CNBC's ticking time bomb Jim "Mad Money" Cramer lashed out at the Federal Reserve again on January 2 for not cutting interest rates. This time he suggesting the Fed was intentionally doling out punishment to reckless investors.
"I have to tell you that I look at this situation and I say to myself, ‘They [the Federal Reserve] want it. They want a recession.'" Cramer said on CNBC's January 2 "Squawk on the Street." "They're Puritans. They want to punish the people who were reckless in their eyes and the punishment has still not finished being metedout."
Cramer was called into a discussion about the Fed with CNBC's David Faber and "Squawk Box" co-host Joe Kernan.
"As 2008 begins, house prices are still skidding, bank losses are still mounting, oil is again flirting with $100 a barrel and consumers are buying less as prices rise," the editorial said. "To many, the wheels appear to be coming off the economy. To others, including President Bush and his aides, the economy is fundamentally sound and resilient."
NewsBusters and affiliate The Business & Media Institute have been reporting for many months the continuous, bearish assessments of economic gloom and doom by America's press.
Of course, this all comes despite 24 straight quarters of Gross Domestic Product growth, 50 consecutive months of job gains, higher wages for virtually all Americans, and last month's consumer spending explosion.
Ignoring all this Sunday morning were panelists on "The Chris Matthews Show" who demonstrated such a deplorable lack of economic acumen that maybe they shouldn't be allowed to comment on such matters when cameras and microphones are on.
Since the stock and credit market turbulence began in July, NewsBusters has been informing readers that media continually predict recessions that never happen.
On the sad flipside, bearishness in the press can become so pervasive that an economic downturn ends up being an unfortunate self-fulfilling prophecy.
NewsBusters affiliate the Business and Media Institute made this very point in a late-November article by Amy Menefee entitled "Talking Ourselves Into Recession."
This concern is shared by business leaders like Craig Hester, CEO of Hester Capital Management, who during an interview with CNBC's Erin Burnett and James Cramer Friday spoke an inconvenient truth about media's impact on the economy that folks in the press sadly don't recognize as they disseminate pessimistic after pessimistic predictions often leading to people unnecessarily losing their jobs - or worse:
Hillary Clinton's performance in her interview with Maria "Money Honey" Bartiromo of CNBC last week was so bad that she must have sent a double (stop shivering at the thought, will ya?).
After all, the genuine Smartest Woman in the World couldn't possibly have said the things she said, as noted at Rush Limbaugh's site last Thursday. It got so bad that Bartiromo, who seemingly has barely cracked a smile since George Bush became president, felt compelled to challenge her.
Here is one of the choice offerings Mrs. Clinton served up:
(There are ) lots of people who come on your show who, you know, are gung-ho, protect the tax cuts for the wealthiest of Americans, that will not work if the economy slows down. You need to get money in the pockets of tens of hundreds of millions of Americans, and that's what I intend to do.
"I'm no longer fiery," Cramer said. "They had their chance," he said four months after the big tirade.
On the December 11 "Street Signs," Cramer's mood swung 180 degrees the other way after the Federal Reserve cut interest rates only 25 basis point to 4.25 percent - viewed as a disappointment by the shock stock picker.
Steve Fraser might look mild-mannered, but when it comes to economic doomsaying, he is the Rocky Marciano of recession, the Tiger Woods of turndown, the David Beckham of depression.
Speaking of bending one, Fraser's LA Times column of today, "Symptoms of an Economic Depression," twists U.S. economic data into a harbinger of impending doom. Fraser begins by falsely claiming that "no one wants to utter the word 'depression.'" In fact, Fraser himself, a left-wing labor historian, wants not merely to utter it, but to bellow the word with a 10,000 megawatt bullhorn. Why? Because, as he gleefully predicts in that same column:
This perfect storm [of a bad economy] will be upon us just as the election season heats up, and it will inevitably hasten the already well-advanced implosion of the Republican Party.
Was that Mike Huckabee on "Morning Joe" today -- or John Edwards? The former Arkansas governor found an odd way to refute charges he's not a true conservative, indulging in some class-warfare rhetoric that would have been the envy of the former North Carolina senator.
Mika Brzezinski hit Huckabee with an excerpt from Bob Novak's column of today. Here are the opening paragraphs from Novak's False Conservative:
Who would respond to criticism from the Club for Growth by calling the conservative, free-market campaign organization the "Club for Greed"? That sounds like Howard Dean, Dennis Kucinich or John Edwards, all Democrats preaching the class struggle.
*****Update at end of post includes detailed response to unhappy e-mail messages concerning this subject.
As someone that has done a lot of economic writing and financial media analysis, I'm used to gloom and doom from journalists.
However, Saturday's Associated Press article concerning the credit crunch and how it's impacting the mortgage market could be the worst example of economic and financial misreporting and exaggeration I've seen since the press universally forecast an economic downturn after Hurricane Katrina hit New Orleans.
Entitled "Have We Seen the Worst of the Mortgage Crisis," Joe Bel Bruno's piece actually suggested that a depression could be looming, and that housing prices in some areas could decline by 40 percent (emphasis added):
That's Bill Lerach. Yes, THAT Bill Lerach. The self-styled, one-time "King of Torts," and former partner at the once-untouchable Milberg Weiss law firm. The now criminally convicted Bill Lerach.
For those who are unfamiliar with the story of Bill Lerach and Milberg Weiss, here's a relatively quick synopsis, courtesy of a subscription-only editorial at the Wall Street Journal excerpted by yours truly in May 2006, when Milberg Weiss and two of its partners were indicted:
Cramer, host of the CNBC’s “Mad Money” called liberal Democratic New York State Attorney General Andrew Cuomo as “communist” on CNBC’s November 7 “Street Signs.”
“[W]itness the fact that right now, the most important man in America for the stock market – the most important man and I mean it negatively is this guy Andrew Cuomo, the New York State Attorney General,” Cramer said. “I’m getting tired of the New York State Attorney General being the most important man in America.”
Over the last year, Angelo Mozilo, CEO of Countrywide (NYSE:CFC), decided to periodically sell some of the stock he owns in the company he co-founded 40 years ago and what is now the nation's largest mortgage lender – part of a prearranged measure known as a 10b5-1 trading plan. This was all done to prepare him for his December 2009 retirement date.
Despite his upcoming retirement, that drew the ire of some liberal pro-union groups and CBS’s Anthony Mason, whereas anyone defending his decision to sell his stock was not found in Mason’s report.
“I know that most people are very fearful of Hillary being elected,” Jim Cramer said to Matthews on the October 29 “Mad Money.”
“Well, they ought to be fearful,” Matthews responded. “Democrats raise taxes and Hillary already said she's going to repeal the Bush tax cuts. The Republicans start this election with their hole card, the ace showing – they’re going to keep taxes lower. That’s always a big plus for Republicans.”
The likely ousting of Merrill Lynch CEO Stanley O’Neal prompted CBS correspondent Randall Pinkston to tell viewers to expect the worst as far as the stock market goes.
“O'Neal's likely exit sets the stage for another rough ride on Wall Street this week with more dramatic peaks expected in crude oil prices which hit nearly $92 a barrel last week and further uncertainty in the housing market,” Pinkston said.
The similarities are eerie. On Oct. 19, 1987, the day of the Black Monday stock market crash there was trouble from the Iranians, a two-term Republican president nearing the end of his term and a network TV news media voicing warnings the American economy might be doomed. Except this day in 1987, the stock market dropped 508 points.
“It’s a day that will be in bold print in history books – Black Monday, October 19th, 1987, when the stock market went into a freefall, losing more in one day than it did on Black Tuesday in 1929,” anchor Tom Brokaw said on the Oct. 19, 1987, NBC “Nightly News.” “And while conditions are much stronger now than they were then, today’s precipitous plunge struck fear in the hearts and pocketbooks of even Wall Street veterans.”
CNN even warned for the worst: “[N]ow some analysts argue that the stock market’s recent activity is heading for recession, if not depression in the 1990s,” said CNN correspondent Mark Left on the Oct. 19, 1987, CNN “PrimeNews.”
This week marks the unhappy milestone of Black Monday for Wall Street, which had some journalists warning “it could” happen again. Even if it doesn’t, the media hammered home the prospect of a possible recession.
The Dow Jones Industrial Average nosedived Oct. 19, 1987, when panicked selling cost investors 22.6 percent in one day of panicked selling. But do investors in 2007 need to be worried about another crash?
“[T]he avalanche [Oct. 19, 1987 stock-market crash] was made worse by computer program trading, but the things that triggered it were overvalued stocks, a weak dollar, a period of extreme market volatility and a summer of worrying economic news,” Christoforous said on the October 14 broadcast. “Sound familiar? Some market strategists are warning investors now to strap in.”
There’s no doubt there is risk involved when investing in the stock market and historical data should play a role in smart investing. However, the comparisons of stock values from October 1987 to October 2007 aren’t accurate according to the October 15 Wall Street Journal.
“In the face of what I … what we all think was a baseless, ugly article about me by a partner, which I found insulting to my audience and to your intelligence, I’ve been overwhelmed the past two days by words of kindness and support from you guys,” said Cramer.
Cramer referred to Barron’s as “a partner,” possibly referring to the agreement between Dow Jones & Co., which publishes Barron’s and The Wall Street Journal, and CNBC. The deal allows CNBC to use Wall Street Journal content through 2012.
In a recent blog post by CBS Evening News correspondent Cynthia Bowers we find that she has had some problems with the housing market herself. Bowers apparently didn’t grasp the fact that her Adjustable Rate Mortgage (ARM) can actually adjust:
“For a while we were okay. Then that Fed rate started going up, and so did our ARM. Over a five-month period it increased the cost of our monthly mortgage by nearly 40%!” Bowers wrote.
But Bowers shouldn’t have been surprised about her rate adjustment. According to Nexis, Cynthia Bowers has been reporting on the mortgage and housing market since at least 1997. With a decade of industry reporting under her belt, you’d think she’d be able to anticipate the fact that rates shift and payments adjust.
"Good Morning America" asked "What is going on?" with the stock market on August 16. Anchor Chris Cuomo asked Bianna Golodryga if the market drop is a correction or a recession.
"There seem to be two schools of thought here, those involved in all this sophisticated mortgage lending are saying this is the beginning of the end. But stock analysts are saying it is just a correction. Where are people's heads down there today?" said Cuomo
An on-screen graphic read, "Very Nervy Wall Street Correction Or Recession?"
CNBC’s Jim Cramer went on an impassioned rant August 6 calling for the Fed to reduce interest rates.
“Bernanke needs to open the discount window. That is how bad things are out there … in the fixed income markets we have Armageddon,” said Cramer on “Stop Trading!” Following Cramers’ rant, NBC brought him on “Today” to analyze the economy August 10.
NBC’s Meredith Vieira asked “Are the markets about to crash?” on the August 10 “Today” show.
“Crashing” stock market? “Legalized gambling”? ABC’s “Good Morning America” berated the stock market for trampling on a supposed individual right to a mortgage.
Chris Cuomo’s August 13 story on a couple who had their mortgage pulled due the recent “drama on Wall Street” started like this:
“To a certain extent the stock market has always been a form of legalized gambling, where Wall Street tries to cash in on bets made on the right companies. But for many financial institutions, the chips were the mortgages of hard-working American families, in danger of losing their homes, or now never getting a chance to live the American dream.”
Overall all the tax questions pushed Bush towards hiking taxes. Notice the first question out of the gate was on raising the gasoline tax, not about oh, how the gas tax funds are perpetually raided by Congress for non-infrastructure spending. The question on corporate tax rates and carried interest also come from the left, pushing Bush on the matter of tax "fairness." I particulary find the questions in bold obnoxious vis-a-vis fiscal policy.
11:18: president concludes news conference.
11:14, unid'd reporter: Given the decision to commute Libby, is it fair for people to ask about your commitment to accountability?
11:13, unid'd reporter, citing Libby pardon, Al Gonzales hearings: Can you give clear examples of how you've held people accountable during your presidency?
11:12, Ann, followup: So you're confident you can continue to sustain the level of spending in Iraq?