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The Punditry Problem: An Insider's Take on Financial Media


Desperate times call for different measures.

"I must be crazy to be in a loony bin like this." --R.P McMurphy, One Flew Over the Cuckoo's Nest

They say the leaders coming out of a crisis are never the same as those who enter it. Nowhere is that more evident than in the world of financial media.

There is much buzz regarding the ongoing-and very public- friction between CNBC (GE) and The Daily Show. On one side you've got a network that prides itself on representing Wall Street. On the other, a widely popular platform that represents the people.

I have a unique perch with which to view this battle. In my former life, I was the president of Cramer, Berkowitz, the hedge fund made famous by James Cramer, the ubiquitous host of CNBC's Mad Money. While Jim and I only overlapped in 2000, I've known the man since I started at Morgan Stanley (MS) in 1991.

I stepped down from the fund in 2003 to build upon the vision of Minyanville Media, Inc., a financial intelligence and entertainment franchise, with aspirations to effect positive change through financial understanding. The media industry was a brand new world, yet every ounce as vicious and powerful as the one I left behind.

I would have never imagined they would one day so violently collide.

Pulling Back the Curtain

The first thing I remember about Jim Cramer was how engaging he was, even over the phone. He was highly intelligent and masterful at harnessing information, which he used to his advantage time and time again. There's nothing wrong with that unless you cross a regulatory line or put other people in harm's way.

At the root of the current conflict is the notion of responsible reporting. Therein lies the question of intent and consciousness. I sat across from Jim in February of 2000 when he wrote his infamous "Winners of the New World" article pushing ten high-flying tech stocks. While that proved disastrous, there was no malice involved-he bought into his own gospel.

I was schooled to believe emotion is the enemy when trading. In the media, where advertising and sponsorship dollars pay the bills, the end goal is to engage and monetize eyeballs. It's possible to do both but it's a delicate balance and one that carries with it tremendous responsibility.

For years, CNBC was the only game in town and the voice of Wall Street by default. They were the bully on the playground, the kid who took your lunch money or worse, told the world your lunch was poisonous. There are certain things you don't do and for a long time, tempting the wrath of CNBC was at the top of the list for corporate America.

Revolutionary Road

It's unfair to paint an entire network with a single brush. If the friction between opinions is where true education lies, you want to hear variant views regardless of whether you agree with them. The fundamental flaw in the equation is that much of the mainstream assumed CNBC knew what they were talking about and accepted it as fact.

Therein lies a broader discussion through a societal lens. If we're to honestly assess culpability, it would extend from consumers who abused credit to firms that financially engineered the marketplace to policy makers who were complicit by acceptance. The rush to disassociate and place blame is endemic of the very mindset that got us into trouble in the first place.

The simple truth is that financial intelligence isn't a soundbite, and it most certainly won't be found in a lightning round. It's a responsibility we must each assume, if not for our personal wellbeing then for that of our children. Perhaps the upside to this acrimony is a proactive movement by the people and for the people that rebuilds the foundational elements of trust and integrity.

A wise man once said that a little levity goes a long way; now more than ever, we need to smile to break the tension. In that regard, Jon Stewart provides a unique social utility that allows people to absorb information while buffering the harsh reality of traditional news. It's a page we turn to often in Minyanville and it's a line we walk quite carefully.

Everything's funny when you're making money, but economic hardship makes for a tough crowd. While laughter is a healthy release, we know it won't pay the bills. In that regard, we need to bridge the gap between these two seemingly disparate platforms and arrive at a place of harmony.

As the financial and economic crisis edges into the social sphere, it's our sincere hope there's room for both as we edge our way into the new world order.

For another take on popular financial media, see Hoofy & Boo's always astute report.

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