, the snake oil salesmen of our time, are pathetic. They make CNBC a humor channel.

"I think energy will be important for the next few years," is a typical (and actual) insight from a hack who will get a million dollar bonus this year.

And another gem of wisdom: "Down the road we can look for improvement." (But don't ask for details.)

That's what fills the void when the horizon is bleak wherever you look.

With all the time in the world to tell the story, CNBC devotes not one second to exposing Wall Street evils. If mentioned at all, it is by defenders insisting there's nothing evil about greed, downsizing, spreading false rumor to benefit short-sellers, corporate raiders, take-unders. The field of ethics ceased to exist for Wall Street long ago, around the time Bob Salomon left the business.

Where money is, bad people drive out good.

Nor will econ-babble TV reveal bad practices by advertisers who support them.

For example, long-term sponsor TDAmeritrade knowingly and intentionally emails insecure communications to customers byte-for-byte identical to email spoofs sent by underworld account thieves. The firm knows they should never put an active Logon URL in email yet refuses to stop doing it despite paying a huge fine to the SEC for cyber security violations. In effect the SEC said TDAmeritade is too stupid to be trusted with our money.

You never hear about such things on CNBC or Bloomberg. Econ-babble is there to serve the Plucker, not the Pluckee.

CNBC has always been a delightful cast of rumor mongers paid to speculate why Wall Street is what it is. Predict? Like the WSJ, Barrons, etc., CNBC assigns people to re-discover day after day hypothetical futures they nullify with "on the other hand."

There is one CNBC staffer, only one, who goes on record recommending stocks. As befits his circus approach, his record looks good only when distorted. Nothing motley about Jim Cramer, snake oil head honcho. Preaching to an audience taking a break from MTV and undecided about astrology or the virgin birth, Cramer says one thing one minute, a contrary thing the next. Such is his sincereity that adoring fans don't care. In their minds they are this far from a famous hedge fund manager whose books they own.

I think it was Dec. 29 when Jim responded to a female caller asking if she should sell a stock that had doubled since she bought it. His response: No one ever regretted taking profits. That was it; no further guidance.

Not five minutes later he told us of his experience with AAPL which he bought low and sold when it rose five points, taking his profits. AAPL then went on to rise 200 more points without Cramer along for the ride, and he had plenty of regrets over taking profits. Jim knows, whether trading or investing, we cannot determine the best time to sell. The stock market has the logic and predictability of astrology, ie. imaginary.

It's not Jim's fault his generic buy/sell advice and his cherry-picked hindsights are nearly all BS. BS is the heart of econ babble. If you cover all possible bases day after day as these guys do, down the road you can prove you "got it right" no matter how things turn out. Even Steve Forbes or a Merrill Lynch newsletter or a stopped clock can point to when they got it right. (Ok, not Forbes or fellow chowderhead, Lyndon LaRouche. Being wrong is their religion.)

On the other hand Cramer does have wall-to-wall integrity and at this time in his life really cares about you and me. He's at one end of the continuum, Cocksure Kudlow at the other. Cramer is the only voice on CNBC to constantly remind viewers that risk is always a front burner issue.

These days, the visiting guests who come on braying about a great future for their biggest losers tout stocks available on the cheap the way a car salesman recommends an "extra clean" special, ignoring the rusty frame.

CNBC competes in coverage of our financial world with the Bloomberg channel. Bloomberg's presentation seeks to be adult and professional. Once it lacked CNBC's on-air charmers but in 2008 it saw the light and let its own amazing talent shine.

A few years ago CNBC lost sight of professionalism in packaging. Computer-generated noise, light shows, genie graphics, etc. reduced CNBC to the carnival midway we see today. In 2011 Bloomberg started down that road, lathering the screen with confusing scroll lines, and rolling a random cycle of astoundingly unimportant headlines probably plucked from a news wire by robotics. Does no one there see the need for a knowledgeable editor?

For Bloomberg that came as a surprise, but was to be expected at NBC under the thumb of greed meister General Electric. Artists, educators, technicians, entertainers were lashed to maximize profits, promote Republicans, undercut Democrats. Bloomberg's goals are apolitical; it's methods include something unknown at NBC: refinement.

For example, at 10 AM on a typical Saturday CNBC will be running an infomercial with gruesome graphics for a habit-forming laxative targeted to suggestible hypochondriacs. Bloomberg will be running a superbly edited interview with an orchestra conductor about his new, state-of-the-art concert hall.

And not the insipid pap we get from A&E, Bravo, USA, and other smart monkey channels that program sophomoric formula shows like "America's Castles." Bloomberg is the real thing, using scripts that would be at home in The New Yorker.

NBC under GE has no vestige of that. Years ago GE closed down NBC's structure to produce quality programming.

After GE took control they let CNBC's reputation ride on ads such as the one for black scalp polish to hide baldness. That example of viewer disrespect gave insight into GE corporate culture. No standards of quality. If it pays, it plays.

And then there's rage. Rage is when CNBC interrupts mature programming to present vacuous prattle endowing half-formed ideas with barbarisms ranted loudly all at once by everyone in the room.

Mock tantrums and free-for-all cacophony is adult broadcasting in who's view? Oh, right, Jim Cramer, patronizing saint of the yahoo investor, and Cocksure Kudlow.

While GE gets paid to insult viewers with moronic commercials, "Rage" they do for free. What kind of focus group encouraged this? Surely not Squawk Box viewers or anyone who might be. This is programming by people impressed by scalp polish.

CNBC's flagship Squawk Box was cleaved Dec. 18, 2005, into two programs using the Squawk name, one from 6 to 9 AM, the other from 9 to 10, 11, whatever. The first part is a round table. The second is a broadcast live from the New York Stock Exchange.

Mark Haines (RIP) was tossed as Squawk Box host, deputized to boosting the NYSE from 9 to 10, then another hour to be bubbly and enthusiastic. They crammed Mark into a format with Liz Claman, queen of cliches, someone who could make me mute a live broadcast of the Hindenberg disaster. Someone at NBC also felt that way, and Liz was replaced by spectacular Erin Burnett, the brightest flower from the Bloomburg garden and a terrific addition to CNBC's revered Hibernian Hall. (Claman went to Fox.)

Squawk on the Floor reflects that TV can wangle space inside the NYSE and wander around with a cam. That may impress an agency time buyer, but there's no one on the floor worth hearing anymore. No market genius, no eloquence, little wit, little charm.

The concept, and here comes pussy out of the bag, is to seek market insight and prediction by interviewing grunts whose life work is filling buy and sell orders.

Everything these floor folks tell the audience they learned reading the morning's WSJ. Is it any wonder it sounds familiar?

GE's company culture of idolizing ignorance is liable to pop up anytime. They dumbed down Cocksure Kudlow, GE's pet right-wing economist who made up his mind and no longer uses it. They air ego trips for Kudlow that make Jim Cramer look almost ruminative.

Some months before the Squawk squeeze, the regular cast of Joe Kernen and David Faber was enlarged to include a splendid new addition, Becky Quick. Becky fit seamlessly into the Hibernian Hall collegiality of old Squawk Box and new. She has wit, investment training, street smarts, an attitude tactfully expressed, and a pleasing on-air presence and voice. She is often the first voice of reason and always a voice of sense. Long may she grace the table, and grace it she does.

Rounding out the new talent is a first-rate broadcast professional, Carl Quintanilla, an amazing fit to the Squawk Box team.

Faber is a reporter with a huge Rolodex and a obligation to report news on a schedule, whether he finds any or not. The camera likes him.

Kernen is an example of what GE/NBC can do to you. Congenial, science-trained at MIT, exceptional charisma, he was the convivial savant who explained bio and health companies as no one else could. Then came word to drop the educated shit and stick to opinions, aggressively stepping on other speakers to do it. Joe, it turned out, had training but not discernment. He was a right winger wallowing in the imbalance for which FOX is famous. Under GE, he became the fair-haired lackey.

Squawk's frequent reports from the Chicago Board of Trade are amazing. Rick Santelli's grasp of things is breath-taking. Rick is visiting us from an advanced planet. And he's such a straight arrow he's probably not invested. But Rick, more than anyone else on cable, even more than Steve Forbes, would impoverish the many to benefit the few. That's a GE requirement at CNBC and Rick swears by it.

Every week day thousands of people in the investment industry or wannabe, mute clicker in hand, start watching CNBC before the US stock market opens. It's how to pick up business info delivered with insight, humor, intelligence, and repetitiveness. Above all repetitiveness.

What especially elevates CNBC is Squawk Box, a unique weekday morning of surprises. What flies out is sometimes a screaming warning to get out of the market, but everyone will say exactly the opposite.

These are entertaining people, but under GE's NBC they are in the trade Toulouse-Lautrec found entertaining. Every day presents scores of examples. For instance, Haines is college educated and a law school graduate, yet he can look at a cue sheet showing that prices of petroleum products are at record highs, oil company profits are at record highs, and not make a connection.

CNBC will invite oil industry spinstress Trilby Lundberg to explain that pump prices or heating oil rose because of OPEC and a hail storm in Montana, and she is thanked for her candor. CNBC will kiss Trilby's ass to be the first to air the Lundberg Letter's horse puckey of the day.

On Sept. 15, 2003 Squawk Box put an oil industry spokesman on who related that the average price of gasoline rose an unprecedented 21 cents in August due to ... the east coast power failure. On the screen was the daily chart of gas prices for August. It clearly showed most of the increase came days before the blackout. No one at CNBC asked about that.

If intellectual prostitution were funny CNBC would be a comedy channel.

500-pound liars get their way on CNBC. On June 2, 2004, the chairman of profit-bloated Pfizer, then the world's largest drug maker, was asked in a Squawk Box interview if there would ever be competition in the retail drug industry.

Hank McKinnell's stupefying reply: "There is competition. Surveys show that in every city in the United States there is a 100% range of drug prices." No one asked him to explain that gibberish.

When McKinnell said Pfizer was using it's billions in excess profits to buy back company stock rather than address the back-breaking cost of its drugs, no one at Squawk Box even sighed.

McKinnell is also chair of the Pharmaceutical Research and Manufacturers of America (PhRMA), the vicious PAC that reportedly has two full-time lobbyists assigned to each member of Congress. Misleading Congress and lavish "campaign contributions" never came up in the CNBC interview.

A third example. Internet search engine Google went from being privately held to publicly owned by issuing stock. This meant they changed masters. A company that was indebted to its users for success switched abruptly to being answerable to Wall Street for profit growth at any cost. "What do users want?" was replaced by "What will Wall Street like?"

[2012 insert] In June 2009, Google welcomed James Whittaker as its newest Test Director. In February 2012, Whittaker left Google, and explained why.

"The Google I was passionate about was a technology company that empowered its employees to innovate. The Google I left was an advertising company with a single corporate-mandated focus ... earnings." [end]

You won't hear that on CNBC when a company goes public. Capitalism's very serious downsides are ignored totally. The most you might hear is childish wonder if going public will "change" the company. That truth is off-limits on US TV, even PBS.

Equally, it is of no concern to these folks that a government initiative will increase jobs or job security. Labor does not have a viewpoint on CNBC, only owners and managers.

And not even they always count. This was evident when "Chainsaw Al" Dunlap, a ruthless corporate downsizer known as "Rambo in Pinstripes," took over Sunbeam Corporation in the 90s. He destroyed labor, management, the board of directors, then Sunbeam itself, and in his visits to Squawk Box never faced less than a glorious homecoming. If Squawk Box needs a motto, "Fuck the People" expresses it well.

The most effective inoculation to keep ethics from infecting business is the IPO. Taking the company public blunts the values that built the company, replacing them with the Wall Street mantra, "what have you done for me lately." That's all explained elsewhere on this site in the 2 cows file.

A few years ago we saw a reciprocal of that, public companies sitting on mountains of cash being taken over by private investors. They bribe stockholders to sell out using cash they plan to take from the company. Later when the climate is right they will IPO back to stockholders the company name and the weak sister assets they didn't sell off. If nothing is left but the name, like happened to Zenith, Emerson, etc., they sell that trademark offshore, often to people who re-sell it.

RCA, a favorite brand among the "Buy American" crowd, stopped being American in the 80s. Currently the Chinese control it. A French company sold it to them. Who sold it to the French? None other than GE, which took over RCA in 1986, chain sawed it into pieces, and sold the RCA manufacturing rights to the French.

Observers bemoan that Wall Street sucks up profits without creating anything, but in one way that's not true. Wall Street creates the businesses that fuel Wall Street, a global industry. Not just anyone can wipe out the retirement accounts of 50,000 employees, make money doing it, and celebrate by getting a huge Xmas/Chanukah bonus. You need the help of Wall Street funded expertise.

[What follows is history written years ago. Inaccurate now, but it shows where Squawk Box came from.]

Squawk Box anchor Haines is the unsung hero of Cable TV. In my years of TV viewing since 1947 I've never seen a better anchor. Avuncular in the Cronkite mold, but an informed, interactive participant. The opposite of a channel gas bag, Haines has a knack for analysis without losing sight of production values. Ambience springs from Haines. The more he participates, the better the show.

When he occasionally had a guest from the consumer side of the aisle or anyone on the left, he eviscerated them with sometimes uncontrollable gusto. These became memorable TV cameos.

Some of the guest co-hosts have little or nothing useful to say. Even respected analysts can talk like salesmen. To these fellas there are but two categories of stock: one to buy now and one to buy later. Names everyone on Wall Street knows and respects may come across no better informed than a commission-driven broker in Nebraska.

There was a wider variety of guests in the mid-90s. Old school iconoclasts like Meyer Berman and Yale Hirsch who brought a touch of circus; former pillars of the industry like Bob Salomon giving us a glimpse of Wall Street's bygone integrity. Today's CNBC producers may see those as youthful Squawk Box indiscretions. A pity. They provided the spice. Without them, today's hamburger and fries make a bland serving, and "Rage" adds e-coli to it.

Guests invited for interviews all have impressive titles. Few give impressive advice.

Hearing a flak from Bank of America Securities talk about stocks makes you realize these folks are today's medicine men. Guest interviews are today's version of whooping and dancing to make it rain. The bank's "Chief Investment Strategist" (impressive title) came on Squawk Box to perform incantations in hopes the great stock god would favor him. There's no better explanation for the unmitigated malarky Thomas McManus handed us for five full minutes one Bastille Day.

General Electric owns NBC, CNBC has a working partnership with Dow Jones, and politics comes in one flavor: big business Republican. Plutocracy. The supply side is us, consumers are them, and don't forget it. So CNBC never heard of, for example, the oil cartel.

This is not too different from Rupert Murdoch's Faux News "We distort; you decide" but with a decade or two older cast not freaky with insecurity.

A career at CNBC means being comfortable with fairy tale capitalism. America's myths continue unabated.

They also editorialize without saying so. They are heavy users of stock price charts. By choosing how to base a chart, the same data can make a company stock look stable and safe, or wildly gyrating and risky. There's no visible sign of chart standardization.

For example, if a stock varies between 12 and 14 over a 3-month period, charting this against a graph whose bottom is 11 and whose top is 14 will create a chart with steep curves associated with volatility and risk. If the chart bottom had been zero and the chart top 25, the graph would have accurately reflected stability.

To make a shaky stock appear stable, they may display a 5-year chart with a zero base and a 120 top. A 20-point drop in the last two months, evidence of large-scale dumping, is all but imperceptible on that chart.

It's not necessary to watch all of Squawk Box. The game plan is to re-hash and update the main news every half hour. No matter when you turn Squawk on you'll hear updates in under 30 minutes on anything that matters. The banter, the humor, and the updates keep it from becoming stale. There's a ton of savvy entertainment here.

The quality comes through because the techies behind the glass are 1st rate. This is the smoothest live TV in history. The screen is ablaze with distracting, jittery motion to feign a powerful control center. CNBC controls bupkes, but by strobing lights on the screen and counting the time ticking down by flashing it in hundredths of a second, it screams Busy! Dynamic!

Squawk is generally over-commercialized to the point of pain. Over and over it's two or three spots, 20 seconds of someone clucking at us to stay tuned, then two or three more, which have been followed by yet more. You can safely channel surf at least 4 minutes before "We're back."

Demographics and focus groups must favor patronizing or vacuous ads for this target audience because most of these ads are patronizing or vacuous in addition to insulting, which is a given.

At its worst it included that ad for black scalp polish to hide baldness. Not an oversight that slipped through, that one ran for six months. If you can afford (or trade out?) GE's price of admission, you can be "as seen on CNBC." GE ownership means there is no clash between production values and earning a buck. There is only the buck.

TV, like radio, is where to put my 50-year observation to the test: "The longer the ad, the less inspired the message."

GE's greed for income appears to include selling editorial content.

An example is Donald Trump. Trump Hotels was once gushed by CNBC to such an extreme it looked like a 1-day infomercial for the Donald. Perhaps it was, but it wasn't labeled that. The Donald was just there every few hours, welcomed like royalty and trumpeting his stock. Even the underwriters must have blushed.

Investors weren't fooled. Donald was there because his watered stock was tanking and it continued to tank on horrid fundamentals.

We learned years later, in 2004 with The Apprentice, that GE and Trump are deeply enmeshed, though just how remains a mystery. Not only was The Apprentice aired to provide artificial glitz to boost badly performing Trump stocks, but it is GE - not Trump - paying that $250,000 annual salary to the winner!

Maybe Trump took a cue from Rick in Casablanca, and lets NBC/GE boss Robert C. Wright win at roulette.

CNBC once gave over an entire day including Squawk Box to a newly-released Lucasfilm movie. For fully 15% of the time between 7 AM and 10, the name of the film was in a banner ad at the bottom of the screen, or there was a filmdom interview on, or the film was the topic of air staff banter. None of the hype was labeled as advertising. It was passed off as news.

Lucasfilm is privately held. Was GE apple polishing while trying quietly to buy it?

Eastman Kodak was another firm that benefited from CNBC hype. Rather than examine its new business plan for the digital era, CNBC heartily endorsed it with no key questions asked. Yet there were glaring questions to be raised the Squawk Box regulars were aware of.

No one asked the Kodak CEO what the new plan would do to photo processing fees, despite the expectation they would rise substantially. No one asked if the company test marketed the plan that consumers would pay Kodak for what they could do themselves for nothing on their home printer. By not asking, Squawk could gush fantasy over Kodak's future while viewers screamed in unheard anguish.

When Kodak implemented this improbable business plan, it bombed and their stock fell from 80 to 20. The company was dropped from the list of 30 stocks comprising the Dow Jones Industrial Average. Caveat emptor. If glaring, obvious issues aren't raised, you're being conned by CNBC.

CNBC is devoted to the financials market from before sunrise in the east to after sunset in the west. It's live TV. Every minute of every hour must be filled with either talk or ads.

There's nowhere near that much news so much of the talk is just talk. Professional prattle, not infrequently self-serving misinformation from reliable sources, delivered with "Wall Street integrity and sincerity."

There's a ton of gossip masquerading as news, and a ton of speculation.

Don't expect it to move the market often. Data show 1% of American stockholders hold 47% of the market's total value. They make it move. They set the agenda. 80% of American stockholders have 4% of the value. CNBC aims at that 4%.

To be missed: the daily parade of guest financial advisors touting or slamming stocks or predicting market direction. Most are short as well as long. They own Futures and Leaps, Puts and Calls, Straddles and Hedges. They have no fiduciary relationship to you. Unless you're invested in the markets and derivatives they are, acting on these interviews will cost you. Fall for their hidden agenda and lose your shirt.

It's one way Wall Street drudges make money, sounding profound and relying on perception to change reality. Appearing on CNBC is self-serving. Don't fall for it.

At GE the suits upstairs make decisions suits make. For example, they copycat other channels to try to keep viewers from straying. That includes a useless weather component describing the entire nation's weather in 30 seconds. They changed that to a useful mention of the major airports reporting delays, or might. Then they changed it back to useless.

GE culture sets the ground rules for all the NBC channels. "Corporations Before People" dominates that culture. GE is very likely the major mover of jobs off-shore, so little is said about that. In fact, GE was the first company to require even its suppliers to out-source off shore, as GE's former CEO Jack Welsh bragged to Haines on CNBC.

On NBC, American jobs are lost because, golly gosh, shit happens.

After 10 AM Squawk Box is over and so is the reason to watch CNBC. Still, a day trader shouldn't ignore it. There is immediacy in hearing what reporters Kernen, Faber, and Pisani say at any hour. They break stories that can move the market simply by being reported, irrespective of importance. Active daily investors have to act fast on what they hear. There's no time to research it.

Live interviews with company execs can boost share price ahead of the interview (buy the mystery) and see it fall afterwards (sell the history.) That's a change due to daytrader psychology. Before the daytrader era a positive CNBC interview nearly always boosted the stock for a day or so. Not so now.

Between 10 AM and 4 PM news is distorted by melodrama. Benign happenings might be introduced in crisis terminology. Ordinary reports are masked behind headlines that over-state, or offer misleading rhetorical speculation. A story the editor thinks matters will show up again and again through the day, making small news act big.

In the heady Internet boom years, any down day was sure to have the news editor reaching for the standing head, "Are we witnessing the end of the bull market?"

When we did reach the end CNBC didn't know and didn't save us a dime. Too many cries of "Wolf!" resulted in the wolf eating the village when he did show up. Those who sold Intel near its high [smile] don't have CNBC to thank for it. We sold despite Ashok Kumar's previous eleven wrong predictions of Intel's impending doom.

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