The theory that bailout legislation recently defeated in the House of Representatives would make money for the federal government has been propagated by the financial media. But according to a recent report released by the International Monetary Fund (IMF), a profit is unlikely.
"What you find in the IMF report is of course that banking crises happen all the time," Patelis said. "If you look at the history of banking crises - that on average they cost about 13 percent of GDP to the government, both in terms of direct recapitalization costs, but also lost revenue."
Conservative opposition to a federal bailout of financial institutions is over campaign donations, not a desire to uphold sound market principles, according to CNBC.
CNBC's chief Washington correspondent John Harwood said Sept. 25 on "Squawk Box" that he had a conversation with "a top Republican member of congress last night" who told him the resistance among conservatives to the $700 billion bailout plan is in part due to Wall Street donations to Democrats.
"‘A lot of our guys have decided that we hate Wall Street ... because they're giving a lot of money to Democrats right now,'" Harwood said he was told by an unnamed source.
"We've talked about how nice the bi-partisan coming together of the far left and the far right to oppose this plan. It was heartwarming, right? That finally brought the fringe elements of both sides together on this," co-host Joe Kernen joked.
As the Bush administration on Friday proposed a sweeping government bailout to address the nation's financial woes, CNBC's chief Washington correspondent John Harwood told viewers that such a move could help John McCain's presidential campaign because the "crisis on Wall Street benefits Barack Obama."
This came just days after CNN's David Gergen and Candy Crowley made similar assertions with the latter stating that "horrific" headlines from Wall Street were exactly what the Obama campaign wanted.
What follows is a partial transcript of this exchange from CNBC's "The Call" Friday (video embedded right):
On The Situation Room today, CNN anchor Wolf Blitzer made a surprising admission to, of all people, real estate entrepreneur Donald Trump:
BLITZER: What do you think of his (Obama's) decision to pick Joe Biden as his running mate?
TRUMP: I really don't know Senator Biden but I know one thing. He's run a number of times for president. He's gotten less than 1 percent of the vote each time. And that's a pretty tough thing. You know, he's also been involved in pretty big controversy like plagiarism in college and various other things. That's a pretty big statement. So perhaps you change over a period of time. But when you plagiarize, that's a very bad statement. That hasn't been brought up yet, but I'm sure at some point it will. I'm sure that Sarah Palin will bring it up in a debate or somebody's going to bring it up.
BLITZER: Are you talking about plagiarism when he was running for president?
TRUMP: No, I'm talking about when he was a college student as I understand it, and this was a big issue originally but he supposedly plagiarized as a college student. That's a pretty serious charge.
BLITZER: I don't remember that. We'll check it out. But maybe you obviously have a better memory about that.
Comparisons to the current Wall Street financial situation to the Great Depression have not been unusual in the media, but Thursday's NBC Nightly News went a step further into inducing panic. Delivering a healthy dose of hyperbole, Steve Liesman of CNBC prompted a “wow” from anchor Brian Williams when he raised the spectre that the credit troubles could lead, “some” would say, to the “U.S. becoming a banana republic” while those in favor of federal action to take over bad debt “would say by losing our banking system, and maybe even Wall Street the way we're going, we would be that much closer to being a banana republic.” Leisman's warning:
I think there are some people who would say that this is, creates a danger, taking on all this bad debt of the U.S. becoming a banana republic. I think those, the proponents of this plan would say by losing our banking system, and maybe even Wall Street the way we're going, we would be that much closer to being a banana republic.
On CNBC's "Squawk Box," reporter Charlie Gasparino told co-host Joe Kernen, "I will say this about the Bear Stearns thing when you compare that [Lehman] with this. I think our reporting was incredibly responsible. It was so responsible ... and you know we went out of our way with Bear Stearns ... We just report on how feckless management is and I can't help that Bear Stearns was feckless. [Lehman] was feckless too and that is the scary part."
"They're going to parse every ‘is' that a journalist said," said Kernen. "We don't hammer the stock. We watch the stock get hammered and then we talk about it."
Immediately following the interview, CNBC Media and Technology Editor Dennis Kneale observed the demeanor of Nelson and warned the scandal would be exploited by Democratic presidential nominee Sen. Barack Obama, Ill., for political purposes.
On CNN's American Morning today, White House correspondent Suzanne Malveaux reported on Barack Obama's campaigning in Virginia. Afterwards, anchor Kiran Chetry had a question:
CHETRY: All right. And Suzanne, what's on tap for the campaign today? And please tell me it's not lipstick again.
MALVEAUX: Let's hope not. He's going to be in Norfolk, Virginia. That is in southeast Virginia, and it's home to the world's largest Naval base. It's one of the most competitive areas that the Democrats and Republicans are fighting over. It's a critical piece of property, piece of land there with folks in Virginia, and they want those voters.
On MSNBC's "Morning Joe" September 8, Jim Cramer took a shot at owner of The Wall Street Journal, Rupert Murdoch, in the midst of talking about the Fannie Mae and Freddie Mac takeover:
I read The Wall Street Journal, sorry, The Fox Street Journal. When is Murdoch going to put his positive right wing implant on left wing journalists? ... When is Murdoch going to broom the Spartacus workers union?
As for Fannie and Freddie, Cramer told the hosts of the September 8 broadcast that "We had a laissez-faire attitude. Now we are going to have the greatest bureaucracy in history created by Republicans. I'm an agent of change," Cramer said sarcastically.
Later in the segment, Cramer joked that the Democratic Party were "Bolsheviks" quipping, "There. How's that for biased media?"
John Harwood, CNBC's chief Washington Correspondent, admitted this morning "that people who talk about bias in the mainstream press, left of center bias, are not imagining things." He went on to explain, "It has to do with the kind of people who go into journalism, okay? So I'm not arguing with that general notion. I think that those of us in journalism have to do our best to try to present the most objective view we can of what we have, but everybody brings their own filter into it."
Harwood's admission of liberal bias in the media came out during a discussion about the Republican Convention with "Squawk Box" host Joe Kernan at about 6:14am EDT on Wednesday. Kernan pointed out a bit of bias he observed in CNN's coverage of the convention last night when Wolf Blitzer stated "We want you to see, to get a feeling for what it's like to be here whether you agree with what they're saying or not." Kernan pointed out that Blitzer did not say that during the Democratic Convention last week.
CNBC's "Squawk Box" co-host Joe Kernen took a moment during a panel discussion September 2 to take a shot at the onslaught of coverage over presumptive vice presidential nominee Sarah Palin's daughter's pregnancy.
You know as a member of the media I'm just kind of embarrassed with the media. The media says, "Yeah it shouldn't matter, it's not going to matter, we're not going to cover it" and then they put it on the cover of every paper.
Earlier in the broadcast Kernen told chief Washington correspondent John Harwood he did not think the family incidence was as big a deal as the media was making it out to be:
Felt a little bit like the guy in Casablanca, shocked, you know: teen sex in Alaska, John. Probably not that much of a shocker I guess, right? Not a whole lot. I guess bowling, yeah, It's a little lonely probably up there, right, John? ... I don't understand everybody at the same time saying that this is not going to be a big deal ... the press is going to be responsible about this, Barack Obama please don't make anything of this, but then it's the cover of every paper like it, you know, like matters.
While a lot of the members of the mainstream media were scratching their heads, trying to figure out just who Alaska Gov. Sarah Palin was, CNBC actually came through with an almost immediate positive response.
The August 29 broadcast of CNBC's "Squawk on the Street" featured two of the network's prominent personalities analyzing Republican presidential nominee Sen. John McCain's choice of a running mate. "Closing Bell" host Maria Bartiromo and "Kudlow & Company" host Larry Kudlow said McCain's decision was wise.
Bartiromo, who was set to feature Palin in an upcoming CNBC special on energy, called the governor a "terrific choice."
BARTIROMO: "I can tell you a lot about Gov. Palin just from my conversation with her and from the day that we spent with her and that is she challenged the establishment in Alaska. She is very, very popular in Alaska and what she brings to the table predominantly is her knowledge and her know-how of energy. That's the bottom line."
But on the August 27 "Mad Money," Cramer bucked his that trend and called for higher taxes for top income earners. On his "Mad Mail" segment, a n e-mailer asked Cramer if Democratic presidential candidate Sen. Barack Obama's plan to raise taxes on incomes higher than $250,000 and redistribute the money to lower income earners would be good for the economy.
"If Obama puts more money in the hands of the majority of the consumers in this country (who make less than $250,000), won't that be a big push for the economy, and in turn for stocks?" the viewer, "Laurence in Iowa," asked.
The ratings for the Democratic National Convention for ABC, CBS and NBC fell by a million viewers compared to the opener for the 2004 convention with headliner Bill Clinton TVWeek is reporting. On the other hand, the cable newsers saw a ratings jump from their 2004 convention ratings. This reveals the further decline in the old paradigm with the big three networks steadily losing their news influence bit by bit to cable outlets.
ABC, CBS and NBC brought in 12.1 million viewers in the 10 p.m. hour, down one million from 2004, according to preliminary, fast-national data from Nielsen Media Research. NBC scored the largest audience.
Add John Harwood to the list of Barack Obama sycophants, for on Tuesday morning's "Squawk Box," CNBC's chief Washington correspondent actually crossed his fingers hoping that Hillary Clinton's speech at the Democratic National Convention tonight can bring about a much-needed catharsis amongst her disgruntled supporters.
In fact, he not only told the viewing audience to cross their fingers, but as he said it, also looked into the camera while crossing his own (file photo).
It seems like a no-brainer: Raising taxes is bad. It's a shame that Barron's is one of the few outlets to pick up on it.
An economic plan floated out by Democratic presidential hopeful Sen. Barack Obama, Ill., would raise taxes on incomes above $250,000 - with the highest rate at 39.6 percent - and redistribute the wealth to the poor and middle-class. But that would be a big mistake, according to an article by Jim McTague in the August 25 issue of Barron's.
"It's almost as if Obama wants to repeat the mistakes of Herbert Hoover," McTague wrote. "During the Great Depression, Hoover raised the top marginal rate to 63% from 25% and hiked corporate taxes, too, says Michael Aronstein, chief investment strategist at Oscar Gruss & Son in New York. The moves siphoned needed investment capital out of the markets and into the hands of bureaucrats, delaying the turnaround."
You know the old software programmer's excuse: "that's not a bug. That's a feature!" John Harwood of CNBC/NYT has produced a political variation on the theme to buff up Joe Biden. Biden's gaffes, including the racially-insensitive ones, are actually . . . "a strength."
Harwood was chatting with Joe Scarborough and Mika Brzezinski on a special Morning Joe edition today, and the topic of Biden's famous "clean and articulate" comment about Obama arose. Biden also made headlines of course with his crack about 7-11s being populated by people with Indian accents.
JOHN HARWOOD: He is not somebody who is infused with political correctness, the verbal equivalent of putting his pinky up when he opens his mouth. So this is what, the way ordinary voters are as well. They're not always worried about sort of calibrating every single word by "ooh, is this racially insensitive?" That's something that Joe Biden brings as an asset to the ticket. The gaffes actually show one of his strengths.
Perhaps the media's Obama lovefest isn't as infectious as previously thought - at least in some corners of the financial media. For the second day in a row CNBC's Michelle Caruso-Cabrera noted low taxes - a conservative economic ideal - trumps those of the left, both economically and politically.
"You know what I just love, Doug?" Caruso-Cabrera asked. "Everybody and their mother, whenever they want to endorse their tax plan - they want to cite the almighty Ronald Reagan, right? I mean, everybody wants to dump all over the Republicans, but when they want to tout their economic and their tax plan, who do they go back to? The guy who cut taxes and cut taxes."
It's not often someone in the media challenges the liberal point-of-view - especially on the issue of taxes when they become a means to redistribute income.
CNBC "Squawk Box" fill-in co-host Michelle Caruso-Cabrera wasn't afraid to buck the trend and challenge Democratic presidential nominee Sen. Barack Obama's senior economic adviser Austan Goolsbee.
Goolsbee appeared on the August 14 "Squawk Box" to defend an op-ed he wrote for the August 14 Wall Street Journal outlining Obama's tax plan. Caruso-Cabrera invoked the name of Milton Friedman, an economist who was a primary defender of free markets throughout the 20th century. Ironically, Friedman taught at the University of Chicago, where Goolsbee is a faculty member.
"WWMD, Austin - what would Milton do? Remember that," Caruso-Cabrera said. "Remember your roots - what got you to where you are."
Former Federal Reserve chairman Alan Greenspan spoke with CNBC's Maria Bartiromo Thursday, and although a number of press outlets reported his concerns about the economy being close to a recession, his comments about high oil prices being a function of speculation and lack of supply went largely unnoticed.
This boycott seems especially absurd as Congress is currently deadlocked on an energy bill that would offer Americans any hope of relief at the gas pump (photo courtesy Reuters).
With this in mind, Greenspan said the following on Thursday that should not only be relevant to media members, but also to our political leaders that are about to take a five week vacation without having come close to addressing America's energy crisis:
Disclaimer: Yes, Joe and Chris. We know Jim was joking.
Money maven Jim Cramer is a self-described Democrat, one who idolized Lenin back in his Harvard days [Cramer's, not Lenin's] and was on the verge of tears over the downfall of his old college buddy Eliot Spitzer. But one Dem not high on Cramer's list is Jimmy Carter, so much so that Cramer feigned dismay to be informed that—contrary to his [tongue-in-cheek] belief—the former president is still among the living.
The host of CNBC's "Mad Money," a guest on today's Morning Joe, was buoyant about the economy, saying the surge in oil prices is over and that happier, if not downright happy, days are ahead. It was when he cautioned people about being sure not to exceed FDIC insurance limits on their bank deposits that Carter came up . . .
Don't blame Sen. Charles Schumer, D-N.Y., member of two influential banking committees - the Senate Finance Committee and the Committee on Banking, Housing, and Urban Affairs - for IndyMac's collapse, says CNBC's Erin Burnett.
Burnett, host of CNBC "Street Signs," disagreed with a claim by MSNBC "Morning Joe" host Joe Scarborough that a letter to regulators from Schumer caused a run on the beleaguered bank IndyMac, which eventually led to its failure and takeover by the Federal Deposit Insurance Corp.
"I don't think Chuck Schumer caused a run on the bank," Burnett said on MSNBC's July 24 "Morning Joe." "This is the new world of banking. Companies, banks come out and they say, and they say, ‘Oh my gosh - our stock's down 20 percent. It's being manipulated. Please come in and help us government. Oh my gosh, there's a run on our bank - let's blame it on a senator.'"
How insulated is the MSM? In how much of a liberal cocoon does it exist? For an answer, consider the vile cartoon displayed here. My guess is that the great majority of NewsBusters readers are familiar with it. But John Harwood—of the New York Times and CNBC—has never seen it.
That became clear on today's Morning Joe. The topic was the TV comedy world's double-standard, in which Republicans are regularly skewered but the laff factory suddenly shuts down when it comes to mocking Barack. A New York Times article on the matter was the jumping off point, and Joe Scarborough had a field day ridiculing lefty comedians' hypocrisy in piously claiming to "speak truth to power." The truth, said Scarborough, is that the comedians lay off Obama not because there's nothing funny about him, but because they're "in the tank" for the Dem candidate.
Towards the end of the segment came this stunning exchange:
As Congress takes new aim at speculators for the high price of gasoline, some media reports seem to be following suit. But as The Biz Flog explains this week, there is considerable debate over whether speculators should be blamed for the high cost of oil.
June 23, the same day Democrats on the House Energy and Commerce Committee condemned oil speculators, the "CBS Evening News" and ABC's "World News" blamed oil speculation for a large chunk of the spike in prices.
"There's no doubt speculation plays a role in the skyrocketing price, but how much?" ABC correspondent Ryan Owens said June 23. "Experts say if it were just simple supply and demand a barrel would cost $75. Today it closed north of $135."
Scott Horsley explained oil speculation on June 29 for National Public Radio's "All Things Considered," where he pointed out that there have always been financial players in the oil market and there is still a debate over what influence they really have.
Although the collapse of Bear Stearns happened back in March, the debate still rages as to what led to the failure of the 85-year old investment bank that had survived years of previous turmoil, including the Great Depression.
"Well, you know, he [Dimon] said one thing that I'm just - listen, I didn't watch it," CNBC's Charlie Gasparino said, "I'm just going by what appears to be a transcript here: ‘Where there's smoke, there's fire.' Oh really? Sometimes where there's smoke, there's no fire, Jamie. I've got news for you."
In the past when Warren Buffett has spoken out the "super rich" needing to pay a higher tax rate, the media have hung on his every word. But, now that he has spoken out against a windfall profits tax on oil, will they notice?
"I think it is very hard to have windfall taxes," Buffett said. "Steel has doubled in price. Is that a windfall for the steel producers? Sure. Corn is $7 a bushel; soybeans are at $15 a bushel. I don't think any candidate in his right mind with the number of electoral votes in farm states would say you ought to tax farms specially because they are getting a windfall."
Not a mere hell-freezes-over-moment. Call it–in honor of Chinese Olympic diving which made the NY Times today–a a triple-twisting forward three-and-a-half flying pig, pike position. An MSM reporter has condemned socialist big-government programs, adding a pitch for unrestrained free-market forces. Check the end of this item for a factoid making the moment even more remarkable.
CNBC's Michelle Caruso-Cabrera made the stunning statement on Morning Joe today while reporting on a change in Chinese policy that should lower the price of crude oil world-wide.
Pushing a liberal social agenda is the last thing you'd expect to see on CNBC's "Squawk on the Street." But the network's June 16 mid-morning show featured a segment praising the California Supreme Court for legalizing same-sex marriage because of a predicted economic benefit.
"This time around, one study expects over 100,000 gay couples will tie the knot, providing a boost to California's ailing economy hit hard by the real estate foreclosure meltdown," CNBC Silicon Valley Bureau Chief Jim Goldman said.
Goldman cited data from the pro-gay Williams Institute, a division of the University of California Los Angeles School of Law. According to its Web site, the Williams Institute "advances sexual orientation law and public policy through rigorous, independent research and scholarship, and disseminates it to judges, legislators, policymakers, media and the public."
Think it's hot outside? "Good Morning America" wants you to think it is your fault - at least that's why an expert featured on the June 9 show told viewers it is hotter outside.
Stanford University professor Dr. Stephen Schneider said that methane and carbon dioxide in the atmosphere are making hot temperatures even hotter.
"While this heat wave like all other heat waves is made by Mother Nature, we've been fooling around by turning the knob and making a little bit hotter," Schneider said. "[W]e've already increased by 35 percent the amount of carbon dioxide which traps heat. We've added 150 percent more methane, which also traps heat."
Ironically, in 1971, Schneider co-authored a research article that explored both warming and cooling of the Earth, warning that a certain level of aerosols entering the atmosphere could trigger an ice age.